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                                                                   EXHIBIT 10(i)

                       KULICKE AND SOFFA INDUSTRIES, INC.
                      1988 EMPLOYEE INCENTIVE STOCK OPTION
                       AND NON-QUALIFIED STOCK OPTION PLAN
               (As Amended and Restated Effective March 21, 2003)

         Section 1. Purpose.

         The purpose of the 1988 Employee Stock Option and Non-qualified Stock
Option Plan (the "Plan") of Kulicke and Soffa Industries, Inc. (the "Company")
is to encourage stock ownership by officers and employees of the Company by
issuing options to purchase shares of the Company's stock ("Options," and
individually an "Option"), enabling such employees to acquire or increase their
proprietary interest in the Company and thereby encouraging them to remain in
the employ of the Company. The Options issued pursuant to the Plan are intended
to constitute either incentive stock options within the meaning of Section 422
of the Internal Revenue Code of 1986, as amended (the "Code"), or non-qualified
stock options, at the discretion of the Board of Directors at the time of grant.

         Section 2. Administration.

         The Plan will be administered by a Committee of the Board of Directors
(the "Committee"), appointed by the Board of Directors (the "Board") of the
Company. The Committee will consist of at least three directors not employed by
the Company who will serve at the pleasure of the Board. The Committee will hold
meetings when a quorum is present at such times and places as it may determine.
A quorum shall consist of a majority of the Committee. A majority of the
Committee present and voting at a meeting at which a quorum is present, or acts
reduced to and approved in writing by a majority of the members of the Committee
at any other time, will be valid acts of the Committee. The Committee may, from
time to time at its discretion, recommend to the Board which, if any, officers
and employees will be granted Options, the type of Option to be granted, the
amount of stock to be subject to each such Option, and the option price of any
non-qualified stock option. Options shall be granted only by the Board of
Directors, provided that no member of the Board eligible to receive options
under the Plan shall participate in any action of the Board with respect to the
Plan.

         The interpretation and construction by the Committee of any provision
of the Plan or of any Option granted under it will be final unless otherwise
determined by the Board. Anything herein to the contrary notwithstanding, no
member of the Board or the Committee will be liable for any action or
determination made in good faith with respect to the Plan or any Option granted
under it.

         Section 3. Eligibility.

         Officers and employees of the Company and its majority owned
subsidiaries (as defined in section 424(f) of the Code) ("Subsidiaries") who are
expected to make significant contributions to the long term success of the
Company are eligible to receive incentive stock options or non-qualified stock
options under the Plan, as the Board may select from time to time either on its
own motion or from among those nominated by the Committee. An officer or
employee who is granted an Option is an Optionee (which term also includes the
Optionee's legal representative under Section 5(g) hereof). An Optionee may be
granted more than one Option.

         Section 4. Stock.

         The stock subject to an Option will be shares of the Company's
authorized but unissued or reacquired Common Stock, without par value (the
"Shares"). Options shall not be issued with respect to more than 500,000 Shares,
subject, however, to adjustment as provided in Section 5(h) hereof.

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         Section 5. Terms and Conditions of Options.

         Each Option granted pursuant to the Plan will be authorized by the
Board and will be evidenced by an Option Notice in such form as the Committee or
the Board may from time to time determine. Each Option Notice will include the
information required in subparagraphs (a), (b) and (c) of this Section 5 and
will be in conformity with and will incorporate by reference all other terms and
conditions of the Plan, including the following terms and conditions:

                  (a)      Number of Shares. The number of Shares subject to the
Option will be stated in the Option Notice.

                  (b)      Option Price. The price per Share payable on the
exercise of the Option will be stated in the Option Notice and (i) with respect
to non-qualified stock options, will be at such price as the Board of Directors
shall determine; and (ii) with respect to incentive stock options, will be at a
price not less than 100% of the fair market value per share of the outstanding
shares of Common Stock of the Company on the date the Option is granted, without
regard to any restriction other than a restriction which will never lapse. So
long as the Company's Common Stock is quoted on NASDAQ, the fair market value,
for the purpose of compliance with the foregoing sentence with respect to
incentive stock options, shall be the representative closing price of the stock
as obtained from NASDAQ on the date of the grant of the Option.

                  (c)      Form of Option. The Option Notice will state whether
the Option granted is to be treated as an incentive stock option or a
non-qualified stock option, and will constitute a binding determination as to
the form of Option granted.

                  (d)      Payment. The price payable on the exercise of the
Option in whole or in part will be equal to the Option price multiplied by the
number of Shares as to which the Option is exercisable, and shall be paid in
full upon exercise of any Option, either in cash or by delivering to the Company
shares of the Company's Common Stock having a fair market value, as of the close
of business on the day preceding such delivery, equal to the aggregate exercise
price of the Shares being purchased on exercise of the Options, or by a
combination of such cash and shares.

                  (e)      Notwithstanding any other provision of this Plan:

                                    (i)      No option shall be granted under
this Plan after December 13, 1998.

                                    (ii)     No Option granted under this Plan
shall be exercisable later than ten years from the date of grant.

                                    (iii)    No Option granted to any Optionee
shall be treated as an incentive stock option under the Code, to the extent such
Option would cause the aggregate fair market value (determined as of the date of
grant of each such option) of the Shares with respect to which incentive stock
options are exercisable by such Optionee for the first time during any calendar
year to exceed $100,000. For purposes of determining whether an incentive stock
option would cause the optionee to exceed the $100,000 limitation, such
incentive stock options shall be taken into account in the order granted. For
purposes of this subsection, incentive stock options include all incentive stock
options under all plans of the Company and its Subsidiaries that are incentive
stock option plans within the meaning of Section 422 of the Code.

                                    (iv)     Options granted pursuant to this
Plan may be exercised in any order elected by the Optionee whether or not the
Optionee holds any unexercised Options under this Plan or any other Plan of the
Company, its parent or any of its subsidiaries.

