Document:

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                                                                    Exhibit 10.1

                              APPNET SYSTEMS, INC.

                            1999 STOCK INCENTIVE PLAN

                               AS OF JUNE 17, 1999

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                              APPNET SYSTEMS, INC.

                            1999 STOCK INCENTIVE PLAN

         1.       PURPOSE.

                  The purpose of this Plan is to strengthen AppNet Systems,
Inc., a Delaware corporation (the "Company"), by providing an incentive to its
employees, officers, directors and consultants and thereby encouraging them to
devote their abilities and industry to the success of the Company's business
enterprise. It is intended that this purpose be achieved by extending to
employees (including future employees who have received a formal written offer
of employment), officers, directors, and consultants of the Company and its
Subsidiaries an added long-term incentive for high levels of performance and
unusual efforts through the grant of Incentive Stock Options, Nonqualified Stock
Options, Formula Options, Stock Appreciation Rights, Dividend Equivalent Rights,
Performance Awards, Share Awards, Phantom Stock and Restricted Stock (as each
term is herein defined).

         2.       DEFINITIONS.

                  For purposes of the Plan:

                  2.1  "ADJUSTED FAIR MARKET VALUE" means, in the event of a
Change in Control, the highest price per Share paid to holders of the Shares in
any transaction (or series of related transactions) constituting or resulting in
a Change in Control other than pursuant to Section 2.10(b).

                  2.2  "AFFILIATE" means, with respect to any Person, any other
Person that, directly or indirectly through one or more intermediaries,
controls, or is controlled by, or under common control with, such Person. Any
Relative (for this purpose, "Relative" means a spouse, child, parent, parent of
spouse, sibling or grandchild) of an individual shall be deemed to be an
Affiliate of such individual for purposes hereof. Neither the Company nor any
Person controlled by the Company shall be deemed to be an Affiliate of any
holder of Company stock.

                  2.3  "AGREEMENT" means the written agreement between the
Company and an Optionee or Grantee evidencing the grant of an Option or Award
and setting forth the terms and conditions thereof.

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                  2.4  "AWARD" means a grant of Restricted Stock, Phantom Stock,
a Stock Appreciation Right, a Performance Award, a Dividend Equivalent Right, a
Share Award, or any or all of them.

                  2.5  "BENEFICIAL OWNERSHIP" means ownership within the meaning
of Rule 13d-3 promulgated under the Exchange Act.

                  2.6  "BENEFICIARY" means an individual, trust or estate who or
which, by a written designation of the Optionee or Grantee filed with the
Company by operation of law succeeds to the rights and obligations of the
Optionee or Grantee under the Plan and an Agreement upon the Optiontee's or
Grantee's death.

                  2.7  "BOARD" means the Board of Directors of the Company.

                  2.8  "CAUSE" means:

                       (a) for purposes of Section 6.4, the term "Cause"
shall mean (i) intentional failure to perform duties as a Director, (ii)
intentional misrepresentation or the commission of an act of fraud in the
performance of such duties, (iii) breach of fiduciary duty involving personal
profit including, without limitation, embezzlement, misappropriation or
conversion of assets or opportunities of the Company or any of its
Subsidiaries or (iv) willful violation of any law, rule or regulation (other
than traffic violations or similar offenses) in connection with the
performance of duties as a Director; PROVIDED, HOWEVER, that if the term
"Cause" is defined in the Articles of Incorporation of the Company, Cause
shall have the meaning given such term in such Articles, or

                       (b) in the case of an Optionee or Grantee whose
employment with the Company or a Subsidiary is, as the date of the applicable
Agreement, subject to the terms of an employment agreement between such
Optionee or Grantee and the Company or Subsidiary, which employment agreement
includes a definition of "Cause," the term "Cause" as used in this Plan or
any Agreement shall have the meaning set forth in such employment agreement
during the period that such employment agreement remains in effect; or

                       (c) in all other cases, the term "Cause" as used in
this Plan or any Agreement shall mean (i) intentional failure to perform
reasonably assigned duties, (ii) dishonesty or willful misconduct in the
performance of duties, (iii) involvement in a transaction in connection with
the performance of duties to the Company or any of its Subsidiaries which
transaction is adverse to the interests of the Company or any of its
Subsidiaries and which is engaged in for personal profit or (iv) willful
violation of any law, rule or regulation (other than traffic violations or
similar offenses) in connection with the performance of duties.

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                  2.9  "CHANGE IN CAPITALIZATION" means any increase or
reduction in the number of Shares, or any change (including, without
limitation, in the case of a spin-off, dividend or other distribution in
respect of Shares, a change in value) in the Shares or exchange of Shares for
a different number or kind of shares or other securities of the Company or
another corporation, by reason of a reclassification, recapitalization,
merger, consolidation, reorganization, spin-off, split-up, issuance of
warrants or rights or debentures, stock dividend, stock split or reverse
stock split, cash dividend, property dividend, combination or exchange of
shares, repurchase of shares, change in corporate structure or a
substantially similar transaction.

                  2.10 A "CHANGE IN CONTROL" shall mean the occurrence of any
of the following:

                       (a) An acquisition in one transaction or a series of
related transactions (other than directly from the Company or pursuant to
Options or Awards granted under this Plan or otherwise by the Company) of any
Voting Securities of the Company by any Person, immediately after which such
Person has Beneficial Ownership of fifty percent (50%) or more of the
combined voting power of the Company's then outstanding Voting Securities;
PROVIDED, HOWEVER, in determining whether a Change in Control has occurred
pursuant to this Section 2.10(a), Voting Securities which are acquired in a
"Non-Control Acquisition" (as hereinafter defined) shall not constitute an
acquisition which would cause a Change in Control. A "Non-Control
Acquisition" shall mean an acquisition by (i) an employee benefit plan (or a
trust forming a part thereof) maintained by (A) the Company or (B) any
corporation or other Person of which a majority of its voting power or its
voting equity securities or equity interest is owned, directly or indirectly,
by the Company (for purposes of this definition, a "Related Entity"), (ii)
the Company or any Related Entity, or (iii) any Person in connection with a
"Non-Control Transaction" (as hereinafter defined);

                       (b) The individuals who, as of the date hereof, are
members of the Board (the "Incumbent Board"), cease for any reason to
constitute at least a majority of the members of the Board; PROVIDED,
HOWEVER, that if the election, or nomination for election by the Company's
common stockholders, of any new director was approved by a vote of at least a
majority of the Incumbent Board, such new director shall, for purposes of
this Plan, be considered as a member of the Incumbent Board; 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 Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than
the Board (a "Proxy Contest") including by reason of any agreement intended
to avoid or settle any Election Contest or Proxy Contest; or

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                       (c) The consummation of:

                           (i) A merger, consolidation or reorganization
                       involving the Company unless:

                                 (A) the stockholders of the Company,
                           immediately  before such merger, consolidation or
                           reorganization, own directly or indirectly
                           immediately following such merger, consolidation
                           or reorganization, more than fifty percent (50%)
                           of the combined voting power of the outstanding
                           voting securities of the corporation resulting
                           from such merger or consolidation or
                           reorganization (the "Surviving Corporation") in
                           substantially the same proportion as their
                           ownership of the Voting Securities immediately
                           before such merger, consolidation or
                           reorganization,

                                 (B) the individuals who were members of the
                           Incumbent Board immediately prior to the
                           execution of the agreement providing for such
                           merger, consolidation or reorganization
                           constitute at least a majority of the members of
                           the board of directors of the Surviving
                           Corporation, or a corporation Beneficially Owning
                           directly or indirectly a majority of the voting
                           securities of the Surviving Corporation, and

                                 (C) no Person other than (1) the Company,
                           (2) any Related Entity, (3) any employee
                           benefit plan (or any trust forming a part
                           thereof) that, immediately prior to such merger,
                           consolidation or reorganization, was maintained
                           by the Company, the Surviving Corporation, or any
                           Related Entity or (4) any Person who, together
                           with its Affiliates, immediately prior to such
                           merger, consolidation or reorganization had
                           Beneficial Ownership of fifty percent (50%) or
                           more of the then outstanding Voting Securities,
                           owns, together with its Affiliates, Beneficial
                           Ownership of fifty percent (50%) or more of the
                           combined voting power of the Surviving
                           Corporation's then outstanding voting securities.

                                 (D) a transaction described in clauses (A)
                           through (C) above shall herein be referred to as
                           a "Non-Control Transaction;"

                           (ii)  A complete liquidation or dissolution of the
                       Company; or

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                           (iii) An agreement for the sale or other
                       disposition of all or substantially all of the
                       assets of the Company to any Person (other than a
                       transfer to a Related Entity or the distribution
                       to the Company's stockholders of the stock of a
                       Related Entity or any other assets).

         Notwithstanding the foregoing, a Change in Control shall not be
deemed to occur solely because any Person (the "Subject Person") acquired
Beneficial Ownership of fifty percent (50%) or more of the combined voting
power of the Company's then outstanding Voting Securities as a result of the
acquisition of Voting Securities by the Company which, by reducing the number
of Voting Securities then outstanding, increases the proportional number of
shares Beneficially Owned by the Subject Persons, provided that if a Change
in Control would occur (but for the operation of this sentence) as a result
of the acquisition of Voting Securities by the Company, and (1) before such
share acquisition by the Company the Subject Person becomes the Beneficial
Owner of any new or additional Voting Securities in a related transaction or
(2) after such share acquisition by the Company the Subject Person becomes
the Beneficial Owner of any new or additional Voting Securities which in
either case increases the percentage of the then outstanding Voting
Securities Beneficially Owned by the Subject Person, then a Change in Control
shall occur.

                  2.11 "CODE" means the Internal Revenue Code of 1986, as
amended.

                  2.12 "COMMITTEE" means a committee, as described in Section
3.1, appointed by the Board from time to time to administer the Plan and to
perform the functions set forth herein.

                  2.13 "COMPANY" means AppNet Systems, Inc.

                  2.14 "DIRECTOR" means a director of the Company.

                  2.15 "DISABILITY" means:

                       (a) in the case of an Optionee or Grantee whose
employment with the Company or a Subsidiary is, as of the date of the
applicable Agreement, subject to the terms of an employment agreement between
such Optionee or Grantee and the Company or Subsidiary, which employment
agreement includes a definition of "Disability," the term "Disability" as
used in this Plan or any Agreement shall have the meaning set forth in such
employment agreement during the period that such employment agreement remains
in effect; or

                       (b) in all other cases, the term "Disability" as
used in this Plan or any Agreement shall mean a physical or mental infirmity
which impairs the Optionee's or

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Grantee's ability to perform substantially his or her duties for a period of
one hundred eighty (180) consecutive days.

                  2.16 "DISABILITY DATE" means the date which is six (6)
months after the date on which an Optionee or Grantee is first absent from
active employment with the Company by reason of a Disability.

                  2.17 "DIVIDEND EQUIVALENT RIGHT" means a right to receive
all or some portion of the cash dividends that are or would be payable with
respect to Shares.

                  2.18 "DIVISION" means any of the operating units or divisions
of the Company designated as a Division by the Committee.

                  2.19 "ELIGIBLE INDIVIDUAL" means any of the following
individuals who is designated by the Committee as eligible to receive Options
or Awards subject to the conditions set forth herein: (a) any director (other
than a Nonemployee Director), officer or employee of the Company or a
Subsidiary, (b) any individual to whom the Company or a Subsidiary has
extended a formal, written offer of employment, or (c) any consultant or
advisor of the Company or a Subsidiary.

                  2.20 "EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended.

                  2.21 "FAIR MARKET VALUE" on any date means the closing
sales prices of the Shares on such date on the principal national securities
exchange on which such Shares are listed or admitted to trading, or, if such
Shares are not so listed or admitted to trading, the average of the per Share
closing bid price and per Share closing asked price on such date as quoted on
the National Association of Securities Dealers Automated Quotation System or
such other market in which such prices are regularly quoted, or, if there
have been no published bid or asked quotations with respect to Shares on such
date, the Fair Market Value shall be the value established by the Board in
good faith and, in the case of an Incentive Stock Option, in accordance with
Section 422 of the Code.

                  2.22 "FORMULA OPTION" means an Option granted pursuant to
Section 6.

                  2.23 "GRANTEE" means a person to whom an Award has been
granted under the Plan.

                  2.24 "INCENTIVE STOCK OPTION" means an Option satisfying the
requirements of Section 422 of the Code and designated by the Committee as an
Incentive Stock Option.

                  2.25 "INITIAL PUBLIC OFFERING" means the consummation of the
first public offering of Shares pursuant to a registration statement (other than
on Form S-8 or successor

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form) filed with, and declared effective by, the Securities and
Exchange Commission.

                  2.26 "NONEMPLOYEE DIRECTOR" means a director of the Company
who is a "nonemployee director" within the meaning of Rule 16b-3 promulgated
under the Exchange Act.

                  2.27 "NONQUALIFIED STOCK OPTION" means an Option which is not
an Incentive Stock Option.

                  2.28 "NORMAL RETIREMENT DATE" means the date on which an
Optionee or Grantee terminates active employment with the Company or a
Subsidiary on or after attainment of age 65, but does not include termination by
the Company or a Subsidiary for Cause.

                  2.29 "OPTION" means a Nonqualified Stock Option, an Incentive
Stock Option, a Formula Option, or any or all of them.

                  2.30 "OPTIONEE" means a person to whom an Option has been
granted under the Plan.

                  2.31 "OUTSIDE DIRECTOR" means a director of the Company who is
an "outside director" within the meaning of Section 162(m) of the Code and the
regulations promulgated thereunder.

                  2.32 "PARENT" means any corporation which is a parent
corporation (within the meaning of Section 424(e) of the Code) with respect to
the Company.

                  2.33 "PERFORMANCE AWARDS" means Performance Units, Performance
Shares or either or both of them.

                  2.34 "PERFORMANCE-BASED COMPENSATION" means any Option or
Award that is intended to constitute "performance based compensation" within the
meaning of Section 162(m)(4)(C) of the Code and the regulations promulgated
thereunder.

                  2.35 "PERFORMANCE CYCLE" means the time period specified by
the Committee at the time Performance Awards are granted during which the
performance of the Company, a Subsidiary or a Division will be measured.

                  2.36 "PERFORMANCE OBJECTIVES" has the meaning set forth
in Section 11.

                  2.37 "PERFORMANCE SHARES" means Shares issued or
transferred to an Eligible Individual under Section 11.

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                  2.38 "PERFORMANCE UNITS" means Performance Units
granted to an Eligible Individual under Section 11.

                  2.39 "PERSON" means `person' as such term is used for purposes
of Section 13(d) or 14(d) of the Exchange Act, including without limitation, any
individual, corporation, limited liability company, partnership, trust,
unincorporated organization, government or any agency or political subdivision
thereof, or any other entity or any group of Persons.

                  2.40 "PHANTOM STOCK" means a right granted to an Eligible
Individual under Section 12 representing a number of hypothetical Shares.

                  2.41 "PLAN" means the AppNet Systems, Inc. 1999 Stock
 Incentive Plan, as amended and restated from time to time.

                  2.42 "POOLING TRANSACTION" means an acquisition of the Company
in a transaction which is intended to be treated as a "pooling of interests"
under generally accepted accounting principles.

                  2.43 "RESTRICTED STOCK" means Shares issued or transferred
to an Eligible Individual pursuant to Section 10.

                  2.44 "SHARE AWARD" means a grant of Shares pursuant to Section
12.

                  2.45 "SHARES" means the common stock, par value $.0005
per share, of the Company.

                  2.46 "STOCK APPRECIATION RIGHT" means a right to receive all
or some portion of the increase in the value of the Shares as provided in
Section 8 hereof.

                  2.47 "SUBSIDIARY" means (i) except as provided in
subsection (ii) below, any corporation which is a subsidiary corporation
(within the meaning of Section 424(f) of the Code) with respect to the
Company, and (ii) with respect to provisions relating to the eligibility to
receive Options or Awards other than Incentive Stock Options and to continued
employment for purposes of Options and Awards (unless the Committee
determines otherwise), any entity, whether or not incorporated, in which the
Company directly or indirectly owns fifty percent (50%) or more of the
outstanding equity or other ownership interests.

                  2.48 "SUCCESSOR CORPORATION" means a corporation, or a parent
or subsidiary thereof, which issues or assumes an Option or Award in a
transaction described in Section 424(a) of the Code without regard to Sections
424(a)(1) and (2) thereof.

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                  2.49 "TAX BENEFIT" means an actual decrease in the Company's
liability for taxes in any period.

                  2.50 "TEN-PERCENT STOCKHOLDER" means an Eligible Individual,
who, at the time an Incentive Stock Option is to be granted to him or her, owns
(within the meaning of Section 422(b)(6) of the Code) stock possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Company, or of a Parent or a Subsidiary.

                  2.51 "TERMINATION OF EMPLOYMENT" means the later of (i)
severance of the employer-employee relationship with the Company or any
Subsidiary or (ii) the resignation, removal or termination of an officer or
Director of the Company or any Subsidiary.

                  2.52 "TRANSITION PERIOD" means the period beginning with an
Initial Public Offering and ending as of the earlier of (i) the date of the
first annual meeting of stockholders of the Company at which Directors are to
be elected that occurs after the close of the third (3rd) calendar year
following the calendar year in which the Initial Public Offering occurs, (ii)
the expiration of the Plan, (iii) a material modification of the Plan within
the meaning of Treasury Regulation Section 1.162-27(h)(1)(iii), or (iv) the
issuance of all Shares that have been allocated under the Plan.

                  2.53 "VOTING SECURITIES" means all outstanding voting
securities of the Company entitled to vote generally in the election of the
Board of Directors.

         3.       ADMINISTRATION.

                  3.1  The Plan shall be administered by the Committee, which
shall be appointed by the Board. The Committee shall hold meetings at such times
as may be necessary for the proper administration of the Plan. The Committee
shall keep minutes of its meetings. A quorum shall consist of a majority of the
members of the Committee and a majority of a quorum may authorize any action.
Any decision or determination reduced to writing and signed by all of the
members of the Committee shall be as fully effective as if made by a majority
vote at a meeting duly called and held. The Committee shall consist of at least
two (2) Directors and may consist of the entire Board; PROVIDED, HOWEVER, that
from and after the date of an Initial Public Offering, (A) if the Committee
consists of less than the entire Board, each member shall be a Nonemployee
Director and (B) to the extent necessary for any Option or Award intended to
qualify as Performance-Based Compensation to so qualify, each member of the
Committee, whether or not it consists of the entire Board, shall be an Outside
Director.

