Document:

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                        INTERNET SECURITY SYSTEMS, INC.
                            (F.K.A. ISS GROUP, INC.)

                       RESTATED 1995 STOCK INCENTIVE PLAN

                  (AMENDED AND RESTATED THROUGH MAY 29, 2002)

                                  ARTICLE ONE

                               GENERAL PROVISIONS

         I.       PURPOSE OF THE PLAN

         This Restated 1995 Stock Incentive Plan is intended to promote the
interests of Internet Security Systems, Inc. (f.k.a. ISS Group, Inc.), a
Delaware corporation, by providing eligible persons with the opportunity to
acquire a proprietary interest, or otherwise increase their proprietary
interest, in the Corporation as an incentive for them to remain in the service
of the Corporation.

         Capitalized terms herein shall have the meanings assigned to such
terms in the attached Appendix.

         II.      STRUCTURE OF THE PLAN

         A.       The Plan shall be divided into three (3) separate equity
programs:

                  (i)      the Discretionary Option Grant Program under which
         eligible persons may, at the discretion of the Plan Administrator, be
         granted options to purchase shares of Common Stock,

                  (ii)     the Stock Issuance Program under which eligible
         persons may, at the discretion of the Plan Administrator, be issued
         shares of Common Stock directly, either through the immediate purchase
         of such shares or as a bonus for services rendered the Corporation (or
         any Parent or Subsidiary), and

                  (iii)    the Automatic Option Grant Program under which
         eligible non-employee Board members shall automatically receive
         options at periodic intervals to purchase shares of Common Stock.

         B.       The provisions of Articles One and Five shall apply to all
equity programs under the Plan and shall accordingly govern the interests of
all persons under the Plan.

         III.     ADMINISTRATION OF THE PLAN

         A.       Prior to the Section 12(g) Registration Date, the Plan shall
be administered by the Board.

         B.       Beginning with the Section 12(g) Registration Date, the Board
shall have the authority to administer the Discretionary Option Grant and Stock
Issuance Programs with respect to Section 16 Insiders but may delegate such
authority in whole or in part to the Primary Committee. Administration of the
Plan with respect to all other persons eligible to participate may, at the
Board's discretion, be vested in the Primary Committee or a Secondary
Committee, or the Board may retain the power to administer the Plan with
respect to all such persons.

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         C.       Members of the Primary Committee or any Secondary Committee
shall serve for such period of time as the Board may determine and may be
removed by the Board at any time. The Board may also at any time terminate the
functions of any Secondary Committee and reassume all powers and authority
previously delegated to such committee.

         D.       Each Plan Administrator shall, within the scope of its
administrative functions under the Plan, have full power and authority to
establish such rules and regulations as it may deem appropriate for proper
administration of the Plan and to make such determinations under, and issue
such interpretations of, the provisions of such Plan and any outstanding
options or stock issuances thereunder as it may deem necessary or advisable.
Decisions of the Plan Administrator within the scope of its administrative
functions under the Plan shall be final and binding on all parties who have an
interest in the Plan or any option or stock issuance thereunder.

         E.       Service on the Primary Committee or the Secondary Committee
shall constitute service as a Board member, and members of each such committee
shall accordingly be entitled to full indemnification and reimbursement as
Board members for their service on such committee. No member of the Primary
Committee or the Secondary Committee shall be liable for any act or omission
made in good faith with respect to the Plan or any option grants or stock
issuances under the Plan.

         F.       Administration of the Automatic Option Grant Program shall be
self-executing in accordance with the terms of such program.

         IV.      ELIGIBILITY

         A.       Prior to the Section 12(g) Registration Date, only Employees
shall be eligible to participate in the Plan.

         B.       Beginning with the Section 12(g) Registration Date, the
persons eligible to participate in the Discretionary Option Grant and Stock
issuance Programs shall be as follows:

                  (i)      Employees,

                  (ii)     non-employee members of the Board or the board of
         directors of any Parent or Subsidiary, and

                  (iii)    consultants and other independent advisors who
         provide services to the Corporation (or any Parent or Subsidiary).

         C.       Only non-employee Board members shall be eligible to
participate in the Automatic Option Grant Program.

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         D.       Each Plan Administrator shall, within the scope of its
administrative jurisdiction under the Plan, have full authority (subject to the
provisions of the Plan) to determine, (i) with respect to the option grants
under the Discretionary Option Grant Program, which eligible persons are to
receive option grants, the time or times when such option grants are to be
made, the number of shares to be covered by each such grant, the status of the
granted option as either an Incentive Option or a Non-Statutory Option, the
time or times at which each option is to become exercisable, the vesting
schedule (if any) applicable to the option shares and the maximum term for
which the option is to remain outstanding and (ii) with respect to stock
issuances under the Stock Issuance Program, which eligible persons are to
receive stock issuances, the time or times when such issuances are to be made,
the number of shares to be issued to each Participant, the vesting schedule (if
any) applicable to the issued shares and the consideration to be paid for such
shares.

         E.       The Plan Administrator shall have the absolute discretion
either to grant options in accordance with the Discretionary Option Grant
Program or to effect stock issuances in accordance with the Stock Issuance
Program.

         V.       STOCK SUBJECT TO THE PLAN

         A.       The stock issuable under the Plan shall be shares of
authorized but unissued or reacquired Common Stock. The maximum number of
shares of Common Stock which may be issued over the term of the Plan shall not
exceed 14,454,122 shares. This amount results from the two-for-one stock split
of May 4, 1999, the 3,000,000 share increase approved by shareholders May 23,
2001, and the automatic increases referred to in clause V. B. below through
January 2, 2002.

         B.       The number of shares of Common Stock available for issuance
under the Plan shall automatically increase on the first trading day of each
calendar year by an amount equal to four percent (4.0%) of the total number of
shares of Common Stock outstanding on the last trading day of the immediately
preceding calendar year; provided, however, that the number of shares added
each calendar year under the automatic increase shall not exceed a limit of
2,600,000 shares. The automatic increase began with the 1999 calendar year and
changed from three percent to four percent beginning with the January 2, 2002
automatic increase. No Incentive Options may be granted on the basis of the
additional shares of Common Stock resulting from such annual increases.

         C.       No one person participating in the Plan may receive options,
separately exercisable stock appreciation rights and direct stock issuances for
more than 600,000 shares of Common Stock per calendar year beginning with the
calendar year in which the Section 12(g) Registration Date occurs.

         D.       Shares of Common Stock subject to outstanding options shall
be available for subsequent issuance under the Plan to the extent (i) the
options expire or terminate for any reason prior to exercise in full or (ii)
the options are cancelled in accordance with the cancellation-regrant
provisions of Article Two. Unvested shares issued under the Plan and
subsequently repurchased by the Corporation at the original issue price paid
per share pursuant to the Corporation's repurchase rights under the Plan shall
be added back to the number of shares of Common Stock reserved for issuance
under the Plan and shall accordingly be available for reissuance through one or
more subsequent option grants or direct stock issuances under the Plan.
However, should the exercise price of an option under the Plan be paid with
shares of Common Stock or should shares of Common Stock otherwise issuable
under the Plan be withheld by the corporation in satisfaction of the
withholding taxes incurred in connection with the exercise of an option or the
vesting of a stock issuance under the Plan, then the number of shares of Common
Stock available for issuance

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under the Plan shall be reduced by the gross number of shares for which the
option is exercised or which vest under the stock issuance, and not by the net
number of shares of Common Stock issued to the holder of such option or stock
issuance.

         E.       Should any change be made to the Common Stock by reason of
any stock split, stock dividend, recapitalization, combination of shares,
exchange of shares or other change affecting the outstanding Common Stock as a
class without the Corporation's receipt of consideration, appropriate
adjustments shall be made to (i) the maximum number and/or class of securities
issuable under the Plan, (ii) the number and/or class of securities for which
any one person may be granted options, separately exercisable stock
appreciation rights and direct stock issuances per calendar year, (iii) the
number and/or class of securities for which grants are subsequently to be made
under the Automatic Option Grant Program to new and continuing non-employee
Board members, (iv) the number and/or class of securities and the exercise
price per share in effect under each outstanding option in order to prevent the
dilution or enlargement of benefits thereunder; and (v) the number of shares by
which the automatic annual increase in the number of shares of Common Stock
available for issuance under the Plan is limited. The adjustments determined by
the Plan Administrator shall be final, binding and conclusive.

