Document:

Exhibit 10.4

                           THIRD AMENDED AND RESTATED
                            PLAYBOY ENTERPRISES, INC.
                            1995 STOCK INCENTIVE PLAN

                As Amended and Restated as of September 17, 2008

      Playboy Enterprises,  Inc., a corporation  organized under the laws of the
State of Delaware (the "Company"), hereby adopts this Third Amended and Restated
Playboy Enterprises, Inc. 1995 Stock Incentive Plan.

      The purposes of this Plan are as follows:

      (1)   To further the  growth,  development  and  financial  success of the
Company by  providing  additional  incentives  to  certain of its key  employees
through the  ownership of Company  stock  and/or  rights  which  recognize  such
growth, development and financial success.

      (2)   To enable the Company  to obtain  and  retain  the  services  of key
employees  considered  essential  to the  long-range  success of the  Company by
providing and offering them an  opportunity  to own stock in the Company  and/or
rights which will reflect the growth,  development and financial  success of the
Company.

                                    ARTICLE I
                                   DEFINITIONS
                                   -----------

      Whenever  the  following  terms are used in this Plan they  shall have the
meaning specified below, unless the context clearly indicates otherwise.

      Section 1.1    Board.  "Board" shall  mean the Board of  Directors  of the
Company.

      Section 1.2    Change of  Control.  "Change  of  Control"  shall  mean the
occurrence of any of the following events: (i) except in a transaction described
in clause (iii) below, Hugh M. Hefner,  Christie Hefner, the Hugh M. Hefner 1991
Trust (for so long as Hugh M. Hefner and Christie  Hefner are joint  trustees or
one of them is sole trustee) and the Hugh M. Hefner  Foundation  (for so long as
Hugh M.  Hefner and  Christie  Hefner are joint  trustees or one of them is sole
trustee) cease  collectively to own a majority of the total number of votes that
may be cast for the  election of  directors  of the  Company;  or (ii) a sale of
Playboy magazine by the Company;  or (iii) the liquidation or dissolution of the
Company,  or any merger,  consolidation  or other  reorganization  involving the
Company  unless  (x)  the  merger,  consolidation  or  other  reorganization  is
initiated  by the  Company,  and (y) is one in  which  the  stockholders  of the
Company   immediately   prior  to  such   reorganization   become  the  majority
stockholders  of a  successor  or  ultimate  parent  corporation  of the Company
resulting  from such  reorganization  and (z) in  connection  with  such  event,
provision  is made for an  assumption  of  outstanding  Options  and rights or a
substitution  thereof of a new  Option or right in such  successor  or  ultimate
parent of substantially equivalent value.

      Section 1.3    Code. "Code"  shall mean the Internal Revenue Code of 1986,
as amended.

      Section 1.4    Committee. "Committee"  shall mean a committee of the Board
of Directors   comprised of persons who are both  non-employee  directors within
the meaning of Rule

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16b-3 which has been adopted by the Securities and Exchange Commission under the
Securities  Exchange Act of 1934, as amended,  as such rule or its equivalent is
then in effect  ("Rule  16b-3") and  "outside  directors"  within the meaning of
Section 162(m) of the Code.

      Section 1.5    Common Stock.  "Common Stock"  shall mean  Class  B  Common
Stock, par value $.01 per share, of the Company.

      Section 1.6    Company. "Company" shall mean Playboy  Enterprises, Inc., a
Delaware corporation.

      Section 1.7    Deferred  Stock. "Deferred Stock"  shall mean Common  Stock
awarded under Article VIII of the Plan.

      Section 1.8    Director. "Director" shall mean a member of the Board.

      Section 1.9    Employee.  "Employee"  shall   mean  any  officer  or other
employee  (as   defined   in   accordance   with  the  Regulations  and  Revenue
Rulings  then  applicable  under  Section 3401(c) of the Code) of the Company or
any Subsidiary.

      Section 1.10   ERISA. "ERISA"  shall mean the Employee  Retirement  Income
Security Act of 1974, as amended.

      Section 1.11   Exchange  Act.  "Exchange  Act" shall  mean the  Securities
Exchange Act of 1934, as amended.

      Section 1.12   Grantee.   "Grantee"  shall  mean  an  Employee  granted  a
Performance  Award, Stock Payment,  Section 162(m)  Performance  Award,  Section
162(m) Stock Payment,  or an award of Deferred Stock or Section 162(m)  Deferred
Stock, under this Plan.

      Section 1.13   Incentive Stock Option. "Incentive Stock Option' shall mean
an Option which conforms to the applicable provisions of Section 422 of the Code
and which is designated as an Incentive Stock Option by the Committee.

      Section 1.14   Non-Qualified  Option. "Non-Qualified Option" shall mean an
Option which is not designated as an Incentive Stock Option by the Committee.

      Section 1.15   Officer. "Officer" shall mean an officer of the Company.

      Section 1.16   Option. "Option" shall mean a stock  option  granted  under
Article III of this Plan. An Option granted under this Plan shall, as determined
by the Committee,  be either a Non-Qualified  Stock Option or an Incentive Stock
Option.

      Section 1.17   Optionee.  "Optionee"  shall  mean  an  Employee to whom an
Option is granted under the Plan.

      Section 1.18   Performance  Award.  "Performance  Award" shall mean a cash
bonus, stock bonus or other performance or incentive award that is paid in cash,
Common Stock or a combination of both, awarded under Article VIII of this Flan.

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      Section  1.19  Performance  Criteria.  "Performance  Criteria"  shall mean
objective performance criteria established pursuant to this Plan with respect to
awards of Section 162(m) Restricted Stock,  Section 162(m)  Performance  Awards,
Section  162(m) Stock Payments and Section 162(m)  Deferred  Stock.  Performance
Criteria shall be measured in terms of one or more of the following  objectives,
described as such objectives relate to corporation-wide objectives or objectives
that  are  related  to the  performance  of the  individual  Employee  or of the
Subsidiary,  division,  department or function with the Company or Subsidiary in
which the participant is employed:

                     (i)    market value;

                     (ii)   book value;

                     (iii)  earnings per share;

                     (iv)   market share;

                     (v)    operating profit;

                     (vi)   net income;

                     (vii)  cash flow;

                     (viii) return on capital;

                     (ix)   return on assets;

                     (x)    return on equity;

                     (xi)   margins;

                     (xii)  shareholder return;

                     (xiii) sales or product volume growth;

                     (xiv)  productivity improvement; or

                     (xv)   costs or expenses.

      Each grant of Section 162(m) Restricted Stock,  Section 162(m) Performance
Awards,  Section 162(m) Stock Payments,  and Section 162(m) Deferred Stock shall
specify the Performance  Criteria to be achieved,  a minimum acceptable level of
achievement  below  which no payment or award  will be made,  and a formula  for
determining  the amount of any payment or award to be made if  performance is at
or above the minimum  acceptable level but fall short of full achievement of the
specified Performance Criteria.

      If the Committee  determines  that a change in the  business,  operations,
corporate  structure or capital structure of the Company, or the manner in which
it  conducts  its  business,   or  other  events  or  circumstances  render  the
Performance Criteria to be unsuitable, the Committee may modify such Performance
Criteria or the related minimum acceptable level of achievement,  in whole or in
part, as the Committee deems appropriate and equitable;  provided, however, that
no such

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modification  shall be made if the effect would be to cause the award to fail to
qualify for the  performance-based  compensation  exception to Section 162(m) of
the Code. In addition,  at the time the award subject to Performance Criteria is
made and performance goals established, the Committee is authorized to determine
the manner in which the  Performance  Criteria will be calculated or measured to
take into account  certain  factors over which the Employees  have no or limited
control including market related changes in inventory value, changes in industry
margins, changes in accounting principles, and extraordinary changes to income.

      Section 1.20   Plan. "Plan" shall  mean  the Third  Amended  and  Restated
Playboy Enterprises, Inc. 1995 Stock Incentive Plan.

      Section 1.21   Restricted Stock.  "Restricted  Stock"  shall  mean  Common
Stock awarded under Article VI of this Plan.

      Section 1.22   Restricted  Stockholder.  "Restricted   Stockholder"  shall
mean an Employee  granted an  award of Restricted Stock under Article VI of this
Plan.

      Section 1.23   Secretary.  "Secretary"  shall  mean the  Secretary  of the
Company.

      Section 1.24   Section 162(m) Deferred  Stock.  "Section  162(m)  Deferred
Stock" shall mean Common Stock awarded under Article IX of this Plan.

      Section 1.25   Section    162(m)  Performance    Award.  "Section   162(m)
Performance Award"  shall mean a cash bonus,  stock bonus, or other  performance
or incentive award  that is paid in cash, Common Stock or a combination of both,
awarded under Article IX of this Plan.

      Section 1.26   Section 162(m) Restricted Stock. "Section 162(m) Restricted
Stock" shall mean Common Stock awarded under Section VII of this Plan.

      Section 1.27   Section  162(m)  Restricted  Stockholder.  "Section  162(m)
Restricted  Stockholder"  shall  mean an  Employee  granted  an award of Section
162(m) Restricted Stock under Article VII of this Plan.

      Section 1.28   Section   162(m)   Stock   Payment.   "Section 162(m) Stock
Payment" shall mean (i) a payment in the form of Commons  Stock,  (ii) an option
or other  right to  purchase  shares  of  Common  Stock,  as part of a  deferred
compensation   arrangement,   made  in  lieu  of  all  or  any  portion  of  the
compensation,  including without  limitation,  salary,  bonuses and commissions,
that would  otherwise  become  payable to a Key  Employee (as defined in Section
3.3(i)) in cash, awarded under Article IX of this Plan.

      Section 1.29   Securities Act. "Securities  Act" shall mean the Securities
Act of 1933, as amended.

      Section 1.30   Stock  Payment.  "Stock   Payment" shall mean (i) a payment
in the form of  shares  of Common  Stock,  or (ii) an  option or other  right to
purchase shares of Common Stock, as part of a deferred compensation arrangement,
made  in lieu  of all or any  portion  of the  compensation,  including  without
limitation, salary, bonuses and commissions, that would otherwise become payable
to a Key Employee (as defined in Section 3.3(i)) in cash,  awarded under Article
VIII of this Plan.

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      Section 1.31   Subsidiary.  "Subsidiary" shall mean any  corporation in an
unbroken  chain  of  corporations  beginning  with  the  Company  if each of the
corporations  other than the last  corporation  in the unbroken  chain then owns
stock  possessing 50% or more of the total combined  voting power of all classes
of stock in one of the other corporations in such chain.

      Section 1.32   Termination  of  Employment.  "Termination  of  Employment"
shall  mean  the  time  when  the  employee-employer  relationship  between  the
Optionee,   Grantee,   Restricted  Stockholder,  or  Section  162(m)  Restricted
Stockholder  and the Company or any  Subsidiary is  terminated,  voluntarily  or
involuntarily,  for any  reason,  with or  without  Cause  (as  defined  below),
including,  but  not  by  way  of  limitation,  a  termination  by  resignation,
discharge,  death, disability or retirement, but excluding any termination where
there  is a  simultaneous  reemployment  by the  Company  or a  Subsidiary.  The
Committee,  subject to the definition of Cause below, shall determine the effect
of all other  matters and  questions  relating  to  Termination  of  Employment,
including,  but not by way of  limitation,  the  question of whether  particular
leaves of absence  constitute  Terminations  of Employment;  provided,  however,
that,  with  respect  to  Incentive  Stock  Options,  a leave of  absence  shall
constitute a Termination of Employment if, and to the extent that, such leave of
absence interrupts  employment for the purposes of Section 422(a)(2) of the Code
and the then applicable  regulations and revenue rulings under said Section. For
purposes of the Plan,  "Cause" shall mean an Employee's (a) gross  negligence in
the performance of the  responsibilities  of such Employee's office or position;
(b) any act of dishonesty or moral turpitude  materially adversely affecting the
Company or the  Company's  reputation;  (c)  commission  of any other willful or
intentional  act that could  reasonably  be  expected to injure  materially  the
reputation, business or business relationships of the Company or any Subsidiary;
or (d) conviction of a felony or of any crime involving moral  turpitude,  fraud
or misrepresentation.

                                   ARTICLE II
                             SHARES SUBJECT TO PLAN
                             ----------------------

      Section 2.1    Shares   Subject to Plan.  (a) The shares of stock  subject
to Options,  or awards of Restricted  Stock,  Section 162(m)  Restricted  Stock,
Performance Awards,  Section 162(m) Performance Awards,  Deferred Stock, Section
162(m) Deferred Stock, Stock Payments, or Section 162(m) Stock Payments shall be
Common Stock.  The aggregate  number of shares which may be issued upon exercise
of such  Options  or rights  or upon any such  awards  under the Plan  shall not
exceed 7,703,000 shares of Common Stock.

