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                                   EXHIBIT 4.3

                               CANDELA CORPORATION

                      AMENDED AND RESTATED 1998 STOCK PLAN

         1. PURPOSE. The purpose of the Candela Corporation 1998 Stock Plan (the
"Plan") is to encourage key employees of Candela Corporation (the "Company") and
of any present or future parent or subsidiary of the Company (collectively,
"Related Corporations") and other individuals who render services to the Company
or a Related Corporation, by providing opportunities to participate in the
ownership of the Company and its future growth through (a) the grant of options
which qualify as "incentive stock options" ("ISOs") under Section 422(b) of the
Internal Revenue Code of 1986, as amended (the "Code"); (b) the grant of options
which do not qualify as ISOs ("Non-Qualified Options"); (c) awards of stock in
the Company ("Awards"); and (d) opportunities to make direct purchases of stock
in the Company ("Purchases"). Both ISOs and Non-Qualified Options are referred
to hereafter individually as an "Option" and collectively as "Options." Options,
Awards and authorizations to make Purchases are referred to hereafter
collectively as "Stock Rights." As used herein, the terms "parent" and
"subsidiary" mean "parent corporation" and "subsidiary corporation,"
respectively, as those terms are defined in Section 424 of the Code.

         2.       ADMINISTRATION OF THE PLAN.

                  A. BOARD OR COMMITTEE ADMINISTRATION. The Plan shall (be
         administered by the Board of Directors of the Company (the "Board") or,
         subject to paragraph 2(D) (relating to compliance with Section 162(m)
         of the Code), by a committee appointed by the Board (the "Committee").
         Hereinafter, all references in this Plan to the "Committee" shall mean
         the Board if no Committee has been appointed. Subject to ratification
         of the grant or authorization of each Stock Right by the Board (if so
         required by applicable state law), and subject to the terms of the
         Plan, the Committee shall have the authority to (i) determine to whom
         (from among the class of employees eligible under paragraph 3 to
         receive ISOs) ISOs shall be granted, and to whom (from among the class
         of individuals and entities eligible under paragraph 3 to receive
         Non-Qualified Options and Awards and to make Purchases) Non-Qualified
         Options, Awards and authorizations to make Purchases may be granted;
         (ii) determine the time or times at which Options or Awards shall be
         granted or Purchases made; (iii) determine the purchase price of shares
         subject to each Option or Purchase, which prices shall not be less than
         the minimum price specified in paragraph 6; (iv) determine whether each
         Option granted shall be an ISO or a Non-Qualified Option; (v) determine
         (subject to paragraph 7) the time or times when each Option shall
         become exercisable and the duration of the exercise period; (vi) extend
         the period during which outstanding Options may be exercised; (vii)
         determine whether restrictions such as repurchase options are to be
         imposed on shares subject to Options, Awards and Purchases and the
         nature of such restrictions, if any, and (viii) interpret the Plan and
         prescribe and rescind rules and regulations relating to it. If the
         Committee
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         determines to issue a Non-Qualified Option, it shall take whatever
         actions it deems necessary, under Section 422 of the Code and the
         regulations promulgated thereunder, to ensure that such Option is not
         treated as an ISO. The interpretation and construction by the Committee
         of any provisions of the Plan or of any Stock Right granted under it
         shall be final unless otherwise determined by the Board. The Committee
         may from time to time adopt such rules and regulations for carrying out
         the Plan as it may deem advisable. No member of the Board or the
         Committee shall be liable for any action or determination made in good
         faith with respect to the Plan or any Stock Right granted under it.

                  B. COMMITTEE ACTIONS. The Committee may select one of its
         members as its chairman, and shall hold meetings at such time and
         places as it may determine. A majority of the Committee shall
         constitute a quorum and acts of a majority of the members of the
         Committee at a meeting at which a quorum is present, or acts reduced to
         or approved in writing by all the members of the Committee (if
         consistent with applicable state law), shall be the valid acts of the
         Committee. From time to time the Board may increase the size of the
         Committee and appoint additional members thereof, remove members (with
         or without cause) and appoint new members in substitution therefor,
         fill vacancies however caused, or remove all members of the Committee
         and thereafter directly administer the Plan.

