Document:

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                                                                    EXHIBIT 10.4

        PRG-SCHULTZ INTERNATIONAL, INC. HSA ACQUISITION STOCK OPTION PLAN

                                     PURPOSE

         The purpose of this PRG-Schultz HSA Acquisition Stock Option Plan (the
"Plan") is to enable PRG-Schultz International, Inc. (the "Company") to attract
and retain former key employees of Howard Schultz & Associates International,
Inc. ("HSA") who were hired in connection with the Company's acquisition of the
assets of HSA ("HSA Acquisition") and to provide such persons with a proprietary
interest in the Company through the granting of Nonqualified Stock Options.

         This Plan is intended to operate as a successor plan to the 1999 Howard
Schultz & Associates International Stock Option Plan (the "Former Plan").

                                    ARTICLE I
                                   DEFINITIONS

         For the purpose of this Plan, unless the context requires otherwise,
the following terms shall have the meanings indicated:

         "BOARD" means the board of directors of the Company.

         "CAUSE" means any one or more of the following: (i) willful
noncompliance with the Company's regulations or instructions; (ii) serious
violations of law; (iii) illegal use of drugs or substance abuse during the
Participant's employment or during the term of the Participant's contract that
impairs the Participant's performance, that causes harm to the Company or that,
in the reasonable judgment of the Company, has damaged or interfered with the
Company's relationships with its customers, suppliers, employees or other
agents; (iv) commission of a material act of fraud, illegality, theft or
dishonesty relating to the Company's assets, products, supplies, activities,
operations or employees; (v) engaging in sexual harassment or other unlawful
discrimination in employment; (vi) breach of a duty of loyalty to the Company or
any of its affiliates or subsidiaries; (vii) disclosure of confidential
information; (viii) breach of a covenant not to compete; or (ix) engaging in any
other deliberate conduct considered detrimental to the interests of the Company
or its employees.

         "CODE" means the Internal Revenue Code of 1986, as amended from time to
time.

         "COMMITTEE" shall have the meaning set forth in Article II hereof.

         "COMMON STOCK" means the common stock which the Company is currently
authorized to issue or may in the future be authorized to issue.

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         "COMPANY" means The Profit Recovery Group International, Inc., a
corporation organized under the laws of the State of Georgia, or any successor
corporation.

         "DATE OF GRANT" means the effective date on which a Stock Option is
awarded to a Participant as set forth in the Stock Option Agreement.

         "DISABILITY" means total and permanent disability as defined in Section
22(e) of the Code.

         "FAIR MARKET VALUE" means, for purposes of determining the exercise
price for a Stock Option or SAR granted hereunder, as of any given date:

                           (i)      if the Common Stock is listed on an
                  established stock exchange or exchanges, or traded on the
                  Nasdaq National Market System ("Nasdaq/NMS") the closing price
                  of the Common Stock as listed thereon on the applicable day,
                  or if no sale of Common Stock has been made on any exchange on
                  that date, on the next preceding day on which there was a sale
                  of Common Stock;

                           (ii)     if the Common Stock is not listed on an
                  established stock exchange or Nasdaq/NMS but is instead traded
                  over-the-counter, the mean of the dealer "bid" and "ask"
                  prices of the Common Stock in the over-the-counter market on
                  the applicable day, as reported by the National Association of
                  Securities Dealers, Inc.;

                           (iii)    if the Common Stock is not listed on any
                  exchange or traded over-the-counter, the value as determined
                  in good faith by the Committee;

         "FORMER PLAN" means the 1999 Howard Schultz & Associates International
Stock Option Plan.

         "HSA" shall mean Howard Schultz & Associates International, Inc., a
Texas Corporation.

         "HSA ACQUISITION" shall mean the purchase of substantially all of the
assets of HSA by the Company pursuant to that certain Agreement and Plan of
Reorganization dated as of August 3, 2001 among the Company, HSA, Howard
Schultz, Andrea H. Schultz and certain trusts, as amended by the Amended and
Restated Agreement and Plan of Reorganization dated as of December 11, 2001.

         "1934 ACT" means the Securities Exchange Act of 1934.

         "PARTICIPANT" means any employee of the Company or any Subsidiary of
the Company who is a recipient of a Stock Option.

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         "PLAN" means The Profit Recovery Group International, Inc. HSA
Acquisition Stock Option Plan, as it may be amended from time to time.

         "RETIREMENT" shall mean retirement from employment with the Company,
its Subsidiaries or their successors or assigns at age sixty-five (65) or older
with the consent of the Company.

         "SERVICES AGREEMENT" means any employment agreement or contract for
services entered into between the Company and a Participant.

         "SPREAD" shall have the meaning set forth in Article XI hereof.

         "STOCK DIVIDEND" means a dividend or other distribution declared on the
shares of Common Stock payable in (i) capital stock of the Company or any
Subsidiary of the Company, or (ii) rights, options or warrants to receive or
purchase capital stock of the Company or any Subsidiary of the Company, or (iii)
securities convertible into or exchangeable for capital stock of the Company or
any Subsidiary of the Company, or (iv) any capital stock received upon the
exercise, or with respect to, the foregoing.

         "STOCK OPTION" shall mean an option to purchase shares of Common Stock
granted to a Participant pursuant to the Former Plan and assumed by the Company
in the HSA Acquisition, as amended to reflect the effects of the HSA
Acquisition. The Stock Options are not intended to qualify as incentive stock
options under Section 422 of the Code.

         "STOCK OPTION AGREEMENT" means a written agreement between HSA and a
Participant that sets forth the terms, conditions and limitations applicable to
a Stock Option, as assumed by the Company and amended in connection with the HSA
Acquisition.

         "SUBSIDIARY" means any corporation in an unbroken chain of corporations
beginning with the Company if, at the time of granting of the Stock Option, each
of the corporations other than the last corporation in the unbroken chain owns
stock possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in the chain, and "Subsidiaries" means
more than one of any such corporations.

         "TERMINATION" or "TERMINATION OF SERVICE" occurs when a Participant who
is an employee of the Company or any Subsidiary shall cease to serve as an
employee of the Company and all of its Subsidiaries, for any reason, or when the
contract between a Participant who is an independent contractor and the Company
or any Subsidiary expires or is terminated for any reason.

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                                   ARTICLE II
                                 ADMINISTRATION

         Subject to the terms of this Article II, the Plan shall be administered
by the Board or such committee of the Board as is designated by the Board to
administer the Plan (the "Committee"). The Committee shall consist of at least
two members. Any member of the Committee may be removed at any time, with or
without cause, by resolution of the Board. Any vacancy occurring in the
membership of the Committee may be filled by appointment by the Board.

         The Board shall select one of its members to act as the Chairman of the
Committee, and the Committee shall make such rules and regulations for its
operation as it deems appropriate. A majority of the Committee shall constitute
a quorum, and the act of a majority of the members of the Committee present at a
meeting at which a quorum is present shall be the act of the Committee. Subject
to the terms hereof, the Committee shall have exclusive power to:

         (a)      Determine the particular key employees of the Company to whom
                  Stock Options have been validly granted;

         (b)      Determine the number of shares of Common Stock subject to
                  issuance pursuant to any Stock Option award, and all of the
                  terms, conditions, restrictions and limitations, if any, of an
                  award of Stock Options, including the time and conditions of
                  exercise or vesting;

         (c)      Accelerate the vesting or exercise of any Stock Options when
                  such actions would be in the best interests of the Company;

         (d)      Interpret the Plan, prescribe, amend, and rescind any rules
                  and regulations necessary or appropriate for the
                  administration of the Plan; and

         (e)      Make such other determinations and take such other action as
                  it deems necessary or advisable in connection with the
                  foregoing.

