Document:

Exhibit 4.2 - Form of NQSO Agreement

NON-QUALIFIED STOCK OPTION AGREEMENT

(LSB Industries, Inc. Outside Directors Stock Purchase Plan)

          This Non-qualified Stock Option Agreement (the "Agreement") is made the 8th day of
July, 1999, between LSB Industries, Inc., a Delaware corporation (the "Company"), and
____________________ (the "Participant").  In consideration of the mutual covenants
and conditions set forth in this Agreement and for good and valuable consideration, the
Company and the Participant agree as follows.

1.      Recitations.    The Participant is a member of the Board of Directors of the Company
who is not an employee of the Company or any Subsidiary.  The Company believes that the
Participant should be provided an inducement to continue the Participant's association with the
Company and to advance the interests of the Company.  Accordingly, the Company desires to
provide the Participant the opportunity to purchase certain shares of the Company's common
stock, par value $.10 per share ("Common Stock"), pursuant to the Company's Outside
Directors Stock Purchase Plan, as approved by the shareholders of the Company on June 24,
1999, and as may be amended  (the "Plan").  A copy of the Plan has been delivered to the
Participant.  The option granted hereunder is granted pursuant and subject to the terms and
provisions of the Plan, which is made a part of this Agreement.  Unless otherwise indicated,
capitalized terms in this Agreement have the same meaning as set forth in the Plan.
2.       Grant of Option.  Subject to the terms and conditions of this Agreement, the Company
hereby grants to the Participant the right, privilege and option to purchase fifteen (15) shares
of the Company's Common Stock (the "Option").  The purchase price for each share to be
purchased under the Option is $1.25 (the "Exercise Price").  The Exercise Price represents
100% of the Fair Market Value (as defined in the Plan) of the Common Stock at the close of
the business on the date of this Agreement and is subject to adjustment as provided in the Plan.
The Option is not an "incentive stock option" as such term is defined under
Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code").

3.       Exercise of Option.  The Option may be exercised only pursuant to the following terms
and conditions.

          3.1     As a Director.  While serving as a member of the Board of Directors of the
Company 

                    or any Subsidiary, the Participant may exercise the Option, in whole
or in part, at any 

                    time after the expiration of six months and one day from the
date of this Agreement.   

                    If the Participant's service as a member of the Board of
Directors ceases by reason 

                    of the death or Permanent Disability of the
Participant, the Option will immediately 

                    become exercisable for all shares
subject to the Option, and the Option may be 

                    exercised for all of shares subject
to the Option as fully-vested shares.  Upon the  

                    Permanent Disability of the
Participant, the Option may be exercised by the 

                    Participant, the Participant's
attorney-in-fact, or the Participant's duly appointed 
 

 

 

 

                    guardian.  Upon the  death
of the Participant, the Option may be exercised by the 

                    personal representative of
the Participant's estate, the person or persons to whom 

                    the Option is transferred
pursuant to the Participant's will or in accordance with 

                    the laws of descent and
distribution, or the Participant's designated beneficiaries 

                    of such Option.  The
Option may not be  exercised after the termination of the 

                    Option pursuant to
paragraph 5 of this Agreement.

         3.2      As a Former Director.  The Participant may exercise the Option if the
Participant 

                    has ceased to be a member of the Board of Directors of the
Company or any 

                    Subsidiary for any reason, other than death or Permanent
Disability, only as to the 

                    number of shares for which the Participant could have
exercised at the time the 

                    Participant ceased being a member of the Board of
Directors.  If the Eligible 

                    Director dies after ceasing to be a member of the
Board of Directors but prior to 

                    the expiration of the Option, the personal
representative of the Participant's estate, 

                    the person or persons to whom the
Option is transferred pursuant to the Participant's 

                    will or in accordance with the
laws of descent and distribution, or the Participant's 

                    designated beneficiaries of
such Option may exercise the Option as to all or any 

                    part of the number of
shares for which the Participant could have exercised as of 

                    the date of the
Participant's death.  The Option may not be  exercised after the 

                    termination of
the Option pursuant to  paragraph 5 of this Agreement.

        3.3      Acceleration.  The Board of Directors of the Company will have the sole and
absolute 

                   discretion to (a) accelerate the time when the Participant will become
entitled to 

                   exercise all or any part of the Option and (b) waive any limitations or
restrictions with 

                   respect to all or any part of the Option.  Unless the Participant
waives the application 

                   of this paragraph 3.3 prior to a Change of Control (as
defined in the Plan), in the event 

                   of a Change of Control, the Option will
become exercisable in full immediately prior 

                   to the effective date of the Change
of Control notwithstanding the vesting provisions 

                   contained in this Agreement
and may be exercised for any or all of the shares subject 

                   to the Option as fully-vested shares.
4.     Method of Exercise and Payment of Exercise Price.

        4.1     Exercise Notice.  Subject to the terms and conditions of this Agreement, the
Option may 

                  be exercised by written notice (an "Exercise Notice") delivered to
the Company at its 

                  principal place of business setting forth the exact number of
shares under the Option 

                  that the Participant is purchasing, which may not
exceed the number of shares that the

                  Participant is eligible to purchase under
this Agreement at the time of such purchase.   

                The Exercise Notice must be
accompanied by the payment to the Company of (a) the 

                full Exercise Price for
the number of shares Participant desires to purchase and (b) all

 

 

 

 

                    withholding
taxes pursuant to paragraph 4.3.  The Participant agrees to comply with 

                  such
other reasonable requirements as the Board of Directors of the Company may 

                  establish.

        4.2     Payment of Exercise Price.  The Participant may pay the Exercise Price in (a)
cash or by 

                  check, draft, money order, or wire transfer, in each case payable to
the order of the 

                  Company,
(b) in whole shares of Common Stock which are
already owned by the 

                  Participant, or (c) partly in cash and partly in such shares.
The Company will not be 

                  required to deliver certificates for shares to be
acquired under the Option until the 

                  Company has confirmed the receipt of good
and valuable funds in payment of the 

                  Exercise Price.  Payments in the form of
shares (x) will be valued at the Fair Market 

                  Value (as defined in the Plan) on
the date of exercise, and (y) will be made by delivery 

                  of stock certificates in
negotiable form which are effective to transfer good and valid 

                  title thereto to the
Company, free of any liens or encumbrances, with signature 

                  guaranteed by a
bank or investment banking firm.

       
4.3     Payment of Withholding Taxes.  No exercise of the Option may be effected
until the 

                  Company receives full payment for any required state and federal
withholding taxes. 

                  Payment for withholding taxes will be made in cash or by
check, draft, money order, 

                  or wire transfer, unless the Board of Directors of the
Company otherwise provides. 

                  The foregoing sentence does not require payment
of withholding taxes at the time of 

                  exercise if payment of such taxes is deferred
pursuant to any provision of the Code, 

                  and actions satisfactory to the Company
are taken to reasonably insure payment of 

                  withholding taxes when due.  The
obligations of the Company under the Plan are 

                  conditioned upon such payment
or arrangements and the Participant agrees that the 

                  Company may deduct any
such taxes from any payment of any kind otherwise due 

                   to the Participant from
the Company to the extent permitted by law.
         4.4     Delivery of Shares. Subject to the terms and conditions of this Agreement, the 

                   Company will deliver the shares acquired upon the exercise of the Option within
a 

                   reasonable period of time after the Company receives the Exercise Notice and
the 

                   correct Exercise Price.  Notwithstanding the foregoing, if any law or
regulation 

                   requires the Company to take any action with respect to the shares
specified in such 

                   written notice before the issuance of such shares, then the date
of delivery of such 

                   shares shall be extended for the period necessary to take
such action.