                  C. GRANT OF STOCK RIGHTS TO BOARD MEMBERS. Stock Rights may be
         granted to members of the Board. All grants of Stock Rights to members
         of the Board shall in all respects be made in accordance with the
         provisions of this Plan applicable to other eligible persons. Members
         of the Board who either (i) are eligible to receive grants of Stock
         Rights pursuant to the Plan or (ii) have been granted Stock Rights may
         vote on any matters affecting the administration of the Plan or the
         grant of any Stock Rights pursuant to the Plan, except that no such
         member shall act upon the granting to himself or herself of Stock
         Rights, but any such member may be counted in determining the existence
         of a quorum at any meeting of the Board during which action is taken
         with respect to the granting to such member of Stock Rights.

                  D. PERFORMANCE-BASED COMPENSATION. The Board, in its
         discretion, may take such action as may be necessary to ensure that
         Stock Rights granted under the Plan qualify as "qualified
         performance-based compensation" within the meaning of Section 162(m) of
         the Code and applicable regulations promulgated thereunder
         ("Performance-Based Compensation"). Such action may include, in the
         Board's discretion, some or all of the following (i) if the Board
         determines that Stock Rights granted under the Plan generally shall
         constitute Performance-Based Compensation, the Plan shall be
         administered, to the extent required for such Stock Rights to
         constitute Performance-Based Compensation, by a Committee consisting
         solely of two or more "outside directors" (as defined in applicable
         regulations promulgated under Section 162(m) of the Code), (ii) if any
         Non-Qualified Options with an exercise price less than the fair market
         value per share of Common Stock are granted under the Plan and the
         Board determines that such Options should constitute Performance-Based
         Compensation, such options shall be made exercisable only upon the
         attainment of a pre-established, objective performance
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         goal established by the Committee, and such grant shall be submitted
         for, and shall be contingent upon shareholder approval and (iii) Stock
         Rights granted under the Plan may be subject to such other terms and
         conditions as are necessary for compensation recognized in connection
         with the exercise or disposition of such Stock Right or the disposition
         of Common Stock acquired pursuant to such Stock Right, to constitute
         Performance-Based Compensation.

         3. ELIGIBLE EMPLOYEES AND OTHERS. ISOs may be granted only to employees
of the Company or any Related Corporation. Non-Qualified Options, Awards and
authorizations to make Purchases may be granted to any employee, officer or
director (whether or not also an employee) or consultant of the Company or any
Related Corporation. The Committee may take into consideration a recipient's
individual circumstances in determining whether to grant a Stock Right. The
granting of any Stock Right to any individual or entity shall neither entitle
that individual or entity to, nor disqualify such individual or entity from,
participation in any other grant of Stock Rights.

         4. STOCK. The stock subject to Stock Rights shall be authorized but
unissued shares of Common Stock of the Company, par value $.01 per share (the
"Common Stock"), or shares of Common Stock reacquired by the Company in any
manner. The aggregate number of shares which may be issued pursuant to the Plan
is 1,250,000, subject to adjustment as provided in paragraph 13. If any Option
granted under the Plan shall expire or terminate for any reason without having
been exercised in full or shall cease for any reason to be exercisable in whole
or in part or shall be repurchased by the Company, the unpurchased shares of
Common Stock subject to such Option shall again be available for grants of Stock
Rights under the Plan.

         No employee of the Company or any Related Corporation may be granted
Options to acquire, in the aggregate, more than 350,000 shares of Common Stock
under the Plan during any fiscal year of the Company. If any Option granted
under the Plan shall expire or terminate for any reason without having been
exercised in full or shall cease for any reason to be exercisable in whole or in
part or shall be repurchased by the Company, the shares subject to such Option
shall be included in the determination of the aggregate number of shares of
Common Stock deemed to have been granted to such employee under the Plan.

         5. GRANTING OF STOCK RIGHTS. Stock Rights may be granted under the Plan
at any time on or after September 19, 1998 and prior to September 18, 2008. The
date of grant of a Stock Right under the Plan will be the date specified by the
Committee at the time it grants the Stock Right; provided, however, that such
date shall not be prior to the date on which the Committee acts to approve the
grant.

