Document:

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                                                                   EXHIBIT 10.21

                                SECOND AMENDMENT

        SECOND AMENDMENT (this "Amendment"), dated as of February 7, 2000, among
Waters Corporation ("Holdings"), Waters Technologies Corporation (the
"Borrower"), the lenders listed on the signature pages hereof (the "Banks"), and
Bankers Trust Company, as Agent (in such capacity, the "Agent"). All capitalized
terms used herein and not otherwise defined herein shall have the respective
meanings provided for such terms in the Credit Agreement referred to below.

                              W I T N E S S E T H:

        WHEREAS, Holdings, the Borrower, the Banks of the Credit Agreement and
the Agent are parties to a Credit Agreement, dated as of November 22, 1995 and
amended and restated as of June 16, 1997 ( as further amended, modified and
supplemented to date, the "Credit Agreement"); and

        WHEREAS, the parties hereto wish to amend the Credit Agreement as herein
provided;

        NOW, THEREFORE, it is agreed:

        1. Section 6.05 of the Credit Agreement is hereby amended by (i)
deleting sub-clause (b) thereof in its entirety and (ii) inserting the following
new sub-clause (b) in lieu thereof:

        "(b) Neither the making of any Loan hereunder, nor the use of
        the proceeds thereof, will violate the provisions of
        Regulation T, U or X of the Board of Governors of the Federal
        Reserve System and no part of the proceeds of any Loan will be
        used to purchase or carry any Margin Stock or to extend credit
        for the purpose of purchasing or carrying any Margin Stock,
        provided that the Borrower may use the proceeds of Loans to
        make distributions or loans to Holdings to enable Holdings to
        purchase Margin Stock pursuant to Section 8.06(x) in
        compliance with Regulations T, U and X, so long as at the time
        of the making of such Loan, and after giving effect thereto,
        not more than 25% of the value of the assets of Holdings, the
        Borrower, or of the Borrower and its Subsidiaries on a
        consolidated basis, shall constitute Margin Stock."

        2. Section 6.13 of the Credit Agreement is hereby amended (i) by
inserting the text "As of the Restatement Effective Date," immediately before
the text "Holdings" appearing in the first sentence thereof and (ii) deleting
the text "Annex V" appearing twice therein and inserting the text "Annex IV" in
lieu thereof.

<PAGE>

        3. Section 6.17 of the Credit Agreement is hereby amended by (i)
deleting the text "Annex IV" appearing twice therein and (ii) inserting the text
"Annex V" in lieu thereof.

        4. Section 8.04 of the Credit Agreement is hereby amended by (i)
deleting sub-clause (e) thereof in its entirety and (ii) inserting the following
new text in lieu thereof:

        "(e)     Indebtedness  constituting  intercompany  loans  to  the
        extent  permitted  by  Section 8.05(g) and (y)".

        5. Section 8.05(v) of the Credit Agreement is hereby amended by
inserting the text "and Section 8.06(x)" immediately after the text "Section
8.06(vii)" appearing therein.

        6. Section 8.05 of the Credit Agreement is hereby further amended by (i)
deleting the text "and" appearing at the end of sub-clause (x) thereof, (ii)
deleting the text "(y)" appearing twice in sub-clause (y) thereof and replacing
it with the text "(z)", (iii) deleting the text "(x)" appearing in sub-clause
(y) thereof and replacing it with the text "(y)", (iv) inserting the text
"pursuant to this Section 8.05(z)" immediately before the period appearing at
the end of the clause that has been redesignated as sub-clause (z) pursuant to
sub-clause (ii) of paragraph 6 of this Amendment and (v) inserting the following
new sub-clause (y) immediately after sub-clause (x) appearing therein:

        "(y) So long as no Default or Event of Default then exists or would
        result therefrom, the Borrower may make loans and advances to Holdings,
        provided that (i) Holdings promptly thereafter uses the cash proceeds
        from such loans and advances for the purposes described in Section
        8.06(x) (such loans and advances, the "Repurchase Loans"), (ii) the sum
        of the aggregate amount of Repurchase Loans and Repurchase Dividends
        shall not exceed $200,000,000, (iii) such Repurchase Loans shall be
        evidenced by an Intercompany Note and (iv) each such Intercompany Note
        shall be pledged to the Collateral Agent pursuant to the Pledge
        Agreement; and"

        7. Section 8.06 of the Credit Agreement is hereby amended by (i)
deleting the text "and" appearing at the end of sub-clause (viii) thereof, (ii)
deleting the period appearing at the end of sub-clause (ix) thereof and
inserting a semi-colon in lieu thereof, and (iii) inserting the following new
sub-clauses (x) and (xi) immediately after sub-clause (ix):

        "(x) Holdings may redeem or purchase shares of Holdings Common Stock,
        provided that (i) at the time of any cash payment permitted to be made
        pursuant to this Section 8.06(x), no Default or Event of Default shall
        then exist or result therefrom and (ii) the aggregate amount of cash
        payments made pursuant to this Section 8.06(x) shall not exceed
        $200,000,000; and"

        "(xi) So long as no Default or Event of Default then exists or would
        result therefrom, the Borrower may pay cash Dividends to Holdings,
        provided that (i) Holdings promptly thereafter uses such cash proceeds
        for the purposes described

                                      -2-
<PAGE>
        in clause (x) of this Section 8.06 (such cash Dividends, the "Repurchase
        Dividends") and (ii) the sum of the aggregate amount of Repurchase
        Dividends and Repurchase Loans shall not exceed $200,000,000."

        8. Section 8.07 of the Credit Agreement is hereby amended by (i)
deleting the text "and" appearing at the end of clause (i) appearing therein and
inserting a comma in lieu thereof, (ii) inserting the text "Holdings"
immediately after the text "between or among" appearing in clause (ii) appearing
therein and (iii) inserting the following text immediately before the period
appearing at the end of said section:

        "and (iii) Holdings may redeem or purchase shares of Holdings Common
        Stock pursuant to Section 8.06(x) so long as Holdings determines in
        good faith that any such transactions with Affiliates are on
        commercially reasonable terms."