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                                  ARTICLE TWO

                       DISCRETIONARY OPTION GRANT PROGRAM

         I.       OPTION TERMS

         Each option shall be evidenced by one or more documents in the form
approved by the Plan Administrator; provided, however, that each such document
shall comply with the terms specified below. Each document evidencing an
Incentive Option shall, in addition, be subject to the provisions of the Plan
applicable to such options.

         A.       Exercise Price.

         1.       The exercise price per share shall be fixed by the Plan
Administrator and may be equal to, greater than or less than the Fair Market
Value per share of Common Stock on the option grant date.

         2.       The exercise price shall become immediately due upon exercise
of the option and shall, subject to the provisions of Section I of Article Five
and the documents evidencing the option, be payable in cash or check made
payable to the Corporation. Should the Common Stock be registered under Section
12(g) of the 1934 Act at the time the option is exercised, then the exercise
price may also be paid as follows:

                  (i)      in shares of Common Stock held for the requisite
         period necessary to avoid a charge to the Corporation's earnings for
         financial reporting purposes and valued at Fair Market Value on the
         Exercise Date, or

                  (ii)     to the extent the option is exercised for vested
         shares, through a special sale and remittance procedure pursuant to
         which the Optionee shall concurrently provide irrevocable instructions
         (A) to a Corporation-designated brokerage firm to effect the immediate
         sale of the purchased shares and remit to the Corporation, out of the
         sale proceeds available on the settlement date, sufficient funds to
         cover the aggregate exercise price payable for the purchased shares
         plus all applicable Federal, state and local income and employment
         taxes required to be withheld by the Corporation by reason of such
         exercise and (B) to the Corporation to deliver the certificates for
         the purchased shares directly to such brokerage firm in order to
         complete the sale.

Except to the extent such sale and remittance procedure is utilized, payment of
the exercise price for the purchased shares must be made on the Exercise Date.

         B.       Exercise and Term of Options. Each option shall be
exercisable at such time or times, during such period and for such number of
shares as shall be determined by the Plan Administrator and set forth in the
documents evidencing the option grant. However, no option shall have a term in
excess of ten (10) years measured from the option grant date.

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         C.       Effect of Termination of Service.

         1.       The following provisions shall govern the exercise of any
options held by the Optionee at the time of cessation of Service or death:

                  (i)      Should the Optionee cease to remain in Service for
         any reason other than Permanent Disability or Misconduct, then the
         Optionee shall have a period of three (3) months following the date of
         such cessation of Service during which to exercise each outstanding
         option held by such Optionee.

                  (ii)     Should the Optionee's Service terminate by reason of
         Permanent Disability, then the Optionee shall have a period of twelve
         (12) months following the date of such cessation of Service during
         which to exercise each outstanding option held by such Optionee.

                  (iii)    If the Optionee dies while holding an outstanding
         option, then the personal representative of his or her estate or the
         person or persons to whom the option is transferred pursuant to the
         Optionee's will or the laws of inheritance shall have a twelve
         (12)-month period following the date of the Optionee's death to
         exercise such option.

                  (iv)     Under no circumstances, however, shall any such
         option be exercisable after the specified expiration of the option
         term.

                  (v)      During the applicable post-Service exercise period,
         the option may not be exercised in the aggregate for more than the
         number of vested shares for which the option is exercisable on the
         date of the Optionee's cessation of Service. Upon the expiration of
         the applicable exercise period or (if earlier) upon the expiration of
         the option term, the option shall terminate and cease to be
         outstanding for any vested shares for which the option has not been
         exercised. However, the option shall, immediately upon the Optionee's
         cessation of Service, terminate and cease to be outstanding with
         respect to any and all option shares for which the option is not
         otherwise at the time exercisable or in which the Optionee is not
         otherwise at that time vested.

                  (vi)     Should the Optionee's Service be terminated for
         Misconduct, then all outstanding options held by the Optionee shall
         terminate immediately and cease to remain outstanding.

                  (vii)    In the event of a Corporate Transaction or Change in
         Control, the provisions of Section III of this Article Two shall
         govern the period for which outstanding options are to remain
         exercisable following the Optionee's cessation of Service and shall
         supersede any provisions to the contrary in this paragraph.

         2.       The Plan Administrator shall have the discretion, exercisable
either at the time an option is granted or at any time while the option remains
outstanding, to:

                  (i)      extend the period of time for which the option is to
         remain exercisable following the Optionee's cessation of Service or
         death from the limited period otherwise in effect for that option to
         such greater period of time as the Plan Administrator shall deem
         appropriate, but in no event beyond the expiration of the option term,
         and/or

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                  (ii)     permit the option to be exercised, during the
         applicable post-Service exercise period, not only with respect to the
         number of vested shares of Common Stock for which such option is
         exercisable at the time of the Optionee's cessation of Service but
         also with respect to one or more additional installments in which the
         Optionee would have vested under the option had the Optionee continued
         in Service.

         D.       Limited Transferability of Options. During the lifetime of
the Optionee, Incentive Options shall be exercisable only by the Optionee and
shall not be assignable or transferable other than by will or by the laws of
descent and distribution following the Optionee's death. However, a
Non-Statutory Option may, in connection with the Optionee's estate plan, be
assigned in whole or in part during the Optionee's lifetime to one or more
members of the Optionee's immediate family or to a trust established
exclusively for one or more such family members. The assigned portion may only
be exercised by the person or persons who acquire a proprietary interest in the
option pursuant to the assignment. The terms applicable to the assigned portion
shall be the same as those in effect for the option immediately prior to such
assignment and shall be set forth in such documents issued to the assignee as
the Plan Administrator may deem appropriate.

         E.       Stockholder Rights. The holder of an option shall have no
stockholder rights with respect to the shares subject to the option until such
person shall have exercised the option, paid the exercise price and become a
holder of record of the purchased shares.

         F.       Unvested Shares. The Plan Administrator shall have the
discretion to grant options which are exercisable for unvested shares of Common
Stock. Should the Optionee cease Service while holding such unvested shares,
the Corporation shall have the right to repurchase, at the exercise price paid
per share, any or all of those unvested shares. The terms upon which such
repurchase right shall be exercisable (including the period and procedure for
exercise and the appropriate vesting schedule for the purchased shares) shall
be established by the Plan Administrator and set forth in the document
evidencing such repurchase right.

         G.       First Refusal Rights. Until the Section 12(g) Registration
Date, the Corporation shall have the right of first refusal with respect to any
proposed disposition by the Optionee (or any successor in interest) of any
shares of Common Stock issued under the Plan. Such right of first refusal shall
be exercisable in accordance with the terms established by the Plan
Administrator and set forth in the document evidencing such right.

         H.       Market Stand-Off. In connection with any underwritten public
offering by the Corporation of its equity securities pursuant to an effective
registration statement filed under the Securities Act of 1933, including the
Corporation's initial public offering, the Optionee may not sell, make any
short sale of, loan, hypothecate, pledge, grant any option for the purchase of,
or otherwise dispose or transfer for value or otherwise agree to engage in any
of the foregoing transactions with respect to, any shares of Common Stock
acquired upon exercise of an option granted under the Plan without the prior
written consent of the Corporation or its underwriters. Such restriction (the
"Market Stand-Off") shall be in effect for such period of time from and after
the effective date of the final prospectus for the offering as may be requested
by the Corporation or such underwriters. The Optionee shall be required to
execute such agreements as the Corporation or the underwriters request in
connection with the Market Stand-Off.

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         I.       Forfeiture for Competition. If, at any time while the
Optionee remains in Service or after the Optionee's termination of Service
while the option remains outstanding, the Optionee provides services to a
competitor of the Corporation (or any Parent or Subsidiary), whether as an
employee, officer, director, independent contractor, consultant, agent or
otherwise, such services being of a nature that can reasonably be expected to
involve the skills and experience used or developed by the Optionee while in
the Corporation's Service, then the Optionee's rights under any options
outstanding under the Plan shall be forfeited and terminated, subject to a
determination to the contrary by the Plan Administrator.