         6.       MINIMUM OPTION PRICE; ISO LIMITATIONS.

                  A. PRICE FOR NON-QUALIFIED OPTIONS, AWARDS AND PURCHASES.
         Subject to paragraph 2(D) (relating to compliance with Section 162(m)
         of the Code), the exercise price per share specified in the agreement
         relating to each Non-Qualified Option granted, and the purchase price
         per share of stock granted in any Award or authorized as a
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         Purchase, under the Plan may be less than the fair market value of the
         Common Stock of the Company on the date of grant; provided that, in no
         event shall such exercise price or such purchase price be less than the
         minimum legal consideration required therefor under the laws of any
         jurisdiction in which the Company or its successors in interest may be
         organized.

                  B. PRICE FOR ISOS. The exercise price per share specified in
         the agreement relating to each ISO granted under the Plan shall not be
         less than the fair market value per share of Common Stock on the date
         of such grant. In the case of an ISO to be granted to an employee
         owning stock possessing more than ten percent (10%) of the total
         combined voting power of all classes of stock of the Company or any
         Related Corporation, the price per share specified in the agreement
         relating to such ISO shall not be less than one hundred ten percent
         (110%) of the fair market value per share of Common Stock on the date
         of grant. For purposes of determining stock ownership under this
         paragraph, the rules of Section 424(d) of the Code shall apply.

                  C. $100,000 ANNUAL LIMITATION ON ISO VESTING. Each eligible
         employee may be granted Options treated as ISOs only to the extent
         that, in the aggregate under this Plan and all incentive stock option
         plans of the Company and any Related Corporation, ISOs do not become
         exercisable for the first time by such employee during any calendar
         year with respect to stock having a fair market value (determined at
         the time the ISOs were granted) in excess of $100,000. The Company
         intends to designate any Options granted in excess of such limitation
         as Non-Qualified Options, and the Company shall issue separate
         certificates to the optionee with respect to Options that are
         Non-Qualified Options and Options that are ISOs.

                  D. DETERMINATION OF FAIR MARKET VALUE. If, at the time an
         Option is granted under the Plan, the Company's Common Stock is
         publicly traded, "fair market value" shall be determined as of the date
         of grant or, if the prices or quotes discussed in this sentence are
         unavailable for such date, the last business day for which such prices
         or quotes are available prior to the date of grant and shall mean (i)
         the average (on that date) of the high and low prices of the Common
         Stock on the principal national securities exchange on which the Common
         Stock is traded, if the Common Stock is then traded on a national
         securities exchange; or (ii) the last reported sale price (on that
         date) of the Common Stock on the Nasdaq National Market, if the Common
         Stock is not then traded on a national securities exchange; or (iii)
         the closing bid price (or average of bid prices) last quoted (on that
         date) by an established quotation service for over-the-counter
         securities, if the Common Stock is not reported on the Nasdaq National
         Market. If the Common Stock is not publicly traded at the time an
         Option is granted under the Plan, "fair market value" shall mean the
         fair value of the Common Stock as determined by the Committee after
         taking into consideration all factors which it deems appropriate,
         including, without limitation, recent sale and offer prices of the
         Common Stock in private transactions negotiated at arm's length.
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         7. OPTION DURATION. Subject to earlier termination as provided in
paragraphs 9 and 10 or in the agreement relating to such Option, each Option
shall expire on the date specified by the Committee, but not more than (i) ten
years from the date of grant in the case of Options generally and (ii) five
years from the date of grant in the case of ISOs granted to an employee owning
stock possessing more than ten percent (10%) of the total combined voting power
of all classes of stock of the Company or any Related Corporation, as determined
under paragraph 6(B). Subject to earlier termination as provided in paragraphs 9
and 10, the term of each ISO shall be the term set forth in the original
instrument granting such ISO, except with respect to any part of such ISO that
is converted into a Non-Qualified Option pursuant to paragraph 16.

         8. EXERCISE OF OPTION. Subject to the provisions of paragraphs 9
through 12, each Option granted under the Plan shall be exercisable as follows:

                  A. VESTING. The Option shall either be fully exercisable on
         the date of grant or shall become exercisable thereafter in such
         installments as the Committee may specify.