        9. Section 10 of the Credit Agreement is hereby amended by inserting the
following definitions in the appropriate alphabetical location:

        "'Repurchase Loans' shall have the meaning provided in Section 8.05(y).

        'Repurchase Dividends' shall have the meaning provided in Section
        8.06(xi)."

        10. Section 10 of the Credit Agreement is hereby further amended by
inserting the text "or intercompany loans as set forth in Section 8.05(y)"
immediately after the text "8.05(g)" appearing in the definition of
"Intercompany Note" appearing therein.

        11. Notwithstanding anything to the contrary contained in the Credit
Agreement, in the Pledge Agreement or in any other Credit Documents, the parties
hereto agree that Holdings will not be required to pledge to the Collateral
Agent (and neither the Collateral Agent nor any of the Banks shall have any Lien
on or in) any Holdings Common Stock constituting Margin Stock which is
repurchased by Holdings as described in Section 8.06(x) of the Credit Agreement
(after giving effect to this Amendment).

        12. In order to induce the Banks to enter into this Amendment, each of
Holdings and the Borrower hereby represents and warrants that (i) the
representations, warranties and agreements contained in Section 6 of the Credit
Agreement are true and correct in all material respects on and as of the
Amendment Effective Date (as defined in Section 17 of this Amendment after
giving effect thereto) (it being understood and agreed that any representation
or warranty which by its terms is made as of a specified date shall be required
to be true and correct in all material respects only as of such specified date)
and (ii) except as provided in paragraph 13 below, there exists no Default or
Event of Default on the Amendment Effective Date, both before and after giving
effect to this Amendment.

        13. The Banks hereby (i) waive the Event of Default caused by the
failure of the Borrower to comply with sub-clause (i) of the proviso appearing
in Section 8.12 of the Credit Agreement with respect to the new Subsidiaries
listed on Schedule 1 to this Amendment and (ii) waive for a period of 21 days
after the Amendment Effective Date, the Event of Default caused by the failure
of the Borrower to comply with the provisions of Section 8.12 of the Credit

                                      -3-
<PAGE>

Agreement (other than sub-clause (i) thereto) with respect to the new
Subsidiaries listed on Schedule 1 to this Amendment.

        14. This Amendment is limited as specified and shall not constitute a
modification, acceptance or waiver of any other provision of the Credit
Agreement or any other Credit Document.

        15. This Amendment may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of which
counterparts when executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A complete set of
counterparts shall be lodged with the Borrower and the Agent.

        16. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK.

        17. This Amendment shall become effective on the date (the "Amendment
Effective Date") when each of Holdings, the Borrower and the Required Banks
shall have signed a counterpart hereof (whether the same or different
counterparts) and shall have delivered (including by way of facsimile
transmission) the same to the Agent at its address for notice provided for in
the Credit Agreement;

                                      * * *

                                       -4-
<PAGE>

        IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Amendment to be duly executed and delivered as of the date first above
written.

                                       WATERS CORPORATION

                                       By /s/ Philip S. Taymor
                                          --------------------------------------
                                          Title: Senior Vice President and CFO

                                       WATERS TECHNOLOGIES CORPORATION

                                       By /s/ Philip S. Taymor
                                          --------------------------------------
                                         Title: Senior Vice President and CFO

                                       WATERS FRANCE HOLDING CORP.

                                       By /s/ Philip S. Taymor
                                          --------------------------------------
                                          Title: Senior Vice President and CFO

                                       WATERS INVESTMENTS LIMITED

                                       By /s/ Philip S. Taymor
                                          --------------------------------------
                                          Title: Senior Vice President and CFO

                                       NIHON WATERS LIMITED

                                       By /s/ Philip S. Taymor
                                          --------------------------------------
                                          Title: Senior Vice President and CFO

                                       WFE HOLDING, INC.

                                       By /s/ Philip S. Taymor
                                          --------------------------------------
                                          Title: Senior Vice President and CFO
<PAGE>

                                       WATERS ASIA LIMITED

                                       By /s/ Philip S. Taymor
                                          --------------------------------------
                                          Title: Senior Vice President and CFO

                                       WATERS OPERATING CORP.

                                       By /s/ Philip S. Taymor
                                          --------------------------------------
                                          Title: Senior Vice President and CFO

                                       T.A. INSTRUMENTS, INC.

                                       By /s/ Philip S. Taymor
                                          --------------------------------------
                                          Title: Senior Vice President and CFO

                                       WATERS OPERATING COMPANY, L.L.C.

                                       By /s/ Philip S. Taymor
                                          --------------------------------------
                                          Title: Senior Vice President and CFO

                                       BANKERS TRUST COMPANY,
                                          Individually, as Agent
                                          and as Collateral Agent

                                       By /s/ Mary Kay Cole
                                          --------------------------------------
                                          Title: Managing Director

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                                       FLEET BANK, N.A.

                                       CREDIT INDUSTRIEL ET COMMERCIAL

                                       ABN AMRO BANK N.V.

                                       THE BANK OF NEW YORK

                                       THE BANK OF NOVA SCOTIA

                                       BANK OF SCOTLAND

                                      THE BANK OF TOKYO-MITSUBISHI TRUST COMPANY

                                      CREDIT AGRICOLE INDOSUEZ

                                      THE SAKURA BANK, LIMITED,
                                         NEW YORK BRANCH

                                      WACHOVIA BANK, N.A.

                                      FUJI BANK, LIMITED

<PAGE>
                                       GENERAL ELECTRIC CAPITAL CORPORATION

                                       THE INDUSTRIAL BANK OF JAPAN

                                       MELLON BANK, N.A.

                                       THE MITSUI TRUST & BANKING
                                         CO., LTD.

                                       ALLIED IRISH BANKS, P.L.C.,
                                         NEW YORK BRANCH

                                       CITIZENS BANK OF CONNECTICUT

                                       CITIZENS BANK OF MASSACHUSETTS

                                       THE ROYAL BANK OF SCOTLAND,
                                         PLC.

