Document:

<PAGE>

                                                                   EXHIBIT 10.21

                          First Amended and Restated
                        Total Renal Care Holdings, Inc.
                         1995 Equity Compensation Plan

     1.   Purpose.  The purpose of the Total Renal Care Holdings, Inc. 1995
          -------
Equity Compensation Plan ("Plan") is to promote the interests of Total Renal
Care Holdings, Inc. ("Company") and its shareholders by enabling the Company to
offer Participants an opportunity to acquire an equity interest in the Company
so as to better attract, retain, and reward employees, directors, and other
persons providing services to the Company and, accordingly, to strengthen the
mutuality of interests between those persons and the Company's shareholders by
providing those persons with a proprietary interest in pursuing the Company's
long-term growth and financial success.

     2.   Definitions.  For purposes of this Plan, the following terms shall
          -----------
have the meanings set forth below.

          (a)  "Board" means the Board of Directors of Total Renal Care
      Holdings, Inc.

          (b)  "Code" means the Internal Revenue Code of 1986, as amended.
      Reference to any specific section of the Code shall be deemed to be a
      reference to any successor provision.

          (c)  "Committee" means the administrative Committee of this Plan that
      is provided in Section 3 below.

          (d)  "Common Stock" means the common stock of Total Renal Care
      Holdings, Inc. or any security issued in substitution, exchange, or in
      lieu thereof.

          (e)  "Company" means Total Renal Care Holdings, Inc., a Delaware
      corporation, or any successor corporation.  Except where the context
      indicates otherwise, the term "Company" shall include its Parent and
      Subsidiaries.

          (f)  "Disabled" means permanent and total disability, as defined in
      Code Section 22(e)(3).

          (g)  "Exchange Act" means the Securities Exchange Act of 1934.

          (h)  "Fair Market Value" shall mean, on any given day, the closing
      price for the Common Stock on that day, or if the Common Stock was not
      traded on that day, on the next preceding day on which the Common Stock
      was traded, determined in accordance with the following rules.
<PAGE>

               (i)    If the Common Stock is admitted to trading or listed on a
          national securities exchange, the closing price for any day shall be
          the last reported sale price regular way, or if no such reported sale
          takes place on that day, the average of the last reported bid and ask
          prices regular way, in either case on the principal national
          securities exchange on which the Common Stock is admitted to trading
          or listed.

               (ii)   If not listed or admitted to trading on any national
          securities exchange, the last sale price on that day of the Common
          Stock reported on the Nasdaq National Market of the Nasdaq Stock
          Market ("Nasdaq National Market") or, if no such reported sale takes
          place on that day, the average of the closing bid and ask prices on
          that day.

               (iiI)  If not included in the Nasdaq National Market, the average
          of the closing bid and ask prices of the Common Stock on that day
          reported by The Nasdaq Stock Market, or any comparable system on that
          day.

               (iv)   If the Common Stock is not included in the Nasdaq Stock
          Market or any comparable system, the closing bid and ask prices on
          that day as furnished by any member of the National Association of
          Securities Dealers, Inc. selected from time to time by the Company for
          that purpose.

     In the case of an Incentive Stock Option, "Fair Market Value" shall be
     determined without reference to any restriction other than one that, by its
     terms, will never lapse.

          (i)  "Incentive Stock Option" means an option to purchase Common Stock
     that is an incentive stock option under Section 422 of the Code.

          (j)  "Insider" means a person who is subject to Section 16 of the
     Exchange Act.

          (k)  "Non-Qualified Stock Option" means any option to purchase Common
     Stock that is not an Incentive Stock Option.

          (l)  "Option" means an Incentive Stock Option or a Non-Qualified Stock
     Option.

          (m)  "Parent" shall mean any corporation (other than the Company) in
     an unbroken chain of corporations ending with the Company if each of the
     corporations (other than the Company) owns stock possessing fifty percent
     (50%) or more of the total combined voting power of all classes of stock in
     one of the other corporations in the chain, as determined in accordance
     with the rules of Code Section 424(e).

                                      -2-
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          (n)  "Participant" means a person who was been granted an Option or
     Restricted Stock.

          (o)  "Plan" means this Total Renal Care Holdings, Inc. 1995 Equity
     Compensation Plan, as it may be amended from time to time.

          (p)  "Restricted Stock" means shares of Common Stock issued under
     Section 8 below that are subject to restrictions on ownership.