                  B. FULL VESTING OF INSTALLMENTS. Once an installment becomes
         exercisable, it shall remain exercisable until expiration or
         termination of the Option, unless otherwise specified by the Committee.

                  C. PARTIAL EXERCISE. Each Option or installment may be
         exercised at any time or from time to time, in whole or in part, for up
         to the total number of shares with respect to which it is then
         exercisable

                  D. ACCELERATION OF VESTING. The Committee shall have the right
         to accelerate the date that any installment of any Option becomes
         exercisable; provided that the Committee shall not, without the consent
         of an optionee, accelerate the permitted exercise date of any
         installment of any Option granted to any employee as an ISO (and not
         previously converted into a Non-Qualified Option pursuant to paragraph
         16) if such acceleration would violate the annual vesting limitation
         contained in Section 422(d) of the Code, as described in paragraph
         6(C).

         9. TERMINATION OF EMPLOYMENT. Unless otherwise specified in the
agreement relating to such ISO, if an ISO optionee ceases to be employed by the
Company and all Related Corporations other than by reason of death or disability
as defined in paragraph 10, no further installments of his or her ISOs shall
become exercisable, and his or her ISOs shall terminate on the earlier of (a)
three months after the date of termination of his or her employment, or (b)
their specified expiration dates, except to the extent that such ISOs (or
unexercised installments thereof) have been converted into Non-Qualified Options
pursuant to paragraph 16. For purposes of this paragraph 9, employment shall be
considered as continuing uninterrupted during any bona fide leave of absence
(such as those attributable to illness, military obligations or governmental
service) provided that the period of such leave does not exceed 90 days or, if
longer, any period during which such optionee's right to re-employment is
guaranteed by statute or by contract. A bona fide leave of absence with the
written approval of the Committee shall
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not be considered an interruption of employment under this paragraph 9, provided
that such written approval contractually obligates the Company or any Related
Corporation to continue the employment of the optionee after the approved period
of absence. ISOs granted under the Plan shall not be affected by any change of
employment within or among the Company and Related Corporations, so long as the
optionee continues to be an employee of the Company or any Related Corporation.
Nothing in the Plan shall be deemed to give any grantee of any Stock Right the
right to be retained in employment or other service by the Company or any
Related Corporation for any period of time.

         10.      DEATH; DISABILITY.

                  A. DEATH. If an ISO optionee ceases to be employed by the
         Company and all Related Corporations by reason of his or her death, any
         ISO owned by such optionee may be exercised, to the extent otherwise
         exercisable on the date of death, by the estate, personal
         representative or beneficiary who has acquired the ISO by will or by
         the laws of descent and distribution, until the earlier of (i) the
         specified expiration date of the ISO or (ii) 180 days from the date of
         the optionee's death.

                  B. DISABILITY. If an ISO optionee ceases to be employed by the
         Company and all Related Corporations by reason of his or her
         disability, such optionee shall have the right to exercise any ISO held
         by him or her on the date of termination of employment, for the number
         of shares for which he or she could have exercised it on that date,
         until the earlier of (i) the specified expiration date of the ISO or
         (ii) 180 days from the date of the termination of the optionee's
         employment. For the purposes of the Plan, the term "disability" shall
         mean "permanent and total disability" as defined in Section 22(e)(3) of
         the Code or any successor statute.

         11. TRANSFERABILITY OF OPTIONS. Except as otherwise provided in
subsections (a) and (b) below, an option may not be sold, pledged, assigned,
hypothecated, transferred or disposed of in any manner other than by will or by
the laws of descent and distribution and may be exercised, during the lifetime
of the Optionee, only by the Optionee. Notwithstanding the foregoing, with the
consent of the Board of Directors or the Compensation Committee thereof, in
either case in its sole discretion, an Optionee may transfer all or a portion of
his or her vested nonqualified stock options to:

                  (a) a trust for the exclusive benefit of the Optionee and/or
         one or more Immediate Family Members or spouses of Immediate Family
         Members. For the purposes of this Section 11(a), "Immediate Family
         Members" shall mean the Optionee's spouse, former spouse, children or
         grandchildren, whether natural or adopted; and

                  (b) an organization which qualifies as a tax exempt
         organization under Internal Revenue Service Code 26 U.S.C. 501(a) and
         501(c)(3).

