Document:

Ex-10.17 Severence Pay for Officers

 

EXHIBIT 10.17

WRIGHT EXPRESS CORPORATION

SEVERANCE PAY PLAN

FOR

OFFICERS

Effective February 22, 2005

ARTICLE I — INTRODUCTION

          Wright Express Corporation (referred to herein as the “Company”), hereby establishes the
Wright Express Corporation Severance Pay Plan for Officers (the “Plan”), effective as of February
22, 2005, to provide severance benefits to certain employees of the Company who suffer a loss of
employment under the terms and conditions set forth in the Plan. The Plan replaces and supercedes
(i) any and all severance plans, policies and/or practices (other than individual employment and
severance agreements) of the Company or its affiliates, whether written or unwritten, in effect for
covered employees prior to February 22, 2005 and (ii) any and all severance plans, policies and or
practices (other than individual employment and severance agreements) of any business or entity
acquired by the Company effective upon the consummation of any such acquisition.

ARTICLE II — DEFINITIONS AND INTERPRETATIONS

The following definitions and interpretations of important terms apply to the Plan.

          (a) Agreement. The Agreement and General Release provided by the Company to an
Eligible Employee in connection with his or her termination of employment with the Company, which
if executed by the Eligible Employee (and not timely revoked), will acknowledge his or her
termination of employment with the Company and release the Company from liability for any and all
claims. By signing the Agreement and General Release, an Employee waives all rights he or she may
have under state and federal employment statutes and all common law causes of action related to his
or her employment and termination thereof.

 

 

          (b) Base Pay. For purposes hereof, Base Pay shall mean an employee’s annual base
salary or wages from the Company. Base Pay shall be determined as reflected on the Company’s
payroll records, and shall not include bonuses, overtime pay, shift or language premiums,
commissions, incentives, employer contributions for benefits, incentive or deferred compensation or
other additional compensation. For purposes hereof, an Eligible Employee’s Base Pay shall include
any salary reduction contributions made on his or her behalf to any plan of the Company under
section 125 or 401(k) of the Internal Revenue Code of 1986, as amended. An Eligible Employee’s
Base Pay shall not be adjusted upward or downward due to the receipt of paid time off or short-term
or long-term disability benefits. One week of Base Pay shall mean an employee’s annual Base Pay
divided by fifty-two (52).

          (c) Cause. Termination for cause shall mean termination as a result of any of the
following: (a) misappropriation or improper use or disclosure of any confidential or proprietary
information of the Company; (b) failure to comply with any contractual obligations to the Company;
(c) solicitation for hire away from the Company any current Company employees absent the Company’s
consent; or (d) taking any action which the Company, in its sole discretion, deems to have been
inimical or detrimental to the interests of the Company.

          (d) Company. Wright Express Corporation.

          (e) Effective Date. February 22, 2005.

          (f) Eligible Employee. Any employee of the Company who: (i) is classified by the
Company as an active, full-time officer of the Company or its subsidiaries and who is designated by
Wright Express Corporation as the President & Chief Executive Officer, or Senior Vice President, or
Vice President, and (ii) is involuntarily terminated from employment for one of the reasons set
forth in Article III, Section A of the Plan. Notwithstanding the foregoing, an Eligible Employee
shall not include any individual (i) classified as an independent contractor by the Company, (ii)
being paid by or through an employee leasing company or other third party agency, or (iii) any
other person classified by the Company as a leased employee, during the period the individual is so
paid or classified even if such individual is later retroactively reclassified as a common-law
employee of the Company or an affiliate for federal employment tax purposes (or other non-Plan
purposes) during all or any part of such period pursuant to applicable law or otherwise.

          (g) Full-time Employee. Any employee of the Company who is regularly scheduled to
work thirty or more hours per week.

          (h) Participant. An Eligible Employee who meets all the requirements set forth in
Article III of the Plan. An individual shall cease being a Participant once payment of all
severance pay and other benefits due to such individual under the Plan has been completed (or upon
the death of the Participant, if earlier) and no person shall have any further rights under the
Plan with respect to such former Participant.

          (i) Plan Administrator. The Company or such other person or committee appointed from
time to time by the Company to administer the Plan. Until a successor is appointed by the Company,
the Plan Administrator shall be Wright Express Corporation.

