Document:

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                                                                   EXHIBIT 10.20

                                   TEAM, INC.

                             STOCK OPTION AGREEMENT

         THIS STOCK OPTION AGREEMENT (the Agreement) is made effective as of
July 5, 2001 (the Effective Date) between Team, Inc., a Texas corporation (the
Company or "Team") and B. Dal Miller (Miller or Option Holder).

         WHEREAS, the Company purchased all of the issued and outstanding shares
of the capital stock of X-Ray Inspection, Inc., ("X-Ray Inc.") a Louisiana
corporation, from Miller and E. Patrick Manuel pursuant to a Stock Purchase
Agreement dated April 9, 1999 (the "Purchase Agreement"), and,

         WHEREAS, the Company, Miller and Manuel amended the Purchase Agreement
by a written document made effective July 5, 2001 (the "Exchange Agreement")
which provides among other things for Miller to relinquish his entitlement to
receive additional consideration (the "Earn-out") pursuant to the Purchase
Agreement in exchange for an option to acquire 100,000 Shares of Team common
stock;

         NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the receipt, and sufficiency and adequacy of which are hereby
acknowledged, the parties agree as follows:

         1. GRANT OF OPTION. The Company hereby grants Miller the Option (the
"Option" to purchase 100,000 Shares of Team common stock, $0.30 par value (the
"Shares") from Team for a purchase price of $3.50 per Share (the Option Price)
subject to the terms and conditions of this Agreement in exchange for which
Miller hereby transfers and relinquishes to Team any and all Earn Out payments
pursuant to the Purchase Agreement.

         2. OPTION PERIOD--VESTING. This Option may be exercised in whole or in
part at any time prior to the termination of the Option Period as determined
pursuant to Section 5 below, subject however to the limitation that the Option
shall be exercisable in increments ratably as set forth in

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Exhibit A hereto (the Vesting Schedule); provided, however, that notwithstanding
the Vesting Schedule, the Option shall immediately become fully vested and
exercisable with respect to all Shares covered by the Option if while Miller is
an employee of the Company: (i) a Change of Control Transaction (as that term is
defined in Section 11.i below) occurs, or (ii) the Adjusted EBIT (as defined by
and determined pursuant to Section 11.j below) from Team's Mechanical Inspection
Services Segment for either of Team's fiscal years ending May 31, 2002 or May
31, 2003 equals or exceeds $2,000,000. The Board of Directors of the Company, in
its sole discretion, may waive the Vesting Schedule and, upon written notice to
the Option Holder, accelerate the earliest date or dates in which the Option
granted hereunder is exercisable. The Option granted by this Agreement is the
Option described in the July 2001 Exchange Agreement.

         3. METHOD FOR EXERCISING THE OPTION. The vested portion of the Option
may be exercised in whole or in part only by delivery in person or through
certified or registered mail to the Company at its principal office in Alvin,
Texas (attention: Corporate Secretary) of written notice specifying the number
of Shares with respect to which the Option is being exercised. The notice must
be accompanied by payment of the Option Price for the portion of the Option
being exercised. Payment of the Option Price for the Shares being purchased
shall be made in full by one or a combination of the following two methods:

                  a. In cash or by certified or cashier's check payable to Team,
Inc.; or,

                  b. The delivery to the Company of a properly executed notice
of exercise together with irrevocable instructions to a broker to deliver
promptly to the Company, in payment of the Option Price, the amount of the cash
proceeds of the sale of Shares or a loan from the broker to the Option Holder
sufficient, in each case, to pay the Option Price, and in a form satisfactory to
the Corporate Secretary.

                  Upon such notice to the Corporate Secretary and payment in
full of the amount of the Option Price being exercised, the exercise of the
Option shall be deemed to be effective, and a properly executed certificate or
certificates representing the Shares so purchased shall be issued by the Company
and delivered to the Option Holder or the agent designated by the Option Holder.

         4. ADJUSTMENTS. The adjustments described in this Section 4 shall be
made to the Option in the event of the occurrence of any of the events described
in Subsections 4(a), 4(b) or 4(c) irrespective of whether such event results in
a Change of Control Transaction as defined in Section 11.i:

                  (a) In the event that the outstanding Shares of the Company
         are hereafter increased or decreased or changed into or exchanged for a
         different number or kind of shares or other securities of the Company
         or of another corporation, by reason of a recapitalization,
         reclassification, stock split-up, combination of shares, or dividend or
         other distribution payable in capital stock, appropriate adjustment
         shall be made by the Board in the number and kind of shares as to which
         the outstanding Option, or portions thereof then unexercised, shall be
         exercisable, to the end that the proportionate interest of the Option
         Holder shall, to the extent practicable, be maintained as before the
         occurrence of such event. Such adjustment in the

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         outstanding Option shall be made without change in the total price
         applicable to the unexercised portion of the Option but with a
         corresponding adjustment in the Option price per share.

                  (b) In the event that the Board shall adopt resolutions
         recommending the dissolution or liquidation of the Company, any Option
         granted under this Agreement shall terminate as of a date to be fixed
         by the Board, provided that not less than thirty (30) days' written
         notice of the date so fixed shall be given to Option Holder and Option
         Holder shall have the right during such period to exercise the Option
         as to all or any part of the shares covered thereby, including shares
         as to which such Option would not otherwise be exercisable by reason of
         an insufficient lapse of time.

                  (c) In the event of a Reorganization (as hereinafter defined)
         in which the Company is not the surviving or acquiring company, or in
         which the Company is or becomes a wholly owned subsidiary of another
         company after the effective date of the Reorganization, then

                           (i) If there is no plan or agreement respecting the
                  Reorganization ("Reorganization Agreement") or if the
                  Reorganization Agreement does not specifically provide for the
                  change, conversion or exchange of the Shares under outstanding
                  and unexercised stock options for securities of another
                  corporation, then the Option shall terminate on the date fixed
                  by the Board, provided that not less than 30 days' written
                  notice of the date so fixed shall be given to the Option
                  Holder and Option Holder shall have the right during such
                  period to exercise the Option as to all or any part of the
                  Shares covered thereby; or

                           (ii) If there is a Reorganization Agreement and if
                  the Reorganization Agreement specifically provides for the
                  change, conversion, or exchange of the Shares under
                  outstanding and unexercised stock options for securities of
                  another corporation, then the Board shall adjust the Shares
                  under such outstanding and unexercised stock options in a
                  manner not inconsistent with the provisions of this Agreement
                  such that the total price applicable to the unexercised
                  portion of the Option does not change.

                  (d) The term "Reorganization" as used in subparagraph (c) of
         this Paragraph 4 shall mean any statutory merger, statutory
         consolidation, sale of all or substantially all of the assets of the
         Company, or sale, pursuant to an agreement with the Company, of
         securities of the Company pursuant to which the Company is or becomes a
         wholly owned subsidiary of another company after the effective date of
         the Reorganization.

                  (e) Adjustments and determinations under this Paragraph 4
         shall be made by the Board, whose decisions shall be final, binding,
         and conclusive.

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         5. EXPIRATION AND TERMINATION OF THE OPTION. This Option shall expire
at 5:00 p.m. Houston, Texas time on July 4, 2011 or prior to such time as
hereafter provided (the period from the Effective Date to the date of the
expiration of the Option is defined herein as the Option Period):

                  a. Upon termination of the employment of the Option Holder for
any reason other than death or termination by the Company without cause, , the
Option exercisable (i.e.,to the extent vested) as of the date of termination may
be exercised by Option Holder within three months after the date of the
termination of employment of the Option Holder. If, as of the date of
termination of employment, the Option Holder has completed at least five full
years of continuous service with the Company, the three month period provided
for in the preceding sentence shall be increased to six months. The reasonable
determination of whether the Option Holder has completed such period of service
shall be made by the Company's Board of Directors; provided, however, it is
acknowledged that the Option Holder commenced his employment with the Company on
April 9, 1999.

                  b. Upon termination of the employment of the Option Holder by
reason of the death of the Option Holder, all the shares under the Option
without regard to whether exercisable (i.e.,vested) as of the date of the Option
Holder's death, may be exercised by the personal representative of the deceased
Option Holder within 12 months of the date of the Option Holder's death.

                  c. Upon termination of the employment of the Option Holder by
the Company without cause, the Option exercisable (i.e., to the extent vested)
as of the date of termination may be exercised by Option Holder within twelve
(12) months after the date of termination of employment of Option Holder by the
Company.

         6. TRANSFERABILITY. The Option may not be transferred except by will or
pursuant to the laws of descent and distribution, and it shall be exercisable
during the Option Holder's life only by him, and after his death, only by those
entitled to do so under his will or the applicable laws of descent and
distribution.

         7. COMPLIANCE WITH SECURITIES LAWS. Upon the acquisition of any Shares
pursuant to the exercise of the Option herein granted, the Option Holder or any
person acting under Section 5(b) will enter into such written representations,
warranties and agreements as the Company may reasonably request in order to
comply with applicable securities laws or with this Agreement.

         8. LEGENDS ON CERTIFICATES. The Certificates representing the Shares
purchased by exercise of an Option will be stamped or otherwise imprinted with
legends in such form as the Company or its counsel may require with respect to
any applicable restrictions on sale or transfer and the stock transfer records
of the Company will reflect stock-transfer instructions with respect to such
shares.

         9. TAX LIABILITY. Option Holder covenants that he shall be solely
responsible for the payment of any and all federal, state and local taxes that
are hereafter determined to be due at any time with respect to the grant and/or
exercise of the Option and the issuance of the Shares. Option

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Holder further covenants that he will pay all taxes as the same become due with
respect to the grant and/or exercise of the Option and the issuance of the
Shares and Option Holder further covenants that he shall indemnify and hold Team
harmless from and against any and all claims that may hereafter be asserted by
any party including any federal, state or local taxing authorities for taxes,
interest and/or penalties with respect to the grant and/or exercise of the
Option and or the issuance of the Shares covered by the Option, excluding taxes
due by Team to a taxing authority related to an income tax liability of Team
related to termination of the Earn Out and/or the grant of the Option.

         10. ACKNOWLEDGMENT OF OPTION HOLDER. The Option Holder acknowledges
having received and read this Agreement and agrees to comply with all laws,
rules and regulations applicable to the grant and exercise of the Option and the
sale or other disposition of the Shares covered by this Option Agreement. Option
Holder further represents that he has conferred with and relied exclusively upon
the advise of his own attorneys and accountants in making his decision to enter
into this Option Agreement.

         11. MISCELLANEOUS.

                  a. Notices. Any notice required or permitted to be given under
this Agreement shall be in writing and shall be given by first class registered
or certified mail, postage prepaid, or by personal delivery to the appropriate
party, addressed:

                           i. If to the Company, to the Company at its principal
place of business at Alvin, Texas (Attention: Corporate Secretary) or at such
other address as may have been furnished to the Option Holder in writing by the
Company; or

                           ii. If to the Option Holder, to the Option Holder at
his address on file with the Company, or at such other address as may have been
furnished to the Company by the Option Holder.

Any such notice shall be deemed to have been given as of the fourth day after
deposit in the United States Postal Service, postage prepaid, properly addressed
as set forth above, in the case of mailed notice, or as of the date delivered in
the case of personal delivery.

                  b. Amendment. The Board of Directors may make any adjustments
that differ from the terms and conditions of this Option; provided, however, THE
BOARD OF DIRECTORS CAN NOT, ADVERSELY AFFECT THE RIGHTS OF THE OPTION HOLDER
WITHOUT THE CONSENT OF THE OPTION HOLDER. If such action is made by amendment,
the effective date of such amendment will be the date of the original grant of
this Option. Except as provided herein, this Agreement may not be amended or
otherwise modified unless evidenced in writing and signed by the Company and the
Option Holder.

                  c. Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, and each other provision of this
Agreement shall be severable and enforceable to the extent permitted by law.