         The Committee shall have full authority and responsibility to
administer the Plan, including authority to interpret and construe any provision
of the Plan and the terms of any Stock Options issued under it and to adopt such
rules and regulations for administering the Plan as it may deem necessary.
Except as provided below, any interpretation, determination, or other action
made or taken by the Committee shall be final, binding, and conclusive on all
interested parties, including the Company and all Participants. The Committee
may delegate to the President of the Company and to other senior officers of the
Company its duties under this Plan pursuant to such conditions or limitations as
the Committee may establish. In the event that the Board does not appoint a
Committee, then the Board shall administer this Plan, and unless and until a
Committee is so appointed, all references in this Plan to the "Committee" shall
be construed to mean, except where the context otherwise requires, the Board.

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                                   ARTICLE III
                           SHARES SUBJECT TO THE PLAN

         Subject to the provisions of Articles X and XI of the Plan, the maximum
number of shares of Common Stock issuable pursuant to the exercise of Stock
Options granted under the Plan shall be 1,083,846 shares of Common Stock. The
Board and the appropriate officers of the Company shall from time to time take
whatever actions are necessary to execute, acknowledge, file and deliver any
documents required to be filed with or delivered to any governmental authority
or any stock exchange or transaction reporting system on which shares of Common
Stock are listed or quoted in order to make shares of Common Stock available for
issuance pursuant to this Plan. Shares to be distributed and sold may be made
available from either authorized but unissued Common Stock or Common Stock held
by the Company in its treasury.

                                   ARTICLE IV
                                  STOCK OPTIONS

         4.1      Eligibility. Participation in this plan shall be limited to
Participants in the Former Plan who were hired by the Company in connection with
the HSA Acquisition.

         4.2      Grant of Stock Options. All Stock Options under this Plan were
awarded under the Former Plan and assumed by the Company in the HSA Acquisition.
Each grant of Stock Options was evidenced by a Stock Option Agreement setting
forth the total number of shares subject to the Stock Option, the option
exercise price, and the term of the Stock Option. Each of the original Stock
Option Agreements shall be amended and supplemented by a letter from the Company
specifying the revised terms in accordance with the HSA Acquisition. The Company
shall execute amendments or supplements to Stock Option Agreements upon
instructions from the Committee.

         4.3      Exercise Price. The exercise price for a Stock Option shall be
determined by the Board or the Committee, consistent with the terms of the HSA
Acquisition. Notwithstanding anything to the contrary contained in this Section
4.3, the exercise price of each Stock Option granted pursuant to the Plan shall
not be less than the par value per share of the Common Stock. Further, other
than pursuant to Article X(ii), in no event shall any Stock Option issued under
the Plan be repriced by:

                  (i)      lowering the exercise price of that Option; or

                  (ii)     canceling that Option and subsequently granting a
                           replacement or regranted Option with a lower exercise
                           price, to the extent that such cancellation,
                           replacement or regrant would fall within the
                           definition of "repriced" contained in Item 402(i) of
                           Regulation S-K promulgated under the Securities Act
                           of 1933, such definition to be applied to grants to
                           all persons, not just "named executive officers" as
                           that term is defined in Item 402(a)(3) of Regulation
                           S-K.

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         4.4      Option Period. The option period will begin on the date of the
closing of the HSA Acquisition and terminate on the date that is the earlier of
the expiration date specified in the Stock Option Agreement or five years from
the date of such closing, as specified by the Committee. No Stock Option granted
under the Plan may be exercised at any time after the expiration of its option
period. The Committee may provide for the vesting and exercise of Stock Options
in installments and upon such terms, conditions and restrictions as it may
determine. In addition to the provisions contained elsewhere herein concerning
automatic acceleration of unmatured installments of Stock Options, the Committee
shall have the right to accelerate the time at which any Stock Option granted to
a Participant shall become vested or exercisable.

                                    ARTICLE V
                   EXERCISE OF STOCK OPTIONS; RESTRICTED STOCK

         5.1      Exercise of Options.

                  (a)      Options granted to Participants shall be exercisable
                           in accordance with the terms of the applicable Stock
                           Option Agreement, as amended.

                  (b)      A Stock Option may be exercised solely by the
                           Participant during his lifetime, by the Participant's
                           guardian if the Participant is incapacitated as a
                           result of a Disability, or after the Participant's
                           death by the person or persons entitled thereto under
                           his will or the laws of descent and distribution. In
                           the event that such a person exercises a Stock
                           Option, all rights, responsibilities, conditions,
                           limitations or restrictions that would be applicable
                           to the Participant shall be applicable to the person
                           exercising the Stock Option.

                  (c)      The purchase price of the shares as to which a Stock
                           Option is exercised shall be paid in full at the time
                           of the exercise. The full purchase price of shares
                           purchased shall be paid upon exercise of the Stock
                           Option in cash, by the use of the proceeds to be
                           received from the sale of Common Stock issuable
                           pursuant to a Stock Option, or any other lawful
                           consideration therefor (including shares of Common
                           Stock previously owned by the Participants), as the
                           Committee may approve or authorize, in the amount of
                           the full purchase price of the shares purchased.

                  (d)      No holder of a Stock Option shall be, or have any of
                           the rights or privileges of, a shareholder of the
                           Company in respect of any shares subject to any Stock
                           Option unless and until certificates evidencing such
                           shares shall have been issued by the Company to such
                           holder.

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                                   ARTICLE VI
                             TERMINATION OF SERVICE

         Upon the Termination of Service of a Participant for any reason, the
specific Stock Option Agreement shall govern the treatment of any unexercised
Stock Options. In the event of such a Termination, the Committee may, in its
discretion, provide for the extension of the exercisability of a Stock Option
for any period that is not beyond the applicable expiration date thereof,
accelerate the vesting or exercisability of a Stock Option, eliminate or make
less restrictive any restrictions contained in a Stock Option, waive any
restriction or other provision of this Plan or a Stock Option or otherwise amend
or modify the Stock Option in any manner that is either (a) not adverse to such
Participant or (b) consented to by such Participant.

         Except as otherwise set forth above, a Participant's right to exercise
his or her Stock Options is subject to the following:

                  (a)      Termination for Cause. In the event of Termination of
Service of a Participant by the Company for Cause, all of the Participant's
outstanding Stock Options, whether or not vested, shall be forfeited and
immediately terminate.

                  (b)      Other Termination of Employment. In the event of a
Termination of Service of a Participant for any reason other than for Cause,
then the Stock Option, and all unexercised Common Stock granted to the
Participant thereunder (whether or not vested) will terminate and be forfeited
at the first of the following to occur:

                           (i)      5 p.m. on the date which is twelve months
         following the Participant's Termination of Service due to death or
         Disability;

                           (ii)     5 p.m. on the date which is ninety days
         following the Participant's Retirement or following the Participant's
         involuntary Termination of Service without Cause;

                           (iii)    5 p.m. on the day prior to the date of the
         Participant's voluntary Termination, other than Termination of Service
         for death, Disability, or Retirement; or

                           (iv)     5 p.m. on the date prior to the date the
         Participant violates any covenant not to compete or confidentiality
         agreement set forth in the Participant's Stock Option Agreement.

                  The provisions of (a) and (b) and will supersede any contrary
provisions contained in any Stock Option Agreement.