          (j) Year of Service. An Eligible Employee shall be credited with a Year of Service
for each full year of service completed with the Company in a capacity which qualifies such person
as an Eligible Employee. Service will be measured from the Eligible Employee’s date of hire used
for vacation benefit accrual purposes. No credit shall be provided for fractions of a Year of
Service.

ARTICLE III — ELIGIBILITY

A. WHO IS ELIGIBLE FOR SEVERANCE UNDER THE PLAN?

 

 

          If you are an Eligible Employee, you shall become eligible for the severance pay described in
Article IV of the Plan (i.e., you will become a “Participant”) by meeting the requirements
set forth below:

     (1) you are involuntarily terminated for one of the following reasons:

•
 a reduction in the Company’s workforce;

•
 elimination or discontinuation of your job or position,
provided that you are not offered a comparable position. Comparability shall
be determined in the sole and absolute discretion of the Plan Administrator;
or

•
 other circumstances as the Plan Administrator, in its sole
discretion, deems appropriate for the payment of severance;

(2) you deliver a signed, dated and notarized Agreement to the individual whose
signature appears on the cover letter accompanying the Agreement no later than the
date (if any) set forth in the Agreement, and the time for you to revoke such
Agreement (if any) as specified in the Agreement has expired; and

(3) the Company has not determined that you, either prior or subsequent to your
termination of employment, have (a) misappropriated or improperly used or disclosed
any confidential or proprietary information of the Company; (b) failed to comply with
any contractual obligations to the Company; (c) solicited for hire away from the
Company, any current Company employees absent the Company’s consent; or (d) taken any
action which the Company, in its sole discretion, deems to have been inimical or
detrimental to the interests of the Company.

     If you do not satisfy all of the above requirements, you shall not be considered a
Participant, and you shall not be entitled to commence or continue to receive any benefits under
the Plan. Additionally, you shall not become a Participant, and shall not become entitled to
benefits while you continue to be employed by the Company.

          B. WHO IS NOT ELIGIBLE FOR SEVERANCE UNDER THE PLAN?

          You shall not be eligible for severance pay under this Plan if your employment is terminated
for any reason other than as set forth in paragraph III(A)(1), above, including, but not limited
to:

• retirement;

• voluntary termination;

• termination by the Company (whether or not for Cause), other
than for reasons set forth in paragraph III(A)(1);

• elimination or discontinuation of your job or position, if
you are offered a comparable position. Comparability shall be determined in
the sole and absolute discretion of the Plan Administrator.

          In addition, if you have executed an employment or severance agreement with the Company which
expressly provides for severance pay, you shall have to make an election whether to receive
benefits under this Plan or under your employment or severance agreement; you shall not be eligible
to receive benefits under both.

 

 

ARTICLE IV — SEVERANCE PAY

          A. SCHEDULE OF BENEFITS

          If you become a Participant, you will be eligible to receive the following benefits under the
Plan, unless you have entered into an individual employment or severance agreement with the Company
that provides for severance benefits:

          If you are an Officer of Wright Express Corporation or any subsidiary or business unit and are
designated by the Company as the President & Chief Executive Officer, then (i) if you have less
than six (6) months employment service with the Company, you will receive twenty-six (26) weeks of
Base Pay; and (ii) if you have been actively employed with the Company for more than six (6)
months, you will receive fifty-two (52) weeks of Base Pay.

          If you are an Officer of Wright Express Corporation or any subsidiary or business unit and are
designated by the Company as a Senior Vice President, then (i) if you have less than six (6) months
of employment service with the Company, you will receive thirteen (13) weeks of Base Pay; and (ii)
if you have been actively employed with the Company for more than six (6) months, you will receive
twenty-six (26) weeks of Base Pay.

          If you are an Officer of Wright Express Corporation or any subsidiary or business unit and are
designated by the Company as a Vice President then (i) if you have less than six (6) months of
employment service with the Company, you will receive six (6) weeks of Base Pay; and (ii) if you
have been actively employed with the Company for more than six (6) months, you will receive
thirteen (13) weeks of Base Pay.

          Notwithstanding the foregoing, if the amount of severance pay that you would have received if
calculated pursuant to the most favorable formula set forth in the Wright Express Corporation
Severance Pay Plan for Non-Officer Employees (assuming that you were an eligible participant of
such plan) is greater than the amount of severance pay calculated hereunder, then you will receive
hereunder, upon eligibility for severance pay hereunder, such higher amount.