         As a condition to any transfer pursuant to Sections 11(a) or 11(b),
each such transferee shall agree in writing (in a form satisfactory to the
Corporation) to be bound by the terms and
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conditions of the stock option agreement evidencing such transferred option, as
well as any additional restrictions or conditions as the Corporation may
require. Following the transfer of an option in accordance with this Section 11,
the term "Optionee" shall refer to the transferee, except that, with respect to
any requirements of continued service or provision of the Corporation's tax
withholding obligations, such terms shall refer to the Optionee. The Corporation
shall have no obligation to notify any transferee of any termination of the
transferred option, including an early termination resulting from the
termination of service of the original Optionee. No transferee shall make a
subsequent transfer of a transferred option except to the original Optionee or
as otherwise provided in this Section 11.

         12. TERMS AND CONDITIONS OF OPTIONS. Options shall be evidenced by
instruments (which need not be identical) in such forms as the Committee may
from time to time approve. Such instruments shall conform to the terms and
conditions set forth in paragraphs 6 through 11 hereof and may contain such
other provisions as the Committee deems advisable which are not inconsistent
with the Plan, including restrictions applicable to shares of Common Stock
issuable upon exercise of Options. The Committee may specify that any
Non-Qualified Option shall be subject to the restrictions set forth herein with
respect to ISOs, or to such other termination and cancellation provisions as the
Committee may determine. The Committee may from time to time confer authority
and responsibility on one or more of its own members and/or one or more officers
of the Company to execute and deliver such instruments. The proper officers of
the Company are authorized and directed to take any and all action necessary or
advisable from time to time to carry out the terms of such instruments.

         13. ADJUSTMENTS. Upon the occurrence of any of the following events, an
optionee's rights with respect to Options granted to such optionee hereunder
shall be adjusted as hereinafter provided, unless otherwise specifically
provided in the written agreement between the optionee and the Company relating
to such Option:

                  A. STOCK DIVIDENDS AND STOCK SPLITS. If the shares of Common
         Stock shall be subdivided or combined into a greater or smaller number
         of shares or if the Company shall issue any shares of Common Stock as a
         stock dividend on its outstanding Common Stock, the number of shares of
         Common Stock deliverable upon the exercise of Options shall be
         appropriately increased or decreased proportionately, and appropriate
         adjustments shall be made in the purchase price per share to reflect
         such subdivision, combination or stock dividend.

                  B. CONSOLIDATIONS OR MERGERS. If the Company is to be
         consolidated with or acquired by another entity in a merger or other
         reorganization in which the holders of the outstanding voting stock of
         the Company immediately preceding the consummation of such event,
         shall, immediately following such event, hold, as a group, less than a
         majority of the voting securities of the surviving or successor entity,
         or in the event of a sale of all or substantially all of the Company's
         assets or otherwise (each, an "Acquisition"), the Committee or the
         board of directors of any entity assuming the obligations of the
         Company hereunder (the "Successor Board"), shall, as to outstanding
         Options, either
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         (i) make appropriate provision for the continuation of such Options by
         substituting on an equitable basis for the shares then subject to such
         Options either (a) the consideration payable with respect to the
         outstanding shares of Common Stock in connection with the Acquisition,
         (b) shares of stock of the surviving or successor corporation or (c)
         such other securities as the Successor Board deems appropriate, the
         fair market value of which shall not materially exceed the fair market
         value of the shares of Common Stock subject to such Options immediately
         preceding the Acquisition; or (ii) upon written notice to the
         optionees, provide that all Options must be exercised, to the extent
         then exercisable or to be exercisable as a result of the Acquisition,
         within a specified number of days of the date of such notice, at the
         end of which period the Options shall terminate; or (iii) terminate all
         Options in exchange for a cash payment equal to the excess of the fair
         market value of the shares subject to such Options (to the extent then
         exercisable or to be exercisable as a result of the Acquisition) over
         the exercise price thereof.