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                                   ARTICLE VII
                           AMENDMENT OR DISCONTINUANCE

         Subject to the limitations set forth in this Article VII, the Board may
at any time and from time to time, without the consent of the Participants,
alter, amend, revise, suspend, or discontinue the Plan in whole or in part;
except that the provisions of Section 4.3 requiring prior shareholder approval
for the repricing of Stock Options may not be amended without the approval of
the Company's shareholders. In the event of any amendment to the Plan, the
holder of any Stock Option outstanding under the Plan shall, upon request of the
Committee and as a condition to the exercisability thereof, execute a conforming
amendment in the form prescribed by the Committee to any Stock Option Agreement
relating thereto within such reasonable time as the Committee shall specify in
such request. Notwithstanding anything contained in this Plan to the contrary,
unless required by law, no action contemplated or permitted by this Article VII
shall adversely affect any rights of Participants or obligations of the Company
to Participants with respect to any Stock Options theretofore granted under the
Plan without the consent of the affected Participant.

                                  ARTICLE VIII
                               EFFECT OF THE PLAN

         Neither the adoption of this Plan nor any action of the Board or the
Committee shall be deemed to give any employee or independent contractor any
right to be granted a Stock Option or to purchase or receive Common Stock of the
Company or any other rights except as may be evidenced by a Stock Option
Agreement, or any amendment thereto, duly authorized by and executed on behalf
of the Company and then only to the extent of and upon and subject to the terms
and conditions expressly set forth therein.

                                   ARTICLE IX
                                      TERM

         Unless sooner terminated by action of the Board, the Plan will
terminate on the 24th day of January, 2007. Stock Options under the Plan may not
be granted after that date, but Stock Options granted before that date will
continue to be effective in accordance with their terms and conditions.

                                    ARTICLE X
                               CAPITAL ADJUSTMENTS

         If at any time while the Plan is in effect or unexercised Stock Options
are outstanding there shall be any increase or decrease in the number of issued
and outstanding shares of Common Stock through the declaration of a Stock
Dividend or through any recapitalization resulting in a stock split-up,
combination, or exchange of shares of Common Stock, then and in such event:

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         (i)      An appropriate adjustment shall be made in the maximum number
                  of shares of Common Stock then subject to being awarded under
                  grants pursuant to the Plan, to the end that the same
                  proportion of the Company's issued and outstanding shares of
                  Common Stock shall continue to be subject to being so awarded;
                  and

         (ii)     Appropriate adjustments shall be made in the number of shares
                  of Common Stock and the exercise price per share thereof then
                  subject to purchase pursuant to each such Stock Option
                  previously granted and unexercised, to the end that the same
                  proportion of the Company's issued and outstanding shares of
                  Common Stock in each instance shall remain subject to purchase
                  at the same aggregate exercise price.

         Any fractional shares resulting from any adjustment made pursuant to
this Article X shall be eliminated for the purposes of such adjustment. Except
as otherwise expressly provided herein, the issuance by the Company of shares of
its capital stock of any class, or securities convertible into shares of capital
stock of any class, either in connection with direct sale or upon the exercise
of rights or warrants to subscribe therefor, or upon conversion of shares or
obligations of the Company convertible into such shares or other securities,
shall not affect, and no adjustment by reason thereof shall be made with respect
to, the number of or exercise price of shares of Common Stock then subject to
outstanding Stock Options granted under the Plan.

                                   ARTICLE XI
                   RECAPITALIZATION, MERGER AND CONSOLIDATION

         (a)      The existence of this Plan and Stock Options granted hereunder
shall not affect in any way the right or power of the Company or its
stockholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or any issue of bonds,
debentures, preferred or prior preference stocks ranking prior to or otherwise
affecting the Common Stock or the rights thereof (or any rights, options or
warrants to purchase same), or the dissolution or liquidation of the Company, or
any sale or transfer of all or any part of its assets or business, or any other
corporate act or proceeding, whether of a similar character or otherwise.

         (b)      Subject to any required action by the stockholders, if the
Company shall be the surviving or resulting corporation in any merger or
consolidation, any outstanding Stock Option granted hereunder shall pertain to
and apply to the securities or rights (including cash, property or assets) to
which a holder of the number of shares of Common Stock subject to the Stock
Option would have been entitled.

         (c)      In the event of any reorganization, merger or consolidation
pursuant to which the Company is not the surviving or resulting corporation, or
of any proposed sale of substantially all of the assets of the Company, there
may be substituted for each share of Common Stock subject to the unexercised
portions of such outstanding Stock Option that number of shares of each class of
stock or other securities or that amount of cash, property or assets of the
surviving or

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consolidated company which were distributed or distributable to the stockholders
of the Company in respect of each share of Common Stock held by them, such
outstanding Stock Options to be thereafter exercisable for such stock,
securities, cash or property in accordance with their terms. Notwithstanding the
foregoing, however, the Board, in its sole discretion, may cancel any portion or
all of such Stock Options as of the effective date of any such reorganization,
merger or consolidation, or of any such proposed sale of substantially all of
the assets of the Company, or of any dissolution or liquidation of the Company,
and, with respect to any such Stock Options that are cancelled, either:

                  (i)      give notice to each holder thereof or his personal
                           representative of its intention to cancel such Stock
                           Options and permit the purchase during the thirty
                           (30) day period next preceding such effective date of
                           any or all of the shares subject to such outstanding
                           Stock Options, including shares as to which such
                           Stock Options would not otherwise be exercisable; or

                  (ii)     pay the holder thereof an amount equal to a
                           reasonable estimate of an amount (hereinafter the
                           "Spread") equal to the difference between the net
                           amount per share payable in such transaction or as a
                           result of such transaction, less the exercise price
                           of such Stock Options. In estimating the Spread,
                           appropriate adjustments to give effect to the
                           existence of the Stock Options shall be made, such as
                           deeming the Stock Options to have been exercised,
                           with the Company receiving the exercise price payable
                           thereunder, and treating the shares receivable upon
                           exercise of the Stock Options as being outstanding in
                           determining the net amount per share. In cases where
                           the proposed transaction consists of the acquisition
                           of assets of the Company, the net amount per share
                           shall be calculated on the basis of the net amount
                           receivable with respect to shares of Common Stock
                           upon a distribution and liquidation by the Company
                           after giving effect to expenses and charges,
                           including but not limited to taxes, payable by the
                           Company before such liquidation could be completed.

         (d)      [INTENTIONALLY OMITTED]

         (e)      Notwithstanding sub-Section (c) above of this Article XI, in
case the Company shall, at any time while any Stock Option under this Plan shall
be in force and remain unexpired, (i) sell all or substantially all of its
property or (ii) dissolve, liquidate, or wind up its affairs, then, provided
that the Board so determines in its sole discretion, each Participant may
thereafter receive upon exercise hereof (in lieu of each share of Common Stock
of the Company which such Participant would have been entitled to receive) the
same kind and amount of any securities or assets as may be issuable,
distributable or payable upon any such sale, dissolution, liquidation, or
winding up with respect to each share of Common Stock of the Company. In the
event that the Company shall, at any time prior to the expiration of any Stock
Option, make any partial distribution of its assets in the nature of a partial
liquidation, whether payable in cash or in kind (but excluding the distribution
of a cash dividend payable out of retained earnings or earned

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surplus and designated as such), then in such event the exercise prices then in
effect with respect to each option shall be reduced, as of the payment date of
such distribution, in proportion to the percentage reduction in the tangible
book value of the shares of the Company's Common Stock (determined in accordance
with generally accepted accounting principles) resulting by reason of such
distribution; provided, that in no event shall any adjustment of exercise prices
in accordance with the terms of the Plan result in any exercise prices being
reduced below the par value per share of the Common Stock.