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                  d. Waiver. Any provision contained in this Agreement may be
waived, either generally or in any particular instance, by the Company.

                  e. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the Company and the Option Holder and their respective
heirs, executors, administrators, legal representatives, successors and assigns.

                  f. Rights to Employment. Nothing contained in this Agreement
shall be construed as giving the Option Holder any right to be retained in the
employ of the Company and this Agreement is limited solely to governing the
rights and obligations of the Option Holder with respect to the Shares and the
Option.

                  g. Gender and Number. Except when otherwise indicated by the
context, the masculine gender shall also include the feminine gender, and the
definition of any term herein in the singular shall also include the plural.

                  h. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas.

                  i. Change of Control Transaction shall for purposes of Section
2 of this Option Agreement mean the occurrence of any of the following: (i) the
consummation of any "Business Combination", as such term is defined in the
Restated Articles of Incorporation of Team filed with the Secretary of State of
Texas on November 15, 1989; (ii) Team merges or consolidates with any other
entity other than a merger or consolidation of Team which would result in the
voting stock of Team outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity ) at least 70% of the total voting power
represented by the voting securities of Team or such surviving entity
immediately thereafter; (iii) Team sells all or substantially all of its assets
to any other person or entity or group of persons acting in concert, or (iv)
Team is liquidated or dissolved, or (v) if any third person or entity together
with its affiliated or subsidiary entities shall become, directly or indirectly,
the beneficial owner of at least 30% of the voting stock of Team, or if (vi) the
individuals who constitute the members of Team's Board of Directors as of the
Effective Date (the "Incumbent Board") cease for any reason to constitute at
least a majority thereof, provided that any person becoming a director whose
election or nomination for election by Team's shareholders was approved by a
vote of 80% of the directors compromising the Incumbent Board (either by
specific vote or by approval of the proxy statement of Team in which such person
is named as a nominee for director, without objection to such nomination) shall
be, for purposes of this clause (vi), considered as though such person were a
member of the Incumbent Board.

                  j. "Adjusted EBIT from Team's Mechanical Inspection Services
Segment shall for purposes of Section 2 of this Option Agreement mean the amount
of the consolidated earnings before interest, taxes and goodwill that arise
directly in connection with all of Team's Mechanical Inspection Services that
are conducted through Team's branch operations including X Ray Inc. for which
Miller has direct management responsibility plus the positive amount of the
earnings before interest, taxes and goodwill that arise directly in connection
with Team's Mechanical Inspections Services for which Miller does not have
direct management responsibility. The determination of the

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amount of Adjusted EBIT from Team's Mechanical Inspection Services will be
determined in the following manner: as promptly as practical after the close of
each of its fiscal years ending May 31, 2002 and May 31, 2003, Team shall
deliver to Miller and to Team's outside independent auditors ("Team's Auditors")
a statement ("Team's EBIT Calculation") setting forth Team's calculation of
Adjusted EBIT from Team's Mechanical Inspection Services Segment for such fiscal
year along with Team's direction for Team's Auditors to review Team's EBIT
Calculation. As promptly as practical thereafter but not later than August 31
following the end of each such fiscal year, Team will deliver to Miller, Team's
audit report for such fiscal year along with an agreed upon procedure report
issued by Team's Auditors with respect to Team's EBIT Calculation.

         IN WITNESS WHEREOF, the parties have executed this Agreement on the
dates set forth below to be effective as of the 5th day of July, 2001.

                                   TEAM, INC.

                                   By: /s/ PHILIP J. HAWK
                                       -------------------------------------
                                       Philip J. Hawk,
                                       Chairman and Chief Executive Officer

                                   OPTION HOLDER

                                   /s/ B. DAL MILLER
                                   -----------------------------------------
                                   B. Dal Miller

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                                    EXHIBIT A

                                Vesting Schedule

<Table>
<Caption>
     CONDITIONS TO VESTING                        AMOUNT EXERCISABLE
-------------------------------------------------------------------------------
<S>                                  <C>
Upon the continuous employment       Cumulative proportion of the Common
by Option Holder through the         Stock as to all or part of which the
applicable date indicated below:     Option can be exercised after satisfaction
                                     of the respective conditions to vesting:

  1. May 31, 2002                                     25%
  2. May 31, 2003                                     50%
  3. May 31, 2004                                     75%
  4. May 31, 2005                                    100%

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

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

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

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</Table>

                                       8<PAGE>
                                                                Exhibit 4.1

                                  TELLIUM, INC.

                            2002 STOCK INCENTIVE PLAN

                                   as adopted
                                 August 28, 2002

    1.    Purpose.

    The purpose of this Plan is to strengthen Tellium, Inc., a Delaware
corporation (the "Company"), by providing an incentive to employees, officers,
consultants and directors and thereby encouraging them to devote their abilities
and industry to the success of the Company's business enterprise. It is intended
that this purpose be achieved by extending to employees (including future
employees who have received a formal written offer of employment), officers,
consultants and directors of the Company and its Subsidiaries an added long-term
incentive for high levels of performance and unusual efforts through the grant
of Incentive Stock Options, Nonqualified Stock Options, Stock Appreciation
Rights, Dividend Equivalent Rights, Performance Units and Performance Shares,
Share Awards, Phantom Stock and Restricted Stock (as each term is herein
defined).

    2.    Definitions.

    For purposes of the Plan:

        2.1 "Adjusted Fair Market Value" means, in the event of a Change in
    Control, the greater of (a) the highest price per Share paid to holders of
    the Shares in any transaction (or series of related transactions)
    constituting or resulting in a Change in Control other than pursuant to
    Section 2.10(b), or (b) the highest Fair Market Value of a Share during the
    ninety (90) day period ending on the date of the Change in Control.

        2.2 "Affiliate" means, with respect to any Person, any other Person
    that, directly or indirectly through one or more intermediaries, controls,
    or is controlled by, or under common control with, such Person. Any Relative
    (for this purpose, "Relative" means a spouse, child, stepchild, parent,
    parent of spouse, sibling or grandchild) of an individual shall be deemed to
    be an Affiliate of such individual for purposes hereof. Neither the Company
    nor any Person controlled by the Company shall be deemed to be an Affiliate
    of any holder of Company stock.

        2.3 "Agreement" means the written agreement between the Company and an
    Optionee or Grantee evidencing the grant of an Option or Award and setting
    forth the terms and conditions thereof.

        2.4 "Award" means a grant of Restricted Stock, Phantom Stock, a Stock
    Appreciation Right, a Performance Award, a Dividend Equivalent Right, a
    Share Award, or any or all of them.

        2.5 "Beneficial Ownership" means ownership within the meaning of Rule
    13d-3 promulgated under the Exchange Act.

        2.6 "Beneficiary" means an individual, trust or estate who or which, by
    a written designation of the Optionee or Grantee filed with the Company or
    by operation of law succeeds to the rights and obligations of the Optionee
    or Grantee under the Plan and an Agreement upon the Optionee's or Grantee's
    death.

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

        2.8    "Cause" means:

            (a) in the case of an Optionee or Grantee whose employment with the
        Company or a Subsidiary is, as of the date of the applicable Agreement,
        subject to the terms of an employment agreement between such Optionee or
        Grantee and the Company or a Subsidiary, which employment agreement
        includes a definition of "Cause," the term "Cause" as used in this Plan
        or any Agreement shall have the meaning set forth in such employment
        agreement during the period that such employment agreement remains in
        effect; or

<PAGE>

                  (b) in all other cases, the term "Cause" as used in this Plan
or any Agreement shall mean (i) willful failure to perform reasonably assigned
duties within thirty (30) days after having received written notice from the
Company to do so, (ii) dishonesty or willful misconduct in the performance of
duties, (iii) involvement in a transaction in connection with the performance of
duties to the Company or any of its Subsidiaries which transaction is adverse to
the interests of the Company or any of its Subsidiaries and which is engaged in
for personal profit or (iv) willful violation of any law, rule or regulation
(other than traffic violations or similar offenses) in connection with the
performance of duties.

        2.9 "Change in Capitalization" means any increase or reduction in the
    number of Shares, or any change (including, without limitation, in the case
    of a spin-off, dividend or other distribution in respect of Shares, a change
    in value) in the Shares or exchange of Shares for a different number or kind
    of shares or other securities of the Company or another corporation, by
    reason of a reclassification, recapitalization, merger, consolidation,
    reorganization, spin-off, split-up, issuance of warrants or rights or
    debentures, stock dividend, stock split or reverse stock split, cash
    dividend, property dividend, combination or exchange of shares, repurchase
    of shares, change in corporate structure or a substantially similar
    transaction.

        2.10 "Change in Control" shall mean the occurrence of any of the
    following:

            (a) An acquisition (other than directly from the Company) of any
        Voting Securities of the Company by any Person, immediately after which
        such Person has Beneficial Ownership of fifty percent (50%) or more of
        the then outstanding Shares or the combined voting power of the
        Company's then outstanding Voting Securities, provided, however, in
        determining whether a Change in Control has occurred pursuant to this
        Section 2.10(a), Shares or Voting Securities which are acquired in a
        "Non-Control Acquisition" (as hereinafter defined) shall not constitute
        an acquisition which would cause a Change in Control. A "Non-Control
        Acquisition" shall mean an acquisition by (i) an employee benefit plan
        (or a trust forming a part thereof) maintained by (A) the Company or (B)
        any corporation or other Person of which a majority of its voting power
        or its voting equity securities or equity interest is owned, directly or
        indirectly, by the Company (for purposes of this definition, a "Related
        Entity"), (ii) the Company or any Related Entity, or (iii) any Person in
        connection with a "Non-Control Transaction" (as hereinafter defined);

            (b) The individuals who, as of the date hereof, are members of the
        Board (the "Incumbent Board"), cease for any reason to constitute at
        least a majority of the members of the Board, or following a Merger (as
        defined in paragraph (c)(i) below) which results in a Parent
        corporation, the board of directors of the ultimate Parent Corporation
        (as defined in paragraph (c)(i)(A) below); provided, however, that if
        the election, or nomination for election by the Company's common
        stockholders, of any new director was approved by a vote of at least
        two-thirds of the Incumbent Board, such new director shall, for purposes
        of this Plan, be considered as a member of the Incumbent Board; provided
        further, however, that no individual shall be considered a member of the
        Incumbent Board if such individual initially assumed office as a result
        of an actual or threatened solicitation of proxies or consents by or on
        behalf of a Person other than the Board (a "Proxy Contest") including by
        reason of any agreement intended to avoid or settle a Proxy Contest; or

            (c)  The consummation of:

                (i) A merger, consolidation or reorganization with or into the
            Company or in which securities of the Company are issued (a
            "Merger"), unless such Merger is a "Non-Control Transaction." A
            "Non-Control Transaction" shall mean a Merger where:

                    (A) the stockholders of the Company, immediately before such
                Merger own directly or indirectly immediately following such
                Merger at least fifty percent (50%) of the combined voting power
                of the outstanding voting securities of (x) the corporation
                resulting from such Merger (the "Surviving Corporation") if
                fifty percent (50%) or more of the combined voting power of the
                then outstanding voting securities of the Surviving Corporation
                is not Beneficially Owned, directly or indirectly by another
                Person (a "Parent Corporation"), or (y) if there are one or more
                Parent Corporations, the ultimate Parent Corporation; and

                                      -2-

<PAGE>

                    (B) the individuals who were members of the Incumbent Board
                immediately prior to the execution of the agreement providing
                for such Merger constitute at least a majority of the members of
                the board of directors of (x) the Surviving Corporation, if
                there is no Parent Corporation, or (y) if there are one or more
                Parent Corporations, the ultimate Parent Corporation; and

                    (C) no Person other than (1) the Company, (2) any Related
                Entity, (3) any employee benefit plan (or any trust forming a
                part thereof) that, immediately prior to such Merger was
                maintained by the Company or any Related Entity, or (4) any
                Person who, together with its Affiliates, immediately prior to
                such Merger, had Beneficial Ownership of fifty percent (50%) or
                more of the then outstanding Voting Securities or Shares, has,
                together with its Affiliates, Beneficial Ownership of (i) fifty
                percent (50%) or more of the combined voting power of the
                outstanding voting securities or common stock of (x) the
                Surviving Corporation if there is no Parent Corporation, or (y)
                if there are one or more Parent Corporations, the ultimate
                Parent Corporation.

                (ii)  A complete liquidation or dissolution of the Company; or

                (iii) The sale or other disposition of all or substantially all
            of the assets of the Company to any Person (other than a transfer to
            a Related Entity or under conditions that would constitute a
            Non-Control Transaction with the disposition of the assets being
            regarded as a Merger for this purpose or the distribution to the
            Company's stockholders of the stock of a Related Entity or any other
            assets).

    Notwithstanding the foregoing, a Change in Control shall not be deemed to
occur solely because any Person (the "Subject Person") acquired Beneficial
Ownership of more than the permitted amount of the then outstanding Shares or
Voting Securities as a result of the acquisition of Shares or Voting Securities
by the Company which, by reducing the number of Shares or Voting Securities then
outstanding, increases the proportional number of shares Beneficially Owned by
the Subject Persons, provided that if a Change in Control would occur (but for
the operation of this sentence) as a result of the acquisition of Shares or
Voting Securities by the Company, and (1) before such share acquisition by the
Company the Subject Person becomes the Beneficial Owner of any new or additional
Shares or Voting Securities in contemplation of such share acquisition by the
Company or (2) after such share acquisition by the Company the Subject Person
becomes the Beneficial Owner of any new or additional Shares or Voting
Securities which in either case increases the percentage of the then outstanding
Shares or Voting Securities Beneficially Owned by the Subject Person, then a
Change in Control shall occur.