                  C. RECAPITALIZATION OR REORGANIZATION. In the event of a
         recapitalization or reorganization of the Company (other than a
         transaction described in subparagraph B above) pursuant to which
         securities of the Company or of another corporation are issued with
         respect to the outstanding shares of Common Stock, an optionee upon
         exercising an Option shall be entitled to receive for the purchase
         price paid upon such exercise the securities he or she would have
         received if he or she had exercised such Option prior to such
         recapitalization or reorganization.

                  D. MODIFICATION OF ISOS. Notwithstanding the foregoing, any
         adjustments made pursuant to subparagraphs A, B or C with respect to
         ISOs shall be made only after the Committee, after consulting with
         counsel for the Company, determines whether such adjustments would
         constitute a "modification" of such ISOs (as that term is defined in
         Section 424 of the Code) or would cause any adverse tax consequences
         for the holders of such ISOs. If the Committee determines that such
         adjustments made with respect to ISOs would constitute a modification
         of such ISOs or would cause adverse tax consequences to the holders, it
         may refrain from making such adjustments.

                  E. DISSOLUTION OR LIQUIDATION. In the event of the proposed
         dissolution or liquidation of the Company, each Option will terminate
         immediately prior to the consummation of such proposed action or at
         such other time and subject to such other conditions as shall be
         determined by the Committee.

                  F. ISSUANCES OF SECURITIES. Except as expressly provided
         herein, no issuance by the Company of shares of stock of any class, or
         securities convertible into shares of stock of any class, shall affect,
         and no adjustment by reason thereof shall be made with respect to, the
         number or price of shares subject to Options. No adjustments shall be
         made for dividends paid in cash or in property other than securities of
         the Company.

                  G. FRACTIONAL SHARES. No fractional shares shall be issued
         under the Plan and the optionee shall receive from the Company cash in
         lieu of such fractional shares.
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                  H. ADJUSTMENTS. Upon the happening of any of the events
         described in subparagraphs A, B or C above, the class and aggregate
         number of shares set forth in paragraph 4 hereof that are subject to
         Stock Rights which previously have been or subsequently may be granted
         under the Plan shall also be appropriately adjusted to reflect the
         events described in such subparagraphs. The Committee or the Successor
         Board shall determine the specific adjustments to be made under this
         paragraph 13 and, subject to paragraph 2, its determination shall be
         conclusive.

         14. MEANS OF EXERCISING OPTIONS. An Option (or any part or installment
thereof) shall be exercised by giving written notice to the Company at its
principal office address, or to such transfer agent as the Company shall
designate. Such notice shall identify the Option being exercised and specify the
number of shares as to which such Option is being exercised, accompanied by full
payment of the purchase price therefor either (a) in United States dollars in
cash or by check, (b) at the discretion of the Committee, through delivery of
shares of Common Stock having a fair market value equal as of the date of the
exercise to the cash exercise price of the Option, (c) at the discretion of the
Committee, by delivery of the grantee's personal recourse note bearing interest
payable not less than annually at no less than 100% of the lowest applicable
Federal rate, as defined in Section 1274(d) of the Code, (d) at the discretion
of the Committee and consistent with applicable law, through the delivery of an
assignment to the Company of a sufficient amount of the proceeds from the sale
of the Common Stock acquired upon exercise of the Option and an authorization to
the broker or selling agent to pay that amount to the Company, which sale shall
be at the participant's direction at the time of exercise, or (e) at the
discretion of the Committee, by any combination of (a), (b), (c) and (d) above.
If the Committee exercises its discretion to permit payment of the exercise
price of an ISO by means of the methods set forth in clauses (b), (c), (d) or
(e) of the preceding sentence, such discretion shall be exercised in writing at
the time of the grant of the ISO in question. The holder of an Option shall not
have the rights of a shareholder with respect to the shares covered by such
Option until the date of issuance of a stock certificate to such holder for such
shares. Except as expressly provided above in paragraph 13 with respect to
changes in capitalization and stock dividends, no adjustment shall be made for
dividends or similar rights for which the record date is before the date such
stock certificate is issued.