         (f)      Upon the occurrence of each event requiring an adjustment of
the exercise price and/or the number of shares purchasable pursuant to Stock
Options granted pursuant to the terms of this Plan, the Company shall mail
forthwith to each Participant a copy of its computation of such adjustment which
shall be conclusive and shall be binding upon each such Participant, except as
to any Participant who contests such computation by written notice to the
Company within thirty (30) days after receipt thereof by such Participant.

                                   ARTICLE XII

         [INTENTIONALLY OMITTED]

                                  ARTICLE XIII
                            MISCELLANEOUS PROVISIONS

         13.1     Exercise of Stock Options. Stock Options granted under the
Plan may be exercised during the option period, at such times and in such
amounts, in accordance with the terms and conditions and subject to such
restrictions as are set forth herein and in the applicable Stock Option
Agreements. Notwithstanding anything to the contrary contained herein, Stock
Options may not be exercised, nor may shares be issued pursuant to a Stock
Option, if any necessary listing of the shares on a stock exchange or any
registration under state or federal securities laws required under the
circumstances has not been accomplished.

         13.2     Assignability. Except as otherwise provided herein or as
provided in the Stock Option Agreement, no Stock Option granted under this Plan
shall be assignable or otherwise transferable by the Participant (or his or her
authorized legal representative) during the Participant's lifetime and, after
the death of the Participant, other than by will or the laws of descent and
distribution; and any attempted assignment or transfer in violation of this
Section 13.2 shall be null and void. Upon the Participant's death, the personal
representative or other person entitled to succeed to the rights of the
Participant (the "Successor Participant") may exercise such rights. A Successor
Participant must furnish proof satisfactory to the Company of his or her right
to exercise the Stock Option under the Participant's will or under the
applicable laws of descent and distribution.

         13.3     Investment Intent. The Company may require that there be
presented to and filed with it by any Participant(s) under the Plan, such
evidence as it may deem necessary to establish

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that the Stock Options granted or the shares of Common Stock to be purchased or
transferred are being acquired for investment purposes and not with a view to
their distribution.

         13.4     No Right to Continue Employment. This Plan does not constitute
a contract of employment. Nothing in the Plan or in any Stock Option confers
upon any employee the right to continue in the employ of the Company or
interferes with or restricts in any way the right of the Company to discharge
any employee at any time (subject to any contract rights of such employee).

         13.5     Tax Requirements. Any Participant who exercises any Stock
Option shall be required to pay the Company the amount of all taxes which the
Company is required to withhold as a result of the exercise of the Stock Option.
With respect to the exercise of a Stock Option by any Participant, such
Participant's obligation to pay such taxes may be satisfied by the following, or
any combination thereof (i) the delivery of cash to the Company in an amount
necessary to satisfy the required tax withholding obligation of the Company
and/or (ii) the actual delivery by the exercising Participant to the Company of
shares of Common Stock which the Participant owns and/or the Company's
withholding of a number of shares to be delivered upon the exercise of the Stock
Option), which shares so delivered or withheld have an aggregate Fair Market
Value which equals or exceeds (if necessary to avoid the issuance of fractional
shares) the required tax withholding payment. Any such withholding payments with
respect to the exercise of a Stock Option made by a Participant in cash or by
actual delivery of shares of Common Stock shall be required to be made within
thirty (30) days after the delivery to the Participant of any certificate
representing the shares of Common Stock acquired upon exercise of the Stock
Option.

         13.6     Indemnification of Board and Committee. No current or previous
member of the Board or the Committee, nor any officer or employee of the Company
acting on behalf of the Board or the Committee, shall be personally liable for
any action, determination, or interpretation taken or made in good faith with
respect to the Plan, and all such members of the Board or the Committee and each
and any officer or employee of the Company acting on their behalf shall, to the
extent permitted by law, be fully indemnified and protected by the Company in
respect of any such action, determination or interpretation. The foregoing right
of indemnification shall not be exclusive of any other rights of indemnification
to which such individuals may be entitled under the Company's Articles of
Incorporation or Bylaws, as a matter of law, or otherwise.

         13.7     Restrictions. This Plan, and the granting and exercise of
Stock Options hereunder, and the obligation of the Company to sell and deliver
Common Stock under such Stock Options, shall be subject to all applicable
foreign and United States laws, rules and regulations, and to such approvals on
the part of any governmental agencies or stock exchanges or transaction
reporting systems as may be required. No Common Stock or other form of payment
shall be issued with respect to any Stock Option unless the Company shall be
satisfied based on the advice of its counsel that such issuance will be in
compliance with applicable federal and state securities laws and the
requirements of any regulatory authority having jurisdiction over the securities
of the Company. Unless the Stock Options and Common Stock covered by this Plan
have been registered under the Securities Act of 1933, as amended, each

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person exercising a Stock Option under this Plan may be required by the Company
to give a representation in writing in form and substance satisfactory to the
Company to the effect that he is acquiring such shares for his own account for
investment and not with a view to, or for sale in connection with, the
distribution of such shares or any part thereof. If any provision of this Plan
is found not to be in compliance with such rules, such provision shall be null
and void to the extent required to permit this Plan to comply with such rules.
Certificates evidencing shares of Common Stock delivered under this Plan may be
subject to such stop transfer orders and other restrictions as the Committee may
deem advisable under the rules, regulations and other requirements of the
Securities and Exchange Commission, any securities exchange or transaction
reporting system upon which the Common Stock is then listed or quoted, and any
applicable federal, foreign and state securities law. The Committee may cause a
legend or legends to be placed upon any such certificates to make appropriate
reference to such restrictions.

         13.8     Gender and Number. Where the context permits, words in the
masculine gender shall include the feminine and neuter genders, the plural form
of a word shall include the singular form, and the singular form of a word shall
include the plural form.

         13.9     Governing Law. The Plan, all awards granted under the Plan and
actions taken thereunder shall be governed by and construed in accordance with
the laws of the State of Georgia.

                                   ARTICLE XV
                                 EFFECTIVE DATE

         The effective date of the Plan shall be January 24, 2002. The Plan will
continue in effect until the expiration of its term or until earlier terminated,
amended, or suspended in accordance with the terms hereof.<PAGE>

                                                                    EXHIBIT 10.1

                            REPUBLIC SERVICES, INC.
                           1998 STOCK INCENTIVE PLAN

                    (AS AMENDED AND RESTATED MARCH 6, 2002)

                                   ARTICLE I
                                  DEFINITIONS

     For purposes of this Plan, the following terms shall have the following
meanings:

     1.01  AGREEMENT means a written agreement (including any amendment or
supplement thereto) between the Company and a Participant specifying the terms
and conditions of a Grant or an Award issued to such Participant.