                  3.2  For purposes of the preceding sentence, if one or more
members of the Committee is not a Nonemployee Director and, if necessary for any
Option or Award

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intended to qualify as Performance-Based Compensation to so qualify, an
Outside Director, but recuses himself or herself or abstains from voting with
respect to a particular action taken by the Committee, then the Committee,
with respect to that action, shall be deemed to consist only of the members
of the Committee who have not recused themselves or abstained from voting.
Subject to applicable law, the Committee may delegate its authority under the
Plan to any other person or persons.

                  3.3  No member of the Committee shall be liable for any
action, failure to act, determination or interpretation made in good faith
with respect to this Plan or any transaction hereunder. The Company hereby
agrees to indemnify each member of the Committee for all costs and expenses
and, to the extent permitted by applicable law, any liability incurred in
connection with defending against, responding to, negotiating for the
settlement of or otherwise dealing with any claim, cause of action or dispute
of any kind arising in connection with any actions in administering this Plan
or in authorizing or denying authorization to any transaction hereunder.

                  3.4  Subject to the express terms and conditions set forth
herein, the Committee shall have the power from time to time to:

                       (a) determine those Eligible Individuals to whom
Options shall be granted under the Plan and the number of such Options to be
granted and to prescribe the terms and conditions (which need not be
identical) of each such Option, including the purchase price per Share
subject to each Option, and make any amendment or modification to any Option
Agreement consistent with the terms of the Plan;

                       (b) select those Eligible Individuals to whom Awards
shall be granted under the Plan and to determine the number of Shares in
respect of which each Award is granted, the terms and conditions (which need
not be identical) of each such Award, including the restrictions or
Performance Objectives relating to Awards and the maximum value of any Award,
and make any amendment or modification to any Award Agreement consistent with
the terms of the Plan;

                       (c) construe and interpret the Plan and the Options
and Awards granted hereunder and to establish, amend and revoke rules and
regulations for the administration of the Plan, including, without
limitation, correcting any defect or supplying any omission, or reconciling
any inconsistency in the Plan or in any Agreement, in the manner and to the
extent it shall deem necessary or advisable, including so that the Plan and
the operation of the Plan complies with the Code to the extent applicable and
other applicable law, and otherwise to make the Plan fully effective. All
decisions and determinations by the Committee in the exercise of this power
shall be final, binding and conclusive upon the Company, its Subsidiaries,
the Optionees and Grantees, and all other persons having any interest therein;

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                       (d) determine the duration and purposes for leaves of
absence which may be granted to an Optionee or Grantee on an individual
basis without constituting a termination of employment or service for
purposes of the Plan;

                       (e) exercise its sole discretion with respect to the
powers and rights granted to it as set forth in the Plan; and

                       (f) generally, exercise such powers and to perform
such acts as are deemed necessary or advisable to promote the best interests
of the Company with respect to the Plan.

         4.       STOCK SUBJECT TO THE PLAN; GRANT LIMITATIONS.

                  4.1  The aggregate number of Shares that may be made the
subject of Options and Awards granted under the Plan shall not exceed
2,000,000 plus the additional Shares described in Section 4.2; PROVIDED,
HOWEVER, that the aggregate maximum number of Shares that may be made the
subject of Options and Awards granted under the Plan shall not exceed
10,000,000; and PROVIDED, FURTHER, HOWEVER, that in the aggregate, not more
than one-third of the number of allotted Shares may be made the subject of
Restricted Stock Awards under Section 10 of the Plan (other than shares of
Restricted Stock made in settlement of Performance Units pursuant to Section
11.2(b)). Upon a Change in Capitalization, the maximum number of Shares
referred to in the first sentence of this Section 4.1 shall be adjusted in
number and kind pursuant to Section 14. The Company shall reserve for the
purposes of the Plan, out of its authorized but unissued Shares or out of
Shares held in the Company's treasury, or partly out of each, such number of
Shares as shall be determined by the Board.

                  4.2  As of January 1 of each year, commencing with the year
2000, the aggregate number of Shares that may be made the subject of Options
and Awards granted under the Plan shall automatically increase by a number
equal to an amount determined by the Committee in its sole discretion.

                  4.3  Upon the granting of an Option or an Award, the number
of Shares available under Section 4.1 for the granting of further Options and
Awards shall be reduced as follows:

                       (a) In connection with the granting of an Option or an
Award (other than the granting of a Performance Unit denominated in dollars),
the number of Shares shall be reduced by the number of Shares in respect of
which the Option or Award is granted or denominated.

                       (b) In connection with the granting of a Performance
Unit denominated in dollars, the number of Shares shall be reduced by an
amount equal to the

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quotient of (i) the dollar amount in which the Performance Unit is
denominated, divided by (ii) the Fair Market Value of a Share on the date the
Performance Unit is granted.

                  4.4  Whenever any outstanding Option or Award or portion
thereof expires, is canceled, or is otherwise terminated for any reason
without having been exercised or payment having been made in respect of the
entire Option or Award, the Shares allocable to the expired, canceled, or
otherwise terminated portion of the Option or Award may again be the subject
of Options or Awards granted hereunder.

         5.       OPTION GRANTS FOR ELIGIBLE INDIVIDUALS.

                  5.1  AUTHORITY OF COMMITTEE. Subject to the provisions of
the Plan, the Committee shall have full and final authority to select those
Eligible Individuals who will receive Options, the terms and conditions of
which shall be set forth in an Agreement; PROVIDED, HOWEVER, that no Eligible
Individual shall receive any Incentive Stock Options unless he is an employee
of the Company, a Parent or a Subsidiary at the time the Incentive Stock
Option is granted.

                  5.2  PURCHASE PRICE. The purchase price (which may be
greater than, less than or equal to the Fair Market Value on the date of
grant) or the manner in which the purchase price is to be determined for
Shares under each Option shall be determined by the Committee and set forth
in the Agreement pursuant to which each Option is granted; PROVIDED, HOWEVER,
that the purchase price per Share under each Incentive Stock Option shall not
be less than 100% of the Fair Market Value of a Share on the date the Option
is granted (110% in the case of an Incentive Stock Option granted to a
Ten-Percent Stockholder).

                  5.3  MAXIMUM DURATION. Options granted hereunder shall be
for such term as the Committee shall determine, PROVIDED, HOWEVER, that an
Option shall not be exercisable after the expiration of ten (10) years from
the date it is granted (five (5) years in the case of an Incentive Stock
Option granted to a Ten-Percent Stockholder); PROVIDED, FURTHER, HOWEVER,
that the Committee may provide that an Option (other than an Incentive Stock
Option) may, upon the death of the Optionee, be exercised for up to one (1)
year following the date of the Optionee's death even if such period extends
beyond ten (10) years from the date the Option is granted. The Committee may,
subsequent to the granting of any Option, extend the term thereof, but in no
event shall the term as so extended exceed the maximum term provided for in
the preceding sentence.

                  5.4  EXERCISABILITY. Subject to Sections 5.5 and 7.5, each
Option shall become exercisable in such installments (which need not be
equal) and at such times as may be designated by the Committee and set forth
in the Agreement. To the extent not exercised, installments shall accumulate
and be exercisable, in whole or in part, at any

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time after becoming exercisable, but not later than the date the Option
expires. The Committee may accelerate the exercisability of any Option or
portion thereof at any time.

                  5.5  TERMINATION. Subject to Sections 7.5 and 13 and unless
otherwise provided by the Committee, in its sole discretion, in the
applicable Agreement, the following provisions shall apply to Options upon a
Termination of Employment:

                       (a) Subject to Section 5.3, unless otherwise
determined by the Committee at the time of grant (and set forth in the
applicable Agreement) or at a later date, except in the case of Disability,
retirement on or after the Optionee's Normal Retirement Date and death as
provided in Sections 5.5(c) and 5.5(d) below, upon an Optionee's Termination
of Employment with the Company, a Parent or a Subsidiary for any reason other
than a termination for Cause, any unexercised Option held by such Optionee
shall expire three (3) months after the Optionee has a Termination of
Employment and such Option may only be exercised by the Optionee or his or
her Beneficiary to the extent that the Option or a portion thereof was
exercisable on the date of Termination of Employment; PROVIDED, HOWEVER, that
no Option may be exercised after the expiration date specified for the
particular Option in the Agreement.

                       (b) If the Optionee's Termination of Employment arises
as a result of a termination for Cause, then, unless the Committee determines
otherwise at the time of the Termination of Employment, any unexercised
Options (whether or not vested and exercisable) held by such Optionee shall
terminate and expire concurrently with the Optionee's Termination of
Employment and no rights thereunder may be exercised.

                       (c) Subject to Section 5.3, unless otherwise
determined by the Committee at the time of grant (and set forth in the
applicable Agreement) or at a later date, if an Optionee suffers a Disability
or retires on or after the Optionee's Normal Retirement Date, any unexercised
Option held by such disabled or retired Optionee shall expire one (1) year
after the Disability Date or date of Termination of Employment by reason of
retirement, as the case may be, and such Option may only be exercised by the
Optionee or his or her guardian or legal representative to the extent that
the Option or a portion thereof was exercisable on the Disability Date or the
date of Termination of Employment by reason of retirement, as the case may
be; PROVIDED, HOWEVER, no Option may be exercised after the expiration date
specified for the particular Option in the Agreement.

                       (d) Subject to Section 5.3, unless otherwise
determined by the Committee at the time of grant (and set forth in the
applicable Agreement) or at a later date, if an Optionee dies while still
employed by the Company, the Options which the Optionee was entitled to
exercise on the date of the Optionee's death may be exercised at any time
after the Optionee's death by the Optionee's Beneficiary; PROVIDED, HOWEVER,
that

                                       -13-

<PAGE>

no Option may be exercised after the earlier of: (i) one (1) year after the
Optionee's death or (ii) the expiration date specified for the particular
Option in the Agreement. If an Optionee dies after his or her Termination of
Employment, then the Options which the Optionee was entitled to exercise on
the date of the Optionee's death may be exercised by his or her Beneficiary
within the period specified in Sections 5.5(a) or 5.5(c), as the case may be.

                       (e) Subject to Section 5.3 and notwithstanding any
other provision of this Section 5.5, upon an Optionee's Termination of
Employment at any time on, or within one (1) year after, the occurrence of a
Change in Control, each Option held by the Optionee that was exercisable as
of the date of such Termination of Employment shall remain exercisable for a
period ending not before the earlier of (A) the first anniversary of the
Termination of Employment or (B) the expiration of the stated term of the
Option.

                       (f) Unless otherwise determined by the Committee at
the time of grant (and set forth in the applicable Agreement) or at a later
date, the Option (or portion thereof), to the extent not yet vested and
exercisable as of the date of the Optionee's Termination of Employment, shall
terminate immediately upon such date.

                  5.6  DEFERRED DELIVERY OF OPTION SHARES. The Committee may,
in its sole discretion, permit Optionees to elect to defer the issuance of
Shares upon the exercise of one or more Nonqualified Stock Options granted
pursuant to the Plan. The terms and conditions of such deferral shall be
determined at the time of the grant of the Option or thereafter and shall be
set forth in the Agreement evidencing the Option.

                  5.7  MODIFICATION. No modification of a Option shall
adversely alter or impair any rights or obligations under the Option without
the Optionee's consent.

                  5.8  LIMITATIONS ON INCENTIVE STOCK OPTIONS. To the extent
that the aggregate Fair Market Value (determined as of the date of the grant)
of Shares with respect to which Incentive Stock Options granted under the
Plan and "incentive stock options" (within the meaning of Section 422 of the
Code) granted under all other plans of the Company or its Subsidiaries (in
either case determined without regard to this Section 5.8) are exercisable by
an Optionee for the first time during any calendar year exceeds $100,000,
such Incentive Stock Options shall be treated as Nonqualified Stock Options.
In applying the limitation in the preceding sentence in the case of multiple
Option grants, Options which were intended to be Incentive Stock Options
shall be treated as Nonqualified Stock Options according to the order in
which they were granted such that the most recently granted Options are first
treated as Nonqualified Stock Options.

         6.       OPTION GRANTS FOR NONEMPLOYEE DIRECTORS.

                                       -14-

<PAGE>

                  6.1  GRANT. Formula Options shall be granted (i) to a
Nonemployee Director who becomes a member of the Board after June 17, 1999
upon election or appointment and (ii) to all Nonemployee Directors who are
members of the Board as follows:

                       (a) INITIAL GRANT.  Each Nonemployee Director who
becomes a Director after June 17, 1999 shall, upon becoming a Director, be
granted a Formula Option in respect of 5,000 Shares.

                       (b) ANNUAL GRANT.  Each Nonemployee Director shall be
granted a Formula Option in respect of 5,000 Shares on the first business day
of January in each year that the Plan is in effect provided that the
Nonemployee Director is a Director on such date; PROVIDED, HOWEVER, that a
Nonemployee Director shall not be entitled to receive an annual grant
pursuant to this Section 6.1(b) for the calendar year in which such
Nonemployee Director is first elected or appointed to the Board.

                       (c) TERMS AND CONDITIONS. All Formula Options granted
pursuant to this Section 6 shall be evidenced by an Agreement containing such
other terms and conditions not inconsistent with the provisions of this Plan
as determined by the Board; PROVIDED, HOWEVER, that such terms shall not vary
the price, amount or timing of Formula Options provided under this Section 6,
including provisions dealing with vesting, forfeiture and termination of such
Formula Options.

                  6.2  PURCHASE PRICE. The purchase price for Shares under
each Formula Option shall be equal to 100% of the Fair Market Value of such
Shares on the date the Formula Option is granted.

                  6.3  VESTING. Each Formula Option shall be fully vested and
exercisable on the date of grant; PROVIDED, HOWEVER, that the Optionee is a
Director on such date.

                  6.4  DURATION. Subject to Section 7.5, each Formula Option
shall terminate on the date which is the tenth (10th) anniversary of the date
of grant; PROVIDED, HOWEVER, that if an Optionee dies while a Director and
prior to such tenth (10th) anniversary, the Formula Option may be exercised
for up to one (1) year following the date of the Optionee's death even if
such period extends beyond ten (10) years from the date the Formula Option is
granted, unless terminated earlier as follows:

                       (a) If an Optionee's service as a Director terminates
for any reason other than Disability, death or Cause, the Optionee may for a
period of three (3) months after such termination exercise his or her Formula
Option, after which time the Formula Option shall automatically terminate in
full.

                                       -15-

<PAGE>

                       (b) If an Optionee's service as a Director terminates
by reason of the Optionee's resignation or removal from the Board due to
Disability, the Optionee or his or her guardian or legal representative may,
for a period of one (1) year after such termination, exercise his or her
Formula Option, after which time the Formula Option shall automatically
terminate in full.

                       (c) If an Optionee's service as a Director terminates
for Cause, the Formula Option granted to the Optionee hereunder shall
immediately terminate in full and no rights thereunder may be exercised.

                       (d) If an Optionee dies while a Director, the Formula
Option may be exercised at any time after the Optionee's death by the
Optionee's Beneficiary; PROVIDED, HOWEVER, that no Formula Option may be
exercised after the first anniversary of the Optionee's death. If an Optionee
dies after his or her service as a Director terminates, then the Formula
Option may be exercised by his or her Beneficiary within the period specified
in Sections. 6.4(a) or 6.4 (b), as the case may be.

                       (e) Notwithstanding any other provision of this
Section 6.4, in the event an Optionee's service as a Director of the Company
is terminated at any time on, or within one (1) year after, the occurrence of
a Change in Control, each Formula Option held by the Optionee shall remain
exercisable for a period ending not before the earlier of (A) the first
anniversary of the termination of the Optionee's employment or service or (B)
the expiration of the stated term of the Formula Option.

         7.       TERMS AND CONDITIONS APPLICABLE TO ALL OPTIONS.

                  7.1  ADDITIONAL TERMS.  The provisions of this Section 7
shall apply to all Options.

                  7.2  NON-TRANSFERABILITY. No Option granted hereunder shall
be transferable by the Optionee to whom it is granted otherwise than by will
or by the laws of descent and distribution or, in the case of an Option other
than an Incentive Stock Option, in the Committee's sole discretion, to a
spouse or former spouse in a transfer described in Section 1041(a) of the
Code (a "Code 1041 Transfer"), and, except with respect to an Option
transferred pursuant to a Code 1041 Transfer, an Option shall be exercisable
during the lifetime of such Optionee only by the Optionee or his or her
guardian or legal representative. Notwithstanding the foregoing, the
Committee may set forth in the Agreement evidencing an Option (other than an
Incentive Stock Option) at the time of grant or thereafter, that the Option
may be transferred to members of the Optionee's immediate family, to trusts
solely for the benefit of such immediate family members and to partnerships
in which such family members and/or trusts are the only partners. Following
transfer, for purposes of this Plan, a transferee of an Option shall be
deemed to be the Optionee; provided that the Option shall be exercisable by
the transferee

                                       -16-

<PAGE>

only to the extent and for such periods that the Option would have been
exercisable if held by the original Optionee. For this purpose, immediate
family means the Optionee's spouse, parents, children, stepchildren and
grandchildren and the spouses of such parents, children, stepchildren and
grandchildren. The terms of an Option shall be final, binding and conclusive
upon the beneficiaries, executors, administrators, heirs and successors of
the Optionee.