                                    (v)      No incentive stock option shall be
granted under this Plan to any person who, at the time of the grant of such
Option, owns stock possessing more than 10% of the total combined voting power
of all classes of the Company's stock, unless the option price at the time the
Option

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is granted is at least 110 percent (110%) of the fair market value of the stock,
and subject to the condition that the Option expires five years from the option
grant date.

                  (f)      Term and Exercise of Options. Subject to the
provisions of Section 5(c)(i), (ii) and (v) hereof, Options granted hereunder
may be exercisable in whole or in part at such time or times as the Board shall
designate when granting such Options.

         No Option may be exercised for less than 25 shares or for any
fractional shares, unless such Option is exhausted upon its exercise.

         Unless sooner terminated as provided in this Plan, each Option shall
expire no later than ten years from the date of grant, and shall be void and
unexercisable thereafter. No incentive stock option and, except as otherwise
provided by the Board or the Committee, no non-qualified stock option shall be
assignable or transferrable by the Optionee otherwise than by will or by the
laws of decent and distribution, and, subject to the preceding clause, an Option
may be exercised only by the Optionee and may not be exercised by any other
person except as provided in Section 5(g) hereof.

                  (g)      Termination of Options. Except as provided herein,
Options shall terminate when the option holder ceases to be employed either by
the Company or one of its Subsidiaries.

         Upon the death of an Optionee while in the employ of the Company or a
Subsidiary, Options held by such Optionee which are exercisable on the date of
his or her death shall be exercisable by his or her executor(s) or
administrator(s) for a period of one year from the date of such Optionee's
death. Notwithstanding the foregoing, with respect to Options granted on and
after October 8, 1996, if an Optionee shall die while in the employ of the
Company or a Subsidiary and prior to the expiration date fixed for his or her
Option, such Option shall accelerate and may be exercised, to the extent it
remains unexercised on the date of his or her death, by the Optionee's estate,
personal representative or beneficiary who acquired the right to exercise such
Option by bequest or inheritance or by reason of the death of the Optionee, at
any time prior to the earlier of: (1) the expiration date specified in such
Option; or (2) one year after the date of death.

         Upon termination of an Optionee's employment with the Company or a
Subsidiary for any reason other than Cause, Options exercisable by such Optionee
on the date of termination of employment shall be exercisable by the Optionee
(or in the case of the Optionee's death subsequent to termination of employment,
by the Optionee's executor(s) or administrator(s)), for a period of three months
from the date of such Optionee's termination of employment. With respect to
Options granted on or after October 8, 1996, the preceding sentence shall apply
in the event of termination of employment for any reason other than death,
disability, Retirement or Cause.

         Upon the termination of an Optionee's employment for Cause, all Options
held by such Optionee shall terminate concurrently with receipt by the Optionee
of oral or written notice that his or her employment has been terminated. For
the purposes of this Plan, termination for Cause shall include termination by
reason of any dishonest or illegal act, or any willful refusal or failure to
perform duties properly assigned.

         With respect to Options granted on or after October 8, 1996, if an
Optionee shall become disabled (within the meaning of section 22(e)(3) of the
Code) during his or her employment and, prior to the expiration date fixed for
his or her Option, his or her employment is terminated as a consequence of such
disability, such Option shall accelerate and may be exercised, to the extent it
remains unexercised on the date of such termination, by the Optionee at any time
prior to the earlier of: (1) the expiration date specified in such Option; or
(2) one year after the date of such termination of employment. In the event of
an Optionee's legal disability, such Option may be so exercised by the
Optionee's legal representative.

         With respect to Options granted on or after October 8, 1996, if an
Optionee's employment is terminated prior to the expiration date fixed for his
or her Option by reason of Retirement (as hereinafter defined), such Option
shall accelerate and may be exercised, to the extent it remains unexercised on
the

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date of such Retirement, by the Optionee at any time prior to the earlier of:
(1) the expiration date specified in such Option; or (2) three months after the
date of such Retirement. For purposes of this Plan, Retirement shall mean,
effective for Options granted on or after February 12, 2002, an Optionee's
retirement from the Company and its Subsidiaries at or after attaining age 50
and completing at least three years of employment with the Company and its
Subsidiaries, provided the sum of the Optionee's age and years of employment
with the Company and its Subsidiaries equals or exceeds 60. With respect to
Options granted prior to February 12, 2002, Retirement shall mean an Optionee's
retirement from the Company and its Subsidiaries at or after attaining age 65 or
before age 65 if expressly agreed to by the Company. The Office of the President
of the Company shall have the authority to grant requests for termination on
account of Retirement under the Plan, provided the age and/or employment
requirements of the applicable standard are met.

         Options may be terminated at any time by agreement between the Company
and the Optionee.

                  (h)      Recapitalization. Subject to any required action by
the stockholders, if any, the number of Shares as to which Options may be
granted under this Plan and the number of Shares subject to outstanding options
and the option prices thereto will be adjusted proportionately for any increase
or decrease in the number of outstanding shares of Common Stock of the Company
resulting from stock splits and reverse stock splits, but not for stock
dividends. The number of shares will be adjusted to the nearest whole share. Any
stock dividend resulting in an increase of 20% or more in the outstanding Common
Stock shall be deemed a stock split.

         If the Company is a party to any merger in which the Company is not the
surviving entity, any consolidation or dissolution (other than the merger or
consolidation of the Company with one or more of its wholly-owned Subsidiaries),
all Options outstanding hereunder shall terminate (1) in the case of such a
merger or consolidation, on the date that such merger or consolidation becomes
effective, and (2) in the case of dissolution, on the date that the Articles of
Election to Dissolve are filed with the Secretary of the Commonwealth of
Pennsylvania. If Options are terminated pursuant to the provisions of the
foregoing sentence, Optionees shall receive in cash from the Company an amount
equal to the fair market value of the Shares which are subject to then
exercisable Options, determined as of the close of business on the day preceding
the event cancelling all outstanding Options under this Plan, less the amount
which would be required to exercise the then exercisable Options. Optionees
shall have no rights to compensation or other consideration with respect to the
cancellation of Options not subject to exercise on the date of cancellation.