     1.02  AWARD means an award of Common Stock, Restricted Stock and/or Phantom
Stock.

     1.03  BOARD means the Board of Directors of the Company.

     1.04  CHANGE OF CONTROL means any change in control of the Company of a
nature which would be required to be reported (a) in response to Item 6(e) of
Schedule 14A of Regulation 14A, as in effect on the date of this Agreement,
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), (b) in response to Item 1 of the Current Report on Form 8-K, as in effect
on the date of this Agreement, promulgated under the Exchange Act, or (c) in any
filing by the Company with the Securities and Exchange commission; provided,
however, that without limitation, a Change of Control of the Company shall be
deemed to have occurred if:

        (i) Any "person" (as such term is defined in Sections 13(d)(3) and
     Section 14(d)(3) of the Exchange Act), other than the Company, any
     majority-owned subsidiary of the Company, or any compensation plan of the
     Company or any majority-owned subsidiary of the Company, becomes the
     "beneficial owner" (as such term is defined in Rule 13d-3 of the Exchange
     Act), directly or indirectly, of securities of the Company representing
     fifty percent (50%) or more of the combined voting power of the Company;

        (ii) During any period of three consecutive years during the term of
     this Agreement, the individuals who at the beginning of such period
     constitute the Board of Directors of the Company cease for any reason to
     constitute at least a majority of such Board of Directors, unless the
     election of each director who was not a director at the beginning of such
     period has been approved in advance by directors representing at least
     two-thirds of the directors then in office who were directors at the
     beginning of such period; or

        (iii) The shareholders of the Company approve (1) a reorganization,
     merger, or consolidation with respect to which persons who were the
     shareholders of the Company immediately prior to such reorganization,
     merger, or consolidation do not immediately thereafter own more than 50% of
     the combined voting power entitled to vote generally in the election of the
     directors of the reorganized, merged or consolidated entity; (2) a
     liquidation or dissolution of the Company; or (3) the sale of all or
     substantially all of the assets of the Company or of a subsidiary of the
     Company that accounts for 30% of the

                                       A-1
<PAGE>

     consolidated revenues of the Company, but not including a reorganization,
     merger or consolidation of the Company.

     1.05  CHANGE OF CONTROL DATE is the date on which an event described in
Section 1.04 occurs.

     1.06  CODE means the Internal Revenue Code of 1986, as amended from time to
time. References to the Code shall include the valid and binding governmental
regulations, court decisions and other regulatory and judicial authority issued
or rendered thereunder.

     1.07  COMMISSION means the Securities and Exchange Commission or any
successor agency.

     1.08  COMMITTEE means the Compensation Committee of the Board.

     1.09  COMMON STOCK means the Common Stock, par value $.01 per share, of the
Company.

     1.10  COMPANY means Republic Services, Inc.

     1.11  EFFECTIVE DATE means June 30, 1998.

     1.12  EXCHANGE ACT means the Securities Exchange Act of 1934, as amended
from time to time, and any successor thereto.

     1.13  FAIR MARKET VALUE means, on any given date, the closing price of a
share of Common Stock as reported on the New York Stock Exchange composite tape
on such day or, if the Common Stock was not traded on the New York Stock
Exchange on such day, then on the next preceding day that the Common Stock was
traded on such exchange, all as reported by such source as the Committee may
select.

     1.14  GRANT means the grant of an Option and/or an SAR.

     1.15  INCENTIVE STOCK OPTION means an Option which qualifies and is
intended to qualify as an "incentive stock option" under Section 422 of the
Code.

     1.16  INITIAL VALUE means, with respect to an SAR, the Fair Market Value of
one share of Common Stock on the date of grant, as set forth in an Agreement.

     1.17  NON-QUALIFIED STOCK OPTION means an Option other than an Incentive
Stock Option.

     1.18  OPTION means a stock option that entitles the holder to purchase from
the Company a stated number of shares of Common Stock at the price and on the
conditions set forth in an Agreement.

     1.19  OPTION PRICE means the price per share for Common Stock purchased on
the exercise of an Option as provided in Article VI.

     1.20  PARTICIPANT means an officer, director or employee of the Company or
of a Subsidiary who satisfies the requirements of Article IV and is selected by
the Committee to receive a Grant or an Award.

     1.21  PHANTOM STOCK means a bookkeeping entry on behalf of a Participant by
which his account is credited (but not funded) as though Common Stock had been
transferred to such account.

                                       A-2
<PAGE>

     1.22  PLAN means the Republic Services, Inc. 1998 Stock Incentive Plan, as
amended from time to time.

     1.23  RESTRICTED STOCK means shares of Common Stock awarded to a
Participant under Article IX and designated as Restricted Stock. Shares of
Common Stock shall cease to be Restricted Stock when, in accordance with the
terms of the applicable Agreement, they become transferable and free of
substantial risk of forfeiture.

     1.24  RULE 16B-3 means Rule 16b-3, as promulgated by the Commission under
Section 16(b) of the Exchange Act, as amended from time to time, or any
successor rule.

     1.25  SAR means a stock appreciation right granted pursuant to this Plan
that entitles the holder to receive, with respect to each share of Common Stock
encompassed by the exercise of such SAR, the excess of the Fair Market Value at
the time of exercise over the Initial Value of the SAR; provided, that any
limited stock appreciation right granted by the Committee and exercisable upon a
Change of Control shall entitle the holder to receive, with respect to each
share of Common Stock encompassed by the exercise of such SAR, the higher of (x)
the highest sales price of a share of Common Stock as reported on the New York
Stock Exchange composite tape during the 60-day period prior to and including
the Change of Control Date, or (y) the highest price per share paid in a Change
of Control transaction, except that in the case of SARs related to Incentive
Stock Options, such price shall be based only on the Fair Market Value of the
Common Stock on the date that the Incentive Stock Option is exercised.

     1.26  SECURITIES BROKER means the registered securities broker acceptable
to the Company who agrees to effect the cashless exercise of an Option pursuant
to Section 8.05 hereof.

     1.27  SUBSIDIARY means, with respect to any corporation, a "subsidiary
corporation" of that corporation within the meaning of Code Section 424(f).

                                   ARTICLE II
                                    PURPOSES

     The Plan is intended to assist the Company in recruiting and retaining
officers, directors, and key employees with ability and initiative by enabling
such persons who contribute significantly to the Company or a Subsidiary to
participate in its future success and to associate their interests with those of
the Company and its shareholders. The Plan is intended to permit the award of
Common Stock, Restricted Stock, and Phantom Stock, and the issuance of Options
qualifying as Incentive Stock Options or Non-Qualified Stock Options as
designated by the Committee at time of grant, and SARs. No Option that is
intended to be an Incentive Stock Option however, shall be invalid for failure
to qualify as an Incentive Stock Option under Section 422 of the Code but shall
be treated as a Non-Qualified Stock Option.

                                  ARTICLE III
                                 ADMINISTRATION

     The Plan shall be administered by the Committee. The Committee shall have
authority to issue Grants and Awards upon such terms (not inconsistent with the
provisions of this Plan) as the Committee may consider appropriate. The terms of
such Grants and Awards

                                       A-3
<PAGE>

may include conditions (in addition to those contained in this Plan) on (i) the
exercisability of all or any part of an Option or SAR and (ii) the
transferability or forfeitability of Restricted Stock or Phantom Stock. In
addition, the Committee shall have complete authority to interpret all
provisions of this Plan; to prescribe the form of Agreements; to adopt, amend,
and rescind rules and regulations pertaining to the administration of the Plan;
and to make all other determinations necessary or advisable for the
administration of this Plan. To fulfill the purposes of the Plan without
amending the Plan, the Committee may also modify any Grants or Awards issued to
Participants who are nonresident aliens or employed outside of the United States
to recognize differences in local law, tax policy or custom.

     The express grant in the Plan of any specific power to the Committee shall
not be construed as limiting any power or authority of the Committee. Any
decision made, or action taken, by the Committee or in connection with the
administration of this Plan shall be final and conclusive. All expenses of
administering this Plan shall be borne by the Company.

                                   ARTICLE IV
                                  ELIGIBILITY

     4.01  GENERAL.  Any officer, director or key employee of the Company or of
any Subsidiary (including any corporation that becomes a Subsidiary of the
Company after the adoption of this Plan) may receive one or more Awards or
Grants, or any combination or type thereof. Employee and non-employee directors
of the Company are eligible to participate in this Plan.