            (b)    The  maximum  number  of shares  of  Common  Stock  which may
be subject to  Options,  rights or other  awards  granted  under the Plan to any
Employee  in any  calendar  year  shall not  exceed  650,000,  and the method of
counting   such  shores  shall  conform  to  any   requirements   applicable  to
performance-based  compensation  under Section 162(m) of the Code. The shares of
Common Stock  issuable  upon exercise of such Options or rights or upon any such
awards may be either  previously  authorized  but  unissued  shares or  treasury
shares.

            (c)    With regard  to Section  162(m)  Performance  Awards that are
cash bonuses or other  performance or incentive  awards expressed as cash awards
(without  regard to whether  such bonuses or awards are  ultimately  paid in the
form of cash,  stock,  or a combination of both as described in Section 9.7), an
Employee  may not be  granted  during  any  calendar  year such  Section  162(m)
Performance Awards in an amount in excess of $1,000,000.

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      Section 2.2    Unexercised  Options and  Awards.  If any Option,  or other
right to acquire  shares of Common  Stock under any other award under this Plan,
expires  or  is  cancelled  without  having  been  fully  exercised   (including
Restricted  Stock,  Section 162(m)  Restricted  Stock or any other award that is
forfeited   before   applicable   vesting   requirements  are  met  or  transfer
restrictions have lapsed),  the number of shares subject to such Option or other
right but as to which such Option or other right was not exercised (or vested or
delivered  without  restriction,  as the case may be) prior to its expiration or
cancellation may again be optioned, granted or awarded hereunder, subject to the
limitations of Section 2.1.

      Section  2.3   Adjustments in  Outstanding  Options or Rights.  Subject to
Section  4.2(c),  in the event that the  outstanding  shares of the Common Stock
subject to Options or other rights are changed into or exchanged for a different
number or kind of shares of the  Company or other  securities  of the Company by
reason of a recapitalization,  reclassification,  stock split, stock dividend or
combination  of shares or  similar  transaction,  the  Committee  shall  make an
appropriate  and  equitable  adjustment  in the  number and kind of shares as to
which all outstanding  Options or rights,  or portions thereof then unexercised,
shall  be   exercisable,   so  that  the   Optionee's,   Grantee's,   Restricted
Stockholder's or Section 162(m) Restricted Stockholder's  proportionate interest
shall be maintained.  Such adjustment  shall be made without change in the total
price  applicable to the unexercised  portion of the Option or right (except for
any  change  in  the  aggregate  price  resulting  from  rounding-off  of  share
quantities or prices) and with any necessary  corresponding  adjustment in price
per share;  provided,  however,  that,  pursuant to Treasury  Regulation Section
1.409A-1(b)(5)(v)(D),  no such  adjustment  shall cause an existing Option to be
treated as a new Option, and, in the case of Incentive Stock Options,  each such
adjustment  shall be made in such manner as not to  constitute a  'modification'
within the meaning of Code Section  424(h)(3).  Any such  adjustment made by the
Committee  shall be final and binding upon all Optionees,  Grantees,  Restricted
Stockholders,  Section  162(m)  Restricted  Stockholders,  the  Company  or  any
Subsidiary,  their  representatives  and  all  other  interested  persons.  Such
adjustments will also be made in determining  Section 2.1 limitations on maximum
number and kind of shares which may be issued on exercise of Options, Restricted
Stock,  Section 162(m)  Restricted Stock or other awards.  The shares of Class B
Common  Stock  reserved  under this Plan will be reduced as Options,  Restricted
Stock,  Section 162(m) Restricted Stock or other awards are granted or issued so
that the  aggregate  number of any single  Class of Stock will never  exceed the
total amount of shares authorized under the Plan.

                                  ARTICLE III
                               GRANTING OF OPTIONS
                               -------------------

      Section 3.1    Eligibility.  Any Key   Employee  (as  defined  in  Section
3.3(i)) of the Company or a  Subsidiary  except Hugh M. Hefner shall be eligible
to be granted Options.

      Section 3.2    Qualification of  Incentive  Stock  Options.  No  Incentive
Stock Option shall be granted unless such Option, when granted,  qualifies as an
"incentive  stock option" under Section 422 of the Code.  Without  limitation of
the foregoing,  no person shall be granted an Incentive  Stock Option under this
Plan if such person,  at the time the  Incentive  Stock Option is granted,  owns
stock  possessing more than ten percent (10%) of the total combined voting power
of all  classes of stock of the  Company  unless  such  Incentive  Stock  Option
conforms to the applicable provisions of Section 422 of the Code.

      Section 3.3    Granting of Options.  (a)  The Committee shall from time to
time, in its absolute discretion:

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                  (i)   Determine which Employees are "Key Employees" and select
      from  among the key  employees  (including  those to whom  Options  and/or
      rights  have been  previously  granted  under the Plan or any other  stock
      option or other plan of the Company) such of them as in its opinion should
      be granted Options; and

                  (ii)  Determine  for each  Employee the number of shares to be
      subject to such Options; and

                  (iii) Determine whether such Options are to be Incentive Stock
      Options or Non-Qualified Options; and

                  (iv)  Determine  the terms  and  conditions  of such  Options,
      consistent with the Plan.

            (b)   Upon the  selection  of a Key  Employee (as defined in Section
3.3(i)) to be granted an Option,  the Committee  shall instruct the Secretary or
other authorized  officer to execute and deliver a Stock Option  Agreement,  and
may impose such conditions on the grant of such Option as deems appropriate, not
inconsistent  with this Plan.  Without  limiting the generality of the preceding
sentence,  the Committee  may, in its  discretion  and on such terms as it deems
appropriate,  require as a  condition  on the grant of an Option to an  Employee
that the Employee  surrender  for  cancellation  some or all of the  unexercised
Options,  awards of Restricted Stock-, Section 162(m) Restricted Stock, Deferred
Stock or Section  162(m)  Deferred  Stock,  Performance  Awards,  Section 162(m)
Performance  Awards,  Stock  Payments or Section  162(m) Stock Payments or other
rights which have been previously  granted to him. An Option, the grant of which
is conditioned  upon such surrender,  may have an Option price lower (or higher)
than the Option price of the surrendered Option, may cover the same (or a lesser
or greater) number of shares as the surrendered  Option,  may contain such other
terms as the Committee deems appropriate and be exercised in accordance with its
terms, without regard to the number of shares, price, option period or any other
term or condition of such surrendered Option or award.

            (c)   Stock Option  Agreements  evidencing  Incentive  Stock Options
shall  contain  such  terms  and  conditions  as may be  necessary  to meet  the
applicable  provisions of Section 422 of the Code.  Any  Incentive  Stock Option
granted  under this Plan may be modified by the  Committee  to  disqualify  such
option from  treatment as an  "incentive  stock option" under Section 422 of the
Code.

            (d)   Options  granted  hereunder  shall  be  consideration  for the
future  performance  of services by the Optionee to the Company or a Subsidiary,
as applicable.

                                   ARTICLE IV
                                TERMS OF OPTIONS
                                ----------------

      Section  4.1   Option  Price.  (a)  The  price  of the  shares  subject to
each  Non-Qualified  Option shall not be less than 100% of the fair market value
of such shares at the end of the business day upon which such Option is granted.

            (b)   For purposes of the Plan,  the fair market value ("Fair Market
Value") of a share of the  Company's  Common  Stock as of a given date shall be:
(i) the closing price of a share of such class of the Company's  Common Stock on
the principal exchange on which shares of

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the Company's Common Stock are then trading, if any, on such date, or, if shares
were not traded on such date,  then on the next  subsequent  trading  day during
which a sale  occurs;  or (ii) if such Common shock is not traded on an exchange
but is quoted on NASDAQ or a  successor  quotation  system,  (1) the last  sales
price (if the Company's  Common Stock is then listed as a National  Market Issue
under the NASD  National  Market  System) or (2) the mean  between  the  closing
representative  bid and asked  prices  (in all other  cases)  for the  Company's
Common  Stock on such date as  reported  by NASDAQ or such  successor  quotation
system;  or (iii) if such Common Stock is not publicly traded on an exchange and
not quoted on NASDAQ or a  successor  quotation  system,  the mean  between  the
closing bid and asked prices for the Company's  Common  Stock,  on such date, as
determined in good faith by the Committee; or (iv) if the Company's Common Stock
is not publicly  traded,  the fair market  value  established  by the  Committee
acting in good faith and,  in all  instances,  established  pursuant to Treasury
Regulation Section 1.409A-1(b)(5)(iv)(B).

            (c)   The price of the shares  subject to  Incentive  Stock  Options
shall not be less than the  greater  of (i) 100% of the Fair  Market  Value of a
share of Common Stock on the date the Incentive Stock Option is granted, or (ii)
110% of the  Fair  Market  Value  of a share of  Common  Stock on the date  such
Incentive  Stock  Option is granted  in the case of an  individual  then  owning
(within  the  meaning of Section  424(d) of the Code) more than 10% of the total
combined voting power of all classes of stock of the Company or any Subsidiary.

      Section  4.2   Commencement  of  Exercisability;  Chance  of  Control. (a)
Subject to the  provisions  of Sections  4.2(b) and 11.3,  Options  shall become
exercisable at such times and in such installments  (which may be cumulative) as
the Committee  shall provide in the terms of each individual  Option;  provided,
however,  that by a resolution  adopted after an Option is granted the Committee
may, on such terms and  conditions  as it may  determine to be  appropriate  and
subject to Sections  4.2 and 11.3,  accelerate  the time at which such Option or
any portion  thereof  may be  exercised;  provided  further,  however,  that all
outstanding  Options shall become fully vested and exercisable as of immediately
prior to a Change of Control.

            (b)   No portion of an Option which is  unexercisable at Termination
of Employment shall thereafter  become  exercisable,  except as may be otherwise
provided  by  the  Committee  either  in  the  Stock  Option  Agreement  or in a
resolution  adopted  following  the grant of the  Option.  Except as  limited by
requirements of Section 422 of the Code and  regulations and rulings  thereunder
applicable to Incentive Stock Options,  the Committee may extend the term of any
outstanding  Option in  connection  with any  Termination  of  Employment of the
Optionee, or amend any other term or condition of such Option relating to such a
termination.

            (c)   To the extent that the  aggregate  Fair Market  Value of stock
with respect to which  "incentive  stock options" (within the meaning of Section
422 of the  Code,  but  without  regard  to  Section  422(d)  of the  Code)  are
exercisable  for the first time by an Optionee  during any calendar  year (under
the Plan and all other  incentive  stock  option  plans of the  Company  and any
subsidiary)  exceeds  $100,000,  such Options shall be treated as  Non-Qualified
Options to the extent required by Section 422 of the Code. The rule set forth in
the preceding  sentence  shall be applied by taking  Options into account in the
order in which they were granted.  For purposes of this Section 4.2(c), the Fair
Market Value of stock shall be determined as of the time the Option with respect
to such stock is granted.

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      Section 4.3    Expiration of Options. (a) Unless an Option expires earlier
or later pursuant to the terms of a Stock Option  Agreement,  each Option may be
exercised  any time until the first of the  following  events,  after which such
Option will become unexercisable:

                  (i)   The  expiration  of ten  (10)  years  from  the date the
      Option was granted if the Employee is still employed by the Company or any
      Subsidiary; or

                  (ii)  The  expiration of three (3) months from the  Employee's
      Termination of Employment if such  Termination of Employment  results from
      such  Employee's  retirement or such Employee's  being  discharged not for
      Cause, unless the Employee dies within said three-month period; or

                  (iii) The effective  date of (i) a  Termination  of Employment
      for Cause, (ii) the Employee's  resignation,  or (iii) a Change of Control
      specified in clause (iii) of the definition of such term; or

                  (iv)  In the case of an Optionee  who is disabled  (within the
      meaning of Section  22(e)(3) of the Code),  the expiration of one (1) year
      from the  date of the  Optionee's  Termination  of  Employment;  provided,
      however,  that subsection (iv) shall not apply if the Optionee dies within
      said one-year period; or

                  (v)   One (1) year from the date of the Optionee's death.

            (b)   Subject to the  provisions  of Section  4.3(a),  the Committee
shall provide,  in the terms of each individual Option, when such Option expires
and  becomes  unexercisable;   and  (without  limiting  the  generality  of  the
foregoing)  the Committee  may provide in the terms of  individual  Options that
said Options expire immediately upon a Termination of Employment for any reason.

            (c)   The term of any Incentive  Stock Option shall not be more than
five (5) years  from such date if the  Incentive  Stock  Option is granted to an
individual  then owning  (within the meaning of Section 424(d) of the Code) more
than 10% of the total  combined  voting power of all classes of capital stock of
the Company or any Subsidiary.

      Section  4.4   No Right to  Continued  Employment.  Nothing in  this  Plan
or in any Stock Option  Agreement  hereunder  shall confer upon any Optionee any
right to  continue  in the  employ  of the  Company  or any  Subsidiary  or as a
director  of the  Company,  or shall  interfere  with or restrict in any way the
rights of the Company and any of its  Subsidiaries,  which are hereby  expressly
reserved, to discharge any Optionee at any time for any reason whatsoever,  with
or without Cause.