          (q)  "Severance" means, with respect to a Participant, the termination
     of the Participant's provision of services to the Company as an employee,
     director, or independent contractor, whether by reason of death,
     disability, retirement, or any other reason. For purposes of determining
     the exercisability of an Incentive Stock Option, a Participant who is on a
     leave of absence that exceeds ninety (90) days will be considered to have
     incurred a Severance on the ninety-first (91st) day of the leave of
     absence, unless the Participant's rights to reemployment are guaranteed by
     statute or contract. However, a Participant will not be considered to have
     incurred a Severance because of a transfer of employment between the
     Company and a Subsidiary or a Parent (or vice versa).

          (r)  "Subsidiary" shall mean any corporation (other than the Company)
     in an unbroken chain of corporations beginning with the Company if each of
     the corporations (other than the last corporation in the unbroken chain)
     owns stock possessing fifty percent (50%) or more of the total combined
     voting power of all classes of stock in one of the other corporations in
     the chain, as determined in accordance with the rules of Code Section
     424(f).

          (s)  "Ten Percent Shareholder" means any person who owns (after taking
     into account the constructive ownership rules of Section 424(d) of the
     Code) more than ten percent (10%) of the stock of Total Renal Care
     Holdings, Inc. or of any of its Parents or Subsidiaries.

     3.   Administration.
          --------------

          (a)  This Plan shall be administered by a Committee appointed by the
     Board.  The Board may remove members from, or add members to, the Committee
     at any time.  The Committee shall be composed of individuals in a manner
     that complies with Rule 16b-3 under the Exchange Act and with Code Section
     162(m).

          (b)  The Committee may conduct its meetings in person or by telephone.
     A majority of the members of the Committee shall constitute a quorum, and
     any action shall constitute the action of the Committee if it is
     authorized by a majority of the members:

                                      -3-
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               (i)   Present at any meeting; or

               (ii)  In writing without a meeting.

          (c)  The Committee is authorized to interpret this Plan and to adopt
     rules and procedures relating to the administration of this Plan. All
     actions of the Committee in connection with the interpretation and
     administration of this Plan shall be binding upon all parties.

          (d)  Subject to the limitations of Sections 9 and 14 below, the
     Committee is expressly authorized to make such modifications to this Plan
     and the Options granted hereunder as are necessary to effectuate the intent
     of this Plan as a result of any changes in the tax, accounting, or
     securities laws treatment of Participants and the Plan.

          (e)  The Committee may delegate its responsibilities to others under
     such conditions and limitations as it may prescribe, except that the
     Committee may not delegate its authority with regard to the granting of
     Options to Insiders.

     4.   Duration of Plan.
          ----------------

          (a)  This Plan shall be effective as of the close of the initial
     public offering of the Common Stock of Total Renal Care Holdings, Inc.,
     provided this Plan is approved by the majority of the Company's
     shareholders, in accordance with the provisions of Code Section 422, within
     twelve (12) months before or after its adoption by the Board. If the Plan
     is not approved by the shareholders within that time period, the Plan and
     all Options issued under the Plan will terminate. The approval by the
     shareholders must relate to:

               (i)  The class of individuals entitled to receive Incentive Stock
          Options; and

               (ii) The aggregate number of shares of Common Stock that may be
            issued under the Plan, except as modified pursuant to Section 12
            below.

     If either of those items are changed, the approval of the shareholders must
     again be obtained.

          (b)  In the event that this Plan is not so approved, this Plan shall
     terminate and any Options granted under this Plan shall be void.

          (c)  This Plan shall terminate on December 17, 1999, except with
     respect to Options then outstanding.

                                      -4-
<PAGE>

     5.   Number of Shares.
          ----------------

          (a)  The aggregate number of shares of Common Stock which may be
     issued pursuant to this Plan shall be one million (1,000,000). This
     aggregate number may be adjusted from time to time as set forth in Section
     12 below. The maximum number of shares that may be issued to a single
     Participant is one million (1,000,000).

          (b)  Upon the forfeiture of shares of Restricted Stock, the forfeited
     shares of Common Stock shall again become available for use under the Plan.
     Upon the expiration or termination of an outstanding Option which shall not
     have been exercised in full, the shares of Common Stock remaining unissued
     under the Option shall again become available for use under the Plan.

          (c)  The Committee shall prescribe such rules as it deems appropriate
     regarding the effect that using Common Stock to:

               (i)   Satisfy the withholding obligations; or

               (ii)  Pay part or all of the exercise price of an Option or the
          purchase price of a grant of Restricted Stock;

      will have upon the maximum number of shares that may be issued under the
      Plan.

      6.  Eligibility.
          -----------

          (a)  Persons eligible to receive grants of Options or Restricted Stock
     under this Plan shall consist of employees, directors, and other persons
     providing services to the Company.  However, Incentive Stock Options may
     only be granted to employees.