     4.02  GRANTS AND AWARDS.  The Committee will designate the individuals to
whom Grants and/or Awards are to be made and will specify the number of shares
of Common Stock subject to each such Grant or Award. An Option may be granted
alone or in addition to other Grants and/or Awards under the Plan. The Committee
shall have the authority to grant Incentive Stock Options, Non-Qualified Stock
Options or both types of Options (in each case with or without a related SAR) to
any Participant; provided, however, that Incentive Stock Options may be granted
only to employees of the Company and its Subsidiaries. An SAR may be granted
with or without a related Option. All Grants or Awards under this Plan shall be
evidenced by Agreements which shall be subject to applicable provisions of this
Plan and to such other provisions as the Committee may determine. No Participant
may be granted Options that are Incentive Stock Options, or related SARs (under
all plans of the Company and its Subsidiaries which provide for the grant of
Incentive Stock Options) which are first exercisable in any calendar year for
Common Stock having an aggregate Fair Market Value (determined as of the date an
Option is granted) exceeding $100,000 or such other amount as shall be specified
in Code Section 422 and the rules and regulations thereunder from time to time.

     The Committee may issue Awards and Grants under such conditions,
restrictions and contingencies as it may deem appropriate. The performance goals
that may be used by the Committee for such Awards or Grants to executive
officers covered by IRC Section 162(m) shall consist of:

<Table>
<S>                              <C>
Revenue                          Return on Equity
Net Income                       Stockholder Return
Earnings Per Share
</Table>

                                       A-4
<PAGE>

Further, performance criteria may reflect absolute entity performance or a
relative comparison of entity performance to the performance of a peer group of
entities or other external measure of the selected performance criteria. Profit,
earnings and revenues used for any performance goal measurement shall exclude:
gains or losses on operating asset sales or dispositions; asset write-downs;
litigation or claim judgments or settlements; accruals for historic
environmental obligations; effect of changes in tax law or rate on deferred tax
liabilities; accruals for reorganization and restructuring programs; uninsured
catastrophic property losses; the cumulative effect of changes in accounting
principles; and any extraordinary non-recurring items as described in Accounting
Principles Board Opinion No. 30 and/or in management's discussion and analysis
of financial condition and results of operation appearing in the Company's
annual report to stockholders for the applicable year.

     4.03  DESIGNATION OF OPTION AS AN INCENTIVE STOCK OPTION OR NON-QUALIFIED
STOCK OPTION.  The Committee will designate at the time an Option is granted
whether the Option is to be treated as an Incentive Stock Option or a
Non-Qualified Stock Option. In the absence, however, of any such designation,
such Option shall be treated as a Non-Qualified Stock Option.

     4.04  QUALIFICATION OF INCENTIVE STOCK OPTION UNDER SECTION 422 OF THE
CODE. Anything in this Plan to the contrary notwithstanding, no term of this
Plan relating to Incentive Stock Options shall be interpreted, amended or
altered, nor shall any discretion or authority granted under the Plan be
exercised so as to disqualify the Plan under Section 422 of the Code or, without
the consent of the Participant so affected, to disqualify any Incentive Stock
Option under such Section 422. No Option that is intended to be an Incentive
Stock Option however, shall be invalid for failure to qualify as an Incentive
Stock Option under Section 422 of the Code but shall be treated as a
Non-Qualified Stock Option.

     4.05  NON-EMPLOYEE DIRECTOR STOCK OPTIONS.  Non-employee directors shall
receive Grants of Non-Qualified Stock Options. These Grants shall consist of
50,000 shares of Common Stock upon election to the Board at a specific price
equal to the closing price of the Common Stock on the date of election and
subsequent annual Grants of 10,000 shares of Common Stock at an exercise price
equal to the closing price of the Common Stock on the first full trading day
following the public announcement of fourth quarter earnings of the prior year.
Each option granted under this Section shall be immediately exercisable.

     4.06  VESTING.  The minimum vesting period for any Award or Grant shall be
one year, except for Awards or Grants made in lieu of cash compensation, which
may vest immediately. In addition, in its absolute discretion, the Committee may
waive the one-year vesting requirement in instances of termination of employment
or upon an extraordinary event.

                                   ARTICLE V
                             STOCK SUBJECT TO PLAN

     5.01  MAXIMUM NUMBER OF SHARES TO BE AWARDED.

     (a) Subject to the adjustment provisions of Article XI and the provisions
of (i) and (ii) of this Article V, up to 27,000,000 shares of Common Stock may
be issued under the Plan. In addition to such authorization, the following
shares of Common Stock may be issued under the Plan:

                                       A-5
<PAGE>

        (i) Shares of Common Stock that are forfeited under this Plan and shares
     of Common Stock that are not issued under this Plan because of (x) a
     payment of cash in lieu of shares of Common Stock, (y) the cancellation,
     termination or expiration of Grants and Awards, and/or (z) other similar
     events under this Plan shall be available for issuance under this Plan; and

        (ii) If a Participant tenders (by physical delivery or attestation), or
     has withheld, shares of Common Stock in payment of all or part of the
     Option Price under an Option granted under this Plan or in satisfaction of
     withholding tax obligations thereunder, the shares of Common Stock so
     tendered by the Participant or so withheld shall become available for
     issuance under this Plan.

     (b) Subject to the adjustment provisions of Article XI:

        (i) Not more than 1,000,000 shares of Common Stock shall be issued under
     Awards to any one Participant in any year, and this limit shall be
     cumulative over the life of the Plan;

        (ii) Not more than 5,000,000 shares, in the aggregate, of Common Stock
     shall be issued in Grants to any one Participant over the life of the Plan;
     and

        (iii) Not more than 27,000,000 shares, in the aggregate, of Common Stock
     shall be issued in Grants of Incentive Stock Options to all Participants
     over the life of the Plan.

     Subject to the foregoing provisions of this Article V, if a Grant or an
Award may be paid only in shares of Common Stock, or in either cash or shares of
Common Stock, the shares of Common Stock shall be deemed to be issued hereunder
only when and to the extent that payment is actually made in shares of Common
Stock. However, the Committee may authorize a cash payment under a Grant or an
Award in lieu of shares of Common Stock if there are insufficient shares of
Common Stock available for issuance under the Plan.

     5.02  INDEPENDENT SARS.  Upon the exercise of an SAR granted independently
of an Option, the Company may deliver to the Participant authorized but
previously unissued Common Stock, cash, or a combination thereof as provided in
Section 8.03. The maximum aggregate number of shares of Common Stock that may be
issued pursuant to SARs that are granted independently of Options is subject to
the provisions of Section 5.01 hereof.

                                   ARTICLE VI
                                  OPTION PRICE

     The price per share for Common Stock purchased on the exercise of an Option
shall be fixed by the Committee on the date of grant; provided, however, that
the price per share shall not be less than the Fair Market Value on such date.

                                  ARTICLE VII
                              EXERCISE OF OPTIONS

     7.01  MAXIMUM OPTION OR SAR PERIOD.  The period in which an Option or SAR
may be exercised shall be determined by the Committee on the date of grant;
provided, however, that an Incentive Stock Option shall not be exercisable after
the expiration of 10 years (or 5 years in the case of an Incentive Stock Option
granted to a 10% shareholder as determined

                                       A-6
<PAGE>

under Section 422 of the Code) from the date the Incentive Stock Option was
granted. The date upon which any Option or SAR granted by the Committee becomes
exercisable may be accelerated by the Committee in its discretion. Subject to
the terms hereof, the term of exercisability for any Option or SAR granted by
the Committee may be extended by the Committee and may be made contingent upon
the continued employment of the Participant by the Company or Subsidiary.