         II.      INCENTIVE OPTIONS

         The terms specified below shall be applicable to all Incentive
Options. Except as modified by the provisions of this Section II, all the
provisions of the Plan shall be applicable to Incentive Options. Options which
are specifically designated as Non-Statutory Options shall not be subject to
the terms of this Section II.

         A.       Eligibility. Incentive Options may only be granted to
Employees.

         B.       Exercise Price. The exercise price per share shall not be
less than one hundred percent (100%) of the Fair Market Value per share of
Common Stock on the option grant date.

         C.       Dollar Limitation. The aggregate Fair Market Value of the
shares of Common Stock (determined as of the respective date or dates of grant)
for which one or more options granted to any Employee under the Plan (or any
other option plan of the Corporation or any Parent or Subsidiary) may for the
first time become exercisable as Incentive Options during any one (1) calendar
year shall not exceed the sum of One Hundred Thousand Dollars ($100,000). To the
extent the Employee holds two (2) or more such options which become exercisable
for the first time in the same calendar year, the foregoing limitation on the
exercisability of such options as Incentive Options shall be applied on the
basis of the order in which such options are granted.

         D.       10% Stockholder. If any Employee to whom an Incentive Option
is granted is a 10% Stockholder, then the option term shall not exceed five (5)
years measured from the option grant date and the exercise price per share of
the option shall be equal to at least one hundred ten percent (110%) of the
Fair Market Value per share of Common Stock on the option grant date.

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         III.     CORPORATE TRANSACTION/CHANGE IN CONTROL

         A.       In the event of any Corporate Transaction, each outstanding
option shall automatically accelerate so that each such option shall,
immediately prior to the effective date of the Corporate Transaction, become
fully exercisable for all of the shares of Common Stock at the time subject to
such option and may be exercised for any or all of those shares as fully-vested
shares of Common Stock. However, an outstanding option shall not so accelerate
if and to the extent: (i) such option is, in connection with the Corporate
Transaction, either to be assumed by the successor corporation (or parent
thereof) or to be replaced with a comparable option to purchase shares of the
capital stock of the successor corporation (or parent thereof), (ii) such
option is to be replaced with a cash incentive program of the successor
corporation which preserves the spread existing on the unvested option shares
at the time of the Corporate Transaction and provides for subsequent payout in
accordance with the same vesting schedule applicable to such option or (iii)
the acceleration of such option is subject to other limitations imposed by the
Plan Administrator at the time of the option grant. The determination of option
comparability under clause (i) above shall be made by the Plan Administrator,
and its determination shall be final, binding and conclusive.

         B.       All outstanding repurchase rights shall also terminate
automatically, and the shares of Common Stock subject to those terminated
rights shall immediately vest in full, in the event of any Corporate
Transaction, except to the extent: (i) those repurchase rights are to be
assigned to the successor corporation (or parent thereof) in connection with
such Corporate Transaction or (ii) such accelerated vesting is precluded by
other limitations imposed by the Plan Administrator at the time the repurchase
right is issued.

         C.       Immediately following the consummation of the Corporate
Transaction, all outstanding options shall terminate and cease to be
outstanding, except to the extent assumed by the successor corporation (or
parent thereof).

         D.       If an outstanding option is assumed by the successor
corporation (or parent thereof) in connection with a Corporate Transaction, and
the Corporation's repurchase rights with respect to the unvested option shares
are assigned to such successor corporation (or parent thereof), and at the time
of or within twelve (12) months following such Corporate Transaction either (i)
the Optionee is offered a Lesser Position in replacement of the position held
by him or her immediately prior to the Corporate Transaction or (ii) the
Optionee's Service terminates by reason of an Involuntary Termination, then,
effective as of the date on which such Lesser Position is offered to the
Optionee or the effective date of such Involuntary Termination, respectively,
the option shall automatically accelerate in part so that, in addition to the
number of vested shares of Common Stock for which the option is exercisable at
such time, the option shall become exercisable with respect to the next annual
installment of option shares for which the option is scheduled to become
exercisable in accordance with the exercise schedule established for the option
(and the Corporation's repurchase rights shall automatically lapse with respect
to such option shares). Following such acceleration, to the extent the Optionee
continues in Service, the exercise schedule for the option shall be adjusted so
that the option shall become exercisable, with respect to each subsequent
annual installment of option shares under the original exercise schedule, on
each subsequent anniversary of the effective date of such option acceleration.
In the event that both the offer of a Lesser Position and a subsequent
Involuntary Termination of an Optionee's Service occur within twelve (12)
months following a Corporate Transaction, then acceleration of the option
shares shall occur only in connection with the offer of such Lesser Position
and no additional acceleration shall occur in connection with such subsequent

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Involuntary Termination. Following an Involuntary Termination that occurs
within twelve (12) months following a Corporate Transaction, the option shall
remain exercisable for any or all of the vested option shares until the earlier
of (i) the expiration of the option term or (ii) the expiration of the one
(1)-year period measured from the effective date of the Involuntary
Termination.

         E.       Each option which is assumed in connection with a Corporate
Transaction shall be appropriately adjusted, immediately after such Corporate
Transaction, to apply to the number and class of securities which would have
been issuable to the Optionee in consummation of such Corporate Transaction had
the option been exercised immediately prior to such Corporate Transaction.
Appropriate adjustments shall also be made to (i) the number and class of
securities available for issuance under the Plan following the consummation of
such Corporate Transaction, (ii) the exercise price payable per share under
each outstanding option, provided the aggregate exercise price payable for such
securities shall remain the same and (iii) the maximum number of securities
and/or class of securities for which any one person may be granted stock
options, separately exercisable stock appreciation rights and direct stock
issuances under the Plan.

         F.       Notwithstanding Sections III.A., III.B. and III.D of this
Article Two, the Plan Administrator shall have the discretion, exercisable
either at the time the option is granted or at any time while the option
remains outstanding, to provide for the automatic acceleration of one or more
outstanding options (and the automatic termination of one or more outstanding
repurchase rights with the immediate vesting of the shares of Common Stock
subject to those rights) upon the occurrence of a Corporate Transaction,
whether or not those options are to be assumed or replaced (or those repurchase
rights are to be assigned) in the Corporate Transaction. The Plan Administrator
shall also have the discretion to grant options which do not accelerate whether
or not such options are assumed (and to provide for repurchase rights that do
not terminate whether or not such rights are assigned) in connection with a
Corporate Transaction.

         G.       The Plan Administrator shall also have the discretion,
exercisable at the time the option is granted or at any time while the option
remains outstanding, to provide for the automatic acceleration, of any options
which are assumed or replaced in a Corporate Transaction and do not otherwise
accelerate at that time (and the termination of any of the Corporation's
outstanding repurchase rights which do not otherwise terminate at the time of
the Corporate Transaction) in the event that within twelve (12) months
following the effective date of such Corporate Transaction either (i) the
Optionee should be offered a Lesser Position in replacement of the position
held by him or her immediately prior to the Corporate Transaction or (ii) the
Optionee's Service should subsequently terminate by reason of an Involuntary
Termination. Following an Involuntary Termination that occurs within twelve
(12) months following a Corporate Transaction, any options accelerated under
this Section III. G shall remain exercisable for the vested option shares until
the earlier of (i) the expiration of the option term or (ii) the expiration of
the one (1)-year period measured from the effective date of the Involuntary
Termination.

         H.       The Plan Administrator shall have the discretion, exercisable
either at the time the option is granted or at any time while the option
remains outstanding, to (i) provide for the automatic acceleration of one or
more outstanding options (and the automatic termination of one or more
outstanding repurchase rights with the immediate vesting of the shares of
Common Stock subject to those rights) upon the occurrence of a Change in
Control or (ii) condition any such option acceleration (and the termination of
any outstanding repurchase rights) upon the occurrence of either of the
following events within a specified period (not to exceed twelve (12) months)
following the effective date of such Change in Control: (a) the

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offer to the Optionee of a Lesser Position in replacement of the position held
by him or her immediately prior to the Change in Control or (b) the Involuntary
Termination of the Optionee's Service. Any options accelerated in connection
with a Change in Control shall remain fully exercisable until the expiration or
sooner termination of the option term; provided, however, that following an
Involuntary Termination that occurs within twelve (12) months following a
Change in Control, any options accelerated under this Section III.H shall
remain exercisable for the vested option shares until the earlier of (i) the
expiration of the option term or (ii) the expiration of the one (1)-year period
measured from the effective date of the Involuntary Termination.