                                       SOCIETE GENERALE

                                       USTRUST<PAGE>

                                                                    EXHIBIT 10.3

                               WATERS CORPORATION

                   SECOND AMENDED AND RESTATED 1996 LONG-TERM

                           PERFORMANCE INCENTIVE PLAN

         1. PURPOSE. The purpose of the Waters Corporation Second Amended and
Restated 1996 Long-Term Performance Incentive Plan (the "Plan") is to advance
the interests of Waters Corporation, a Delaware corporation (the "Company"), and
its stockholders by providing incentives to certain key employees of the Company
and its subsidiaries who contribute significantly to the strategic and long-term
performance objectives and growth of the Company.

         2. ADMINISTRATION. The Plan shall be administered solely by the
Compensation Committee (the "Committee") of the Board of Directors (the "Board")
of the Company, which Committee shall be comprised solely of two or more Outside
Directors who shall administer the Plan. The term "Outside Director" shall mean
either: (A) until the first election of directors after January 1, 1996, a
director of the Company who is "disinterested" within the meaning of Rule
16b3(c)(2)(i) under the Securities Exchange Act of 1934, as amended (including
as well the provisions of Rule 16b-3(d)(3) as in effect on April 30, 1991) or
(B) a director who, within the meaning of Treasury Department regulation Section
1.162-27(e)(3), (1) is not a current employee of the Company, (2) is not a
former employee of the Company who receives compensation for prior services
(other than benefits under a tax-qualified retirement plan) during the taxable
year with respect to which the director's status is being determined, (3) has
not been an officer of the Company or (4) does not receive remuneration from the
Company, either directly or indirectly, in any capacity other than as a
director. References to the Committee hereunder shall include the Board where
appropriate. The membership of the Committee or such successor committee shall
be constituted so as to comply at all times with the applicable requirements of
Rule 16b-3. No member of the Committee shall have within one year prior to his
appointment received awards under the Plan ("Awards") or under any other plan,
program or arrangement of the Company or any of its affiliates if such receipt
would cause such member to cease to be a "disinterested person" under Rule
16b-3; provided that if at any time (i) Rule 16b-3 so permits without adversely
affecting the ability of the Plan to comply with the conditions for exemption
from Section 16 of the Exchange Act (or any successor provision) provided by
Rule 16b-3 and (ii) Treasury Department regulation Section 1.162-27 so permits
without adversely affecting the ability of Awards under the Plan to qualify as
"performance-based" within the meaning

<PAGE>
                                      -2-

of such regulation, one or more members of the Committee may cease to be a
"disinterested person."

         The Committee has all the powers vested in it by the terms of the Plan
set forth herein, such powers to include exclusive authority (except as may be
delegated as permitted herein) to select the key employees and other key
individuals to be granted Awards under the Plan, to determine the type, size and
terms of the Award to be made to each individual selected, to modify the terms
of any Award that has been granted, to determine the time when Awards will be
granted, to establish performance objectives, to make any adjustments necessary
or desirable as a result of the granting of Awards to eligible individuals
located outside the United States and to prescribe the form of the instruments
embodying Awards made under the Plan. The Committee is authorized to interpret
the Plan and the Awards granted under the Plan, to establish, amend and rescind
any rules and regulations relating to the Plan, and to make any other
determinations which it deems necessary or desirable for the administration of
the Plan. The Committee (or its delegate as permitted herein) may correct any
defect or supply any omission or reconcile any inconsistency in the Plan or in
any Award in the manner and to the extent the Committee deems necessary or
desirable to carry it into effect. Any decision of the Committee (or its
delegate as permitted herein) in the interpretation and administration of the
Plan, as described herein, shall lie within its sole and absolute discretion and
shall be final, conclusive and binding on all parties concerned. The Committee
may act only by a majority of its members in office, except that the members
thereof may authorize any one or more of their members or any officer of the
Company to execute and deliver documents or to take any other ministerial action
on behalf of the Committee with respect to Awards made or to be made to Plan
participants. No member of the Committee and no officer of the Company shall be
liable for anything done or omitted to be done by him, by any other member of
the Committee or by any officer of the Company in connection with the
performance of duties under the Plan, except for his own willful misconduct or
as expressly provided by statute. Determinations to be made by the Committee
under the Plan may be made by its delegates.

         3. PARTICIPATION. Consistent with the purposes of the Plan, the
Committee shall have exclusive power (except as may be delegated as permitted
herein) to select the key employees of the Company and its subsidiaries who may
participate in the Plan and be granted Awards under the Plan. Eligible
individuals may be selected individually or by groups or categories, as
determined by the Committee in its discretion. No non-employee director of the
Company shall be eligible to receive an Award under the Plan.

<PAGE>
                                      -3-

         4.       AWARDS UNDER THE PLAN.

         (a) TYPES OF AWARDS. Awards under the Plan may include, but need not be
limited to, one or more of the following types, either alone or in any
combination thereof: (i) "Stock Options," (ii) "Stock Appreciation Rights," or
(iii) "Restricted Stock" (including, but not limited to, Awards of, or options
or similar rights granted with respect to, unbundled stock units or components
thereof, and Awards made to participants who are foreign nationals or are
employed or performing services outside the United States). Stock Options, which
include "Nonqualified Stock Options" and "Incentive Stock Options" or
combinations thereof, are rights to purchase common shares of the Company having
a par value of $.01 per share and stock of any other class into which such
shares may thereafter be changed (the "Common Shares"). Nonqualified Stock
Options and Incentive Stock Options are subject to the terms, conditions and
restrictions specified in Paragraph 5. Stock Appreciation Rights are rights to
receive (without payment to the Company) cash, Common Shares, other Company
securities (which may include, but need not be limited to, unbundled stock units
or components thereof, debentures, preferred stock, warrants, securities
convertible into Common Shares or other property ("Other Company Securities"))
or property, or other forms of payment, or any combination thereof, as
determined by the Committee, based on the increase in the value of the number of
Common Shares specified in the Stock Appreciation Right. Stock Appreciation
Rights are subject to the terms, conditions and restrictions specified in
Paragraph 6. Shares of Restricted Stock are Common Shares which are issued
subject to certain restrictions pursuant to Paragraph 7.