         Except as expressly provided above in this Section 5(h), the Optionee
will have no rights by reason of (1) any subdivision or consolidation of shares
of stock of any class of the Company; (2) payment of any stock dividend by the
Company; (3) any other increase or decrease in the number of shares of stock of
any class of the Company; or (4) by reason of any dissolution, liquidation,
merger, consolidation or spin-off of assets or stock of another corporation.

         The grant or existence of any Option shall not affect in any way the
right or power of the Company to make adjustments, reclassifications,
reorganizations, or changes of its capital or business structure, or to merge,
consolidate, dissolve, liquidate, sell or transfer all or any part of its stock
or assets.

                  (i)      Rights as a Stockholder. The Optionee will have no
rights as a stockholder of the Company with respect to any Shares subject to an
Option until such Option has been exercised and a certificate with respect to
the Shares purchased upon exercise has been issued to him or her. No adjustment
will be made for dividends (ordinary or extraordinary, whether in cash,
securities or other property), distributions or other rights for which the
record date is prior to the date the Shares so purchased have been issued.

                  (j)      Modification, Extension and Renewal of Option.
Subject to the terms and conditions of the Plan, the Board may modify, extend or
renew an Option, or accept the surrender of an Option (to the extent not
theretofore exercised). Notwithstanding the foregoing, no modification of an
Option which adversely affects the Optionee shall be made without the consent of
the Optionee. Further, notwithstanding any provision of this Plan to the
contrary (other than Section 5(h)), with respect to Options

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outstanding on February 9, 1999, the option price of an outstanding Option shall
not, without the prior approval of the Company's stockholders, be reduced,
whether through amendment, cancellation, replacement grants, or other similar
means.

                  (k)      Purchase for Investment. The issuance of Shares on
exercise of the Option will be conditioned on obtaining appropriate
representations and warranties of the Optionee that the purchase of Shares
thereunder will be for investment, and not with a view to the public resale or
distribution thereof, unless the Shares subject to the Option are registered
under the Securities Act of 1933, as amended (the "Act"), and comply with any
other law, regulation or rule applicable thereto. Unless the Shares are
registered under the Act, the Optionee shall acknowledge that the Shares
purchased on exercise of the Option are not registered under the Act and may not
be sold or otherwise transferred unless the Shares have been registered under
the Act in connection with the sale or other transfer, or that counsel
satisfactory to the Company is of the opinion that the sale or other transfer is
exempt from registration under the Act, and unless said sale or transfer is in
compliance with any other applicable law, including all applicable state
securities laws.

                  (l)      No Rights to Employment. Officers or employees
granted Options under this Plan shall not have any right to continue in the
employment of the Company or any Subsidiary by nature of the existence of such
Options. An Optionee whose employment is terminated shall have no rights against
the Company by reason of the termination of such Option whether the termination
of the employment be with or without Cause.

                  (m)      Other Provisions. The Option Notice may contain such
other provisions as the Board in its discretion deems advisable and which are
not inconsistent with the provisions of this Plan, including, without
limitation, restrictions upon the exercise of the Option.

         Section 6. Term of Plan.

         Options may be granted from time to time within a period of ten years
from the date the Plan is effective as described in Article 10 hereof.

         Section 7.  Amendment of the Plan.

         Insofar as permitted by law and the Plan, the Board may from time to
time suspend or discontinue the Plan or revise or amend it in any respect
whatsoever with respect to any Shares at the time not subject to an Option;
provided, however, that without approval of the stockholders, no such revision
or amendment may change the aggregate number of Shares for which options may be
granted hereunder, change the designation of the class of employees eligible to
receive Options, decrease the price at which Options may be granted, remove the
administration of the Plan from the Committee, or render any member of the
Committee eligible to receive an Option under the Plan while serving thereon.

         Any other provision of this Section 7 notwithstanding, the Board
specifically is authorized to adopt any amendment to this Plan deemed by the
Board to be necessary or advisable to assure that the incentive stock options or
the non-qualified stock options available under the Plan continue to be treated
as such, respectively, under the law.

         Section 8. Application of Funds.

         The proceeds received by the Company from the sale of Shares pursuant
to the exercise of Options will be used for general corporate purposes.

         Section 9. No Obligation to Exercise Option.

         The granting of an Option will impose no obligation upon the Optionee
to exercise such Option.

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         Section 10. Approval of Stockholders.

         This Plan shall become effective on the date that it is adopted by the
Board, provided, however, that it shall become null and void if it is not
approved by a majority of the holders of the Company's Common Stock present in
person or by proxy at a meeting held within one year (365 days) of its adoption
by the Board. The Board may grant Options hereunder prior to approval of the
Plan by the holders of such a majority of the Common Stock; provided, however,
that no Option so granted shall be exercisable within 365 days of the date of
the adoption of the Plan, and all Options so granted shall terminate and become
null and void if the Plan is not approved by a majority of the holders of the
Company's Common Stock present in person or by proxy at a meeting of the
shareholders held within 365 days of its adoption by the Board.

Date Plan adopted by Board of Directors: December 6, 1988<PAGE>

                                                                 EXHIBIT 10(iii)

                       KULICKE AND SOFFA INDUSTRIES, INC.

                      1994 EMPLOYEE INCENTIVE STOCK OPTION
                       AND NON-QUALIFIED STOCK OPTION PLAN
               (As Amended and Restated Effective March 21, 2003)

                                    SECTION I
                                     PURPOSE

         This KULICKE AND SOFFA INDUSTRIES, INC. 1994 EMPLOYEE STOCK OPTION PLAN
("Plan") is intended to provide a means whereby KULICKE AND SOFFA INDUSTRIES,
INC. ("Company") and any Subsidiary (as hereinafter defined) may, through the
grant of incentive stock options and non-qualified stock options (collectively,
"Options") to officers and other Key Employees (as defined in Section 3),
attract and retain such Key Employees and motivate such Key Employees to
exercise their best efforts on behalf of the Company and of any Subsidiary.