                  7.3  METHOD OF EXERCISE.

                       (a) The exercise of an Option shall be made only by a
written notice delivered in person or by mail to the Secretary of the Company
at the Company's principal executive office, specifying the number of Shares
to be purchased and, to the extent applicable, accompanied by payment
therefor and otherwise in accordance with such procedures which may be
approved by the Committee from time to time, and in accordance with the
Agreement pursuant to which the Option was granted; PROVIDED, HOWEVER, that
Options may not be exercised by an Optionee for twelve months following a
hardship distribution to the Optionee, to the extent such exercise is
prohibited under Treasury Regulation Section 1.401(k)-1(d)(2)(iv)(B)(4). The
purchase price for any Shares purchased pursuant to the exercise of an Option
shall be paid, as determined by the Committee in its sole discretion, by any
one or a combination of the following: (a) delivery of cash or a check to the
order of the Company or (b) transferring to the Company Shares that have been
held by the Optionee for at least six (6) months (or such lesser period as
may be permitted by the Committee) prior to the exercise of the Option and
that have a Fair Market Value equal in amount to the purchase price, such
transfer to be upon such terms and conditions as determined by the Committee.
In addition, both Options and Formula Options may be exercised through a
registered broker-dealer pursuant to such cashless exercise procedures which
are, from time to time, deemed acceptable by the Committee. Any Shares
transferred to the Company as payment of the purchase price under an Option
shall be valued at their Fair Market Value on the day preceding the date of
exercise of such Option. If requested by the Committee, the Optionee shall
deliver the Agreement evidencing the Option to the Secretary of the Company
who shall endorse thereon a notation of such exercise and return such
Agreement to the Optionee. No fractional Shares (or cash in lieu thereof)
shall be issued upon exercise of an Option and the number of Shares that may
be purchased upon exercise shall be rounded to the nearest number of whole
Shares.

                       (b) If the Fair Market Value of the Shares with
respect to which the Option is being exercised exceeds the purchase price of
such Option, an Optionee may, instead of exercising an Option as provided in
Section 7.3(a), request that the Committee authorize payment to the Optionee
of the difference between the Fair Market Value of part or all of the Shares
which are the subject of the Option and the purchase price of the Option,
such difference to be determined as of the date the Committee

                                       -17-

<PAGE>

receives the request from the Optionee. The Committee, in its sole
discretion, may grant or deny such a request from an Optionee with respect to
part or all of the Shares as to which the Option is then exercisable and, to
the extent granted, shall direct the Company to make the payment to the
Optionee either in cash or in Shares or in any combination thereof; PROVIDED,
HOWEVER, that the payment in Shares shall be based upon the Fair Market Value
of Shares as of the date the Committee received the request from the
Optionee. An Option shall be deemed to have been exercised and shall be
canceled to the extent that the Committee grants a request pursuant to this
Section 7.3(b).

                  7.4  RIGHTS OF OPTIONEES. No Optionee shall be deemed for any
purpose to be the owner of any Shares subject to any Option unless and until (a)
the Option shall have been exercised pursuant to the terms thereof, (b) the
Company shall have issued and delivered Shares to the Optionee, and (c) the
Optionee's name shall have been entered as a stockholder of record on the books
of the Company. Thereupon, the Optionee shall have full voting, dividend and
other ownership rights with respect to such Shares, subject to such terms and
conditions as may be set forth in the applicable Agreement.

                  7.5  EFFECT OF CHANGE IN CONTROL.

                       (a) Notwithstanding anything contained in Sections 5
or 6 to the  contrary, in the event of a Change in Control, the Committee, in
its sole discretion, may provide in writing in connection with, or in
contemplation of, any such Change in Control for any or all of the following
alternatives (separately or in any combination): (i) for the assumption by
the Successor Corporation of the Options theretofore granted or the
substitution by such corporation for such Options of new options covering the
stock of the Successor Corporation with appropriate adjustments as to the
number and kinds of shares and the purchase prices; (ii) for the continuation
of the Plan in which event the Plan and the Options shall continue under such
terms as may be provided; (iii) for the accelerated vesting of the Options;
or (iv) for the payment in cash upon the surrender to the Company for
cancellation of any Option or portion of an Option to the extent vested and
not yet exercised in an amount equal to the excess, if any, of (i) (A) in the
case of a Nonqualified Stock Option, the greater of (1) the Fair Market
Value, on the date preceding the date of surrender, of the Shares subject to
the Option or portion thereof surrendered or (2) the Adjusted Fair Market
Value of the Shares subject to the Option or portion thereof surrendered or
(B) in the case of an Incentive Stock Option, the Fair Market Value, on the
date preceding the date of surrender, of the Shares subject to the Option or
portion thereof surrendered, over (ii) the aggregate purchase price for such
Shares under the Option or portion thereof surrendered. Any vesting of an
Option or portion of an Option pursuant to this Section 7.5(a) or surrender
of an Option for a cash payment shall be conditioned upon the consummation of
the Change in Control and shall be effective only immediately before the
consummation of the Change in Control. Upon consummation of the Change in
Control, the Plan and all outstanding but unexercised Options shall
terminate, except to

                                       -18-

<PAGE>

the extent provision is made in writing in connection with such transaction
for continuation of the Plan, or the assumption or substitution of such
Options. The Committee shall send written notice of an event that will result
in such a termination to all individuals who hold Options not later than the
time at which the Company gives notice thereof to its stockholders.

                       (b) To the extent set forth in the applicable
Agreement, if, as a result of a Change in Control transaction, an Option
intended to qualify as an Incentive Stock Option fails to so qualify SOLELY
because of the failure to meet the holding requirements of Code Section
422(a)(1) (a "Disqualifying Disposition"), the Company shall make a cash
payment to the Optionee equal to the amount which will, after taking into
account all taxes imposed on the Disqualifying Disposition and the receipt of
such payment, leave the Optionee in the same after-tax position the Optionee
would have been in had the Code Section 422(a)(1) holding requirements been
met at the time of the Disqualifying Disposition; PROVIDED, HOWEVER, that no
payment described in this Section shall exceed the Tax Benefit to the Company
resulting from deductions relating to ordinary income recognized by the
Optionee as a result of the Disqualifying Disposition and the receipt of such
payment. The payment described in this Section shall be made by the Company
within thirty (30) days of the filing by the Company of the federal tax
return which includes the tax items associated with the income recognized by
the Optionee as a result of the Disqualifying Disposition (or, if the Tax
Benefit described in the preceding sentence is not realized until a later
year, within thirty (30) days of the filing by the Company of the federal tax
return with respect to which such Tax Benefit is realized); PROVIDED,
HOWEVER, that if more than one Optionee is entitled to a cash payment
pursuant to this Section 7.5(b) in any single tax year and the Tax Benefit
realized by the Company in such year with respect to all such Optionees is
less than the aggregate amount of the payments due to such Optionees
hereunder, then (i) each such Optionee shall receive a portion of such cash
payment equal to an amount determined by multiplying the amount of the Tax
Benefit realized by the Company in such year by a fraction the numerator of
which is equal to the amount of payment due to such Optionee and the
denominator of which is equal to the aggregate amount due to all such
Optionees entitled to a payment hereunder, and (ii) subject to further
application of this proviso, shall be entitled to receive the remaining
portion within thirty (30) days of the filing by the Company of the federal
tax return with respect to which such Tax Benefit is realized.

                       (c) To the extent set forth in the  applicable
Agreement and provided that an Optionee is not entitled to payment under
Section 7.5(b) hereof, if, as a result of a Change in Control transaction, an
Option intended to qualify as an Incentive Stock Option fails to so qualify
SOLELY because the vesting of the Option is accelerated pursuant to Section
7.5(a) and such acceleration causes the aggregate fair market value
(determined at the time the Option is granted) of the Shares with respect to
which Options are exercisable for the first time by an Optionee during the
calendar year in which such

                                       -19-

<PAGE>

vesting occurs to exceed $100,000, within the meaning of Code Section 422(d)
(a "Disqualified Option"), then, upon exercise of such Disqualified Option,
the Company shall make a cash payment to the Optionee equal to the amount
which will, after taking into account all taxes imposed on the exercise of
such Disqualified Option and the receipt of such payment, leave the Optionee
in the same after-tax position the Optionee would have been in had the
Disqualified Option continued to qualify as an Incentive Stock Option on the
date of exercise and the Optionee sold the Shares received upon exercise of
the Option at their Fair Market Value on the date of exercise; PROVIDED,
HOWEVER, that no payment described in this Section shall exceed the Tax
Benefit to the Company resulting from deductions relating to ordinary income
recognized by the Optionee as a result of exercising the Disqualified Option
and the receipt of such payment. The payment described in this Section shall
be made by the Company within thirty (30) days of the filing by the Company
of the federal tax return which includes the tax items associated with the
income recognized by the Optionee as a result of exercising the Disqualified
Option (or, if the Tax Benefit described in the preceding sentence is not
realized until a later year, within thirty (30) days of the filing by the
Company of the federal tax return with respect to which such Tax Benefit is
realized); PROVIDED, HOWEVER, that if more than one Optionee is entitled to a
cash payment pursuant to this Section 7.5(c) in any single tax year and the
Tax Benefit realized by the Company in such year with respect to all such
Optionees is less than the aggregate amount of the payments due to such
Optionees hereunder, then (i) each such Optionee shall receive a portion of
such cash payment equal to an amount determined by multiplying the amount of
the Tax Benefit realized by the Company in such year by a fraction the
numerator of which is equal to the amount of payment due to such Optionee and
the denominator of which is equal to the aggregate amount due to all such
Optionees entitled to a payment hereunder, and (ii) subject to further
application of this proviso, shall be entitled to receive the remaining
portion within thirty (30) days of the filing by the Company of the federal
tax return with respect to which such Tax Benefit is realized.

                                       -20-

<PAGE>

         8.       STOCK APPRECIATION RIGHTS.

                  The Committee may in its sole discretion, either alone or
in connection with the grant of an Option, grant Stock Appreciation Rights in
accordance with the Plan, the terms and conditions of which shall be set
forth in an Agreement. If granted in connection with an Option, a Stock
Appreciation Right shall cover the same Shares covered by the Option (or such
lesser number of Shares as the Committee may determine) and shall, except as
provided in this Section 8, be subject to the same terms and conditions as
the related Option.

                  8.1  TIME OF GRANT. A Stock Appreciation Right may be
granted (a) at any time if unrelated to an Option, or (b) if related to an
Option, either at the time of grant, or (except in the case of an Incentive
Stock Option) at any time thereafter during the term of the Option.

                  8.2  STOCK APPRECIATION RIGHT RELATED TO AN OPTION.

                       (a) EXERCISE.  Subject to Section 8.9, a Stock
Appreciation Right granted in connection with an Option shall be exercisable
at such time or times and only to the extent that the related Options are
exercisable (including, without limitation, exercisability upon Termination
of Employment or a Change in Control), and will not be transferable except to
the extent the related Option may be transferable. A Stock Appreciation Right
granted in connection with an Incentive Stock Option shall expire no later
than the expiration of the related Incentive Stock Option and shall be
exercisable only if the Fair Market Value of a Share on the date of exercise
exceeds the purchase price of the Option specified in the related Incentive
Stock Option Agreement.

                       (b) TREATMENT OF RELATED OPTIONS AND STOCK
APPRECIATION RIGHTS UPON EXERCISE. Upon the exercise of a Stock Appreciation
Right granted in connection with an Option, the Option shall be canceled to
the extent of the number of Shares as to which the Stock Appreciation Right
is exercised, and upon the exercise of an Option granted in connection with a
Stock Appreciation Right, the Stock Appreciation Right shall be canceled to
the extent of the number of Shares as to which the Option is exercised or
surrendered.

                  8.3  STOCK APPRECIATION RIGHT UNRELATED TO AN OPTION.

                       (a) TERMS. Stock Appreciation Rights unrelated to
Options shall contain such terms and conditions as to exercisability (subject
to Section 8.9), vesting and duration as the Committee shall determine, but
in no event shall they have a term of greater than ten (10) years; PROVIDED,
HOWEVER, that the Committee may provide that Stock Appreciation right may,
upon the death of the Grantee, be exercised for up to one (1) year

                                       -21-

<PAGE>

following the date of the Grantee's death even if such period extends beyond
ten (10) years from the date the Stock Appreciation Right is granted.

                       (b) TERMINATION. Subject to Section 13 and except as
provided in Section 8.9, and unless otherwise provided by the Committee, in
its sole discretion, in the applicable Agreement, upon a Grantee's
Termination of Employment, a Stock Appreciation Right shall be exercisable by
the Grantee to the same extent that an Option would be exercisable by an
Optionee upon the Optionee's Termination of Employment under the provisions
of Section 5.5; PROVIDED, HOWEVER, no Stock Appreciation Right may be
exercised after the expiration date specified for the particular Stock
Appreciation Right in the applicable Agreement.

                  8.4  AMOUNT PAYABLE. Subject to Section 8.7, upon the
exercise of a Stock Appreciation Right, the Grantee shall be entitled to
receive an amount determined by multiplying (x) the excess of the Fair Market
Value of a Share on the date preceding the date of exercise of such Stock
Appreciation Right over (A) in the case of a Stock Appreciation Right granted
in connection with an Option, the per Share purchase price under the related
Option, or (B) in the case of a Stock Appreciation Right unrelated to an
Option, the Fair Market Value of a Share on the date the Stock Appreciation
Right was granted, by (y) the number of Shares as to which such Stock
Appreciation Right is being exercised. Notwithstanding the foregoing, the
Committee may limit in any manner the amount payable with respect to any
Stock Appreciation Right by including such a limit in the Agreement
evidencing the Stock Appreciation Right at the time it is granted.

                  8.5  NON-TRANSFERABILITY. No Stock Appreciation Right shall
be transferable by the Grantee to whom it was granted otherwise than by will
or by the laws of descent and distribution or, in the Committee's sole
discretion, (except in the case of a Stock Appreciation Right granted in
connection with an Incentive Stock Option), to a spouse or former spouse in a
transfer described in Section 1041(a) of the Code (a "Code 1041 Transfer"),
and, except with respect to a Stock Appreciation Right transferred pursuant
to a Code 1041 Transfer, such Stock Appreciation Right shall be exercisable
during the lifetime of such Grantee only by the Grantee or his or her
guardian or legal representative. The terms of such Stock Appreciation Right
shall be final, binding and conclusive upon the beneficiaries, executors,
administrators, heirs and successors of the Grantee.

                  8.6  METHOD OF EXERCISE. Stock Appreciation Rights shall be
exercised by a Grantee only by a written notice delivered in person or by
mail to the Secretary of the Company at the Company's principal executive
office, specifying the number of Shares with respect to which the Stock
Appreciation Right is being exercised. If requested by the Committee, the
Grantee shall deliver the Agreement evidencing the Stock Appreciation Right
being exercised and the Agreement evidencing any related Option to

                                       -22-

<PAGE>

the Secretary of the Company who shall endorse thereon a notation of such
exercise and return such Agreement to the Grantee.

                  8.7  FORM OF PAYMENT. Payment of the amount determined
under Section 8.4 may be made in the sole discretion of the Committee solely
in whole Shares in a number determined at their Fair Market Value on the date
preceding the date of exercise of the Stock Appreciation Right, or solely in
cash, or in a combination of cash and Shares. If the Committee decides to
make full payment in Shares and the amount payable results in a fractional
Share, no fractional Shares (or cash in lieu thereof) shall be issued upon
the exercise of the Stock Appreciation Right and the number of Shares that
will be delivered shall be rounded to the nearest number of whole Shares.

                  8.8  MODIFICATION. No modification of an Award shall
adversely alter or impair any rights or obligations under the Agreement
without the Grantee's consent.

                  8.9  EFFECT OF CHANGE IN CONTROL. Notwithstanding anything
contained in this Section 8 to the contrary, in the event of a Change in
Control, the Committee, in its sole discretion, may provide in writing in
connection with, or in contemplation of, any such Change in Control for any
or all of the following alternatives (separately or in any combination): (i)
for the assumption by the Successor Corporation of the Stock Appreciation
Rights theretofore granted or the substitution by such corporation for such
Stock Appreciation Rights of new stock appreciation rights covering the stock
of the Successor Corporation with appropriate adjustments as to the number
and kinds of shares and the purchase prices; (ii) for the continuation of the
Plan in which event the Plan and the Stock Appreciation Rights shall continue
under such terms as may be provided; (iii) for the accelerated vesting of the
Stock Appreciation Rights; or (iv) with respect to a Stock Appreciation Right
unrelated to an Option, for the payment in cash upon the surrender to the
Company for cancellation of any such Stock Appreciation Right or portion of a
Stock Appreciation Right to the extent vested and not yet exercised in an
amount equal to the excess, if any, of (A) the greater of (i) the Fair Market
Value, on the date preceding the date of surrender, of the underlying Shares
subject to the Stock Appreciation Right or portion thereof surrendered and
(ii) the Adjusted Fair Market Value, on the date preceding the date of
surrender, of the Shares over (B) the aggregate Fair Market Value, on the
date the Stock Appreciation Right was granted, of the Shares subject to the
Stock Appreciation Right or portion thereof surrendered. Any vesting of Stock
Appreciation Rights pursuant to this Section 8.9 or surrender of a Stock
Appreciation Right for a cash payment shall be conditioned upon the
consummation of the Change in Control and shall be effective only immediately
before the consummation of the Change in Control. Upon consummation of the
Change in Control, the Plan and all outstanding but unexercised Stock
Appreciation Rights shall terminate, except to the extent provision is made
in writing in connection with such transaction for the continuation of the
Plan, or the assumption or substitution of such Stock Appreciation

                                       -23-

<PAGE>

Rights. The Committee shall send written notice of an event that will result
in such a termination to all individuals who hold Stock Appreciation Rights
not later than the time at which the Company gives notice thereof to its
stockholders.