     7.02  TRANSFERABILITY OF OPTIONS AND SARS.  Non-Qualified Stock Options and
SARs may be transferable by a Participant and exercisable by a person other than
a Participant, but only to the extent specifically provided in an Option or SAR
Agreement. Incentive Stock Options, by their terms, shall not be transferable
except by will or by the laws of descent and distribution and shall be
exercisable, during the Participant's lifetime, only by the Participant. No
right or interest of a Participant in any Option or SAR shall be liable for, or
subject to, any lien, obligation or liability of such Participant.

     7.03  EMPLOYEE STATUS.  For purposes of determining the applicability of
Section 422 of the Code (relating to Incentive Stock Options), or in the event
that the terms of any Grant provide that it may be exercised only during
employment or within a specified period of time after termination of employment,
the Committee may decide to what extent leaves of absence for governmental or
military service, illness, temporary disability, or other reasons shall not be
deemed interruptions of continuous employment.

                                  ARTICLE VIII
                               METHOD OF EXERCISE

     8.01  EXERCISE.  Subject to the provisions of Articles VII and XII, an
Option or SAR may be exercised in whole at any time or in part from time to time
at such times and in compliance with the applicable Agreement and such other
requirements as the Committee shall determine; provided, however, that an SAR
that is related to an Option may be exercised only to the extent that the
related Option is exercisable and when the Fair Market Value exceeds the Option
Price of the related Option. An Option or SAR granted under this Plan may be
exercised with respect to any number of whole shares less than the full number
for which the Option or SAR could be exercised. Such partial exercise of an
Option or SAR shall not affect the right to exercise the Option or SAR from time
to time in accordance with this Plan with respect to remaining shares subject to
the Option or related SAR. The exercise of an Option shall result in the
termination of the SAR to the extent of the number of shares with respect to
which the Option is exercised.

     8.02  PAYMENT.  Unless otherwise provided by the Agreement, payment of the
Option Price shall be made in cash. If the Agreement provides, payment of all or
part of the Option Price (and any applicable withholding taxes) may be made by
surrendering already owned shares of Common Stock to the Company (by physical
delivery or attestation) or by the Company withholding shares of Common Stock
from the Participant upon exercise, provided the shares surrendered or withheld
have a Fair Market Value (determined as of the day preceding the date of
exercise) that is not less than such price or part thereof and any such
withholding taxes. In addition, the Committee may establish such payment or
other terms as it may deem to be appropriate and consistent with these purposes.

     8.03  DETERMINATION OF PAYMENT OF CASH AND/OR COMMON STOCK UPON EXERCISE OF
SAR.  At the Committee's discretion, the amount payable as a result of the
exercise of an SAR may be settled in cash, Common Stock, or a combination of
cash and Common Stock.

                                       A-7
<PAGE>

No fractional shares shall be delivered upon the exercise of an SAR but a cash
payment will be made in lieu thereof.

     8.04  SHAREHOLDER RIGHTS.  No Participant shall have any rights as a
shareholder with respect to shares subject to his Option or SAR until the date
he exercises such Option.

     8.05  CASHLESS EXERCISE.  To the extent permitted under the applicable laws
and regulations, at the request of the Participant and with the consent of the
Committee, the Company agrees to cooperate in a "cashless exercise" of the
Option. The cashless exercise shall be effected by the Participant delivering to
the Securities Broker instructions to exercise all or part of the Option,
including instructions to sell a sufficient number of shares of Common Stock to
cover the costs and expenses associated therewith. The Committee may permit a
Participant to elect to pay any applicable withholding taxes by requesting that
the Company withhold the number of shares of Common Stock equivalent at current
Fair Market Value to the withholding taxes due.

     8.06  CASHING OUT OF OPTION.  The Committee may elect to cash out all or
part of the portion of any Option to be exercised by paying the optionee an
amount, in cash or Common Stock, equal to the excess of the Fair Market Value of
the Common Stock that is the subject of the portion of the Option to be
exercised over the Option Price times the number of shares of Common Stock
subject to the portion of the Option to be exercised on the effective date of
such cash out.

                                   ARTICLE IX
                       COMMON STOCK AND RESTRICTED STOCK

     9.01  AWARD.  In accordance with the provisions of Article IV, the
Committee will designate the individuals to whom an Award of Common Stock and/or
Restricted Stock is to be made and will specify the number of shares of Common
Stock covered by such Award or Awards.

     9.02  VESTING.  In the case of Restricted Stock, on the date of the Award,
the Committee may prescribe that the Participant's rights in the Restricted
Stock shall be forfeitable or otherwise restricted in any manner in the
discretion of the Committee for such period of time as is set forth in the
Agreement. Subject to the provisions of Article XII hereof, the Committee may
award Common Stock to a Participant which is not forfeitable and is free of any
restrictions on transferability.

     9.03  SHAREHOLDER RIGHTS.  Prior to their forfeiture in accordance with the
terms of the Agreement and while the shares are Restricted Stock, a Participant
will have all rights of a shareholder with respect to Restricted Stock,
including the right to receive dividends and vote the shares; provided, however,
that (i) a Participant may not sell, transfer, pledge, exchange, hypothecate, or
otherwise dispose of Restricted Stock, (ii) the Company shall retain custody of
the certificates evidencing shares of Restricted Stock, and (iii) the
Participant will deliver to the Company a stock power, endorsed in blank, with
respect to each award of Restricted Stock.

                                       A-8
<PAGE>

                                   ARTICLE X
                                 PHANTOM STOCK

     10.01  AWARD.  Pursuant to this Plan or an Agreement establishing
additional terms and conditions, the Committee may designate employees to whom
Awards of Phantom Stock may be made and will specify the number of shares of
Common Stock covered by the Award.

     10.02  VESTING.  On the date of the Award, the Committee may prescribe that
the Participant's right to receive payment for Phantom Stock shall be
forfeitable or otherwise restricted in any manner in the discretion of the
Committee for such period of time set forth in the Agreement.

     10.03  SHAREHOLDER RIGHTS.  A Participant for whom Phantom Stock has been
credited generally shall have none of the rights of a shareholder with respect
to such Phantom Stock. However, a plan or Agreement for the use of Phantom Stock
may provide for the crediting of a Participant's Phantom Stock account with cash
or stock dividends declared with respect to Common Stock represented by such
Phantom Stock.

     10.04  PAYMENT.  At the Committee's discretion, the amount payable to a
Participant for Phantom Stock credited to his account shall be made in cash,
Common Stock or a combination of cash and Common Stock.

     10.05  TRANSFERABILITY OF PHANTOM STOCK.  Phantom Stock may be transferable
by a Participant, but only to the extent specifically provided in the Agreement.
No right or interest of a Participant in any Phantom Stock shall be liable for,
or subject to, any lien, obligation or liability of such Participant.

                                   ARTICLE XI
                     ADJUSTMENT UPON CHANGE IN COMMON STOCK

     Should the Company effect one or more (x) stock dividends, stock split-ups,
subdivisions or consolidations of shares or other similar changes in
capitalization; (y) spin-offs, spin-outs, split-ups, split-offs, or other such
distribution of assets to shareholders; or (z) direct or indirect assumptions
and/or conversions of outstanding Options due to an acquisition of the Company,
then the maximum number of shares as to which Grants and Awards may be issued
under this Plan shall be proportionately adjusted and their terms shall be
adjusted as the Committee shall determine to be equitably required, provided
that the number of shares subject to any Grant or Award shall always be a whole
number. Any determination made under this Article XI by the Committee shall be
final and conclusive.