          (b)  In the event that the Company acquires another entity, the
     Committee may authorize the issuance of Options ("Substitute Options") to
     the individuals performing services for the acquired entity in substitution
     of stock options previously granted to those individuals in connection with
     their performance of services for the acquired entity upon such terms and
     conditions as the Committee shall determine, taking into account the
     limitations of Code Section 424(a) in the case of a Substitute Option that
     is intended to be an Incentive Stock Option.

     7.   Form of Options.  Options shall be granted under this Plan on such
          ---------------
terms and in such form as the Committee may approve, which shall not be
inconsistent with the provisions of this Plan, and which need not be the same
for each such grant.

                                      -5-
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          (a)  The exercise price per share of Common Stock purchasable under an
     Option shall be set forth in the Option.  However, the exercise price of an
     Incentive Stock Option, determined on the date of the grant, shall be no
     less than:

               (i)   One hundred ten percent (110%) of the Fair Market Value of
          the Common Stock in the case of a Ten Percent Shareholder; or

               (ii)  One hundred percent (100%) of the Fair Market Value of the
          Common Stock in the case of any other employee.

     However, the exercise price of such a substituted Incentive Stock Option
     (issued pursuant to Section 6 above) may be less than the Fair Market Value
     on the grant date.

          (b)  An Option shall be exercisable at such time or times and be
     subject to such terms and conditions as may be set forth in the Option.
     However, no Option shall be exercisable prior to the date this Plan is
     approved by the Company's shareholders, as set forth in Section 4 above.

          (c)  The aggregate Fair Market Value (determined as of the date of
     grant) of the number of shares of Common Stock with respect to which
     Incentive Stock Options are exercisable for the first time by a Participant
     during any calendar year shall not exceed one hundred thousand dollars
     ($100,000) or such other limit as may be required by Code Section 422.

     8.   Restricted Stock.
          ----------------

          (a)  The Committee may issue grants of Restricted Stock, upon such
     terms and conditions as it may deem appropriate, which need not be the same
     for each grant.

          (b)  Restricted Stock may be sold to Participants, or it may be issued
     to Participants without the receipt of any consideration.

          (c)  A Participant shall not have a vested right to the shares subject
     to the grant of Restricted Stock until the satisfaction of the vesting
     requirements specified in the grant.

          (d)  The Participant may not assign or alienate the Participant's
     interest in the shares of Restricted Stock prior to vesting. Otherwise, the
     Participant shall have all of the rights of a shareholder of the Company,
     with respect to the shares received under a grant of Restricted Stock,
     including the right to vote the shares and to receive any cash dividends.
     Stock dividends issued with respect to the shares covered by a grant of
     Restricted Stock shall be treated as additional shares received under the
     grant of Restricted Stock.

                                      -6-
<PAGE>

     9.   Modification of Grants.
          ----------------------

          (a)  The Committee may modify an existing Option, including the right
     to:

               (i)    Change the exercise price;

               (ii)   Accelerate the right to exercise it;

               (iii)  Extend or renew it; or

               (iv)   Cancel it and issue a new Option.

     However, no modification may be made to an Option that would impair the
     rights of the Participant holding the Option without the Participant's
     consent.  The Committee may make similar modifications to grants of
     Restricted Stock.

          (b)  In the event that the Board amends the terms of an Option so that
     it no longer qualifies as an Incentive Stock Option under Code Section 422,
     the limitations imposed upon the Option under the Code and the Plan by
     virtue of it (formerly) qualifying as an Incentive Stock Option shall no
     longer apply, to the extent specified in the amendment.

          (c)  Whether a modification of an existing Incentive Stock Option will
     be treated as the issuance of a new Incentive Stock Option will be
     determined in accordance with the rules of Code Section 424(h).

          (d)  Whether a modification of an existing Option granted to an
     Insider will be treated as a new grant will be determined in accordance
     with Rule 16b-3.

     10.  Termination of Options.
          ----------------------

          (a)  Except to the extent the terms of an Option require its prior
     termination, each Incentive Stock Option shall terminate on the earliest of
     the following dates:

               (i)   The date which is ten (10) years from the date on which the
          Option is granted or five (5) years in the case of an Option granted
          to a Ten Percent Shareholder.

               (ii)  The date which is one (1) year from the date of the
          Severance of the Participant to whom the Option was granted, if the
          Participant was Disabled at the time of Severance.

                                      -7-
<PAGE>

               (iii)  The date which is one (1) year from the date of the
           Severance of the Participant to whom the Option was granted, if the
           Participant's death occurs:

                    (A)  While the Participant is employed by the Company; or

                    (B)  Within three (3) months following the Participant's
               Severance.

