Document:

<PAGE>
                                                                     Exhibit 4.1
[LOGO]
American Bank Note Company

INCORPORATED UNDER THE LAWS
OF THE STATE OF DELAWARE

                                                             COMMON STOCK
--------------------                                    ----------------------
        NUMBER                                                SHARES
  C
--------------------                                    ----------------------
                                                       PAR VALUE $0.01 PER SHARE

THIS CERTIFICATE IS TRANSFERABLE
IN NEW YORK, NY AND DENVER, CO

                                     [LOGO]

                                                               CUSIP 961765 10 4
                                            SEE REVERSE FOR CERTAIN RESTRICTIONS

                         WESTWOOD HOLDINGS GROUP, INC.

THIS CERTIFIES THAT

IS THE OWNER OF

           FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK OF

Westwood Holdings Group, Inc.(the "Corporation") transferable on the books of
the Corporation by the holder hereof in person or by duly authorized attorney,
upon surrender of this Certificate properly endorsed. This Certificate and the
shares represented hereby are issued and shall be held subject to all the
provisions of the Certificate of Incorporation and the Bylaws of the
Corporation, and all amendments thereto, to all of which the holder, by
acceptance hereof, consents. This Certificate is not valid until countersigned
by the Transfer Agent and registered by the Registrar.

     Witness the facsimile seal of the Corporation and the facsimile signatures
of its duly authorized officers.

  Dated

/s/ Susan M Byrne             [SEAL]                  /s/ Bill Casey
CHAIRMAN OF THE BOARD                                     SECRETARY

COUNTERSIGNED AND REGISTERED:
       COMPUTERSHARE TRUST COMPANY, INC.
                P.O. Box 1596
                Denver, Colorado 80201
                  TRANSFER AGENT AND REGISTRAR
BY
                         AUTHORIZED SIGNATURE

<PAGE>

                         WESTWOOD HOLDINGS GROUP, INC.

     The Corporation will furnish, without charge, to each stockholder who so
requests a statement of the powers, designations, preferences and relative,
optional or other special rights of each class of stock or series thereof and
the qualifications, limitations or restrictions of such preferences and/or
rights.

     The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<S>                                                      <C>
     TEN COM -- as tenants in common                     UNIF GIFT MIN ACT- __________ Custodian ___________
     TEN ENT -- as tenants by the entireties                                  (Cust)               (Minor)
     JT TEN  -- as joint tenants with right of                              under Uniform Gifts to Minors
                survivorship and not as tenants                             Act ____________________________
                in common                                                                 (State)
</TABLE>

     Additional abbreviations may also be used though not in the above list.

     For value received, ____________________________________ hereby sell,
assign and transfer unto

     PLEASE INSERT SOCIAL SECURITY OR OTHER
         IDENTIFYING NUMBER OF ASSIGNEE
---------------------------------------------

--------------------------------------------------------------------------------

________________________________________________________________________________
   PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE, OF
                                    ASSIGNEE
________________________________________________________________________________

________________________________________________________________________________

_________________________________________________________________________ Shares
of the capital stock of the Corporation represented by the within Certificate,

and do hereby irrevocably constitute and appoint _______________________________

________________________________________________________________________________
Attorney to transfer the said stock on the books of the Corporation with full
power of substitution in the premises.

Dated, ____________________

                                                   X____________________________
                                                             (SIGNATURE)

       NOTICE: THE SIGNATURE(S) TO THIS
       ASSIGNMENT MUST CORRESPOND WITH
       THE NAME(S) AS WRITTEN UPON THE
       FACE OF THE CERTIFICATE IN EVERY
       PARTICULAR, WITHOUT ALTERATION OR
       ENLARGEMENT OR ANY CHANGE WHATEVER.

                                                   X____________________________
                                                             (SIGNATURE)

                                                   -----------------------------
                                                    THE SIGNATURE(S) SHOULD BE
                                                    GUARANTEED BY AN ELIGIBLE
                                                    GUARANTOR INSTITUTION
                                                    (BANKS, STOCKBROKERS,
                                                    SAVINGS AND LOAN
                                                    ASSOCIATIONS AND CREDIT
                                                    UNIONS WITH MEMBERSHIP IN AN
                                                    APPROVED SIGNATURE GUARANTEE
                                                    MEDALLION PROGRAM), PURSUANT
                                                    TO S.E.C. RULE 17Ad-15.
                                                   -----------------------------
                                                    SIGNATURE(S) GUARANTEED BY:

                                                   -----------------------------

<TABLE>
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<S>                                   <C>
 AMERICAN BANK NOTE COMPANY           PRODUCTION COORDINATOR: BELINDA BECK: 215-764-8619
55TH STREET AT SANSOM STREET                        PROOF OF MARCH 8, 2002
   PHILADELPHIA, PA 19139                                  WESTWOOD
       (215) 764-8600                                      H72515bk
-----------------------------------------------------------------------------------------
SALES: M. GARRETT: 214-823-270                 OPERATOR:                    HJ/JW/eg
-----------------------------------------------------------------------------------------
NET/BANKNOTE/HOME 23/MAC 6/WESTWOOD 72515                      Rev. 2
-----------------------------------------------------------------------------------------
</TABLE><PAGE>

                                                                    EXHIBIT 10.1

                          WESTWOOD HOLDINGS GROUP, INC.
                              STOCK INCENTIVE PLAN
                              --------------------

1.   ESTABLISHMENT, PURPOSE AND TERM OF PLAN.
     ---------------------------------------

     1.1  Establishment. This Westwood Holdings Group, Inc. Stock Incentive Plan
          (the "Plan") is hereby established effective as of February 1, 2002.

     1.2  Purpose. The purpose of the Plan is to advance the interests of the
          Participating Company Group and its stockholders by providing an
          incentive to attract and retain persons performing services for the
          Participating Company Group and by motivating such persons to
          contribute to the growth and profitability of the Participating
          Company Group.

     1.3  Term of Plan. The Plan shall continue in effect until the earlier of
          its termination by the Board or the date on which all of the shares of
          Stock available for issuance under the Plan have been issued and all
          restrictions on such shares (if any) under the terms of the Plan and
          the agreements evidencing the Awards granted under the Plan have
          lapsed. However, all Awards shall be granted, if at all, within ten
          (10) years from the earlier of the date the Plan is adopted by the
          Board or the date the Plan is duly approved by the stockholders of the
          Company.

2.   DEFINITIONS AND CONSTRUCTION.
     ----------------------------

     2.1  Definitions. Whenever used herein, the following terms shall have
          their respective meanings set forth below:

          (a)  "Acquiring Corporation" has the meaning given to it in Section
               13.2.

          (b)  "Annual Incentive Award" has the meaning given to it in Section
               11.1.

          (c)  "Award" means any form of incentive or performance award granted
               under the Plan, whether singly or in combination, to a
               Participant by the Board pursuant to such terms, conditions,
               restrictions and/or limitations (if any) as the Board may
               establish. Awards granted under the Plan may include:

               (i)   Options awarded pursuant to Sections 6-8;

               (ii)  Restricted Stock awarded pursuant to Section 9;

               (iii) Purchase Rights awarded pursuant to Section 10;

                                                                          Page 1

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               (iv) Annual Incentive Awards awarded pursuant to Section 11; and

               (v)  Performance-Based Awards awarded pursuant to Section 12.

          (d)  "Award Certificate" has the meaning given to it in Section 12.3.

          (e)  "Board" means the Board of Directors of the Company. If one or
               more Committees have been appointed by the Board to administer
               the Plan, "Board" also means such Committee(s).

          (f)  "Cashless Exercise" has the meaning given to it in Section
               6.3(a).