5.      Termination of Option.  This Agreement and the Option, to the extent not theretofore
exercised, will terminate immediately and become null and void upon the earlier of the
following to occur:

	        (a)      the expiration of three years from the date the Participant ceased to be a
member of the 

                  Board of Directors of the Company or any Subsidiary;

	 

	 

	        (b)      the tenth anniversary of the date of this Agreement; and

	        (c)      the Participant's surrender to the Company for cancellation of this Agreement
and the 

                  Option granted herein.

6.     Limited Transferability of Options.  The Option may, in connection with the
Participant's estate plan, be assigned in whole or in part during the Participant's lifetime to
one or more members of the Participant's immediate family or to a trust established
exclusively for one or more such family members. The assigned portion may only be exercised
by the person or persons who acquire a proprietary interest in the Option pursuant to the
assignment. The terms applicable to the assigned portion shall be the same as those in effect
for the Option immediately prior to such assignment and will be set forth in such documents
issued to the assignee as the Board of Directors may deem appropriate. The Participant may
also designate one or more persons as the beneficiary or beneficiaries of the Option, and the
Option will, in accordance with such designation, be automatically transferred to such
beneficiary or beneficiaries upon the Participant's death. Such beneficiary or beneficiaries will
take the Option subject to all the terms and conditions of this Agreement.  Any attempted
assignment, transfer, pledge, hypothecation, or other disposition of the Option contrary to the
provisions of this paragraph or the Plan, and the levy of any execution, attachment or similar
process upon the Option, will be null and void and without effect.
7.      Rights as Stockholder.  Participant shall have no right as a stockholder with respect to
any shares covered by the Option until the exercise of the Option and the issuance of a stock
certificate in accordance with this Agreement.  No adjustment will be made for dividends or
other rights for which the record date is prior to the date such stock certificate is issued.

8.      Stock Dividends, Reorganizations.  If and to the extent the number of issued shares of
Common Stock of the Company shall be increased or reduced resulting from a subdivision or
consolidation of shares or the payment of a stock dividend or any other increase or decrease in
the number of such shares of Common Stock of the Company effected without receipt of
consideration by the Company, the number of shares of Common Stock subject to the Option
and the Exercise Price will be proportionately adjusted in accordance with the terms and
conditions of the Plan.  The grant of the Option will not affect in any way the right or power
of the Company to make adjustments, reclassifications, reorganizations or changes of its
capital or business structure or to merge or to consolidate or to dissolve, liquidate or sell, or
transfer all or any part of its business or assets.

9.      Compliance with Law and Approval of Regulatory Bodies. Notwithstanding anything in
this Agreement to the contrary, no shares will be issued, or, in the case of treasury shares
transferred, upon exercise of the Option, except in compliance with all applicable Federal and
State laws, rules and regulations (including, but not limited to the Federal and State securities
laws, rules and regulations) and in compliance with rules of stock exchanges on which the
Company's Common Stock may be listed.  Notwithstanding anything in this Agreement to the
contrary, no shares will be issued, or, in the case of treasury shares transferred, upon exercise
of the Option until the Company has obtain such consent or approval from any
 

 

and all
regulatory bodies, Federal or State, and such stock exchanges having jurisdiction over such
matters as the Board of Directors of the Company may deem advisable.

10.     Additional Provisions.
         10.1      Amendments.  The Board of Directors of the Company may at any time, and
from time 

                      to time, amend or modify any of the provisions of the Plan, and may
at any time 

                      suspend or terminate the Plan. This Agreement may be amended
from time to time by 

                      the Board of Directors of the Company, but no amendment
which in any material 

                      respect impairs the rights of the Participant under this
Agreement will be effective as 

                      to the Participant unless all of the parties hereto
agree in writing.

         10.2      Interpretation.  The Board of Directors of the Company will construe and
interpret the 

                      terms and provisions of this Agreement, which construction and
interpretation, shall be 

                      binding and conclusive upon all parties hereto.
         10.3      Investment Intent.  The Participant represents and warrants that all shares
acquired 

                      under this Agreement will be acquired for the Participant's own
account and for 

                      the purpose of investment and not with a view to the sale or
distribution thereof, 

                      except for sales pursuant to an effective registration
statement under the Securities 

                      Act of 1933 (the "Act") or pursuant to an
exemption from registration under the 

                      Act.  The Participant
understands that the
shares of Common Stock covered 

                      by this Agreement have not been as of the
date hereof, and may be at the time 

                      that such are purchased, registered under
the Act (the Company being under no 

                      obligation to effect such registration) and that such shares must be held indefinitely 

                      unless a subsequent disposition
thereof is registered under the Act or is exempt 

                      from registration.  The
Participant further understands that the exemption from 

                      registration afforded by
Rule 144 under the Act depends upon the satisfaction 

                      of various conditions and
that, if applicable, Rule 144 affords the basis for sale 

                      of such shares only in
limited amounts.

         10.4      Sales of Shares.  The Participant represents, covenants, and agrees that he will
not 

                      sell or otherwise dispose of the shares acquired under this Agreement in the
absence 

                      of (a) an effective registration statement under the Act, (b) an opinion
acceptable in 

                      form and substance to the Company from Participant's counsel
satisfactory to the 

                      Company, or an opinion of counsel to the Company, to the
effect that no registration 

                      is required for such disposition, or (c) a "no-action"
letter from the staff of the 

                      Securities & Exchange Commission ("SEC") to the
effect that such a disposition takes 

                      place without registration.
 

 

          10.5     Legend.  The certificates representing shares covered by this Agreement will
upon 

                      issuance thereof have stamped or imprinted thereon or affixed thereto a
legend to 

                      the following effect:

			                                  The registered holder hereof has acquired the shares represented 

                                  by this certificate for investment and not for resale in connection 

                                  with a distribution thereof.  Accordingly, such shares have not
been 

                                  registered under the Securities Act of 1933 and may not be
sold, 

                                  transferred or otherwise disposed of except pursuant to a
currently 

                                  effective registration statement under said Act or
otherwise in a 

                                  transaction exempt from the provisions of Section
5 of said Act.

         10.6      Definition of Subsidiary.  For the purposes of this Agreement, the term
"Subsidiary" 

                      means any corporation (other than the Company) in an unbroken
chain of 

                      corporations beginning with the Company if each of the corporations
other than 

                      the last corporation in the unbroken chain own stock possessing fifty
percent (50%) 

                      or more of the total combined voting power of all classes of
stock in one or the 

                      other corporations in such chain.
         10.7      Governing Law.  This Agreement will be construed pursuant to the laws of the
State 

                     of Delaware.

        10.8      Binding Effect.  This Agreement shall be binding upon the heirs, executors, 

                     administrators and successors of the parties hereto.

	        IN WITNESS WHEREOF, the parties hereunto have caused this Agreement to be
executed the day and year first above written.

							                                                                     LSB INDUSTRIES, INC.

                                                                    By:	_________________________________

                                                                          Jack E. Golsen, President
                                                                    (the "Company")

                                                                     ____________________________________

                                                                     _______________________, Director

							                                                                     (the "Participant")Exhibit 4.3 - 1998 Stock Option and Incentive Plan

LSB INDUSTRIES, INC.