               (iv)   In the case of any Severance other than one described in
          Subparagraphs (ii) or (iii) above, the date that is three (3) months
          from the date of the Participant's Severance.

          (b)  The rules contained in Paragraph (a) above do not apply to Non-
     Qualified Stock Options.

     11.  Non-transferability of Grants.
          -----------------------------

          (a)  During the lifetime of the Participant, each Option is
     exercisable only by the Participant.  Options are not assignable or
     transferable except by will or the laws of descent and distribution.

          (b)  Shares of Restricted Stock shall be subject to such restrictions
     as may be imposed in the grants.

     12.  Adjustments
          -----------

          (a)  In the event of any change in the capitalization of the Company
     affecting its Common Stock (e.g., a stock split, reverse stock split, stock
     dividend, recapitalization, combination, or reclassification), the
     Committee shall authorize such adjustments as it may deem appropriate with
     respect to:

               (i)    The aggregate number or kind of shares for which Options
          may be granted under this Plan;

               (ii)   The number or kind of shares covered by each outstanding
          Option; and

                (iii) The exercise price per share in respect of each
          outstanding Option.

          (b)  The Committee may also make such adjustments in the event of a
     spinoff or other distribution) of Company assets to shareholders (other
     than normal cash

                                      -8-
<PAGE>

     dividends.

     13.  Notice of Disqualifying Disposition.  A Participant must notify the
          -----------------------------------
Company if the Participant disposes of stock acquired pursuant to the exercise
of an Incentive Stock Option issued under the Plan prior to the expiration of
the holding periods required to qualify for capital gains treatment on the sale.

     14.  Amendment and Termination.  The Board may at any time amend or
          -------------------------
terminate this Plan.  However, no amendment or termination may impair the rights
of the Participant holding an Option without the Participant's consent.
However, except as may otherwise be permitted under Rule 16b-3 under the 1934
Act, no amendment to the Plan may be adopted without the approval of the
shareholders that would materially:

          (a)  Increase the number of shares that may be issued to Insiders;

          (b)  Increase the benefits accruing to Insiders; or

          (c)  Modify the requirements for Insiders to participate.

     15.  Tax Withholding.
          ---------------

          (a)  The Company shall have the right to take such actions as may be
     necessary to satisfy its tax withholding obligations arising because of
     the operation of this Plan.

          (b)  If Common Stock is used to satisfy the Company's tax withholding
     obligations, the stock shall be its Fair Market Value when the tax
     withholding is required to be made.

      16.  No Additional Rights.
           --------------------

          (a)  Neither the adoption of this Plan nor the granting of any Option
     or Restricted Stock shall:

               (i)   Affect or restrict in any way the power of the Company to
          undertake any corporate action otherwise permitted under applicable
          law; or

               (ii)  Confer upon any Participant the right to continue
          performing services for the Company, nor shall it interfere in any way
          with the right of the Company to terminate the services of any
          Participant at any time, with or without cause.

          (b)  No Participant shall have any rights as a shareholder with
     respect to any

                                      -9-
<PAGE>

     shares covered by an Option granted to the Participant until the date a
     certificate for such shares has been issued to the Participant following
     the exercise of the Option.

     17.  Securities Law Restrictions.
          ---------------------------

          (a)  No shares of Common Stock shall be issued under this Plan unless
     the Committee shall be satisfied that the issuance will be in compliance
     with applicable federal and state securities laws.

          (b)  The Committee may require certain investment or other
     representations and undertakings by the person exercising an Option or
     purchasing Restricted Stock in order to comply with applicable law.

          (c)  Certificates for shares of Common Stock delivered under this Plan
     may be subject to such restrictions as the Committee may deem advisable.
     The Committee may cause a legend to be placed on the certificates to refer
     to these restrictions.

     18.  Indemnification.  To the maximum extent permitted by law, the Company
          ---------------
shall indemnify each member of the Committee and each other member of the Board,
as well as any other employee of the Company with duties under this Plan,
against expenses (including any amount paid in settlement) reasonably incurred
by the individual in connection with any claims against the individual by reason
of the performance of the individual's duties under this Plan, unless the losses
are due to the individual's gross negligence or lack of good faith.

     19.  Governing Law.  This Plan and all actions taken thereunder shall be
          -------------
governed by and construed in accordance with the laws of the State of Delaware.

                                      -10-<PAGE>

                                                                   EXHIBIT 10.22

                        Total Renal Care Holdings, Inc.