          (g)  "Cause" shall mean any of the following: (i) the Participant's
               theft of a Participating Company's property or falsification of
               any Participating Company documents or records; (ii) the
               Participant's improper use or disclosure of a Participating
               Company's confidential or proprietary information; (iii) any
               action by the Participant which has a detrimental effect on a
               Participating Company's reputation or business; (iv) the
               Participant's failure or inability to perform any reasonable
               assigned duties after written notice from the Participating
               Company Group or any Participating Company of, and a reasonable
               opportunity to cure, such failure or inability; (v) any material
               breach by the Participant of any employment agreement between the
               Participant and the Participating Company Group or any
               Participating Company, which breach is not cured pursuant to the
               terms of such agreement; or (vi) the Participant's conviction
               (including any plea of guilty or nolo contendere) of any felony
               or any other criminal act which impairs the Participant's ability
               to perform his or her duties with the Participating Company Group
               or any Participating Company.

          (h)  "Change in Control" has the meaning given to it in Section 13.1.

          (i)  "Code" means the Internal Revenue Code of 1986, as amended, and
               any applicable regulations promulgated thereunder.

          (j)  "Committee" means the Compensation Committee or other committee
               of the Board duly appointed to administer the Plan and having
               such powers as shall be specified by the Board. Unless the powers
               of the Committee have been specifically limited, the Committee
               shall have all of the powers of the Board granted herein,
               including, without limitation, the power to amend or terminate
               the Plan at any time, subject to the terms of the Plan and any
               applicable limitations imposed by law.

          (k)  "Company" means Westwood Holdings Group, Inc., a Delaware
               corporation, or any successor corporation thereto.

          (l)  "Consultant" means a person engaged to provide consulting or
               advisory services (other than as an Employee or a Director) to a
               Participating

                                                                          Page 2

<PAGE>

               Company, provided that the identity of such person, the nature of
               such services or the entity to which such services are provided
               would not preclude the Company from offering or selling
               securities to such person pursuant to the Plan in reliance on
               either the exemption from registration provided by Rule 701 under
               the Securities Act or, if the Company is required to file reports
               pursuant to Section 13 or 15(d) of the Exchange Act, registration
               on a Form S-8 Registration Statement under the Securities Act.

          (m)  "Deferred Compensation Plan" means that certain Westwood Holdings
               Group, Inc. Deferred Compensation Plan, effective February 1,
               2002.

          (n)  "Director" means a member of the Board or of the board of
               directors of any other Participating Company.

          (o)  "Disability" means the permanent and total disability of the
               Participant within the meaning of Section 22(e)(3) of the Code.

          (p)  "Employee" means any person treated as an employee (including an
               officer or a Director who is also treated as an employee) in the
               records of a Participating Company and, with respect to any
               Incentive Stock Option granted to such person, who is an employee
               for purposes of Section 422 of the Code; provided, however, that
               neither service as a Director nor payment of a director's fee
               shall be sufficient to constitute employment for purposes of the
               Plan.

          (q)  "Exchange Act" means the Securities Exchange Act of 1934, as
               amended.

          (r)  "Exercise Period" has the meaning given to it in Section 10.1.

          (s)  "Fair Market Value" means, as of any date, the value of a share
               of Stock or other property as determined by the Board, in its
               discretion, or by the Company, in its discretion, if such
               determination is expressly allocated to the Company herein,
               subject to the following:

               (i)  If, on such date, the Stock is listed on a national or
                    regional securities exchange or market system, the Fair
                    Market Value of a share of Stock shall be the closing price
                    of a share of Stock (or the mean of the closing bid and
                    asked prices of a share of Stock if the Stock is so quoted
                    instead) as quoted on the Nasdaq National Market, the Nasdaq
                    SmallCap Market or such other national or regional
                    securities exchange or market system constituting the
                    primary market for the Stock, as reported in The Wall Street
                                                                 ---------------
                    Journal or such other source as the Company deems reliable.
                    -------
                    If the relevant date does not fall on a day on which the
                    Stock has traded on such securities exchange or market
                    system, the date on which the Fair Market Value shall be
                    established shall be the last day on which the Stock was so
                    traded prior to the relevant date, or

                                                                          Page 3

<PAGE>

                    such other appropriate day as shall be determined by the
                    Board, in its discretion.

               (ii) If, on such date, the Stock is not listed on a national or
                    regional securities exchange or market system, the Fair
                    Market Value of a share of Stock shall be as determined by
                    the Board in good faith without regard to any restriction
                    other than a restriction which, by its terms, will never
                    lapse.

          (t)  "Good Reason" means (i) a resignation occurring within ninety
               (90) days following a Change in Control; (ii) the relocation of
               the principal place of business of the Participating Company for
               which the Participant renders Service to a location more than 100
               miles from its location as of the date of the Change in Control
               without the Participant's consent; or (iii) a material reduction
               in the Participant's salary or bonus opportunity, or the
               Participant's responsibilities.

          (u)  "Incentive Stock Option" means an Option intended to be (as set
               forth in the Option Agreement), and which qualifies as, an
               incentive stock option within the meaning of Section 422(b) of
               the Code.

          (v)  "Insider" means an officer or a Director of the Company or any
               other person whose transactions in Stock are subject to Section
               16 of the Exchange Act.

          (w)  "Non-Employee Director" has the meaning given to it in Article 8.

          (x)  "Nonstatutory Stock Option" means an Option not intended to be
               (as set forth in the Option Agreement), or which does not qualify
               as, an Incentive Stock Option.

          (y)  "Option" means a right to purchase Stock (subject to adjustment
               as provided in Section 4.2) pursuant to the terms and conditions
               of the Plan. An Option may be either an Incentive Stock Option or
               a Nonstatutory Stock Option.

          (z)  "Option Agreement" means a written agreement between the Company
               and a Participant setting forth the terms, conditions and
               restrictions of the Option granted to the Participant and any
               shares acquired upon the exercise thereof. An Option Agreement
               may consist of a form of "Notice of Grant of Stock Option" and a
               form of "Stock Option Agreement" incorporated therein by
               reference, or such other form or forms as the Board may approve
               from time to time

          (aa) "Option Expiration Date" has the meaning given to it in Section
               6.6(a)(i).

          (bb) "Ownership Change Event" has the meaning given to it in Section
               13.1.

                                                                          Page 4

<PAGE>

          (cc) "Parent" means (i) any "parent corporation" as defined in Section
               424(e) of the Code and any successor provisions; (ii) any other
               entity that is taxed as a corporation under Section 7701(a)(3) of
               the Code and is a member of the "affiliated group" as defined in
               Section 1504(a) of the Code of which the Company is a common
               subsidiary corporation, and (iii) any other entity as may be
               permitted from time to time by the Code or the Internal Revenue
               Service to be an employer of employees to whom Options may be
               granted; provided, however, that in each case the Company must be
               consolidated in the Parent's financial statements.

          (dd) "Participant" means a person who has been granted one or more
               awards pursuant to the terms and conditions of the Plan.

          (ee) "Participating Company" means the Company or any Parent or
               Subsidiary.

          (ff) "Participating Company Group" means, at any point in time, all
               corporations or other entities collectively which are then
               Participating Companies.

          (gg) "Performance Cycle" means (i) with respect to any Annual
               Incentive Award, the twelve (12) month period beginning on
               January 1, 2002 and each January 1 thereafter, and (ii) with
               respect to any Performance-Based Award, the period determined by
               the Committee over which the Company's level of attainment of a
               Performance Measure shall be determined.

          (hh) "Performance Goals" means, with respect to any Annual Incentive
               Award or Performance-Based Award, one or more targets, goals or
               levels of attainment required to be achieved in terms of the
               specified Performance Measure during a fiscal year or specified
               Performance Cycle, as applicable.

          (ii) "Performance Measure" means, with respect to any Annual Incentive
               Award or Performance-Based Award, the business criteria
               established by the Committee to measure the level of performance
               of the Company during the fiscal year or Performance Cycle, as
               applicable. The Committee may select as the Performance Measure
               any one or combination of financial measures, as interpreted by
               the Committee, which (to the extent applicable) can be determined
               either on a pro forma or GAAP basis, and either pre-tax or
               after-tax, such as: earnings per share, return on equity, return
               on invested capital, relative total shareholder return, revenue
               growth, Stock performance, net income, return on sales, return on
               assets, economic value added, cash flow and net operating income.