          Notwithstanding any provision of this Plan to the contrary, the Plan Administrator, in its
sole and absolute discretion and based on such criteria as the Administrator deems relevant, may
vary the severance benefits under this Plan. In no event, however, will a Participant receive more
than fifty-two (52) weeks of Base Pay. In addition, in no event will any employee be entitled to
receive severance pay under this Plan in addition to severance pay provided for under a separate
employment or severance agreement or from any other source.

          B. HOW AND WHEN BENEFITS WILL BE PAID

          Severance pay benefits are payable to you in a lump sum payment, subject to applicable
federal, state and local tax deductions and withholding.

          You shall not be eligible after your date of termination for continued coverage under the
Company’s medical/dental plans (except to the extent you elect to continue such coverage under the
Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”)).

ARTICLE V — GENERAL PROVISIONS OF THE PLAN

          (a) Re-employment. If you are re-employed by the Company after severance has been
paid to you, you will have to make arrangements, prior to being rehired, to return any severance
pay which you received in excess of one week’s pay plus the amount of your weekly salary multiplied
by the number

 

 

of weeks during the period of your separation. If, after being re-employed, your employment
with the Company is terminated for a reason set forth in Article III, you shall receive the
severance pay calculated based upon your rehire date, plus the severance pay which was refunded by
you to the Company upon your re-employment or the severance pay calculated before your rehire date
which was not paid to you because you became re-employed with the Company.

          (b) Termination, Amendment and Modification. Notwithstanding anything in this Plan to
the contrary, the Company expressly reserves the right, at any time, for any reason, without
limitation, and in its sole and absolute discretion, to terminate, amend or modify the Plan and any
or all of the benefits provided thereunder, either in whole or in part, whether as to all persons
covered thereby or as to one or more groups thereof. The termination, amendment or modification of
the Plan shall be effected by a document in writing.

          (c) No Additional Rights Created. Neither the establishment of this Plan, nor any
modification thereof, nor the payment of any benefits hereunder, shall be construed as giving to
any Participant, Eligible Employee (or any beneficiary of either), or other person any legal or
equitable right against the Company or any Officer, director or employee thereof; and in no event
shall the terms and conditions of employment by the Company of any Eligible Employee be modified or
in any way affected by this Plan. There is no promise of employment of any kind by the Company
contained in this Plan. Regardless of what this Plan provides, the Company remains free to change
wages and all other working conditions without notice of agreement. The Company also continues to
have the absolute right to terminate your employment with or without cause.

          (d) Records. The records of the Company with respect to employment history, Base
Salary, Years of Service, absences, and all other relevant matters shall be conclusive for all
purposes of this Plan.

          (e) Construction. The respective terms and provisions of the Plan shall be construed,
whenever possible, to be in conformity with the requirements of ERISA, or any subsequent laws or
amendments thereto. To the extent not in conflict with the preceding sentence or another provision
in the Plan, the construction and administration of the Plan shall be in accordance with the laws
of Maine (without reference to its conflicts of law provisions).

          (f) Severability. Should any provisions of the Plan be deemed or held to be unlawful
or invalid for any reason, such fact shall not adversely affect the other provisions of the Plan
unless such determination shall render impossible or impracticable the functioning of the Plan, and
in such case, an appropriate provision or provisions shall be adopted so that the Plan may continue
to function properly.

          (g) Unfunded Plan. The Company shall pay for benefits under the Plan out of its
general assets. No Participant or any other person shall have any interest whatsoever in any
specific asset of the Company. To the extent that any person acquires a right to receive payments
under this Plan, such right shall not be secured by any assets of the Company. The obligations of
the Company may be funded through contributions to a trust or otherwise, but the obligations of the
Company are not required to be funded under this Plan unless required by law.

          (h) Nontransferability. In no event shall the Company make any payment under this
Plan to any assignee or creditor of a Participant, except as otherwise required by law. Prior to
the time of a payment hereunder, a Participant shall have no rights by way of anticipation or
otherwise to assign or otherwise dispose of any interest under this Plan, nor shall rights be
assigned or transferred by operation of law.