         15. TERM AND AMENDMENT OF PLAN. This Plan was adopted by the Board on
September 19, 1998, subject, with respect to the validation of ISOs granted
under the Plan, to approval of the Plan by the stockholders of the Company at
the next Meeting of Stockholders or, in lieu thereof, by written consent. If the
approval of stockholders is not obtained prior to September 19, 1999, any grants
of ISOs under the Plan made prior to that date will be rescinded. The Plan shall
expire at the end of the day on September 18, 2008 (except as to Options
outstanding on that date). Subject to the provisions of paragraph 5 above,
Options may be granted under the Plan prior to the date of stockholder approval
of the Plan. The Board may terminate or amend the Plan in any respect at any
time, except that, without the approval of the stockholders obtained within 12
months before or after the Board adopts a resolution authorizing any of the
following actions: (a) the total number of shares that may be issued under the
Plan may not be increased (except by adjustment pursuant to paragraph 13); (b)
the provisions of paragraph 3 regarding eligibility for grants of ISOs may not
be modified; (c) the provisions of
<PAGE>

paragraph 6(B) regarding the exercise price at which shares may be offered
pursuant to ISOs may not be modified (except by adjustment pursuant to paragraph
13); and (d) the expiration date of the Plan may not be extended. Except as
otherwise provided in this paragraph 15, in no event may action of the Board or
stockholders alter or impair the rights of a grantee, without such grantee's
consent, under any Stock Right previously granted to such grantee.

         16. MODIFICATIONS OF ISOS; CONVERSION OF ISOS INTO NON-QUALIFIED
OPTIONS. Subject to paragraph 13(D), without the prior written consent of the
holder of an ISO, the Committee shall not alter the terms of such ISO (including
the means of exercising such ISO) if such alteration would constitute a
modification (within the meaning of Section 424(h)(3) of the Code). The
Committee, at the written request or with the written consent of any optionee,
may in its discretion take such actions as may be necessary to convert such
optionee's ISOs (or any installments or portions of installments thereof) that
have not been exercised on the date of conversion into Non-Qualified Options at
any time prior to the expiration of such ISOs, regardless of whether the
optionee is an employee of the Company or a Related Corporation at the time of
such conversion. Such actions may include, but shall not be limited to,
extending the exercise period or reducing the exercise price of the appropriate
installments of such ISOs. At the time of such conversion, the Committee (with
the consent of the optionee) may impose such conditions on the exercise of the
resulting Non-Qualified Options as the Committee in its discretion may
determine, provided that such conditions shall not be inconsistent with this
Plan. Nothing in the Plan shall be deemed to give any optionee the right to have
such optionee's ISOs converted into Non-Qualified Options, and no such
conversion shall occur until and unless the Committee takes appropriate action.
Upon the taking of such action, the Company shall issue separate certificates to
the optionee with respect to Options that are Non-Qualified Options and Options
that are ISOs.

         17. APPLICATION OF FUNDS. The proceeds received by the Company from the
sale of shares pursuant to Options granted and Purchases authorized under the
Plan shall be used for general corporate purposes.

         18. NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION. By accepting an ISO
granted under the Plan, each optionee agrees to notify the Company in writing
immediately after such optionee makes a Disqualifying Disposition (as described
in Sections 421, 422 and 424 of the Code and regulations thereunder) of any
stock acquired pursuant to the exercise of ISOs granted under the Plan. A
Disqualifying Disposition is generally any disposition occurring on or before
the later of (a) the date two years following the date the ISO was granted or
(b) the date one year following the date the ISO was exercised.

         19. WITHHOLDING OF ADDITIONAL INCOME TAXES. Upon the exercise of a
Non-Qualified Option, the transfer of a Non-Qualified Stock Option pursuant to
an arm's-length transaction, the grant of an Award, the making of a Purchase of
Common Stock for less than its fair market value, the making of a Disqualifying
Disposition (as defined in paragraph 18), the vesting or transfer of restricted
stock or securities acquired on the exercise of an Option hereunder, or the
making of a distribution or other payment with respect to such stock or
securities, the Company may withhold taxes in respect of amounts that constitute
compensation
<PAGE>

includible in gross income. The Committee in its discretion may condition (i)
the exercise of an Option, (ii) the transfer of a Non-Qualified Stock Option,
(iii) the grant of an Award, (iv) the making of a Purchase of Common Stock for
less than its fair market value, or (v) the vesting or transferability of
restricted stock or securities acquired by exercising an Option, on the
grantee's making satisfactory arrangement for such withholding. Such arrangement
may include payment by the grantee in cash or by check of the amount of the
withholding taxes or, at the discretion of the Committee, by the grantee's
delivery of previously held shares of Common Stock or the withholding from the
shares of Common Stock otherwise deliverable upon exercise of a Option shares
having an aggregate fair market value equal to the amount of such withholding
taxes.