                          Employee Stock Purchase Plan

                         1999 Amendment and Restatement
<PAGE>

                               Table of Contents
<TABLE>
<CAPTION>

                                                                                      Page
                                                                                      ----
<C>    <S>                                                                          <C>
Article I  - Purpose and Effective Date..............................................   1

Article II  - Definitions............................................................   1
 2.1   "Account......................................................................   1
 2.2   "Board........................................................................   1
 2.3   "Code.........................................................................   1
 2.4   "Committee....................................................................   1
 2.5   "Common Stock.................................................................   1
 2.6   "Company......................................................................   1
 2.7   "Continuous Employment........................................................   1
 2.8   "Employee.....................................................................   2
 2.9   "Exchange Act"................................................................   2
2.10   "Fair Market Value"...........................................................   2
2.11   "Leave of Absence.............................................................   2
2.12   "Participant..................................................................   2
2.13   "Plan.........................................................................   3
2.14   "Purchase Right...............................................................   3
2.15   "Purchase Right Period........................................................   3
2.16   "Stockholders.................................................................   3
2.17   "Subsidiary...................................................................   3

Article III  - Eligibility and Participation.........................................   3
 3.1   Eligibility...................................................................   3
 3.2   Payroll Withholding...........................................................   3
 3.3   Limitations...................................................................   4
 3.4   Granting of Purchase Rights...................................................   4
 3.5   Establishment of Accounts.....................................................   5

Article IV  - Purchase Rights........................................................   5
 4.1   Termination of Purchase Rights................................................   5
 4.2   Exercise of Purchase Rights...................................................   5
 4.3   Termination Event.............................................................   6
 4.4   Non-Transferability of Purchase Rights........................................   6

Article V  - Common Stock............................................................   6
 5.1   Shares Subject to Plan........................................................   6
 5.2   Adjustment Upon Changes in Capitalization.....................................   7

</TABLE>

                                       i
<PAGE>

<TABLE>

<S>          <C>                                                                      <C>
Article VI  - Plan Administration....................................................   7

 6.1   Administration................................................................   7
 6.2   Indemnification...............................................................   8

Article VII  - Amendment and Termination.............................................   8
 7.1   Amendment and Termination.....................................................   8
 7.2   Shareholder Approval..........................................................   8

Article VIII  - Miscellaneous Matters................................................   9
 8.1   Uniform Rights and Privileges.................................................   9
 8.2   Application of Proceeds.......................................................   9
 8.4   No Additional Rights..........................................................   9
 8.5   Governing Law.................................................................   9
</TABLE>

                                      ii
<PAGE>

                        Total Renal Care Holdings, Inc.
                         Employee Stock Purchase Plan

                                   Article I
                           Purpose and Effective Date

     The purpose of the Plan is to provide incentives for, and to encourage
stock ownership by, Employees of Total Renal Care Holdings, Inc. or any of its
Subsidiaries whose Employees participate in the Plan in order to increase their
proprietary interest in the success of the Company.

     The effective date of this 1999 Amendment and Restatement of the Plan is
November 9, 1999.

                                   Article II
                                  Definitions

     Whenever capitalized in the text, the following terms shall have the
meanings set forth below.

      2.1 "Account" shall mean the account established pursuant to Section 3.5
           -------
to hold a Participant's contributions to the Plan.

      2.2 "Board" shall mean the Board of Directors of Total Renal Care
           -----
Holdings, Inc.

      2.3 "Code" shall mean the Internal Revenue Code of 1986, as amended.
           ----
Reference to any specific section of the Code shall be deemed to be a reference
to any successor provision.

      2.4 "Committee" shall mean the Board of Total Renal Care Holdings, Inc. or
           ---------
a committee designated by the Board to administer the Plan.

      2.5 "Common Stock" shall mean the common stock of Total Renal Care
           ------------
Holdings, Inc.

      2.6 "Company" shall mean Total Renal Care Holdings, Inc., a Delaware
           -------
corporation, as well as any Subsidiary whose employees participate in the Plan
with the consent of the Board.

      2.7 "Continuous Employment" shall mean employment without interruption by
           ---------------------
the Company.  Employment shall not be considered interrupted because of:
<PAGE>

          (a) Transfers of employment between the Company and a Subsidiary (or
     vice versa); or

          (b)  Any Leave of Absence.

     2.8 "Employee" shall mean any person employed by the Company.  This term
          --------
does not include directors unless they are employed by the Company in a position
in addition to their duties as a director.

     2.9 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
          ------------
amended.

     2.10 "Fair Market Value" shall mean, on any given day, the closing price
           -----------------
for the Common Stock on that day, or if the Common Stock was not traded on that
day, on the next preceding day on which the Common Stock was traded, determined
in accordance with the following rules.

          (a) If the Common Stock is admitted to trading or listed on a national
     securities exchange, the closing price for any day shall be the last
     reported sale price regular way, or if no such reported sale takes place on
     that day, the average of the last reported bid and ask prices regular way,
     in either case on the principal national securities exchange on which the
     Common Stock is admitted to trading or listed.