         9.       DIVIDEND EQUIVALENT RIGHTS.

                  The Committee may in its sole discretion grant Dividend
Equivalent Rights to Eligible Individuals in tandem with an Option or Award
or as a separate Award. The terms and conditions (including, without
limitation, terms and conditions relating to a Change in Control) applicable
to each Dividend Equivalent Right shall be specified in the Agreement under
which the Dividend Equivalent Right is granted. In the sole discretion of the
Committee, amounts payable in respect of Dividend Equivalent Rights may be
payable currently or deferred until the lapsing of restrictions on such
Dividend Equivalent Rights or until the vesting, exercise, payment,
settlement or other lapse of restrictions on the Option or Award to which the
Dividend Equivalent Rights relate. In the event that the amount payable in
respect of Dividend Equivalent Rights are to be deferred, the Committee shall
determine whether such amounts are to be held in cash or reinvested in Shares
or deemed (notionally) to be reinvested in Shares. If amounts payable in
respect of Dividend Equivalent Rights are to be held in cash, there may be
credited at the end of each year (or portion thereof) interest on the amount
of the account at the beginning of the year at a rate per annum as the
Committee, in its sole discretion, may determine. In the sole discretion of
the Committee, Dividend Equivalent Rights may be settled in cash or Shares or
a combination thereof, in a single installment or multiple installments. With
respect to Dividend Equivalent Rights granted in tandem with an Option, the
Agreement may provide that the Optionee may elect to have amounts payable in
respect of such Dividend Equivalent Rights applied against the purchase price
of such Option. To the extent necessary for any Dividend Equivalent Right
intended to qualify as Performance-Based Compensation under Section 162(m) of
the Code to so qualify, the terms and conditions of the Dividend Equivalent
Right shall be such that payment of the Dividend Equivalent Right is
contingent upon attainment of specified Performance Objectives within the
Performance Cycle, as provided for in Section 11, and such Dividend
Equivalent Right shall be treated as a Performance Award for purposes of
Sections 11 and 16.

         10.      RESTRICTED STOCK.

                  10.1 GRANT. The Committee may in its sole discretion grant
Awards to Eligible Individuals of Restricted Stock, which shall be evidenced
by an Agreement between the Company and the Grantee. Each Agreement shall
contain such restrictions, terms and conditions as the Committee may, in its
sole discretion, determine and (without limiting the generality of the
foregoing) such Agreements may require that an appropriate

                                       -24-

<PAGE>

legend be placed on Share certificates. Awards of Restricted Stock shall be
subject to the terms and provisions set forth below in this Section 10.

                  10.2 RIGHTS OF GRANTEE. Shares of Restricted Stock granted
pursuant to an Award hereunder shall be issued in the name of the Grantee as
soon as reasonably practicable after the Award is granted PROVIDED that the
Grantee has executed an Agreement evidencing the Award, the appropriate blank
stock powers and, in the sole discretion of the Committee, an escrow
agreement and any other documents which the Committee may require as a
condition to the issuance of such Shares. If a Grantee shall fail to execute
the Agreement evidencing a Restricted Stock Award, the appropriate blank
stock powers, an escrow agreement or any other documents which the Committee
may require within the time period prescribed by the Committee at the time
the Award is granted, the Award shall be null and void. At the sole
discretion of the Committee, Shares issued in connection with a Restricted
Stock Award shall be deposited together with the stock powers with an escrow
agent (which may be the Company) designated by the Committee. Unless the
Committee determines otherwise and as set forth in the Agreement, upon
delivery of the Shares to the escrow agent, the Grantee shall have all of the
rights of a stockholder with respect to such Shares, including the right to
vote the Shares and to receive all dividends or other distributions paid or
made with respect to the Shares.

                  10.3 NON-TRANSFERABILITY. Until all restrictions upon the
Shares of Restricted Stock awarded to a Grantee shall have lapsed in the
manner set forth in Section 10.4, such Shares shall not be sold, transferred
or otherwise disposed of and shall not be pledged or otherwise hypothecated,
nor shall they be delivered to the Grantee.

                  10.4 LAPSE OF RESTRICTIONS.

                       (a) GENERALLY. Subject to Section 10.4(b),
restrictions upon Shares of Restricted Stock awarded hereunder shall lapse at
such time or times and on such terms and conditions as the Committee may
determine; PROVIDED, HOWEVER, that except in the case of Shares of Restricted
Stock issued in full or partial settlement of another Award or other earned
compensation, such restrictions shall not fully lapse prior to the third
anniversary of the date on which such Shares of Restricted Stock were
granted. The Agreement evidencing the Award shall set forth any such
restrictions.

                       (b) EFFECT OF CHANGE IN CONTROL. Notwithstanding
anything in this Section 10 to the contrary, in the event of a Change in
Control, the Committee, in its sole discretion, may provide in writing in
connection with, or in contemplation of, any such Change in Control for any
or all of the following alternatives (separately or in any combination): (i)
for the assumption by the Successor Corporation of the shares of Restricted
Stock theretofore granted or the substitution by such corporation for such
shares of Restricted Stock of new shares of restricted stock of the Successor
Corporation

                                       -25-

<PAGE>

with appropriate adjustments as to the number and kinds of shares; (ii) for
the continuation of the Plan in which event the Plan and the shares of
Restricted Stock shall continue under such terms as may be provided; or (iii)
for the lapse of all restrictions upon the shares of Restricted Stock. Any
vesting of shares of Restricted Stock pursuant to this Section 10.5(b) shall
be conditioned upon the consummation of the Change in Control and shall be
effective only immediately before the consummation of the Change in Control.

                  10.5 TERMS OF RESTRICTED STOCK.

                       (a) FORFEITURE OF RESTRICTED STOCK. Subject to
Sections  10.4(b), 10.5(b) and 13, all Restricted Stock shall be forfeited
and returned to the Company and all rights of the Grantee with respect to
such Restricted Stock shall terminate unless the Grantee continues in the
service of the Company as an employee or director until the expiration of the
forfeiture period for such Restricted Stock and satisfies any and all other
conditions set forth in the Agreement. The Committee, in its sole discretion,
shall determine the forfeiture period (which may, but need not, lapse in
installments) and any other terms and conditions applicable with respect to
any Restricted Stock Award.

                       (b) WAIVER OF FORFEITURE PERIOD. Notwithstanding
anything contained in this Section 10 to the contrary, the Committee may, in
its sole discretion, waive the forfeiture period and any other conditions set
forth in any Agreement under appropriate circumstances (including, without
limitation, the death, Disability or retirement of the Grantee or a material
change in circumstances arising after the date of grant) and subject to such
terms and conditions (including, without limitation, forfeiture of a
proportionate number of the Restricted Stock) as the Committee shall deem
appropriate, PROVIDED that the Grantee shall at that time have completed at
least one (1) year of employment or service after the date of grant.

                  10.6 MODIFICATION OR SUBSTITUTION. Subject to the terms of
the Plan, including, without limitation, Section 16, the Committee may modify
outstanding Awards of Restricted Stock or accept the surrender of outstanding
shares of Restricted Stock (to the extent the restrictions on such Shares
have not yet lapsed) and grant new Awards in substitution for them.
Notwithstanding the foregoing, no modification of an Award shall adversely
alter or impair any rights or obligations under the Agreement without the
Grantee's consent.

                  10.7 TREATMENT OF DIVIDENDS. At the time an Award of Shares
of Restricted Stock is granted, the Committee may, in its sole discretion,
determine that the payment to the Grantee of dividends, or a specified
portion thereof, declared or paid on such Shares by the Company shall be (a)
deferred until the lapsing of the restrictions imposed upon such Shares and
(b) held by the Company for the account of the Grantee until such time. In
the event that dividends are to be deferred, the Committee shall

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<PAGE>

determine whether such dividends are to be reinvested in Shares (which shall
be held as additional Shares of Restricted Stock) or held in cash. If
deferred dividends are to be held in cash, there may be credited at the end
of each year (or portion thereof) interest on the amount of the account at
the beginning of the year at a rate per annum as the Committee, in its sole
discretion, may determine. Payment of deferred dividends in respect of Shares
of Restricted Stock (whether held in cash or as additional Shares of
Restricted Stock), together with interest accrued thereon, if any, shall be
made upon the lapsing of restrictions imposed on the Shares in respect of
which the deferred dividends were paid, and any dividends deferred (together
with any interest accrued thereon) in respect of any Shares of Restricted
Stock shall be forfeited upon the forfeiture of such Shares.

                  10.8 DELIVERY OF SHARES. Upon the lapse of the restrictions
on Shares of Restricted Stock, the Committee shall cause a stock certificate
to be delivered to the Grantee with respect to such Shares, free of all
restrictions hereunder.

         11.      PERFORMANCE AWARDS.

                  11.1 PERFORMANCE OBJECTIVES

                       (a) ESTABLISHMENT. Performance Objectives for
Performance Awards may be expressed in terms of (i) earnings per Share, (ii)
Share price, (iii) pre-tax profits, (iv) net earnings, (v) return on equity
or assets, (vi) revenues, (vii) EBITDA (earnings before interest, taxes,
depreciation and amortization), (viii) market share, or market penetration,
(ix) any combination of the foregoing or (x) prior to the end of the
Transition Period, such other criteria as the Committee may determine, and
may be determined before or after accounting changes, special charges,
foreign currency effects, acquisitions, divestitures, or other extraordinary
events as determined by the Committee. Performance Objectives may be in
respect of the performance of the Company, any of its Subsidiaries, any of
its Divisions or any combination thereof. Performance Objectives may be
absolute or relative (to prior performance of the Company or to the
performance of one or more other entities or external indices) and may be
expressed in terms of a progression within a specified range. The Performance
Objectives with respect to a Performance Cycle shall be established in
writing by the Committee by the earlier of (x) the date on which a quarter of
the Performance Cycle has elapsed or (y) the date which is ninety (90) days
after the commencement of the Performance Cycle, and in any event while the
performance relating to the Performance Objectives remains substantially
uncertain.

                       (b) EFFECT OF CERTAIN EVENTS. At the time of the
granting of a Performance Award, or at any time thereafter, in either case to
the extent permitted under Section 162(m) of the Code and the regulations
thereunder without adversely affecting the treatment of the Performance Award
as Performance-Based Compensation, the Committee may provide for the manner
in which performance will be measured against

                                       -27-

<PAGE>

the Performance Objectives (or may adjust the Performance Objectives) to
reflect the impact of specified corporate transactions, accounting or tax law
changes and other extraordinary or nonrecurring events.

                       (c) DETERMINATION OF PERFORMANCE. Prior to the
vesting, payment, settlement or lapsing of any restrictions with respect to
any Performance Award that is intended to constitute Performance-Based
Compensation made to a Grantee who is subject to Section 162(m) of the Code,
the Committee shall certify in writing that the applicable Performance
Objectives have been satisfied.

                  11.2 PERFORMANCE UNITS. The Committee, in its sole
discretion, may grant Awards of Performance Units to Eligible Individuals,
the terms and conditions of which shall be set forth in an Agreement between
the Company and the Grantee. Performance Units may be denominated in Shares
or a specified dollar amount and, contingent upon the attainment of specified
Performance Objectives within the Performance Cycle, represent the right to
receive payment as provided in Section 11.2(b) of (i) in the case of
Share-denominated Performance Units, the Fair Market Value of a Share on the
date the Performance Unit was granted, the date the Performance Unit became
vested or any other date specified by the Committee, (ii) in the case of
dollar-denominated Performance Units, the specified dollar amount or (iii) a
percentage (which may be more than 100%) of the amount described in clause
(i) or (ii) depending on the level of Performance Objective attainment;
PROVIDED, HOWEVER, that, the Committee may at the time a Performance Unit is
granted specify a maximum amount payable in respect of a vested Performance
Unit. Each Agreement shall specify the number of Performance Units to which
it relates, the Performance Objectives which must be satisfied in order for
the Performance Units to vest and the Performance Cycle within which such
Performance Objectives must be satisfied.

                       (a) VESTING AND FORFEITURE.  Subject to Sections
11.1(c) and 11.4, Performance Units shall become vested in such installments
(which need not be equal) and at such times or times and on such terms,
conditions and satisfaction of Performance Objectives as the Committee may,
in its sole discretion, determine at the time an Award is granted.

                       (b) PAYMENT OF AWARDS.  Subject to Section 11.1(c),
payment to Grantees in respect of vested Performance Units shall be made as
soon as practicable after the last day of the Performance Cycle to which such
Award relates unless the Agreement evidencing the Award provides for the
deferral of payment, in which event the terms and conditions of the deferral
shall be set forth in the Agreement. Subject to Section 11.4, such payments
may be made entirely in Shares valued at their Fair Market Value as of the
day preceding the date of payment or such other date specified by the
Committee, entirely in cash, or in such combination of Shares and cash as the
Committee in its sole discretion shall determine at any time prior to such
payment; PROVIDED,

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<PAGE>

HOWEVER, that if the Committee in its sole discretion determines to make such
payment entirely or partially in Shares of Restricted Stock, the Committee
must determine the extent to which such payment will be in Shares of
Restricted Stock and the terms of such Restricted Stock at the time the Award
is granted.

                       (c) NON-TRANSFERABILITY. Until the vesting of
Performance Units, such Performance Units shall not be sold, transferred or
otherwise disposed of and shall not be pledged or otherwise hypothecated.

                  11.3 PERFORMANCE SHARES. The Committee, in its sole
discretion, may grant Awards of Performance Shares to Eligible Individuals,
the terms and conditions of which shall be set forth in an Agreement between
the Company and the Grantee. Each Agreement may require that an appropriate
legend be placed on Share certificates. Awards of Performance Shares shall be
subject to the following terms and provisions:

                       (a) RIGHTS OF GRANTEE.  The Committee shall provide
at the time an Award of Performance Shares is made the time or times at which
the actual Shares represented by such Award shall be issued in the name of
the Grantee; PROVIDED, HOWEVER, that no Performance Shares shall be issued
until the Grantee has executed an Agreement evidencing the Award, the
appropriate blank stock powers and, in the sole discretion of the Committee,
an escrow agreement and any other documents which the Committee may require
as a condition to the issuance of such Performance Shares. If a Grantee shall
fail to execute the Agreement evidencing an Award of Performance Shares, the
appropriate blank stock powers, an escrow agreement and any other documents
which the Committee may require within the time period prescribed by the
Committee at the time the Award is granted, the Award shall be null and void.
At the sole discretion of the Committee, Shares issued in connection with an
Award of Performance Shares shall be deposited together with the stock powers
with an escrow agent (which may be the Company) designated by the Committee.
Except as restricted by the terms of the Agreement, upon delivery of the
Shares to the escrow agent, the Grantee shall have, in the sole discretion of
the Committee, all of the rights of a stockholder with respect to such
Shares, including the right to vote the Shares and to receive all dividends
or other distributions paid or made with respect to the Shares.

                       (b) NON-TRANSFERABILITY. Until any restrictions upon
the Performance Shares awarded to a Grantee shall have lapsed in the manner
set forth in Sections 11.3(c) or 11.4, such Performance Shares shall not be
sold, transferred or otherwise disposed of and shall not be pledged or
otherwise hypothecated, nor shall they be delivered to the Grantee. The
Committee may also impose such other restrictions and conditions on the
Performance Shares, if any, as it deems appropriate.

                       (c) LAPSE OF RESTRICTIONS. Subject to Sections
11.1(c) and 11.4, restrictions upon Performance Shares awarded hereunder
shall lapse and such

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<PAGE>

Performance Shares shall become vested at such time or times and on such
terms, conditions and satisfaction of Performance Objectives as the Committee
may, in its sole discretion, determine at the time an Award is granted.

                       (d) TREATMENT OF DIVIDENDS. At the time the Award of
Performance Shares is granted, the Committee may, in its sole discretion,
determine that the payment to the Grantee of dividends, or a specified
portion thereof, declared or paid on Shares represented by such Award which
have been issued by the Company to the Grantee shall be (i) deferred until
the lapsing of the restrictions imposed upon such Performance Shares and (ii)
held by the Company for the account of the Grantee until such time. In the
event that dividends are to be deferred, the Committee shall determine
whether such dividends are to be reinvested in Shares (which shall be held as
additional Performance Shares) or held in cash. If deferred dividends are to
be held in cash, there may be credited at the end of each year (or portion
thereof) interest on the amount of the account at the beginning of the year
at a rate per annum as the Committee, in its sole discretion, may determine.
Payment of deferred dividends in respect of Performance Shares (whether held
in cash or in additional Performance Shares), together with interest accrued
thereon, if any, shall be made upon the lapsing of restrictions imposed on
the Performance Shares in respect of which the deferred dividends were paid,
and any dividends deferred (together with any interest accrued thereon) in
respect of any Performance Shares shall be forfeited upon the forfeiture of
such Performance Shares.

                       (e) DELIVERY OF SHARES. Upon the lapse of the
restrictions on Performance Shares awarded hereunder, the Committee shall
cause a stock certificate to be delivered to the Grantee with respect to such
Shares, free of all restrictions hereunder.

                  11.4 EFFECT OF CHANGE IN CONTROL. Notwithstanding anything
in this Section 11 to the contrary, in the event of a Change in Control, the
Committee, in its sole discretion, may provide in writing in connection with,
or in contemplation of, any such Change in Control for any or all of the
following alternatives (separately or in any combination): (i) for the
assumption by the Successor Corporation of the Performance Awards theretofore
granted or the substitution by such corporation for such Performance Awards
of new performance awards of the Successor Corporation with appropriate
adjustments as to the applicable performance objectives and, if necessary,
the number and kinds of shares; (ii) for the continuation of the Plan in
which event the Plan and the Performance Awards shall continue under such
terms as may be provided; or (iii) for the vesting of outstanding Performance
Awards as if all Performance Objectives had been satisfied at the maximum
level and, in the case of Performance Units which become vested as a result
of a Change in Control, for a payment which may be made entirely in Shares
valued at their Fair Market Value as of the day preceding the payment,
entirely in cash, or in such combination of Shares and cash as the Committee
shall determine in its sole discretion at any time prior to such payment;
provided that such payment shall be

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<PAGE>

made within ten (10) business days after such Change in Control. Any vesting
of Performance Awards pursuant to this Section 11.4 shall be conditioned upon
the consummation of the Change in Control and shall be effective only
immediately before the consummation of the Change in Control.

                  11.5 TERMINATION. Except as provided in Section 13, and
unless otherwise provided by the Committee, in its sole discretion, in the
applicable Agreement, the following provisions shall apply to Performance
Awards upon a Termination of Employment:

                       (a) TERMINATION OF EMPLOYMENT PRIOR TO END OF
PERFORMANCE CYCLE. Except as provided in Sections 11.5(b) and (d), in the
case of a Grantee's Termination of Employment, prior to the end of a
Performance Cycle, the Grantee will not be entitled to any Performance
Awards, and any Performance Shares shall be forfeited.