         I.       The portion of any Incentive Option accelerated in connection
with a Corporate Transaction or Change in Control shall remain exercisable as
an Incentive Option only to the extent the applicable One Hundred Thousand
Dollar ($100,000) limitation is not exceeded. To the extent such dollar
limitation is exceeded, the accelerated portion of such option shall be
exercisable as a Non-Statutory Option under the Federal tax laws.

         J.       The grant of options under the Option Grant Program shall in
no way affect the right of the Corporation to adjust, reclassify, reorganize or
otherwise change its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or
assets.

         IV.      CANCELLATION AND REGRANT OF OPTIONS

         The Plan Administrator shall have the authority to effect, at any time
and from time to time, with the consent of the affected option holders, the
cancellation of any or all outstanding options under the Plan and to grant in
substitution therefor new options covering the same or different number of
shares of Common Stock but with an exercise price per share based on the Fair
Market Value per share of Common Stock on the new option grant date.

         V.       STOCK APPRECIATION RIGHTS

         A.       The Plan Administrator shall have full power and authority to
grant to selected Optionee's tandem stock appreciation rights and/or limited
stock appreciation rights.

         B.       The following terms shall govern the grant and exercise of
tandem stock appreciation rights:

                  (i)      One or more Optionees may be granted the right,
         exercisable upon such terms as the Plan Administrator may establish,
         to elect between the exercise of the underlying option for shares of
         Common Stock and the surrender of that option in exchange for a
         distribution from the Corporation in an amount equal to the excess of
         (a) the Fair Market Value (on the option surrender date) of the number
         of shares in which the Optionee is at the time vested under the
         surrendered option (or surrendered portion thereof) over (b) the
         aggregate exercise price payable for such shares.

                  (ii)     No such option surrender shall be effective unless
         it is approved by the Plan Administrator. If the surrender is so
         approved, then the distribution to which the Optionee shall be
         entitled may be made in shares of Common Stock valued at Fair Market
         Value on the option

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         surrender date, in cash, or partly in shares and partly in cash, as
         the Plan Administrator shall in its sole discretion deem appropriate.

                  (iii)    If the surrender of an option is rejected by the
         Plan Administrator, then the Optionee shall retain whatever rights the
         Optionee had under the surrendered option (or surrendered portion
         thereof) on the option surrender date and may exercise such rights at
         any time prior to the later of (a) five (5) business days after the
         receipt of the rejection notice or (b) the last day on which the
         option is otherwise exercisable in accordance with the terms of the
         documents evidencing such option, but in no event may such rights be
         exercised more than ten (10) years after the option grant date.

         C.       The following terms shall govern the grant and exercise of
limited stock appreciation rights:

                  (i)      One or more Section 16 Insiders may be granted
         limited stock appreciation rights with respect to their outstanding
         options.

                  (ii)     Upon the occurrence of a Hostile Take-Over, each
         such individual holding one or more options with such a limited stock
         appreciation right shall have the unconditional right (exercisable for
         a thirty (30)-day period following such Hostile Take-Over) to
         surrender each such option to the Corporation, to the extent the
         option is at the time exercisable for vested shares of Common Stock.
         In return for the surrendered option, the Optionee shall receive a
         cash distribution from the Corporation in an amount equal to the
         excess of (a) the Take-Over Price of the shares of Common Stock which
         are at the time vested under each surrendered option (or surrendered
         portion thereof) over (b) the aggregate exercise price payable for
         such shares. Such cash distribution shall be paid within five (5) days
         following the option surrender date.

                  (iii)    The Plan Administrator shall pre-approve, at the
         time the limited right is granted, the subsequent exercise of that
         right in accordance with the terms of the grant and the provisions of
         this Section V.C. No additional approval of the Plan Administrator or
         the Board shall be required at the time of the actual option surrender
         and cash distribution.

                  (iv)     The balance of the option (if any) shall continue in
         full force and effect in accordance with the documents evidencing such
         option.

                                      12
<PAGE>
                                 ARTICLE THREE

                             STOCK ISSUANCE PROGRAM

         I.       STOCK ISSUANCE TERMS

         Shares of Common Stock may be issued under the Stock Issuance Program
through direct and immediate issuances without any intervening option grants.
Each such stock issuance shall be evidenced by a Stock Issuance Agreement which
complies with the terms specified below.

         A.       Purchase Price.

         1.       The purchase price per share shall be fixed by the Plan
Administrator and may be less than, equal to or greater than the Fair Market
Value per share of Common Stock on the issue date.

         2.       Subject to the provisions of Section I of Article Four,
shares of Common Stock may be issued under the Stock Issuance Program for any
of the following items of consideration which the Plan Administrator may deem
appropriate in each individual instance:

                  (i)      cash or check made payable to the Corporation, or

                  (ii)     past services rendered to the Corporation (or any
         Parent or Subsidiary).

         B.       Vesting Provisions.

         1.       Shares of Common Stock issued under the Stock Issuance
Program may, in the discretion of the Plan Administrator, be fully and
immediately vested upon issuance or may vest in one or more installments over
the Participant's period of Service or upon attainment of specified performance
objectives.

         2.       Any new, substituted or additional securities or other
property (including money paid other than as a regular cash dividend) which the
Participant may have the right to receive with respect to the Participant's
unvested shares of Common Stock by reason of any stock dividend, stock split,
recapitalization, combination of shares, exchange of shares or other change
affecting the outstanding Common Stock as a class without the Corporation's
receipt of consideration shall be issued subject to (i) the same vesting
requirements applicable to the Participant's unvested shares of Common Stock
and (ii) such escrow arrangements as the Plan Administrator shall deem
appropriate.

         3.       The Participant shall have full stockholder rights with
respect to any shares of Common Stock issued to the Participant under the Stock
Issuance Program, whether or not the Participant's interest in those shares is
vested. Accordingly, the Participant shall have the right to vote such shares
and to receive any regular cash dividends paid on such shares.

         4.       Should the Participant cease to remain in Service while
holding one or more unvested shares of Common Stock issued under the Stock
Issuance Program or should the performance objectives not be attained with
respect to one or more such unvested shares of Common Stock, then those shares
shall be

                                      13
<PAGE>
immediately surrendered to the Corporation for cancellation, and the
Participant shall have no further stockholder rights with respect to those
shares. To the extent the surrendered shares were previously issued to the
Participant for consideration paid in cash or cash equivalent (including the
Participant's purchase-money indebtedness), the Corporation shall repay to the
Participant the cash consideration paid for the surrendered shares and shall
cancel the unpaid principal balance of any outstanding purchase-money note of
the Participant attributable to such surrendered shares.

         5.       The Plan Administrator may in its discretion waive the
surrender and cancellation of one or more unvested shares of Common Stock (or
other assets attributable thereto) which would otherwise occur upon the
non-completion of the vesting schedule applicable to such shares. Such waiver
shall result in the immediate vesting of the Participant's interest in the
shares of Common Stock as to which the waiver applies. Such waiver may be
effected at any time, whether before or after the Participant's cessation of
Service or the attainment or non-attainment of the applicable performance
objectives.

         C.       First Refusal rights. Until the Section 12(g) Registration
Date, the Corporation shall have the right of first refusal with respect to any
proposed disposition by the Participant (or any successor in interest) of any
shares of Common Stock issued under the Stock Issuance Program. Such right of
first refusal shall be exercisable in accordance with the terms established by
the Plan Administrator and set forth in the document evidencing such right.