      Section 4.5    Reload Options.  Options  may, in  the  discretion  of  the
Committee,  be granted  under the Plan to permit a  participant  to reaquire any
shares such  participant  delivered  to the  Company as payment of the  exercise
price (as described in Section 5.3) in connection with the exercise of an Option
hereunder  or to  reaquire  any shares  retained  by the  Company to satisfy the
participant's  withholding  obligation  in  connection  with the  exercise of an
Option  hereunder  (a "Reload  Option").  The terms of a Reload  Option shall be
identical in all  material  respects to the terms of the Option as to which such
Reload Option was granted,  provided,  however, that the

                                        9

<PAGE>

exercise  price for each share granted under the Reload Option shall be the Fair
Market Value of a share at the time such Reload Option is granted.

                                    ARTICLE V
                               EXERCISE OF OPTIONS
                               -------------------

      Section 5.1    Person  Eligible   to   Exercise.  (a)  Subject to 5.1 (b),
during the  lifetime of an Optionee,  only such  Optionee may exercise an Option
(or any  portion  thereof)  granted  to such  Optionee.  After  the death of the
Optionee,  any  exercisable  portion  of an Option  may,  within  the time frame
allowed, be exercised by his personal  representative or by any person empowered
to do so under the deceased Optionee's will or under the then applicable laws of
descent and  distribution.  To the extent  Rule 16b-3 as then in effect  permits
transfers  of  Options,   the  Committee  may  approve  such  transfers  in  its
discretion.

            (b)   Should the Optionee be determined under applicable law to have
become a disabled person or the equivalent  thereof,  the then-vested portion of
the  Option  may,  prior to the time  when  such  Option  becomes  unexercisable
pursuant to the Plan or the applicable Stock Option  Agreement,  be exercised by
the Optionee's guardian or by any other person empowered to do so under the then
applicable laws of guardianship.  For purposes of this section 5.1(b), "disabled
person" shall mean a person who (i) because of mental  deterioration or physical
incapacity is not fully able to manage such person's person or estate or (ii) is
mentally ill and who because of such person's  mental  illness is not fully able
to manage such person's person or estate.

      Section 5.2    Partial Exercise. An exercisable Option may be exercised in
whole or in part.  However,  an Option shall not be exercisable  with respect to
fractional  shares and the Committee may require that, by terms of the Option, a
partial exercise be with respect to a number of shares.

      Section 5.3    Manner of Exercise.  All or a  portion  of  an  exercisable
Option shall be deemed  exercised  upon  delivery of all of the following to the
Secretary of the Company or the Secretary's office:

            (a)   A written  notice signed by the Optionee (or other person then
entitled  to  exercise  such  Option or  portion),  stating  that such Option or
portion  thereof is being exercised and such notice complies with all applicable
rules established by the Committee; and

            (b)   Payment in full for the exercised shares:

                  (i)   In cash or by certified or cashier's check; or

                  (ii)  In  shares  of the same  class of the  Company's  Common
      Stock owned by the Optionee;  provided, however, that the Optionee may use
      Common Stock in payment of the  exercise  price only if the shares so used
      are  considered  "mature" for purposes of  generally  accepted  accounting
      principles,  i.e.,  (x) they have been held by the Optionee free and clear
      for at least six months  prior to the use thereof to pay part of an Option
      exercise price, (y) they have been purchased by the Optionee in other than
      a compensatory  transaction,  or (z) they meet any other

                                       10

<PAGE>
      requirements  for  "mature"  shares  as may  exist  on the date of the use
      thereof to pay part of an Option  exercise  price,  as  determined  by the
      Committee;  further  provided,  however,  that the  Company may use Common
      Stock in payment of the exercise  price by means of attestation to Company
      of his ownership of sufficient shares in a manner reasonably acceptable to
      the Committee.  Shares actually delivered to the Company (i.e., shares for
      which the  attestation  mechanism  is not used) must be duly  endorsed for
      transfer  to the  Company.  Shares  used to pay all or part of the  Option
      exercise  price  pursuant to this provision will be credited at their Fair
      Market Value on the date of delivery; or

                        (iii)  With the consent of the Committee and at the sole
      discretion  of the Company,  by a full  recourse  promissory  note bearing
      interest (at no less than such rate as shall then preclude the  imputation
      of interest  under the Code or successor  provision) and payable upon such
      terms  as may be  prescribed  by the  Committee.  The  Committee  may also
      prescribe  the form of such  note and the  security  to be given  for such
      note.  No Option may,  however,  be  exercised by delivery of a promissory
      note or by a loan  from  the  Company  when or  where  such  loan or other
      extension of credit is prohibited by law; or

                        (iv)   With the consent of the Committee and at the sole
      discretion of the Company,  by a "net  exercise" via the forfeiture to the
      Company  of a portion  of the  Option  pertaining  to shares  with a value
      (based on the Fair Market Value of such  underlying  Option  shares on the
      date of  forfeiture)  equal to the  exercise  price of the  portion of the
      Option being exercised plus the applicable tax withholding amount; or

                        (v)    Any combination of the consideration  provided in
      the foregoing subsections (i), (ii), (iii) and (iv); or

                        (vi)   To the extent permitted  by law  (including  then
      existing  interpretations of Rule 16b-3) a "cashless  exercise  procedure"
      satisfactory  to the  Committee  which  permits the Optionee to deliver an
      exercise  notice to a  broker-dealer,  who then sells the  Option  shares,
      delivers  the  exercise  price and  withholding  taxes to the  Company and
      delivers the excess funds less  commission  and  withholding  taxes to the
      Optionee; and

                  (c)   Such representations and documents as the Committee,  in
its absolute discretion,  deems necessary or advisable to effect compliance with
all  applicable  provisions of the Securities Act and any other federal or state
securities laws or regulations.  The Committee may, in its absolute  discretion,
also take  whatever  additional  actions  it deems  appropriate  to effect  such
compliance including, without limitation,  placing legends on share certificates
and issuing stop-transfer orders to transfer agents and registrars; and

                  (d)   Appropriate proof of the right of such person or persons
to  exercise  the  option or  portion  thereof  in the event  that the Option or
portion  thereof  shall be  exercised  pursuant  to Section 5.1 by any person or
persons other than the Optionee; and

                  (e)   Full payment of all amounts which, under federal,  state
or local law, it is required to withhold upon  exercise of the Option.  With the
consent of the  Committee,  shares of

                                       11

<PAGE>

the  Company's  Common Stock owned by the Employee duly endorsed for transfer or
shares of the Company's  Common Stock  issuable to the Employee upon exercise of
the Option,  valued in accordance with Section 4.1(b) of the Plan at the date of
Option exercise, may be used to make all or part of such payment.

      Section 5.4    [RESERVED]

      Section 5.5    Additional Conditions to Issuance  of  Stock  Certificates.
The shares of Common Stock  deliverable  upon the exercise of an Option shall be
fully paid and  non-assessable.  In addition to  satisfaction  of the conditions
specified in Section 5.3, the Company  shall not be required to issue or deliver
any certificate or certificates  for shares of stock purchased upon the exercise
of any Option or portion  thereof prior to  fulfillment  of all of the following
conditions:

                  (a)   The   completion   of   any    registration   or   other
qualification of such shares under any state or federal law or under the rulings
or  regulations  of the  Securities  and  Exchange  Commission  or of any  other
governmental  regulatory  body,  which  the  Committee  shall,  in its  absolute
discretion, deem necessary or advisable; and

                  (b)   The  obtaining of any approval or other  clearance  from
any state or federal  governmental  agency  which the  Committee  shall,  in its
absolute discretion, determine to be necessary or advisable; and

                  (c)   The lapse of such  reasonable  period of time  following
the exercise of the Option as the Committee or Board may establish  from time to
time for reasons of administrative convenience.

      Section 5.6    Rights as  Stockholders.  The holders of  Options shall not
be, nor have any of the rights or privileges of,  stockholders of the Company in
respect of any shares  purchasable  upon the  exercise  of any part of an Option
unless and until  certificates  representing such shares have been issued by the
Company to such holders or the Company's stock record books reflect the Optionee
as a stockholder pursuant to any book entry procedure approved by the Secretary.

      The  Committee,  in  its  absolute  discretion,   may  impose  such  other
restrictions on the  transferability of the shares purchasable upon the exercise
of an Option as it deems  appropriate.  Any such other  restriction shall be set
forth in the  respective  Stock Option  Agreement  and may be referred to on the
certificates  evidencing such shares.  The Committee may require the Employee to
give the Company  prompt  notice of any  disposition  of shares of Common Stock,
acquired by exercise of an Incentive Stock Option, within (i) two years from the
date of granting  such Option or (ii) one year after the transfer of such shares
to such  Employee.  The  Committee may direct that the  certificates  evidencing
shares  acquired  by  exercise of an Option  refer to such  requirement  to give
prompt notice of disposition.

                                   ARTICLE VI
                            AWARD OF RESTRICTED STOCK
                            -------------------------

      Section 6.1    Award of Restricted  Stock.  (a) The  Committee shall from
time to time, in its absolute discretion:

                                       12

<PAGE>

                        (i)    Select from among the Key  Employees (as  defined
      in Section 3.3(i)) (including Employees who have previously received other
      awards under this Plan or any other stock option plan of the Company) such
      of them as in its opinion should be awarded Restricted Stock; and

                        (ii)   Determine  the purchase  price, if any, and other
      terms and conditions applicable to such Restricted Stock,  consistent with
      this Plan.

                  (b)   In  all   cases,   legal   consideration   meeting   the
requirements  of Delaware law shall be required for each  issuance of Restricted
Stock.

                  (c)   Upon the  selection  of a Key  Employee  (as  defined in
Section 3.3(i)) to be awarded Restricted Stock, the Committee shall instruct the
Secretary  of the  Company to issue such  Restricted  Stock and may impose  such
conditions on the issuance of such Restricted Stock as it deems appropriate.

      Section 6.2    Restricted Stock Agreement. Restricted  Stock all be issued
only pursuant to a written  Restricted Stock Agreement,  which shall be executed
by the selected Key  Employee (as defined in Section  3.3(i)) and an  authorized
officer of the Company and which shall contain such terms and  conditions as the
Committee shall determine, consistent with this Plan.

      Section 6.3    No Right to Continued  Employment.  Nothing in this Plan or
in any  Restricted  Stock  Agreement  hereunder  shall confer on any  Restricted
Stockholder any right to continue in the employ of the Company or any Subsidiary
or shall interfere with or restrict in any way the rights of the Company and any
Subsidiary,  which are hereby  expressly  reserved,  to discharge any Restricted
Stockholder at any time for any reason whatsoever, with or without good cause.

      Section  6.4   Rights as  Stockholders.  Upon  delivery  of any  shares of
Restricted  Stock that are certificated to the escrow holder pursuant to Section
6.7, and upon issuance thereof,  if uncertificated,  the Restricted  Stockholder
shall have,  unless  otherwise  provided by the  Committee,  all the rights of a
stockholder  with respect to said  shares,  subject to the  restrictions  in the
Restricted  Stock  Agreement,  including  the right to receive all dividends and
other distributions paid or made with respect to the shares; provided,  however,
that in the discretion of the Committee,  any  extraordinary  distribution  with
respect to the Common  Stock shall be subject to the  restrictions  set forth in
Section 6.5.

      Section 6.5    Restrictions. All  shares  of Restricted Stock issued under
this Plan  (including  any shares  received by holders  thereof  with respect to
shares of Restricted Stock as a result of stock  dividends,  stock splits or any
other  form  of  recapitalization)  shall,  in  the  terms  of  each  individual
Restricted  Stock  Agreement,  be subject to such  restrictions as the Committee
shall provide, which restrictions may include, without limitation,  restrictions
concerning voting rights and  transferability and restrictions based on duration
of employment with the Company or a Subsidiary, Company performance,  individual
performance,  or a change of control;  provided,  however,  that by a resolution
adopted after the Restricted  Stock is issued,  the Committee may, on such terms
and conditions as it may determine to be  appropriate,  remove any or all of the
restrictions imposed by the terms of the Restricted Stock Agreement.  Restricted
Stock may not be sold or encumbered  until all  restrictions  are  terminated or
expire.  Unless provided otherwise by the Committee,  if no consideration (other
than  services)  was  paid  by  the  Restricted  Stockholder  upon  issuance,  a

                                       13

<PAGE>

Restricted  Stockholder's  rights in unvested  Restricted Stock shall lapse upon
Termination  of  Employment  for any reason at any time or prior to any date the
Committee may establish.