                       (b) DISABILITY, RETIREMENT OR DEATH PRIOR TO END  OF
PERFORMANCE CYCLE. Unless otherwise provided by the Committee, in its sole
discretion, in the Agreement, if a Grantee's Disability Date or Termination
of Employment by reason of retirement on or after the Grantee's Normal
Retirement Date or death occurs following at least twelve (12) months of
participation in any Performance Cycle, but prior to the end of a Performance
Cycle, the Grantee or such Grantee's Beneficiary, as the case may be, shall
be entitled to receive a pro-rata share of his or her Performance Award as
determined under Subsection (c).

                       (c) PRO-RATA PAYMENT.

                           (i) PERFORMANCE UNITS. With respect to
Performance Units,the amount of any payment made to a Grantee (or
Beneficiary) under circumstances described in Section 11.5(b) will be the
amount determined by multiplying the amount of the Performance Units payable
in Shares or dollars which would have been earned, determined at the end of
the Performance Cycle, had such employment not been terminated, by a
fraction, the numerator of which is the number of whole months such Grantee
was employed during the Performance Cycle, and the denominator of which is
the total number of months of the Performance Cycle. Any such payment shall
be made as soon as practicable after the end of the respective Performance
Cycle, and shall relate to attainment of Performance Objectives over the
entire Performance Cycle.

                           (ii) PERFORMANCE SHARES. With respect to
Performance Shares, the amount of Performance Shares held by a Grantee (or
Beneficiary) with respect to which restrictions shall lapse under
circumstances described in Section 11.5(b) will be the amount determined by
multiplying the amount of the Performance Shares with respect to which
restrictions would have lapsed, determined at the end of the Performance
Cycle,

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<PAGE>

had such employment not been terminated, by a fraction, the numerator of
which is the number of whole months such Grantee was employed during the
Performance Cycle, and the denominator of which is the total number of months
of the Performance Cycle. The Committee shall determine the amount of
Performance Shares with respect to which restrictions shall lapse under this
Section 11.5(c)(ii) as soon as practicable after the end of the respective
Performance Cycle, and such determination shall relate to attainment of
Performance Objectives over the entire Performance Cycle. At that time, all
Performance Shares relating to that Performance Cycle with respect to which
restrictions shall not lapse shall be forfeited.

                       (d) OTHER EVENTS. Notwithstanding anything to the
contrary in this Section 11, the Committee may, in its sole discretion,
determine to pay all or any portion of a Performance Award to a Grantee who
has a Termination of Employment prior to the end of a Performance Cycle under
certain circumstances (including, without limitation, a material change in
circumstances arising after the date of grant) and subject to such terms and
conditions as the Committee shall deem appropriate, provided that the Grantee
shall have completed at his or her date of Termination of Employment at least
one (1) year of employment after the date of grant.

                       (e) TERMINATION OF EMPLOYMENT AFTER END OF
PERFORMANCE CYCLE. Subject to Section 11.5(f), in the case of a Grantee's
Termination of Employment after the end of a Performance Cycle in which the
applicable Performance Objectives have been satisfied, the Grantee shall not
be entitled to any Performance Awards that have not yet vested as of the date
of the Grantee's Termination of Employment.

                       (f) WAIVER OF FORFEITURE. Notwithstanding anything to
the contrary in Section 11(e), in the case of a Grantee's Termination of
Employment after the end of a Performance Cycle in which the applicable
Performance Objectives have been satisfied, the Committee may, in its sole
discretion, waive the forfeiture of Performance Awards and any other
conditions set forth in any Agreement under appropriate circumstances
(including, without limitation, the death, Disability, or retirement of the
Grantee or a material change in circumstances arising after the date of
grant) and subject to such terms and conditions as the Committee shall deem
appropriate.

                  11.6 MODIFICATION OR SUBSTITUTION. Subject to the terms of
the Plan, including, without limitation, Section 16, the Committee may modify
outstanding Performance Awards or accept the surrender of outstanding
Performance Awards and grant new Performance Awards in substitution for them.
Notwithstanding the foregoing, no modification of a Performance Award shall
adversely alter or impair any rights or obligations under the Agreement
without the Grantee's consent.

         12.      OTHER SHARE BASED AWARDS.

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<PAGE>

                  12.1 SHARE AWARDS. The Committee may, in its sole
discretion, grant a Share Award to any Eligible Individual on such terms and
conditions as the Committee may, in its sole discretion, determine. Share
Awards may be made as additional compensation for services rendered by the
Eligible Individual or may be in lieu of cash or other compensation to which
the Eligible Individual is entitled from the Company.

                  12.2 PHANTOM STOCK AWARDS.

                       (a) GRANT. The Committee may, in its sole discretion,
grant shares of Phantom Stock to any Eligible Individual. Such Phantom Stock
shall be subject to the terms and conditions established by the Committee and
set forth in the applicable Agreement.

                       (b) PAYMENT OF AWARDS. Upon the vesting of a Phantom
Stock Award, the Grantee shall be entitled to receive a cash payment in
respect of each share of Phantom Stock which shall be equal to the Fair
Market Value of a Share as of the date the Phantom Stock Award was granted,
or such other date as determined by the Committee at the time the Phantom
Stock Award was granted. The Committee may, at the time a Phantom Stock Award
is granted, provide a limitation on the amount payable in respect of each
share of Phantom Stock. In lieu of a cash payment, the Committee may settle
Phantom Stock Awards with Shares having a Fair Market Value on the date of
vesting equal to the cash payment to which the Grantee has become entitled.

         13.      EMPLOYMENT AGREEMENT GOVERNS TERMINATION OF EMPLOYMENT. An
employment agreement, if applicable, between an Optionee or Grantee and the
Company shall govern with respect to the terms and conditions applicable to
such Option or Award upon a termination or change in the status of the
employment of the Optionee or Grantee, to the extent that such employment
agreement provides for terms and conditions that differ from the terms and
conditions provided for in the applicable Agreement or the Plan; PROVIDED,
HOWEVER, that to the extent necessary for an Option or Award intended to
qualify as performance-based compensation under Section 162(m) of the Code to
so qualify, the terms of the applicable Agreement or the Plan shall govern
the Option or Award; and, PROVIDED FURTHER, that the Committee shall have
reviewed and, in its sole discretion, approved the employment agreement.

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<PAGE>

         14.      ADJUSTMENT UPON CHANGES IN CAPITALIZATION.

                  (a) In the event of a Change in Capitalization, the
Committee shall conclusively determine the appropriate adjustments, if any,
to (i) the maximum number and class of Shares or other stock or securities
with respect to which Options or Awards may be granted under the Plan, (ii)
the maximum number and class of Shares or other stock or securities with
respect to which Options or Awards may be granted to any Eligible Individual
during any calendar year period, (iii) the number and class of Shares or
other stock or securities which are subject to outstanding Options or Awards
granted under the Plan and the purchase price therefor, if applicable, (iv)
the number and class of Shares or other securities in respect of which
Formula Options are to be granted under Section 6 and (v) the Performance
Objectives.

                  (b) Any such adjustment in the Shares or other stock or
securities subject to outstanding Incentive Stock Options (including any
adjustments in the purchase price) shall be made in such manner as not to
constitute a modification as defined by Section 424(h)(3) of the Code and
only to the extent otherwise permitted by Sections 422 and 424 of the Code
and, to the extent necessary for any Option or Award intended to qualify as
Performance-Based Compensation to continue to so qualify, any such adjustment
in the Shares or other stock or securities subject to such Options and Awards
shall be made in such manner as to comply with Section 162(m) of the Code and
the regulations promulgated thereunder.

                  (c) If, by reason of a Change in Capitalization, a Grantee
of an Award shall be entitled to, or an Optionee shall be entitled to
exercise an Option with respect to, new, additional or different shares of
stock or securities of the Company or any other corporation, such new,
additional or different shares shall thereupon be subject to all of the
conditions, restrictions and performance criteria which were applicable to
the Shares subject to the Award or Option, as the case may be, prior to such
Change in Capitalization.

         15.      EFFECT OF CERTAIN TRANSACTIONS. Subject to Sections 7.5,
8.9, 10.4(b) and 11.4 or as otherwise provided in an Agreement, in the event
of (a) the liquidation or dissolution of the Company or (b) a merger or
consolidation of the Company (a "Transaction"), the Plan and the Options and
Awards issued hereunder shall continue in effect in accordance with their
respective terms, except that following a Transaction each Optionee and
Grantee shall be entitled to receive in respect of each Share subject to any
outstanding Options or Awards, as the case may be, upon exercise of any
Option or payment or transfer in respect of any Award, the same number and
kind of stock, securities, cash, property or other consideration that each
holder of a Share was entitled to receive in the Transaction in respect of a
Share; PROVIDED, HOWEVER, that such stock, securities, cash, property, or
other consideration shall remain subject to all of the

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<PAGE>

conditions, restrictions and performance criteria which were applicable to
the Options and Awards prior to such Transaction.

         16.      INTERPRETATION. Following the required registration of any
equity security of the Company pursuant to Section 12 of the Exchange Act,
unless otherwise expressly stated in the relevant Agreement, each Option,
Stock Appreciation Right and Performance Award granted under the Plan to a
"covered employee" within the meaning of Section 162(m)(3) of the Code is
intended to be Performance-Based Compensation (except that, in the event of a
Change in Control, payment of Performance Awards to a Grantee who remains a
"covered employee" with respect to such payment may not qualify as
Performance-Based Compensation). The Committee shall not be entitled to
exercise any discretion otherwise authorized hereunder with respect to such
Options or Awards if the ability to exercise such discretion or the exercise
of such discretion itself would cause the compensation attributable to such
Options or Awards to fail to qualify as Performance-Based Compensation.
Notwithstanding anything to the contrary in the Plan, the provisions of the
Plan may at any time be bifurcated by the Board or the Committee in any
manner so that certain provisions of the Plan or any Performance Award
intended (or required in order) to satisfy the applicable requirements of
Section 162(m) of the Code are only applicable to persons whose compensation
is subject to Section 162(m).

         17.      POOLING TRANSACTIONS. Notwithstanding anything contained in
the Plan or any Agreement to the contrary, in the event of a Change in
Control which is also intended to constitute a Pooling Transaction, the
Committee shall take such actions, if any, as are specifically recommended by
an independent accounting firm retained by the Company to the extent
reasonably necessary in order to assure that the Pooling Transaction will
qualify as such, including, without limitation, (a) deferring the vesting,
exercise, payment, settlement or lapsing of restrictions with respect to any
Option or Award, (b) providing that the payment or settlement in respect of
any Option or Award be made in the form of cash, Shares or securities of a
successor or acquirer of the Company, or a combination of the foregoing, and
(c) providing for the extension of the term of any Option or Award to the
extent necessary to accommodate the foregoing, but not beyond the maximum
term permitted for any Option or Award.

         18.      EFFECTIVE DATE, TERMINATION AND AMENDMENT OF THE PLAN.

                  18.1 EFFECTIVE DATE. The effective date of this Plan shall
be the date the Plan is adopted by the Board, subject only to the approval of
the affirmative vote of the holders of a majority of the securities of the
Company present, or represented, and entitled to vote at a meeting of the
stockholders duly held in accordance with the applicable laws of the State of
Delaware within twelve (12) months of the adoption of the Plan by the Board.

                                       -35-

<PAGE>

                  18.2 PLAN AMENDMENT OR TERMINATION. The Plan shall
terminate on the day preceding the tenth anniversary of the date of its
adoption by the Board and no Option or Award may be granted thereafter. The
Board may sooner terminate the Plan and the Board may at any time and from
time to time amend, modify or suspend the Plan; PROVIDED, HOWEVER, that:

                       (a) no such amendment, modification, suspension or
termination shall impair or adversely alter any Options or Awards theretofore
granted under the Plan, except with the consent of the Optionee or Grantee,
nor shall any amendment, modification, suspension or termination deprive any
Optionee or Grantee of any Shares which he or she may have acquired through
or as a result of the Plan; and

                       (b) to the extent necessary under any applicable law,
regulation or exchange requirement no amendment shall be effective unless
approved by the stockholders of the Company in accordance with applicable
law, regulation or exchange requirement.

         19.      NON-EXCLUSIVITY OF THE PLAN. The adoption of the Plan by
the Board shall not be construed as amending, modifying or rescinding any
previously approved incentive arrangement or as creating any limitations on
the power of the Board to adopt such other incentive arrangements as it may
deem desirable, including, without limitation, the granting of stock options
otherwise than under the Plan, and such arrangements may be either applicable
generally or only in specific cases.

         20.      LIMITATION OF LIABILITY. As illustrative of the limitations
of liability of the Company, but not intended to be exhaustive thereof,
nothing in the Plan shall be construed to:

                  (a) give any person any right to be granted an Option or
Award other than at the sole discretion of the Committee;

                  (b) give any person any rights whatsoever with respect to
Shares except as specifically provided in the Plan;

                  (c) limit in any way the right of the Company or any
Subsidiary to terminate the employment of any person at any time; or

                  (d) be evidence of any agreement or understanding,
expressed or implied, that the Company will employ any person at any
particular rate of compensation or for any particular period of time.

                                       -36-

<PAGE>

         21.      REGULATIONS AND OTHER APPROVALS; GOVERNING LAW.

                  21.1 Except as to matters of federal law, the Plan and the
rights of all persons claiming hereunder shall be construed and determined in
accordance with the laws of the State of Delaware without giving effect to
conflicts of laws principles thereof.

                  21.2 The obligation of the Company to sell or deliver
Shares with respect to Options and Awards granted under the Plan shall be
subject to all applicable laws, rules and regulations, including all
applicable federal and state securities laws, and the obtaining of all such
approvals by governmental agencies as may be deemed necessary or appropriate
by the Committee.

                  21.3 The Board may make such changes as may be necessary or
appropriate to comply with the rules and regulations of any government
authority, or to obtain for Eligible Individuals granted Incentive Stock
Options the tax benefits under the applicable provisions of the Code and
regulations promulgated thereunder.

                  21.4 Each Option and Award is subject to the requirement
that, if at any time the Committee determines, in its sole discretion, that
the listing, registration or qualification of Shares issuable pursuant to the
Plan is required by 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 grant of
an Option or Award or the issuance of Shares, no Options or Awards shall be
granted or payment made or Shares issued, in whole or in part, unless
listing, registration, qualification, consent or approval has been effected
or obtained free of any conditions as acceptable to the Committee.

                  21.5 Notwithstanding anything contained in the Plan or any
Agreement to the contrary, in the event that the disposition of Shares
acquired pursuant to the Plan is not covered by a then current registration
statement under the Securities Act of 1933, as amended (the "Securities
Act"), and is not otherwise exempt from such registration, such Shares shall
be restricted against transfer to the extent required by the Securities Act
and Rule 144 or other regulations thereunder. The Company may place on any
certificate representing any such Shares any legend deemed desirable by the
Company's counsel to comply with federal or state securities laws and the
Committee may require any individual receiving Shares pursuant to an Option
or Award granted under the Plan, as a condition precedent to receipt of such
Shares, to represent and warrant to the Company in writing that the Shares
acquired by such individual are acquired without a view to any distribution
thereof and will not be sold or transferred other than pursuant to an
effective registration thereof under said Act or pursuant to an exemption
applicable under the Securities Act or the rules and regulations promulgated
thereunder.

                                       -37-

<PAGE>

         22.      MISCELLANEOUS.

                  22.1 MULTIPLE AGREEMENTS. The terms of each Option or Award
may differ from other Options or Awards granted under the Plan at the same
time, or at some other time. The Committee may also grant more than one
Option or Award to a given Eligible Individual during the term of the Plan,
either in addition to, or in substitution for, one or more Options or Awards
previously granted to that Eligible Individual.

                  22.2 CAPTIONS. The use of captions in this Plan or any
Agreement is for the convenience of reference only and shall not affect the
meaning of any provision of the Plan or such Agreement.

                  22.3 SEVERABILITY. Whenever possible, each provision of the
Plan or an Agreement shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of the Plan or an
Agreement shall be held by a court of competent jurisdiction to be prohibited
by or invalid or unenforceable under applicable law, then (a) such provision
shall be deemed to be amended to accomplish the objectives of the provision
as originally written to the fullest extent permitted by law and (b) all
other provisions of the Plan or an Agreement shall remain in full force and
effect.

                  22.4 WITHHOLDING OF TAXES.

                       (a) At such times as an Optionee or Grantee recognizes
taxable income in connection with the receipt of Shares or cash hereunder (a
"Taxable Event"), the Optionee or Grantee shall pay to the Company an amount
equal to the federal, state and local income taxes and other amounts as may
be required by law to be withheld by the Company in connection with the
Taxable Event (the "Withholding Taxes") prior to the issuance, or release
from escrow, of such Shares or the payment of such cash. The Company shall
have the right to deduct from any payment of cash to an Optionee or Grantee
an amount equal to the Withholding Taxes in satisfaction of the obligation to
pay Withholding Taxes. In satisfaction of the obligation to pay Withholding
Taxes to the Company, the Optionee or Grantee may make a written election
(the "Tax Election"), which may be accepted or rejected in the sole
discretion of the Committee, to have withheld a portion of the Shares then
issuable to him or her having an aggregate Fair Market Value, on the date
preceding the date of such issuance, equal to the Withholding Taxes.

                       (b) If an Optionee makes a disposition, within the
meaning of Section 424(c) of the Code and regulations promulgated thereunder,
of any Share or Shares issued to such Optionee pursuant to the exercise of an
Incentive Stock Option within the two-year period commencing on the day after
the date of the grant or within the one-year period commencing on the day
after the date of transfer of such Share or Shares to the Optionee pursuant
to such exercise, the Optionee shall, within ten (10) days of such

                                       -38-

<PAGE>

disposition, notify the Company thereof, by delivery of written notice to the
Company at its principal executive office.

                  22.5 POST-TRANSITION PERIOD. Any Option or Award granted under
the Plan after the expiration of the Transition Period which is intended to be
Performance-Based Compensation shall be subject to the approval of the material
terms of the Plan by a majority of the stockholders of the Company in accordance
with Section 162(m) of the Code and the regulations promulgated thereunder.