         II.      CORPORATE TRANSACTION/CHANGE IN CONTROL

         A.       All of the Corporation's outstanding repurchase rights under
the Stock Issuance Program shall terminate automatically, and all the shares of
Common Stock subject to those terminated rights shall immediately vest in full,
in the event of any Corporate Transaction, except to the extent (i) those
repurchase rights are assigned to the successor corporation (or parent thereof)
in connection with such Corporate Transaction or (ii) such accelerated vesting
is precluded by other limitations imposed in the Stock Issuance Agreement.

         B.       Notwithstanding Section II.A. of this Article Three, the Plan
Administrator shall have the discretionary authority, exercisable either at the
time the unvested shares are issued or any time while the Corporation's
repurchase rights remain outstanding under the Stock Issuance Program, to
provide that those rights shall automatically terminate in whole or in part,
and the shares of Common Stock subject to those terminated rights shall
immediately vest, in the event of a Corporate Transaction, whether or not those
repurchase rights are to be assigned to the successor corporation (or its
parent) in connection with such Corporate Transaction. The Plan Administrator
shall also have the discretion to provide for repurchase rights with terms
different from those in effect under this Section II in connection with a
Corporate Transaction.

         C.       The Plan Administrator shall have the discretion, exercisable
either at the time the unvested shares are issued or at any time while the
Corporation's repurchase rights remain outstanding, to provide that any
repurchase rights that are assigned in the Corporate Transaction shall
automatically terminate, and the shares of Common Stock subject to those
terminated rights shall immediately vest in full, in the event that either of
the following events should occur either at the time of or within a specified
period (not to exceed twelve (12) months) following the effective date of the
Corporate Transaction: (a) the Participant is

                                      14
<PAGE>
offered a Lesser Position in replacement of the position held by him or her
immediately prior to the Corporate Transaction or (b) the Participant's Service
terminates by reason of an Involuntary Termination.

         D.       The Plan Administrator shall have the discretion, exercisable
either at the time the unvested shares are issued or at any time while the
Corporation's repurchase right remains outstanding, to (i) provide for the
automatic termination of one or more outstanding repurchase rights and the
immediate vesting of the shares of Common Stock subject to those rights upon
the occurrence of a Change in Control or (ii) condition any such accelerated
vesting upon the occurrence of either of the following events at the time of or
within a specified period (not to exceed twelve (12) months) following the
effective date of such Change in Control: (a) the Participant is offered a
Lesser Position in replacement of the position held by him or her immediately
prior to the Change in Control or (b) the Involuntary Termination of the
Participant's Service.

         III.     SHARE ESCROW/LEGENDS

         Unvested shares may, in the Plan Administrator's discretion, be held
in escrow by the Corporation until the Participant's interest in such shares
vests or may be issued directly to the Participant with restrictive legends on
the certificates evidencing those unvested shares.

         IV.      MARKET STAND-OFF

         In connection with any underwritten public offering by the Corporation
of its equity securities pursuant to an effective registration statement filed
under the Securities Act of 1933, including the Corporation's initial public
offering, the Participant may not sell, make any short sale of, loan,
hypothecate, pledge, grant any option for the purchase of, or otherwise dispose
or transfer for value or otherwise agree to engage in any of the foregoing
transactions with respect to, any shares of Common Stock acquired under the
Plan without the prior written consent of the Corporation or its underwriters.
Such restriction (the "Market Stand-Off") shall be in effect for such period of
time from and after the effective date of the final prospectus for the offering
as may be requested by the Corporation or such underwriters. The Participant
shall be required to execute such agreements as the Corporation or the
underwriters request in connection with the Market Stand-Off.

                                      15
<PAGE>
                                  ARTICLE FOUR

                         AUTOMATIC OPTION GRANT PROGRAM

         I.       OPTION TERMS

         A.       Grant Dates. Options shall be made on the dates specified
below:

         1.       Each individual who is first elected or appointed as a
non-employee Board member shall automatically be granted, on the date of such
initial election or appointment, a Non-Statutory Option to purchase 20,000
shares of Common Stock, provided that individual has not previously been in the
employ of the Corporation or any Parent or Subsidiary.

         2.       On the date of each Annual Stockholders Meeting, each
individual who is to continue to serve as a non-employee Board member, whether
or not that individual is standing for re-election to the Board, shall
automatically be granted a Non-Statutory Option to purchase 10,000 shares of
Common Stock, provided such individual has served as a non-employee Board
member for at least six (6) months.

         B.       Exercise Price.

         1.       The exercise price per share shall be equal to one hundred
percent (100%) of the Fair Market Value per share of Common Stock on the option
grant date.

         2.       The exercise price shall be payable in one or more of the
alternative forms authorized under the Discretionary Option Grant Program.
Except to the extent the sale and remittance procedure specified thereunder is
utilized, payment of the exercise price for the purchased shares must be made
on the Exercise Date.

         C.       Option Term. Each option shall have a term of ten (10) years
measured from the option grant date.

         D.       Exercise and Vesting of Options. Each initial option and
annual option shall be immediately exercisable for any or all of the option
shares. However, any shares purchased under the option shall be subject to
repurchase by the Corporation, at the exercise price paid per share, upon the
Optionee's cessation of Board service prior to vesting in those shares. Each
initial 20,000-share option shall vest, and the Corporation's repurchase right
shall lapse, in a series of four (4) successive equal annual installments upon
the Optionee's completion of each year of Board service over the four (4)-year
period measured from the option grant date. Each annual 10,000-share option
shall vest, and the Corporation's repurchase right shall lapse, upon the
Optionee's completion of one year of Board service measured from the grant
date.

         E.       Cessation of Board Service. The following provisions shall
govern the exercise of any options outstanding at the time of the Optionee's
cessation of Board service:

                  (i)      The Optionee (or, in the event of Optionee's death,
         the personal representative of the Optionee's estate or the person or
         persons to whom the option is transferred pursuant to the Optionee's
         will or in accordance with the laws of descent and distribution) shall
         have a twelve

                                      16
<PAGE>
         (12)-month period following the date of such cessation of Board
         service in which to exercise each such option.

                  (ii)     During the twelve (12)-month exercise period, the
         option may not be exercised in the aggregate for more than the number
         of vested shares of Common Stock for which the option is exercisable
         at the time of the Optionee's cessation of Board service.

                  (iii)    Should the Optionee cease to serve as a Board member
         by reason of death or Permanent Disability, then all shares at the
         time subject to the option shall immediately vest so that such option
         may, during the twelve (12)-month exercise period following such
         cessation of Board service, be exercised for all or any portion of
         those shares as fully-vested shares of Common Stock.

                  (iv)     In no event shall the option remain exercisable
         after the expiration of the option term. Upon the expiration of the
         twelve (12)-month exercise period or (if earlier) upon the expiration
         of the option term, the option shall terminate and cease to be
         outstanding for any vested shares for which the option has not been
         exercised. However, the option shall, immediately upon the Optionee's
         cessation of Board service for any reason other than death or
         Permanent Disability, terminate and cease to be outstanding to the
         extent the option is not otherwise at that time exercisable for vested
         shares.

         II.      CORPORATE TRANSACTION/CHANGE IN CONTROL/HOSTILE TAKE-OVER

         A.       In the event of any Corporate Transaction, the shares of
Common Stock at the time subject to each outstanding option but not otherwise
vested shall automatically vest in full so that each such option shall,
immediately prior to the effective date of the Corporate Transaction, become
fully exercisable for all of the shares of Common Stock at the time subject to
such option and may be exercised for all or any portion of those shares as
fully-vested shares of Common Stock. Immediately following the consummation of
the Corporate Transaction, each automatic option grant shall terminate and
cease to be outstanding, except to the extent assumed by the successor
corporation (or parent thereof).

         B.       In connection with any Change in Control, the shares of
Common Stock at the time subject to each outstanding option but not otherwise
vested shall automatically vest in full so that each such option shall,
immediately prior to the effective date of the Change in Control, become fully
exercisable for all of the shares of Common Stock at the time subject to such
option and may be exercised for all or any portion of those shares as
fully-vested shares of Common Stock. Each such option shall remain exercisable
for such fully-vested option shares until the expiration or sooner termination
of the option term or the surrender of the option in connection with a Hostile
Take-Over.