1998 STOCK OPTION AND INCENTIVE PLAN

 

           The Board of Directors of LSB Industries, Inc., a Delaware corporation (the
"Company"), has adopted this 1998 Stock Option and Incentive Plan (the "Plan"), effective the
13th day of August, 1998, as follows:

1.      Purpose.  This Plan permits selected officers and employees, prospective employees,
consultants and independent contractors of the Company or any Subsidiary who bear a large
measure of responsibility for the success of the Company to acquire and retain a proprietary
interest in the Company and to participate in the future of the Company as shareholders.  The
purpose of this Plan is to advance the interests of the Company and its shareholders by
enabling the Company and the subsidiaries to offer to its employee-directors, officers,
employees, consultants and independent contractors, long-term performance-based stock
and/or other equity interests in the Company, thereby enhancing its ability to attract, retain
and reward such individuals, and by providing an incentive for employee-directors, officers,
employees to render outstanding service to the Company and to the Company's shareholders.

2.      Definitions.  For purposes of the Plan, the following terms shall be defined as set forth
herein:

	         2.1      "Act" means the Securities Act of 1933, as amended from time to time, or
any successor

                   
statute or statutes thereto. 

	         2.2      "Agreement" means the agreement between the Company and the Holder
setting forth 

                    the terms and conditions of an award under the Plan.

	         2.3      "Board" means the Board of Directors of the Company.

	         2.4      "Change of Control" means a change of control of the Company pursuant to
Section 

                     8.2 hereof.

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

                   and any successor statute or statutes thereto.

	         2.6     "Committee" means the Stock Option Committee of the Board or any other
committee 

                   of the Board which the Board may designate.  In all events, the
Committee shall consist 

                   only of non-employee directors of the Company.

	         2.7     "Common Stock" means the Common Stock of the Company, par value $.10
per share.

	 

	 

	 

	 

	 

	         2.8      "Disability" means disability as determined under the procedures established
by the 

                    Committee for purposes of the Plan.

	         2.9      "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to 

                    time, or any successor statute or statutes thereto.

	         2.10     "Fair Market Value", unless otherwise required by any applicable provision
of the 

                    Code or any regulations issued thereunder, means, as of any given
date:

		                    2.10.1      the closing price of the Common Stock on the last preceding day
on 

                                    which the Common Stock was traded, as reported on a
national securities

                                   
exchange; and,

		                    2.10.2      if the fair market value of the Common Stock cannot be
determined 

                                    pursuant to clause (i) hereof, such price as the
Committee shall determine.

	        2.11     "Formula Price Per Share" means the highest gross price (before brokerage 

                    commissions, soliciting dealers' fees and similar charges) paid for any share
of Common 

                    Stock at any time during the ninety (90) day period immediately
prior to the Change 

                    of Control (whether by way of exchange, conversion,
distribution, liquidation or 

                    otherwise) paid or to be paid for any share of
Common Stock in connection with a 

                    Change of Control.  If the consideration
paid or to be paid in any transaction that results 

                    in a Change of Control
consists, in whole or in part, of consideration, other than cash, 

                    the Board
shall take such action, as in its judgment it deems appropriate, to establish 

                    the cash value of such consideration, but such valuation shall not be less than
the value, 

                    if any, attributed to such consideration by any other party to such
transaction that 

                    results in a Change of Control.

	        2.12     "Holder" means an eligible employee-director, officer, employee, consultant
or 

                    independent contractor of the Company or a Subsidiary who has received
an award 

                    under the Plan.

	         2.13    "Incentive Stock Option" or "ISO" means any Stock Option intended to be
and 

                    designated as an "incentive stock option" within the meaning of Section
422 of the Code.

	         2.14    "Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock 

                    Option.

	 

	-2-

	 

	         2.15     "SAR Value" means the excess of the Fair Market Value of one share of
Common 

                     Stock over the exercise price per share specified in a related Stock
Option in the 

                     case of a Stock Appreciation Right granted in tandem with a
Stock Option and the 

                     Stock Appreciation Right price per share in the case of
a Stock Appreciation Right 

                     awarded on a free-standing basis multiplied by
the number of shares in respect of 

                     which the Stock Appreciation Right shall
be exercised, on the date of exercise.

	        2.16      "Section 16(b) Holder" means such officer or director or ten percent (10%)
beneficial 

                     owner of Common Stock subject to Section 16(b) of the Exchange
Act.

	        2.17      "Stock Appreciation Right" means the right, pursuant to an award granted
under 

                     Section 7 hereof, to recover an amount equal to the SAR Value.

	        2.18      "Stock Option" means any Incentive Stock Option or Non-Qualified Stock
Option to

                    
purchase shares of Common Stock which is awarded pursuant to
this Plan.

	        2.19      "Subsidiary" means any present or future subsidiary corporation of the
Company, as 

                     such term is defined in Section 424(f) of the Code.

3.      Administration.

	        3.1      Board; Committee.  The Board shall create a committee consisting of three
members of 

                   the Board.  The Board may also appoint one member of the
Board as an alternate 

                   member of the Committee.  Upon such appointment,
the Committee shall have all the 

                   powers, privileges and duties set forth
herein.  The Board may, from time to time, 

                   appoint members of any such
Committee in substitution for, or in addition to, members

                   previously
appointed, may fill vacancies in the Committee and may discharge the 

                   Committee.  The Committee shall select one of its members as its Chairman
and shall 

                   hold its meetings at such times and places as it shall deem
advisable.  A majority of 

                   its members shall constitute a quorum and all
determinations shall be made by a 

                   majority of such quorum.  Any
determination reduced to writing and signed by a 

                   majority of the members of
the Committee, shall be fully effective and a valid 

                   act of the Committee as if
it had been made by a majority vote at a meeting 

                   duly called and held.  The
membership of the Committee shall at all times be 

                   constituted so as to not
adversely affect the compliance of the Plan with the 

                   requirements of Rule
16b-3 under the Exchange Act, to the extent it is applicable, 

                   or with the
requirements of any other applicable law, rule or regulation.

	 

	-3-

	 

	        3.2      Power and Authority.  The Committee shall have full power and authority to
do all things

                   necessary or appropriate to administer this Plan according to its
terms and provisions 

                   (excluding the power to appoint members of the
Committee and to terminate, modify, 

                   or amend the Plan, except as otherwise
authorized by the Board), including, but not 

                   limited to the full power and
authority (subject to the express provisions of this Plan):

		                   3.2.1     to award Stock Options and Stock Appreciation Rights, pursuant
to the 

                                terms of this Plan, to eligible individuals described under
Section 5 hereof;

		                   3.2.2     to select the eligible individuals to whom Stock Options or Stock
Appreciation 

                                Rights, or any combination thereof, if any, may
from time to time be awarded

                                hereunder;

		                   3.2.3     to determine the Incentive Stock Options, Non-Qualified Stock
Options, Stock

                                Appreciation Rights, or any combination thereof,
if any, to be awarded 

                                hereunder to one or more eligible
employees or persons;

		                  3.2.4     to determine the number of shares to be covered by each award
granted 

                               hereunder;

		                  3.2.5     to determine the terms and conditions not inconsistent with the
terms of the Plan, 

                               of any award hereunder (including, but not
limited to, share price, any restrictions 

                               or limitations, and any
vesting, exchange, surrender, cancellation, acceleration,

                               termination, exercise or forfeiture provisions, as the Committee shall
determine);

		                  3.2.6     to determine any specified performance goals or such other
factors or criteria 

                               which need to be attained for the vesting of an
award granted hereunder;

		                  3.2.7     to determine the terms and conditions under which awards
hereunder are to 

                               operate on a tandem basis and/or in conjunction
with or apart from other equity

                               awarded under this Plan and cash
awards made by the Company or any 

                               Subsidiary outside of this
Plan;

		                 3.2.8     to determine the extent and circumstances under which Common
Stock and 

                              other amounts payable with respect to an award
hereunder shall be deferred, 

                              which may be either automatic or at
the election of the Holder; and

		 

		-4-

		 

		                 3.2.9     to substitute (i) new Stock Options for previously granted Stock
Options, which

                             
previously granted Stock Options have higher
option exercise prices and/or 

                              contain other less favorable terms,
and (ii) new awards of any other type for 

                              previously granted
awards of the same or other type, which previously granted 

                              awards are upon less favorable terms.