         (b) MAXIMUM NUMBER OF SHARES THAT MAY BE ISSUED. There may be issued
under the Plan (as Restricted Stock, pursuant to the exercise of Stock Options
or Stock Appreciation Rights, or in payment of or pursuant to the exercise of
such other Awards as the Committee, in its discretion, may determine) an
aggregate of not more than 6,000,000 Common Shares, subject to adjustment as
provided in Paragraph 13. Irrespective of the aggregate number of shares
authorized herein, each participant in the Plan shall be entitled to receive
grants of Stock Options and Stock Appreciation Rights with respect to no more
than 100,000 Common Shares in any calendar year. Common Shares issued pursuant
to the Plan may be either authorized but unissued shares, treasury shares,
reacquired shares, or any combination thereof. If any Common Shares issued as
Restricted Stock or otherwise subject to repurchase or forfeiture rights are
reacquired by the Company pursuant to such rights, or if any Award is cancelled,
terminates or expires unexercised, any Common Shares that would otherwise have
been issuable pursuant thereto will be available for issuance under new Awards.

<PAGE>
                                      -4-

         (c) RIGHTS WITH RESPECT TO COMMON SHARES AND OTHER SECURITIES.

                  (i) Unless otherwise determined by the Committee in its
         discretion, a participant to whom an Award of Restricted Stock has been
         made (and any person succeeding to such participant's rights in
         accordance with the Plan) shall have, after issuance of a certificate
         for the number of Common Shares awarded and prior to the expiration of
         the Restricted Period (as hereinafter defined) or the earlier
         repurchase of such Common Shares as herein provided, ownership of such
         Common Shares, including the right to vote the same and to receive
         dividends or other distributions made or paid with respect to such
         Common Shares (provided that such Common Shares, and any new,
         additional or different shares, or Other Company Securities or
         property, or other forms of consideration which the participant may be
         entitled to receive with respect to such Common Shares as a result of a
         stock split, stock dividend or any other change in the corporation or
         capital structure of the Company, shall be subject to the restrictions
         hereinafter described as determined by the Committee in its
         discretion), subject, however, to the options, restrictions and
         limitations imposed thereon pursuant to the Plan. Notwithstanding the
         foregoing, a participant with whom an Award agreement is made to issue
         Common Shares in the future, shall have no rights as a stockholder with
         respect to Common Shares related to such agreement until issuance of a
         certificate to him.

                  (ii) Unless otherwise determined by the Committee in its
         discretion, a participant to whom a grant of Stock Options or Stock
         Appreciation Rights is made (and any person succeeding to such a
         participant's rights pursuant to the Plan) shall have no rights as a
         stockholder with respect to any Common Shares or as a holder with
         respect to other securities, if any, issuable pursuant to any such
         Award until the date of the issuance of a stock certificate to him for
         such Common Shares or other instrument of ownership, if any. Except as
         provided in Paragraph 13, no adjustment shall be made for dividends,
         distributions or other rights (whether ordinary or extraordinary, and
         whether in cash, securities, other property or other forms of
         consideration, or any combination thereof) for which the record date is
         prior to the date such stock certificate or other instrument of
         ownership, if any, is issued.

                  (iii) Any participant who is directly or indirectly the
          beneficial owner of more than 10 per centum of any class of any equity
          security which is registered pursuant to Section 12 of the Exchange
          Act, or who is an officer of the Company, shall hold his Restricted
          Stock, if any, for

<PAGE>
                                      -5-

         at least six months from the date of grant and any other Award received
         by him for at least six months from the date of acquisition of the
         Award before disposition of the Award or its underlying Common Stock.

         (d) VESTING. Rights acquired pursuant to an Award may be subject to
vesting as determined by the Committee in its sole discretion.

         (e) FREQUENCY OF GRANTS. Unless otherwise determined by the Committee
in its discretion, Awards shall be granted once per year.

         (f)      SECURITIES AND TAX LAW COMPLIANCE.

                  (i) Unless otherwise determined by the Committee in its
          discretion, no Awards shall be granted unless counsel for the Company
          shall be satisfied that such issuance will qualify as
          performance-based compensation for purposes of Section 162(m) of the
          Internal Revenue Code of 1986, as amended, or any successor statutory
          provision thereto (the "Code") and that such issuance will be in
          compliance with the Code and regulations issued thereunder.

                  (ii) No Common Shares, Other Company Securities or property,
          other securities or property, or other forms of payment shall be
          issued hereunder with respect to any Award unless counsel for the
          Company shall be satisfied that such issuance will be in compliance
          with applicable federal, state, local and foreign legal, securities
          exchange and other applicable requirements.

         5. STOCK OPTIONS. The Committee may grant or sell Stock Options either
alone, or in conjunction with Stock Appreciation Rights, either at the time of
grant or by amendment thereafter; provided that an Incentive Stock Option may be
granted only to an eligible employee of the Company or any parent or subsidiary
corporation. Each Stock Option (referred to herein as an "Option") granted or
sold under the Plan shall be evidenced by an instrument in such form as the
Committee shall prescribe from time to time in accordance with the Plan and
shall comply with the following terms and conditions, and with such other terms
and conditions, including, but not limited to, restrictions upon the Option or
the Common Shares issuable upon exercise thereof, as the Committee, in its
discretion, shall establish:

         (a) The option price shall be at least the fair market value of the
Common Shares subject to such Option at the time the Option is granted.

         (b) The Committee shall determine the number of Common Shares to be
subject to each Option. The number of Common Shares subject to an

<PAGE>
                                      -6-

outstanding Option may be reduced on a share-for-share or other appropriate
basis, as determined by the Committee, to the extent that Common Shares under
such Option are used to calculate the cash, Common Shares, Other Company
Securities or property, or other forms of payment, or any combination thereof,
received pursuant to exercise of a Stock Appreciation Right attached to such
Option.

         (c)(i)   Except as provided in Paragraph 5(c)(ii) below, the Option may
                  not be sold, assigned, transferred, pledged, hypothecated or
                  otherwise disposed of, except by will or the laws of descent
                  and distribution, and shall be exercisable during the
                  grantee's lifetime only by him.