         C.       Upon the occurrence of a Hostile Take-Over, the Optionee
shall have a thirty (30)-day period in which to surrender to the Corporation
each of his or her outstanding automatic option grants. The Optionee shall in
return be entitled to a cash distribution from the Corporation in an amount
equal to the excess of (i) the Take-Over Price of the shares of Common Stock at
the time subject to each surrendered option (whether or not the Optionee is
otherwise at the time vested in those shares) over (ii) the aggregate exercise
price payable for such shares. Such cash distribution shall be paid within five
(5) days following the surrender of the option to the Corporation.

                                      17
<PAGE>
         D.       Each option which is assumed in connection with a Corporate
Transaction shall be appropriately adjusted, immediately after such Corporate
Transaction, to apply to the number and class of securities which would have
been issuable to the Optionee in consummation of such Corporate Transaction had
the option been exercised immediately prior to such Corporate Transaction.
Appropriate adjustments shall also be made to the exercise price payable per
share under each outstanding option, provided the aggregate exercise price
payable for such securities shall remain the same.

         E.       The grant of options under the Automatic Option Grant Program
shall in no way affect the right of the Corporation to adjust, reclassify,
reorganize or otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets.

         III.     REMAINING TERMS

         The remaining terms of each option granted under the Automatic Option
Grant Program shall be the same as the terms in effect for options made under
the Discretionary Option Grant Program.

                                      18
<PAGE>
                                  ARTICLE FIVE

                                 MISCELLANEOUS

         I.       FINANCING

         The Plan Administrator may permit any Optionee or Participant to pay
the option exercise price under the Discretionary Option Grant Program or the
purchase price of shares issued under the Stock Issuance Program by delivering
a full-recourse, interest bearing promissory note payable in one or more
installments. The terms of any such promissory note (including the interest
rate and the terms of repayment) shall be established by the Plan Administrator
in its sole discretion. In no event may the maximum credit available to the
Optionee or Participant exceed the sum of (i) the aggregate option exercise
price or purchase price payable for the purchased shares (less the par value,
if any, of those shares) plus (ii) any Federal, state and local income and
employment tax liability incurred by the Optionee or the Participant in
connection with the option exercise or share purchase.

         II.      TAX WITHHOLDING

         A.       The Corporation's obligation to deliver shares of Common
Stock upon the exercise of options or upon the issuance or vesting of such
shares under the Plan shall be subject to the satisfaction of all applicable
Federal, state and local income and employment tax withholding requirements.

         B.       The Plan Administrator may, in its discretion, provide any or
all holders of Non-Statutory Options or unvested shares of Common Stock under
the Plan with the right to use shares of Common Stock in satisfaction of all or
part of the Taxes incurred by such holders in connection with the exercise of
their options or the vesting of their shares. Such right may be provided to any
such holder in either or both of the following formats:

                  (i)      STOCK WITHHOLDING: The election to have the
         Corporation withhold, from the shares of Common Stock otherwise
         issuable upon the exercise of such Non-Statutory Option or the vesting
         of such shares, a portion of those shares with an aggregate Fair
         Market Value equal to the percentage of the Taxes (not to exceed one
         hundred percent (100%)) designated by the holder.

                  (ii)     STOCK DELIVERY: The election to deliver to the
         Corporation, at the time the Non-Statutory Option is exercised or the
         shares vest, one or more shares of Common Stock previously acquired by
         such holder (other than in connection with the option exercise or
         share vesting triggering the Taxes) with an aggregate Fair Market
         Value equal to the percentage of the Taxes (not to exceed one hundred
         percent (100%)) designated by the holder.

         III.     EFFECTIVE DATE AND TERM OF PLAN

         A. The Plan became effective when adopted by the board of directors of
Internet Security Systems, Inc., a Georgia Corporation, (the "Predecessor
Corporation") on September 6, 1995 and was approved by the stockholders of the
Predecessor Corporation on January 31, 1996. Effective as of February 28, 1997,
the board of directors of the Predecessor Corporation restated, subject to
approval by the stockholders, the Plan to make the following changes: (i) to
re-name the Plan the "Restated 1995 Stock Incentive Plan",

                                      19
<PAGE>
(ii) to increase the number of shares of the Predecessor Corporation's common
stock available for issuance thereunder by 600,000 shares from 948,029 to
1,548,029 shares, (iii) to add the Stock Issuance Program, (iv) to give the
Plan Administrator additional discretion to structure options as immediately
exercisable options, subject to repurchase at the option exercise price paid
per share, (v) to give the Plan Administrator additional discretion to provide
for the accelerated vesting of options or issued shares of Common Stock in
connection with a Corporate Transaction or Change in Control or upon either (a)
the offer to an Optionee or Participant of a Lesser Position or (b) the
Involuntary Termination of an Optionee or Participant's Service following such
Corporate Transaction or Change in Control and (vi) to incorporate certain
features which would be appropriate after the Section 12(g) Registration Date
including, in particular the power to grant stock appreciation rights, certain
amendments to the administrative provisions of the Plan to comply with
applicable Federal securities and tax laws and the imposition of a
300,000-share limit on the number of shares which may be awarded to any
individual under the Plan after the Section 12(g) Registration Date, as
required by Section 162(m) of the Code.

         The provisions of the February 28, 1997 restatement of the Plan shall
apply only to options granted and stock issuances made under the Plan from and
after February 28, 1997. All options outstanding under the Plan at the time of
the February 28, 1997 restatement shall continue to be governed by the terms
and conditions of the Plan (and the respective instruments evidencing each such
option) as in effect on the date each such option was granted; provided,
however, that one or more provisions of the restated Plan, may, in the Plan
Administrator's discretion, be extended to one or more such options.

         B.       On December 3, 1997, in connection with incorporation of the
Corporation, the Plan was assumed by the Corporation and each option
outstanding thereunder was assumed by the Corporation and converted into an
option to purchase shares of the Corporation's Common Stock on a 1-for-1 basis,
at the original option exercise price per share and subject to the original
terms and conditions of each such option. Also on December 3, 1997, the Board,
in anticipation of the initial public offering of the Common Stock and subject
to approval by the Corporation's stockholders, further amended the Plan to (i)
render non-employee Board members and consultants and independent advisors
eligible to receive option grants under the Plan after the Section 12(g)
Registration Date, (ii) add the Automatic Option Grant Program, (iii) increase
the number of shares of Common Stock issuable under the Plan from 1,548,029 to
3,000,000 shares and (iv) provide for an automatic annual increase in the total
number of shares of Common Stock authorized for issuance under the Plan.

         C.       The Plan shall terminate upon the earliest of (i) September
6, 2005, (ii) the date on which all shares available for issuance under the
Plan shall have been issued as vested shares or (iii) the termination of all
outstanding options in connection with a Corporate Transaction. All options and
unvested stock issuances outstanding at that time under the Plan shall continue
to have full force and effect in accordance with the provisions of the
documents evidencing such options or issuances.

         IV.      AMENDMENT OF THE PLAN

         A.       The Board shall have complete and exclusive power and
authority to amend or modify the Plan in any or all respects. However, no such
amendment or modification shall adversely affect the rights and obligations
with respect to options or unvested stock issuances at the time outstanding
under the Plan unless the Optionee or the Participant consents to such
amendment or modification. In addition, no such amendment shall be made without
the approval of the Corporation's stockholders to the extent such approval is
required by law or agreement or if such amendment would:

                                      20
<PAGE>
(1)      expand the classes of persons to whom awards may be made under Article
         One, Section IV of the Plan;

(2)      increase the number of shares of Common Stock authorized for grant
         under Article One, Section V of the Plan;

(3)      increase the number of shares which may be granted under awards to any
         one participant under Article One, Section V of the Plan;

(4)      increase the percentage of shares available for awards of restricted
         stock or unrestricted shares of Common Stock;

(5)      permit unrestricted shares of Common Stock to be granted other than in
         lieu of cash payments under other incentive plans and programs of the
         Corporation and its Subsidiaries;

(6)      allow the creation of additional types of awards;

(7)      grant options at prices below fair market value at date of grant or
         permit decreasing the option price on any outstanding option or the
         base price on any Stock Appreciation Right;

(8)      permit shortening of vesting periods or removing or waiving
         performance goals except to the extent permitted under Article Two,
         Section III, and Article Three, Section II of the Plan; or

(9)      change any of the provisions of this paragraph of this Article Five,
         Section IV.