      Section 6.6    Repurchase of Restricted  Stock. If  consideration  (other
than services) was paid for Restricted Stock, the Committee shall provide in the
terms of each individual  Restricted Stock Agreement that the Company shall have
the right to repurchase  from the Restricted  Stockholder  the Restricted  Stock
then subject to restrictions  under the Restricted  Stock Agreement  immediately
upon a  Termination  of  Employment at a cash price per share equal to the price
paid by the Restricted Stockholder for such Restricted Stock or such other price
as may be specified in the Restricted Stock Agreement;  provided,  however, that
provision  may be made in the  Restricted  Stock  Agreement  in the  Committee's
discretion  that no such  right of  repurchase  shall  exist  in the  event of a
Termination of Employment without Cause, or following a Change in Control of the
Company  or  because  of  the  Restricted  Stockholder's  retirement,  death  or
disability, or otherwise.

      Section  6.7   Escrow. The Secretary  of the Company or such other  escrow
holder as the  Committee  may  appoint  shall  retain  physical  custody of each
certificate  representing Restricted Stock until all of the restrictions imposed
under the Restricted  Stock  Agreement  with respect to the shares  evidenced by
such  certificate  expire or shall have been  removed  (or the  Secretary  shall
establish book entry procedures sufficient to prevent unauthorized  transfers of
the Restricted Stock).

      Section 6.8    Legend. In order to enforce the  restrictions imposed  upon
shares of Restricted  Stock  hereunder,  the  Committee  shall cause a legend or
legends to be placed on certificates  representing  all  certificated  shares of
Restricted  Stock that are still subject to restrictions  under Restricted Stock
Agreements, or stop transfer instructions with respect to book entry procedures,
which legend,  legends or instructions  shall make appropriate  reference to the
conditions imposed hereby.

                                   ARTICLE VII
                    AWARD OF SECTION 162(m) RESTRICTED STOCK
                    ----------------------------------------

      Section 7.1    Award of Section 162(m) Restricted Stock. (a) The Committee
shall from time to time, in its absolute discretion:

                        (i)    Select from among the Key  Employees  (as defined
      in Section 3.3(i)) (including Employees who have previously received other
      awards under this Plan or any other stock option plan of the Company) such
      of them as in its  opinion  should be awarded  Section  162(m)  Restricted
      Stock; and

                        (ii)   Determine  the purchase  price, if any, and other
      terms and conditions  applicable to such Section 162(m)  Restricted Stock,
      consistent with this Plan.

                  (b)   In  all   cases,   legal   consideration   meeting   the
requirements  of  Delaware  law shall be required  for each  issuance of Section
162(m) Restricted Stock.

                  (c)   Upon the  selection  of a Key  Employee  (as  defined in
Section 3.3(i)) to be awarded  Section 162(m)  Restricted  Stock,  the Committee
shall  instruct  the  Secretary  of the

                                       14

<PAGE>

Company to issue  such  Section  162(m)  Restricted  Stock and may  impose  such
conditions on the issuance of such Section 162(m)  Restricted  Stock as it deems
appropriate.

      Section 7.2    Section   162(m)   Restricted   Agreement.  Section  162(m)
Restricted  Stock shall be issued  only  pursuant  to a written  Section  162(m)
Restricted Stock Agreement, which shall be executed by the selected Key Employee
(as  defined in Section  3.3(i))  and an  authorized  officer of the Company and
which shall contain such terms and conditions as the Committee shall  determine,
consistent with this Plan.

      Section 7.3    No Right to Continued  Employment. Nothing in this  Plan or
in any Section 162(m)  Restricted Stock Agreement  hereunder shall confer on any
Section 162(m) Restricted Stockholder any right to continue in the employ of the
Company or any  Subsidiary  or shall  interfere  with or restrict in any way the
rights of the Company and any Subsidiary,  which are hereby expressly  reserved,
to  discharge  any Section  162(m)  Restricted  Stockholder  at any time for any
reason whatsoever, with or without good cause.

      Section 7.4    Rights  as  Stockholders. Upon  delivery of  any  shares of
Section  162(m)  Restricted  Stock that are  certificated  to the escrow  holder
pursuant to Section 7.7,  and upon  issuance  thereof,  if  uncertificated,  the
Section 162(m) Restricted  Stockholder shall have, unless otherwise  provided by
the  Committee,  all the rights of a  stockholder  with  respect to said shares,
subject to the  restrictions in the Section 162(m)  Restricted  Stock Agreement,
including  the right to receive all dividends  and other  distributions  paid or
made with respect to the shares;  provided,  however,  that in the discretion of
the Committee,  any extraordinary  distribution with respect to the Common Stock
shall be subject to the restrictions set forth in Section 7.5.

      Section 7.5    Restrictions. All shares of Section 162(m) Restricted Stock
issued under this Plan  (including any shares  received by holders  thereof with
respect  to  shares  of  Section  162(m)  Restricted  Stock as a result of stock
dividends,  stock splits or any other form of  recapitalization)  shall,  in the
terms of each individual  Section 162(m) Restricted Stock Agreement,  be subject
to such  restrictions as the Committee  shall provide,  which  restrictions  may
include,   without  limitation,   restrictions   concerning  voting  rights  and
transferability.  The Section 162(m)  Restricted  Stock  Agreement shall provide
that  a  Section  162(m)  Restricted  Stockholder's  rights  in  Section  162(m)
Restricted  Stock  shall  not  vest  unless  one or more  specified  Performance
Criteria  established by the Committee shall have been achieved.  Section 162(m)
Restricted  Stock  may not be sold or  encumbered  until  all  restrictions  are
terminated  or  expire.  Unless  provided  otherwise  by  the  Committee,  if no
consideration  (other than services) was paid by the Section  162(m)  Restricted
Stockholder upon issuance,  a Section 162(m) Restricted  Stockholder's rights in
unvested  Section  162(m)  Restricted  Stock  shall  lapse upon  Termination  of
Employment  for any  reason at any time or prior to any date the  Committee  may
establish.

      Section  7.6   Repurchase  of  Section   162(m)   Restricted   Stock.   If
consideration  (other than  services))  was paid for Section  162(m)  Restricted
Stock,  the  Committee  shall  provide in the terms of each  individual  Section
162(m)  Restricted  Stock  Agreement  that the  Company  shall have the right to
repurchase  from the Section 162(m)  Restricted  Stockholder  the Section 162(m)
Restricted  Stock  then  subject  to  restrictions   under  the  Section  162(m)
Restricted  Stock  Agreement  immediately  upon a Termination of Employment at a
cash price per share  equal to the price paid by the Section  162(m)  Restricted
Stockholder for such Section 162(m)  Restricted Stock or such other price as may
be  specified  in the  Section  162(m)  Restricted  Stock  Agreement;  provided,
however,  that  provision  may be made in the Section  162(m)  Restricted  Stock
Agreement in the Committee's

                                       15

<PAGE>

discretion  that no such  right of  repurchase  shall  exist  in the  event of a
Termination of Employment without Cause, or following a Change in Control of the
Company or because of the Section 162(m)  Restricted  Stockholder's  retirement,
death or disability, or otherwise.

      Section  7.7   Escrow. The Secretary  of the Company or such other  escrow
holder as the  Committee  may  appoint  shall  retain  physical  custody of each
certificate  representing  Section  162(m)  Restricted  Stock  until  all of the
restrictions  imposed under the Section 162(m)  Restricted  Stock Agreement with
respect to the shares  evidenced by such  certificate  expire or shall have been
removed (or the Secretary  shall establish book entry  procedures  sufficient to
prevent unauthorized transfers of the Section 162(m) Restricted Stock).

      Section 7.8    Legend. In order to enforce the  restrictions  imposed upon
shares of Section 162(m) Restricted Stock hereunder, the Committee shall cause a
legend or legends to be placed on  certificates  representing  all  certificated
shares of Section 162(m) Restricted Stock that are still subject to restrictions
under Section 162(m) Restricted Stock Agreements,  or stop transfer instructions
with respect to book entry  procedures,  which legend,  legends or  instructions
shall make appropriate reference to the conditions imposed hereby.

                                  ARTICLE VIII
               PERFORMANCE AWARDS, DEFERRED STOCK, STOCK PAYMENTS
               --------------------------------------------------

      Section 8.1    Performance  Award. Any Key Employee (as defined in Section
3.3(i)) selected by the Committee may be granted one or more Performance Awards.
The value of such  Performance  Awards may be linked to the market  value,  book
value,  net  profits  or other  measure  of the value of  Common  Stock or other
specific Performance Criteria determined to be appropriate by the Committee,  in
each case on a specified date or dates or over any period or periods  determined
by the  Committee,  or may be based upon the  appreciation  in the market value,
book value,  net profits or other measure of the value of a specified  number of
shares  of  Common  Stock  over a fixed  period  or  periods  determined  by the
Committee.  In making such  determinations,  the Committee shall consider (among
such other factors as it deems  relevant in light of the specific type of award)
the contributions, responsibilities and other compensation of the particular Key
Employee (as defined in Section 3.3(i)).

      Section  8.2   Stock Payments. Any Key  Employee  (as  defined  in Section
3.3(i))  selected  by the  Committee  may receive  Stock  Payments in the manner
determined  from  time to time  by the  Committee.  In  particular,  any  person
designated  by the  Committee as a  participant  in the  Company's Key Executive
Incentive  Bonus Plan (the  "Bonus  Plan") or under the  Company  Service  Award
Program (the "Service Award Program") in accordance with the terms thereof,  and
whose bonus or service  award  thereunder  is  comprised  wholly or partially in
shares of Common Stock,  shall be deemed to have been selected to participate in
this Plan,  and shall  receive  such Common Stock  denominated  bonus as a Stock
Payment in  accordance  with and under the  provisions  of this Section 8.2. The
number of shares shall be  determined by the Committee and may be based upon the
Fair  Market  Value,  book value,  net profits or other  measure of the value of
Common Stock or other specific  Performance  Criteria determined  appropriate by
the Committee,  determined on the date such Stack Payment is made or on any date
thereafter.

      Section  8.3   Deferred  Stock. Any Key  Employee  (as  defined in Section
3.3(i))  selected by the Committee may be granted an award of Deferred  Stock in
the manner  determined from time to time by the Committee.  The number of shares
of Deferred  Stock shall be determined by

                                       16

<PAGE>

the Committee and may be linked to the market value,  book value, net profits or
other  measure  of the  value of  Common  Stock or  other  specific  Performance
Criteria,  in each  case on a  specified  date or dates or over  any  period  or
periods  determined by the Committee.  Common Stock  underlying a Deferred Stock
award will not be issued until the Deferred Stock award has vested,  pursuant to
a  vesting  schedule  or  Performance  Criteria  set  by the  Committee.  Unless
otherwise  provided by the Committee,  a Grantee of Deferred Stock shall have no
rights as a Company  stockholder  with respect to such Deferred Stock until such
time as the award has vested and the Common Stock  underlying the award has been
issued.

      Section  8.4   Performance  Award  Agreement,  Deferred  Stock  Agreement,
Stock Payment  Agreement.  Each Performance  Award,  Deferred Stock Award and/or
Stock Payment shall be evidenced by a written agreement, which shall be executed
by the Grantee and an authorized  Officer of the Company and which shall contain
such terms and conditions as the Committee shall determine, consistent with this
Plan.

      Section  8.5   Term. The term of a Performance Award  Agreement,  Deferred
Stock  Award  and/or  Stock  Payment  shall  be  set  by  the  Committee  in its
discretion.

      Section  8.6   Exercise  Upon  Termination  of  Employment.  A Performance
Award,  Deferred  Stock Award  and/or  Stock  Payment is payable  only while the
Grantee is an Employee;  provided  that the  Committee  may  determine  that the
Performance  Award,   Deferred  Stock  Award  and/or  Stock  Payment  will  vest
immediately upon a Termination of Employment without cause, Change of Control of
the  Company,  or  the  Grantee's  death  or  disability.  In all  instances,  a
Performance  Award,  Deferred  Stock Award and/or Stock Payment shall be paid to
the Employee in a lump sum (whether in cash or Common Stock) no later than March
15 of the calendar year following the calendar year in which such award vests.

      Section  8.7   Payment. Payment of the amount determined under Section 8.1
above shall be in cash, in Common Stock or a combination  of both, as determined
by the Committee.  To the extent any payment under this Article VIII is effected
in Common Stock,  it shall he made subject to  satisfaction of all provisions of
Section 5.5.

      Section  8.8   No Right to Continued Employment. Nothing  in  this Plan or
in any agreement  hereunder shall confer on any Grantee any right to continue in
the employ of the Company or any Subsidiary or shall  interfere with or restrict
in any way the  rights of the  Company  and any  Subsidiary,  which  are  hereby
expressly  reserved,  to  discharge  any  Grantee  at any  time  for any  reason
whatsoever, with or without good cause.