                                       -39-<PAGE>

                                                               Exhibit 10.2

             APPNET SYSTEMS,INC. 1998 STOCK OPTION AND INCENTIVE PLAN

    (AS ADOPTED AUGUST 25, 1998 AND AMENDED AND RESTATED AS OF MARCH 26, 1999)

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                                             <C>
2.   DEFINITIONS..................................................................................................1
3.   ADMINISTRATION OF THE PLAN...................................................................................4
     3.1.      BOARD..............................................................................................4
     3.2.      COMMITTEE..........................................................................................4
     3.3.      GRANTS.............................................................................................5
     3.4.      NO LIABILITY.......................................................................................5
4.   SHARES SUBJECT TO THE PLAN...................................................................................5
     4.1.      AGGREGATE LIMITATION...............................................................................5
     4.2.      APPLICATION OF AGGREGATE LIMITATION................................................................6
     4.3.      PER-GRANTEE LIMITATION.............................................................................6
5.   EFFECTIVE DATE AND TERM OF THE PLAN..........................................................................6
     5.1.      EFFECTIVE DATE.....................................................................................6
     5.2.      TERM...............................................................................................7
6.   PERMISSIBLE GRANTEES.........................................................................................7
     6.1.      EMPLOYEES AND SERVICE PROVIDERS....................................................................7
     6.2.      SUCCESSIVE GRANTS..................................................................................7
7.   LIMITATIONS ON GRANTS OF INCENTIVE STOCK OPTIONS.............................................................7
8.   AWARD AGREEMENT..............................................................................................7
9.   OPTION PRICE.................................................................................................7
10.  VESTING, TERM AND EXERCISE OF OPTIONS........................................................................8
     10.1.     VESTING AND OPTION PERIOD..........................................................................8
     10.2.     TERM...............................................................................................8
     10.3.     ACCELERATION.......................................................................................8
     10.4.     TERMINATION OF EMPLOYMENT OR OTHER RELATIONSHIP FOR A REASON OTHER THAN DEATH OR DISABILITY........8
     10.5.     RIGHTS IN THE EVENT OF DEATH.......................................................................9
     10.6.     RIGHTS IN THE EVENT OF DISABILITY..................................................................9
     10.7.     LIMITATIONS ON EXERCISE OF OPTION..................................................................9
     10.8.     METHOD OF EXERCISE................................................................................10
     10.9.     RIGHTS AS A STOCKHOLDER; DIVIDEND EQUIVALENTS.....................................................10
     10.10.    DELIVERY OF STOCK CERTIFICATES....................................................................11
11.  TRANSFERABILITY OF OPTIONS..................................................................................11
     11.1      GENERAL RULE......................................................................................11
     11.2.     FAMILY TRANSFERS..................................................................................11
12.  RESTRICTED STOCK............................................................................................11
     12.1.     GRANT OF RESTRICTED STOCK OR RESTRICTED STOCK UNITS...............................................11
     12.2.     RESTRICTIONS......................................................................................11
     12.3.     RESTRICTED STOCK CERTIFICATES.....................................................................12
     12.4.     RIGHTS OF HOLDERS OF RESTRICTED STOCK.............................................................12
     12.5.     RIGHTS OF HOLDERS OF RESTRICTED STOCK UNITS.......................................................12
     12.6.     TERMINATION OF EMPLOYMENT OR OTHER RELATIONSHIP FOR A REASON OTHER THAN DEATH OR DISABILITY.......13
     12.7.     RIGHTS IN THE EVENT OF DEATH......................................................................13
</TABLE>

<PAGE>

<TABLE>
<S>                                                                                                             <C>
     12.8.     RIGHTS IN THE EVENT OF DISABILITY.................................................................13
     12.9.     DELIVERY OF SHARES AND PAYMENT THEREFOR...........................................................14
13.  STOCK APPRECIATION RIGHTS...................................................................................14
     13.1.     GRANT OF STOCK APPRECIATION RIGHTS................................................................14
     13.2.     NATURE OF STOCK APPRECIATION RIGHTS...............................................................14
     13.3.     TERMS AND CONDITIONS GOVERNING SARS...............................................................14
14.  PARACHUTE LIMITATIONS.......................................................................................14
15.  REQUIREMENTS OF LAW.........................................................................................15
     15.1.     GENERAL...........................................................................................15
16.  AMENDMENT AND TERMINATION OF THE PLAN.......................................................................16
17.  EFFECT OF CHANGES IN CAPITALIZATION.........................................................................16
     17.1.     CHANGES IN STOCK..................................................................................16
     17.2.     REORGANIZATION, SALE OF ASSETS OR SALE OF STOCK...................................................17
     17.3.     CHANGE OF CONTROL.................................................................................17
     17.4.     ADJUSTMENTS.......................................................................................18
     17.5.     NO LIMITATIONS ON COMPANY.........................................................................18
18.  DISCLAIMER OF RIGHTS........................................................................................18
19.  NONEXCLUSIVITY OF THE PLAN..................................................................................18
20.  WITHHOLDING TAXES...........................................................................................18
21.  CAPTIONS....................................................................................................19
22.  OTHER PROVISIONS............................................................................................19
23.  NUMBER AND GENDER...........................................................................................19
24.  SEVERABILITY................................................................................................19
25.  POOLING.....................................................................................................19
26.  GOVERNING LAW...............................................................................................20
</TABLE>

<PAGE>

                              APPNET SYSTEMS, INC.

                      1998 STOCK OPTION AND INCENTIVE PLAN

AppNet Systems, Inc., a Delaware corporation (the "Company"), sets forth
herein the terms of its 1998 Stock Option and Incentive Plan (the "Plan") as
follows:

1. PURPOSE

The Plan is intended to enhance the Company's ability to attract and retain
highly qualified officers, key employees, outside directors and other
persons, and to motivate such officers, key employees, outside directors and
other persons to serve the Company and its affiliates (as defined herein) and
to expend maximum effort to improve the business results and earnings of the
Company, by providing to such officers, key employees, outside directors and
other persons an opportunity to acquire or increase a direct proprietary
interest in the operations and future success of the Company. To this end,
the Plan provides for the grant of stock options, restricted stocks,
restricted stock units and stock appreciation rights in accordance with the
terms hereof. Stock options granted under the Plan may be non-qualified stock
options or incentive stock options, as provided herein, except that stock
options granted to outside directors shall in all cases be non-qualified
stock options.

2. DEFINITIONS

For purposes of interpreting the Plan and related documents (including Award
Agreements), the following definitions shall apply:

2.1. "affiliate" of, or person "affiliated" with, a person means any company
or other trade or business that controls, is controlled by or is under common
control with such person within the meaning of Rule 405 of Regulation C under
the Securities Act.

2.2. "Award Agreement" means the stock option agreement, restricted stock
agreement, restricted stock unit agreement, stock appreciation right
agreement of other written agreement between the Company and a Grantee that
evidences and sets out the terms and conditions of a Grant.

2.3. "Benefit Arrangement" shall have the meaning set forth in SECTION
14 hereof.

2.4. "Board" means the Board of Directors of the Company.

2.5 "Change of Control" shall mean any of the following:

(a) any "person" or "group" (within the meaning of Section 13(d)(3) or
14(d)(2) of the Exchange Act) (other than the Company, its affiliates, any
trustee or other fiduciary holding securities under an employee benefit plan
of the Company, or any entity, owned, directly or indirectly, by the
shareholders of the Company in substantially the same proportions as their
ownership of shares of Stock by the Company) becomes (other than solely by
reason of a repurchase of shares of Stock of the Company), the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities representing fifty percent (50%) or more of the
total number of votes that may be cast for the election of directors of the
Company;

(b) there occurs any sale of all or substantially all of the assets
of the Company;

                                        1

<PAGE>

(c) within eighteen months after a tender offer or exchange offer for voting
securities of the Company (other than by the Company) individuals who were
directors of the Company immediately prior thereto shall cease to constitute
a majority of the Board;

(d) proxies are solicited for voting securities of the Company by persons
other than the Company or its Board and, within eighteen months thereafter,
individuals who were directors of the Company immediately prior thereto shall
cease to constitute a majority of the Board;

(e) "Change in Control" shall not include a change in legal domicile or any
sale, reorganization, compromise or arrangement or other transaction which
the Board determines, in its discretion acting in good faith, to be effected
in order to change the legal domicile of the Company or the holding company
of the Company's group of companies and which leaves control of the Company
substantially unaffected or control of the holding company in the same
shareholders as control of the Company prior to such transaction.

2.6. "Code" means the Internal Revenue Code of 1986, as now in effect or as
hereafter amended.

2.7. "Committee" means a committee of, and designated from time to
time by resolution of, the Board.

2.8. "Company" means AppNet Systems, Inc.

2.9. "Effective Date" means the date designated by the Board in its resolution
adopting the Plan.

2.10. "Exchange Act" means the Securities Exchange Act of 1934, as now in
effect or as hereafter amended.

2.11. "Fair Market Value" means the value of a share of Stock, determined as
follows: if on the Grant Date or other determination date of the shares of
Stock are listed on an established national or regional stock exchange, are
admitted to quotation on the Nasdaq National Market, or are publicly traded
on an established securities market, the Fair Market Value of a share of
Stock shall be the opening price of the shares of Stock on such exchange or
in such market (the highest such opening price if there is more than one such
exchange or market) on the Grant Date or such other determination date (or if
there is no such reported opening price, the Fair Market Value shall be the
mean between the highest bid and lowest asked prices or between the high and
low sale prices on such trading day) or, if no sale of shares of Stock are
reported for such trading day, on the next preceding day on which any sale
shall have been reported. If the shares of Stock are not listed on such an
exchange, quoted on such system or traded on such a market, Fair Market Value
shall be the value of the shares of Stock as determined by the Board in good
faith.

2.12 "Good Reason" means (i) any proposed reduction in a Grantee's base
salary (provided that the base salary may be reduced by up to 10% due to a
reduction in compensation generally applicable to executive officers of the
Company); (ii) a substantial reduction of a Grantee's responsibilities or
areas of supervision within the Company, or (iii) relocation of a Grantee's
office outside the metropolitan area in which the office of the Grantee was
located immediately prior to the Change in Control (provided that temporary
assignments made for the good of the business of the Company do not
constitute such a move of office location).

                                        2

<PAGE>

2.13 "Grant" means an award of an Option, Restricted Stock, Restricted Stock
Unit or Stock Appreciation Right under the Plan.

2.14. "Grant Date" means, as determined by the Board or authorized Committee,
(i) the date as of which the Board or such Committee approves a Grant, (ii)
the date on which the recipient of a Grant first becomes eligible to receive
a Grant under SECTION 6 hereof, or (iii) such other date as may be specified
by the Board or such Committee.

2.15. "Grantee" means a person who receives or holds an Option, Restricted
Stock, Restricted Stock Unit or Stock Appreciation Right under the Plan.

2.16. "Immediate Family Members" means the spouse, children and grandchildren
of the Grantee.

2.17. "Incentive Stock Option" means an "incentive stock option" within the
meaning of Section 422 of the Code, or the corresponding provision of any
subsequently enacted tax statute, as amended from time to time.

2.18. "Option" means an option to purchase one or more shares of Stock
pursuant to the Plan.

2.19. "Option Period" means the period during which Options may be exercised
as set forth in SECTION 10 hereof.

2.20. "Option Price" means the purchase price for each share of Stock subject
to an Option.

2.21. "Other Agreement" shall have the meaning set forth in SECTION 14 hereof.

2.22. "Outside Director" means a member who is not an officer or employee of
the Company.

2.23. "Plan" means this AppNet Systems, Inc. 1998 Stock Option and Incentive
Plan, as amended and restated from time to time.

2.24. "Restricted Period" means the period during which Restricted Stock or
Restricted Stock Units are subject to restrictions or conditions pursuant to
SECTION 12.2 hereof.

2.25. "Restricted Stock" means shares of Stock, awarded to a Grantee pursuant
to SECTION 12 hereof, that are subject to restrictions and to a risk of
forfeiture.

2.26. "Restricted Stock Unit" means a unit awarded to a Grantee pursuant to
SECTION 12 hereof, which represents a conditional right to receive a share of
Stock in the future, and which is subject to restrictions and to a risk of
forfeiture.

2.27. "Securities Act" means the Securities Act of 1933, as now in effect or
as hereafter amended.

2.28. "Service Provider" means a consultant or adviser to the Company, a
manager of the Company's properties or affairs, or other similar service
provider or affiliate of the Company, and employees of any of the foregoing,
as such persons may be designated from time to time by the Board pursuant to
SECTION 6 hereof.

                                        3

<PAGE>

2.29. "Stock" means common stock, par value $0.0005 per share, of the
Company.

2.30. "Stock Appreciation Right" or "SAR" means a right granted to a Grantee
pursuant to the provisions of SECTION 13 hereof.

2.31. "Subsidiary" means any "subsidiary corporation" of the Company within
the meaning of Section 424(f) of the Code.

2.32. "Termination Date" shall be the date upon which an Option shall
terminate or expire, as set forth in SECTION 10.2 hereof.

3. ADMINISTRATION OF THE PLAN

3.1 BOARD.

The Board shall have such powers and authorities related to the
administration of the Plan as are consistent with the Company's Certificate
of Incorporation and bylaws and applicable law. The Board shall have full
power and authority to take all actions and to make all determinations
required or provided for under the Plan, any Grant or any Award Agreement,
and shall have full power and authority to take all such other actions and
make all such other determinations not inconsistent with the specific terms
and provisions of the Plan that the Board deems to be necessary or
appropriate to the administration of the Plan, any Grant or any Award
Agreement. All such actions and determinations shall be by the affirmative
vote of a majority of the members of the Board present at a meeting or by
unanimous consent of the Board executed in writing in accordance with the
Company's Certificate of Incorporation and bylaws and applicable law. The
interpretation and construction by the Board of any provision of the Plan,
any Grant or any Award Agreement shall be final and conclusive. As permitted
by law, the Board may delegate its authority under the Plan to a member of
the Board of Directors or an executive officer of the Company.

3.2 COMMITTEE.

The Board from time to time may delegate to a Committee such powers and
authorities related to the administration and implementation of the Plan, as
set forth in SECTION 3.1 hereof and in other applicable provisions, as the
Board shall determine, consistent with the Certificate of Incorporation and
bylaws of the Company and applicable law. In the event that the Plan, any
Grant or any Award Agreement entered into hereunder provides for any action
to be taken by or determination to be made by the Board, such action may be
taken by or such determination may be made by the Committee if the power and
authority to do so has been delegated to the Committee by the Board as
provided for in this Section. Unless otherwise expressly determined by the
Board, any such action or determination by the Committee shall be final,
binding and conclusive. As permitted by law, the Committee may delegate the
authority delegated to it under the Plan to a member of the Board of
Directors or an executive officer of the Company.

                                        4

<PAGE>

3.3 GRANTS.

Subject to the other terms and conditions of the Plan, the Board shall have
full and final authority (i) to designate Grantees, (ii) to determine the
type or types of Grant to be made to a Grantee, (iii) to determine the number
of shares of Stock to be subject to a Grant, (iv) to establish the terms and
conditions of each Grant (including, but not limited to, the exercise price
of any Option, the nature and duration of any restriction or condition (or
provision for lapse thereof) relating to the vesting, exercise, transfer, or
forfeiture of a Grant or the shares of Stock subject thereto, and any terms
or conditions that may be necessary to qualify Options as Incentive Stock
Options), (v) to prescribe the form of each Award Agreement evidencing a
Grant, (vi) to make Grants alone, in addition to, in tandem with, or in
substitution or exchange for any other Grant or any other award granted under
another plan of the Company or a Subsidiary, and (vii) to amend, modify, or
supplement the terms of any outstanding Grant. Such authority specifically
includes the authority, in order to effectuate the purposes of the Plan but
without amending the Plan, to modify Grants to eligible individuals who are
foreign nationals or are individuals who are employed outside the United
States to recognize differences in local law, tax policy, or custom. The
terms and conditions imposed by the Board with respect to the vesting,
exercise or forfeiture of a Grant may, without limitation, include
performance-based conditions relating to the trading price of shares of
Stock, market share, sales, revenue growth, cost reduction, earnings per
share and return on equity. As a condition to any subsequent Grant, the Board
shall have the right, at its discretion, to require Grantees to return to the
Company Grants previously awarded under the Plan. Subject to the terms and
conditions of the Plan, any such new Grant shall be upon such terms and
conditions as are specified by the Board at the time the new Grant is made.

3.4 NO LIABILITY.

No member of the Board or of the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any Grant or
Award Agreement.

4. SHARES SUBJECT TO THE PLAN

4.1. AGGREGATE LIMITATION.

Subject to adjustment as provided in SECTION 17 hereof, the aggregate number
of shares of Stock available for issuance under the Plan pursuant to
Incentive Stock Options or other Grants shall be four million five hundred
thousand (4,500,000). Shares of Stock issued or to be issued under the Plan
shall be authorized but unissued shares. If any shares covered by a Grant are
not purchased or are forfeited, or if a Grant otherwise terminates without
delivery of any shares of Stock subject thereto, then the number of shares of
Stock counted against the aggregate number of shares available under the Plan
with respect to such Grant shall, to the extent of any such forfeiture or
termination, again be available for making Grants under the Plan.

                                        5

<PAGE>

4.2. APPLICATION OF AGGREGATE LIMITATION.

The limitation contained in SECTION 4.1 shall apply not only to Grants that
are settleable by the delivery of shares of Stock but also to Grants relating
to shares of Stock but settleable only in cash (such as cash-only SARs). The
Board may adopt reasonable counting procedures to ensure appropriate
counting, avoid double counting (as, for example, in the case of tandem or
substitute awards) and make adjustments if the number of shares of Stock
actually delivered differs from the number of shares previously counted in
connection with a Grant.

4.3. PER-GRANTEE LIMITATION.

During any time when the Company has a class of equity security registered
under Section 12 of the Exchange Act:

(i) no person eligible for a Grant under SECTION 6 hereof may be awarded Options
in any calendar year exercisable for greater than one hundred thousand (100,000)
shares of Stock (subject to adjustment as provided in SECTION 17 hereof); (ii)
the maximum number of shares of Restricted Stock that can be awarded under the
Plan (including for this purpose any shares of Stock represented by Restricted
Stock Units) to any person eligible for a Grant under SECTION 12 hereof is one
hundred thousand (100,000) per calendar year (subject to adjustment as provided
in SECTION 17 hereof); and

(iii) the maximum number of shares of Stock that can be the subject of SARs
awarded to any Grantee under SECTION 13 hereof is one hundred thousand
(100,000) per calendar year (subject to adjustment as provided in SECTION 17
hereof).