         The Plan Administrator may amend the terms of any stock option or
other award theretofore granted, prospectively or retroactively, but no such
amendment (a) shall cause a Qualified Performance-Base Award to cease to
qualify for the Section 162(m) Exemption or (b) impair the rights of any holder
without the holder's consent except such an amendment made to cause the Plan or
award to qualify for any exemption provided by Rule 16b-3 or (c) modify the
terms of any stock options or other award in a manner inconsistent with the
provisions of the Plan.

         Subject to the above provisions, the Plan Administrator shall have
authority to amend the Plan to take into account changes in law and tax and
accounting rules as well as other developments, and to grant awards that
qualify for beneficial treatment under such rules without stockholder approval.

         V.       USE OF PROCEEDS

         Any cash proceeds received by the Corporation from the sale of shares
of Common Stock under the Plan shall be used for general corporate purposes.

         VI.      WITHHOLDING

         The Corporation's obligation to deliver shares of Common Stock upon
the exercise of any options or upon the vesting of any shares issued under the
Plan shall be subject to the satisfaction of all applicable Federal, state and
local income and employment tax withholding requirements.

         VII.     REGULATORY APPROVALS

         A. The implementation of the Plan, the granting of any options under
the Plan and the issuance of any shares of Common Stock (i) upon the exercise
of any option or (ii) under the Stock Issuance Program

                                      21
<PAGE>
shall be subject to the Corporation's procurement of all approvals and permits
required by regulatory authorities having jurisdiction over the Plan, the
options granted under it and the shares of Common Stock issued pursuant to it.

         B.       No shares of Common Stock or other assets shall be issued or
delivered under the Plan unless and until there shall have been compliance with
all applicable requirements of Federal and state securities laws and all
applicable listing requirements of any stock exchange (or the Nasdaq National
Market, if applicable) on which Common Stock is then listed for trading.

         VIII.    NO EMPLOYMENT OR SERVICE RIGHTS

         Nothing in the Plan shall confer upon the Optionee or the Participant
any right to continue in Service for any period of specific duration or
interfere with or otherwise restrict in any way the rights of the Corporation
(or any Parent or Subsidiary employing or retaining such person) or of the
Optionee or the Participant, which rights are hereby expressly reserved by
each, to terminate such person's Service at any time for any reason, with or
without cause.

                                      22
<PAGE>
                                    APPENDIX

         The following definitions shall be in effect under the Plan:

         A.       AUTOMATIC OPTION GRANT PROGRAM shall mean the automatic
option grant program in effect under the Plan.

         B.       BOARD shall mean the Corporation's Board of Directors.

         C.       CHANGE IN CONTROL shall mean a change in ownership or control
of the Corporation effected through either of the following transactions:

                  (i)      the acquisition, directly or indirectly, by any
         person or related group of persons (other than the Corporation or a
         person that directly or indirectly controls, is controlled by, or is
         under common control with, the Corporation), of beneficial ownership
         (within the meaning of Rule 13d-3 of the 1934 Act) of securities
         possessing more than fifty percent (50%) of the total combined voting
         power of the Corporation's outstanding securities pursuant to a tender
         or exchange offer made directly to the Corporation's stockholders, or

                  (ii)     a change in the composition of the Board over a
         period of thirty-six (36) consecutive months or less such that a
         majority of the Board members ceases, by reason of one or more
         contested elections for Board membership, to be comprised of
         individuals who either (A) have been Board members continuously since
         the beginning of such period or (B) have been elected or nominated for
         election as Board members during such period by at least a majority of
         the Board members described in clause (A) who were still in office at
         the time the Board approved such election or nomination.

         D.       CODE shall mean the Internal Revenue Code of 1986, as
amended.

         E.       COMMITTEE shall mean a committee of one (1) or more Board
members appointed by the Board to exercise one or more administrative functions
under the Plan.

         F.       COMMON STOCK shall mean the Corporation's common stock.

         G.       CORPORATE TRANSACTION shall mean either of the following
stockholder-approved transactions to which the Corporation is a party:

                  (i)      a merger or consolidation in which securities
         possessing more than fifty percent (50%) of the total combined voting
         power of the Corporation's outstanding securities are transferred to a
         person or persons different from the persons holding those securities
         immediately prior to such transaction, or

                  (ii)     the sale, transfer or other disposition of all or
         substantially all of the Corporation's assets in complete liquidation
         or dissolution of the Corporation.

                                      23
<PAGE>
         H.       CORPORATION shall mean Internet Security Systems, Inc., a
Delaware corporation.

         I.       DISCRETIONARY OPTION GRANT PROGRAM shall mean the option
grant program in effect under the Plan.

         J.       EMPLOYEE shall mean an individual who is in the employ of the
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.

         K.       EXERCISE DATE shall mean the date on which the Corporation
shall have received written notice of the option exercise.

         L.       FAIR MARKET VALUE per share of Common Stock on any relevant
date shall be determined in accordance with the following provisions:

                  (i)      If the Common Stock is at the time traded on the
         Nasdaq National Market, then the Fair Market Value shall be the
         closing selling price per share of Common Stock on the date in
         question, as such price is reported by the National Association of
         Securities Dealers on the Nasdaq National Market. If there is no
         closing selling price for the Common Stock on the date in question,
         then the Fair Market Value shall be the closing selling price on the
         last preceding date for which such quotation exists.

                  (ii)     If the Common Stock is at the time listed on any
         Stock Exchange, then the Fair Market Value shall be the closing
         selling price per share of Common Stock on the date in question on the
         Stock Exchange determined by the Plan Administrator to be the primary
         market for the Common Stock, as such price is officially quoted in the
         composite tape of transactions on such exchange. If there is no
         closing selling price for the Common Stock on the date in question,
         then the Fair Market Value shall be the closing selling price on the
         last preceding date for which such quotation exists.

                  (iii)    For purposes of any option grants made on the
         Underwriting Date, the Fair Market Value shall be deemed to be equal
         to the price per share at which the Common Stock is sold in the
         initial public offering pursuant to the Underwriting Agreement.

                  (iv)     For purposes of any option grants made prior to the
         Underwriting Date, the Fair Market Value shall be determined by the
         Plan Administrator after taking into account such factors as the Plan
         Administrator shall deem appropriate.

         M.       HOSTILE TAKE-OVER shall mean the acquisition, directly or
indirectly, by any person or related group of persons (other than the
Corporation or a person that directly or indirectly controls, is controlled by,
or is under common control with, the Corporation) of

                                      24
<PAGE>
beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of
securities possessing more than fifty percent (50%) of the total combined
voting power of the Corporation's outstanding securities pursuant to a tender
or exchange offer made directly to the Corporation's stockholders which the
Board does not recommend such stockholders to accept.

         N.       1934 ACT shall mean the Securities Exchange Act of 1934, as
amended.

         O.       INCENTIVE OPTION shall mean an option which satisfies the
requirements of Code Section 422.

         P.       INVOLUNTARY TERMINATION shall mean the termination of the
Service of any individual which occurs by reason of:

                  (i)      such individual's involuntary dismissal or discharge
         by the Corporation for reasons other than Misconduct, or

                  (ii)     such individual's voluntary resignation following
         the offer to such individual of a Lesser Position in replacement of
         the position held by him or her immediately prior to the Corporate
         Transaction or Change in Control.

         Q.       LESSER POSITION FOR AN OPTIONEE OR PARTICIPANT shall mean a
new position or a change in the Optionee or Participant's position which,
compared with such individual's position with the Corporation immediately prior
to the Corporate Transaction or Change in Control, (i) offers a lower level of
compensation (including base salary, fringe benefits and target bonuses under
any corporate-performance based bonus or incentive programs), or (ii)
materially reduces such individual's duties or level of responsibility.