          (jj) "Performance-Based Award" has the meaning given to it in Section
               12.1.

                                                                          Page 5

<PAGE>

          (kk)    "Permitted Transferees" has the meaning given to it in Section
                  6.7.

          (ll)    "Plan" has the meaning given to it in Section 1.1.

          (mm)    "Purchase Right" means the right to purchase Stock in
                  accordance with the provisions of Section 10.

          (nn)    "Restricted Period" has the meaning given to it in Section
                  9.1.

          (oo)    "Restricted Stock" means an award of Stock made under Section
                  9, which is subject to vesting provisions.

          (pp)    "Rule 16b-3" means Rule 16b-3 under the Exchange Act, as
                  amended from time to time, or any successor rule or
                  regulation.

          (qq)    "Securities Act" means the Securities Act of 1933, as amended.

          (rr)    "Service" means a Participant's employment or service with the
                  Participating Company Group, whether in the capacity of an
                  Employee, a Director or a Consultant. A Participant's Service
                  shall not be deemed to have terminated merely because of a
                  change in the capacity in which the Participant renders
                  Service to the Participating Company Group or a change in the
                  Participating Company for which the Participant renders such
                  Service, provided that there is no interruption or termination
                  of the Participant's Service. Furthermore, a Participant's
                  Service with the Participating Company Group shall not be
                  deemed to have terminated if the Participant takes any
                  military leave, sick leave, or other bona fide leave of
                  absence approved by the Company; provided, however, that if
                  any such leave exceeds ninety (90) days, on the ninety-first
                  (91st) day of such leave the Participant's Service shall be
                  deemed to have terminated unless the Participant's right to
                  return to Service with the Participating Company Group is
                  guaranteed by statute or contract. Notwithstanding the
                  foregoing, unless otherwise designated by the Company or
                  required by law, a leave of absence shall not be treated as
                  Service for purposes of determining vesting under any Option
                  Agreement. The Participant's Service shall be deemed to have
                  terminated either upon an actual termination of Service or
                  upon the corporation for which the Participant performs
                  Service ceasing to be a Participating Company. Subject to the
                  foregoing, the Company, in its discretion, shall determine
                  whether the Participant's Service has terminated and the
                  effective date of such termination.

          (ss)    "Spin-off Date" means the date on which SWS Group, Inc., a
                  Delaware corporation, distributes all of the Stock that it
                  then holds to its stockholders.

          (tt)    "Stock" means the common stock of the Company, as adjusted
                  from time to time in accordance with Section 4.2.

                                                                          Page 6

<PAGE>

          (uu)    "Subsidiary" means (i) any "subsidiary corporation" of the
                  Company, as defined in Section 424(f) of the Code and any
                  successor provisions, (ii) any other entity that is taxed as a
                  corporation under Section 7701(a)(3) of the Code and is a
                  member of the "affiliated group" as defined in Section 1504(a)
                  of the Code of which the Company is a common parent
                  corporation, and (iii) any other entity as may be permitted
                  from time to time by the Code or the Internal Revenue Service
                  to be an employer of employees to whom Options may be granted;
                  provided, however, that in each case the subsidiary
                  corporation must be consolidated in the Company's financial
                  statements.

          (vv)    "Ten Percent Owner Participant" means a Participant who, at
                  the time an Option is granted to the Participant, owns stock
                  possessing more than ten percent (10%) of the total combined
                  voting power of all classes of stock of a Participating
                  Company within the meaning of Section 422(b)(6) of the Code.

          (ww)    "Termination After Change in Control" shall mean either of the
                  following events occurring within twelve (12) months after (or
                  as a result of) a Change in Control:

                  (i)   termination by the Participating Company Group of the
                        Participant's Service with the Participating Company
                        Group for any reason other than for Cause; or

                  (ii)  the Participant's resignation for Good Reason from
                        Service with the Participating Company Group within a
                        reasonable period of time following the event
                        constituting Good Reason.

          Notwithstanding any provision herein to the contrary, Termination
          After Change in Control shall not include any termination of the
          Participant's Service with the Participating Company Group which (1)
          is for Cause; (2) is a result of the Participant's death or
          Disability; (3) is a result of the Participant's voluntary termination
          of Service other than for Good Reason; or (4) occurs prior to the
          effectiveness of a Change in Control (and is not directly related to a
          Change in Control).

     2.2  Construction. Captions and titles contained herein are for convenience
          only and shall not affect the meaning or interpretation of any
          provision of the Plan. Except when otherwise indicated by the context,
          the singular shall include the plural and the plural shall include the
          singular. Use of the term "or" is not intended to be exclusive, unless
          the context clearly requires otherwise.

3.   ADMINISTRATION.
     --------------

     3.1  Administration by the Board. The Plan shall be administered by the
          Board. All questions of interpretation of the Plan or of any Award
          shall be determined by the

                                                                          Page 7

<PAGE>

          Board, and such determinations shall be final and binding upon all
          persons having an interest in the Plan.

     3.2  Authority of Officers. Any officer of a Participating Company shall
          have the authority to act on behalf of the Company with respect to any
          matter, right, obligation, determination or election which is the
          responsibility of or which is allocated to the Company herein,
          provided the officer has apparent authority with respect to such
          matter, right, obligation, determination or election.

     3.3  Powers of the Board. In addition to any other powers set forth in the
          Plan and subject to the provisions of the Plan, the Board shall have
          the full and final power and authority, in its discretion:

          (a)  to determine the persons to whom, and the time or times at which,
               Awards shall be granted and, if applicable, the number of shares
               of Stock to be subject thereto;

          (b)  to designate Options as Incentive Stock Options or Nonstatutory
               Stock Options;

          (c)  to determine the Fair Market Value of shares of Stock or other
               property;

          (d)  to determine the terms, conditions and restrictions applicable to
               each Award (which need not be identical) and, if applicable, any
               shares acquired upon the exercise thereof, including, without
               limitation, (i) the exercise price of an Option or Purchase
               Right, (ii) the method of payment for shares purchased upon the
               exercise of the Option or Purchase Right, (iii) the method for
               satisfaction of any tax withholding obligation arising in
               connection with the Award or such shares of Stock issued or cash
               provided thereunder, including by the withholding or delivery of
               shares of Stock or cash, (iv) the timing, terms and conditions of
               the exercisability of the Award or the vesting of any shares
               acquired upon the exercise thereof, (v) the time of the
               expiration of the Award, (vi) the effect of the Participant's
               termination of Service with the Participating Company Group on
               any of the foregoing, and (vii) all other terms, conditions and
               restrictions applicable to the Award not inconsistent with the
               terms of the Plan;

          (e)  to approve one or more forms of Option Agreement or Award
               Certificate;

          (f)  to amend, modify, extend, cancel or renew any Award, or to waive
               any restrictions or conditions applicable to any Award or any
               shares of Stock acquired upon the exercise thereof;

          (g)  to accelerate, continue, extend or defer the exercisability of
               any Award or the vesting of any shares acquired upon the exercise
               thereof, including with respect to the period following a
               Participant's termination of Service with the Participating
               Company Group;

                                                                          Page 8

<PAGE>

          (h)  to prescribe, amend or rescind rules, guidelines and policies
               relating to the Plan, or to adopt supplements to, or alternative
               versions of, the Plan, including, without limitation, as the
               Board deems necessary or desirable to comply with the laws of, or
               to accommodate the tax policy or custom of, foreign jurisdictions
               whose citizens may be granted Options; and

          (i)  to correct any defect, supply any omission or reconcile any
               inconsistency in the Plan, any Option Agreement or any Award
               Certificate and to make all other determinations and take such
               other actions with respect to the Plan or any Option as the Board
               may deem advisable to the extent not inconsistent with the
               provisions of the Plan or applicable law.