	       3.3     Interpretation of Plan.  

		                 3.3.1     Subject to Sections 3.2 and 9 hereof, the Committee shall have
the authority at 

                              its discretion to adopt, alter and repeal such
general and special administrative 

                              rules, regulations, and
practices governing the Plan as it shall, from time to time, 

                              deem
advisable, to construe and interpret the terms and provisions of
this Plan 

                              and any award issued under this Plan (and to determine
the form and substance 

                              of all Agreements relating thereto), and to
otherwise supervise the administration 

                              of this Plan.

		                 3.3.2     Anything in this Plan to the contrary notwithstanding, no term of
this Plan 

                              relating to Incentive Stock Options shall be interpreted,
amended or 

                              altered, nor shall any discretion or authority granted
under this Plan be so 

                              exercised, so as to disqualify the Plan under
Section 422 of the Code, or, 

                              without the consent of the Holder(s)
affected, to disqualify any Incentive 

                              Stock Option under Section 422 of the Code.

		                 3.3.3    Subject to Sections 3.2 and 9 hereof, all decisions made by the
Committee 

                             pursuant to the provisions of this Plan shall be made
in the Committee's sole 

                             discretion and shall be final and binding
upon all persons granted options 

                             pursuant to the Plan.

4.      Shares Subject to Plan.

	        4.1     Number of Shares.  The aggregate number of shares of Common Stock
reserved and 

                  available for distribution under this Plan shall be 850,000
shares.  If any shares of 

                  Common Stock that are subject to a Stock Option or
Stock Appreciation Right cease 

                  to be subject to such Stock Option or Stock
Appreciation Right, or any such award 

                  otherwise terminates without a
payment being made to the Holder in the form of 

	 

	-5-

	 

	

                  Common Stock, such
shares shall again be available for distribution in connection with 

                  future
grants and awards under this Plan.  The number of shares available for
distribution 

                  under this Plan shall be reduced by the number of shares of
Common Stock issued under 

                  this Plan upon the exercise of a Stock Option.

	        4.2     Character of Shares.  The Company may elect to satisfy its obligations to a
Holder 

                  exercising a Stock Option entirely by issuing authorized and unissued
shares of Common 

                  Stock to such Holder, entirely by transferring treasury
shares to such Holder, or in part 

                  by the issue of authorized and unissued
shares and the balance by the transfer of treasury 

                  shares.

5.      Eligibility.  

	        5.1      General.  Awards under this Plan may be made to: (i) officers and other
employees of the

                   Company or any Subsidiary who are at the time of the
grant of an award under this Plan

                   regularly employed by the Company or
any Subsidiary, including any full time salaried 

                   officer or employee who is a
member of the Board (except as provided in the last 

                   sentence under Section
3.1); and, (ii) consultants or independent contractors whom the 

                   Board
believes have contributed or will contribute to the success of the Company.

	        5.2     Multiple Awards.  The Committee shall from time to time designate such
employees, 

                  consultants or independent contractors to whom options are to be
granted, and the 

                  number of shares to be subject to each option.  The
Committee may at any time grant 

                  one or more Stock Options or Stock
Appreciation Rights or a combination thereof 

                  to an individual to whom a
Stock Option or Stock Appreciation Right has previously 

                  been granted under
this or any other stock option plan of the Company, whether or 

                  not such
previously granted Stock Option or Stock Appreciation Right has been fully 

                  exercised.

	        5.3      Ineligibility for Awards.  No person designated by the Board to serve on the
Committee,

                   effective at such future time so that he qualifies as a
"disinterested person" within the 

                   meaning of Rule 16b-3(c) of the Exchange
Act, shall be eligible to receive any awards 

                   under the Plan during the period
from the date such designation is made to the date 

                   such designation becomes
effective.  Notwithstanding Section 5.1 hereof, no member 

                   of the
Committee, while serving as such, shall be eligible to receive an award under 

                   the Plan.

6.      Stock Options.

	         6.1      Grant and Exercise.  Stock Options granted under the Plan may be of two
types: 

                    (i) Incentive Stock Options and (ii) Non-Qualified Stock Options.
Only full-time 

	 

	-6-

	 

	

                    salaried officers or employees may be granted Incentive Stock
Options.  Any individual 

                    eligible to participate under this Plan may be
granted Non-Qualified Stock Options.  Any 

                    Stock Option granted under the
Plan shall contain such terms, not inconsistent with this 

                    Plan, as the
Committee may from time to time approve.  The Committee shall have the 

                    authority to grant to any eligible individual Incentive Stock Options, Non-Qualified 

                    Stock Options, or both types of Stock Options and, in each case,
may be granted 

                    alone, in tandem with, or without, or in addition to Stock
Appreciation Rights.  To the 

                    extent that any Stock Option (or portion
thereof) does not qualify as an Incentive 

                    Stock Option, it shall constitute a
separate Non-Qualified Stock Option.  Unless 

                    granted in substitution for
another outstanding award, Stock Options shall be granted 

                    for no consideration other than services to the Company or a Subsidiary.

	        6.2      Exercise Price.

		                   6.2.1      Less Than 10% Shareholder.  The exercise price in any option
granted under 

                                 this Plan to an individual who, at the time the
Stock Option is granted, does 

                                 not own stock possessing more
than ten percent (10%) of the total combined 

                                 voting power of all
classes of stock of the Company or of any Subsidiary 

                                 (computed
in accordance with the provisions applicable to Section 422(b)(6) 

                                 of the Code) (a "less than 10% Shareholder") shall be not less
than the Fair 

                                 Market Value of the shares of Common Stock
subject to the Stock Option 

                                 at the time the Stock Option is
granted, determined by the Committee in 

                                 accordance with the
applicable regulations and rulings of the Commissioner 

                                 of the
Internal Revenue Service in effect at the time the Stock Option is
granted.

		                  6.2.2      10% Shareholder.  The exercise price in any option granted
under the Plan to 

                                an individual who is not a less than ten percent
(10%) Shareholder (a "10%

                                Shareholder") shall be not less than
one hundred ten percent (110%) of the 

                                Fair Market Value of the
shares of Common Stock subject to the Stock Option 

                                at the time
the Stock Option is granted, determined in accordance with the 

                                applicable regulations and rulings of the Commissioner of the
Internal Revenue 

                                Service in effect at the time the Stock Option is
granted.

	        6.3      Option Term.  The term of each Stock Option shall be fixed by the Board,
but no Stock 

                   Option shall be exercisable more than ten (10) years (five (5)
years, in the case of an 

	 

	-7-

	 

	

                   Incentive Stock Option granted to a 10%
Shareholder) after the date on which the Stock

                   Option is granted.