          (b) If not listed or admitted to trading on any national securities
     exchange, the last sale price on that day of the Common Stock reported on
     the Nasdaq National Market of the Nasdaq Stock Market ("Nasdaq National
     Market") or, if no such reported sale takes place on that day, the average
     of the closing bid and ask prices on that day.

          (c) If not included in the Nasdaq National Market, the average of the
     closing bid and ask prices of the Common Stock on that day reported by The
     Nasdaq Stock Market, or any comparable system on that day.

          (d) If the Common Stock is not included in the Nasdaq Stock Market or
     any comparable system, the closing bid and ask prices on that day as
     furnished by any member of the National Association of Securities Dealers,
     Inc. selected from time to time by the Company for that purpose.

     2.11 "Leave of Absence" shall mean an unpaid leave of absence taken in
           ----------------
accordance with the Company's leave of absence policy.  A Participant will not
be considered to have incurred a break in Continuous Employment because of a
Leave of Absence that does not exceed ninety (90) days.  If the Leave of Absence
exceeds ninety (90) days, the Participant will be deemed to have incurred a
break in Continuous Employment on the ninety-first (91st) day, unless the
Participant's rights to reemployment are guaranteed by statute or contract.

                                      -2-
<PAGE>

      2.12 "Participant" shall mean an Employee who has been granted a Purchase
            -----------
Right under the Plan.

      2.13  "Plan" shall mean the 1999 Amendment and Restatement of the Total
             ----
Renal Care Holdings, Inc. Employee Stock Purchase Plan.

      2.14  "Purchase Right" shall mean a right to purchase Common Stock granted
            --------------
pursuant to the Plan.

      2.15  "Purchase Right Period" shall mean the period beginning on January 1
            ---------------------
or July 1 (whichever is applicable) and terminating on the immediately following
December 31.  (But see Section 43 for special rules regarding the termination of
a Purchase Right Period.)

      2.16  "Stockholders" shall mean the holders of Common Stock.
            ------------

      2.17  "Subsidiary" shall mean any corporation (other than the Company) in
             ----------
an unbroken chain of corporations beginning with the Company if each of the
corporations (other than the last corporation in the unbroken chain) owns stock
possessing fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in the chain.

                                  Article III
                         Eligibility and Participation

      3.1 Eligibility.
          -----------

          (a) All Employees of the Company who are scheduled to work at least
     twenty (20) hours per week are eligible to participate in the Plan,
     provided they have completed at least three (3) months of Continuous
     Employment prior to the first day of the Purchase Right Period.

          (b) No Employee may be granted a Purchase Right if the Employee would
     immediately thereafter own, directly or indirectly, five percent (5%) or
     more of the combined voting power or value of all classes of stock of the
     Company or of a Subsidiary.  For this purpose, an Employee's ownership
     interest shall be determined in accordance with the constructive ownership
     rules of Code Section 424(d).

      3.2 Payroll Withholding.
          -------------------

          (a) Employees who have satisfied the eligibility conditions of Section
     3.1 may enroll as Participants by executing prior to the commencement of
     each Purchase Right Period a form provided by the Committee on which they
     designate:

                                      -3-
<PAGE>

               (i)  The dollar amount (not a percentage of compensation) to be
          deducted from their paychecks and contributed to their Accounts for
          the purchase of Common Stock, which shall not be less than ten dollars
          ($10) per payroll period; and/or

               (ii)  The amount of funds, if any, which they will deposit at the
          beginning of the Purchase Right Period for the purchase of Common
          Stock.

          (b) Once chosen, the rate of contributions for a Purchase Right Period
     cannot be decreased or increased without terminating the Purchase Right.
     However, pursuant to rules and procedures prescribed by the Committee, a
     Participant may make additional contributions to make up for amounts that
     he or she failed to make while on a Leave of Absence if the Participant
     returns to active employment and contributes those amounts before the end
     of the Purchase Right Period.

      3.3 Limitations.
          -----------

          (a) Notwithstanding anything herein to the contrary, a Participant may
     not accrue a right to purchase shares of Common Stock at a rate that
     exceeds twenty-five thousand dollars ($25,000) per calendar year,
     determined in a manner consistent with Code Section 423(b)(8).

          (b) This limitation shall apply to the Participant's right to purchase
     Common Stock under the Plan and under all other employee stock purchase
     plans described in Code Section 423 that are maintained by the Company and
     its Subsidiaries.

          (c) This dollar limitation applies to the Fair Market Value of Common
     Stock determined at the time the Purchase Right is granted.