     3.4  Administration with Respect to Insiders. With respect to participation
          by Insiders in the Plan, at any time that any class of equity security
          of the Company is registered pursuant to Section 12 of the Exchange
          Act, the Plan shall be administered in compliance with the
          requirements, if any, of Rule 16b-3.

     3.5  Indemnification. In addition to such other rights of indemnification
          as they may have as members of the Board or officers or employees of
          the Participating Company Group, members of the Board and any officers
          or employees of the Participating Company Group to whom authority to
          act for the Board or the Company is delegated shall be indemnified by
          the Company against all reasonable expenses, including attorneys'
          fees, actually and necessarily incurred in connection with the defense
          of any action, suit or proceeding, or in connection with any appeal
          therein, to which they or any of them may be a party by reason of any
          action taken or failure to act under or in connection with the Plan,
          or any right granted hereunder, and against all amounts paid by them
          in settlement thereof (provided such settlement is approved by
          independent legal counsel selected by the Company) or paid by them in
          satisfaction of a judgment in any such action, suit or proceeding,
          except in relation to matters as to which it shall be adjudged in such
          action, suit or proceeding that such person is liable for gross
          negligence, bad faith or intentional misconduct in duties; provided,
          however, that within sixty (60) days after the institution of such
          action, suit or proceeding, such person shall offer to the Company, in
          writing, the opportunity at its own expense to handle and defend the
          same.

4.   SHARES SUBJECT TO PLAN.
     ----------------------

     4.1  Maximum Number of Shares Issuable. Subject to adjustment as provided
          in Section 4.2, the maximum aggregate number of shares of Stock that
          may be issued under the Plan shall be 948,100 shares, and shall
          consist of authorized but unissued or reacquired shares of Stock or
          any combination thereof. If an outstanding Award for any reason
          expires or is terminated or canceled or if shares of Stock are
          acquired upon the exercise of an Award or otherwise subject to a
          Company repurchase option and are repurchased by the Company at the
          Participant's exercise price, or if shares of Restricted Stock are
          forfeited unvested, the shares of Stock shall again be available for
          issuance under the Plan. Subject

                                                                          Page 9

<PAGE>

          to adjustment as provided in Section 4.2, the maximum aggregate number
          of Options for shares of Stock that may be awarded in any year to any
          Participant may not exceed 316,033 shares.

     4.2  Adjustments for Changes in Capital Structure. In the event of any
          stock dividend, stock split, reverse stock split, recapitalization,
          combination, reclassification or similar change in the capital
          structure of the Company, appropriate adjustments shall be made in the
          number and class of shares subject to the Plan and to any outstanding
          Awards (if applicable) and in the exercise price per share of any
          outstanding Awards (if applicable). If a majority of the shares which
          are of the same class as the shares that are subject to outstanding
          Awards are exchanged for, converted into, or otherwise become (whether
          or not pursuant to an Ownership Change Event, as defined in Section
          13.1) shares of another corporation (the "New Shares"), the Board may
          unilaterally amend the outstanding Awards to provide that such Awards
          are exercisable for New Shares. In the event of any such amendment,
          the number of shares subject to, and the exercise price per share of,
          the outstanding Awards shall be adjusted in a fair and equitable
          manner as determined by the Board, in its discretion. Notwithstanding
          the foregoing, any fractional share resulting from an adjustment
          pursuant to this Section 4.2 shall be rounded down to the nearest
          whole number, and in no event may the exercise price of any Award be
          decreased to an amount less than the par value, if any, of the stock
          subject to the Award. The adjustments determined by the Board pursuant
          to this Section 4.2 shall be final, binding and conclusive.

5.   ELIGIBILITY AND OPTION LIMITATIONS.
     ----------------------------------

     5.1  Persons Eligible for Awards. Awards may be granted pursuant to this
          Plan only to Employees, Consultants, and Directors. For purposes of
          the foregoing sentence, "Employees," "Consultants" and "Directors"
          shall include prospective Employees, prospective Consultants and
          prospective Directors to whom Awards are granted in connection with
          written offers of an employment or other service relationship with the
          Participating Company Group. Eligible persons may be granted more than
          one (1) Award.

     5.2  Option Grant Restrictions. Any person who is not an Employee on the
          effective date of the grant of an Option to such person may be granted
          only a Nonstatutory Stock Option. An Incentive Stock Option granted to
          a prospective Employee upon the condition that such person become an
          Employee shall be deemed granted effective on the date such person
          commences Service with a Participating Company, with an exercise price
          determined as of such date in accordance with Section 6.1.

     5.3  Fair Market Value Limitation. To the extent that Options designated as
          Incentive Stock Options (granted under all stock option plans of the
          Participating Company Group, including the Plan) become exercisable by
          a Participant for the first time during any calendar year for Stock
          having a Fair Market Value greater than One Hundred Thousand Dollars
          ($100,000), the portions of such Options

                                                                         Page 10

<PAGE>
               which exceed such amount shall be treated as Nonstatutory Stock
               Options. For purposes of this Section 5.3, options designated as
               Incentive Stock Options shall be taken into account in the order
               in which they were granted, and the Fair Market Value of Stock
               shall be determined as of the time the Option with respect to
               such Stock is granted. If the Code is amended to provide for a
               different limitation from that set forth in this Section 5.3,
               such different limitation shall be deemed incorporated herein
               effective as of the date and with respect to such Options as
               required or permitted by such amendment to the Code. If an Option
               is treated as an Incentive Stock Option in part and as a
               Nonstatutory Stock Option in part by reason of the limitation set
               forth in this Section 5.3, the Participant may designate which
               portion of such Option the Participant is exercising. In the
               absence of such designation, the Participant shall be deemed to
               have exercised the Incentive Stock Option portion of the Option
               first. Separate certificates representing each such portion shall
               be issued upon the exercise of the Option.

6.    TERMS AND CONDITIONS OF OPTIONS.
      -------------------------------

      Options shall be evidenced by Option Agreements specifying the number of
shares of Stock covered thereby, in such form as the Board shall from time to
time establish. No Option or purported Option shall be a valid and binding
obligation of the Company unless evidenced by a fully executed Option Agreement.
Option Agreements may incorporate all or any of the terms of the Plan by
reference and shall comply with and be subject to the following terms and
conditions:

      6.1      Exercise Price. The exercise price for each Option shall be
               established in the discretion of the Board; provided, however,
               that (a) the exercise price per share for an Option shall be not
               less than the Fair Market Value of a share of Stock on the
               effective date of grant of the Option, and (b) no Incentive Stock
               Option granted to a Ten Percent Owner Participant shall have an
               exercise price per share less than one hundred ten percent (110%)
               of the Fair Market Value of a share of Stock on the effective
               date of grant of the Option. Notwithstanding the foregoing, an
               Option (whether an Incentive Stock Option or a Nonstatutory Stock
               Option) may be granted with an exercise price lower than the
               minimum exercise price set forth above if such Option is granted
               pursuant to an assumption or substitution for another option in a
               manner qualifying under the provisions of Section 424(a) of the
               Code.

      6.2      Exercisability and Term of Options. Options shall be exercisable
               at such time or times, or upon such event or events, and subject
               to such terms, conditions, performance criteria and restrictions
               as shall be determined by the Board and set forth in the Option
               Agreement evidencing such Option; provided, however, that (a) no
               Option shall be exercisable after the expiration of ten (10)
               years after the effective date of grant of such Option, (b) no
               Incentive Stock Option granted to a Ten Percent Owner Participant
               shall be exercisable after the expiration of five (5) years after
               the effective date of grant of such Option, and (c) no Option
               granted to a prospective Employee, prospective Consultant or
               prospective Director may become exercisable prior to the date on
               which such person commences Service

                                                                         Page 11

<PAGE>

               with a Participating Company. Subject to the foregoing, unless
               otherwise specified by the Board in the grant of an Option, any
               Option granted hereunder shall terminate ten (10) years after the
               effective date of grant of the Option, unless earlier terminated
               in accordance with its provisions.