         As used in the Plan, the term "incentive stock options" ("ISOs") means
Options which qualify as incentive stock options within the meaning of section
422 of the Internal Revenue Code of 1986, as amended from time to time ("Code"),
at the time they are granted and which are either designated as ISOs in the
Grant Letters (as hereinafter defined) covering such Options or which are
designated as ISOs by the Committee (as defined in Section 2 hereof) at the time
of grant. The term "non-qualified stock options" ("NQSOs") means all other
Options granted under the Plan. The term "Subsidiary" means any corporation
(whether or not in existence at the time the Plan is adopted) which, at the time
an Option is granted, is a subsidiary of the Company under the definition of
"subsidiary corporation" contained in section 424(f) of the Code or any similar
provision hereafter enacted.

                                    SECTION 2
                                 ADMINISTRATION

         The Plan shall be administered by the Company's Compensation Committee
("Committee"), which shall consist solely of not fewer than two (2)
"non-employee directors" (within the meaning of Rule 16b-3(b)(3) under the
Securities Exchange Act of 1934, or any successor thereto) of the Company who
are also "outside directors" (within the meaning of Treas. Reg.
Section 1.162-27(e)(3), or any successor thereto), who shall be appointed by,
and shall serve at the pleasure of, the Company's Board of Directors ("Board").
Each member of such Committee, while serving as such, shall be deemed to be
acting in his or her capacity as a director of the Company.

         The Committee shall have the authority, subject to the terms of the
Plan, to select the persons to be granted ISOs and NQSOs under the Plan, to
grant Options on behalf of the Company, and to set the date of grant and the
other terms of such Options. The Committee may correct any defect, supply any
omission and reconcile any inconsistency in the Plan and in any Option granted
hereunder in the manner and to the extent it shall deem desirable. The Committee
also shall have the authority to establish such rules and regulations, not
inconsistent with the provisions of the Plan, for the proper administration of
the Plan, and to amend, modify or rescind any such rules and regulations, and to
make such determinations and interpretations under, or in connection with, the
Plan, as it deems necessary or advisable. All such rules, regulations,
determinations and interpretations shall be binding and conclusive upon the
Company, its Subsidiaries and its shareholders and all officers and employees
and former officers and employees, and upon their respective legal
representatives, beneficiaries, successors and assigns and upon all other
persons claiming under or through any of them. The Committee may delegate to the
Office of the President and/or to other senior officers of the Company its
duties under the Plan pursuant to such conditions or limitations as the
Committee may establish, except that only the Committee may make any awards to
or determinations regarding grants to employees who are subject to Section 16 of
the Securities Exchange Act of 1934.

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         No member of the Board or the Committee, and no delegate of the
Committee, shall be liable for any action or determination made in good faith
with respect to the Plan or any Option granted hereunder.

                                    SECTION 3
                                   ELIGIBILITY

         The class of employees who shall be eligible to receive Options under
the Plan shall be the Key Employees (including any directors who also are Key
Employees) of the Company and/or of a Subsidiary. A "Key Employee" is an officer
or other employee who occupies a responsible executive, professional, managerial
or administrative position and who the Committee believes has the capacity to
contribute to the long-term success of the Company and its Subsidiaries. More
than one Option may be granted to a Key Employee under the Plan.

                                    SECTION 4
                                      STOCK

         Subject to adjustment as hereinafter provided, the aggregate number of
shares of common stock of the Company, no par value ("Common Shares"), that may
be subject to Options under the Plan shall equal (i) 850,000 shares reduced by
the number of shares subject to options outstanding immediately prior to July
17, 2000, (ii) multiplied by two, (iii) reduced by the number of shares subject
to options issued on or after July 17, 2000, and (iv) increased by the number of
shares subject to options expiring or terminating on or after July 17, 2000,
which aggregate number equals 178,348 shares as of the effective date of this
amended and restated Plan. Shares issuable under the Plan may be authorized but
unissued shares or reacquired shares, as the Company may determine from time to
time. Any Common Shares subject to an Option which expires or otherwise
terminates for any reason whatever (including, without limitation, the Key
Employee's surrender thereof) without having been exercised shall continue to be
available for the granting of Options under the Plan.

         Notwithstanding anything in this Plan to the contrary, no Key Employee
shall receive Options for more than 600,000 Common Shares under the Plan;
provided, however, that in the case of a Key Employee who has exercised options
under the Plan prior to July 17, 2000, the maximum number of Common Shares
available to such Key Employee shall equal (i) 300,000 Common Shares reduced by
the number of Common Shares received by the Key Employee upon the exercise of
Options under this Plan prior to July 17, 2000, (b) multiplied by two. If an
Option is cancelled, the Common Shares covered by the cancelled Option shall be
counted against such maximum number of shares for which Options may be granted
to a single Key Employee. If the exercise price of an Option is reduced after
the date of grant, the transaction shall be treated as a cancellation of the
original Option and the grant of a new Option for purposes of counting the
maximum number of shares for which Options may be granted to a single Key
Employee.

                                    SECTION 5
                                  ANNUAL LIMIT

         (a)      ISOs. The aggregate Fair Market Value (determined as of the
date the ISO is granted) of the Common Shares with respect to which ISOs become
exercisable for the first time by a Key Employee during any calendar year (under
this Plan and any other ISO plan of the Company or any parent corporation
(within the meaning of section 424(e) of the Code ("Parent")) or Subsidiary)
shall not exceed $100,000. The term "Fair Market Value" shall mean the value of
the Common Shares arrived at by a good faith determination of the Committee and
shall be:

                  (1)      The quoted closing price, if there is a market for
and there are sales of Common Shares on a registered securities exchange or in
an over the counter market, on the date specified;

<PAGE>

                  (2)      The weighted average of the quoted closing prices on
the nearest date before and the nearest date after the specified date, if there
are no sales of Common Shares on the specified date but there are such sales on
dates within a reasonable period both before and after the specified date;

                  (3)      The mean between the bid and asked prices, as
reported by the National Quotation Bureau on the specified date, if actual sales
are not available during a reasonable period beginning before and ending after
the specified date; or

                  (4)      Such other method of determining Fair Market Value as
shall be authorized by the Code, or the rules or regulations thereunder, and
adopted by the Committee.