	        6.4      Exercise of Non-Qualified Stock Options.  Non-Qualified Stock Options shall
be 

                   exercisable at such time or times and subject to such terms and conditions
as shall be

                   determined by the Committee; provided, however, that no Non-Qualified Stock Option 

                   granted under this Plan may be exercised until after
the expiration of six (6) months 

                   from the date the Stock Option is granted. If
the Committee provides, in its discretion, 

                   that any Stock Option is
exercisable only in installments, the Committee may waive 

                   such installment
exercise provisions at any time at or after the time of grant in whole 

                   or in
part, based upon such factors as the Committee shall determine; provided
that 

                   the Committee cannot waive the requirement that the Stock Option may
not be 

                   exercised until after the expiration of six (6) months from the date the
Stock Option is 

                   granted.

	        6.5      Exercise of Incentive Stock Options.

		                   6.5.1      By an Employee.  No Incentive Stock Option  granted under this
Plan shall be

                                 exercisable after the expiration of ten (10) years
from the date such ISO is 

                                 granted, except that no ISO granted to
a person who is not a less than 10%

                                 Shareholder shall be
exercisable after the expiration of five (5) years from the 

                                 date
such option is granted.  Employment by a Subsidiary shall be
employment 

                                 by the Company.  Unless such requirements are
waived by the Committee, 

                                 the employee, while still in the
employment of the Company, may exercise the 

                                 options as
follows:

				                                 6.5.1.1      at any time after one (1) year of continuous
employment from the 

                                                  date such ISO is granted, as
to twenty percent (20%) of the 

                                                  shares subject to
the option;

				                                6.5.1.2      at any time after two (2) years of such continuous
employment 

                                                 from the date such ISO is granted, as
to an additional twenty 

                                                 percent (20%) of the shares
subject to the option;

				                                6.5.1.3      at any time after three (3) years of such continuous
employment 

                                                 from the date such ISO is granted, as
to an additional thirty 

                                                 percent (30%) of the shares
subject to the option; and

				 

-8-

				 

				                               6.5.1.4      at any time after four (4) years of such continuous
employment 

                                                from the date such ISO is granted, as
to all of the shares 

                                                remaining subject to the option.

				                       The Committee may decide in each case to what extent leaves of
absence for 

                       government or military service, illness, temporary
disability, or other reasons, 

                       shall not interrupt continuous
employment.

		          6.5.2     Termination of Employment.  Except as otherwise expressly
provided in Sections 

                       6.5.3 and 6.5.4 of this Plan or in the
Agreement, no Stock Option may be 

                       exercised at any time unless
the Holder thereof is then an employee of the 

                       Company or a
Subsidiary.

          6.5.3     By a Former Employee.  No person may exercise an ISO after he
is no longer an 

                       employee of the Company or any Subsidiary;
except that if an employee ceases 

                       to be an employee on account
of physical or mental disability as defined in 

                       Section 22(e)(3) of
the Code ("Former Employee"), he may exercise the ISO 

                       within
twelve (12) months after the date on which he ceased to be an
employee, 

                       for the number of shares for which he could have
exercised at the time he ceased 

                       to be an employee.  No ISO
granted under this Plan shall in any event be exercised 

                       by such
Former Employee after the expiration of ten (10) years from the
date 

                       such ISO is granted, except that no ISO granted to a person
who is a 10% 

                       Shareholder may be exercisable after the expiration
of five (5) years from the date 

                       such ISO is granted.

          6.5.4     In Case of Death.  If any employee or Former Employee who
was granted an ISO 

                      dies prior to the termination of such ISO,
such ISO may be exercised within twelve 

                      (12) months after the
death of the employee or Former Employee by his estate, or 

                      by a
person who acquired the right to exercise such ISO by bequest or
inheritance, 

                      or by reason of the death of such employee or
Former Employee, provided that:

				                     6.5.4.1      such employee died while an employee of the
Company or a Subsidiary; or

                     6.5.4.2      such Former Employee had ceased to be an
employee of the Company 

                                      or a Subsidiary on
account of physical or mental disability and died
within 

                                      three (3) months after the date on which he
ceased to be such employee.

 

-9-

 

                       Such ISO may be exercised only as to the number of shares for
which he could have 

                       exercised at the time the employee or
Former Employee died.  No ISO granted under 

                       this Plan shall in
any event be exercised in case of death of an employee or Former 

                       Employee after the expiration of ten (10) years from the date
such ISO is granted, 

                       except that no ISO granted to a 10% Shareholder shall be exercisable after the 

                       expiration of five (5) years
from the date such ISO is granted.

          6.5.5     The Committee may, in its discretion, waive the installment
exercise provisions at 

                       any time at or after the time of grant, in
whole or in part, based on such factors as 

                       the Committee shall
determine; provided that at all times no ISO may be exercised 

                       until the expiration of six (6) months from the date that the Stock
Option was granted.

     6.6     Termination of Options.  A Stock Option granted under this Plan shall be
considered 

               terminated, in whole or in part, to the extent that it can no longer
be exercised for 

               shares originally subject to it, provided that a Stock Option
granted shall be 

               considered terminated at an earlier date upon surrender for
cancellation by the Holder 

               to whom such Stock Option was granted.

     6.7     Notice of Exercise and Payment.  Subject to any installment, exercise and
waiting period

               provisions that are applicable in a particular case, Stock
Options granted under this Plan 

               may be exercised, in whole or in part, at any
time during the term of the Stock Option, 

               by giving written notice of such
exercise to the Company identifying the Stock Option 

               being exercised and
specifying the number of shares then being purchased.  Such notice 

               shall be
accompanied by payment in full of the exercise price, which shall be in cash
or, 

               unless otherwise provided in the Agreement, in whole shares of Common
Stock which 

               are already owned by the Holder of the Stock Option or, unless
otherwise provided 

               in the Agreement, partly in cash and partly in such
Common Stock.  Cash payments 

               shall be made by wire transfer, certified check or bank check or personal check, in 

               each case payable to the order of
the Company; provided, however, that the 

               Company shall not be required to
deliver certificates for shares of Common Stock 

               with respect to which a
Stock Option is exercised until the Company has confirmed 

               the receipt of
good and valuable funds in payment of the purchase price thereof. 

               Payments
in the form of Common Stock (which shall be valued at the Fair Market 

               Value of a share of Common Stock on the date of exercise) shall be made by
delivery of   

   

-10-  

   

               stock certificates in negotiable form which are effective to
transfer good and valid title 

               thereto to the Company, free of any liens or
encumbrances, with signature guaranteed 

               by a bank or investment banking
firm.  

	      6.8     Issuance of Shares.  As soon as practicable after its receipt of such notice and
payment, the

               
Company shall cause one or more certificates for the shares so
purchased to be delivered 

                to the Holder or his or her estate, as the case may
be.  No Holder or estate shall have any 

                of the rights of a shareholder with
reference to shares of Common Stock subject to a 

                Stock Option until after the
Stock Option has been exercised in accordance with Section 

                6.7 and certificates representing the shares of Common Stock so purchased by the Holder

                pursuant to the Stock Option have been delivered to the Holder or estate.

	      6.9     Partial Exercise.  A Stock Option granted under this Plan may be exercised
as to any part 

                of the shares for which it could be exercised.  Such a partial
exercise of a Stock Option 

                shall not affect the right to exercise the Stock
Option from time to time in accordance 

                with this Plan as to the remaining
shares of Common Stock subject to the Stock Option.

	     6.10    $100,000 Per Year Limitation.  To the extent that the aggregate Fair Market
Value of 

                Common Stock with respect to which Incentive Stock Options are
exercisable for the 

                first time by a Holder during any calendar year (under all
of the Company's plans) 

                exceeds $100,000, such excess Stock Options shall
be treated as Non-Qualified 

                Stock Options for purposes of Section 422 of the
Code.