                                   ARTICLE IX
                SECTION 162(m) PERFORMANCE AWARDS, SECTION 162(m)
                  DEFERRED STOCK, SECTION 162(m) STOCK PAYMENTS
                  ---------------------------------------------

      Section  9.1   Section 162(m) Performance  Awards.  Any Key  Employee  (as
defined in Section 3.3(i))  selected by the Committee may be granted one or more
Section 162(m)  Performance  Awards.  The right to a Section 162(m)  Performance
Award  shall  not  vest  unless  one  or  more  specified  Performance  Criteria
established by the Committee shall have been achieved.

      Section  9.2   Section 162(m) Stock Payments. Any Key Employee (as defined
in Section 3.3(i))  selected by the Committee may be granted one or more Section
162(m) Stock

                                       17

<PAGE>

Payments.  The right to a Section 162(m) Stock Payment shall not vest unless one
or more specified  Performance  Criteria established by the Committee shall have
been achieved.

      Section  9.3   Section 162(m) Deferred Stock. Any Key Employee (as defined
in Section 3.3(i))  selected by the Committee may be granted an award of Section
162(m)  Deferred Stock. An award of Section 162(m) Deferred Stock shall not vest
unless one or more specified  Performance  Criteria established by the Committee
shall have been  achieved.  Common Stock  underlying a Section  162(m)  Deferred
Stock award will not be issued until the Section 162(m) Deferred Stock award has
vested. Unless otherwise provided by the Committee,  a Grantee of Section 162(m)
Deferred  Stock shall have no rights as a Company  stockholder  with  respect to
such Section  162(m)  Deferred Stock until such time as the award has vested and
the Common Stock underlying the award has been issued.

      Section  9.4   Section   162(m)   Performance   Award  Agreement,  Section
162(m) Deferred Stock  Agreement  Section 162(m) Stock Payment  Agreement.  Each
Section 162(m)  Performance  Award,  Section 162(m)  Deferred Stock Award and/or
Section  162(m) Stock Payment shall be evidenced by a written  agreement,  which
shall be executed by the  Grantee and an  authorized  Officer of the Company and
which shall contain such terms and conditions as the Committee shall  determine,
consistent with this Plan.

      Section  9.5   Term. The  term  of  a  Section  162(m)  Performance  Award
Agreement,  Section  162(m)  Deferred  Stock Award and/or  Section  162(m) Stock
Payment shall be set by the Committee in its discretion.

      Section  9.6   Exercise Upon Termination of Employment.  A Section  162(m)
Performance  Award,  Section  162(m)  Deferred Stock Award and/or Section 162(m)
Stock  Payment is payable only while the Grantee is an Employee;  provided  that
the Committee may determine that the Section 162(m) Performance  Award,  Section
162(m)  Deferred  Stock Award  and/or  Section  162(m)  Stock  Payment will vest
immediately  upon a Change of Control of the Company,  or the Grantee's death or
disability. In all instances, a Section 162(m) Performance Award, Section 162(m)
Deferred  Stock Award and/or  Section  162(m) Stock Payment shall be paid to the
Employee in a lump sum (whether in cash or Common  Stock) no later than March 15
of the calendar year following the calendar year in which such award vests.

      Section  9.7   Payment. Payment of the amount determined under Section 9.1
above shall be in cash, in Common Stock or a combination  of both, as determined
by the Committee. To the extent any payment under this Article IX is effected in
Common  Stock,  it shall be made subject to  satisfaction  of all  provisions of
Section 5.5.

      Section  9.8   No Right to Continued  Employment. Nothing in this Plan or
in any agreement  hereunder shall confer on any Grantee any right to continue in
the employ of' the Company or any Subsidiary or shall interfere with or restrict
in any way the  rights of the  Company  and any  Subsidiary,  which  are  hereby
expressly  reserved,  to  discharge  any  Grantee  at any  time  for any  reason
whatsoever, with or without good cause.

                                       18

<PAGE>

                                    ARTICLE X
                                 ADMINISTRATION
                                 --------------

      Section 10.1   Duties and Powers of Committee. It shall be the duty of the
Committee to conduct the general  administration  of the Plan in accordance with
its provisions. The Committee shall have the power to interpret the Plan and the
agreements  pursuant to which  Options,  awards of  Restricted  Stock,  Deferred
Stock,  Section  162(m)  Restricted  Stock or  Section  162(m)  Deferred  Stock,
Performance  Awards,  Stock  Payments,  Section 162(m)  Performance  Awards,  or
Section  162(m)  Stock  Payments are granted and awarded and to adopt such rules
for  the  administration,  interpretation  and  application  of the  Plan as are
consistent herewith and to interpret,  amend or revoke any such rules.  Options,
awards of Section  162(m)  Restricted  Stock,  Section  162(m)  Deferred  Stock,
Section 162(m) Performance Awards and Section 162(m) Stock Payments are intended
to qualify as  performance-based  compensation under Section 162(m) of the Code,
and the Committee shall grant or award such Options, rights or other awards in a
manner consistent with the rules governing performance-based  compensation under
Section  162(m) of the  Code.  Any such  interpretations  and rules in regard to
Incentive  Stock Options shall be consistent  with the basic purpose of the Plan
to grant  "incentive  stock  options"  within the  meaning of Section 422 of the
Code.  In its  absolute  discretion,  the Board may at any time and from time to
time  exercise  any and all rights and duties of the  Committee  under this Plan
except with respect to matters  which under Rule 16b-3 or Section  162(m) of the
Code,  or any  regulations  or  rules  issued  thereunder,  are  required  to be
determined in the sole discretion of the Committee.

      Section 10.2   Majority Rule. The Committee shall act by a majority of its
members  in  attendance  at a  meeting  at which a  quorum  is  present  or by a
memorandum or other written instrument signed by all members of the Committee.

      Section 10.3   Compensation;  Professional Assistance;  Good Faith Action.
Members of the Committee shall receive such  compensation  for their services as
members as may be determined by the Board. All expenses and liabilities incurred
by members of the Committee in connection  with the  administration  of the Plan
shall be borne by the Company. The Committee may employ attorneys,  consultants,
accountants,  appraisers,  brokers or other persons. The Committee,  the Company
and its  officers  and  directors  shall he  entitled  to rely upon the  advice,
opinions  or  valuations  of  any  such  persons.  All  actions  taken  and  all
interpretations  and determinations made by the Committee in good faith shall be
final  and  binding,  upon all  Optionees,  Grantees,  Restricted  Stockholders,
Section 162(m)  Restricted  Stockholders,  the Company and all other  interested
persons.  No member of the Committee shall be personally  liable for any action,
determination,  or interpretation made in good faith with respect to the Plan or
the Options or other  awards,  and all members of the  Committee  shall be fully
protected  by the  Company  in  respect  to any such  action,  determination  or
interpretation.

                                   ARTICLE XI
                                OTHER PROVISIONS
                                ----------------

      Section 11.1   Period for Making Award Grants. Awards are  permitted to be
granted  under  this  Plan  for a  period  ending  ten  years  from  the date of
stockholder approval which was secured on May 23, 2007.

      Section 11.2   Options and Other Rights Are Not Transferable.  No Options,
Performance Awards, Stock Payments,  Section 162(m) Performance Awards,  Section
162(m) Stock

                                       19

<PAGE>

Payments,  Restricted Stock,  Section 162(m)  Restricted  Stock,  Deferred Stock
Awards or Section  162(m)  Deferred  Stock Awards or interest under this Plan or
part  thereof  shall be liable for the debts,  contracts or  engagements  of any
Optionee,  Grantee,  Restricted  Stockholder or their  respective  successors in
interest  or  shall  be  subject  to   disposition   by  transfer,   alienation,
anticipation,  pledge,  encumbrance,  assignment or any other means whether such
disposition  be  voluntary  or  involuntary  or by operation of law by judgment,
levy,  attachment,  garnishment  or any  other  legal or  equitable  proceedings
(including bankruptcy),  and any attempted disposition thereof shall be null and
void and of no effect;  provided,  however,  that  nothing in this  Section 11.2
shall  prevent  transfers  by  will,  by the  applicable  laws  of  descent  and
distribution  or by the approval of the Committee as described in Section 5.1(a)
of the Plan.

      Section 11.3   Amendment,   Suspension  or   Termination   of   the  Plan;
Modification of Options.  The Board may at any time terminate the Plan. With the
express written consent of an individual participant, the Board or the Committee
may cancel or reduce or otherwise alter outstanding Options or other awards. The
Board or the Committee may, at any time, or from time to time,  amend or suspend
and, if suspended,  reinstate,  the Plan in whole or in part;  provided that any
such amendment shall be contingent on obtaining the approval of the shareholders
of the Company if the  Committee  determines  that such approval is necessary to
comply with any  requirement  of law or any rule of any stock  exchange on which
the Company's  equity  securities  are traded,  or in order for Options or other
awards to  qualify  for an  exception  from  Section  162(m) of the Code (to the
extent  they would so qualify  but for the  absence  of  shareholder  approval).
Neither the amendment, suspension nor termination of the Plan shall, without the
consent of the holder of an Option,  Restricted Stock, Section 162(m) Restricted
Stock or award, alter or impair any rights or obligations under any such Option,
Restricted  Stock,   Section  162(m)  Restricted  Stock  or  award.  No  Option,
Restricted Stock, Section 162(m) Restricted Stock or award may be granted during
any period suspension nor after termination of the Plan, and in no event may any
Option  be  granted  under  this  date the  Plan is  approved  by the  Company's
stockholders  under Section 11.4. An Option,  Restricted  Stock,  Section 162(m)
Restricted  Stock or award shall be subject in all events to the condition that,
if at any time the Board shall determine,  in its discretion,  that the listing,
registration  or  qualification  of any of the  Company's  securities  upon  any
securities  exchange or under any law,  regulation or other  requirement  of any
governmental  authority  is  necessary  or  desirable,  or that any  consent  or
approval from any  governmental  authority is necessary or  desirable,  then the
Board may modify  the terms of any  Option,  Restricted  Stock,  Section  162(m)
Restricted  Stock or other award granted under the Plan,  without the consent of
the Optionee,  Grantee,  Restricted  Stockholder  or Section  162(m)  Restricted
Stockholder in any manner which the Board deems  necessary or desirable in order
to  improve  the  Company's  ability  to  obtain  such  listing,   registration,
qualifications, consent or approval.

      Section 11.4   Approval  of Plan by  Stockholders.  The Plan shall  become
effective as of the date of Board approval (the  "Effective  Date"),  subject to
the approval of the Company's  stockholders within 12 months after the Effective
Date; provided,  however,  that notwithstanding  anything herein or in any award
agreement to the contrary, all Section 162(m) Performance Awards, Section 162(m)
Stock Payments,  Section 162(m)  Restricted  Stock,  and Section 162(m) Deferred
Stock awarded prior to such stockholder  approval shall be void if such approval
has not been obtained at the end of said 12-month period.

      Section 11.5   Effect  of  Plan Upon Other Option and Compensation  Plans.
The adoption of this Plan shall not affect any other  compensation  or incentive
plans in effect for the Company or any Subsidiary. Nothing in this Plan shall be
construed to limit the right the Company

                                       20

<PAGE>

or any Subsidiary (a) to establish any other forms of incentives or compensation
for employees of the Company or any Subsidiary or (b) to grant or assume options
otherwise than under this Plan in connection with any proper corporate  purpose,
including,  but not by way of limitation,  the grant or assumption of options in
connection with the acquisition by purchase,  lease,  merger,  consolidation  or
otherwise,  of the  business,  stock  or  assets  of any  corporation,  firm  or
association.

      Section 11.6   No Obligation to Register. The Company shall not be deemed,
by reason of the  granting of any Option or any other award  hereunder,  to have
any  obligation to register the shares of Common Stock subject to such Option or
award under the Securities Act or to maintain in effect any registration of such
shares  which may be made at any time under the  Securities  Act subject to such
Option  or  award  under  the  Securities  Act  or to  maintain  in  effect  any
registration  of such shares which may be made at any time under the  Securities
Act.

      Section 11.7   Tax Withholding. The  Company  shall be entitled to require
payment in cash or deduction from other  compensation  payable to each Optionee,
Grantee,  Restricted Stockholder or Section 162(m) Restricted Stockholder of any
sums required by federal,  state or local tax law to be withheld with respect to
the  issuance,  vesting or exercise of any Option,  Restricted  Stock,  Deferred
Stock,  Performance  Award,  Stock  Payment,  Section 162(m)  Restricted  Stock,
Section 162(m)  Deferred  Stock,  Section 162(m)  Performance  Award, or Section
162(m) Stock Payment.