         R.       MISCONDUCT shall mean the commission of any act of fraud,
embezzlement or dishonesty by the Optionee or Participant, any unauthorized use
or disclosure by such person of confidential information or trade secrets of
the Corporation (or any Parent or Subsidiary), or any other intentional
misconduct by such person adversely affecting the business or affairs of the
Corporation (or any Parent or Subsidiary) in a material manner. The foregoing
definition shall not be deemed to be inclusive of all the acts or omissions
which the Corporation (or any Parent or Subsidiary) may consider as grounds for
the dismissal or discharge of any Optionee, Participant or other person in the
Service of the Corporation (or any Parent or Subsidiary).

         S.       1934 ACT shall mean the Securities Exchange Act of 1934, as
amended.

         T.       NON-STATUTORY OPTION shall mean an option not intended to
satisfy the requirements of Code Section 422.

         U.       OPTIONEE shall mean any person to whom an option is granted
under the Plan.

                                      25
<PAGE>
         V.       PARENT shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations ending with the Corporation,
provided each corporation in the unbroken chain (other than the Corporation)
owns, at the time of the determination, stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.

         W.       PARTICIPANT shall mean any person who is issued shares of
Common Stock under the Stock Issuance Program.

         X.       PERMANENT DISABILITY OR PERMANENTLY DISABLED shall mean the
inability of the Optionee or the Participant to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment expected to result in death or to be of continuous duration of
twelve (12) months or more. However, solely for purposes of the Automatic
Option Grant Program, Permanent Disability or Permanently Disabled shall mean
the inability of the non-employee Board member to perform his or her usual
duties as a Board member by reason of any medically determinable physical or
mental impairment expected to result in death or to be of continuous duration
of twelve (12) months or more.

         Y.       PLAN shall mean the Corporation's Restated 1995 Stock
Incentive Plan, as set forth in this document.

         Z.       PLAN ADMINISTRATOR shall mean the particular entity, whether
the Primary Committee, the Board or the Secondary Committee, which is
authorized to administer the Option Grant and Stock Issuance Programs with
respect to one or more classes of eligible persons, to the extent such entity
is carrying out its administrative functions under those programs with respect
to the persons under its jurisdiction.

         AA.      PRIMARY COMMITTEE shall mean the committee of two (2) or more
non-employee Board members appointed by the Board to administer the Option
Grant and Stock Issuance Programs with respect to Section 16 Insiders.

         BB.      SECONDARY COMMITTEE shall mean a committee of one (1) or more
Board members appointed by the Board to administer the Option Grant and Stock
Issuance Programs with respect to eligible persons other than Section 16
Insiders.

         CC.      SECTION 12(G) REGISTRATION DATE shall mean the date on which
the Common Stock is first registered under Section 12(g) of the 1934 Act.

         DD.      SECTION 16 INSIDER shall mean an officer or director of the
Corporation subject to the short-swing profit liabilities of Section 16 of the
1934 Act.

         EE.      SERVICE shall mean the provision of services to the
Corporation (or any Parent or Subsidiary) by a person in the capacity of an
Employee, a non-employee member of the board of directors or a consultant or
independent advisor, except to the extent otherwise specifically provided in
the documents evidencing the option grant.

                                      26
<PAGE>
         FF.      STOCK EXCHANGE shall mean either the American Stock Exchange
or the New York Stock Exchange.

         GG.      STOCK ISSUANCE AGREEMENT shall mean the agreement entered
into by the Corporation and the Participant at the time of issuance of shares
of Common Stock under the Stock Issuance Program.

         HH.      STOCK ISSUANCE PROGRAM shall mean the stock issuance program
in effect under the Plan.

         II.      SUBSIDIARY shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations beginning with the
Corporation, provided each corporation (other than the last corporation) in the
unbroken chain owns, at the time of the determination, stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.

         JJ.      TAKE-OVER PRICE shall mean the greater of (i) the Fair Market
Value per share of Common Stock on the date the option is surrendered to the
Corporation in connection with a Hostile Take-Over or (ii) the highest reported
price per share of Common Stock paid by the tender offeror in effecting such
Hostile Take-Over. However, if the surrendered option is an Incentive Option,
the Take-Over Price shall not exceed the clause (i) price per share.

         KK.      TAXES shall mean the Federal, state and local income and
employment tax liabilities incurred by the holder of Non-Statutory Options or
unvested shares of Common Stock in connection with the exercise of those
options or the vesting of those shares.

         LL.      10% STOCKHOLDER shall mean the owner of stock (as determined
under Code Section 424(d)) possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Corporation (or any Parent
or Subsidiary).

         MM.      UNDERWRITING AGREEMENT shall mean the agreement between the
Corporation and the underwriter or underwriters managing the initial public
offering of the Common Stock.

         NN.      UNDERWRITING DATE shall mean the date on which the
Underwriting Agreement is executed and the initial public offering price of the
Common Stock is established.

                                      27<PAGE>
                                                                     EXHIBIT 4.3

                        [Internet Security Systems Logo]

Number                                                         Shares
C 6467

COMMON STOCK                                                   COMMON STOCK

                        INTERNET SECURITY SYSTEMS, INC.

              INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE

                                                               CUSIP 46060X 10 7

This Certifies that

                                    SPECIMEN
                                                                 SEE REVERSE FOR
                                                             CERTAIN DEFINITIONS

is the owner of

FULLY PAID AND NON-ASSESSABLE SHARES OF THE PAR VALUE OF $0.001 EACH OF THE
COMMON STOCK OF

INTERNET SECURITY SYSTEMS, INC. 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 is not valid unless countersigned and registered by the
Transfer Agent and Registrar.
WITNESS the facsimile seal of the Corporation and the facsimile signatures of
its duly authorized officers.

Dated:

/s/                                            /s/
SECRETARY AND                                  CHAIRMAN, CHIEF EXECUTIVE OFFICER
CHIEF TECHNICAL OFFICER                        AND PRESIDENT

                     [INTERNET SECURITY SYSTEMS, INC. SEAL]

                                                   COUNTERSIGNED AND REGISTERED:
                                                                   SUNTRUST BANK
                                                      BY SPECIMEN TRANSFER AGENT
                                                                    AND REGISTER

                                                            AUTHORIZED SIGNATURE
<PAGE>

                        INTERNET SECURITY SYSTEMS, INC.

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

<Table>
<C>      <C>  <S>                              <C>                         <C>                <C>  <C>
TEN COM  --   As tenants in Common                                         UNIF GIFT MIN ACT  --
TEN ENT  --   As tenants by the entireties                                                         ---------- Custodian ----------
 JT TEN  --   As joint tenants with right of                                                         (Cust)               (Minor)
              survivorship and not as tenants                                                      Under Uniform Gifts to Minors
              in common                                                                            Act
                                                                                                       --------------------------
                                                                                                               (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 ZIP CODE, OF ASSIGNEE)

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

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

--------------------------------------------------------------------------------
Shares of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint

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

Dated
     -------------------------------------------------------

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

                                                --------------------------------
                       Signature(s) Guaranteed: THE SIGNATURE(S) SHOULD BE
                                                GUARANTEED BY AN ELIGIBLE
                                                GUARANTOR INSTITUTION SUCH AS A
                                                SECURITIES BROKER/DEALER,
                                                COMMERCIAL BANK, TRUST COMPANY,
                                                SAVINGS ASSOCIATION OR A CREDIT
                                                UNION PARTICIPATING IN A
                                                MEDALLION PROGRAM.

    This certificate also evidences and entitles the holder hereof to certain
Rights as set forth in a Rights Agreement between Internet Security Systems,
Inc. and SunTrust Bank, as Rights Agent, dated as of July 18, 2002 (the "Rights
Agreement"), the terms of which are incorporated herein by reference and a copy
of which is on file at the principal executive offices of Internet Security
Systems, Inc. Under certain circumstances, as set forth in the Rights Agreement,
such Rights will be evidenced by separate certificates and will no longer be
evidenced by this certificate. Internet Security Systems, Inc. will mail to the
holder of this certificate a copy of the Rights Agreement, as in effect on the
date of mailing, without charge, after receipt by it of a written request
therefor. Under certain circumstances as provided in the Rights Agreement,
Rights issued to, held by or Beneficially Owned by Acquiring Persons, their
Associates or Affiliates (as such terms are defined in the Rights Agreement), or
any subsequent holder of such Rights will become null and void.

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