5. EFFECTIVE DATE AND TERM OF THE PLAN

5.1. EFFECTIVE DATE.

The Plan shall be effective as of the Effective Date, subject to approval of
the Plan, within one year before or after the date upon which the Plan was
adopted by the Board, by a majority of the votes cast on the proposal at a
meeting of shareholders, provided that the total votes cast represent a
majority of all shares entitled to vote or by the written consent of the
holders of a majority of the Company's shares entitled to vote. Upon approval
of the Plan by the shareholders of the Company as set forth above, all Grants
made under the Plan on or after the Effective Date shall be fully effective
as if the shareholders of the Company had approved the Plan on the Effective
Date. If the shareholders fail to approve the Plan within the time period set
forth above, any Grants made hereunder shall be null and void and of no
effect.

                                        6

<PAGE>

5.2. TERM.

The Plan has no termination date; however, no Incentive Stock Option may be
granted under the Plan on or after August 25, 2008.

6. PERMISSIBLE GRANTEES

6.1. EMPLOYEES AND SERVICE PROVIDERS.

Subject to the provisions of SECTION 7, Grants may be made under the Plan
to any employee of, or Service Provider or employee of a Service Provider
providing, or who has provided, services to, the Company or any Subsidiary,
including any such employee who is an officer or director of the Company,
including an Outside Director, or of any Subsidiary, and any other individual
whose participation in the Plan is determined by the Board to be in the best
interests of the Company, as the Board shall determine and designate from
time to time.

6.2. SUCCESSIVE GRANTS.

An eligible person may receive more than one Grant, subject to such
restrictions as are provided herein.

7. LIMITATIONS ON GRANTS OF INCENTIVE STOCK OPTIONS

An Option shall constitute an Incentive Stock Option only (i) if the Grantee
of such Option is an employee of the Company or any Subsidiary of the
Company; (ii) to the extent specifically provided in the related Award
Agreement;  and (iii) to the extent that the aggregate Fair Market Value
(determined at the time the Option is granted) of the shares of Stock with
respect to which all Incentive Stock Options held by such Grantee become
exercisable for the first time during any calendar year (under the Plan and
all other plans of the Grantee's employer and its affiliates) does not exceed
$100,000. This limitation shall be applied by taking Options into account in
the order in which they were granted.

8. AWARD AGREEMENT

Each Grant pursuant to the Plan shall be evidenced by an Award Agreement, in
such form or forms as the Board shall from time to time determine. Award
Agreements granted from time to time or at the same time need not contain
similar provisions but shall be consistent with the terms of the Plan. Each
Award Agreement evidencing a Grant of Options shall specify whether such
Options are intended to be non-qualified Stock options or Incentive Stock
Options, and in the absence of such specification such options shall be
deemed non-qualified Stock options.

9. OPTION PRICE

The Option Price of each Option shall be fixed by the Board and stated in the
Award Agreement evidencing such Option. The Option Price of an Incentive
Stock Option shall be the Fair Market Value on the date of grant of a share
of Stock; PROVIDED, HOWEVER, that in the event that a Grantee would otherwise
be ineligible to receive an Incentive Stock Option by reason of the
provisions of Sections 422(b)(6) and 424(d) of the Code (relating to
ownership of more than ten

                                        7

<PAGE>

percent of the Company's outstanding shares of Stock), the Option Price of an
Option granted to such Grantee that is intended to be an Incentive Stock
Option shall be not less than 110 percent of the Fair Market Value of a share
of Stock on the date of grant. In no case shall the Option Price of any
Option be less than the par value of a share.

10. VESTING, TERM AND EXERCISE OF OPTIONS

10.1. VESTING AND OPTION PERIOD.

Subject to SECTIONS 10.2 and 17 hereof, each Option granted under the
Plan shall become exercisable at such times and under such conditions as
shall be determined by the Board and stated in the Award Agreement. For
purposes of this SECTION 10.1, fractional numbers of shares of Stock subject
to an Option shall be rounded down to the next nearest whole number. The
period during which any Option shall be exercisable shall constitute the
"Option Period" with respect to such Option.

10.2. TERM.

Each Option granted under the Plan shall terminate, and all rights to
purchase shares of Stock thereunder shall cease, upon the expiration of ten
years from the date such Option is granted, or under such circumstances and
on such date prior thereto as is set forth in the Plan or as may be fixed by
the Board and stated in the Award Agreement relating to such Option (the
"Termination Date"); PROVIDED, HOWEVER, that in the event that the Grantee
would otherwise be ineligible to receive an Incentive Stock Option by reason
of the provisions of Sections 422(b)(6) and 424(d) of the Code (relating to
ownership of more than ten percent of the outstanding shares of Stock), an
Option granted to such Grantee that is intended to be an Incentive Stock
Option shall not be exercisable after the expiration of five years from its
date of grant.

10.3. ACCELERATION.

Any limitation on the exercise of an Option contained in any Award Agreement
may be rescinded, modified or waived by the Board, in its sole discretion, at
any time and from time to time after the Grant Date of such Option, so as to
accelerate the time at which the Option may be exercised. Notwithstanding any
other provision of the Plan, no Option shall be exercisable in whole or in
part prior to the date of the Plan is approved by the shareholders of the
Company as provided in SECTION 5.1 hereof.

10.4. TERMINATION OF EMPLOYMENT OR OTHER RELATIONSHIP FOR A REASON OTHER THAN
DEATH OR DISABILITY.

Subject to SECTION 16, upon the termination of a Grantee's employment or
other relationship with the Company and its Subsidiaries other than by reason
of death, or "permanent and total disability" (within the meaning of Section
22(e)(3) of the Code), any Option or portion thereof held by such Grantee
that has not vested in accordance with the provisions of SECTION 10.1 hereof
shall terminate immediately, and any Option or portion thereof that has
vested in accordance with the provisions of SECTION 10.1 hereof but has not
been exercised shall terminate at the close of business on the 90th day
following the Grantee's termination of

                                        8

<PAGE>

employment or other relationship (or, if such 90th day is a Saturday, Sunday
or holiday, at the close of business on the next preceding day that is not a
Saturday, Sunday or holiday), subject to earlier termination of the Option as
provided in SECTION 10.2 above, unless the Board, in its discretion, extends
the period during which the Option may be exercised (which period may not be
extended beyond the original term of the Option). Upon termination of an
Option or portion thereof, the Grantee shall have no further right to
purchase shares of Stock pursuant to such Option or portion thereof. Whether
a leave of absence or leave on military or government service shall
constitute a termination of employment or other relationship for purposes of
the Plan shall be determined by the Board, which determination shall be final
and conclusive. For purposes of the Plan, a termination of employment,
service or other relationship shall not be deemed to occur if the Grantee is
immediately thereafter employed with the Company, a Subsidiary or a Service
Provider, or is engaged as a Service Provider or an Outside Director of the
Company or a Subsidiary. Whether a termination of a Grantee's employment or
other relationship with the Company and its Subsidiaries shall have occurred
shall be determined by the Board, which determination shall be final and
conclusive.

10.5 RIGHTS IN THE EVENT OF DEATH.

If a Grantee dies while employed by or providing services to the Company, all
Options granted to such Grantee that have not previously terminated shall
fully vest on the date of death, and the executors or administrators or
legatees or distributees of such Grantee's estate shall have the right, at
any time within one year after the date of such Grantee's death (or such
longer period as the Board, in its discretion, may determine prior to the
expiration of such one-year period) and prior to termination of the Option
pursuant to SECTION 10.2 above, to exercise any Option held by such Grantee
at the date of such Grantee's death.

10.6 RIGHTS IN THE EVENT OF DISABILITY.

Subject to SECTION 16, if a Grantee's employment or other relationship with
the Company is terminated by reason of the "permanent and total disability"
(within the meaning of Section 22(e)(3) of the Code) of such Grantee, such
Grantee's Options shall continue to vest, and shall be exercisable to the
extent that they are vested, for a period of one year after such termination
of employment or service (or, in the case of an Option that is not an
Incentive Stock Option, such longer period as the Board, in its discretion,
may determine prior to the expiration of such one-year period), subject to
earlier termination of the Option as provided in SECTION 10.2 above. Whether
a termination of employment or service is to be considered by reason of
"permanent and total disability" for purposes of the Plan shall be determined
by the Board which determination shall be final and conclusive.

10.7 LIMITATIONS ON EXERCISE OF OPTION.

Notwithstanding any other provision of the Plan, in no event may any Option
be exercised, in whole or in part, prior to the date the Plan is approved by
the shareholders of the Company as provided herein, or after ten years
following the date upon which the Option is granted, or after

                                        9

<PAGE>

the occurrence of an event referred to in SECTION 17 hereof which results in
termination of the Option.

10.8. METHOD OF EXERCISE.

An Option that is exercisable may be exercised by the Grantee's delivery to
the Company of written notice of exercise on any business day, at the
Company's principal office, addressed to the attention of the Board. Such
notice shall specify the number of shares of Stock with respect to which the
Option is being exercised and shall be accompanied by payment in full of the
Option Price of the shares of Stock for which the Option is being exercised.
The minimum number of shares of Stock with respect to which an Option may be
exercised, in whole or in part, at any time shall be the lesser of (i) 100
shares of Stock or such lesser number set forth in the applicable Award
Agreement and (ii) the maximum number of shares of Stock available for
purchase under the Option at the time of exercise. Payment of the Option
Price for the shares purchased pursuant to the exercise of an Option shall be
made (i) in cash or in cash equivalents; (ii) to the extent permitted by law,
through the tender to the Company of shares of Stock, which shares, if
acquired from the Company, shall have been held for at least six months and
which shall be valued, for purposes of determining the extent to which the
Option Price has been paid thereby, at their Fair Market Value on the date of
exercise; or (iii) by a combination of the methods described in (i) and (ii).
The Board may provide, by inclusion of appropriate language in an Award
Agreement, that payment in full of the Option Price need not accompany the
written notice of exercise provided that the notice is accompanied by
delivery of an unconditional and irrevocable undertaking by a licensed broker
acceptable to the Corporation as the agent for the individual exercising the
Option to deliver promptly to the Corporation sufficient funds to pay the
Option Price and directs that the certificate or certificates for the shares
of Stock for which the Option is exercised be delivered to a licensed broker
acceptable to the Company as the agent for the individual exercising the
Option and, at the time such certificate or certificates are delivered, the
broker tenders to the Company cash (or cash equivalents acceptable to the
Company) equal to the Option Price for the shares of Stock purchased pursuant
to the exercise of the Option plus the amount (if any) of federal and/or
other taxes which the Company may in its judgment, be required to withhold
with respect to the exercise of the Option. An attempt to exercise any Option
granted hereunder other than as set forth above shall be invalid and of no
force and effect.

10.9 RIGHTS AS A STOCKHOLDER; DIVIDEND EQUIVALENTS.

Unless otherwise stated in the applicable Stock Option Agreement, an
individual holding or exercising an Option shall have none of the rights of a
shareholder (for example, the right to receive cash or dividend payments or
distributions attributable to the subject shares of Stock or to direct the
voting of the subject shares of Stock) until the shares of Stock covered
thereby are fully paid and issued to such individual. Except as provided in
SECTION 17 hereof, no adjustment shall be made for dividends, distributions
or other rights for which the record date is prior to the date of such
issuance. However, the Board may, on such conditions as it deems appropriate,
provide that a Grantee will receive a benefit in lieu of cash dividends that
would have been payable on any or all shares of Stock subject to the Grant
had such shares of Stock been outstanding. Without limitation, the Board may
provide for payment to the Grantee of

                                        10

<PAGE>

amounts representing such dividends, either currently or in the future, or
for the investment of such amounts on behalf of the Grantee.

10.10 DELIVERY OF STOCK CERTIFICATES.

Promptly after the exercise of an Option by a Grantee and the payment in full
of the Option Price, such Grantee shall be entitled to the issuance of a
certificate or certificates evidencing his or her ownership of the shares of
Stock subject to the Option.

11. TRANSFERABILITY OF OPTIONS.

11.1. GENERAL RULE.

Except as provided in SECTION 11.2, during the lifetime of a Grantee, only
the Grantee (or, in the event of legal incapacity or incompetency, the
Grantee's guardian or legal representative) may exercise an Option. Except
as provided in SECTION 11.2, no Option shall be assignable or transferable
by the Grantee to whom it is granted, other than by will or the laws of
descent and distribution.

11.2 FAMILY TRANSFERS.

If authorized in the applicable Award Agreement, a Grantee may transfer all
or part of an Option that is not an Incentive Stock Option to (i) any
Immediate Family Member, (ii) a trust or trusts for the exclusive benefit of
any Immediate Family Member, or (iii) a partnership or limited liability
company in which Immediate Family Members are the only partners or members,
provided that (x) there may be no consideration for any such transfer, and
(y) subsequent transfers of transferred Options are prohibited except those
in accordance with this SECTION 11.2 or by will or the laws of descent and
distribution. Following transfer, any such Option shall continue to be
subject to the same terms and conditions as were applicable immediately prior
to transfer, provided that for purposes of SECTION 11.2 hereof the term
"Grantee" shall be deemed to refer to the transferee. The events of
termination of the employment or other relationship of SECTION 10.4 hereof
shall continue to be applied with respect to the original Grantee, following
which the Option shall be exercisable by the transferee only to the extent
and for the periods specified in SECTIONS 10.4, 10.5 or 10.6.

12. RESTRICTED STOCK

12.1 GRANT OF RESTRICTED STOCK OR RESTRICTED STOCK UNITS.

The Board may from time to time grant Restricted Stock or Restricted Stock
Units to persons eligible to receive Grants under SECTION 6 hereof, subject
to such restrictions, conditions and other terms as the Board may determine.

12.2 RESTRICTIONS.

At the time a Grant of Restricted Stock or Restricted Stock Units is made,
the Board shall establish a period of time (the "Restricted Period")
applicable to such Restricted Stock or

                                        11

<PAGE>

Restricted Stock Units. Each Grant of Restricted Stock or Restricted Stock
Units may be subject to a different Restricted Period. The Board may, in its
sole discretion, at the time a Grant of Restricted Stock or Restricted Stock
Units is made, prescribe restrictions in addition to or other than the
expiration of the Restricted Period, including the satisfaction of corporate
or individual performance objectives, which may be applicable to all or any
portion of the Restricted Stock or Restricted Stock Units. Such performance
objectives shall be established in writing by the Board by not later than the
ninetieth day of the period of service to which such performance objectives
relate and while the outcome is substantially uncertain. Performance
objectives may be based on share price, market share, sales, earnings per
share, return on equity or costs. Performance objectives may include positive
results, maintaining the status quo or limiting economic losses. Subject to
the fourth sentence of this SECTION 12.2, the Board also may, in its sole
discretion, shorten or terminate the Restricted Period or waive any other
restrictions applicable to all or a portion of the Restricted Stock or
Restricted Stock Units. Neither Restricted Stock nor Restricted Stock Units
may be sold, transferred, assigned, pledged or otherwise encumbered or
disposed of during the Restricted Period or prior to the satisfaction of any
other restrictions prescribed by the Board with respect to such Restricted
Stock or Restricted Stock Units.

12.3 RESTRICTED STOCK CERTIFICATES.

The Company shall issue, in the name of each Grantee to whom Restricted
Stock has been granted, certificates representing the total number of
Restricted Stock granted to the Grantee, as soon as reasonably practicable
after the Grant Date. The Secretary of the Company shall hold such
certificates for the Grantee's benefit until such time as the Restricted
Stock is forfeited to the Company, or the restrictions lapse.

12.4 RIGHTS OF HOLDERS OF RESTRICTED STOCK.

Unless the Board otherwise provides in an Award Agreement, holders of
Restricted Stock shall have the right to vote such shares of Stock and the
right to receive any dividends declared or paid with respect to such shares
of Stock. The Board may provide that any dividends paid on Restricted Stock
must be reinvested in shares of Stock, which may or may not be subject to the
same vesting conditions and restrictions applicable to such Restricted Stock.
All distributions, if any, received by a Grantee with respect to Restricted
Stock as a result of any stock split, stock dividend, combination of shares,
or other similar transaction shall be subject to the restrictions applicable
to the original Grant.

12.5 RIGHTS OF HOLDERS OF RESTRICTED STOCK UNITS.

Unless the Board otherwise provides in an Award Agreement, holders of
Restricted Stock Units shall have no rights as shareholders of the Company.
The Board may provide in an Award Agreement evidencing a Grant of Restricted
Stock Units that the holder of such Restricted Stock Units shall be entitled
to receive, upon the Company's payment of a cash dividend on its outstanding
shares of Stock, a cash payment for each Restricted Stock Unit held equal to
the per-share dividend paid on the shares of Stock. Such Award Agreement may
also provide that such

                                        12

<PAGE>

cash payment will be deemed reinvested in additional Restricted Stock Units
at a price per unit equal to the Fair Market Value of a share of Stock on the
date that such dividend is paid.

12.6. TERMINATION OF EMPLOYMENT OR OTHER RELATIONSHIP FOR A REASON OTHER THAN
DEATH OR DISABILITY.

Upon the termination of a Grantee's employment or other relationship with the
Company and its Subsidiaries, in either case other than, in the case of
individuals, by reason of death or "permanent and total disability" (within
the meaning of Section 22(e)(3) of the Code), any Restricted Stock or
Restricted Stock Units held by such Grantee that have not vested, or with
respect to which all applicable restrictions and conditions have not lapsed,
shall immediately be deemed forfeited, unless the Board, in its discretion,
determines otherwise. Upon forfeiture of Restricted Stock or Restricted Stock
Units, the Grantee shall have no further rights with respect to such Grant,
including but not limited to any right to vote Restricted Stock or any right
to receive dividends with respect to Restricted Stock or Restricted Stock
Units. Whether a leave of absence or leave on military or government service
shall constitute a termination of employment or other relationship for
purposes of the Plan shall be determined by the Board, which determination
shall be final and conclusive. For purposes of the Plan, a termination of
employment, service or other relationship shall not be deemed to occur if the
Grantee is immediately thereafter employed with the Company or any other
Service Provider, or is engaged as a Service Provider or an Outside Director
of the Company. Whether a termination of a Grantee's employment or other
relationship with the Company and its Subsidiaries shall have occurred shall
be determined by the Board, which determination shall be final and conclusive.