	     6.11    Buyout and Settlement Provisions.  The Committee may at any time offer to
buy out for 

                cash or otherwise settle a Stock Option previously granted, based
upon such terms and

                conditions as the Committee shall establish and
communicate to the Holder at the time 

                that such offer is made, including a
settlement for exchange of a different award under 

                the Plan for the surrender
of the Stock Option.

7.     Stock Appreciation Rights.  

	        7.1     Grant and Exercise.  Stock Appreciation Rights may be granted in tandem
with ("Tandem 

                  Stock Appreciation Right") or in conjunction with all or part
of any Stock Option granted 

                  under this Plan or may be granted on a free-standing basis.  In the case of a Non-Qualified 

                  Stock Option, a Tandem
Stock Appreciation Right may be granted either at or after the 

                  time of the
grant of such Non-Qualified Stock Option.  In the case of an Incentive Stock 

                  Option, a Tandem Stock Appreciation Right may be granted only at the time
of the grant 

	 

	-11-

	 

	                  of such Incentive Stock Option.  Unless granted in substitution
for another outstanding 

                  award, Stock Appreciation Rights shall be granted
for no consideration other than 

                  services to the Company or a Subsidiary.

       7.2     Termination.  A Tandem Stock Appreciation Right shall terminate and shall
no longer be

                 exercisable upon the termination or exercise of the related Stock
Option, except that, 

                 unless
otherwise determined by the Board, a Tandem
Stock Appreciation Right granted 

                 with respect to less than the full number of
shares covered by a related Stock Option 

                 shall not be
reduced until after the
number of shares remaining under the related Stock 

                 Option equals the
number of shares covered by the Tandem Stock Appreciation Right.

	        7.3     Method of Exercise.  A Tandem Stock Appreciation Right may be exercised
by a Holder, 

                  in accordance with Section 7.4 hereof, by surrendering the
applicable portion of the 

                  related
Stock Option.  Upon such exercise and
surrender, the Holder shall be entitled 

                  to receive such amount in the form of
payment determined in the manner prescribed 

                  in Section 7.5 hereof.  Stock
Options which have been so surrendered, in whole or 

                  in part, shall no longer be exercisable to the extent Tandem Stock Appreciation 

                  Rights have been
exercised.

       7.4      Exercisability.  Tandem Stock Appreciation Rights shall be exercisable only
at such time

                  or
times and to the extent that the Stock Options to which they
relate shall be 

                  exercisable in
accordance with the provisions of Section 6
hereof and this Section 7, 

                  and may be subject to such additional limitations
on exercisability as shall be 

                  determined by the Committee and set forth in the
Agreement.  Other Stock 

                  Appreciation Rights shall be exercisable at such
time or times and subject to such 

                  terms and conditions as shall be determined
by the Committee and set forth in the 

                  Agreement.  Notwithstanding anything
to the contrary contained herein (including the 

                  provisions of Section 8.1
hereof), any Stock Appreciation Right granted to a 

                  Section 16(b) Holder to
be settled wholly or partially in cash (i) shall not be 

                  exercisable during the
first six (6) months of the term of such Stock Appreciation 

                  Right, except that
this special limitation shall not apply in the event of death or disability 

                  of
such Holder prior to the expiration of the six (6) month period, and (ii) shall
only be

                  exercisable during the period beginning on the third business day
following the date of 

                  release for publication of the Company of quarterly or
annual summary statements of 

                  sales and earnings and ending on the twelfth
(12) business day following such date.

       7.5     Receipt of SAR Value.  Upon the exercise of a Stock Appreciation Right, a
Holder shall be

                
entitled to receive up to, but not more than, an amount in
cash and/or shares of Common 

 

-12-

 

                 Stock equal to the SAR Value with the Committee having the right to determine the form 

                 of payment.

      7.6      Shares Affected Under Plan.  Upon the exercise of a Tandem Stock
Appreciation Right, the

                 Stock Option or part thereof to which such Tandem
Stock Appreciation Right is related 

                 shall be deemed to have been exercised
for the purpose of the limitation set forth in 

                 Section 4.1 hereof on the
number of shares of Common Stock to be issued under the Plan, 

                 but only to
the extent of the number of shares, if any, issued under the Tandem Stock

                 Appreciation Right at the time of exercise based upon the SAR Value.

       7.7     Limited Stock Appreciation Rights.  The Committee may grant "Limited
Stock 

                 Appreciation
Rights", i.e., Stock Appreciation Rights that become
exercisable upon 

                 the occurrence of one or more of the events which trigger a
Change of Control as 

                 defined in Section 8.2 hereof, and shall be settled in an
amount equal to the Formula 

                 Price Per Share, subject to such other terms
and conditions as the Committee 

                 may specify; provided, however, if any
Limited Stock Appreciation Right is granted 

                 to a Section 16(b) Holder such
Limited Stock Appreciation Right (i) shall only be 

                 exercisable within sixty
(60) days after the event triggering the Change of Control; 

                 and (ii) may not
be exercised during the first six (6) months after the date of grant 

                 of such
Limited Stock Appreciation Right (except in the event of death or disability 

                 of such Holder prior to the expiration of the six (6) month period); and (iii)
shall 

                 only be exercisable in the event that the date of the Change of Control
was outside the 

                 control of such Holder; and (iv) shall only be settled in cash
in an amount equal to the 

                 Formula Price Per Share.

8.     Acceleration.

	        8.1     Acceleration Upon Change of Control.  Unless the award Agreement
provides otherwise or

                  unless the Holder waives the application of this Section
8.1 prior to a Change of Control 

                  (as hereinafter defined), in the event of a
Change of Control, each outstanding Stock 

                  Option, Stock Appreciation Right
and Limited Stock Appreciation Right granted under 

                  the Plan shall immediately become exercisable in full notwithstanding the vesting or 

                  exercise
provisions contained in the Agreement.

	       8.2      Change of Control Defined.  A "Change of control" shall be deemed to have
occurred 

                  upon any of the following events:

                  8.2.1     The consummation of any of the following transactions: any
merger, reverse 

                               stock split, recapitalization or other business
combination of the Company, 

                               with or into another corporation,
or an acquisition of securities or assets 

 

-13-

 

                               by the Company,
pursuant
to which the Company is not the continuing or 

                               surviving
corporation or pursuant to which shares of Common Stock 

                               would
be converted into cash, securities or other property, other than a 

                               transaction in which the majority of the holders of
Common
Stock 

                               immediately prior to such transaction will own at least fifty
percent (50%) 

                               of the total voting power of the then-outstanding
securities of the surviving

                               corporation immediately after such
transaction; or

                   8.2.2     A transaction in which any person (as such term is defined in
Sections 13(d)(3) 

                                and 14(d)(2) of the Exchange Act), corporation
or other entity (other than the

                               
Company, or any profit-sharing,
employee ownership or other employee benefit 

                                plan sponsored by
the Company or any Subsidiary, or any trustee of or fiduciary 

                                with respect to any such plan when acting in such capacity, or
any group 

                                comprised solely of such entities): (i) shall purchase
any Common Stock (or 

                                securities convertible into Common
Stock) for cash, securities or any other

                                consideration pursuant to
a tender offer or exchange offer, without the prior 

                                consent of the
Board, or (ii) shall become the "beneficial owner" (as such term
is

                                defined in Rule 13d-3 under the Exchange Act), directly or
indirectly (in one

                                transaction or a series of transactions), of
securities of the Company representing 

                                fifty percent (50%) or
more of the total voting power of the then-outstanding 

                                securities
of the Company ordinarily (and apart from the rights accruing
under 

                                special circumstances) having the right to vote in the
election of directors 

                                (calculated as provided in Rule 13d-3(d) in
the case of rights to acquire the 

                                Company's securities); or

                 8.2.3       If, during any period of two consecutive years, individuals who
at the beginning 

                                of such period constituted the entire Board and
any new director whose election 

                                by the Board, or nomination for
election by the Company's stockholders was

                                approved by a vote
of at least two-thirds of the directors then still in office who 

                                either were directors at the beginning of the period or whose
election or 

                                nomination for election by the stockholders was
previously so approved, cease 

                                for any reason to constitute a
majority thereof.