    If an Eligible Individual's employment or service is terminated by the
Company without Cause prior to the date of a Change in Control but the Eligible
Individual reasonably demonstrates that the termination (A) was at the request
of a third party who has indicated an intention or taken steps reasonably
calculated to effect a Change in Control or (B) otherwise arose in connection
with, or in anticipation of, a Change in Control which has been threatened or
proposed, such termination shall be deemed to have occurred after a Change in
Control for purposes of this Plan provided a Change in Control shall actually
have occurred.

        2.11    "Code" means the Internal Revenue Code of 1986, as amended.

        2.12 "Committee" means a committee, as described in Section 3.1,
    appointed by the Board from time to time to administer the Plan and to
    perform the functions set forth herein.

        2.13    "Company" means Tellium, Inc.

        2.14    "Director" means a director of the Company.

        2.15    "Disability" means:

            (a) in the case of an Optionee or Grantee whose employment with the
        Company or a Subsidiary is, as of the date of the applicable Agreement,
        subject to the terms of an employment agreement between such Optionee or
        Grantee and the Company or a Subsidiary, which employment agreement
        includes a definition of "Disability," the term "Disability" as used in
        this Plan or any Agreement shall have the meaning set forth in such
        employment agreement during the period that such employment agreement
        remains in effect; or

                                      -3-

<PAGE>

            (b) in all other cases, the term "Disability" as used in this Plan
        or any Agreement shall mean a physical or mental infirmity which impairs
        the Optionee's or Grantee's ability to perform substantially his or her
        duties for a period of one hundred eighty (180) consecutive days.

        2.16 "Disability Date" means the date which is one hundred eighty (180)
    consecutive days after the date on which an Optionee or Grantee is first
    absent from active employment or service as a Nonemployee Director with the
    Company by reason of a Disability.

        2.17 "Dividend Equivalent Right" means a right to receive all or some
    portion of the cash dividends that are or would be payable with respect to
    Shares.

        2.18 "Division" means any of the operating units or divisions of the
    Company designated as a Division by the Committee.

        2.19 "Eligible Individual" means any of the following individuals who is
    designated by the Committee as eligible to receive Options or Awards subject
    to the conditions set forth herein: (a) any Director (including any
    Nonemployee Director), officer or employee of the Company or a Subsidiary,
    (b) any individual to whom the Company or a Subsidiary has extended a
    formal, written offer of employment, or (c) any consultant or advisor who
    performs actual services for the Company or a Subsidiary.

        2.20 "Exchange Act" means the Securities Exchange Act of 1934, as
    amended.

        2.21 "Fair Market Value" on any date means the closing price at the
    close of the primary trading session of the Shares on such date on the
    principal national securities exchange on which such Shares are listed or
    admitted to trading, or, if such Shares are not so listed or admitted to
    trading, the closing price at the close of the primary trading session of
    the Shares on such date as quoted on the Nasdaq Stock Market or such other
    market in which such prices are regularly quoted, or, if there has been no
    such closing price with respect to Shares on such date, the Fair Market
    Value shall be the value established by the Committee in good faith and, in
    the case of an Incentive Stock Option, in accordance with Section 422 of the
    Code.

        2.22 "Grantee" means a person to whom an Award has been granted under
    the Plan.

        2.23 "Incentive Stock Option" means an Option satisfying the
    requirements of Section 422 of the Code and designated by the Committee as
    an Incentive Stock Option.

        2.24 "Nonemployee Director" means a Director who is a "nonemployee
    director" within the meaning of Rule 16b-3 promulgated under the Exchange
    Act.

        2.25 "Nonqualified Stock Option" means an Option which is not an
    Incentive Stock Option.

        2.26 "Normal Retirement Date" means the date on which an Optionee or
    Grantee terminates active employment with the Company on or after attainment
    of age 65, or with respect to Nonemployee Directors, the date on which such
    Optionee or Grantee resigns, is removed or is not reelected, provided
    however, that a termination for Cause shall not qualify as a termination of
    active employment for the purposes of this sentence.

        2.27 "Option" means a Nonqualified Stock Option, an Incentive Stock
    Option, or either or both of them.

        2.28 "Optionee" means a person to whom an Option has been granted under
    the Plan.

        2.29 "Outside Director" means a Director who is an "outside director"
    within the meaning of Section 162(m) of the Code and the regulations
    promulgated thereunder.

        2.30 "Parent" means any corporation which is a parent corporation
    (within the meaning of Section 424(e) of the Code) with respect to the
    Company.

                                      -4-

<PAGE>

        2.31 "Performance Awards" means Performance Units, Performance Shares or
either or both of them.

        2.32 "Performance-Based Compensation" means any Option or Award that is
    intended to constitute "performance based compensation" within the meaning
    of Section 162(m)(4)(C) of the Code and the regulations promulgated
    thereunder.

        2.33 "Performance Cycle" means the time period specified by the
    Committee at the time Performance Awards are granted during which the
    performance of the Company, a Subsidiary or a Division will be measured.

        2.34 "Performance Objectives" has the meaning set forth in Section 10.

        2.35 "Performance Shares" means Shares issued or transferred to an
Eligible Individual under Section 10.

        2.36 "Performance Units" means Performance Units granted to an Eligible
Individual under Section 10.

        2.37 "Person" means `person' as such term is used for purposes of
    Section 13(d) or 14(d) of the Exchange Act, including without limitation,
    any individual, corporation, limited liability company, partnership, trust,
    unincorporated organization, government or any agency or political
    subdivision thereof, or any other entity or any group of Persons.

        2.38 "Phantom Stock" means a right granted to an Eligible Individual
    under Section 11 representing a number of hypothetical Shares.

        2.39 "Plan" means the Tellium, Inc. 2002 Stock Incentive Plan, as
    amended and restated from time to time.

        2.40 "Restricted Stock" means Shares issued or transferred to an
    Eligible Individual pursuant to Section 9.

        2.41    "Share Award" means a grant of Shares pursuant to Section 11.

        2.42 "Shares" means the common stock, par value $0.001 per share, of the
    Company and any other securities into which such shares are changed or for
    which such shares are exchanged.

        2.43 "Stock Appreciation Right" means a right to receive all or some
    portion of the increase in the value of the Shares as provided in Section 7
    hereof.

        2.44 "Subsidiary" means (i) except as provided in subsection (ii) below,
    any corporation which is or becomes a subsidiary corporation (within the
    meaning of Section 424(f) of the Code) with respect to the Company, and (ii)
    with respect to provisions relating to the eligibility to receive Options or
    Awards other than Incentive Stock Options and to continued employment or
    service for purposes of Options and Awards (unless the Committee determines
    otherwise), any entity, whether or not incorporated, in which the Company
    directly or indirectly owns fifty percent (50%) or more of the outstanding
    equity or other ownership interests.

        2.45 "Successor Corporation" means a corporation, or a parent or
    subsidiary thereof, which issues or assumes an Option or Award in a
    transaction described in Section 424(a) of the Code without regard to
    Sections 424(a)(1) and (2) thereof.

        2.46 "Tax Benefit" means an actual decrease in the Company's liability
    for taxes in any period.

        2.47 "Ten-Percent Stockholder" means an Eligible Individual, who, at the
    time an Incentive Stock Option is to be granted to him or her, owns (within
    the meaning of Section 422(b)(6) of the Code) stock possessing more than ten
    percent (10%) of the total combined voting power of all classes of stock of
    the Company, or of a Parent or a Subsidiary.

                                      -5-

<PAGE>

        2.48 "Termination of Employment" means the later of (i) severance of the
    employer-employee or consulting relationship with the Company, a Parent or a
    Subsidiary or (ii) the resignation, removal or termination of an officer or
    Director of the Company, a Parent or a Subsidiary.

        2.49 "Voting Securities" means all outstanding voting securities of the
    Company entitled to vote generally in the election of the Board of
    Directors.

    3.    Administration.

        3.1 The Plan shall be administered by the Committee, which shall hold
    meetings at such times as may be necessary for the proper administration of
    the Plan. The Committee shall keep minutes of its meetings. If the Committee
    consists of more than one (1) member, a quorum shall consist of not fewer
    than two (2) members of the Committee and a majority of a quorum may
    authorize any action. Any decision or determination reduced to writing and
    signed by all of the members of the Committee shall be as fully effective as
    if made by a majority vote at a meeting duly called and held. The Committee
    shall consist of at least one (1) Director and may consist of the entire
    Board; provided, however, that, (A) if the Committee consists of less than
    the entire Board, then with respect to any Option or Award to an Eligible
    Individual who is subject to Section 16 of the Exchange Act, the Committee
    shall consist of at least two (2) Directors each of whom shall be a
    Nonemployee Director and (B) to the extent necessary for any Option or Award
    intended to qualify as Performance-Based Compensation to so qualify, the
    Committee shall consist of at least two (2) Directors each of whom shall be
    an Outside Director. For purposes of the preceding sentence, if one or more
    members of the Committee is not a Nonemployee Director and an Outside
    Director but recuses himself or herself or abstains from voting with respect
    to a particular action taken by the Committee, then the Committee, with
    respect to that action, shall be deemed to consist only of the members of
    the Committee who have not recused themselves or abstained from voting.
    Subject to applicable law, the Committee may delegate its authority under
    the Plan to any other person or persons.

        3.2 No member of the Committee shall be liable for any action, failure
    to act, determination or interpretation made in good faith with respect to
    this Plan or any transaction hereunder. The Company hereby agrees to
    indemnify each member of the Committee for all costs and expenses and, to
    the extent permitted by applicable law, any liability incurred in connection
    with defending against, responding to, negotiating for the settlement of or
    otherwise dealing with any claim, cause of action or dispute of any kind
    arising in connection with any actions in administering this Plan or in
    authorizing or denying authorization to any transaction hereunder.

        3.3 Subject to the express terms and conditions set forth herein, the
    Committee shall have the power from time to time to:

            (a) determine those Eligible Individuals to whom Options shall be
        granted under the Plan and the number of such Options to be granted and
        to prescribe the terms and conditions (which need not be identical) of
        each such Option, including the purchase price per Share, the vesting
        schedule and the duration of each Option, and make any amendment or
        modification to any Option Agreement consistent with the terms of the
        Plan;

            (b) select those Eligible Individuals to whom Awards shall be
        granted under the Plan and to determine the number of Shares in respect
        of which each Award is granted, the terms and conditions (which need not
        be identical) of each such Award, including the restrictions or
        Performance Objectives relating to Awards and the maximum value of any
        Award, and make any amendment or modification to any Award Agreement
        consistent with the terms of the Plan;

            (c) construe and interpret the Plan and the Options and Awards
        granted hereunder and to establish, amend and revoke rules and
        regulations for the administration of the Plan, including, without
        limitation, correcting any defect or supplying any omission, or
        reconciling any inconsistency in the Plan or in any Agreement, in the
        manner and to the extent it shall deem necessary or advisable, including
        so that the Plan and the operation of the Plan complies with Rule 16b-3
        under the Exchange Act, the Code to the extent applicable and other
        applicable law, and otherwise to make the Plan fully effective. All
        decisions and

                                      -6-

<PAGE>

            determinations by the Committee in the exercise of this power shall
        be final, binding and conclusive upon the Company, its Subsidiaries, the
        Optionees and Grantees, and all other persons having any interest
        therein;

            (d) determine the duration and purposes for leaves of absence which
        may be granted to an Optionee or Grantee on an individual basis without
        constituting a Termination of Employment or service for purposes of the
        Plan;

            (e) exercise its sole discretion with respect to the powers and
        rights granted to it as set forth in the Plan; and

            (f) exercise, generally, such powers and to perform such acts as are
        deemed necessary or advisable to promote the best interests of the
        Company with respect to the Plan.

    4.    Stock Subject to the Plan; Grant Limitations.

        4.1 The maximum number of Shares that may be made the subject of Options
    and Awards granted under this Plan shall be 13,645,000. The maximum number
    of Shares that may be the subject of Options and Awards granted to an
    Eligible Individual in any one calendar year period may not exceed 7,000,000
    Shares. The maximum dollar amount of cash or the Fair Market Value of Shares
    that any Eligible Individual may receive in any calendar year in respect of
    Performance Units denominated in dollars may not exceed $3,000,000. The
    Company shall reserve for the purposes of the Plan such number of Shares as
    shall be determined by the Board.

        4.2 Upon the granting of an Option or an Award, the number of Shares
    available under Section 4.1 for the granting of further Options and Awards
    shall be reduced as follows:

            (a) In connection with the granting of an Option or an Award (other
        than the granting of a Performance Unit denominated in dollars), the
        number of Shares shall be reduced by the number of Shares in respect of
        which the Option or Award is granted or denominated; provided, however,
        that if any Option is exercised by tendering Shares, either actually or
        by attestation, to the Company as full or partial payment of the
        purchase price, the maximum number of Shares available under Section 4.1
        shall be increased by the number of Shares so tendered.