      3.4 Granting of Purchase Rights.  The price at which each share covered by
          ---------------------------
a Purchase Right will be purchased will in all instances be the lesser of:

          (a) One hundred percent (100%) of the Fair Market Value of a share of
     Common Stock on the first day of the applicable Purchase Right Period; or

          (b) Eighty-five percent (85%) of the Fair Market Value of a share of
     Common Stock on the last day of that Purchase Right Period.

However, in no event will the maximum number of shares that can be purchased
pursuant to the provisions of this Section 3.4 in a single Purchase Right Period
exceed twenty-five thousand (25,000).

                                      -4-
<PAGE>

      3.5 Establishment of Accounts.
          -------------------------

          (a) All amounts contributed by the Participant to the Plan (whether by
     means of payroll withholding or a lump sum advance contribution) will be
     deposited into a separate Account maintained for the Participant.

          (b) No interest will be earned on those contributions.

          (c) A Participant may not withdraw any amounts from his or her Account
     without terminating his or her Purchase Right pursuant to Section 4.1
     below.

                                   Article IV
                                Purchase Rights

      4.1 Termination of Purchase Rights.
          ------------------------------

          (a) A Participant may withdraw from the Plan at any time prior to the
     last day of the Purchase Right Period by submitting a form prescribed by
     the Committee to the Human Resources Department of the Company at the
     Corporate Office in Torrance, California.  The Participant's Purchase Right
     shall terminate upon withdrawal from the Plan.

          (b) A Purchase Right shall terminate automatically if the Participant
     holding the Purchase Right ceases to be employed by the Company for any
     reason (including death, disability, or retirement) prior to the last day
     of the Purchase Right Period.

          (c) Upon the termination of a Purchase Right, all amounts held in the
     Participant's Account shall be refunded to the Participant.

      4.2 Exercise of Purchase Rights.
          ---------------------------

          (a) Unless previously terminated, Purchase Rights will be exercised
     automatically on the last day of the Purchase Right Period.

          (b) Except as provided in Paragraph (b) of Section 3.2 above, payment
     for shares to be purchased at the termination of the Purchase Right Period
     may only be made from funds:

               (i)   Deposited at the beginning of a Purchase Right Period;
          and/or

               (ii)  Accumulated through payroll deductions made during the
          Purchase Right Period.

                                      -5-
<PAGE>

          (c) If the amount in the Participant's Account at the end of the
     Purchase Right Period is insufficient to purchase all the shares covered by
     the Purchase Right granted to the Participant, those funds will be used to
     purchase as many whole shares as possible.

          (d) If the balance of the Participant's Account on the date of
     purchase exceeds the purchase price of the whole number of shares to be
     acquired, the surplus shall be applied to the next Purchase Right Period,
     unless the Participant elects to receive a refund by submitting a form
     prescribed by the Committee to the Human Resources Department of the
     Company at the Corporate Office in Torrance, California.

          (e) Stock certificates will be distributed within forty-five (45) days
     following the date of the exercise of the Purchase Right.

      4.3 Termination Event.  The following provisions of this Section 4.3 shall
          -----------------
apply, notwithstanding anything herein to the contrary.

          (a) A "Termination Event" shall be deemed to occur as a result of (i)
     a transaction in which the Company will cease to be an independent
     publicly-owned corporation or (ii) a sale or other disposition of all or
     substantially all the assets of the Company.

          (b) All Purchase Rights shall be automatically exercised immediately
     preceding the Termination Event. In such an event, for purposes of applying
     the rules of Paragraph (b) of Section 3.4, the Fair Market Value of the
     Common Stock on that date shall be deemed to be the consideration paid for
     the Common Stock in the transaction.

      4.4 Non-Transferability of Purchase Rights.  A Purchase Right may not be
          --------------------------------------
assigned or alienated other than by will and the laws of descent and
distribution.

                                   Article V
                                  Common Stock

      5.1 Shares Subject to Plan.
          ----------------------

          (a) Effective November 9, 1999, the maximum number of shares of Common
     Stock which may be issued under the Plan is one million, three hundred
     thirty-three thousand, three hundred and three  (1,133,333). The number of
     these shares shall be subject to adjustment under Section 5.2 below.

          (b) If any outstanding Purchase Right is terminated for any reason
     prior to its exercise, the shares subject to the Purchase Right will again
     become subject to purchase

                                      -6-
<PAGE>

     under the Plan.

          (c) The Common Stock issuable under the Plan may be previously
     unissued or may have been reacquired by the Company in the open market (or
     otherwise).