	       8.3      General Waiver by Board.  The Committee may, after grant of an award,
accelerate the 

                  vesting of all or any part of any Stock Option, and/or waive
any limitations or 

                  restrictions, if any, for all or any part of an award.

	 

	-14-

	 

        8.4     Acceleration Upon Termination of Employment.  In the case of a Holder
whose 

                  employment or affiliation with the Company or a Subsidiary is
involuntarily terminated 

                  for any reason (other than for cause), the Committee
may, at its option and in its sole 

                  discretion, accelerate the vesting of all or
any part of any award and/or waive, in 

                  whole or in part, any or all of the
remaining deferral limitations or restrictions imposed 

                  hereunder or pursuant
to the Agreement.

9.      Amendments and Termination.

        9.1      Amendments to Plan; Termination.  The Board may at any time, and from
time to time, 

                   amend any of the provisions of the Plan, and may at any time
suspend or terminate the 

                   Plan; provided, however, that no such amendment
shall be effective unless and until it 

                   has been duly approved by the
stockholders of the outstanding shares of Common 

                   Stock if (i)
such amendment materially increases the benefits accruing to participants 

                   under this
Plan; (ii) such amendment materially increases the number of securities
which 

                   may be issued under this Plan; (iii) such amendment materially modifies the 

                   requirements as to eligibility for participation in this Plan; or, (iv)
the failure to obtain 

                   such approval would adversely affect the compliance of
the Plan with the requirements 

                   of Rule 16b-3 under the Exchange Act, or
with the requirements of any other 

                   applicable law, rule or
regulation.  

	        9.2     Amendments to Individual Awards.  The Board may amend the terms of any
award 

                  granted under the Plan; provided, however, that subject to Section 11
hereof, no such

                  amendment may be made by the Board which in any material
respect impairs the rights 

                  of the Holder without the Holder's consent.

10.    Term of Plan.

        10.1     Effective Date.  The Plan shall be effective as of August 13, 1998
("Effective Date"), 

                    subject to the approval of the Plan by the stockholders of
the Company within one year 

                    after the Effective Date.  Any awards granted
under the Plan prior to such approval 

                    shall be effective when made (unless
otherwise specified by the Committee at the time 

                    of grant) but shall be
conditioned upon, and subject to, such approval of the Plan by the

                    Company's stockholders and approval of the Company's application to list
the shares of 

                    the Company's Common Stock covered by the Plan on the New
York Stock Exchange 

                    (and no awards shall vest or otherwise become free of
restrictions prior to such 

                    approvals).

        10.2     Termination Date.  No award shall be granted pursuant to the Plan on or
after the tenth 

                    (10th) anniversary of the Effective Date, but awards granted
prior to such tenth (10th)

 

-15-

 

                    anniversary may extend beyond that date.  The
Plan shall terminate at such time as no 

                    further awards may be granted and all
awards granted under the Plan are no longer

                    outstanding.

11.     Adjustment Upon Change of Shares.  Subject to any required action by the
stockholders of the

          Company, the number of shares of Common Stock for which Stock
Options may thereafter be

          granted, and the number of shares of Common Stock then
subject to Stock Options previously

          granted, and the price per share payable upon
exercise of such Stock Option and the number of

          shares and exercise price relating to
Stock Appreciation Rights, shall be proportionately 

          adjusted for any increase or
decrease in the number of issued shares of Common Stock of the

          Company resulting
from a subdivision or consolidation of shares of Common Stock or the 

          payment of a stock dividend (but only on the Common Stock) or any other increase or 

          decrease in
the number of shares of Common Stock effected without receipt of consideration 

          by the
Company.

         11.1     If the Company is reorganized or consolidated or merged with another
corporation, in 

                     which the Company is the non-surviving corporation, a
Holder of an outstanding Stock 

                     Option and/or Stock Appreciation Right
granted under this Plan shall be entitled 

                     (subject to the provisions of this
Section 11) to receive options and/or stock appreciation

                     rights covering
shares of such reorganized, consolidated or merged corporation in the 

                     same
proportion as granted to Holder prior to such reorganization, consolidation
or 

                     merger at an equivalent exercise price, and subject to the same terms and
conditions 

                     as this Plan.  For purposes of the preceding sentence, the excess
of the aggregate Fair 

                     Market Value of shares subject to the option immediately after the reorganization,

                     consolidation or merger over the aggregate
exercise price of such shares shall not be 

                     more than the excess of the
aggregate Fair Market Value of all shares of Common 

                     Stock subject to the
option or Stock Appreciation Right immediately before such

                     reorganization,
consolidation or merger over the aggregate exercise price of such 

                     shares of
Common Stock, and the new stock option or stock appreciation right or 

                     assumption of the old Stock Option or old Stock Appreciation Right by any 

                     surviving corporation shall not give the Holder additional benefits which he
did not 

                     have under the old Stock Option or Stock Appreciation Right.

       11.2      To the extent that the foregoing adjustments relate to the shares of Common
Stock 

                    of the Company, such adjustments shall be made by the Committee,
whose 

                    determination in that respect shall be final, binding and conclusive,
provided that each 

                     Incentive Stock Option granted pursuant to this Plan shall
not be adjusted in a manner 

                     that causes the Incentive Stock Option to fail to
continue to qualify as an incentive 

                     stock option within the meaning of Section
422 of the Code.

 

-16-

 

        11.3      Except as expressly provided in this Section 11, the Holder shall have no
rights by 

                     reason of any subdivision or consolidation of shares of stock of any
class or the 

                     payment of any stock dividend or any other increase or decrease
in the number of 

                     shares of stock of any class or by reason of any dissolution,
liquidation, merger, 

                     consolidation,
reorganization or spin-off of assets or
stock of another corporation, 

                     and any issue by the
Company of shares of
stock of any class, or securities 

                     convertible into shares of stock of any class,
shall not affect, and no adjustment 

                     by reason thereof shall be made with respect to, the number or price of shares 

                     of Common Stock subject to the
Stock Option or the number or price of Stock 

                     Appreciation Rights granted
under this Plan.

	        11.4     The grant of a Stock Option or Stock Appreciation Right pursuant to this
Plan shall not 

                    affect in any way the right or power of the Company to make
adjustments, 

                    reclassifications,
reorganizations or changes of its capital or
business structure or to 

                    merge or to consolidate or to dissolve, liquidate or
sell, or transfer all or any part of 

                    its business or assets.

12.     General Provisions.

        12.1     Investment Representations.  The Committee may require each person
acquiring shares of

                    Common Stock pursuant to an award under this Plan to
represent to and agree with the

                    Company in writing that the Holder is acquiring the shares for investment without a 

                    view to distribution thereof.

        12.2     Additional Incentive Arrangements.  Nothing contained in this Plan shall
prevent the 

                    Board from adopting such other or additional incentive
arrangements as it may deem 

                    desirable,
including, but not limited to, the
granting of Stock Options and the 

                    awarding of stock and cash otherwise than
under this Plan; and such arrangements 

                    may be either generally
applicable or
applicable only in specific cases.