     The issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, for cash or property or for labor
or services, either upon direct sale or upon the exercise of rights or warrants
to subscribe therefor, or upon conversion of shares or obligations of the
Company convertible into such shares or other securities, shall not affect, and
no adjustment by reason thereof shall be made with respect to any Grant or
Award.

                                       A-9
<PAGE>

                                  ARTICLE XII
             COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES

     No Grant shall be exercisable, no Common Stock shall be issued, no
certificates for shares of Common Stock shall be delivered, and no payment shall
be made under this Plan except in compliance with all applicable federal and
state laws and regulations (including, without limitation, withholding tax
requirements) and the rules of all domestic stock exchanges on which the
Company's shares may be listed. The Company may rely on an opinion of its
counsel as to such compliance. Any share certificate issued to evidence Common
Stock for which a Grant is exercised or an Award is issued may bear such legends
and statements as the Committee may deem advisable to assure compliance with
federal and state laws and regulations. No Grant shall be exercisable, no Common
Stock shall be issued, no certificate for shares shall be delivered, and no
payment shall be made under this Plan until the Company has obtained such
consent or approval as the Committee may deem advisable from regulatory bodies
having jurisdiction over such matters.

                                  ARTICLE XIII
                               GENERAL PROVISIONS

     13.01  EFFECT ON EMPLOYMENT.  Neither the adoption of this Plan, its
operation, nor any documents describing or referring to this Plan (or any part
thereof) shall confer upon any employee any right to continue in the employ of
the Company or a Subsidiary or in any way affect any right and power of the
Company or a Subsidiary to terminate the employment of any employee at any time
with or without assigning a reason therefor.

     13.02  UNFUNDED PLAN.  The Plan, insofar as it provides for a Grant or an
Award of Phantom Stock, is not required to be funded, and the Company shall not
be required to segregate any assets that may at any time be represented by a
Grant or an Award of Phantom Stock under this Plan.

     13.03  CHANGE OF CONTROL.  Notwithstanding any other provision of the Plan
to the contrary, in the event of a Change of Control:

        (i) Unless otherwise provided by the Committee in an Agreement, any
     outstanding Option, SAR (including any limited SAR) or Phantom Stock which
     is not presently exercisable and vested as of a Change of Control Date
     shall become fully exercisable and vested to the full extent of the
     original Grant upon such Change of Control Date.

        (ii) Unless otherwise provided by the Committee in an Agreement, the
     restrictions applicable to any outstanding Restricted Stock shall lapse,
     and such Restricted Stock shall become free of all restrictions and become
     fully vested, nonforfeitable and transferable to the full extent of the
     original Award. The Committee may also provide in an Agreement that a
     Participant may elect, by written notice to the Company within 60 days
     after a Change of Control Date, to receive, in exchange for shares that
     were Restricted Stock immediately before the Change of Control Date, a cash
     payment equal to the Fair Market Value of the shares surrendered on the
     last business day the Common Stock is traded on the New York Stock Exchange
     prior to receipt by the Company of such written notice.

        (iii) The Committee may, in its complete discretion, cause the
     acceleration or release of any and all restrictions or conditions related
     to a Grant or Award, in such

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<PAGE>

     manner, in the case of officers and directors of the Company who are
     subject to Section 16(b) of the Exchange Act, as to conform to the
     provisions of Rule 16b-3.

     13.04  RULES OF CONSTRUCTION.  Headings are given to the articles and
sections of this Plan solely for ease of reference and are not to be considered
in construing the terms and conditions of the Plan. The reference to any
statute, regulation, or other provision of law shall be construed to refer to
any amendment to or successor of such provision of law.

     13.05  RULE 16B-3 REQUIREMENTS.  Notwithstanding any other provisions of
the Plan, the Committee may impose such conditions on any Grant or Award, and
the Board may amend the Plan in any such respects, as they may determine, on the
advice of counsel, are necessary or desirable to satisfy the provisions of Rule
16b-3. Any provision of the Plan to the contrary notwithstanding, and except to
the extent that the Committee determines otherwise: (a) transactions by and with
respect to officers and directors of the Company who are subject to Section
16(b) of the Exchange Act shall comply with any applicable conditions of Rule
16b-3; and (b) every provision of the Plan shall be administered, interpreted
and construed to carry out the foregoing provisions of this sentence.

     13.06  AMENDMENT, MODIFICATION AND TERMINATION.  At any time and from time
to time, the Board may terminate, amend or modify the Plan. Such amendment or
modification may be without shareholder approval, except to the extent that (a)
such amendment (i) materially increases the aggregate number of shares of Common
Stock that may be issued under the Plan, (ii) materially increases the benefits
to Participants under the Plan, or (iii) materially changes the requirements for
eligibility to participate in the Plan, or (b) such approval is required by the
Code, pursuant to the rules under Section 16 of the Exchange Act, by any
national securities exchange or system on which the Common Stock is then listed
or reported, by any regulatory body having jurisdiction with respect thereto or
under any other applicable laws, rules, or regulations. In addition, except as
provided in Article XI, the Option Price of any outstanding Option may not be
adjusted or amended, whether through amendment, cancellation or replacement,
unless such adjustment or amendment is approved by the shareholders of the
Company.

     No termination, amendment, or modification of the Plan, other than pursuant
to Section 13.05 herein, shall in any manner adversely affect any Grant or Award
theretofore issued under the Plan, without the written consent of the
Participant. The Committee may amend the terms of any Grant or Award theretofore
issued under this Plan, prospectively or retrospectively, but no such amendment
shall impair the rights of any Participant without the Participant's written
consent except an amendment provided for or contemplated in the terms of the
Grant or Award, an amendment made to cause the Plan, or Grant or Award, to
qualify for the exemption provided by Rule 16b-3, or an amendment to make an
adjustment under Article XI.

     13.07  GOVERNING LAW.  The validity, construction and effect of the Plan
and any actions taken or related to the Plan shall be determined in accordance
with the laws of the state of Delaware and applicable federal law.

     13.08  SUCCESSORS AND ASSIGNS.  All obligations of the Company under the
Plan, with respect to Grants and Awards issued hereunder, shall be binding on
any successor to the Company, whether the existence of such successor is the
result of a direct or indirect purchase, merger, consolidation or otherwise, of
all or substantially all of the business and/or assets of the Company. The Plan
shall be binding on all successors and permitted assigns of a Participant,
including, but not limited to, the estate of such Participant and the executor,

                                       A-11
<PAGE>

administrator or trustee of such estate, and the guardians or legal
representative of the Participant.

     13.09  EFFECT ON PRIOR PLAN AND OTHER COMPENSATION ARRANGEMENTS.  The
adoption of this Amended and Restated Plan shall have no effect on Grants and
Awards made pursuant to the Plan prior to amendment and restatement and the
Company's other compensation arrangements. Nothing contained in this Plan shall
prevent the Company from adopting other or additional compensation plans or
arrangements for its officers, directors or employees.

     13.10  DURATION OF PLAN.  No Grant or Award may be made under this Plan
after June 30, 2008. Grants or Awards made prior to such date shall continue to
vest and become exercisable according to their terms.

     13.11  EFFECTIVE DATE.  Options may be granted under this Plan, upon its
adoption by the Board, provided that no Option will be effective unless and
until this Plan is approved by the holders of a majority of the shares of the
Company's outstanding voting stock present in person, or represented by proxy,
and entitled to vote at a duly held meeting of the shareholders. No Option
granted prior to the Effective Date may be exercised before the requisite
shareholder approval is obtained.

                                       A-12

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