      5.2 Adjustment Upon Changes in Capitalization.  Subject to the provisions
          -----------------------------------------
of Section 4.3, a proportionate adjustment shall be made by the Committee in the
number, price, and kind of shares subject to outstanding Purchase Rights if the
outstanding shares of Common Stock are increased, decreased, or exchanged for
different securities, through reorganization, merger, consolidation,
recapitalization, reclassification, stock split, stock dividend, or other
similar transaction.

                                   Article VI
                              Plan Administration

      6.1 Administration.
          --------------

          (a) The Plan shall be administered by the Committee.  The Committee
     shall have authority to:

               (i)   Interpret the Plan;

               (ii)  Prescribe rules and procedures relating to the Plan; and

               (iii) Take all other actions necessary or appropriate in
          connection with the administration of the Plan.

          (b) A majority of the members of the Committee shall constitute a
     quorum, and any action shall constitute the action of the Committee if it
     is authorized by a majority of the members:

               (i)   Present at any meeting; or

               (ii)  In writing without a meeting.

          (c) All decisions of the Committee shall be final and binding on all
     Participants.

          (d) No member of the Committee shall be liable for any action or
     inaction taken in good faith with respect to the Plan or any Purchase Right
     granted under it.

                                      -7-
<PAGE>

      6.2 Indemnification.
          ---------------

          (a)  To the maximum extent permitted by law, the Company shall
     indemnify each member of the Committee and each other member of the Board,
     as well as any other Employee with duties under the Plan, against expenses
     (including any amount paid in settlement or in satisfaction of a judgment)
     reasonably incurred by the individual in connection with any claims against
     the individual by reason of the performance of the individual's duties
     under the Plan.  This indemnity shall not apply, however, if:

               (i) It is determined in the action, lawsuit, or proceeding that
          the individual is guilty of gross negligence or intentional misconduct
          in the performance of those duties; or

               (ii) The individual fails to assist the Company in defending
          against any such claim.

          (b) Notwithstanding the above, the Company shall have the right to
     select counsel and to control the prosecution or defense of the suit.
     Furthermore, the Company shall not be obligated to indemnify any individual
     for any amount incurred through any settlement or compromise of any action
     unless the Company consents in writing to the settlement or compromise.

                                  Article VII
                           Amendment and Termination

      7.1 Amendment and Termination.  The Board may amend or terminate the Plan
          -------------------------
at any time by means of written action, except with respect to outstanding
Purchase Rights.

      7.2 Stockholder Approval.  No additional shares of Common Stock shall be
          --------------------
issued solely as a result of the adoption of the 1999 Amendment and Restatement
of the Plan unless the Plan is approved by the Stockholders within twelve (12)
months before or after the date of its adoption by the Board, which is November
9, 1999.   If the 1999 Amendment and Restatement is not approved by the
Stockholders within that time period, the prior version of the Plan will remain
in effect. The approval by the Stockholders must relate to:

          (a) The class of individuals eligible to participate; and

          (b) The aggregate number of shares to be granted under the Plan.

If either of those items are changed, approval of the Stockholders must again be
obtained.

                                      -8-
<PAGE>

                                  Article VII
                             Miscellaneous Matters

      8.1 Uniform Rights and Privileges.  The rights and privileges of all
          -----------------------------
Participants under the Plan shall be the same.

      8.2 Application of Proceeds.  The proceeds received by the Company from
          -----------------------
the sale of Common Stock pursuant to Purchase Rights may be used for any
corporate purpose.

      8.3 Notice of Disqualifying Disposition.  A Participant must notify the
          -----------------------------------
Company if the Participant disposes of stock acquired pursuant to the Plan prior
to the expiration of the holding periods required to qualify for capital gains
treatment on the sale.

      8.4 No Additional Rights.
          --------------------

          (a)  Neither the adoption of this Plan nor the granting of any
      Purchase Right shall:

               (i)  Affect or restrict in any way the power of the Company to
          undertake any corporate action otherwise permitted under applicable
          law; or

               (ii) Confer upon any Participant the right to continue to be
          employed by the Company, nor shall it interfere in any way with the
          right of the Company to terminate the employment of any Participant at
          any time, with or without cause.

          (b) No Participant shall have any rights as a Shareholder with respect
     to any shares covered by a Purchase Right granted to the Participant until
     the Common Stock is actually issued to the Participant.

          (c) No adjustments will be made for cash dividends or other rights for
     which the record date is prior to the issuance of the Common Stock.

      8.5 Governing Law.
          -------------

          (a) The Plan and all actions taken under it shall be governed by and
     construed in accordance with the laws of the State of Delaware.

          (b) The provisions of this Plan shall be interpreted in a manner that
     is consistent with this Plan satisfying the requirements of Code Section
     423.

                                      -9-

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