                  Where the Fair Market Value of Common Shares is determined
under (2) above, the average of the closing prices on the nearest sales date
before and the nearest date after the specified date shall be weighted inversely
by the respective numbers of trading days between the dates of reported sales
and the specified date (i.e., the valuation date), in accordance with Treasury
Regulation Section 20.2031-2(b)(1), or any successor thereto, under the Code.

         (b)      OPTIONS OVER ANNUAL LIMIT. If an Option intended as an ISO is
granted to a Key Employee and such Option may not be treated in whole or in part
as an ISO pursuant to the limitation in (a) above, such Option shall be treated
as an ISO to the extent it may be so treated under such limitation and as a NQSO
as to the remainder. For purposes of determining whether an ISO would cause such
limitation to be exceeded, ISOs shall be taken into account in the order
granted.

         (c)      NQSOs. The annual limit set forth above for ISOs shall not
apply to NQSOs.

                                    SECTION 6
                                     OPTIONS

         (a)      GRANTING OF OPTIONS. From time to time until the expiration or
earlier suspension or discontinuance of the Plan, the Committee may, on behalf
of the Company, grant to Key Employees under the Plan such Options as it
determines are warranted, subject to the limitations of the Plan; provided,
however, that grants of ISOs and NQSOs shall be separate and not in tandem
(i.e., a Key Employee's exercise of an ISO shall not affect his or her right to
exercise an NQSO, and vice versa). The granting of an Option under the Plan
shall not be deemed either to entitle the Key Employee to, or to disqualify the
Key Employee from, any participation in any other grant of Options under the
Plan. In making any determination as to whether a Key Employee shall be granted
an Option and as to the number of shares to be covered by such Option, the
Committee shall take into account the duties of the Key Employee, the
Committee's views as to his or her present and potential contributions to the
success of the Company or a Subsidiary, and such other factors as the Committee
shall deem relevant in accomplishing the purposes of the Plan. Moreover, the
Committee may determine that the Grant Letter (as defined below) shall provide
that said Option may be exercised only if certain conditions, as determined by
the Committee, are fulfilled.

         (b)      TERMS AND CONDITIONS OF OPTIONS. The Options granted pursuant
to the Plan shall specify whether they are ISOs or NQSOs; however, if the Option
is not designated in the Grant Letter as an ISO or NQSO, the Option shall
constitute an ISO if it complies with the terms of section 422 of the Code, and
otherwise, it shall constitute an NQSO. In addition, the Options granted
pursuant to the Plan shall include expressly or by reference the following terms
and conditions, as well as such other provisions not inconsistent with the
provisions of this Plan as the Committee shall deem desirable, and for ISOs
granted under this Plan, the provisions of section 422(b) of the Code:

                  (1)      NUMBER OF SHARES. A statement of the number of Common
Shares to which the Option pertains.

                  (2)      PRICE. A statement of the Option exercise price,
which shall be determined and fixed by the Committee in its discretion at the
time of grant, but shall not be less than 100% (110% in the

<PAGE>

case of an ISO granted to a more than 10% shareholder as provided in Subsection
(9) below) of the Fair Market Value of the optioned Common Shares on the date
the Option is granted.

                  (3)      TERM.

                           (A)      ISOs. Subject to earlier termination as
provided in Subsections (5), (6) and (7) below, the term of each ISO shall be
not more than 10 years (5 years in the case of a more than 10% shareholder as
provided in (9) below) from the date of grant.

                           (B)      NQSOs. Subject to earlier termination as
provided in Subsections (5), (6) and (7) below, the term of each NQSO shall be
not more than 10 years from the date of grant.

                  (4)      EXERCISE.

                           (A)      GENERAL. Options shall be exercisable in
such installments, on such dates, and/or upon fulfillment of such other
conditions as the Committee may specify, provided, however, that Options granted
prior to October 2, 2001, shall be exercisable in such installments commencing
not less than 12 months from the date of grant; and further provided that:

                                    (i)      In the case of new Options granted
to a Key Employee in replacement for options (whether granted under this Plan or
otherwise) held by the Key Employee, the new Options may be made exercisable, if
so determined by the Committee, in its discretion, at the earliest date the
replaced options were exercisable; and

                                    (ii)     The Committee may accelerate the
exercise date of any outstanding Options in its discretion, if it deems such
acceleration to be desirable.

                           Any Common Shares the right to the purchase of which
has accrued under an Option may be purchased at any time up to the expiration or
termination of the Option. Exercisable Options may be exercised, in whole or in
part, from time to time by giving written notice of exercise to the Company at
its principal office, specifying the number of Common Shares to be purchased and
accompanied by payment in full of the aggregate Option exercise price for such
shares. Options may not be exercised in installments of less than 25 shares,
unless such Option is exhausted upon its exercise. Only full shares shall be
issued under the Plan, and any fractional share which might otherwise be
issuable upon the exercise of an Option granted hereunder shall be forfeited.

                           (B)      MANNER OF PAYMENT. The Option price shall be
payable:

                                    (i)      In cash or its equivalent;

                                    (ii)     In the case of Options granted on
or after May 16, 2000, in Common Shares previously acquired by the Key Employee;
provided that if such Common Shares were acquired through the exercise of an ISO
or NQSO, such shares have been held by the Key Employee for such period of time
as required to be considered "mature" shares for purposes of accounting
treatment; and further provided, that with respect to Options granted prior to
May 16, 2000, in the case of an ISO, if the Committee, in its discretion, causes
the Grant Letter so to provide and in the case of an NQSO if the Committee, in
its discretion, so determines at or prior to the time of exercise, in Common
Shares previously acquired by the Key Employee, provided that if such shares
were acquired through the exercise of an ISO granted under this Plan or any
other plan of the Company and are used to pay the Option exercise price of an
ISO, such shares have been held by the Key Employee for a period of not less
than the holding period described in section 422(a)(1) of the Code on the date
of exercise, or if such Common Shares were acquired through exercise of an NQSO
or ISO granted under this Plan or any other plan of the Company and are used to
pay the Option exercise price of an NQSO, such shares have been held by the Key
Employee for a period of more than 12 months on the date of exercise; or

                                    (iii)    In any combination of (i) and (ii)
above.