            (b) In connection with the granting of a Performance Unit
        denominated in dollars, the number of Shares shall be reduced by an
        amount equal to the quotient of (i) the dollar amount in which the
        Performance Unit is denominated, divided by (ii) the Fair Market Value
        of a Share on the date the Performance Unit is granted.

        4.3 Whenever any outstanding Option or Award or portion thereof under
    this Plan expires, is canceled, is settled in cash (including the settlement
    of tax withholding obligations using Shares), or is otherwise terminated for
    any reason without having been exercised or payment having been made in
    respect of the entire Option or Award, the Shares allocable to the expired,
    canceled, settled or otherwise terminated portion of the Option or Award may
    again be the subject of Options or Awards granted hereunder.

        4.4 In no event may more than 13,645,000 Shares be issued upon the
    exercise of Incentive Stock Options granted under the Plan.

    5.    Option Grants for Eligible Individuals.

        5.1 Authority of Committee. Subject to the provisions of the Plan, the
    Committee shall have full and final authority to select those Eligible
    Individuals who will receive Options, the terms and conditions of which
    shall be set forth in an Agreement. Without limiting the generality of the
    preceding sentence, unless the Committee determines otherwise in its sole
    discretion, in consideration of granting an Option, the Optionee shall
    agree, in the Agreement, to remain in the employ or service of the Company
    or any Subsidiary for a period of at least one (1) year (or such shorter
    period as may be fixed in the Agreement or by action of the Committee
    following grant

                                      -7-

<PAGE>

    of the Option) after the Option is granted. Incentive Stock Options may be
    granted only to Eligible Individuals who are employees of the Company or any
    Subsidiary.

        5.2 Purchase Price. The purchase price (which may be greater than, less
    than or equal to the Fair Market Value on the date of grant) or the manner
    in which the purchase price is to be determined for Shares under each Option
    shall be determined by the Committee and set forth in the Agreement pursuant
    to which each Option is granted; provided, however, that the purchase price
    per Share under each Option intended to qualify as Performance-Based
    Compensation shall not be less than 100% of the Fair Market Value of a Share
    on the Date the Option is granted and provided, further, however, that the
    purchase price per Share under each Incentive Stock Option shall not be less
    than 100% of the Fair Market Value of a Share on the date the Option is
    granted (110% in the case of an Incentive Stock Option granted to a
    Ten-Percent Stockholder).

        5.3 Maximum Duration. Options granted hereunder shall be for such term
    as the Committee shall determine; provided, however, that an Option shall
    not be exercisable after the expiration of ten (10) years from the date it
    is granted (five (5) years in the case of an Incentive Stock Option granted
    to a Ten-Percent Stockholder); and provided, further, however, that the
    Committee may provide that an Option (other than an Incentive Stock Option)
    may, upon the death of the Optionee prior to the expiration of the Option,
    be exercised for up to one (1) year following the date of the Optionee's
    death even if such period extends beyond ten (10) years from the date the
    Option is granted. The Committee may, subsequent to the granting of any
    Option, extend the term thereof, but in no event shall the term as so
    extended exceed the maximum term provided for in the preceding sentence.

        5.4 Vesting and Exercisability. Subject to Sections 5.5 and 6.5, each
    Option shall become vested and exercisable in such installments (which need
    not be equal) and at such times as may be designated by the Committee and
    set forth in the Agreement. To the extent not exercised, installments shall
    accumulate and be exercisable, in whole or in part, at any time after
    becoming exercisable, but not later than the date the Option expires. The
    Committee may accelerate the exercisability of any Option or portion thereof
    at any time.

        5.5 Termination. Subject to Sections 5.3, 6.5 and 12 and unless
    otherwise provided by the Committee, in its sole discretion, at the time of
    grant (and set forth in the applicable Agreement) or at a later date, the
    following provisions shall apply to Options upon a Termination of
    Employment:

            (a) Except in the case of termination for Cause, Disability,
        retirement on or after the Optionee's Normal Retirement Date, or death
        as provided in Sections 5.5(b), (c) and (d) below, upon an Optionee's
        Termination of Employment with the Company, a Parent or a Subsidiary for
        any reason, any unexercised Option (or portion thereof) held by such
        Optionee shall expire three (3) months after the Optionee has a
        Termination of Employment and such Option (or portion thereof) may only
        be exercised by the Optionee or his or her Beneficiary to the extent
        that the Option (or a portion thereof) was exercisable on the date of
        Termination of Employment.

            (b) If the Optionee's Termination of Employment arises as a result
        of a termination for Cause, then, unless the Committee determines
        otherwise at the time of the Termination of Employment, any unexercised
        Options (whether or not vested and exercisable) held by such Optionee
        shall terminate and expire concurrently with the Optionee's Termination
        of Employment and no rights thereunder may be exercised.

            (c) If an Optionee suffers a Disability or retires on or after the
        Optionee's Normal Retirement Date, any unexercised Option (or portion
        thereof) held by such disabled or retired Optionee shall expire one (1)
        year after the Disability Date or date of Termination of Employment by
        reason of retirement, as the case may be, and such Option (or portion
        thereof) may only be exercised by the Optionee or his or her guardian or
        legal representative to the extent that the Option (or a portion
        thereof) was exercisable on the Disability Date or the date of
        Termination of Employment by reason of retirement, as the case may be.

            (d) If an Optionee dies while still employed by or providing
        services to the Company, each Option (or portion thereof) held by such
        Optionee shall immediately become vested and exercisable with respect to
        those Shares that otherwise would have vested during the one-year period
        following the Optionee's death and will be deemed to have become vested
        and exercisable on the day preceding the date of the Optionee's

                                      -8-

<PAGE>

        death. The Options (or portions thereof) which the Optionee was entitled
        to exercise on the date of the Optionee's death (which shall include
        those Options (or portions thereof) that become vested and exercisable
        pursuant to the preceding sentence by reason of the Optionee's death)
        may be exercised at any time after the Optionee's death by the
        Optionee's Beneficiary; provided, however, that no Option (or portion
        thereof) may be exercised after the earlier of: (i) one (1) year after
        the Optionee's death or (ii) the expiration date specified for the
        particular Option in the Agreement. If an Optionee dies after his or her
        Termination of Employment, then the Option (or portions thereof) which
        the Optionee was entitled to exercise on the date of the Optionee's
        death may be exercised by his or her Beneficiary within the remaining
        portion of the period specified in Sections 5.5(a) or 5.5(c), as the
        case may be.

            (e) The Option (or portion thereof), to the extent not yet vested
        and exercisable as of the date of the Optionee's Termination of
        Employment, shall terminate immediately upon such date.

        5.6 Deferred Delivery of Option Shares. The Committee may, in its sole
    discretion, permit Optionees to elect to defer the issuance of Shares upon
    the exercise of one or more Nonqualified Stock Options granted pursuant to
    the Plan. The terms and conditions of such deferral shall be determined at
    the time of the grant of the Option or thereafter and shall be set forth in
    the Agreement evidencing the Option.

        5.7 Modification. No modification of an Option shall adversely alter or
    impair any rights or obligations under the Option without the Optionee's
    consent.

        5.8 Limitations on Incentive Stock Options. To the extent that the
    aggregate Fair Market Value (determined as of the date of the grant) of
    Shares with respect to which Incentive Stock Options granted under the Plan
    and "incentive stock options" (within the meaning of Section 422 of the
    Code) granted under all other plans of the Company or its Subsidiaries (in
    either case determined without regard to this Section 5.8) are exercisable
    by an Optionee for the first time during any calendar year exceeds $100,000,
    such Incentive Stock Options shall be treated as Nonqualified Stock Options.
    In applying the limitation in the preceding sentence in the case of multiple
    Option grants, Options which were intended to be Incentive Stock Options
    shall be treated as Nonqualified Stock Options according to the order in
    which they were granted such that the most recently granted Options are
    first treated as Nonqualified Stock Options.

    6.    Terms and Conditions Applicable to All Options.

        6.1 Additional Terms. The provisions of this Section 6 shall apply to
    all Options, unless otherwise provided by the Committee, in its sole
    discretion, in the applicable Agreement.

        6.2 Non-Transferability. No Option granted hereunder shall be
    transferable by the Optionee to whom it is granted otherwise than by will or
    by the laws of descent and distribution or, in the case of an Option other
    than an Incentive Stock Option, in the Committee's sole discretion, pursuant
    to a domestic relations order (within the meaning of Rule 16a-12 promulgated
    under the Exchange Act) (a "Domestic Relations Transfer"), and, except with
    respect to an Option transferred pursuant to a Domestic Relations Transfer,
    an Option shall be exercisable during the lifetime of such Optionee only by
    the Optionee or his or her guardian or legal representative. Notwithstanding
    the foregoing, the Committee may set forth in the Agreement evidencing an
    Option (other than an Incentive Stock Option) at the time of grant or
    thereafter, that the Option may be transferred to members of the Optionee's
    immediate family, to trusts solely for the benefit of such immediate family
    members and to partnerships in which such family members and/or trusts are
    the only partners. Following transfer, for purposes of this Plan, a
    transferee of an Option shall be deemed to be the Optionee; provided that
    the Option shall be exercisable by the transferee only to the extent and for
    such periods that the Option would have been exercisable if held by the
    original Optionee. For this purpose, immediate family means the Optionee's
    spouse, parents, children, stepchildren and grandchildren and the spouses of
    such parents, children, stepchildren and grandchildren. The terms of an
    Option shall be final, binding and conclusive upon the beneficiaries,
    executors, administrators, heirs and successors of the Optionee.

         6.3    Method of Exercise.

                                      -9-

<PAGE>

            (a) The exercise of an Option shall be made only by a written notice
        delivered in person or by mail to the Secretary of the Company at the
        Company's principal executive office, specifying the number of Shares to
        be purchased and, to the extent applicable, accompanied by payment
        therefor and otherwise in accordance with such procedures which may be
        approved by the Committee from time to time, and in accordance with the
        Agreement pursuant to which the Option was granted; provided, however,
        that Options may not be exercised by an Optionee for six months
        following a hardship distribution to the Optionee, to the extent such
        exercise is prohibited under Treasury Regulation ss.
        1.401(k)-1(d)(2)(iv)(B)(4). The purchase price for any Shares purchased
        pursuant to the exercise of an Option shall be paid, in any of the
        following forms: (a) cash or (b) the transfer, either actually or by
        attestation, to the Company of Shares that have been held by the
        Optionee for at least six (6) months (or such lesser period as may be
        permitted by the Committee) prior to the exercise of the Option and that
        have a Fair Market Value equal in amount to the purchase price, such
        transfer to be upon such terms and conditions as determined by the
        Committee or (c) a combination of cash and the transfer of Shares,
        provided, however, that the Committee, in its sole discretion, may
        determine in the case of Options that the purchase price shall be paid
        only in cash. In addition, Options may be exercised through a registered
        broker-dealer pursuant to such cashless exercise procedures which are,
        from time to time, deemed acceptable by the Committee. Any Shares
        transferred to the Company as payment of the purchase price under an
        Option shall be valued at their Fair Market Value on the day preceding
        the date of exercise of such Option. If requested by the Committee, the
        Optionee shall deliver the Agreement evidencing the Option to the
        Secretary of the Company who shall endorse thereon a notation of such
        exercise and return such Agreement to the Optionee. No fractional Shares
        (or cash in lieu thereof) shall be issued upon exercise of an Option and
        the number of Shares that may be purchased upon exercise shall be
        rounded to the nearest number of whole Shares.

             (b) If the Fair Market Value of the Shares with respect to which
        the Option is being exercised exceeds the purchase price of such Option,
        an Optionee may, instead of exercising an Option as provided in Section
        6.3(a), request that the Committee authorize payment to the Optionee of
        the difference between the Fair Market Value of part or all of the
        Shares which are the subject of the Option and the purchase price of the
        Option, such difference to be determined as of the date the Committee
        receives the request from the Optionee. The Committee, in its sole
        discretion, may grant or deny such a request from an Optionee with
        respect to part or all of the Shares as to which the Option is then
        exercisable and, to the extent granted, shall direct the Company to make
        the payment to the Optionee either in cash or in Shares or in any
        combination thereof; provided, however, that the payment in Shares shall
        be based upon the Fair Market Value of Shares as of the date the
        Committee received the request from the Optionee. An Option shall be
        deemed to have been exercised and shall be canceled to the extent that
        the Committee grants a request pursuant to this Section 6.3(b).