      Section 11.8   Limitations   Applicable   to   Section  16   Persons   and
Performance-Based  Compensation.  Notwithstanding  any other  provision  of this
Plan, any Option,  Performance Award, Stock Payment,  Section 162(m) Performance
Award, or Section 162(m) Stock Payment granted,  or Restricted  Stock,  Deferred
Stock,  Section  162(m)  Restricted  Stock,  or Section  162(m)  Deferred  Stock
awarded, to a Key Employee (as defined in Section 3.3(i)) who is then subject to
Section 16 of the Exchange Act, shall be subject to any  additional  limitations
set forth in any applicable  exemptive rule under Section 16 of the Exchange Act
(including   any  amendment  to  Rule  16b-3  of  the  Exchange  Act)  that  are
requirements  for the application of such exemptive rule, and this Plan shall be
deemed  amended  to  the  extent  necessary  to  conform  to  such  limitations.
Furthermore, notwithstanding any other provision of this Plan, any Option, right
or award intended to qualify as  performance-based  compensation as described in
Section 162(m)(4)(C) of the Code shall be subject to any additional  limitations
set forth in Section  162(m) of the Code  (including  any  amendment  to Section
162(m) of the Code) or any  regulations  or rulings issued  thereunder  that ale
requirements for qualification as performance-based compensation as described in
Section  162(m)(4)(C)  of the Code, and this Plan shall be deemed amended to the
extern necessary to conform to such requirements.

      Section 11.9   Compliance  with  Laws. This Plan, the granting and vesting
of Options,  Restricted Stock awards, Deferred Stock awards, Performance Awards,
Stock Payments,  Section 162(m) Restricted Stock awards, Section 162(m) Deferred
Stock  awards,  Section  162(m)  Performance  Awards,  or Section  162(m)  Stock
Payments under this Plan and the issuance and delivery of shares of Common Stock
and the payment of money under this Plan or under Options,  Performance  Awards,
Stock  Payments,  Section  162(m)  Performance  Awards,  or Section 162(m) Stock
Payments granted or Restricted Stock,  Deferred Stock, Section 162(m) Restricted
Stock,  or Section  162(m)  Deferred  Stock  awarded  hereunder  are  subject to
compliance  with all applicable  federal and state laws,  rules and  regulations
(including  but not  limited to state and  federal  securities  laws and federal
requirements)  and to such approvals by any listing,  regulatory or governmental
authority  as may, in the opinion of counsel for the  Company,  be  necessary or
advisable connection  therewith.  Any securities delivered under this Plan shall
be subject to such restrictions, and the

                                       21

<PAGE>

person  acquiring such securities  shall,  if requested by the Company,  provide
such  assurances  and  representations  to the  Company as the  Company may deem
necessary  or  desirable  to  assure   compliance  with  all  applicable   legal
requirements.  To the extent  permitted by  applicable  law, the Plan,  Options,
Restricted  Stock awards,  Deferred  Stock  awards,  Performance  Awards,  Stock
Payments,  Section 162(m) Restricted Stock awards, Section 162(m) Deferred Stock
awards,  Section  162(m)  Performance  Awards,  or Section 162(m) Stock Payments
granted or awarded  hereunder shall be deemed amended to the extent necessary to
conform to such laws, rules and regulations.

      Section 11.10  Noncompetition Provisions. The Committee, as a condition of
issuing any award under the Plan, may include in any agreement  evidencing  such
award such noncompetition  and/or  nonsolicitation  shall not be effective until
and unless the  grantee  thereof  acknowledges  by  written  consent  his or her
obligation to be bound thereby.

      Section 11.11  Titles. Titles are provided herein for convenience only and
are not to serve as a basis for interpretation or construction of the Plan.

      Section 11.12  Governing  Law. The  laws of  the State of  Delaware  shall
govern the interpretation, validity, administration, enforcement and performance
of the terms of this Agreement regardless of the law that might be applied under
principles of conflicts of laws.

                                       22Exhibit 10.5

                           SECOND AMENDED AND RESTATED
                        1997 EQUITY PLAN FOR NON-EMPLOYEE
                     DIRECTORS OF PLAYBOY ENTERPRISES, INC.

               As Amended and Restated as of September 17, 2008

      1.    Purpose. The purposes of the Plan are:

            (a)   to  promote  the  growth  and  long-term  success  of  Playboy
      Enterprises,  Inc., a Delaware  corporation (the  "Company"),  by offering
      Non-Employee Directors the ability to acquire Common Stock of the Company;

            (b)   to enable the Company to attract and retain qualified  persons
      to  serve  as  Non-Employee  Directors,   which  services  are  considered
      essential to the  long-term  success of the Company,  by offering  them an
      opportunity to own Common Stock of the Company; and

            (c)   to more closely align the interests of Non-Employee  Directors
      with the interests of the Company's stockholders by paying certain amounts
      of compensation for services as a Director in the form of shares of Common
      Stock.

Notwithstanding anything to the contrary,  Awards, Mandatory Meeting Fee Shares,
Mandatory  Committee Fee Shares,  Mandatory Retainer Shares and Voluntary Shares
issued or granted under this Plan shall be issued only to a Participant.

      2.    Definitions.  In  addition  to the  other  terms  defined  elsewhere
herein,  wherever the following terms are used in this Plan with initial capital
letters,  they have the meanings  specified  below,  unless the context  clearly
indicates otherwise.

            (a)   "Accounting   Period"  means  each  calendar  quarter  of  the
      Company, such quarters beginning on January 1, April 1, July 1 and October
      1 of each year.

            (b)   "Award" means an award of an Option Right, Restricted Stock or
      Common Stock Grant under this Plan.

            (c)   "Award Agreement" means either:

                  (i)   a written  agreement  entered  into by the Company and a
            Participant setting forth the terms and provisions  applicable to an
            Award granted under this Plan: or

                  (ii)  a written or electronic  statement issued by the Company
            to a Participant  describing the terms and provisions of such Award,
            including in each case any amendment or modification thereof.

      The  Company may provide  for the use of  electronic,  Internet,  or other
      non-paper Award Agreements, and the use of electronic,  Internet, or other
      non-paper  means for the  acceptance  thereof and actions  thereunder by a
      Participant.

            (d)   "Board" means the Board of Directors of the Company.

<PAGE>

            (e)   "Calendar  Year"  means the period  beginning  on January 1 of
      each year and ending on December 31 of each year.

            (f)   "Code"  means the Internal  Revenue  Code of 1986,  as amended
      from time to time.

            (g)   "Committee   Fees"  means  the  portion  of  the  Non-Employee
      Director's  annual  compensation  that  is  payable  based  on  his or her
      assignment  to, and service on, one or more  committees  of the Board,  as
      determined by the Board from time to time,  but, for purposes of Section 7
      of this  Plan,  shall  not  include  any  such  compensation  issued  to a
      Non-Employee  Director  as  Mandatory  Committee  Fee Shares  pursuant  to
      Section 6(b) hereof.

            (h)   "Common Stock" means the Class B Common Stock, par value $0.01
      per share,  of the Company,  and any security into which such Common Stock
      may be converted or for which such Common Stock may be exchanged by reason
      of any  transaction  or event of the type  described  in Section 9 of this
      Plan.

            (i)   "Common Stock Grant" means Common Stock, other than Restricted
      Stock, awarded pursuant to Section 5 of this Plan.

            (j)   "Company" has the meaning set forth in Section 1, and includes
     its successors.

            (k)   "Date of Award" means the date specified by the Board on which
      an Award  becomes  effective,  which shall not be earlier than the date on
      which the Board takes action with respect thereto.

            (l)   "Deferred  Compensation  Plan" means the Playboy  Enterprises,
      Inc. Board of Directors' Deferred  Compensation Plan, Amended and Restated
      as of January 1, 2005, as it may be further amended from time to time.

            (m)   "Employee"  means any officer or other employee of the Company
      or of any corporation which is then a Subsidiary.

            (n)   "Issuance Date" has the meaning set forth in Section 6.

            (o)   "Mandatory  Committee  Fee Shares"  means Common Stock awarded
      pursuant  to  Section  6(b)  with an  aggregate  Market  Value  per  Share
      generally  equal to fifty  percent  (50%) of the  Non-Employee  Director's
      total Committee Fees for the given year.

            (p)   "Mandatory  Meeting Fee Shares"  means  Common  Stock  awarded
      pursuant  to  Section  6(a)  with an  aggregate  Market  Value  per  Share
      generally  equal to a Non-Employee  Director's  Meeting Fees for the given
      year.

            (q)   "Mandatory   Retainer   Shares"  means  Common  Stock  awarded
      pursuant  to  Section  6(c)  with an  aggregate  Market  Value  per  Share
      generally  equal to fifty  percent  (50%) of the  Non-Employee  Director's
      total Retainer for the given year.

                                        2

<PAGE>

            (r)   "Meeting   Fees"   means  the   compensation   payable   to  a
      Non-Employee Director with regard to meetings of the Board, convening as a
      whole,  that he or she attends  during a Plan Year,  as  determined by the
      Board from time to time.

            (s)   "Market Value per Share" means either

                  (i)   the closing price of a share of Common Stock as reported
            on the New York Stock  Exchange (the "NYSE") on the date as of which
            such  value is  being  determined,  or,  if  there  are no  reported
            transactions  for such date,  on the next  preceding  date for which
            transactions  were reported,  as published in the Midwest Edition of
            The Wall Street Journal, or

                  (ii)  if there is no  reporting of  transactions  on the NYSE,
            the fair market  value of a share of Common Stock as  determined  by
            the  Board  from  time to time  acting  in good  faith  and,  in all
            instances,    established    pursuant   to    Treasury    Regulation
            Section 1.409A-1(b)(5)(iv)(B).

            (t)   "Non-Employee Director" means a member of the Board who is not
      an Employee.

            (u)   "Optionee"  means a  Non-Employee  Director  to whom an Option
      Right is awarded under this Plan.

            (v)   "Option  Price"  means the  purchase  price  payable  upon the
      exercise of an Option Right.

            (w)   "Option  Right"  means the right to purchase  shares of Common
      Stock from the Company upon the exercise of an option awarded hereunder.

            (x)   "Participant"  means a Non-Employee  Director (or a person who
      has agreed to commence serving in such capacity) who:

                  (i)   is  selected by the Board to receive  Awards  under this
                        Plan;

                  (ii)  is  entitled  to receive  Mandatory  Meeting Fee Shares,
                        Mandatory Committee Fee Shares and/or Mandatory Retainer
                        Shares; or

                  (iii) has elected to receive Voluntary Shares.

            (y)   "Participation  Agreement" means the agreement  submitted by a
      Non-Employee  Director to the Secretary of the Company pursuant to which a
      Non-Employee  Director  may elect to receive  all or any portion of his or
      her Committee Fees and/or  Retainer in the form of Voluntary  Shares for a
      specified period in the future.

            (z)   "Performance Objectives" means the performance objectives that
      may be established by the Board pursuant to this Plan for Participants who
      have received Awards.

                                        3

<PAGE>

            (aa)  "Plan" means this Second Amended and Restated 1997 Equity Plan
      for  Non-Employee  Directors  of Playboy  Enterprises,  Inc.  as set forth
      herein, as the same may be amended or restated from time to time.

            (bb)  "Restricted  Stock"  means Common  Stock  awarded  pursuant to
      Section  5 of this  Plan  as to  which  neither  the  substantial  risk of
      forfeiture  nor the  restrictions  on  transfer  referred  to in Section 5
      hereof have expired.

            (cc)  "Restricted Stockholder" means a Non-Employee Director to whom
      Restricted Stock has been awarded under this Plan.

            (dd)  "Retainer"  means the  portion  of a  Non-Employee  Director's
      annual  compensation that is payable without regard to the number of board
      or committee meetings attended or committee  positions held, as determined
      by the Board from time to time,  but,  for  purposes  of Section 7 of this
      Plan,  shall not include any such  compensation  issued to a  Non-Employee
      Directors as Mandatory Retainer Shares pursuant to Section 6(c) hereof.

            (ee)  "Rule  16b-3" means Rule 16b-3 under the  Securities  Exchange
      Act of 1934, as amended or any successor rule.

            (ff)  "Subsidiary"   means  any  corporation,   partnership,   joint
      venture,  limited liability company,  unincorporated  association or other
      entity (each, an "Entity") in an unbroken chain of Entities beginning with
      the  Company if each of the  Entities  other  than the last  Entity in the
      unbroken chain then owns stock or other interests possessing 50 percent or
      more of the total  combined  voting power of all classes of stock or other
      interests in one of the other Entities in such chain.

            (gg)  "Termination   of   Directorship"   means   the  time  when  a
      Participant  ceases to be a Director  for any reason,  including,  without
      limitation,  a termination by resignation,  removal, failure to be elected
      or reelected, death or retirement.

            (hh)  "Valuation Date" has the meaning set forth in Section 6.

            (ii)  "Voluntary Shares" has the meaning set forth in Section 7(a).