12.7. RIGHTS IN THE EVENT OF DEATH.

If a Grantee dies while employed by the Company or a Service Provider, or
while serving as a Service Provider, all Restricted Stock or Restricted Stock
Units granted to such Grantee shall fully vest on the date of death unless
the Board provided otherwise in the Award Agreement relating to such
Restricted Stock or Restricted Stock Units. Upon such vesting, the shares of
Stock represented thereby shall be deliverable in accordance with the terms
of the Plan to the executors, administrators, legatees or distributees of the
Grantee's estates.

12.8. RIGHTS IN THE EVENT OF DISABILITY.

If a Grantee's employment or other relationship with the Company or a Service
Provider, or while serving as a Service Provider, is terminated by reason of
the "permanent and total disability" (within the meaning of Section 22(e)(3)
of the Code) of such Grantee, such Grantee's then unvested Restricted Stock
or Restricted Stock Units shall be fully vested. Whether a termination of
employment or service is to be considered by reason of "permanent and total
disability" for purposes of the Plan shall be determined by the Board, which
determination shall be final and conclusive.

                                        13

<PAGE>

12.9 DELIVERY OF SHARES AND PAYMENT THEREFOR.

Upon the expiration of termination of the Restricted Period and the
satisfaction of any other conditions prescribed by the Board, the
restrictions applicable to Restricted Stock or Restricted Stock Units shall
lapse, and upon payment by the Grantee to the Company, in cash or by check,
of the greater of (i) the aggregate par value of the shares of Stock
represented by such Restricted Stock or Restricted Stock Units or (ii) the
purchase price, if any, specified in the Award Agreement relating to such
Restricted Stock or Restricted Stock Units, a certificate for such
shares shall be delivered, free of all such restrictions, to the
Grantee or the Grantee's beneficiary or estate, as the case may be.

13. STOCK APPRECIATION RIGHTS

13.1 GRANT OF STOCK APPRECIATION RIGHTS.

The Board may from time to time grant SARs to persons eligible to receive
grants under SECTION 6 hereof, subject to the provisions of this Section and
to such restrictions, conditions and other terms as the Board may determine.

13.2 NATURE OF STOCK APPRECIATION RIGHTS.

An SAR shall confer on the Grantee a right to receive, upon exercise
thereof, the excess of (A) the Fair Market Value of one share of Stock on the
date of exercise over (B) the grant price of the SAR as determined by the
Board. Unless the Board provides otherwise in the Award Agreement, the grant
price of an SAR shall not be less than the Fair Market Value of a share of
Stock on the date of grant.

13.3 TERMS AND CONDITIONS GOVERNING SARS.

The Board shall determine at the date of grant or thereafter, the time or
times at which and the circumstances under which an SAR may be exercised in
whole or in part (including based on achievement of performance goals and/or
future service requirements), the time or times at which and the
circumstances under which an SAR shall cease to be exercisable, the method of
exercise, method of settlement, form of consideration payable in settlement,
whether or not an SAR shall be in tandem or in combination  with any other
Grant, and any other terms and conditions of any SAR.

14. PARACHUTE LIMITATIONS

Notwithstanding any other provision of this Plan or of any other agreement,
contract, or understanding heretofore or hereafter entered into by a Grantee
with the Company or any Subsidiary, except an agreement, contract, or
understanding hereafter entered into that expressly modifies or excludes
application of this paragraph (an "Other Agreement"), and notwithstanding any
formal or informal plan or other arrangement for the direct or indirect
provision of compensation to the Grantee (including groups or classes of
participants or beneficiaries of which the Grantee is a member), whether or
not such compensation is deferred, is in cash, or is in the form of a benefit
to or for the Grantee (a "Benefit Arrangement"), if the Grantee is a
"disqualified individual," as defined in Section 280G(c) of the Code, any
Option, Restricted

                                        14

<PAGE>

Stock, Restricted Stock Unit or SARs held by that Grantee and any right to
receive any payment or other benefit under this Plan shall not become
exercisable or vested (i) to the extent that such right to exercise, vesting,
payment, or benefit, taking into account all other rights, payments, or
benefits to or for the Grantee under this Plan, all Other Agreements, and all
Benefit Arrangements, would cause any payment or benefit to the Grantee under
this Plan to be considered a "parachute payment" within the meaning of
Section 280G(b)(2) of the Code as then in effect (a "Parachute Payment") AND
(ii) if, as a result of receiving a Parachute Payment, the aggregate
after-tax amounts received by the Grantee from the Company under this Plan,
all Other Agreements, and all Benefit Arrangements would be less than the
maximum after-tax amount that could be received by the Grantee without
causing any such payment or benefit to be considered a Parachute Payment. In
the event that the receipt of any such right to exercise, vesting, payment,
or benefit under this Plan, in conjunction with all other rights, payments,
or benefits to or for the Grantee under any Other Agreement or any Benefit
Arrangement would cause the Grantee to be considered to have received a
Parachute Payment under this Plan that would have the effect of decreasing
the after-tax amount received by the Grantee as described in clause (ii) of
the preceding sentence, then the Grantee shall have the right, in the
Grantee's sole discretion, to designate those rights, payments, or benefits
under this Plan, any Other Agreements, and any Benefit Arrangements that
should be reduced or eliminated so as to avoid having the payment or benefit
to the Grantee under this Plan be deemed to be a Parachute Payment.

15. REQUIREMENTS OF LAW

15.1. GENERAL.

The Company shall not be required to sell or issue any shares of Stock under
any Grant if the sale or issuance of such shares of Stock would constitute a
violation by the Grantee, any other person exercising a right emanating from
such Grant, or the Company of any provision of any law or regulation of any
governmental authority, including without limitation any federal or state
securities laws or regulations. If at any time the Company shall determine,
in its discretion, that the listing, registration or qualification of any
shares of Stock subject to a Grant upon any securities exchange or under any
governmental regulatory body is necessary or desirable as a condition of, or
in connection with, the issuance or purchase of shares of Stock hereunder, no
shares of Stock may be issued or sold to the Grantee or any other person
exercising a right emanating from such Grant unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Company, and any delay
caused thereby shall in no way affect the date of termination of the Grant.
Specifically, in connection with the Securities Act, upon the exercise of any
Option or any SAR that may be settled in shares of Stock or the delivery of
any Restricted Stock or shares of Stock underlying Restricted Stock Units,
unless a registration statement under such Act is in effect with respect to
the shares of Stock covered by such Grant, the Company shall not be required
to sell or issue such shares of Stock unless the Board has received evidence
satisfactory to it that the Grantee may acquire such shares of Stock pursuant
to an exemption from registration under the Securities

                                        15

<PAGE>

Act. Any determination in this connection by the Board shall be final,
binding, and conclusive. The Company may, but shall in no event be obligated
to, register any securities covered hereby pursuant to the Securities Act.
The Company shall not be obligated to take any affirmative action in order to
cause the exercise of an Option or an SAR or the issuance of shares of Stock
pursuant to the Plan to comply with any law or regulation of any governmental
authority. As to any jurisdiction that expressly imposes the requirement that
an Option (or SAR that may be settled in shares of Stock) shall not be
exercisable until the shares of Stock covered by such Option (or SAR) are
registered or are exempt from registration, the exercise of such Option (or
SAR) under circumstances in which the laws of such jurisdiction apply shall
be deemed conditioned upon the effectiveness of such registration or the
availability of such an exemption.

16. AMENDMENT AND TERMINATION OF THE PLAN

The Board may, at any time and from time to time, amend, suspend, or
terminate the Plan as to any shares of Stock as to which Grants have not been
made; PROVIDED, HOWEVER, that the Board shall not, without approval of the
Company's shareholders, amend the Plan such that it does not comply with the
Code. The Company may retain the right in an Award Agreement to cause a
forfeiture of the gain realized by a Grantee on account of the Grantee taking
actions in "competition with the Company," as defined in the applicable Award
Agreement. Furthermore, the Company may annul a Grant if the Grantee is an
employee of the Company or an affiliate and is terminated "for cause" as
defined in the applicable Award Agreement. Except as permitted under this
SECTION 16 or SECTION 17 hereof, no amendment, suspension, or termination of
the Plan shall, without the consent of the Grantee, alter or impair rights or
obligations under any Grant theretofore awarded under the Plan.

17. EFFECT OF CHANGES IN CAPITALIZATION

17.1 CHANGES IN STOCK.

Subject to SECTION 17.2, in the event of any  merger, reorganization,
consolidation, recapitalization, separation, liquidation, stock dividend,
spin-off, split-up, share combination or other change in the corporate
structure of the Company affecting the shares of Stock, (a) such adjustment
may be made in the number and class of shares of Stock which may be delivered
under SECTION 4 hereof and the Grant limits under SECTION 4 hereof, and in
the number and class of and/or price of shares of Stock subject to
outstanding Grants as may be determined to be appropriate and equitable by
the Board, in its sole discretion, to prevent dilution or enlargement of
existing rights; and (b) the Board, or, if another legal entity assumes the
obligations of the Company hereunder, the board of directors, compensation
committee or similar body of such other legal entity, shall either (i) make
appropriate provision for the protection of outstanding Grants by the
substitution on an equitable basis of appropriate equity interests or awards
similar to the Grants, provided that the substitution neither enlarges nor
diminishes the value and rights under the Grants or (ii) upon written notice
to the Grantees, provide that Grants will be exercised, distributed, canceled
or exchanged for value pursuant to such terms and conditions (including the
waiver of any existing terms or conditions) as shall be specified in the
notice. Any adjustment or an Incentive Stock Option under this paragraph
shall be made in such a manner so as not to constitute a "modification"
within the meaning of Section 424(h)(3) of the Code. The conversion of any
convertible securities of the Company shall not be treated as change in the

                                        16

<PAGE>

corporate structure of the company affecting the shares of Stock. Subject to
any contrary language in an Award Agreement evidencing a Grant of Restricted
stock, any restrictions applicable to such Restricted Stock shall apply as
well to any replacement shares received by the Grantee as a result of the
reorganization, merger or consolidation.

17.2 REORGANIZATION, SALE OF ASSETS OR SALE OF STOCK.

Upon the dissolution or liquidation of the Company or upon a merger,
consolidation, or reorganization of the Company with one or more other
entities in which the Company is not the surviving entity, or upon a sale of
substantially all of the assets of the Company to another entity, or upon any
transaction (including, without limitation, a merger or reorganization in
which the Company is the surviving entity) approved by the Board that results
in any person or entity (or person or entities acting as a group or otherwise
in concert), owning fifty percent (50%) or more of the combined voting power
of all classes of securities of the Company, (i) all outstanding shares of
Restricted Stock and Restricted Stock Units shall be deemed to have vested,
and all restrictions and conditions applicable to such shares of Restricted
Stock and Restricted Stock Units shall be deemed to have lapsed, immediately
prior to the occurrence of such event, and (ii) all Options outstanding
hereunder shall become immediately exercisable for a period of fifteen days
immediately prior to the scheduled consummation of the event, except to the
extent provision is made in writing in connection with such transaction for
the continuation of the Plan or the assumption of such Options, Restricted
Stock and Restricted Stock Units theretofore granted, or for the substitution
for such Options, Restricted Stock and Restricted Stock Units of new options,
restricted stock and restricted stock units covering the stock of a successor
entity, or a parent or subsidiary thereof, with appropriate adjustments as to
the number and kinds of shares or units and exercise prices, in which event
the Plan and Options, Restricted Stock and Restricted Stock Units theretofore
granted shall continue in the manner and under the terms so provided. Any
exercise of an Option during such fifteen-day period shall be conditioned
upon the consummation of the event and shall be effective only immediately
before the consummation of the event. Upon consummation of any such event,
the Plan and all outstanding but unexercised Options shall terminate, except
to the extent provision is made in writing in connection with such
transaction for the continuation of the Plan or the assumption of such
Options theretofore granted, or for the substitution for such Options of new
options covering the stock of a successor entity, or a parent or subsidiary
thereof, with appropriate adjustments as to the number and kinds of shares or
units and exercise prices, in which event the Plan and Options theretofore
granted shall continue in the manner and under the terms so provided. The
Board shall send written notice of an event that will result in such a
termination to all individuals who hold Options not later than the time at
which the Company gives notice thereof to its shareholders.

17.3. CHANGE OF CONTROL.

Upon the termination of a Grantee's employment or other relationship with the
Company and its Subsidiaries by the Company or by the Grantee for Good
Reason, at any time on, or within two years after, the occurrence of a Change
of Control, all Options held by such Grantee that have not previously
terminated shall become immediately exercisable and shall remain exercisable
for a period of 90 days.

                                        17

<PAGE>

17.4. ADJUSTMENTS.

Adjustments under this SECTION 17 related to shares of Stock or securities
of the Company shall be made by the Board, whose determination in that
respect shall be final, binding and conclusive. No fractional shares of Stock
or other securities shall be issued pursuant to any such adjustment, and any
fractions resulting from any such adjustment shall be eliminated in each case
by rounding downward to the nearest whole share.

17.5. NO LIMITATIONS ON COMPANY.

The making of Grants pursuant to the Plan shall not affect or limit in any
way the right or power of the Company to make adjustments, reclassifications,
reorganization, or changes of its capital or business structure or to merge,
consolidate, dissolve, or liquidate, or to sell or transfer all or any part
of its business or assets.

18. DISCLAIMER OF RIGHTS

No provision in the Plan or in any Grant or Award Agreement shall be
construed to confer upon any individual the right to remain in the employ or
service of the Company or any affiliate, or to interfere in any way with any
contractual or other right or authority of the Company or Service Provider
either to increase or decrease the compensation or other payments to any
individual at any time, or to terminate any employment or other relationship
between any individual and the Company. In addition, notwithstanding anything
contained in the Plan to the contrary, unless otherwise stated in the
applicable Award Agreement, no Grant awarded under the Plan shall be affected
by any change of duties or position of the Grantee, so long as such Grantee
continues to be a director, officer, consultant or employee of the Company.
The obligation of the Company to pay any benefits pursuant to this Plan shall
be interpreted to require the Company to transfer any amounts to a third
party trustee or otherwise hold any amounts in trust or escrow for payment to
any participant or beneficiary under the terms of the Plan. No Grantee shall
have any of the rights of a shareholder with respect to the shares of Stock
subject to an Option or SAR except to the extent the certificates for such
shares of Stock shall have been issued upon the exercise of the Option or
SAR.

19. NONEXCLUSIVITY OF THE PLAN

Neither the adoption of the Plan nor the submission of the Plan to the
shareholders of the Company for approval shall be construed as creating any
limitations upon the right and authority of the Board to adopt such other
incentive compensation arrangements (which arrangements may be applicable
either generally to a class or classes of individuals or specifically to a
particular individual or particular individuals) as the Board in its
discretion determines desirable, including, without limitation, the granting
of stock options otherwise than under the Plan.

20. WITHHOLDING TAXES

The Company or a Subsidiary, as the case may be, shall have the right to
deduct from payments of any kind otherwise due to a Grantee any Federal,
state, or local taxes of any kind required by law to be withheld with respect
to the vesting of or other lapse restrictions applicable to Restricted Stock
or Restricted Stock Units or upon the exercise of an Option or SAR. At the
time

                                        18

<PAGE>

of such vesting, lapse, or exercise, the Grantee shall pay to the
Company or the Subsidiary, as the case may be, any amount that the Company or
the Subsidiary may reasonably determine to be necessary to satisfy such
withholding obligation. Subject to the prior approval of the Company or the
Subsidiary, which may be withheld by the Company or the Subsidiary, as the
case may be, in its sole discretion, the Grantee may elect to satisfy such
obligations, in whole or in part, (i) by causing the Company or the
Subsidiary to withhold shares of Stock otherwise issuable to the Grantee or
(ii) by delivering to the Company or the Subsidiary shares of Stock already
owned by the Grantee. The shares of Stock so delivered or withheld shall have
an aggregate fair market value equal to such withholding obligations. The
fair market value of the shares of Stock used to satisfy such withholding
obligation shall be determined by the Company or the Subsidiary as of the
date that the amount of tax to be withheld is to be determined. A Grantee who
has made an election pursuant to this SECTION 20 may satisfy his or her
withholding obligation only with shares of Stock that are not subject to any
repurchase, forfeiture, unfulfilled vesting, or other similar requirements.

21. CAPTIONS

The use of captions in this Plan or any Award Agreement is for the
convenience of reference only and shall not affect the meaning of any
provision of the Plan or such Award Agreement.

22. OTHER PROVISIONS

Each Grant awarded under the Plan may contain such other terms and conditions
not inconsistent with the Plan as may be determined by the Board, in its sole
discretion.

23. NUMBER AND GENDER

With respect to words used in this Plan, the singular form shall include the
plural form, the masculine gender shall include the feminine gender, etc., as
the context requires.

24. SEVERABILITY

If any provision of the Plan or any Award Agreement shall be
determined to be illegal or unenforceable by any court of law in any
jurisdiction, the remaining provisions hereof and thereof shall be
severable and enforceable in accordance with their terms, and all
provisions shall remain enforceable in any other jurisdiction.

25. POOLING

Notwithstanding anything in the Plan to the contrary, if any right under
or feature of the Plan would cause to be ineligible for pooling of
interest accounting a transaction that would, but for the right or
feature hereunder, be eligible for such accounting treatment, the Board
may modify or adjust the right or feature so that the transaction will be
eligible for pooling of interest accounting. Such modification or
adjustment may include payment of cash or issuance to a Grantee of shares
of Stock having a Fair Market Value equal to the cash value of such right
or feature.

                                        19

<PAGE>

26. GOVERNING LAW

The validity and construction of this Plan and the instruments
evidencing the Grants awarded hereunder shall be governed by the laws of the
State of Delaware (without giving effect to the choice of law provisions
thereof).

This Plan was duly adopted and approved by the Board of Directors of the
Company as of the 26th day of March, 1999.

/S/
-----------------------------

The Plan was duly approved by the shareholders of the Company on the 26th day
of March, 1999.

/S/
-----------------------------

                                        20

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