        12.3     No Right of Employment.  Nothing contained in this Plan or in any award
hereunder 

                    shall be deemed to confer upon any employee of the Company or
any Subsidiary 

                    any right to
continued employment with the Company or any
Subsidiary, nor 

                    shall it interfere in any way with the right of the Company or
any Subsidiary to 

                    terminate the employment of any of its employees at any
time.

         12.4     Withholding Taxes.  Not later than the date as of which an amount first
becomes 

                     includible in the gross income of the Holder for federal income tax
purposes 

                     with respect to any award under the Plan, the Holder shall pay to
the Company, 

                     or make arrangements
satisfactory to the Company regarding
the payment of, 

                     

 

-17-

 

                     any federal, state and local taxes of any kind required by law
to be withheld or 

                     paid with respect to such amount.  If permitted by the
Board, tax withholding or 

                     payment obligations may be settled with Common
Stock, including Common 

                     Stock that is part of the award that gives rise to the withholding requirement. 

                     The obligations of the Company under this
Plan shall be conditional upon such 

                     payment or arrangements and the
Company shall, to the extent permitted by 

                     law, have the right to deduct any
such taxes from any payment of any kind

                     otherwise due to the Holder from
the Company.

       12.5      Governing Law.  This Plan and all awards made and actions taken
thereunder shall be 

                    governed by and construed in accordance with the laws
of the State of Delaware (without

                    regard to choice of law provisions).

        12.6     Other Benefit Plans.  Any award granted under this Plan shall not be deemed 

                    compensation for purposes of computing benefits under any retirement plan
of the 

                    Company or any
Subsidiary and shall not affect any benefits under any
other 

                    benefit plan now or subsequently in effect under which the availability
or amount 

                    of benefits is related to the level of
compensation (unless required
by specific 

                    reference in any such other plan to awards under this Plan).

       12.7      Employee Status.  A leave of absence, unless otherwise determined by the
Board prior to 

                    the commencement thereof, shall not be considered a
termination of employment.  Any 

                    awards granted under this Plan shall not be
affected by any change of employment, so 

                    long as the Holder continues to be
an employee of the Company or any Subsidiary.

       12.8      Non-Transferability.  Other than the transfer of a Stock Option or Stock
Appreciation 

                    Right by will or by the laws of descent and distribution, no
award under this Plan 

                    may be alienated, sold, assigned, hypothecated,
pledged, exchanged, transferred, 

                    encumbered or
charged, and any attempt to
alienate, sell, assign, hypothecate, 

                    pledge, exchange, transfer,
encumber or
charge the same shall be void.  No right or 

                    benefit hereunder shall in any manner be liable for or subject to the debts, contracts, 

                    liabilities or torts of
the person entitled to such benefit.  Unless otherwise provided 

                    in this Plan or
the Agreement, any Stock Option or Stock Appreciation Right 

                    granted under
this Plan is only exercisable during the lifetime of the Holder by the 

                    Holder
or by his guardian or legal representative.

       12.9      Applicable Laws.  The obligations of the Company with respect to all awards
under this 

                    Plan shall be subject to (i) all applicable laws, rules and
regulations, including, without 

                    limitation, the requirements of all federal
securities laws, rules and regulations and state

                    securities and blue sky laws,
rules and regulations, and such approvals by any 

 

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                    governmental
agencies as
may be required, including, without limitation, the 

                    effectiveness of a
registration statement under the Act, and (ii) the rules and 

                    regulations of any
national securities exchange on which the Common Stock 

                    may be listed or
the NASDAQ National Market System if the Common Stock 

                    is designated
for quotation thereon.

       12.10     Conflicts.  If any of the terms or provisions of the Plan conflict with the
requirements of 

                     Rule 16b-3 under the Exchange Act, or with the
requirements of any other applicable 

                     law, rule or regulation, and/or with
respect to Incentive Stock Options, Section 422 

                     of the Code, then such terms
or provisions shall be deemed inoperative to the extent 

                     they so conflict with
the requirements of said Rule 16b-3, and/or with respect to 

                     Incentive Stock
Options, Section 422 of the Code.  With respect to Incentive Stock 

                     Options,
if this Plan does not contain any provision required to be included herein 

                     under Section 422 of the Code, such provision shall be deemed to be
incorporated 

                     herein with the same force and effect as if such provision had
been set out at length 

                     herein.

       12.11     Written Agreements.  Each award granted under this Plan shall be confirmed
by, and 

                     shall be subject to the terms of the Agreement approved by the
Committee and 

                     executed by the Company and the Holder.  The Committee
may terminate any 

                     award made under this Plan if the Agreement relating
thereto is not executed and 

                     returned to the Company within sixty (60) days
after the Agreement has been 

                     delivered to the Holder for his or her execution.

        12.12     Indemnification of Committee.  In addition to such other rights of
indemnification as 

                      they may have as directors or as members of the
Committee, the members of the 

                      Committee shall be indemnified by the
Company against the reasonable expenses, 

                      including attorneys' fees actually
and necessarily incurred in connection with the 

                      defense of any action, suit or
proceeding, or in connection with any appeal therein, 

                      to which they or any of
them may be a party by reason of any action taken or failure 

                      to act under or
in connection with the Plan or any award granted thereunder, and 

                      against all
amounts paid by them in settlement thereof (provided such settlement is 

                      approved by independent legal counsel selected by the Company) or paid by
them 

                      in satisfaction of a judgment in any such action, suit or proceeding,
except in 

                      relation to matters as to which it shall be adjudged in such action,
suit or proceeding 

                      that such Committee member is liable for negligence or
misconduct in the 

                      performance of his duties; provided that within sixty (60)
days after institution of 

                      

 

-19-

 

                      any such action, suit or proceeding a Committee
member shall in writing offer the 

                      Company the opportunity, at its own
expense, to handle and defend the same.

        12.13     Consideration for Common Stock.  The Committee may not grant any
awards under 

                      this Plan pursuant to which the Company will be required to
issue any shares of 

                      Common Stock unless the Company will receive
consideration for the shares of 

                      Common Stock sufficient under the laws of
the State of Delaware so that such 

                      shares of Common Stock will be, when
issued, validly issued and fully paid and

                      nonassessable when issued.

         12.14    Common Stock Certificates.  All certificates for shares of Common Stock
delivered 

                      under this Plan shall be subject to such stop-transfer orders and
other restrictions as 

                      the Committee may deem advisable under the rules,
regulations, and other 

                      requirements of the Securities and Exchange
Commission, any stock exchange 

                      upon which the Common Stock is then
listed, any applicable federal or state 

                      securities law and any applicable
corporate law, and the Committee may cause 

                      a legend or legends to be put on any such certificates to make appropriate 

                      reference to such restrictions. Notwithstanding anything to the contrary contained 

                      herein, whenever
certificates representing shares of Common Stock subject to an 

                      award are
required to be delivered pursuant to the terms of this Plan, the 

                      Company
may, in lieu of such delivery requirement, comply with the provisions 

                      of
Section 158 of the Delaware General Corporation Law.

         12.15     Unfunded Status of Plan.  This Plan is intended to constitute an "unfunded"
plan for 

                       incentive and deferred compensation.  With respect to any payments
not yet made to 

                       a Holder by the Company, nothing contained herein shall
give any such Holder any 

                       rights that are greater than those of a general
creditor of the Company.

 
 

 

 

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