      6.3      Payment of Exercise Price.

               (a)  Forms of Consideration Authorized. Except as otherwise
                    provided below, payment of the exercise price for the number
                    of shares of Stock being purchased pursuant to any Option
                    shall be made (i) in cash, by check or cash equivalent, (ii)
                    by tender to the Company, or attestation to the ownership,
                    of shares of Stock owned by the Participant having a Fair
                    Market Value (as determined by the Company without regard to
                    any restrictions on transferability applicable to such stock
                    by reason of federal or state securities laws or agreements
                    with an underwriter for the Company) not less than the
                    exercise price, (iii) by delivery of a properly executed
                    notice together with irrevocable instructions to a broker
                    providing for the assignment to the Company of the proceeds
                    of a sale or loan with respect to some or all of the shares
                    being acquired upon the exercise of the Option (including,
                    without limitation, through an exercise complying with the
                    provisions of Regulation T as promulgated from time to time
                    by the Board of Governors of the Federal Reserve System) (a
                    "Cashless Exercise"), (iv) provided that the Participant is
                    an Employee and in the Company's sole discretion at the time
                    the Option is exercised, by delivery of the Participant's
                    promissory note in a form approved by the Company for the
                    aggregate exercise price, provided that, if the Company is
                    incorporated in the State of Texas, the Participant shall
                    pay in cash that portion of the aggregate exercise price not
                    less than the par value of the shares being acquired, (v) by
                    such other consideration as may be approved by the Board
                    from time to time to the extent permitted by applicable law,
                    or (vi) by any combination thereof. The Board may at any
                    time or from time to time, by approval of or by amendment to
                    the standard forms of Option Agreement described in Section
                    7, or by other means, grant Options which do not permit all
                    of the foregoing forms of consideration to be used in
                    payment of the exercise price or which otherwise restrict
                    one or more forms of consideration.

               (b)  Limitations on Forms of Consideration.

                    (i)   Tender of Stock. Notwithstanding the foregoing, an
                          Option may not be exercised by tender to the Company,
                          or attestation to the ownership, of shares of Stock to
                          the extent such tender or attestation would constitute
                          a violation of the provisions of any law, regulation
                          or agreement restricting the redemption of the
                          Company's stock. Unless otherwise provided by the
                          Board, an Option may not be by tender to the Company,
                          or attestation to the ownership, of shares of Stock
                          unless such shares

                                                                         Page 12

<PAGE>

                          either have been owned by the Participant for more
                          than six (6) months or were not acquired, directly or
                          indirectly, from the Company.

                   (ii)   Cashless Exercise.  The Company reserves, at any and
                          all times, the right, in the Company's sole and
                          absolute discretion, to establish, decline to approve
                          or terminate any program or procedures for the
                          exercise of Options by means of a Cashless Exercise.

                  (iii)   Payment by Promissory Note.  No promissory note shall
                          be permitted if the exercise of an Option using a
                          promissory note would be a violation of any law.  Any
                          permitted promissory note shall be on such terms as
                          the Board shall determine at the time the Option is
                          granted.  The Board shall have the authority to
                          permit or require the Participant to secure any
                          promissory note used to exercise an Option with the
                          shares of Stock acquired upon the exercise of the
                          Option or with other collateral acceptable to the
                          Company.  Unless otherwise provided by the Board, if
                          the Company at any time is subject to the regulations
                          promulgated by the Board of Governors of the Federal
                          Reserve System or any other governmental entity
                          affecting the extension of credit in connection with
                          the Company's securities, any promissory note shall
                          comply with such applicable regulations, and the
                          Participant shall pay the unpaid principal and accrued
                          interest, if any, to the extent necessary to comply
                          with such applicable regulations.

    6.4   Tax Withholding. The Company shall have the right, but not the
          obligation, to deduct from the shares of Stock issuable upon the
          exercise of an Option, or to accept from the Participant the tender
          of, a number of whole shares of Stock having a Fair Market Value, as
          determined by the Company, equal to all or any part of the federal,
          state, local and foreign taxes, if any, required by law to be withheld
          by the Participating Company Group with respect to such Option or the
          shares acquired upon the exercise thereof. Alternatively or in
          addition, in its discretion, the Company shall have the right to
          require the Participant, through payroll withholding, cash payment or
          otherwise, including by means of a Cashless Exercise, to make adequate
          provision for any such tax withholding obligations of the
          Participating Company Group arising in connection with the Option or
          the shares acquired upon the exercise thereof the Fair Market Value of
          any shares of Stock withheld or tendered to satisfy any such tax
          withholding obligations shall not exceed the amount determined by the
          applicable minimum statutory withholding rates, the Company shall have
          no obligation to deliver shares of Stock or to release shares of Stock
          from an escrow established pursuant to the Option Agreement until the
          Participating Company Group's tax withholding obligations have been
          satisfied by the Participant.

                                                                         Page 13

<PAGE>

 6.5      Repurchase Rights. Shares issued under the Plan may be subject to a
          right of first refusal, one or more repurchase options, or other
          conditions and restrictions as determined by the Board in its
          discretion at the time the Option is granted. The Company shall have
          the right to assign at any time any repurchase right it may have,
          whether or not such right is then exercisable, to one or more persons
          as may be selected by the Company. Upon request by the Company, each
          Participant shall execute any agreement evidencing such transfer
          restrictions prior to the receipt of shares of Stock hereunder and
          shall promptly present to the Company any and all certificates
          representing shares of Stock acquired hereunder for the placement on
          such certificates of appropriate legends evidencing any such transfer
          restrictions.

 6.6      Effect of Termination of Service.

          (a)  Option Exercisability. Subject to earlier termination of the
               Option as otherwise provided herein and unless otherwise provided
               by the Board in the grant of an Option and set forth in the
               Option Agreement, an Option shall be exercisable after a
               Participant's termination of Service only during the applicable
               time period determined in accordance with this Section 6.6 and
               thereafter shall terminate:

               (i)       Disability. If the Participant's Service with the
                         Participating Company Group terminates because of the
                         Disability of the Participant, the Option, to the
                         Disability exercisable on the date on which the
                         Disability terminated, may be exercised by the
                         Participant (or the Participant's guardian or legal
                         to the expiration of one (1) year (or such other period
                         of time as determined by the Board, in its discretion)
                         after the date on which the Participant's Service
                         terminated, but in any event no later than the date of
                         expiration of the Option's term as set forth in the
                         Option Agreement evidencing such Option (the
                         "Option Expiration Date").

              (ii)       Death.  If the Participant's Service with the
                         Participating Company Group terminates because of the
                         death of the Participant, the Option, to the extent
                         unexercised and exercisable on the date on which the
                         Participant's Service terminated, may be exercised by
                         legal representative or other person who acquired the
                         right to exercise the Option by reason of the
                         Participant's death at any time prior to the expiration
                         of one (1) year (or such other period of time as
                         determined by the Board, in its discretion) after the
                         date on which the Participant'sService terminated, but
                         in any event no later than the Option Expiration Date.
                         The Participant's Service shall be deemed to have
                         terminated on account of death if theParticipant dies
                         within three (3) months (or such otherperiod of time as
                         determined by the Board, in its discretion) after the
                         Participant's termination of Service.

                                                                         Page 14

<PAGE>

                (iii)     Cause. If the Participant's Service with the
                          Participating Company Group is terminated for Cause,
                          the Option shall terminate and cease to be exercisable
                          immediately upon such termination of Service.

                (iv)      Termination After Change in Control.  Except as
                          otherwise specified in an Option Agreement, if the
                          Participant's Service with the Participating Company
                          Group ceases as a result of Termination After Change
                          in Control, then (1) the Option, to the extent
                          unexercised and exercisable on the date on which the
                          Participant's Service terminated, may be exercised by
                          the Participant (or the Participant's guardian or
                          legal representative) at any time prior to the
                          expiration of three (3) months (or such longer period
                          of time as determined by the Board, in its sole
                          discretion) after the date on which the Participant's
                          Service terminated, but in any event no later than the
                          Option Expiration Date, and (2) any unexercisable or
                          unvested portion of the Option shall become fully
                          vested and exercisable as of the date on which the
                          Participant's Service terminated.