        6.4 Rights of Optionees. No Optionee shall be deemed for any purpose to
    be the owner of any Shares subject to any Option unless and until (a) the
    Option shall have been exercised pursuant to the terms thereof, (b) the
    Company shall have issued and delivered Shares to the Optionee, and (c) the
    Optionee's name shall have been entered as a stockholder of record on the
    books of the Company. Thereupon, the Optionee shall have full voting,
    dividend and other ownership rights with respect to such Shares, subject to
    such terms and conditions as may be set forth in the applicable Agreement.

        6.5    Effect of Change in Control.

            (a) Notwithstanding anything to the contrary in Section 5, in the
        event of a Change in Control, the Plan and the Options shall continue;
        provided, however, that the Committee, in its sole discretion and on
        such terms and conditions as it deems appropriate, may provide, either
        by the terms of the applicable Agreement or by action taken prior to the
        occurrence of any such Change in Control, for any or all of the
        following alternatives (separately or in any combination):

                (i) for the payment in cash upon the surrender to the Company
            for cancellation of any Option or portion of an Option to the extent
            vested and not yet exercised in an amount equal to the excess, if
            any, of (a) (i) in the case of a Nonqualified Stock Option, the
            greater of (A) the Fair Market Value, on the date preceding the date
            of surrender, of the Shares subject to the Option or portion thereof
            surrendered or (B) the Adjusted Fair Market Value of the Shares
            subject to the Option or portion thereof surrendered

                                      -10-

<PAGE>

                or (ii) in the case of an Incentive Stock Option, the Fair
            Market Value, on the date preceding the date of surrender, of the
            Shares subject to the Option or portion thereof surrendered, over
            (b) the aggregate purchase price for such Shares under the Option or
            portion thereof surrendered.

                (ii) for the replacement of the Options with other rights or
            property selected by the Committee in its sole discretion;

                (iii) for the accelerated vesting of all or a portion of the
            Options;

                (iv) for the assumption of the Options by the successor or
            survivor corporation, or a parent or subsidiary thereof, or the
            substitution by such corporation for such Options of new options
            covering the stock of the successor or survivor corporation, or a
            parent or subsidiary thereof, with appropriate adjustments as to the
            number and kind of shares and prices; or

                (v) for adjustments in the terms and conditions of outstanding
            Options and/or the number and type of Shares or other securities or
            property subject to such outstanding Options.

            Any action pursuant to this Section 6.5(a) shall be conditioned upon
        the consummation of the Change in Control and shall be effective only
        immediately before the consummation of the Change in Control.

            (b) Subject to Section 6.5(d) and to the extent set forth in the
        applicable Agreement or provided by the Committee, in its sole
        discretion, subsequent to the granting of an Option, if, as a result of
        a Change in Control transaction, an Option intended to qualify as an
        Incentive Stock Option fails to so qualify solely because of the failure
        to meet the holding requirements of Code Section 422(a)(1) (a
        "Disqualifying Disposition"), the Company shall make a cash payment to
        the Optionee equal to the amount which will, after taking into account
        all taxes imposed on the Disqualifying Disposition and the receipt of
        such payment, leave the Optionee in the same after-tax position the
        Optionee would have been in had the Code Section 422(a)(1) holding
        requirements been met at the time of the Disqualifying Disposition
        (which after-tax position will reflect the total taxes, if any, that
        would have been incurred by the Optionee had the Disqualifying
        Disposition been subject to federal income tax at capital gains rates)
        provided, however, that no payment described in this Section shall
        exceed the Tax Benefit to the Company resulting from deductions relating
        to ordinary income recognized by the Optionee as a result of the
        Disqualifying Disposition. The payment described in this Section shall
        be made by the Company within thirty (30) days of the filing by the
        Company of the federal tax return which includes the tax items
        associated with the income recognized by the Optionee as a result of the
        Disqualifying Disposition (or, if the Tax Benefit described in the
        preceding sentence is not realized until a later year, within thirty
        (30) days of the filing by the Company of the federal tax return with
        respect to which such Tax Benefit is realized).

            (c) Subject to Section 6.5(d) and to the extent set forth in the
        applicable Agreement or provided by the Committee, in its sole
        discretion, subsequent to the granting of an Option, and provided that
        an Optionee is not entitled to payment under Section 6.5(b) hereof, if,
        as a result of a Change in Control transaction, an Option intended to
        qualify as an Incentive Stock Option fails to so qualify solely because
        the vesting of the Option is accelerated pursuant to Section 6.5(a) and
        such acceleration causes the aggregate fair market value (determined at
        the time the Option is granted) of the Shares with respect to which
        Options are exercisable for the first time by an Optionee during the
        calendar year in which such vesting occurs to exceed $100,000, within
        the meaning of Code Section 422(d) (a "Disqualified Option"), then, upon
        exercise of such Disqualified Option, the Company shall make a cash
        payment to the Optionee equal to the amount which will, after taking
        into account all taxes imposed on the exercise of such Disqualified
        Option and the receipt of such payment, leave the Optionee in the same
        after-tax position the Optionee would have been in had the Disqualified
        Option continued to qualify as an Incentive Stock Option on the date of
        exercise and the Optionee sold the Shares received upon exercise of the
        Option at their Fair Market Value on the date of exercise, provided,
        however, that no payment described in this Section shall exceed the Tax
        Benefit to the Company resulting from deductions relating to ordinary
        income recognized by the Optionee as a result of exercising the
        Disqualified Option and the receipt of such payment. The payment
        described in this Section shall be made by the Company within thirty
        (30) days of the filing by the Company of the federal tax return which
        includes the tax items associated with the income recognized by the
        Optionee as a result of exercising

                                      -11-

<PAGE>

        the Disqualified Option (or, if the Tax Benefit described in the
        preceding sentence is not realized until a later year, within thirty
        (30) days of the filing by the Company of the federal tax return with
        respect to which such Tax Benefit is realized).

            (d) If more than one Optionee is entitled to a cash payment pursuant
        to Section 6.5(b) or Section 6.5(c) in any single tax year and the Tax
        Benefit realized by the Company in such year with respect to all such
        Optionees is less than the aggregate amount of the payments due to such
        Optionees hereunder, then (i) each such Optionee shall receive a portion
        of such cash payment equal to an amount determined by multiplying the
        amount of the Tax Benefit realized by the Company in such year by a
        fraction the numerator of which is equal to the amount of payment due to
        such Optionee and the denominator of which is equal to the aggregate
        amount due to all such Optionees entitled to a payment hereunder, and
        (ii) subject to further application of this Section 6.5(d), shall be
        entitled to receive the remaining portion within thirty (30) days of the
        filing by the Company of the federal tax return with respect to which
        such Tax Benefit is realized.

    7.    Stock Appreciation Rights.

    The Committee may in its sole discretion, either alone or in connection with
the grant of an Option, grant Stock Appreciation Rights in accordance with the
Plan, the terms and conditions of which shall be set forth in an Agreement. If
granted in connection with an Option, a Stock Appreciation Right shall cover the
same Shares covered by the Option (or such lesser number of Shares as the
Committee may determine) and shall, except as provided in this Section 7, be
subject to the same terms and conditions as the related Option.

        7.1 Time of Grant. A Stock Appreciation Right may be granted (a) at any
    time if unrelated to an Option, or (b) if related to an Option, either at
    the time of grant, or (except in the case of an Incentive Stock Option) at
    any time thereafter during the term of the Option.

        7.2    Stock Appreciation Right Related to an Option.

            (a) Exercise. Subject to Section 7.9, a Stock Appreciation Right
        granted in connection with an Option shall be exercisable at such time
        or times and only to the extent that the related Options are exercisable
        (including, without limitation, exercisability upon Termination of
        Employment or a Change in Control), and will not be transferable except
        to the extent the related Option may be transferable. A Stock
        Appreciation Right granted in connection with an Incentive Stock Option
        shall expire no later than the expiration of the related Incentive Stock
        Option and shall be exercisable only if the Fair Market Value of a Share
        on the date of exercise exceeds the purchase price of the Option
        specified in the related Incentive Stock Option Agreement.

            (b) Treatment of Related Options and Stock Appreciation Rights Upon
        Exercise. Upon the exercise of a Stock Appreciation Right granted in
        connection with an Option, the Option shall be canceled to the extent of
        the number of Shares as to which the Stock Appreciation Right is
        exercised, and upon the exercise of an Option granted in connection with
        a Stock Appreciation Right, the Stock Appreciation Right shall be
        canceled to the extent of the number of Shares as to which the Option is
        exercised or surrendered.

        7.3    Stock Appreciation Right Unrelated to an Option.

            (a) Terms. Subject to Section 7.9, Stock Appreciation Rights
        unrelated to Options shall contain such terms and conditions as to
        exercisability, vesting and duration as the Committee shall determine,
        but in no event shall they have a term of greater than ten (10) years;
        provided, however, that the Committee may provide that Stock
        Appreciation Rights may, upon the death of the Grantee, be exercised for
        up to one (1) year following the date of the Grantee's death even if
        such period extends beyond ten (10) years from the date the Stock
        Appreciation Right was granted.

            (b) Termination. Subject to Section 12 and except as provided in
        Section 7.9, and unless otherwise provided by the Committee, in its sole
        discretion, in the applicable Agreement, upon a Grantee's Termination of
        Employment, a Stock Appreciation Right shall be exercisable by the
        Grantee to the same extent that an Option would be exercisable by an
        Optionee upon the Optionee's Termination of Employment

                                      -12-

<PAGE>

        under the provisions of Section 5.5; provided, however, no Stock
        Appreciation Right may be exercised after the expiration date specified
        for the particular Stock Appreciation Right in the applicable Agreement.

        7.4 Amount Payable. Subject to Section 7.7, upon the exercise of a Stock
    Appreciation Right, the Grantee shall be entitled to receive an amount
    determined by multiplying (x) the excess of the Fair Market Value of a Share
    on the date preceding the date of exercise of such Stock Appreciation Right
    over (A) in the case of a Stock Appreciation Right granted in connection
    with an Option, the per Share purchase price under the related Option, or
    (B) in the case of a Stock Appreciation Right unrelated to an Option, the
    Fair Market Value of a Share on the date the Stock Appreciation Right was
    granted, by (y) the number of Shares as to which such Stock Appreciation
    Right is being exercised. Notwithstanding the foregoing, the Committee may
    limit in any manner the amount payable with respect to any Stock
    Appreciation Right by including such a limit in the Agreement evidencing the
    Stock Appreciation Right at the time it is granted.

        7.5 Non-Transferability. No Stock Appreciation Right shall be
    transferable by the Grantee to whom it was granted otherwise than by will or
    by the laws of descent and distribution or, in the Committee's sole
    discretion, (except in the case of a Stock Appreciation Right granted in
    connection with an Incentive Stock Option), pursuant to domestic relations
    order (within the meaning of Rule 16a-12 promulgated under the Exchange Act
    (a "Domestic Relations Transfer") and, except with respect to a Stock
    Appreciation Right transferred pursuant to a Domestic Relations Transfer,
    such Stock Appreciation Right shall be exercisable during the lifetime of
    such Grantee only by the Grantee or his or her guardian or legal
    representative. The terms of such Stock Appreciation Right shall be final,
    binding and conclusive upon the beneficiaries, executors, administrators,
    heirs and successors of the Grantee.

        7.6 Method of Exercise. Stock Appreciation Rights shall be exercised by
    a Grantee only by a written notice delivered in person or by mail to the
    Secretary of the Company at the Company's principal executive office,
    specifying the number of Shares with respect to which the Stock Appreciation
    Right is being exercised. If requested by the Committee, the Grantee shall
    deliver the Agreement evidencing the Stock Appreciation Right being
    exercised and the Agreement evidencing any related Option to the Secretary
    of the Company who shall endorse thereon a notation of such exercise and
    return such Agreement to the Grantee.

        7.7 Form of Payment. Payment of the amount determined under Section 7.4
    may be made in the sole discretion of the Committee solely in whole Shares
    in a number determined at their Fair Market Value on the date preceding the
    date of exercise of the Stock Appreciation Right, or solely in cash, or in a
    combination of cash and Shares. If the Committee decides to make full
    payment in Shares and the amount payable results in a fractional Share, no
    fractional Shares (or cash in lieu thereof) shall be issued upon the
    exercise of the Stock Appreciation Right and the number of Shares that will
    be delivered shall be rounded to the nearest number of whole Shares.

        7.8 Modification. No modification of an Award shall adversely alter or
    impair any rights or obligations under the Agreement without the Grantee's
    consent.