                  (ii)     The Committee, in its sole discretion, may establish,
                           as permitted by applicable law, rules and conditions
                           under which a grantee may transfer an Option to such
                           individuals or types of trusts that the Committee may
                           determine to be eligible for transfer.

                   (iii)   Unless the Committee determines otherwise, the Option
                           shall not be exercisable for at least six months
                           after the date of grant, unless the grantee ceases
                           employment before the expiration of such six-month
                           period by reason of his disability as defined in
                           Paragraph 11 or his death.

         (d)      The Option shall not be exercisable:

                  (i) after the tenth anniversary of the date it is granted. Any
         Option may be exercised during such period only as set forth under
         Paragraph 4(d) or at such time or times and in such installments as the
         Committee may establish in its grant of the Option;

                  (ii) unless payment in full is made for the shares being
          acquired thereunder at the time of exercise; such payment shall be
          made in such form (including, but not limited to, cash, Common Shares
          held for at least six months, or a combination thereof) as the
          Committee may determine in its discretion; and

                  (iii) unless the person exercising the Option has been, at all
         times during the period beginning with the date of the grant of the
         Option and ending on the date of such exercise, employed by the
         Company, or a parent or subsidiary of the Company, or a corporation
         substituting or assuming the Option in a transaction to which Section
         424(a) of the Code, is applicable, except that:

<PAGE>
                                      -7-

                           (A) if such person shall cease such employment by
                  reason of his disability as defined in Paragraph 11 or early,
                  normal or deferred retirement under an approved retirement
                  program of the Company (or such other plan or arrangement as
                  may be approved by the Committee, in its discretion, for this
                  purpose) while holding an Option which has not expired and has
                  not been fully exercised, such person, at any time within one
                  year (or such period determined by the Committee) after the
                  date he ceased such employment (but in no event after the
                  Option has expired), may exercise the Option with respect to
                  any shares as to which he could have exercised the Option on
                  the date he ceased such employment or with respect to such
                  greater number of shares as determined by the Committee;

                           (B) if any person to whom an Option has been granted
                  shall die holding an Option which has not expired and has not
                  been fully exercised, his executors, administrators, heirs or
                  distributees, as the case may be, may, at any time within one
                  year (or such other period determined by the Committee) after
                  the date of death (but in no event after the Option has
                  expired), exercise the Option with respect to any shares as to
                  which the decedent could have exercised the Option at the time
                  of his death, or with respect to such greater number of shares
                  as determined by the Committee; or

                           (C) if such person shall cease employment with the
                  Company while holding an Option which has not expired and has
                  not been fully exercised, the Committee may determine to allow
                  such person at any time within the one year (or three months
                  in the case of an Incentive Stock Option) or such other period
                  determined by the Committee after the date he ceased such
                  employment (but in no event after the Option has expired), to
                  exercise the Option with respect to any shares as to which he
                  could have exercised the Option on the date he ceased such
                  employment or with respect to such greater number of shares as
                  determined by the Committee.

         (e) In the case of an Incentive Stock Option, the amount of the
aggregate fair market value of Common Shares (determined at the time of grant of
the Option pursuant to subparagraph 5(a) of the Plan) with respect to which
incentive stock options are exercisable for the first time by an employee during
any calendar year (under all such plans of his employer corporation and its
parent and subsidiary corporations) shall not exceed $100,000.

<PAGE>
                                      -8-

         (f) It is the intent of the Company that Nonqualified Stock Options
granted under the Plan not be classified as Incentive Stock Options, that the
Incentive Stock Options granted under the Plan be consistent with and contain or
be deemed to contain all provisions required under Section 422 (and the other
appropriate provisions) of the Code and any implementing regulations (and any
successor provisions thereof), and that any ambiguities in construction shall be
interpreted in order to effectuate such intent.

         6. STOCK APPRECIATION RIGHTS. The Committee may grant Stock
Appreciation Rights either alone, or in conjunction with Stock Options, either
at the time of grant or by amendment thereafter. Each Award of Stock
Appreciation Rights granted under the Plan shall be evidenced by an instrument
in such form as the Committee shall prescribe from time to time in accordance
with the Plan and shall comply with the following terms and conditions, and with
such other terms and conditions, including, but not limited to, restrictions
upon the Award of Stock Appreciation Rights or the Common Shares issuable upon
exercise thereof, as the Committee, in its discretion, shall establish:

         (a) The Stock Appreciation Right shall be granted with a hurdle price
equal to at least the fair market value of the underlying Common Shares on the
date of such grant.

         (b) The Committee shall determine the number of Common Shares to be
subject to each Award of Stock Appreciation Rights. The number of Common Shares
subject to an outstanding Award of Stock Appreciation Rights may be reduced on a
share-for-share or other appropriate basis, as determined by the Committee, to
the extent that Common Shares under such Award of Stock Appreciation Rights are
used to calculate the cash, Common Shares, Other Company Securities or property,
or other forms of payment, or any combination thereof, received pursuant to
exercise of an Option attached to such Award of Stock Appreciation Rights, or to
the extent that any other Award granted in conjunction with such Award of Stock
Appreciation Rights is paid.

         (c) The Award of Stock Appreciation Rights may not be sold, assigned,
transferred, pledged, hypothecated or otherwise disposed of, except by will or
the laws of descent and distribution, and shall be exercisable during the
grantee's lifetime only by him. Unless the Committee determines otherwise, the
Award of Stock Appreciation Rights shall not be exercisable for at least six
months after the date of grant, unless the grantee ceases employment or
performance of services before the expiration of such six-month period by reason
of his disability as defined in Paragraph 11 or his death.