<PAGE>

                  In the event such Option exercise price is paid, in whole or
in part, with Common Shares, the portion of the Option exercise price so paid
shall equal the Fair Market Value on the date of exercise of the Option of the
Common Shares surrendered in payment of such Option exercise price.

                  (5)      TERMINATION OF EMPLOYMENT. If a Key Employee's
employment by the Company (and Subsidiaries) is terminated by either party prior
to the expiration date fixed for his or her Option for any reason other than
death, disability, or Cause (as hereinafter defined), such Option may be
exercised, to the extent of the number of shares with respect to which the Key
Employee could have exercised it on the date of such termination, or to any
greater extent permitted by the Committee, by the Key Employee at any time prior
to the earlier of:

                           (A)      The expiration date specified in such
Option; or

                           (B)      Three months after the date of such
termination of employment.

With respect to Options granted on or after October 8, 1996, the foregoing
provisions of this Subsection (5) shall apply in the event of termination of
employment for any reason other than death, disability, Retirement, or Cause.

                  If a Key Employee's employment by the Company (and
Subsidiaries) is terminated for Cause, all Options held by the Key Employee
shall terminate concurrently with receipt by the Optionee of oral or written
notice that his or her employment has been terminated. For purposes of this
Plan, termination for Cause shall include termination by reason of any dishonest
or illegal act, or any willful refusal or failure to perform duties properly
assigned.

                  (5a)     EXERCISE UPON RETIREMENT OF KEY EMPLOYEE. With
respect to Options granted on or after October 8, 1996, if a Key Employee's
employment is terminated prior to the expiration date fixed for his or her
Option by reason of Retirement (as hereinafter defined), such Option shall
accelerate and may be exercised, to the extent it remains unexercised on the
date of such Retirement, by the Key Employee at any time prior to the earlier
of:

                           (A)      The expiration date specified in such
Option; or

                           (B)      Three months after the date of such
Retirement.

                  For purposes of this Plan, Retirement shall mean, effective
for options granted on or after February 12, 2002, a Key Employee's retirement
from the Company and its Subsidiaries at or after attaining age 50 and
completing at least three years of employment with the Company and its
Subsidiaries, provided the sum of the Employee's age and years of employment
with the Company and its Subsidiaries equals or exceeds 60. With respect to
options granted prior to February 12, 2002, Retirement shall mean (i) for
options granted on or after May 16, 2000, a Key Employee's retirement from the
Company and its Subsidiaries at or after attaining age 65 and completing at
least five years of employment with the Company and its Subsidiaries, or before
such time if expressly agreed to by the Company, and (ii) for options granted
prior to May 16, 2000, a Key Employee's retirement from the Company and its
Subsidiaries at or after age 65 or before age 65 if expressly agreed to by the
Company. The Office of the President of the Company shall have the authority to
grant requests for termination on account of Retirement under the Plan, provided
the age and/or employment requirements of the applicable standard are met.

                  (6)      EXERCISE UPON DISABILITY OF KEY EMPLOYEE. Effective
with respect to Options outstanding on October 8, 1996 and Options granted on
and after such date, if a Key Employee shall become disabled (within the meaning
of section 22(e)(3) of the Code) during his or her employment and, prior to the
expiration date fixed for his or her Option, his or her employment is terminated
as a consequence of such disability, such Option shall accelerate and may be
exercised, to the extent it remains unexercised on the date of such termination,
by the Key Employee at any time prior to the earlier of:

<PAGE>

                           (A)      The expiration date specified in such
Option; or

                           (B)      One year after the date of such termination
of employment.

                  In the event of the Key Employee's legal disability, such
Option may be so exercised by the Key Employee's legal representative.

                  (7)      EXERCISE UPON DEATH OF KEY EMPLOYEE. Effective with
respect to Options outstanding on October 8, 1996 and Options granted on and
after such date, if a Key Employee shall die during his or her employment and
prior to the expiration date fixed for his or her Option, or if a Key Employee
whose employment is terminated for any reason shall die following his or her
termination of employment but prior to the earliest of:

                           (A)      The expiration date fixed for his or her
Option;

                           (B)      The expiration of the period determined
under Subsections (5), (5a) (if applicable), and (6) above; or

                           (C)      In the case of an ISO which is to remain an
ISO, three months following termination of employment;

his or her Option shall accelerate and may be exercised, to the extent it
remains unexercised on the date of his or her death, by the Key Employee's
estate, personal representative or beneficiary who acquired the right to
exercise such Option by bequest or inheritance or by reason of the death of the
Key Employee, at any time prior to the earlier of:

                                    (i)      The expiration date specified in
such Option; or

                                    (ii)     One year after the date of death.

                  (8)      RIGHTS AS A SHAREHOLDER. A Key Employee shall have no
rights as a shareholder with respect to any shares covered by his or her Option
until the issuance of a stock certificate to him or her for such shares.

                  (9)      TEN PERCENT SHAREHOLDER. If the Key Employee owns
more than 10% of the total combined voting power of all shares of stock of the
Company or of a Subsidiary or Parent at the time an ISO is granted to such Key
Employee, the Option exercise price for the ISO shall be not less than 110% of
the Fair Market Value of the optioned Common Shares on the date the ISO is
granted, and such ISO, by its terms, shall not be exercisable after the
expiration of five years after the date the ISO is granted. The conditions set
forth in this Subsection (9) shall not apply to NQSOs.