      3.    Shares  Available under the Plan.  Subject to adjustment as provided
in  Section 9 of this  Plan,  the  number of  shares of Common  Stock  issued or
transferred,  plus the number of shares of Common Stock  covered by  outstanding
Awards and not  forfeited  under this Plan,  shall not in the  aggregate  exceed
600,000  shares,  which may be shares of  original  issuance  or shares  held in
treasury or a  combination  thereof.  If an Option  Right  lapses or  terminates
before such Option Right is exercised  or shares of  Restricted  Stock or Common
Stock Grants are forfeited, for any reason, the shares covered thereby may again
be made subject to Awards or issued as Mandatory Committee Fee Shares, Mandatory
Meeting Fee Shares,  Mandatory  Retainer Shares,  or Voluntary Shares under this
Plan.

      4.    Option Rights.  The Board may from time to time authorize  Awards to
Participants  of options to purchase  shares of Common Stock upon such terms and
conditions  as  the  Board  may  determine  in  accordance  with  the  following
provisions:

                                        4

<PAGE>

            (a)   Each Award shall  specify the number of shares of Common Stock
      to which the Option Rights pertain.

            (b)   Each Award of Option  Rights shall specify an Option Price per
      share of Common Stock,  which shall be equal to or greater than the Market
      Value per Share on the Date of Award.

            (c)   Each  Award  of  Option  Rights  shall  specify  the  form  of
      consideration  to be paid in  satisfaction  of the  Option  Price  and the
      manner of payment of such consideration, which may include:

                  (i)   cash in the form of  currency  or  check  or other  cash
            equivalent acceptable to the Company;

                  (ii)  nonforfeitable,  nonrestricted  shares of Common  Stock,
            which are already owned by the Optionee and have a value at the time
            of exercise that is equal to the Option Price;

                  (iii) any other  legal  consideration  that the Board may deem
            appropriate,    including,   without   limitation,   any   form   of
            consideration  authorized under Section 4(d) below, on such basis as
            the Board may determine in accordance with this Plan; and

                  (iv)  any combination of the foregoing.

      In addition, the Board may, in its discretion and whether or not specified
      in an Award of Option Rights, permit payment of the Option Price by a "net
      exercise"  via the  forfeiture  to the  Company of a portion of the Option
      Rights  pertaining  to shares of Common  Stock with a value  (based on the
      Market  Value  per  Share  on the  date of such  forfeiture)  equal to the
      exercise  price of the portion of the Option Rights being  exercised  plus
      the applicable tax withholding amount.

            (d)   On or after the Date of Award of any Option  Right,  the Board
      may  determine  that payment of the Option Price may also be made in whole
      or in part in the form of shares of  Restricted  Stock or other  shares of
      Common Stock that are subject to risk of  forfeiture  or  restrictions  on
      transfer. Unless otherwise determined by the Board on or after the Date of
      Award,  whenever  any Option Price is paid in whole or in part by means of
      any of the forms of  consideration  specified  in this Section  4(d),  the
      shares of Common Stock  received by the Optionee  upon the exercise of the
      Option  Right  shall  be  subject  to the  same  risks  of  forfeiture  or
      restrictions  on  transfer  as those  that  applied  to the  consideration
      surrendered  by the  Optionee;  provided,  however,  that  such  risks  of
      forfeiture  and  restrictions  on  transfer  shall  apply only to the same
      number of shares of Common  Stock  received by the  Optionee as applied to
      the  forfeitable or restricted  shares of Common Stock  surrendered by the
      Optionee.

            (e)   Any  Award of  Option  Rights  may  provide  for the  deferred
      payment of the Option  Price from the proceeds of sale through a broker of
      some or all of the shares of Common Stock to which the exercise relates.

                                        5

<PAGE>

            (f)   Successive   Awards  may  be  made  to  the  same  Participant
      regardless  of  whether  any  Option  Rights  previously  awarded  to  the
      Participant remain unexercised.

            (g)   Each Award shall  specify the period or periods of  continuous
      service as a  Non-Employee  Director by the Optionee that are necessary or
      Performance  Objectives  that must be achieved before the Option Rights or
      installments  thereof shall become exercisable,  and any Award may provide
      for the earlier  exercise of the Option Rights in the event of a change in
      control of the Company or other transaction or event.

            (h)   The  term  of an  Option  Right  shall  be set  by the  Board;
      provided, however, that no Option Right awarded pursuant to this Section 4
      may have a term of more than 10 years from the Date of Award.

            (i)   Each Award of an Option  Right shall be evidenced by a written
      Award  Agreement,  which shall be executed on behalf of the Company by any
      officer  thereof and  delivered  to and accepted by the Optionee and shall
      contain such terms and  provisions as the Board may  determine  consistent
      with this Plan.

      5.    Common  Stock  Grants  and  Restricted  Stock.  The  Board  may also
authorize  Awards to  Participants  of Common Stock Grants and Restricted  Stock
upon such terms and conditions as the Board may determine in accordance with the
following provisions:

            (a)   A Common  Stock Grant  consists of the transfer by the Company
      to a  Participant  of  shares  of  Common  Stock in  consideration  and as
      additional compensation for services performed for the Company. Each Award
      of Common Stock Grants and Restricted  Stock shall constitute an immediate
      transfer of the ownership of shares of Common Stock to the  Participant in
      consideration  of the performance of services,  entitling such Participant
      to dividend, voting and other ownership rights, subject to, in the case of
      Awards  of  Restricted  Stock,  the  substantial  risk of  forfeiture  and
      restrictions on transfer hereinafter referred to.

            (b)   Each Award of  Restricted  Stock shall provide that the shares
      of  Restricted  Stock covered  thereby shall be subject to a  "substantial
      risk of  forfeiture"  within  the  meaning of Section 83 of the Code for a
      period to be determined by the Board on the Date of Award, and may provide
      for the  termination  of such risk of forfeiture  upon the  achievement of
      certain Performance Objectives, in the event of a change in control of the
      Company, or upon any other transaction or event.

            (c)   Each Award of Restricted Stock shall provide during the period
      for which such  substantial  risk of  forfeiture  is to continue,  and any
      Award of Common Stock Grants may provide,  that the transferability of the
      shares of Common  Stock  subject to such  Awards  shall be  prohibited  or
      restricted in the manner and to the extent  prescribed by the Board on the
      Date of Award. Such restrictions may include,  without limitation,  rights
      of repurchase or first refusal in the Company or provisions subjecting the
      shares of Restricted Stock to a continuing  substantial risk of forfeiture
      in the hands of any transferee.

            (d)   In all instances,  all shares of Common Stock  attributable to
      any such Award of a Common Stock Grant or  Restricted  Stock shall be paid
      to a Participant  in a lump sum (whether in cash or Common Stock) no later
      than March 15 of the calendar  year  following  the calendar year in which
      such Award vests.

                                        6

<PAGE>

            (e)   Any  Award of  Restricted  Stock may  require  that any or all
      dividends or other  distributions  paid on the shares of Restricted  Stock
      during the period of such  restrictions be  automatically  sequestered and
      reinvested  on an  immediate  or deferred  basis in  additional  shares of
      Common  Stock,  which  may be  subject  to the  same  restrictions  as the
      underlying award or such other restrictions as the Board may determine.

            (f)   Each Award of a Common Stock Grant and Restricted  Stock shall
      be evidenced by an Award  Agreement,  which shall be executed on behalf of
      the Company by any officer  thereof and  delivered  to and accepted by the
      Participant  and shall contain such terms and  provisions as the Board may
      determine  consistent  with this Plan.  Unless  otherwise  directed by the
      Board,  Restricted Stock will be held in book-entry form by the Company as
      custodian for the  Participant.  Any certificates  representing  shares of
      Restricted  Stock,  together  with a stock power  endorsed in blank by the
      Participant with respect to the shares of Restricted Stock,  shall be held
      in custody by the Company until all restrictions thereon lapse.

            (g)   The  Board may  provide,  at or after the Date of Award of any
      Common Stock Grant or  Restricted  Stock,  for the payment of a cash award
      intended  to offset  the amount of tax that the  Participant  may incur in
      connection  with such Common Stock Grant or Restricted  Stock,  including,
      without limitation, tax on the receipt of such cash award.

            (h)   The Board may provide in any individual  Award  Agreement that
      the Company shall have the right to repurchase the  Restricted  Stock then
      subject to  restrictions  under the Award  Agreement,  or the Common Stock
      subject to the Common  Stock  Grant,  immediately  upon a  Termination  of
      Directorship  for any reason at a cash  price per share  equal to the cash
      price paid by the  Participants for such Restricted Stock or Common Stock.
      In the  discretion of the Board,  provision may be made that no such right
      of repurchase  shall exist in the event of a Termination  of  Directorship
      without  cause  or  because  of the  Participant's  retirement,  death  or
      permanent and total disability.

      6.    Mandatory Meeting Fee, Committee Fee and Retainer Shares.

            (a)   Mandatory  Meeting  Fee  Shares.  All  Meeting  Fees  shall be
      payable in the form of  Mandatory  Meeting Fee  Shares.  No later than ten
      (10) days following the end of an Accounting Period (the "Issuance Date"),
      the  Company  shall  issue  to each  Non-Employee  Director  a  number  of
      Mandatory Meeting Fee Shares equal to:

                  (i)   the  amount  of such  Director's  Meeting  Fees for such
            Accounting Period, divided by

                  (ii)  the  Market  Value  per  Share  on the  last day of each
            Accounting  Period (the "Valuation Date") with respect to which such
            Meeting Fees are payable.

      To the extent that the  application of the foregoing  formula would result
      in the issuance of fractional  shares of Common Stock, any such fractional
      shares  shall be  disregarded,  and the  remaining  amount of Meeting Fees
      shall  be paid in  cash.  The  Company  shall  pay  any and all  fees  and
      commissions  incurred in connection with the payment of Mandatory  Meeting
      Fee  Shares to a  Director.  Anything  in this  Section 6 to the  contrary
      notwithstanding,  any Mandatory  Meeting Fee Shares that become subject to
      deferral under the Deferred

                                       7

<PAGE>

      Compensation  Plan  shall be  issued in such  form  (including  book-entry
      form),  at such times and with such  rights and  restrictions  as shall be
      specified in the Deferred Compensation Plan.

            (b)   Mandatory  Committee Fee Shares.  Notwithstanding  anything to
      the  contrary,   fifty  percent  (50%)  of  each  Non-Employee  Director's
      Committee  Fees shall be payable in the form of  Mandatory  Committee  Fee
      Shares.   Upon  the  Issuance  Date,  the  Company  shall  issue  to  each
      Non-Employee Director a number of Mandatory Committee Fee Shares equal to:

                  (i)   50% of the amount of such Director's  Committee Fees for
            such accounting period, divided by

                  (ii)  the Market Value per Share on the  applicable  Valuation
            Date.

      To the extent that the  application of the foregoing  formula would result
      in the issuance of fractional  shares of Common Stock, any such fractional
      shares shall be  disregarded,  and the remaining  amount of Committee Fees
      shall  be paid in  cash.  The  Company  shall  pay  any and all  fees  and
      commissions incurred in connection with the payment of Mandatory Committee
      Fee  Shares to a  Director.  Anything  in this  Section 6 to the  contrary
      notwithstanding, any Mandatory Committee Fee Shares that become subject to
      deferral under the Deferred Compensation Plan shall be issued in such form
      (including  book-entry  form),  at such  times  and with such  rights  and
      restrictions as shall be specified in the Deferred Compensation Plan.

            (c)   Mandatory  Retainer  Shares. Notwithstanding  anything  to the
      contrary,  fifty percent (50%) of each  Non-Employee  Director's  Retainer
      shall  be  payable  in the form of  Mandatory  Retainer  Shares.  Upon the
      Issuance  Date,  the Company shall issue to each  Non-Employee  Director a
      number of Mandatory Retainer Shares equal to:

                  (i)   50% of the amount of such  Director's  Retainer for such
            accounting period, divided by

                  (ii)  the Market Value per Share on the  applicable  Valuation
            Date.

      To the extent that the  application of the foregoing  formula would result
      in the issuance of fractional  shares of Common Stock,  any such fractions
      shares shall be disregarded,  and the remaining  amount of such portion of
      the  Non-Employee  Director's  Retainer shall be paid in cash. The Company
      shall pay any and all fees and commissions incurred in connection with the
      payment of  Mandatory  Retainer  Shares to a  Director.  Anything  in this
      Section 6 to the contrary  notwithstanding,  any Mandatory Retainer Shares
      that become subject to deferral under the Deferred Compensation Plan shall
      be issued in such form (including book-entry form), at such times and with
      such  rights  and  restrictions  as shall  be  specified  in the  Deferred
      Compensation Plan.