        7.9 Effect of Change in Control. Notwithstanding anything contained in
    this Section 7 to the contrary, in the event of a Change in Control, the
    Plan and the Stock Appreciation Rights shall continue; provided, however,
    that the Committee, in its sole discretion and on such terms and conditions
    as it deems appropriate, may provide, either by the terms of the applicable
    Agreement or by action taken prior to the occurrence of any such Change in
    Control, for any or all of the following alternatives (separately or in any
    combination):

            (a) with respect to a Stock Appreciation Right unrelated to an
        Option, for the payment in cash upon the surrender to the Company for
        cancellation of any such Stock Appreciation Right or portion of a Stock
        Appreciation Right to the extent vested and not yet exercised in an
        amount equal to the excess, if any, of (A) the greater of (i) the Fair
        Market Value, on the date preceding the date of surrender, of the Shares
        subject to the Stock Appreciation Right or portion thereof surrendered
        or

            (b) the Adjusted Fair Market Value, on the date preceding the date
        of surrender, of the Shares over (B) the aggregate Fair Market Value, on
        the date the Stock Appreciation Right was granted, of the Shares subject
        to the Stock Appreciation Right or portion thereof surrendered.

                                      -13-

<PAGE>

            (c) for the replacement of the Stock Appreciation Rights with other
        rights or property selected by the Committee in its sole discretion;

            (d) for the accelerated vesting of all or a portion of the Stock
        Appreciation Rights;

            (e) for the assumption of the Stock Appreciation Rights by the
        successor or survivor corporation, or a parent or subsidiary thereof, or
        the substitution by such corporation for such Stock Appreciation Rights
        of new stock appreciation rights covering the stock of the successor or
        survivor corporation, or a parent or subsidiary thereof, with
        appropriate adjustments as to the number and kind of shares and prices;
        or

            (f) for adjustments in the terms and conditions of outstanding Stock
        Appreciation Rights and/or the number and type of Shares or other
        securities or property subject to such outstanding Stock Appreciation
        Rights.

        Any action pursuant to this Section 7.9 shall be conditioned upon the
    consummation of the Change in Control and shall be effective only
    immediately before the consummation of the Change in Control.

    8.    Dividend Equivalent Rights.

        The Committee may in its sole discretion grant Dividend Equivalent
    Rights to Eligible Individuals in tandem with an Option or Award or as a
    separate Award. The terms and conditions (including, without limitation,
    terms and conditions relating to a Change in Control) applicable to each
    Dividend Equivalent Right shall be specified in the Agreement under which
    the Dividend Equivalent Right is granted. In the sole discretion of the
    Committee, amounts payable in respect of Dividend Equivalent Rights may be
    payable currently or deferred until the lapsing of restrictions on such
    Dividend Equivalent Rights or until the vesting, exercise, payment,
    settlement or other lapse of restrictions on the Option or Award to which
    the Dividend Equivalent Rights relate. In the event that the amount payable
    in respect of Dividend Equivalent Rights are to be deferred, the Committee
    shall determine whether such amounts are to be held in cash or reinvested in
    Shares or deemed (notionally) to be reinvested in Shares. If amounts payable
    in respect of Dividend Equivalent Rights are to be held in cash, there may
    be credited at the end of each year (or portion thereof) interest on the
    amount of the account at the beginning of the year at a rate per annum as
    the Committee, in its sole discretion, may determine. In the sole discretion
    of the Committee, Dividend Equivalent Rights may be settled in cash or
    Shares or a combination thereof, in a single installment or multiple
    installments. To the extent necessary for any Dividend Equivalent Right
    intended to qualify as Performance-Based Compensation to so qualify, the
    terms and conditions of the Dividend Equivalent Right shall be such that
    payment of the Dividend Equivalent Right is contingent upon attainment of
    specified Performance Objectives within the Performance Cycle, as provided
    for in Section 10, and such Dividend Equivalent Right shall be treated as a
    Performance Award for purposes of Sections 10 and 15.

    9.    Restricted Stock.

        9.1 Grant. The Committee may in its sole discretion grant Awards to
    Eligible Individuals of Restricted Stock, which shall be evidenced by an
    Agreement between the Company and the Grantee. Each Agreement shall contain
    such restrictions, terms and conditions as the Committee may, in its sole
    discretion, determine and (without limiting the generality of the foregoing)
    such Agreements may require that an appropriate legend be placed on Share
    certificates. Awards of Restricted Stock shall be subject to the terms and
    provisions set forth below in this Section 9.

        9.2 Rights of Grantee. Shares of Restricted Stock granted pursuant to an
    Award hereunder shall be issued in the name of the Grantee as soon as
    reasonably practicable after the Award is granted provided that the Grantee
    has executed an Agreement evidencing the Award, the appropriate blank stock
    powers and, in the sole discretion of the Committee, an escrow agreement and
    any other documents which the Committee may require as a condition to the
    issuance of such Shares. If a Grantee shall fail to execute the Agreement
    evidencing a

                                      -14-

<PAGE>

    Restricted Stock Award, the appropriate blank stock powers, an escrow
    agreement or any other documents which the Committee may require within the
    time period prescribed by the Committee at the time the Award is granted,
    the Award shall be null and void. At the sole discretion of the Committee,
    Shares issued in connection with a Restricted Stock Award shall be deposited
    together with the stock powers with an escrow agent (which may be the
    Company) designated by the Committee. Unless the Committee determines
    otherwise and as set forth in the Agreement, upon delivery of the Shares to
    the escrow agent, the Grantee shall have all of the rights of a stockholder
    with respect to such Shares, including the right to vote the Shares and to
    receive all dividends or other distributions paid or made with respect to
    the Shares.

        9.3 Non-transferability. Until all restrictions upon the Shares of
    Restricted Stock awarded to a Grantee shall have lapsed in the manner set
    forth in Section 9.4, such Shares shall not be sold, transferred or
    otherwise disposed of and shall not be pledged or otherwise hypothecated,
    nor shall they be delivered to the Grantee.

        9.4    Lapse of Restrictions.

            (a) Generally. Subject to Section 9.4(b), restrictions upon Shares
        of Restricted Stock awarded hereunder shall lapse at such time or times
        and on such terms and conditions as the Committee may determine. The
        Agreement evidencing the Award shall set forth any such restrictions.

            (b) Effect of Change in Control. Notwithstanding anything contained
        in this Section 9 to the contrary, in the event of a Change in Control,
        the Plan and the Awards of Restricted Stock shall continue; provided,
        however, that the Committee, in its sole discretion and on such terms
        and conditions as it deems appropriate, may provide, either by the terms
        of the applicable Agreement or by action taken prior to the occurrence
        of any such Change in Control, for any or all of the following
        alternatives (separately or in any combination): (i) for the assumption
        of the shares of Restricted Stock by the successor or survivor
        corporation, or a parent or subsidiary thereof, or the substitution by
        such corporation for such shares of Restricted Stock of new shares of
        restricted stock of the successor or survivor corporation, or a parent
        or subsidiary thereof, with appropriate adjustments as to the number and
        kind of shares, (ii) for the lapse of all restrictions upon all or a
        portion of the shares of Restricted Stock, or (iii) for adjustments in
        the terms and conditions of outstanding Awards of Restricted Stock. Any
        action pursuant to this Section 9.5(b) shall be conditioned upon the
        consummation of the Change in Control and shall be effective only
        immediately before the consummation of the Change in Control.

        9.5    Terms of Restricted Stock.

            (a) Forfeiture of Restricted Stock. Subject to Sections 9.4(b),
        9.5(b) and 12, all Restricted Stock shall be forfeited and returned to
        the Company and all rights of the Grantee with respect to such
        Restricted Stock shall terminate unless the Grantee continues in the
        service of the Company as an employee, officer, consultant or Director
        until the expiration of the forfeiture period for such Restricted Stock
        and satisfies any and all other conditions set forth in the Agreement.
        The Committee, in its sole discretion, shall determine the forfeiture
        period (which may, but need not, lapse in installments) and any other
        terms and conditions applicable with respect to any Restricted Stock
        Award.

            (b) Waiver of Forfeiture Period. Notwithstanding anything contained
        in this Section 9 to the contrary, the Committee may, in its sole
        discretion, waive the forfeiture period and any other conditions set
        forth in any Agreement under appropriate circumstances (including,
        without limitation, the death, Disability or retirement of the Grantee
        or a material change in circumstances arising after the date of grant)
        and subject to such terms and conditions (including, without limitation,
        forfeiture of a proportionate number of the Restricted Stock) as the
        Committee shall deem appropriate, provided that the Grantee shall at
        that time have completed at least one (1) year of employment or service
        after the date of grant.

        9.6 Modification or Substitution. Subject to the terms of the Plan,
    including, without limitation, Section 15, the Committee may modify
    outstanding Awards of Restricted Stock or accept the surrender of
    outstanding shares of Restricted Stock (to the extent the restrictions on
    such Shares have not yet lapsed) and grant new Awards in substitution for
    them. Notwithstanding the foregoing, no modification of an Award shall
    adversely alter or impair any rights or obligations under the Agreement
    without the Grantee's consent.

                                      -15-

<PAGE>

        9.7 Treatment of Dividends. At the time an Award of Shares of Restricted
    Stock is granted, the Committee may, in its sole discretion, determine that
    the payment to the Grantee of dividends, or a specified portion thereof,
    declared or paid on such Shares by the Company shall be (a) deferred until
    the lapsing of the restrictions imposed upon such Shares and (b) held by the
    Company for the account of the Grantee until such time. In the event that
    dividends are to be deferred, the Committee shall determine whether such
    dividends are to be reinvested in Shares (which shall be held as additional
    Shares of Restricted Stock) or held in cash. If deferred dividends are to be
    held in cash, there may be credited at the end of each year (or portion
    thereof) interest on the amount of the account at the beginning of the year
    at a rate per annum as the Committee, in its sole discretion, may determine.
    Payment of deferred dividends in respect of Shares of Restricted Stock
    (whether held in cash or as additional Shares of Restricted Stock), together
    with interest accrued thereon, if any, shall be made upon the lapsing of
    restrictions imposed on the Shares in respect of which the deferred
    dividends were paid, and any dividends deferred (together with any interest
    accrued thereon) in respect of any Shares of Restricted Stock shall be
    forfeited upon the forfeiture of such Shares.

        9.8 Delivery of Shares. Upon the lapse of the restrictions on Shares of
    Restricted Stock, the Committee shall cause a stock certificate to be
    delivered to the Grantee with respect to such Shares, free of all
    restrictions hereunder.

    10.    Performance Awards.

        10.1    Performance Objectives.

            (a) Establishment. Performance Objectives for Performance Awards may
        be expressed in terms of (i) earnings per Share, (ii) Share price, (iii)
        pre-tax profits, (iv) after-tax profits, (v) operating profits, (vi)
        sales or expenses, (vii) net earnings, (viii) return on equity or
        assets, (ix) revenues, (x) EBITDA (earnings before interest, taxes,
        depreciation and amortization), (xi) market share, or market
        penetration, (xii) confidential business objectives, or (xiii) any
        combination of the foregoing. Performance Objectives may be in respect
        of the performance of the Company, any of its Subsidiaries, any of its
        Divisions or any combination thereof. Performance Objectives may be
        absolute or relative (to prior performance of the Company or to the
        performance of one or more other entities or external indices) and may
        be expressed in terms of a progression within a specified range. The
        Performance Objectives with respect to a Performance Cycle shall be
        established in writing by the Committee by the earlier of (x) the date
        on which a quarter of the Performance Cycle has elapsed or (y) the date
        which is ninety (90) days after the commencement of the Performance
        Cycle, and in any event while the performance relating to the
        Performance Objectives remains substantially uncertain.

            (b) Effect of Certain Events. At the time of the granting of a
        Performance Award, or at any time thereafter, in either case to the
        extent permitted under Section 162(m) of the Code and the regulations
        thereunder without adversely affecting the treatment of the Performance
        Award as Performance-Based Compensation, the Committee may provide for
        the manner in which performance will be measured against the Performance
        Objectives (or may adjust the Performance Objectives) to reflect the
        impact of specified corporate transactions, accounting or tax law
        changes and other extraordinary or nonrecurring events.

            (c) Determination of Performance. Prior to the vesting, payment,
        settlement or lapsing of any restrictions with respect to any
        Performance Award that is intended to constitute Performance-Based
        Compensation made to a Grantee who is subject to Section 162(m) of the
        Code, the Committee shall certify in writing that the applicable
        Performance Objectives have been satisfied to the extent necessary for
        such Award to qualify as Performance-Based Compensation.