<PAGE>
                                      -9-

         (d) The Award of Stock Appreciation Rights shall not be exercisable:

                  (i) after the tenth anniversary of the date it is granted. Any
         Award of Stock Appreciation Rights may be exercised only as set forth
         under Paragraph 4(d) or at such time or times and in such installments
         as the Committee may establish;

                  (ii) in the case that the Award of Stock Appreciation Rights
          is attached to an Option, unless such Option is at the time
          exercisable; and

                  (iii) unless the person exercising the Award of Stock
         Appreciation Rights has been, at all times during the period beginning
         with the date of the grant thereof and ending on the date of such
         exercise, employed by the Company, except that:

                           (A) if such person shall cease such employment or
                  performance of services by reason of his disability as defined
                  in Paragraph 11 or early, normal or deferred retirement under
                  an approved retirement program of the Company (or such other
                  plan or arrangement as may be approved by the Committee, in
                  its discretion, for this purpose) while holding an Award of
                  Stock Appreciation Rights which has not expired and has not
                  been fully exercised, such person may, at any time within
                  three years (or such other period determined by the Committee)
                  after the date he ceased such employment (but in no event
                  after the Award of Stock Appreciation Rights has expired),
                  exercise the Award of Stock Appreciation Rights with respect
                  to any shares as to which he could have exercised the Award of
                  Stock Appreciation Rights on the date he ceased such
                  employment or with respect to such greater number of shares as
                  determined by the Committee; or

                           (B) if any person to whom an Award of Stock
                  Appreciation Rights has been granted shall die holding an
                  Award of Stock Appreciation Rights which has not expired and
                  has not been fully exercised, his executors, administrators,
                  heirs or distributees, as the case may be, may at any time
                  within one year (or such other period determined by the
                  Committee) after the date of death (but in no event after the
                  Award of Stock Appreciation Rights has expired), exercise the
                  Award of Stock Appreciation Rights with respect to any shares
                  as to which the decedent could have exercised the Award of
                  Stock Appreciation Rights at the time of his death, or with
                  respect to such greater number of shares as determined by the
                  Committee.

<PAGE>
                                      -10-

         (e) An Award of Stock Appreciation Rights shall entitle the holder (or
any person entitled to act under the provisions of subparagraph 6(d)(iii)(B)
hereof) to exercise such Award and surrender unexercised the Option, if any, to
which the Stock Appreciation Right is attached (or any portion of such Option)
to the Company and to receive from the Company in exchange thereof, without
payment to the Company, that number of Common Shares having an aggregate value
equal to (or, in the discretion of the Committee, less than) the excess of the
fair market value of one share at the time of such exercise, over the exercise
price (or Option Price, as the case may be), times the number of shares subject
to the Award or the Option, or portion thereof, which is so exercised or
surrendered, as the case may be. The Committee shall be entitled in its
discretion to elect to settle the obligation arising out of the exercise of a
Stock Appreciation Right by the payment of cash or Other Company Securities or
property, or other forms of payment, or any combination thereof, as determined
by the Committee, equal to the aggregate value of the Common Shares it would
otherwise be obligated to deliver. Any such election by the Committee shall be
made as soon as practicable after the receipt by the Committee of written notice
of the exercise of the Stock Appreciation Right. The value of a Common Share,
Other Company Securities or property, or other forms of payment determined by
the Committee for this purpose shall be the fair market value thereof on the
last business day next preceding the date of the election to exercise the Stock
Appreciation Right, unless the Committee, in its discretion, determines
otherwise.

         (f) A Stock Appreciation Right may provide that it shall be deemed to
have been exercised at the close of business on the business day preceding the
expiration date of the Stock Appreciation Right or of the related Option, or
such other date as specified by the Committee, if at such time such Stock
Appreciation Right has a positive value. Such deemed exercise shall be settled
or paid in the same manner as a regular exercise thereof as provided in
subparagraph 6(e) hereof.

         (g) No fractional shares may be delivered under this Paragraph 6, but
in lieu thereof a cash or other adjustment shall be made as determined by the
Committee in its discretion.

         7. RESTRICTED STOCK. Each Award of Restricted Stock under the Plan
shall be evidenced by an instrument in such form as the Committee shall
prescribe from time to time in accordance with the Plan and shall comply with
the following terms and conditions, and with such other terms and conditions as
the Committee, in its discretion, shall establish:

<PAGE>
                                      -11-

         (a) The Committee shall determine the number of Common Shares to be
issued to a participant pursuant to the Award, and the extent, if any, to which
they shall be issued in exchange for cash, other consideration, or both.

         (b) Restricted Stock awarded to a participant in accordance with the
Award shall be subject to the following restrictions until the expiration of
such period as the Committee shall determine, from the date on which the Award
is granted (the "Restricted Period"): (i) a participant to whom an award of
Restricted Stock is made shall be issued, but shall not be entitled to, a stock
certificate, (ii) the Restricted Stock shall not be transferable prior to the
end of the Restricted Period, (iii) the Restricted Stock shall be forfeited and
the stock certificate shall be returned to the Company and all rights of the
holder of such Restricted Stock to such shares and as a shareholder shall
terminate without further obligation on the part of the Company if the
participant's continuous employment or performance of services for the Company
shall terminate for any reason prior to the end of the Restricted Period, except
as otherwise provided in subparagraph 7(c), and (iv) such other restrictions as
determined by the Committee in its discretion. Except as may be recommended by
the Committee and approved by the Board, no Award of Restricted Stock shall have
a Restricted Period of less than 3 years.

         (c) If a participant who has been in continuous employment with the
Company since the date on which a Restricted Stock Award was granted to him
shall, while in such employment, die, or terminate such employment by reason of
disability as defined in Paragraph 11 or by reason of early, normal or deferred
retirement under an approved retirement program of the Company (or such other
plan or arrangement as may be approved by the Committee in its discretion, for
this purpose) and any of such events shall occur after the date on which the
Award was granted to him and prior to the end of the Restricted Period of such
Award, the Committee may determine to cancel any and all restrictions on any or
all of the Common Shares subject to such Award.

         8. DEFERRAL OF COMPENSATION. The Committee shall determine whether or
not an Award shall be made in conjunction with deferral of the participant's
salary, bonus or other compensation, or any combination thereof, and whether or
not such deferred amounts may be:

         (a) forfeited to the Company or to other participants or any
combination thereof, under certain circumstances (which may include, but need
not be limited to, certain types of termination of employment with the Company),

<PAGE>
                                      -12-

         (b) subject to increase or decrease in value based upon the attainment
of or failure to attain, respectively, certain performance measures and/or,

         (c) credited with income equivalents (which may include, but need not
be limited to, interest, dividends or other rates of return) until the date or
dates of payment of the Award, if any.