                (v)       Termination of Service. If the Participant's Service
                          with the Participating Company Group terminates for
                          any reason, except Disability, death or Cause, the
                          Option, to the extent unexercised and exercisable by
                          the Participant on the date on which the Participant's
                          Service terminated, may be exercised by the
                          Participant at any time prior to the expiration of
                          three (3) months (or such other period of time as
                          determined by the Board, in its discretion) after  the
                          date on which the Participant's Service terminated,
                          but in any event no later than the Option Expiration
                          Date.

        (b)     Extension if Exercise Prevented by Law. Notwithstanding the
                foregoing, if the exercise of an Option within the applicable
                time periods set forth in Section 6.6(a) is prevented by the
                provisions of Section 16 below, the Option shall remain
                exercisable until three (3) months (or such longer period of
                time as determined by the Board, in its discretion) after the
                date the Participant is notified by the Company that the Option
                is exercisable, but in any event no later than the Option
                Expiration Date.

        (c)     Extension if Participant Subject to Section 16(b).
                Notwithstanding the foregoing, if a sale within the applicable
                time periods set forth in Section 6.6(a) of shares acquired upon
                the exercise of the Option would subject the Participant to suit
                under Section 16(b) of the Exchange Act, the Option shall
                remain exercisable until the earliest to occur of (i) the tenth
                (10th) day following the date on which a sale of such shares by
                the Participant would no longer be subject to such suit, (ii)
                the one hundred and ninetieth

                                                                         Page 15

<PAGE>

               (190/th/) day after the Participant's termination of Service, or
               (iii) the Option Expiration Date.

     6.7  Transferability of Options. Incentive Stock Options granted under the
          Plan shall not be transferable otherwise than by will or the laws of
          descent and distribution, or pursuant to a qualified domestic
          relations order as defined by the Code or Title I of the Employee
          Retirement Income Security Act of 1974, as amended, or the rules
          thereunder. Incentive Stock Options shall be exercisable during the
          lifetime of the Participant only by the Participant or by the
          Participant's guardian or legal representative (unless such exercise
          would disqualify an Option as an Incentive Stock Option). With the
          approval of the Board, the Option Agreement (other than an Incentive
          Stock Option) may provide that such Option may be transferred without
          consideration to one or more Permitted Transferees. Any attempted
          assignment, transfer, pledge, hypothecation or other disposition of an
          Option or other award contrary to the provisions hereof, or the levy
          of any execution, attachment or similar process upon an Option or
          other award shall be null and void and without effect. As used herein,
          "Permitted Transferees" means a member of a Participant's immediate
          family, trusts for the exclusive benefit of such Participant and/or
          such Participant's immediate family members, and partnerships or other
          entities in which the Participant and/or such immediate family members
          are the only partners, provided that no consideration is provided for
          the transfer. Immediate family members shall include a Participant's
          spouse, descendants (children, grandchildren and more remote
          descendants), spouses of descendants, and shall include step-children
          and relationships arising from legal adoption.

7.   STANDARD FORMS OF OPTION AGREEMENT.
     ----------------------------------

     7.1  Option Agreement. Unless otherwise provided by the Board at the time
          the Option is granted, an Option shall comply with and be subject to
          the terms and conditions set forth in the form of Option Agreement
          approved by the Board concurrently with its adoption of the Plan and
          as amended from time to time.

     7.2  Authority to Vary Terms. The Board shall have the authority from time
          to time to vary the terms of any standard form of Option Agreement
          described in this Section 7 either in connection with the grant or
          amendment of an individual Option or in connection with the
          authorization of a new standard form or forms; provided, however, that
          the terms and conditions of any such new, revised or amended standard
          form or forms of Option Agreement are not inconsistent with the terms
          of the Plan.

8.   AWARD AND DELIVERY OF OPTIONS TO NON-EMPLOYEE DIRECTORS.
     -------------------------------------------------------

     Notwithstanding any other provision of the Plan, each Director who is not
an Employee (a "Non-Employee Director") shall, shortly following the Spin-off
Date and upon each date of election or re-election as a Board member, be granted
a Nonstatutory Stock Option for 2,500 shares of Stock. The exercise price for
any Options awarded pursuant to this Article 8

                                                                         Page 16

<PAGE>

shall be equal to one hundred percent (100%) of the Fair Market Value of the
shares on the date of grant. Each such Option shall fully vest at the expiration
of twelve (12) months from the date of the grant. Each Non-Employee Director
Option shall have a term of ten (10) years. Expiration of a Non-Employee
Director's term of office shall not affect a Non-Employee Director's right to
exercise its Option to the extent such Option is vested at any time prior to the
expiration of the Director's term.

9.   AWARD AND DELIVERY OF RESTRICTED STOCK.
     --------------------------------------

     9.1  Restricted Period. At the time an award of Restricted Stock is made,
          the Committee shall establish a period or periods of time (each a
          "Restricted Period") or such other restrictions on the vesting of the
          Restricted Stock as it shall deem appropriate or applicable to such
          award. Each award of Restricted Stock may have a different Restricted
          Period or Restricted Periods. The Committee may, in its sole
          discretion, at the time an award is made, provide for the incremental
          lapse of Restricted Periods with respect to a portion or portions of
          the Restricted Stock awarded, and for the lapse or termination of
          restrictions upon all or any portion of the Restricted Stock upon the
          satisfaction of other conditions in addition to or other than the
          expiration of the applicable Restricted Period. The Committee may
          also, in its sole discretion, shorten or terminate a Restricted Period
          or waive any conditions for the lapse or termination of restrictions
          with respect to all or any portion of the Restricted Stock.

     9.2  Rights and Privileges. At the time a grant of Restricted Stock is made
          to a Participant, a stock certificate representing a number of shares
          of the Company's common stock equal to the number of shares of such
          Restricted Stock shall be registered in the Participant's name but
          shall be held in custody by the Company for such Participant's
          account. The Participant shall generally have the rights and
          privileges of a stockholder as to such Restricted Stock, including,
          without limitation, the right to vote the Restricted Stock, except
          that, subject to the earlier lapse or termination of restrictions as
          herein provided, the following restrictions shall apply: (i) the
          Participant shall not be entitled to delivery of the stock certificate
          evidencing Restricted Stock until the expiration or termination of the
          Restricted Period applicable to such shares and the satisfaction of
          any other conditions prescribed by the Committee; (ii) none of the
          shares then subject to a Restricted Period shall be sold, transferred,
          assigned, pledged, or otherwise encumbered or disposed of during the
          Restricted Period applicable to such shares and until the satisfaction
          of any other conditions prescribed by the Committee; and (iii) all of
          the shares then subject to a Restricted Period shall be forfeited and
          all rights of the Participant to such Restricted Stock shall terminate
          without further obligation on the part of the Company if the
          Participant ceases to be an Employee, Consultant or Director of the
          Company or any of its subsidiaries before the expiration or
          termination of such Restricted Period and the satisfaction of any
          other conditions prescribed by the Committee applicable to such
          Restricted Stock. Dividends on Restricted Stock shall be currently
          paid; provided, however,
                --------  -------

                                                                         Page 17

<PAGE>

          that in lieu of paying currently a dividend of shares of Common Stock
          in respect of Restricted Stock, the Committee may, in its sole
          discretion, register in the name of a Participant a stock certificate
          representing such shares of Common Stock issued as a dividend on
          Restricted Stock, and may cause the Company to hold such certificate
          in custody for the Participant's account subject to the same terms and
          conditions as such Restricted Stock. Upon the forfeiture of any
          Restricted Stock, such forfeited Restricted Stock shall be transferred
          to the Company without further action by the Participant.