         (c)      GRANT LETTERS. Options granted under the Plan shall be
evidenced by written documents ("Grant Letters") in such form as the Committee
shall, from time to time, approve, which Grant Letters shall contain such
provisions, not inconsistent with the provisions of the Plan, for NQSOs granted
pursuant to the Plan, and such conditions, not inconsistent with section 422(b)
of the Code or the provisions of the Plan, for ISOs granted pursuant to the
Plan, as the Committee shall deem advisable, and which Grant Letters shall
specify whether the Option is an ISO or NQSO; provided, however, if the Option
is not designated in the Grant Letter as an ISO or NQSO, the Option shall
constitute an ISO if it complies with the terms of section 422 of the Code, and
otherwise, it shall constitute an NQSO. Each Key Employee shall be bound by the
terms of the Grant Letter.

<PAGE>

                                    SECTION 7
                               CAPITAL ADJUSTMENTS

         The number of shares which may be issued under the Plan, the maximum
number of shares with respect to which Options may be granted to any Key
Employee under the Plan, both as stated in Section 4 hereof, and the number of
shares issuable upon exercise of outstanding Options under the Plan (as well as
the Option exercise price per share under such outstanding Options) shall,
subject to the provisions of section 424(a) of the Code, be adjusted, as may be
deemed appropriate by the Committee, to reflect any stock dividend, stock split,
share combination, or similar change in the capitalization of the Company.

         In the event of a corporate transaction (as that term is described in
section 424(a) of the Code and the Treasury Regulations issued thereunder as,
for example, a merger, consolidation, acquisition of property or stock,
separation, reorganization, or liquidation), each outstanding Option shall be
assumed by the surviving or successor corporation; provided, however, that in
the event of a proposed corporate transaction, the Committee may terminate all
or a portion of the outstanding Options if it determines that such termination
is in the best interests of the Company. If the Committee decides to terminate
outstanding Options, the Committee shall give each Key Employee holding an
Option to be terminated not less than ten days' notice prior to any such
termination by reason of such a corporate transaction, and any such Option which
is to be so terminated shall become fully exercisable and may be exercised up
to, and including the date immediately preceding such termination.

         The Committee also may, in its discretion, change the terms of any
outstanding Option to reflect any such corporate transaction, provided that, in
the case of ISOs which are to remain ISOs, such change is excluded from the
definition of a "modification" under section 424(h) of the Code unless the
Option holder consents to such change.

                                    SECTION 8
                                CHANGE IN CONTROL

         All Options shall become fully vested and exercisable upon a Change in
Control of the Company. "Change in Control" shall mean any of the following
events:

         (a)      An acquisition (other than directly from the Company of any
voting securities of the Company ("Voting Securities") by any "Person" (as such
term is used for purposes of section 13(d) or 14(d) of the Securities Exchange
Act of 1934, as amended (the "1934 Act")) immediately after which such Person
has "Beneficial Ownership" (within the meaning of Rule 13d-3 promulgated under
the 1934 Act) of 50% or more of the combined voting power of all then
outstanding Voting Securities, provided, however, that any such acquisition
approved by two-thirds of the Incumbent Board (as hereinafter defined) shall not
be deemed to be a Change in Control;

         (b)      The individuals who, as of December 13, 1994, are members of
the Company's Board of Directors (the "Incumbent Board") cease for any reason to
constitute at least two-thirds of the Board of Directors; provided, however,
that if the election, or nomination for election by the shareholders, of any new
director was approved by a vote of at least two-thirds of the members of the
Board of Directors who constitute Incumbent Board members, such new directors
shall for all purposes be considered as members of the Incumbent Board as of
December 13, 1994; provided further, however, that no individual shall be
considered a member of the Incumbent Board if such individual initially assumed
office as a result of either an actual or threatened "Election Contest" (as
described in Rule 14a-11 promulgated under the 1934 Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other
than the Board of Directors (a "Proxy Contest") including by reason of any
agreement intended to avoid or settle any Election Contest or Proxy Contest;

         (c)      Approval by shareholders of the Company of (1) a merger or
consolidation involving the Company if the shareholders of the Company
immediately before such merger or consolidation do not own,

<PAGE>

directly or indirectly, immediately following such merger or consolidation more
than 50% of the combined voting power of the outstanding Voting Securities of
the corporation resulting from such merger or consolidation in substantially the
same proportion as their ownership of the Voting Securities immediately before
such merger or consolidation or (2) a complete liquidation or dissolution of the
Company or an agreement for the sale or other disposition of all or
substantially all of the assets of the Company; or

         (d)      Acceptance of shareholders of the Company of shares in a share
exchange if the shareholders of the Company immediately before such share
exchange do not own, directly or indirectly, immediately following such share
exchange more than 50% of the combined voting power of the outstanding Voting
Securities of the corporation resulting from such share exchange in
substantially the same proportion as their ownership of the Voting Securities
outstanding immediately before such share exchange.

                                    SECTION 9
                     AMENDMENT OR DISCONTINUANCE OF THE PLAN

         At any time and from time to time, the Board may suspend or terminate
the Plan or amend it, and the Committee may amend any outstanding Options, in
any respect whatsoever, except that the following amendments shall require the
approval by the affirmative votes of holders of at least a majority of the
shares present, or represented, and entitled to vote at a duly held meeting of
shareholders of the Company:

         (a)      Any amendment which would:

                  (1)      Materially increase the benefits accruing to
directors and officers, within the meaning of Rule 16a-1(f) under the 1934 Act
(hereinafter referred to as "Officers"), under the Plan;

                  (2)      Materially increase the number of Common Shares which
may be issued to directors and Officers under the Plan; or

                  (3)      Materially modify the requirements as to eligibility
for directors and Officers to participate in the Plan;

         (b)      With respect to ISOs, any amendment which would:

                  (1)      Change the class of employees eligible to participate
in the Plan;

                  (2)      Except as permitted under Section 7 hereof, increase
the maximum number of Common Shares with respect to which ISOs may be granted
under the Plan; or

                  (3)      Extend the duration of the Plan under Section 10
hereof with respect to any ISOs granted hereunder; and

         (c)      Any amendment which would require shareholder approval
pursuant to Treasury Regulation Section 1.162-27(e)(4)(vi), or any successor
thereto.

         Notwithstanding the foregoing, no such suspension, discontinuance or
amendment shall materially impair the rights of any holder of an outstanding
Option without the consent of such holder.