         9. DEFERRED PAYMENT OF AWARDS. The Committee may specify that the
payment of all or any portion of cash, Common Shares, Other Company Securities
or property, or any other form of payment, or any combination thereof, under an
Award shall be deferred until a later date. Deferrals shall be for such periods
or until the occurrence of such events, and upon such terms, as the Committee
shall determine in its discretion. Deferred payments of Awards may be made by
undertaking to make payment in the future based upon the performance of certain
investment equivalents (which may include, but need not be limited to,
government securities, Common Shares, other securities, property or
consideration, or any combination thereof), together with such additional
amounts of income equivalents (which may be compounded and may include, but need
not be limited to, interest, dividends or other rates of return or
any-combination thereof) as may accrue thereon until the date or dates of
payment, such investment equivalents and such additional amounts of income
equivalents to be determined by the Committee in its discretion.

         10. AMENDMENT OR SUBSTITUTION OF AWARDS UNDER THE PLAN. The terms of
any outstanding Award under the Plan may be amended from time to time by the
Committee in its discretion in any manner that it deems appropriate (including,
but not limited to, acceleration of the date of exercise of any Award and/or
payments thereunder); provided that no such amendment shall adversely affect in
a material manner any right of a participant under the Award without his written
consent, unless the Committee determines in its discretion that there have
occurred or are about to occur significant changes in the participant's
position, duties or responsibilities, or significant changes in economic,
legislative, regulatory, tax, accounting or cost/benefit conditions which are
determined by the Committee in its discretion to have or to be expected to have
a substantial effect on the performance of the Company, or any subsidiary,
affiliate, division or department thereof, on the Plan or on any Award under the
Plan. The Committee may, in its discretion, permit holders of Awards under the
Plan to surrender outstanding Awards in order to exercise or realize the rights
under other Awards, or in exchange for the grant of new Awards, or require
holders of Awards to surrender outstanding Awards as a condition precedent to
the grant of new Awards under the Plan. Notwithstanding the

<PAGE>
                                      -13-

foregoing, no outstanding Award of Restricted Stock under the Plan may be
amended to shorten the Restricted Period without the approval of the Board. No
Award of Options may be amended to allow the exchange or repricing of such
Options without the approval of the stockholders of the Company.

         11. DISABILITY. For the purposes of this Plan, a participant shall be
deemed to have terminated his employment by the Company and its Affiliates by
reason of disability, if the Committee shall determine that the physical or
mental condition of the participant by reason of which such employment
terminated was such at that time as would entitle him to payment of monthly
disability benefits under any Company disability plan. If the participant is not
eligible for benefits under any disability plan of the Company, he shall be
deemed to have terminated such employment by reason of disability if the
Committee shall determine that his physical or mental condition would entitle
him to benefits under any Company disability plan if he were eligible therefor.

         12. TERMINATION OF A PARTICIPANT. For all purposes under the Plan, the
Committee shall determine whether a participant has terminated employment with
the Company.

         13. DILUTION AND OTHER ADJUSTMENTS. In the event of any change in the
outstanding Common Shares of the Company by reason of any stock split, dividend,
split-up, split-off, spin-off, recapitalization, merger, consolidation, rights
offering, reorganization, combination or exchange of shares, a sale by the
Company of all of its assets, any distribution to stockholders other than a
normal cash dividend, or other extraordinary or unusual event, in each such case
occurring after June 10, 1999, if the Committee shall determine, in its
discretion, that such change equitably requires an adjustment in the terms of
any Award or the number of Common Shares available for Awards, such adjustment
may be made by the Committee and shall be final, conclusive and binding for all
purposes of the Plan.

         In the event of the proposed dissolution or liquidation of the Company,
all outstanding Awards shall terminate immediately prior to the consummation of
such proposed action, unless otherwise provided by the Committee. In the event
of a proposed sale of all or substantially all of the assets of the Company, or
the merger of the Company with or into another corporation, all restrictions on
any outstanding Awards shall lapse and participants shall be entitled to the
full benefit of all such Awards immediately prior to the closing date of such
sale or merger, unless otherwise provided by the Committee.

<PAGE>
                                      -14-

         14. DESIGNATION OF BENEFICIARY BY PARTICIPANT. A participant may name a
beneficiary to receive any payment to which he may be entitled in respect of any
Award under the Plan in the event of his death, on a written form to be provided
by and filed with the Committee, and in a manner determined by the Committee in
its discretion. The Committee reserves the right to review and approve
beneficiary designations. A participant may change his beneficiary from time to
time in the same manner, unless such participant has made an irrevocable
designation. Any designation of beneficiary under the Plan (to the extent it is
valid and enforceable under applicable law) shall be controlling over any other
disposition, testamentary or otherwise, as determined by the Committee in its
discretion. If no designated beneficiary survives the participant and is living
on the date on which any amount becomes payable to such a participant's
beneficiary, such payment will be made to the legal representatives of the
participant's estate, and the term "beneficiary" as used in the Plan shall be
deemed to include such person or persons. If there are any questions as to the
legal right of any beneficiary to receive a distribution under the Plan, the
Committee in its discretion may determine that the amount in question be paid to
the legal representatives of the estate of the participant, in which event the
Company, the Board and the Committee and the members thereof, will have no
further liability to anyone with respect to such amount.

         15. FINANCIAL ASSISTANCE. If the Committee determines that such action
is advisable, the Company may assist any person to whom an Award has been
granted in obtaining financing from the Company (or under any program of the
Company approved pursuant to applicable law), or from a bank or other third
party, on such terms as are determined by the Committee, and in such amount as
is required to accomplish the purposes of the Plan, including, but not limited
to, to permit the exercise of an Award, the participation therein, and/or the
payment of any taxes in respect thereof. Such assistance may take any form that
the Committee deems appropriate, including, but not limited to, a direct loan
from the Company, a guarantee of the obligation by the Company, or the
maintenance by the Company of deposits with such bank or third party.