        10.2 Performance Units. The Committee, in its sole discretion, may grant
    Awards of Performance Units to Eligible Individuals, the terms and
    conditions of which shall be set forth in an Agreement between the Company
    and the Grantee. Performance Units may be denominated in Shares or a
    specified dollar amount and, contingent upon the attainment of specified
    Performance Objectives within the Performance Cycle, represent the right to
    receive payment as provided in Section 10.2(b) of (i) in the case of
    Share-denominated Performance

                                      -16-

<PAGE>

    Units, the Fair Market Value of a Share on the date the Performance Unit was
    granted, the date the Performance Unit became vested or any other date
    specified by the Committee, (ii) in the case of dollar-denominated
    Performance Units, the specified dollar amount or (iii) a percentage (which
    may be more than 100%) of the amount described in clause (i) or (ii)
    depending on the level of Performance Objective attainment; provided,
    however, that, the Committee may at the time a Performance Unit is granted
    specify a maximum amount payable in respect of a vested Performance Unit.
    Each Agreement shall specify the number of Performance Units to which it
    relates, the Performance Objectives which must be satisfied in order for the
    Performance Units to vest and the Performance Cycle within which such
    Performance Objectives must be satisfied.

            (a) Vesting and Forfeiture. Subject to Sections 10.1(c) and 10.4,
        Performance Units shall become vested in such installments (which need
        not be equal) and at such time or times and on such terms, conditions
        and satisfaction of Performance Objectives as the Committee may, in its
        sole discretion, determine at the time an Award is granted.

            (b) Payment of Awards. Subject to Sections 10.1(c) and 10.4, payment
        to Grantees in respect of vested Performance Units shall be made as soon
        as practicable after the last day of the Performance Cycle to which such
        Award relates unless the Agreement evidencing the Award provides for the
        deferral of payment, in which event the terms and conditions of the
        deferral shall be set forth in the Agreement. Subject to Section 10.4,
        such payments may be made entirely in Shares valued at their Fair Market
        Value as of the day preceding the date of payment or such other date
        specified by the Committee, entirely in cash, or in such combination of
        Shares and cash as the Committee in its sole discretion shall determine
        at any time prior to such payment; provided, however, that if the
        Committee in its sole discretion determines to make such payment
        entirely or partially in Shares of Restricted Stock, the Committee must
        determine the extent to which such payment will be in Shares of
        Restricted Stock and the terms of such Restricted Stock at the time the
        Award is granted.

            (c) Non-transferability. Until the vesting of Performance Units,
        such Performance Units shall not be sold, transferred or otherwise
        disposed of and shall not be pledged or otherwise hypothecated.

        10.3 Performance Shares. The Committee, in its sole discretion, may
    grant Awards of Performance Shares to Eligible Individuals, the terms and
    conditions of which shall be set forth in an Agreement between the Company
    and the Grantee. Each Agreement may require that an appropriate legend be
    placed on Share certificates. Awards of Performance Shares shall be subject
    to the following terms and provisions:

            (a) Rights of Grantee. The Committee shall provide at the time an
        Award of Performance Shares is made the time or times at which the
        actual Shares represented by such Award shall be issued in the name of
        the Grantee; provided, however, that no Performance Shares shall be
        issued until the Grantee has executed an Agreement evidencing the Award,
        the appropriate blank stock powers and, in the sole discretion of the
        Committee, an escrow agreement and any other documents which the
        Committee may require as a condition to the issuance of such Performance
        Shares. If a Grantee shall fail to execute the Agreement evidencing an
        Award of Performance Shares, the appropriate blank stock powers, an
        escrow agreement and any other documents which the Committee may require
        within the time period prescribed by the Committee at the time the Award
        is granted, the Award shall be null and void. At the sole discretion of
        the Committee, Shares issued in connection with an Award of Performance
        Shares shall be deposited together with the stock powers with an escrow
        agent (which may be the Company) designated by the Committee. Except as
        restricted by the terms of the Agreement, upon delivery of the Shares to
        the escrow agent, the Grantee shall have, in the sole discretion of the
        Committee, all of the rights of a stockholder with respect to such
        Shares, including the right to vote the Shares and to receive all
        dividends or other distributions paid or made with respect to the
        Shares.

            (b) Non-transferability. Until any restrictions upon the Performance
        Shares awarded to a Grantee shall have lapsed in the manner set forth in
        Sections 10.3(c) or 10.4, such Performance Shares shall not be sold,
        transferred or otherwise disposed of and shall not be pledged or
        otherwise hypothecated, nor shall they be delivered to the Grantee. The
        Committee also may impose such other restrictions and conditions on the
        Performance Shares, if any, as it deems appropriate.

                                      -17-

<PAGE>

            (c) Lapse of Restrictions. Subject to Sections 10.1(c) and 10.4,
        restrictions upon Performance Shares awarded hereunder shall lapse and
        such Performance Shares shall become vested at such time or times and on
        such terms, conditions and satisfaction of Performance Objectives as the
        Committee may, in its sole discretion, determine at the time an Award is
        granted.

            (d) Treatment of Dividends. At the time the Award of Performance
        Shares is granted, the Committee may, in its sole discretion, determine
        that the payment to the Grantee of dividends, or a specified portion
        thereof, declared or paid on Shares represented by such Award which have
        been issued by the Company to the Grantee shall be (i) deferred until
        the lapsing of the restrictions imposed upon such Performance Shares and
        (ii) held by the Company for the account of the Grantee until such time.
        In the event that dividends are to be deferred, the Committee shall
        determine whether such dividends are to be reinvested in Shares (which
        shall be held as additional Performance Shares) or held in cash. If
        deferred dividends are to be held in cash, there may be credited at the
        end of each year (or portion thereof) interest on the amount of the
        account at the beginning of the year at a rate per annum as the
        Committee, in its sole discretion, may determine. Payment of deferred
        dividends in respect of Performance Shares (whether held in cash or in
        additional Performance Shares), together with interest accrued thereon,
        if any, shall be made upon the lapsing of restrictions imposed on the
        Performance Shares in respect of which the deferred dividends were paid,
        and any dividends deferred (together with any interest accrued thereon)
        in respect of any Performance Shares shall be forfeited upon the
        forfeiture of such Performance Shares.

            (e) Delivery of Shares. Upon the lapse of the restrictions on
        Performance Shares awarded hereunder, the Committee shall cause a stock
        certificate to be delivered to the Grantee with respect to such Shares,
        free of all restrictions hereunder.

        10.4 Effect of Change in Control. Notwithstanding anything in this
    Section 10 to the contrary, in the event of a Change in Control, the Plan
    and the Performance Awards shall continue; provided, however, that the
    Committee, in its sole discretion and on such terms and conditions as it
    deems appropriate, may provide, either by the terms of the applicable
    Agreement or by action taken prior to the occurrence of any such Change in
    Control, for any or all of the following alternatives (separately or in any
    combination): (i) for the assumption of the Performance Awards by the
    successor or survivor corporation, or a parent or subsidiary thereof, or the
    substitution by such corporation for such Performance Awards of new
    performance awards of the successor or survivor corporation, or a parent or
    subsidiary thereof, with appropriate adjustments as to the applicable
    performance objectives and, if necessary, the number and kind of shares,
    (ii) for the vesting of all or a portion of the Performance Awards as if all
    Performance Objectives had been satisfied at the level specified by the
    Committee in its sole discretion and, in the case of Performance Units which
    become vested as a result of a Change in Control, for a payment which may be
    made entirely in cash, entirely in Shares valued at their Fair Market Value
    as of the day preceding the payment, or in such combination of cash and
    Shares as the Committee shall determine in its sole discretion at any time
    prior to such payment; provided that such payment shall be made within ten
    (10) business days after such Change in Control, or (iii) for adjustments in
    the terms and conditions of outstanding Performance Awards. Any action
    pursuant to this Section 10.4 shall be conditioned upon the consummation of
    the Change in Control and shall be effective only immediately before the
    consummation of the Change in Control.

        10.5 Termination. Subject to Sections 10.4 and 12, and unless otherwise
    provided by the Committee, in its sole discretion, in the applicable
    Agreement, the following provisions shall apply to Performance Awards upon a
    Termination of Employment:

            (a) Termination of Employment Prior to End of Performance Cycle.
        Except as provided in Sections 10.5(b) and (d), in the case of a
        Grantee's Termination of Employment, prior to the end of a Performance
        Cycle, the Grantee will not be entitled to any Performance Awards, and
        any Performance Shares shall be forfeited.

            (b) Disability, Retirement or Death Prior to End of Performance
        Cycle. Unless otherwise provided by the Committee, in its sole
        discretion, in the Agreement, if a Grantee's Disability Date or
        Termination of Employment by reason of retirement on or after the
        Grantee's Normal Retirement Date or death occurs following participation
        in at least one-half ( 1/2) of the Performance Cycle, but prior to the
        end of a

                                      -18-

<PAGE>

        Performance Cycle, the Grantee or such Grantee's Beneficiary, as the
        case may be, shall be entitled to receive a pro-rata share of his or her
        Performance Award as determined under Subsection (c).

            (c)  Pro-Rata Payment.

                (i) Performance Units. With respect to Performance Units, the
            amount of any payment made to a Grantee (or Beneficiary) under
            circumstances described in Section 10.5(b) shall be the amount
            determined by multiplying the amount of the Performance Units
            payable in Shares or dollars which would have been earned,
            determined at the end of the Performance Cycle, had such employment
            not been terminated, by a fraction, the numerator of which is the
            number of whole months such Grantee was employed during the
            Performance Cycle, and the denominator of which is the total number
            of months of the Performance Cycle. Any such payment shall be made
            as soon as practicable after the end of the respective Performance
            Cycle, and shall relate to attainment of Performance Objectives over
            the entire Performance Cycle.

                (ii) Performance Shares. With respect to Performance Shares, the
            amount of Performance Shares held by a Grantee (or Beneficiary) with
            respect to which restrictions shall lapse under circumstances
            described in Section 10.5(b) shall be the amount determined by
            multiplying the amount of the Performance Shares with respect to
            which restrictions would have lapsed, determined at the end of the
            Performance Cycle, had such employment not been terminated, by a
            fraction, the numerator of which is the number of whole months such
            Grantee was employed during the Performance Cycle, and the
            denominator of which is the total number of months of the
            Performance Cycle. The Committee shall determine the amount of
            Performance Shares with respect to which restrictions shall lapse
            under this Section 10.5(c)(ii) as soon as practicable after the end
            of the respective Performance Cycle, and such determination shall
            relate to attainment of Performance Objectives over the entire
            Performance Cycle. At that time, all Performance Shares relating to
            that Performance Cycle with respect to which restrictions shall not
            lapse shall be forfeited.

            (d) Other Events. Except to the extent a Performance Award is
        intended to qualify as Performance-Based Compensation, the Committee
        may, in its sole discretion, determine to pay all or any portion of a
        Performance Award to a Grantee who has a Termination of Employment prior
        to the end of a Performance Cycle under certain circumstances
        (including, without limitation, a material change in circumstances
        arising after the date of grant) and subject to such terms and
        conditions as the Committee shall deem appropriate, provided that the
        Grantee shall have completed at his or her date of Termination of
        Employment at least one (1) year of employment after the date of grant.

            (e) Termination of Employment After End of Performance Cycle.
        Subject to Sections 10.4 and 10.5(f), in the case of a Grantee's
        Termination of Employment after the end of a Performance Cycle in which
        the applicable Performance Objectives have been satisfied, the Grantee
        shall not be entitled to any Performance Awards that have not yet vested
        as of the date of the Grantee's Termination of Employment.

            (f) Waiver of Forfeiture. Notwithstanding anything to the contrary
        in Section 10(e), in the case of a Grantee's Termination of Employment
        after the end of a Performance Cycle in which the applicable Performance
        Objectives have been satisfied, the Committee may, in its sole
        discretion, waive the forfeiture of Performance Awards and any other
        conditions set forth in any Agreement under appropriate circumstances
        (including, without limitation, the death, Disability, or retirement of
        the Grantee or a material change in circumstances arising after the date
        of grant) and subject to such terms and conditions as the Committee
        shall deem appropriate.

        10.6 Modification or Substitution. Subject to the terms of the Plan,
    including, without limitation, Section 15, the Committee may modify
    outstanding Performance Awards or accept the surrender of outstanding
    Performance Awards and grant new Performance Awards in substitution for
    them. Notwithstanding the foregoing, no modification of a Performance Award
    shall adversely alter or impair any rights or obligations under the
    Agreement without the Grantee's consent.

                                      -19-

<PAGE>

    11.    Other Share Based Awards.

        11.1 Share Awards. The Committee, in its sole discretion, may grant a
    Share Award to any Eligible Individual on such terms and conditions as the
    Committee may determine. Share Awards may be made as additional compensation
    for services rendered by the Eligible Individual or may be in lieu of cash
    or other compensation to which the Eligible Individual is entitled from the
    Company.

        11.2    Phantom Stock Awards.

            (a) Grant. The Committee, in its sole discretion, may grant shares
        of Phantom Stock to any Eligible Individual. Such Phantom Stock shall be
        subject to the terms and conditions established by the Committee and set
        forth in the applicable Agreement.