<PAGE>

                                   SECTION 10
                               TERMINATION OF PLAN

         Unless earlier terminated as provided in the Plan, the Plan and all
authority granted hereunder shall terminate absolutely at 12:00 midnight on
December 12, 2004, which date is within ten years after the date the Plan was
adopted by the Board, and no Options hereunder shall be granted thereafter.
Nothing contained in this Section 10, however, shall terminate or affect the
continued existence of rights created under Options issued hereunder and
outstanding on December 12, 2004 which by their terms extend beyond such date.

                                   SECTION 11
                                 EFFECTIVE DATE

         This Plan became effective on December 13, 1994 (the date the Plan was
adopted by the Board), and was approved by shareholders on February 14, 1995. As
amended and restated, the Plan shall be effective March 21, 2003.

                                   SECTION 12
                                  MISCELLANEOUS

         (a)      GOVERNING LAW. The Plan and the Grant Letters entered into,
and the Options granted thereunder, shall be governed by the applicable Code
provisions to the maximum extent possible. Otherwise, the operation of, and the
rights of Key Employees under, the Plan, the Grant Letters, and the Options
shall be governed by applicable federal law and otherwise by the laws of the
Commonwealth of Pennsylvania.

         (b)      RIGHTS. Neither the adoption of the Plan nor any action of the
Board or the Committee shall be deemed to give any individual any right to be
granted an Option, or any other right hereunder, unless and until the Committee
shall have granted such individual an Option, and then his or her rights shall
be only such as are provided by this Plan and the Grant Letter.

         Any Option under the Plan shall not entitle the holder thereof to any
rights as a shareholder of the Company prior to the exercise of such Option and
the issuance of the shares pursuant thereto. Further, notwithstanding any
provisions of the Plan or any Grant Letter with a Key Employee, the Company
shall have the right, in its discretion, to retire a Key Employee at any time
pursuant to its retirement rules or otherwise to terminate his or her employment
at any time for any reason whatsoever.

         (c)      NO OBLIGATION TO EXERCISE OPTION. The granting of an Option
shall impose no obligation upon a Key Employee to exercise such Option.

         (d)      NON-TRANSFERABILITY. No Option which is to remain an ISO and,
except as otherwise provided by the Committee, no other Option shall be
assignable or transferable by the Key Employee otherwise than by will or by the
laws of descent and distribution, and subject to the preceding clause, during
the lifetime of the Key Employee, any Options shall be exercisable only by him
or her or by his or her guardian or legal representative. If a Key Employee is
married at the time of exercise of an Option and if the Key Employee so requests
at the time of exercise, the certificate or certificates issued shall be
registered in the name of the Key Employee and the Key Employee's spouse,
jointly, with right of survivorship.

         (e)      WITHHOLDING AND USE OF SHARES TO SATISFY TAX OBLIGATIONS. The
obligation of the Company to deliver Common Shares to a Key Employee pursuant to
any Option under the Plan shall be subject to applicable federal, state and
local tax withholding requirements.

<PAGE>

         With respect to Options granted on or after May 16, 2000, in order to
satisfy the withholding requirements of applicable federal tax laws, Key
Employees may satisfy the minimum required federal withholding tax, in whole or
in part, by returning to the Company Common Shares, which shares shall be
valued, for this purpose, at their Fair Market Value on the date of exercise of
the Option (or if later, the date on which the Key Employee recognizes ordinary
income with respect to such exercise) ("Determination Date"). Alternatively, the
Committee, in its discretion, may permit the Key Employee to satisfy the minimum
required federal withholding tax, in whole or in part, by electing to have the
Company withhold Common Shares. An election to use Common Shares to satisfy tax
withholding requirements must be made in compliance with and subject to any
withholding rules adopted by the Committee. The Company may not withhold shares
in excess of the number necessary to satisfy the minimum required federal income
tax withholding requirements. In the event Common Shares acquired under the
exercise of an Option, granted under this Plan or any other plan of the Company,
are used to satisfy such withholding requirement, such Common Shares must have
been held by the Key Employee for such period of time as required to be
considered "mature" shares for purposes of accounting treatment; provided,
however, with respect to Options granted prior to May 16, 2000, in the event
Common Shares acquired under the exercise of an ISO, granted under this Plan or
any other plan of the Company, are used to satisfy such withholding
requirements, such Common Shares must have been held by the Key Employee for a
period of not less than the holding period described in section 422(a)(1) of the
Code on the Determination Date, or if such Common Shares were acquired through
exercise of an NQSO, granted under the Plan or any other plan of the Company,
such option must have been granted to the Key Employee at least six (6) months
prior to the Determination Date.

         (f)      LISTING AND REGISTRATION OF SHARES. Each Option shall be
subject to the requirement that, if at any time the Committee shall determine,
in its discretion, that the listing, registration or qualification of the shares
covered thereby upon any securities exchange or under any state or federal law,
or the consent or approval of any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with, the granting of such Option
or the purchase or vesting of shares thereunder, or that action by the Company
or by the Key Employee should be taken in order to obtain an exemption from any
such requirement, no such Option may be exercised, in whole or in part, unless
and until such listing, registration, qualification, consent, approval, or
action shall have been effected, obtained, or taken under conditions acceptable
to the Committee. Without limiting the generality of the foregoing, each Key
Employee or his or her legal representative or beneficiary may also be required
to give satisfactory assurance that shares purchased upon exercise of an Option
are being purchased for investment and not with a view to distribution, and
certificates representing such shares may be legended accordingly.

         (g)      MODIFICATION OF OPTION. With respect to Options outstanding on
February 9, 1999, and to Options granted on and after such date, notwithstanding
any provisions of this Plan to the contrary (other than Section 7), the option
price of an outstanding Option shall not, without the prior approval of the
Company's stockholders, be reduced whether through amendment, cancellation,
replacement grants, or other similar means; provided, however, that this shall
not preclude the grant, in accordance with the provisions of this Plan, of
additional Options: (1) not in replacement, in whole or in part, of cancelled
Options, or (2) following expiration of Options.

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