     9.3  Expiration of Restricted Period. Upon the expiration or termination of
          the Restricted Period applicable to Restricted Stock and the
          satisfaction of any other conditions prescribed by the Committee or at
          such earlier time as provided for herein, the restrictions applicable
          to the Restricted Stock to such Restricted Period shall lapse and a
          certificate for a number of shares of Common Stock equal to the number
          of shares of Restricted Stock with respect to which the restrictions
          have expired or terminated shall be delivered, free of all such
          restrictions, except any that may be imposed by law, to the
          Participant. The Company shall not be required to deliver any
          fractional share of Common Stock but shall pay to the Participant, in
          lieu thereof, the product of (i) the Fair Market Value per share
          (determined as of the date the restrictions expire or terminate) and
          (ii) the fraction of a share to which such Participant would otherwise
          be entitled.

10.  AWARD AND DELIVERY OF PURCHASE RIGHTS.
     -------------------------------------

     10.1 Purchase Rights. At the time an award of Purchase Rights is made, the
          Committee shall establish a period or periods of time during which the
          Purchase Right may be exercised (each an "Exercise Period") or such
          other restrictions as it shall deem appropriate and applicable to such
          award. Each award of Purchase Rights may have a different Exercise
          Period or Exercise Periods. Each award shall specify the method of
          payment (which may include promissory notes) to purchase Stock and
          shall set forth any repurchase rights or calls applicable to the
          purchased Stock.

11.  ANNUAL INCENTIVE AWARDS.
     -----------------------

     11.1 Annual Incentive Awards. The Committee may grant annual incentive
          awards of Stock or cash (each an "Annual Incentive Award") to such
          Participants as the Committee may from time to time recommend, in such
          amounts and subject to such terms and conditions as the Committee in
          its discretion may determine. The Committee shall establish the
          maximum amount of Annual Incentive Awards that may be granted for each
          Performance Cycle. Notwithstanding the foregoing, all Annual Incentive
          Awards shall be subject to the provisions of paragraphs (a) through
          (e) below:

          (a)  Annual Incentive Awards shall be granted in connection with a
               12-month Performance Cycle, which shall be the fiscal year of the
               Company. The

                                                                         Page 18

<PAGE>

          first Performance Cycle under the Plan shall commence on January 1,
          2002.

     (b)  Subject to Section 4.1, within ninety (90) days after the commencement
          of a Performance Cycle, the Committee shall determine the Participants
          who shall be eligible to receive an Annual Incentive Award for such
          Performance Cycle.

     (c)  Within ninety (90) days after the commencement of a Performance Cycle,
          the Committee shall fix and establish, in writing, (A) the Performance
          Measure(s) that shall apply to such Performance Cycle, (B) an
          objective formula for computing the amount of the Annual Incentive
          Awards for such Performance Cycle, where the amount shall be based
          upon the attainment of various Performance Goals for the applicable
          Performance Measure(s). Notwithstanding anything to the contrary, the
          Committee may, on a case by case basis and in its sole discretion,
          reduce, but not increase, the Annual Incentive Award payable to any
          Participant with respect to any given Performance Cycle (unless the
          Participant has a vested right under applicable employment law to
          receive the full Annual Incentive Award), provided, however, that no
                                                    --------  -------
          such reduction shall result in an  increase to any other Participant.

     (d)  No Annual Incentive Award shall be paid to a Participant under this
          Section 11 unless and until the Committee certifies in writing the
          level of attainment of the applicable Performance Goals for the
          applicable Performance Cycle and Participants shall not have any right
          or claim whatsoever for payment of any Annual Incentive Award until
          the Committee has made such certification in writing.

     (e)  Annual Incentive Awards shall be paid in the form of cash, Stock
          (including Restricted Stock) or any combination thereof; provided,
                                                                   --------
          however, that the Committee shall determine the form of payment of any
          -------
          Annual Incentive Awarded to a Participant within ninety (90) days
          after the commencement of the applicable Performance Cycle. A portion
          of any payments made in connection with an Annual Incentive Award may,
          at the election of the Participant, be deferred pursuant to the
          provisions of the Deferred Compensation Plan.

12.  PERFORMANCE-BASED AWARDS.
     ------------------------

     12.1 Performance-Based Awards. The Committee may grant to officers and
     other key Employees of either the Company or any Subsidiary the prospective
     contingent right, expressed in Units, to receive payments of Stock, cash or
     any combination thereof, with each Unit equivalent in value to one share of
     Stock, or equivalent to such other value or monetary amount as may be
     designated or established by the Committee ("Performance-Based Awards").
     Performance-Based Awards shall be earned by Participants only if

                                                                         Page 19

<PAGE>

     specified Performance Goals are satisfied in the applicable Performance
     Cycle. The Committee shall, in its sole discretion, determine the officers
     and other key Employees eligible to receive Performance-Based Awards. At
     the time each grant of a Performance-Based Award is made, the Committee
     shall establish the applicable Performance Cycle, the Performance Measure
     and Performance Goals in respect of such Performance-Based Award. The
     number of shares of Stock and/or the amount of cash earned and payable in
     settlement of a Performance-Based Award shall be determined by the
     Committee at the end of the Performance Cycle.

     12.2 The Committee may grant Performance-Based Awards to a Participant in
     such amounts as the Committee may determine, subject to the limitations set
     forth in Section 4.1.

     12.3 A certificate (an "Award Certificate") for each Performance-Based
     Award shall provide that, in order for a Participant to earn all or a
     portion of the Units subject to such Performance-Based Award, the Company
     must achieve certain Performance Goals over a designated Performance Cycle
     having a minimum duration of one year. The Performance Goals and
     Performance Cycle shall be established by the Committee in its sole
     discretion. The Committee shall establish a Performance Measure for each
     Performance Cycle for determining the portion of the Performance-Based
     Award, which will be earned or forfeited, based on the extent to which the
     Performance Goals are achieved or exceeded. Performance Goals may include
     minimum, maximum and target levels of performance, with the size of the
     Performance-Based Award based on the level attained. Once established by
     the Committee and specified in the Award Certificate, and if and to the
     extent provided in or required by the Award Certificate, the Performance
     Goals and the Performance Measure in respect of any Performance-Based Award
     shall not be changed. The Committee may, in its discretion, eliminate or
     reduce (but not increase) the amount of any Performance-Based Award that
     otherwise would be payable to a Participant upon attainment of the
     Performance Goal(s) unless the Participant has a vested right under
     applicable employment law to receive the full Performance-Based Award.

     12.4 Performance-Based Awards may be made on such terms and conditions not
     inconsistent with the Plan, and in such form or forms, as the Committee may
     from time to time approve. Performance-Based Awards may be made alone, in
     addition to in tandem with, or independent of other grants and awards under
     the Plan. Subject to the terms of the Plan, the Committee shall, in its
     discretion, determine the number of Units subject to each Performance Grant
     made to a Participant and the Committee may impose different terms and
     conditions on any particular Performance-Based Award made to any
     Participant. The Performance Goals, the Performance Cycle and the
     Performance Measure applicable to a Performance Grant shall be set forth in
     the relevant Award Certificate.

     12.5 Each Participant shall be entitled to receive payment in an amount
     equal to the aggregate Fair Market Value (if the Unit is equivalent to a
     share of Stock), or such other value as the Committee shall specify, of the
     Units earned in respect of such Performance Award. Payment in settlement of
     a Performance-Based Award may be made in Stock, in cash, or in any
     combination of Stock and cash, and at such time or times, as the

                                                                         Page 20

<PAGE>

          Committee, in its discretion, shall determine. A portion of any
          payments made in connection with a Performance-Based Award may, at the
          election of the Participant, be deferred pursuant to the provisions of
          the Deferred Compensation Plan.

     13.  CHANGE IN CONTROL.
          -----------------

          13.1 Definitions.

               (a)  An "Ownership Change Event" shall be deemed to have occurred
                    if any of the following occurs with respect to the Company:
                    (i) the direct or indirect sale or exchange in a single or
                    series of related transactions by the stockholders of the
                    Company of more than fifty percent (50%) of the voting stock
                    of the Company; (ii) a merger or consolidation in which the
                    Company is a party; (iii) the sale, exchange, or transfer of
                    all or substantially all of the assets of the Company; or
                    (iv) a liquidation or dissolution of the Company.