         20. GOVERNMENTAL REGULATION. The Company's obligation to sell and
deliver shares of the Common Stock under this Plan is subject to the approval of
any governmental authority required in connection with the authorization,
issuance or sale of such shares.

         Government regulations may impose reporting or other obligations on the
Company with respect to the Plan. For example, the Company may be required to
send tax information statements to employees and former employees that exercise
ISOs under the Plan, and the Company may be required to file tax information
returns reporting the income received by grantees of Options in connection with
the Plan.

         21. GOVERNING LAW. The validity and construction of the Plan and the
instruments evidencing Stock Rights shall be governed by the laws of Delaware,
or the laws of any jurisdiction in which the Company or its successors in
interest may be organized.<PAGE>

                                                                    EXHIBIT 10.1

                      DAY RUNNER, INC. OFFICER BONUS PLAN
                    FOR THE FISCAL YEAR ENDING JUNE 30, 2001

         The Officer Bonus Plan (the "Bonus Plan") for the fiscal year ending
June 30, 2001, will be paid based on the Company's fiscal year ending June 30,
2001 financial performance as measured by the degree of attainment of a pre-set,
Compensation Committee-approved, EBITDA goal.

         The Bonus Plan is based on EBITDA goals, with increasing bonus payments
for increasing EBITDA.

         A minimum EBITDA target of $2 million must be achieved before any bonus
payments are earned. Maximum bonus payments are achieved with an EBITDA of $6
million.

         EBITDA is defined as Day Runner's (excluding all Filofax operations)
(1) Operating Income PLUS (2) depreciation and amortization PLUS (3) payments
and accruals for any management or sales bonuses and/or success fees paid to
Crossroads LLC excluding (4) any provisions for restructuring or discontinuation
of operations or shutdown of operations or facilities (e.g., Day Runner Canada,
Day Runner Australia or Day runner de Mexico) excluding (5) any legal and
consulting costs incurred by the bank group but paid by Day Runner excluding (6)
any legal and consulting costs incurred above budget amounts and excluding (7)
any gain or loss on the sale of any operation or subsidiary.

         Bonus payments, if earned, are due and payable within 30 days of the
end of the period stated below; provided, however, that if there is a "Change of
Control" (as defined in the Officers Severance Plan) of Day Runner, bonuses
earned up to the time of the Change of Control are due and payable at the time
of the Change of Control.

         Except in the event of a Change of Control of Day Runner, an officer
must be employed from the beginning of the fiscal year to the end to computation
period to be eligible for any bonus under this Plan.

<TABLE>
<CAPTION>
Computation Period                  Pay out Potential
------------------                  -----------------
<S>                                 <C>
July 1 to December 31, 2000         1/2 of maximum

July 1 to January 31, 2001          7/12 of maximum less prior payments

July 1 to February 28, 2001         8/12 of maximum less prior payments

<PAGE>

July 1 to March 31, 2001            9/12 of maximum less prior payments

July 1 to April 30, 2001            10/12 of maximum less prior payments

July 1 to May 31, 2001              11/12 of maximum less prior payments

July 1 to June 30, 2001             Maximum less prior payments
</TABLE>

         Payment calculation will be based on year to date performance versus
plan. For example, if the year to date performance for the period ending
December would indicate a maximum pay out, then 1/2 of the maximum pay out
potential would be paid as soon as practical after December.

         Unless additional officers are explicitly included in the Bonus Plan
pursuant to a subsequent, duly adopted Board or Compensation Committee
resolution, only the following officers shall be eligible to participate in the
Bonus Plan: Chief Financial Officer and Executive Vice President, Finance, Chief
Operating Officer, Vice President, General Counsel and Human Resources and Vice
President, Operations, North America.

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