         16.      MISCELLANEOUS PROVISIONS.

         (a) No employee or other person shall have any claim or right to be
granted an Award under the Plan. Determinations made by the Committee under the
Plan need not be uniform and may be made selectively among eligible individuals
under the plan, whether or not such eligible individuals are similarly situated.
Neither the Plan nor any action taken hereunder shall be construed as giving any
employee any right to continue to be

<PAGE>
                                      -15-

employed by the Company, and the right to terminate the employment of any
participants at any time and for any reason is specifically reserved.

         (b) No participant or other person shall have any right with respect to
the Plan, the Common Shares reserved for issuance under the Plan or in any
Award, contingent or otherwise, until written evidence of the Award shall have
been delivered to the recipient and all the terms, conditions and provisions of
the Plan and the Award applicable to such recipient (and each person claiming
under or through him) have been met.

         (c) Except as may be approved by the Committee where such approval
shall not adversely affect compliance of the Plan with Rule 16b-3 under the
Exchange Act, a participant's rights and interest under the Plan may not be
assigned or transferred, hypothecated or encumbered in whole or in part either
directly or by operation of law or otherwise (except in the event of a
participant's death) including, but not by way of limitation, execution, levy,
garnishment, attachment, pledge, bankruptcy or in any other manner; provided,
however, that any Option or similar right (including, but not limited to, a
Stock Appreciation Right) offered pursuant to the Plan shall be transferable by
will or the laws of descent and distribution but shall be exercisable during the
participant's lifetime only by him.

         (d) It is the intent of the Company that the Plan comply in all
respects with Rule 16b-3 under the Exchange Act, that any ambiguities or
inconsistencies in construction of the Plan be interpreted to give effect to
such intention and that if any provision of the Plan is found not to be in
compliance with Rule 16b-3, such provision shall be deemed null and void to the
extent required to permit the Plan to comply with Rule 16b-3.

         (e) The Company shall have the right to deduct from any payment made
under the Plan any federal, state, local or foreign income or other taxes
required by law to be withheld with respect to such payment. It shall be a
condition to the obligation of the Company to issue Common Shares, Other
Company Securities or property, other securities or property, or other forms
of payment, or any combination thereof, upon exercise, settlement or payment
of any Award under the Plan, that the participant (or any beneficiary or
person entitled to act) pay to the Company, upon its demand, such amount as
may be required by the Company for the purpose of satisfying any liability to
withhold federal, state, local or foreign income or other taxes. If the
amount requested is not paid, the Company may refuse to issue Common Shares,
Other Company Securities or property, other securities or property, or other
forms of payment, or any combination thereof. Notwithstanding anything in the
Plan to the contrary, the Committee may, in its discretion, permit an
eligible participant (or any beneficiary or person

<PAGE>
                                      -16-

entitled to act) to elect to pay a portion or all of the amount requested by
the Company for such taxes with respect to such Award, at such time and in
such manner as the Committee shall deem to be appropriate (including, but not
limited to, by authorizing the Company to withhold, or agreeing to surrender
to the Company on or about the date such tax liability is determinable,
Common Shares, Other Company Securities or property, other securities or
property, or other forms of payment, or any combination thereof, owned by
such person or a portion of such forms of payment that would otherwise be
distributed, or have been distributed, as the case may be, pursuant to such
Award to such person, having a fair market value equal to the amount of such
taxes).

         (f) The expenses of the Plan shall be borne by the Company.

         (g) The Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the payment of any Award under the Plan, and rights to the
payment of Awards shall be no greater than the rights of the Company's general
creditors.

         (h) By accepting any Award or other benefit under the Plan, each
participant and each person claiming under or through him shall be conclusively
deemed to have indicated his acceptance and ratification of, and consent to, any
action taken under the Plan by the Company, the Board or the Committee or its
delegates.

         (i) Fair market value in relation to Common Shares, Other Company
Securities or property, other securities or property or other forms of payment
of Awards under the Plan, or any combination thereof, as of any specific time
shall mean such value as determined by the Committee in accordance with
applicable law.

         (j) The masculine pronoun includes the feminine and the singular
includes the plural wherever appropriate.

         (k) The appropriate officers of the Company shall cause to be filed any
reports, returns or other information regarding Awards hereunder of any Common
Shares issued pursuant hereto as may be required by Section 13 or 15(d) of the
Exchange Act (or any successor provision) or any other applicable statute, rule
or regulation.

         (l) The validity, construction, interpretation, administration and
effect of the Plan, and of its rules and regulations, and rights relating to the
Plan and to Awards granted under the Plan, shall be governed by the substantive
laws, but not the choice of law rules, of the State of Delaware.

<PAGE>
                                      -17-

         17. PLAN AMENDMENT OR SUSPENSION. The Plan may be amended or suspended
in whole or in part any time to time by the Board; provided, however, that (i)
no material amendment which is to the benefit of management or the Board shall
be effective unless and until the same is approved by stockholders of the
Company or (ii) no amendment shall be effective unless and until the same is
approved by the stockholders of the Company where the failure to obtain such
approval would adversely affect the compliance of the Plan with Rule 16b-3 under
the Exchange Act and with other applicable law. No amendment of the Plan shall
adversely affect in a material manner any right of any participant with respect
to any Award theretofore granted without such participant's written consent,
except as permitted under Paragraph 10.

         18. PLAN TERMINATION. This Plan shall terminate upon the earlier of the
following dates or events to occur:

         (a) upon the adoption of a resolution of the Board terminating the
Plan; or

         (b) ten years from the date the Plan is initially approved and adopted
by the stockholders of the Company in accordance with Paragraph 19 hereof;
provided, however, that the Board may, prior to the expiration of such ten-year
period, extend the term of the Plan for an additional period of up to five years
for the grant of Awards other than Incentive Stock Options. No termination of
the Plan shall materially alter or impair any of the rights or obligations of
any person, without his consent, under any Award theretofore granted under the
Plan, except that subsequent to termination of the Plan, the Committee may make
amendments permitted under Paragraph 17.

         19. STOCKHOLDER ADOPTION. The Plan was approved by the Board of
Directors on February 26, 1996 and approved and adopted by the stockholders of
the Company, in accordance with applicable law and Rule 16b-3 under the Exchange
Act, at the meeting of stockholders of the Company held May 7, 1996.

                                    * * * * *

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