               (b)  A "Change in Control" shall mean (i) a merger or
                    consolidation of the Company with or into another
                    corporation in which the Company shall not be the surviving
                    corporation (other than a merger undertaken solely in order
                    to reincorporate in another state) (for purposes hereof, the
                    Company shall not be deemed the surviving corporation in any
                    such transaction if, as the result thereof, it becomes a
                    wholly-owned subsidiary of another corporation), (ii) a
                    dissolution of the Company, (iii) a transfer of all or
                    substantially all of the assets of the Company in one
                    transaction or a series of related transactions to one or
                    more other persons or entities, (iv) a transaction or series
                    of transactions that results in any entity, "Person" or
                    "Group" (as defined below), becoming the beneficial owner,
                    directly or indirectly, of securities of the Company
                    representing more than 50% of the combined voting power of
                    the Company's then outstanding securities, or (v) during any
                    period of two (2) consecutive years commencing on or after
                    January 1, 2002, individuals who at the beginning of the
                    period constituted the Company's Board of Directors cease
                    for any reason to constitute at least a majority, unless the
                    election of each director who was not a director at the
                    beginning of the period has been approved in advance by
                    directors representing at least two-thirds (2/3) of the
                    directors then in office who were directors at the beginning
                    of the period; provided, however, that a "Change in Control"
                    shall not be deemed to have occurred if the ownership of 50%
                    or more of the combined voting power of the surviving
                    corporation, asset transferee or Company (as the case may
                    be), after giving effect to the transaction or series of
                    transactions, is directly or indirectly held by (A) a
                    trustee or other fiduciary under an employee benefit plan
                    maintained by the Company, (B) one or more of the "executive
                    officers" of the Company that held such positions prior to
                    the transaction or series of transactions, or any entity,
                    Person or Group under their control. As used herein,
                    "Person" and "Group" shall have the meanings set forth in
                    Sections 13(d)(3) and/or 14(d)(2) of the Securities Exchange
                    Act of 1934,

                                                                         Page 21

<PAGE>

               as amended, and "executive officer" shall have the meaning set
               forth in Rule 3b-7 promulgated under such Act .

     13.2 Effect of Change in Control on Awards. In the event of a Change in
          Control, the surviving, continuing, successor, or purchasing
          corporation or Parent thereof, as the case may be (the "Acquiring
          Corporation"), may either assume the Company's rights and obligations
          under outstanding Awards or substitute for outstanding Awards
          substantially equivalent awards, including awards for the Acquiring
          Corporation's stock, if applicable. For purposes of this Section 13.2,
          an Award shall be deemed assumed if, following the Change in Control,
          the Award confers the right to purchase in accordance with its terms
          and conditions, for each share of Stock subject to the Award
          immediately prior to the Change in Control, the consideration (whether
          stock, cash or other securities or property) to which a holder of a
          share of Stock on the effective date of the Change in Control was
          entitled. In the event the Acquiring Corporation elects not to assume
          or substitute for outstanding Awards in connection with a Change in
          Control, the exercisability and vesting of each outstanding Award
          shall be accelerated for 12 months as of the date ten (10) days prior
          to the date of the Change in Control, provided that the Participant's
          Service has not terminated prior to such date. The exercise or vesting
          of any Award that was permissible solely by reason of this Section
          13.2 shall be conditioned upon the consummation of the Change in
          Control. Any Award which is neither assumed or substituted for by the
          Acquiring Corporation in connection with the Change in Control nor
          exercised as of the date of the Change in Control shall terminate and
          cease to be outstanding effective as of the date of the Change in
          Control. Notwithstanding the foregoing, shares acquired upon exercise
          of an Award prior to the Change in Control and any consideration
          received pursuant to the Change in Control with respect to such shares
          shall continue to be subject to all applicable provisions of the
          applicable Option Agreement, Award Certificate or Stock Purchase
          Agreement, except as otherwise provided therein. Furthermore,
          notwithstanding the foregoing, if the Change in Control results from
          an Ownership Change Event described in Section 13.1(a)(i) and the
          Company is the surviving or continuing corporation and immediately
          after such Change in Control less than fifty percent (50%) of the
          total combined voting power of its voting stock is held by another
          corporation or by other corporations that are members of an affiliated
          group within the meaning of Section 1504(a) of the Code without regard
          to the provisions of Section 1504(b) of the Code, the outstanding
          Awards shall not terminate unless the Board otherwise provides in its
          discretion.

14.  PROVISION OF INFORMATION.
     ------------------------

     Each Participant shall be given access to information concerning the
Company equivalent to that information generally made available to the Company's
common stockholders.

                                                                         Page 22

<PAGE>

15.  COMPLIANCE WITH SECURITIES LAW.
     ------------------------------

     The grant of an Award and the issuance of shares of Stock upon exercise of
an Award, if applicable, shall be subject to compliance with all applicable
requirements of federal, state and foreign law with respect to such securities.
An Award may not be exercised for shares of Stock if the issuance of such shares
would constitute a violation of any applicable federal, state or foreign
securities laws or other law or regulations or the requirements of any stock
exchange or market system upon which the Stock may then be listed. In addition,
no Award may be exercised for shares of Stock unless (a) a registration
statement under the Securities Act shall at the time of exercise of the Award be
in effect with respect to the shares of Stock issuable upon exercise of the
Award or (b) in the opinion of legal counsel to the Company, the shares of Stock
issuable upon exercise of the Award may be issued in accordance with the terms
of an applicable exemption from the registration requirements of the Securities
Act. The inability of the Company to obtain from any regulatory body having
jurisdiction the authority, if any, deemed by the Company's legal counsel to be
necessary to the lawful issuance and sale of any shares of Stock hereunder shall
relieve the Company of any liability in respect of the failure to issue or sell
such shares of Stock as to which such requisite authority shall not have been
obtained. As a condition to the exercise of any Award, the Company may require
the Participant to satisfy any qualifications that may be necessary or
appropriate, to evidence compliance with any applicable law or regulation and to
make any representation or warranty with respect thereto as may be requested by
the Company.

16.  TERMINATION OR AMENDMENT OF PLAN.
     --------------------------------

     The Board may terminate or amend the Plan at any time. However, subject to
changes in applicable law, regulations or rules that would permit otherwise,
without the approval of the Company's stockholders, there shall be (a) no
increase in the maximum aggregate number of shares of Stock that may be issued
under the Plan (except by operation of the provisions of Section 4.2), (b) no
change in the class of persons eligible to receive Incentive Stock Options, and
(c) no other amendment of the Plan that would require approval of the Company's
stockholders under any applicable law, regulation or rule. No termination or
amendment of the Plan shall affect any then outstanding Award unless expressly
provided by the Board. In any event, no termination or amendment of the Plan may
adversely affect any then outstanding Award without the consent of the
Participant, unless such termination or amendment is required to enable an
Option designated as an Incentive Stock Option to qualify as an Incentive Stock
Option or is necessary to comply with any applicable law, regulation or rule.

17.  STOCKHOLDER APPROVAL.
     --------------------

     Both the Plan and any increase in the maximum aggregate number of shares of
Stock issuable thereunder as provided in Section 4.1 (the "Authorized Shares")
shall be approved by the stockholders of the Company within twelve (12) months
of the date of adoption thereof by the Board. Awards granted prior to
stockholder approval of the Plan or in excess of the Authorized Shares
previously approved by the stockholders shall become exercisable no earlier than
the date of stockholder approval of the Plan or such increase in the Authorized
Shares, as the case may be.

                                                                         Page 23

<PAGE>

                                  PLAN HISTORY
                                  ------------

February 1, 2002        Board adopts Plan, with an initial reserve of 948,100
                        shares.

February 8, 2002        Stockholders approve Plan, with an initial reserve of
                        948,100 shares.

                                                                         Page 24

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