            (b) Payment of Awards. Upon the vesting of a Phantom Stock Award,
        the Grantee shall be entitled to receive a cash payment in respect of
        each share of Phantom Stock which shall be equal to the Fair Market
        Value of a Share as of the date the Phantom Stock Award was granted, or
        such other date as determined by the Committee at the time the Phantom
        Stock Award was granted. The Committee may, at the time a Phantom Stock
        Award is granted, provide a limitation on the amount payable in respect
        of each share of Phantom Stock. In lieu of a cash payment, the
        Committee, in its sole discretion, may settle Phantom Stock Awards with
        Shares having a Fair Market Value on the date of vesting equal to the
        cash payment to which the Grantee has become entitled.

    12.    Employment Agreement Governs Termination of Employment.

    An employment agreement, if applicable, between an Optionee or Grantee and
the Company shall govern with respect to the terms and conditions applicable to
such Option or Award upon a termination or change in the status of the
employment of the Optionee or Grantee, to the extent that such employment
agreement provides for terms and conditions that differ from the terms and
conditions provided for in the applicable Agreement or the Plan; provided,
however, that to the extent necessary for an Option or Award intended to qualify
as Performance-Based Compensation to so qualify, the terms of the applicable
Agreement or the Plan shall govern the Option or Award; and, provided further,
that the Committee shall have reviewed and, in its sole discretion, approved the
employment agreement.

    13.    Adjustment Upon Changes in Capitalization.

        (a) In the event of a Change in Capitalization, the Committee shall
    conclusively determine the appropriate adjustments, if any, to (i) the
    maximum number and class of Shares or other stock or securities with respect
    to which Options or Awards may be granted under the Plan, (ii) the maximum
    number and class of Shares or other stock or securities that may be issued
    upon exercise of Incentive Stock Options; (iii) the maximum number and class
    of Shares or other stock or securities with respect to which Options or
    Awards may be granted to any Eligible Individual in any one calendar year,
    (iv) the number and class of Shares or other stock or securities which are
    subject to outstanding Options or Awards granted under the Plan and the
    purchase price therefor, if applicable, and (v) the Performance Objectives.

        (b) Any such adjustment in the Shares or other stock or securities (i)
    subject to outstanding Incentive Stock Options (including any adjustments in
    the purchase price) shall be made in such manner as not to constitute a
    modification as defined by Section 424(h)(3) of the Code and only to the
    extent otherwise permitted by Sections 422 and 424 of the Code or (ii)
    subject to outstanding Options or Awards that are intended to qualify as
    Performance-Based Compensation shall be made in such a manner as not to
    adversely affect the treatment of the Options or Awards as Performance-Based
    Compensation.

        (c) If, by reason of a Change in Capitalization, a Grantee of an Award
    shall be entitled to, or an Optionee shall be entitled to exercise an Option
    with respect to, new, additional or different shares of stock or securities
    of the Company or any other corporation, such new, additional or different
    shares shall thereupon be subject to all

                                      -20-

<PAGE>

    of the conditions, restrictions and performance criteria which were
    applicable to the Shares subject to the Award or Option, as the case may be,
    prior to such Change in Capitalization.

    14.    Effect of Certain Transactions.

    Subject to Sections 6.5, 7.9, 9.4(b) and 10.4 or as otherwise provided in an
Agreement, in the event of (a) the liquidation or dissolution of the Company or
(b) a merger or consolidation of the Company (a "Transaction"), the Plan and the
Options and Awards issued hereunder shall continue in effect in accordance with
their respective terms, except that following a Transaction either (i) each
outstanding Option or Award shall be treated as provided for in the agreement
entered into in connection with the Transaction or (ii) if not so provided in
such agreement, each Optionee and Grantee shall be entitled to receive in
respect of each Share subject to any outstanding Options or Awards, as the case
may be, upon exercise of any Option or payment or transfer in respect of any
Award, the same number and kind of stock, securities, cash, property or other
consideration that each holder of a Share was entitled to receive in the
Transaction in respect of a Share; provided, however, that such stock,
securities, cash, property, or other consideration shall remain subject to all
of the conditions, restrictions and performance criteria which were applicable
to the Options and Awards prior to such Transaction. The treatment of any Option
or Award as provided in this Section 14 shall be conclusively presumed to be
appropriate for purposes of Section 10.

    15.    Interpretation.

    Following the required registration of any equity security of the Company
pursuant to Section 12 of the Exchange Act:

        (a) The Plan is intended to comply with Rule 16b-3 promulgated under the
    Exchange Act and the Committee shall interpret and administer the provisions
    of the Plan or any Agreement in a manner consistent therewith. Any
    provisions inconsistent with such Rule shall be inoperative and shall not
    affect the validity of the Plan.

        (b) Unless otherwise expressly stated in the relevant Agreement, and
    provided that the Plan is submitted to and approved by the holders of a
    majority of the outstanding Common Stock of the Company, each Option, Stock
    Appreciation Right and Performance Award granted under the Plan is intended
    to be Performance-Based Compensation. In such event, the Committee shall not
    be entitled to exercise any discretion otherwise authorized hereunder with
    respect to such Options or Awards if the ability to exercise such discretion
    or the exercise of such discretion itself would cause the compensation
    attributable to such Options or Awards to fail to qualify as
    Performance-Based Compensation. Notwithstanding anything to the contrary in
    the Plan, the provisions of the Plan may at any time be bifurcated by the
    Board or the Committee in any manner so that certain provisions of the Plan
    or any Performance Award intended (or required in order) to satisfy the
    applicable requirements of Section 162(m) of the Code are only applicable to
    persons whose compensation is subject to Section 162(m).

    16.    Effective Date, Termination and Amendment of the Plan.

        16.1 Effective Date. The effective date of this Plan shall be the date
    the Plan is adopted by the Board, subject only with respect to the grant of
    Incentive Stock Options to the approval of the holders of a majority of the
    outstanding Common Stock of the Company within twelve (12) months of the
    adoption of the Plan by the Board.

        16.2 Plan Amendment or Termination. The Plan shall terminate on the day
    preceding the tenth anniversary of the date of its adoption by the Board and
    no Option or Award may be granted thereafter. The Board may sooner terminate
    the Plan and the Board may at any time and from time to time amend, modify
    or suspend the Plan; provided, however, that:

            (a) no such amendment, modification, suspension or termination shall
        impair or adversely alter any Options or Awards theretofore granted
        under the Plan, except with the consent of the Optionee or Grantee,

                                      -21-

<PAGE>

        nor shall any amendment, modification, suspension or termination deprive
        any Optionee or Grantee of any Shares which he or she may have acquired
        through or as a result of the Plan; and

            (b) to the extent necessary under any applicable law, regulation or
        exchange requirement, no amendment shall be effective unless approved by
        the stockholders of the Company in accordance with applicable law,
        regulation or exchange requirement.

    17.    Non-Exclusivity of the Plan.

    The adoption of the Plan by the Board shall not be construed as amending,
modifying or rescinding any previously approved incentive arrangement or as
creating any limitations on the power of the Board to adopt such other incentive
arrangements as it may deem desirable, including, without limitation, the
granting of stock options otherwise than under the Plan, and such arrangements
may be either applicable generally or only in specific cases.

    18.    Limitation of Liability.

    As illustrative of the limitations of liability of the Company, but not
intended to be exhaustive thereof, nothing in the Plan shall be construed to:

        (a) give any person any right to be granted an Option or Award other
    than at the sole discretion of the Committee;

        (b) give any person any rights whatsoever with respect to Shares except
    as specifically provided in the Plan;

        (c) interfere with or limit in any way the right of the Company or any
    Subsidiary to terminate the employment or services of any person at any time
    for any reason whatsoever, with or without good cause; or

        (d) be evidence of any agreement or understanding, expressed or implied,
    that the Company will employ or maintain a service relationship with any
    person at any particular rate of compensation or for any particular period
    of time.

    19.    Regulations and Other Approvals; Governing Law.

        19.1 Except as to matters of federal law, the Plan and the rights of all
    persons claiming hereunder shall be construed and determined in accordance
    with the laws of the State of Delaware without giving effect to conflicts of
    laws principles thereof.

        19.2 The obligation of the Company to sell or deliver Shares with
    respect to Options and Awards granted under the Plan shall be subject to all
    applicable laws, rules and regulations, including all applicable federal and
    state securities laws, and the obtaining of all such approvals by
    governmental agencies as may be deemed necessary or appropriate by the
    Committee.

        19.3 The Board may make such changes as may be necessary or appropriate
    to comply with the rules and regulations of any government authority, or to
    obtain for Eligible Individuals granted Incentive Stock Options the tax
    benefits under the applicable provisions of the Code and regulations
    promulgated thereunder.

        19.4 Each Option and Award is subject to the requirement that, if at any
    time the Committee determines, in its sole discretion, that the listing,
    registration or qualification of Shares issuable pursuant to the Plan is
    required by any securities exchange or under any state or federal law, or
    the consent or approval of any governmental regulatory body is necessary or
    desirable as a condition of, or in connection with, the grant of an Option
    or Award or the issuance of Shares, no Options or Awards shall be granted or
    payment made or Shares issued, in whole or in part, unless listing,
    registration, qualification, consent or approval has been effected or
    obtained free of any conditions as acceptable to the Committee.

                                      -22-

<PAGE>

        19.5 Notwithstanding anything contained in the Plan or any Agreement to
    the contrary, in the event that the disposition of Shares acquired pursuant
    to the Plan is not covered by a then current registration statement under
    the Securities Act of 1933, as amended (the "Securities Act"), and is not
    otherwise exempt from such registration, such Shares shall be restricted
    against transfer to the extent required by the Securities Act and Rule 144
    or other regulations thereunder. The Company may place on any certificate
    representing any such Shares any legend deemed desirable by the Company's
    counsel to comply with federal or state securities laws and the Committee
    may require any individual receiving Shares pursuant to an Option or Award
    granted under the Plan, as a condition precedent to receipt of such Shares,
    to represent and warrant to the Company in writing that the Shares acquired
    by such individual are acquired without a view to any distribution thereof
    and will not be sold or transferred other than pursuant to an effective
    registration thereof under said Act or pursuant to an exemption applicable
    under the Securities Act or the rules and regulations promulgated
    thereunder.

    20.    Miscellaneous.

        20.1 Multiple Agreements. The terms of each Option or Award may differ
    from other Options or Awards granted under the Plan at the same time, or at
    some other time. The Committee may also grant more than one Option or Award
    to a given Eligible Individual during the term of the Plan, either in
    addition to, or in substitution for, one or more Options or Awards
    previously granted to that Eligible Individual.

        20.2 Captions. The use of captions in this Plan or any Agreement is for
    the convenience of reference only and shall not affect the meaning of any
    provision of the Plan or such Agreement.

        20.3 Severability. Whenever possible, each provision of the Plan or an
    Agreement shall be interpreted in such manner as to be effective and valid
    under applicable law, but if any provision of the Plan or an Agreement shall
    be held by a court of competent jurisdiction to be prohibited by or invalid
    or unenforceable under applicable law, then (a) such provision shall be
    deemed to be amended to accomplish the objectives of the provision as
    originally written to the fullest extent permitted by law and (b) all other
    provisions of the Plan or an Agreement shall remain in full force and
    effect.

        20.4    Withholding of Taxes.

            (a) At such times as an Optionee or Grantee recognizes taxable
        income in connection with the receipt of Shares or cash hereunder (a
        "Taxable Event"), the Optionee or Grantee shall pay to the Company an
        amount equal to the federal, state and local income taxes and other
        amounts as may be required by law to be withheld by the Company in
        connection with the Taxable Event (the "Withholding Taxes") prior to the
        issuance, or release from escrow, of such Shares or the payment of such
        cash. The Company shall have the right to deduct from any payment of
        cash to an Optionee or Grantee an amount equal to the Withholding Taxes
        in satisfaction of the obligation to pay Withholding Taxes. In
        satisfaction of the obligation to pay Withholding Taxes to the Company,
        the Optionee or Grantee may make a written election (the "Tax
        Election"), which may be accepted or rejected in the sole discretion of
        the Committee, to have withheld a portion of the Shares then issuable to
        him or her having an aggregate Fair Market Value equal to the
        Withholding Taxes.

            (b) If an Optionee makes a disposition, within the meaning of
        Section 424(c) of the Code and regulations promulgated thereunder, of
        any Share or Shares issued to such Optionee pursuant to the exercise of
        an Incentive Stock Option within the two-year period commencing on the
        day after the date of the grant or within the one-year period commencing
        on the day after the date of transfer of such Share or Shares to the
        Optionee pursuant to such exercise, the Optionee shall, within ten (10)
        days of such disposition, notify the Company thereof, by delivery of
        written notice to the Company at its principal executive office.

                                      -23-

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