      7.    Voluntary Shares.  Each  Non-Employee  Director shall be eligible to
elect to  receive  shares  of  Common  Stock in  accordance  with the  following
provisions:

            (a)   Prior to the  commencement of the Company's  Calendar Year (or
      by such other date as may be specified by the Board),  a  Participant  may
      elect, by the filing of a Participation  Agreement,  to receive payment of
      the remaining fifty percent (50%) of his or

                                        8

<PAGE>

      her Committee  Fees and/or  Retainer not payable  pursuant to Section 6 in
      the  form of  shares  of  Common  Stock  in lieu  of a cash  payment  (the
      "Voluntary  Shares").  Such  Participation  Agreement must,  except as the
      Board may  otherwise  provide,  be filed as a  one-time  election  for the
      applicable  Calendar Year.  Unless the  Non-Employee  Director  revokes or
      changes such election by filing a new  Participation  Agreement by the due
      date therefor specified in this Section 7(a), such election shall apply to
      a Participant's  Committee Fees and Retainer for each subsequent  Calendar
      Year. Once an election has been  terminated,  another  election may not be
      made effective until the commencement of the next subsequent full Calendar
      Year.

            (b)   No later than the Issuance  Date,  the Company  shall issue to
      each  Participant who has made an election under Section 7(a), a number of
      Voluntary Shares for the prior Accounting Period equal to:

                  (i)   the  amount of such  Non-Employee  Director's  Committee
            Fees and Retainer for such Accounting  Period that such Non-Employee
            Director has elected to receive as Voluntary Shares, divided by

                  (ii)  the Market Value per Share on the Valuation Date.

      To the extent that the  application of the foregoing  formula would result
      in the issuance of fractional  shares of Common Stock, any such fractional
      shares shall be  disregarded,  and the  remaining  amount of the Committee
      Fees and/or  Retainer shall be paid in cash. The Company shall pay any and
      all fees and  commissions  incurred in connection  with the payment of the
      Voluntary Shares to a Non-Employee Director. Anything in this Section 7 to
      the contrary notwithstanding,  any Voluntary Shares that become subject to
      deferral under the Deferred Compensation Plan shall be issued in such form
      (including  book-entry  form),  at such  times  and with such  rights  and
      restrictions as shall be specified in the Deferred Compensation Plan.

      8. Transferability.

            (a)   Except as may be otherwise determined by the Board:

                  (i)   Option Rights and Restricted Stock may be transferred by
            a Participant only by will or the laws of descent and  distribution;
            and

                  (ii)  Option   Rights   may   not  be   exercised   during   a
            Participant's lifetime except by the Participant or, in the event of
            the  Participant's  legal  incapacity,  by  his  guardian  or  legal
            representative  acting  in a  fiduciary  capacity  on  behalf of the
            Participant under state law and court supervision.

            (b)   Any Award  made under  this Plan may  provide  that all or any
      part of the shares of Common Stock that are to be issued or transferred by
      the Company upon the exercise of Option  Rights,  or are no longer subject
      to the  substantial  risk  of  forfeiture  and  restrictions  on  transfer
      referred  to in  Section  5 of this  Plan,  shall be  subject  to  further
      restrictions upon transfer.

            (c)   To the extent  required to satisfy any  condition to exemption
      available pursuant to Rule 16b-3, Mandatory Meeting Fee Shares,  Mandatory
      Committee Fee Shares,

                                       9

<PAGE>

      Mandatory  Retainer Shares and Voluntary  Shares acquired by a Participant
      shall be held by the  Participant  for a period  of at  least  six  months
      following the date of such acquisition.

      9.    Adjustments. The Board shall make or provide for such adjustments in
            the:

            (a)   number of shares of Common Stock covered by outstanding Awards
      payable as Mandatory Meeting Fee Shares, Mandatory Committee Fee Shares or
      Mandatory  Retainer  Shares or subject to elections  to receive  Voluntary
      Shares;

            (b)   prices per share applicable to Option Rights; and

            (c)   kind of  shares  (including,  without  limitation,  shares  of
      another issuer) covered  thereby,  as the Board in its sole discretion may
      in good  faith  determine  to be  equitably  required  in order to prevent
      dilution or enlargement of the rights of Participants that otherwise would
      result from:

                  (i)   any stock dividend,  stock split, combination of shares,
            recapitalization  or other  change in the capital  structure  of the
            Company;

                  (ii)  any   merger,   consolidation,    spin-off,   split-off,
            split-up,  reorganization,  partial or complete liquidation or other
            distribution  of  assets,  or  issuance  of  rights or  warrants  to
            purchase securities; or

                  (iii) any  other  corporate  transaction  or event  having  an
            effect similar to any of the foregoing.

      In the event of any such  transaction  or event,  the Board may provide in
      substitution  for any or all  outstanding  Awards,  Mandatory  Meeting Fee
      Shares,  Mandatory  Committee  Fee Shares,  Mandatory  Retainer  Shares or
      Voluntary   Shares  to  be  issued   under  this  Plan  such   alternative
      consideration  as it may in good faith determine to be equitable under the
      circumstances and may require in connection therewith the surrender of all
      Awards,  Mandatory  Meeting Fee Shares,  Mandatory  Committee  Fee Shares,
      Mandatory Retainer Shares or Voluntary Shares so replaced. The Board shall
      also make or  provide  for such  adjustments  in the  numbers  and kind of
      shares  specified in Section 3 of this Plan as the Board may in good faith
      determine to be appropriate  in order to reflect any  transaction or event
      described in this Section 9.

      10.   Fractional  Shares.  The Company  shall not be required to issue any
fractional  shares of Common Stock  pursuant to this Plan. The Board may provide
for the elimination of fractions, for the settlement thereof in cash or for such
other adjustments as the Board may deem appropriate under this Plan.

      11.   Withholding  Taxes.  To the  extent,  if any,  that the  Company  is
required to withhold federal,  state,  local or foreign taxes in connection with
any payment made or benefit realized by a Participant or other person under this
Plan,  and  the  amounts  available  to the  Company  for  the  withholding  are
insufficient,  it shall be a condition to the receipt of any such payment or the
realization  of any such benefit that the  Participant or such other person make
arrangements satisfactory to the Company for payment of the balance of any taxes
required to be withheld.  At the discretion of the Board, any such  arrangements
may include  relinquishment  of a portion of any such  payment or  benefit.  The
Company  and  any  Participant  or such  other  person  may  also  make  similar

                                       10

<PAGE>

arrangements  with  respect to the  payment  of any taxes with  respect to which
withholding is not required.

      12.   Certain Terminations of Directorships.

            (a)   Notwithstanding  any  other  provision  of  this  Plan  to the
      contrary, in the event of a Termination of Directorship by reason of death
      or disability, or in the event of hardship or other special circumstances,
      of a  Participant  who holds an Option Right that is not  immediately  and
      fully  exercisable  or any  Award  as to  which  the  substantial  risk of
      forfeiture or the  prohibition  or restriction on transfer has not lapsed,
      the Board may in its sole  discretion  take any action that it deems to be
      equitable under the circumstances or in the best interests of the Company,
      including,  without  limitation,  waiving or modifying  any  limitation or
      requirement  with respect to any Award under this Plan. In all  instances,
      an  Award  as to  which  the  Board  has  either  immediately  lapsed  the
      substantial  risk of forfeiture or immediately  lapsed the  prohibition on
      restriction  on transfer  shall be paid to the  Participant  in a lump sum
      (whether in cash or Common  Stock) no later than March 15 of the  calendar
      year following the calendar year in which such Award vests.

            (b)   If  a   Non-Employee   Director   becomes  an  Employee  while
      continuing  to serve as a Director,  that fact alone shall not result in a
      Termination of Directorship  or otherwise  impair the rights such Director
      may have under this Plan, including,  without limitation,  the rights such
      Director may have under any Award  outstanding  under this Plan,  but such
      Director  shall no longer be  eligible  to  receive  any  further  Awards,
      Mandatory Meeting Fee Shares,  Mandatory  Committee Fee Shares,  Mandatory
      Retainer Shares or Voluntary Shares under this Plan.

      13.   Administration.

            (a)   Administration  by the Board;  Delegation.  This Plan shall be
      administered by the Board, which may from time to time delegate all or any
      part of its authority  under this Plan to a committee or  subcommittee  of
      not less than two Directors  appointed by the Board who are  "non-employee
      directors"  within the meaning of that term as defined in Rule  16b-3.  To
      the extent of any  delegation by the Board under this Plan,  references in
      this Plan to the Board  shall also refer to the  applicable  committee  or
      subcommittee.  The majority of any such  committee or  subcommittee  shall
      constitute a quorum,  and the action of a majority of its members  present
      at any meeting at which a quorum is present, or acts unanimously  approved
      in writing, shall be the acts of such committee or subcommittee.

            (b)   Administrative  Powers.  The  Board  shall  have the  power to
      interpret  this Plan,  the Option  Rights,  the Common Stock  Grants,  the
      Restricted  Stock,  the procedures  for issuance of Mandatory  Meeting Fee
      Shares,  Mandatory  Committee Fee Shares or Mandatory  Retainer Shares and
      elections to receive  Voluntary  Shares,  and the  agreements  pursuant to
      which the Option Rights,  the Common Stock Grants,  the Restricted  Stock,
      the  Mandatory  Meeting  Fee  Shares,   Mandatory  Committee  Fee  Shares,
      Mandatory  Retainer Shares and the Voluntary Shares are awarded and issued
      (including Award Agreements and  Participation  Agreements),  and to adopt
      such rules for the administration,  interpretation and application of this
      Plan (including the  administration  of this Plan in conjunction  with the
      Deferred  Compensation  Plan),  and  such  agreements  as  are  consistent
      therewith  and to  interpret,  amend

                                       11

<PAGE>

      or revoke any such  rules.  Any Award under this Plan need not be the same
      with respect to each Optionee or Restricted Stockholder.

            (c)   Professional  Assistance;  Good Faith Actions. An expenses and
      liabilities  which  members  of the  Board  incur in  connection  with the
      administration  of this Plan shall be borne by the Company.  The Board may
      employ attorneys, consultants,  accountants,  appraisers, brokers or other
      persons.  The Board, the Company and the Company's  officers and Directors
      shall be entitled to rely upon the advice,  opinions or  valuations of any
      such persons. All actions taken and all interpretations and determinations
      made by the  Board  in good  faith  shall be final  and  binding  upon all
      Participants,  the Company and all other interested persons. No members of
      the Board  shall be  personally  liable for any action,  determination  or
      interpretation made in good faith with respect to this Plan, or any Option
      Right, Common Stock Grant, Restricted Stock, Mandatory Meeting Fee Shares,
      Mandatory  Committee Fee Shares,  Mandatory  Retainer  Shares or Voluntary
      Shares,  and all  members  of the Board  shall be fully  protected  by the
      Company in respect of any such action, determination or interpretation.

      14.   Amendment, Suspension, Termination and Other Matters.

            (a)   This Plan may be  wholly or  partially  amended  or  otherwise
      modified,  suspended or terminated at any time or from time to time by the
      Board.  However,  without  further  approval  of the  stockholders  of the
      Company,  no action of the Board may,  except as  provided in Section 9 of
      this Plan,  increase the limits imposed in Section 3 on the maximum number
      of shares of Common  Stock  which may be issued  under this  Plan,  and no
      action of the Board may be taken that would otherwise require  stockholder
      approval  as a matter of  applicable  law or the  rules of any U.S.  stock
      exchange,  including the NYSE, on which the Common Stock may be listed for
      trading  or  authorized  for  quotation.   No  amendment,   suspension  or
      termination  of this Plan  shall,  without the consent of the holder of an
      Award,  alter  or  impair  any  rights  or  obligations  under  any  Award
      theretofore  granted,  unless  the Award  itself  otherwise  expressly  so
      provides.

            (b)   The Board may make under this Plan any Award or combination of
      Awards  authorized  under this Plan in exchange for the cancellation of an
      Award that was not made under this Plan.

            (c)   Except as provided in Section  14(b) of this Plan,  the making
      of one or more Awards to a Non-Employee Director under this Plan shall not
      preclude  the  making of Awards to such  Non-Employee  Director  under any
      other stock option or incentive plan previously or subsequently adopted by
      the Board,  nor shall the fact that a  Non-Employee  Director has received
      one or more awards under any other stock  option or incentive  plan of the
      Company  preclude such  Non-Employee  Director from receiving awards under
      this Plan.

      15.   Termination  of the Plan.  The Plan was most  recently  approved and
extended by  shareholder  action on May 23, 2007.  Pursuant to that  stockholder
action,  no further awards shall be made under this Plan after the passage of 10
years from May 23, 2007.

      16.   Effective Date. The effective date of this Plan shall be the date of
its  adoption  by the  Board of  Directors.  This Plan and all  Awards  granted,
Mandatory  Meeting  Fee Shares,  Mandatory  Committee  Fee Shares and  Mandatory
Retainer Shares issued,  and any elections to receive  Voluntary

                                       12

<PAGE>

Shares effected prior to the stockholder approval hereinafter  mentioned,  shall
be void and of no  further  force and  effect  unless  this Plan shall have been
approved at a meeting of  stockholders of the Company called for such purpose by
the affirmative  vote of a majority of the shares of Class A Common Stock of the
Company represented in person or by proxy.

                                       13

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