          (i) Incompetency. In the event that the Plan Administrator finds that a Participant
is unable to care for his or her affairs because of illness or accident, then benefits payable
hereunder, unless claim has been made therefor by a duly appointed guardian, committee, or other
legal representative, may be paid in such manner as the Plan Administrator shall determine, and the
application thereof shall be a complete discharge of all liability for any payments or benefits to
which such Participant (or designated

 

 

beneficiary) was or would have been otherwise entitled under this Plan.

          (j) Exclusive Plan Benefit. A Participant who receives severance benefits under this
Plan shall not be eligible to receive severance benefits under the Wright Express Corporation
Severance Pay Plan for Non-Officer Employees.

          (k) Termination, Amendment and Modification. Notwithstanding anything in this Plan to
the contrary, the Company expressly reserves the right, at any time, for any reason, without
limitation, and in its sole and absolute discretion, to terminate, amend or modify the Plan and any
or all of the benefits provided thereunder, either in whole or in part, whether as to all persons
covered thereby or as to one or more groups thereof. The termination, amendment or modification of
the Plan shall be effected by a document in writing.

ARTICLE VI — CLAIMS FOR BENEFITS AND PLAN ADMINISTRATION

          (a) Claim Procedure

          (1) How to File a Claim. If you are a Participant in the Plan, you will
auto-matically receive the benefits set forth under Article IV of the Plan. If you feel you have
not been provided with all benefits to which you are entitled under the Plan, you may file a
written claim with the Plan Administrator with respect to your rights to receive benefits from the
Plan. If you wish to make a claim for payment of benefits under the Plan, a claim must be filed by
contacting the Human Resources Department at the Company’s headquarters in South Portland, Maine
within 90 days of your termination of employment from the Company. You may be required to provide
additional information. After your claim has been processed, you will be notified in writing if
any benefits are denied in whole or in part, or if any additional information is required by the
office that processes your claim. This written notice will set forth (i) the specific reason or
reasons for the denial; (ii) specific reference to pertinent Plan provisions upon which the denial
is based; (iii) a description of any additional material or information necessary for you to
perfect the claim and an explanation of why such material or information is necessary; and (iv)
appropriate information as to the steps to be taken if you wish to submit your claim for review,
including a statement of your right to bring a civil action under Section 502(a) of ERISA following
an adverse benefit determination on review. You will receive this written notification within 90
days after it is filed. Under special circumstances, the Plan Administrator may require an
additional period of not more than 90 days to review your claim. If this occurs, you will be
notified in writing as to the length of the extension, the reason for the extension, and any other
information needed in order to process your claim.

          (2) How to Appeal a Claim. If you do not agree with the reason(s) your claim was
denied in whole or in part, you then have sixty (60) days from the date of receipt of the written
denial to appeal the decision to the Plan Administrator. Your appeal must be submitted in writing.
Be sure to state why you believe the claim should not have been denied and submit any data,
questions or comments you think are appropriate.

          You or your duly authorized representative may: (i) have, upon request and free of charge,
reasonable access to, and copies of, all documents, records, and other information relevant to your
claim for benefits, and (ii) submit written comments, documents, records, and other information
relating to the claim for benefits.

          Your appeal will be reviewed by the Company, and a decision will be made within sixty (60)
days after the appeal is received. Under special circumstances, the Plan Administrator may require
an additional period of not more than 60 days to review your appeal. If this occurs, you will be
notified in writing as to the length of the extension, not to exceed 120 days from the day on which
your appeal was

 

 

received.

          If your appeal is denied, in whole or in part, you will be notified in writing of the specific
reason(s) for the denial and specific references to the pertinent Plan provision(s) on which the
decision was based. In addition, the decision shall inform you that you are entitled to receive,
upon request and free of charge, reasonable access to, and copies of, all documents, records, and
other information relevant to your claim for benefits, and a statement of your right to bring an
action under Section 502(a) of ERISA. The decision on your appeal will be final and binding on all
parties and persons affected thereby. If you are not satisfied with the final decision and you
wish to review the documents pertinent to an appeal claim, you should write to the Plan
Administrator.

          (b) Plan Interpretation and Benefit Determination. The Plan is administered and
operated by the Plan Administrator, who has the exclusive discretionary authority and power to
determine eligibility for benefits and to construe the terms and provisions of the Plan, to
determine questions of fact and law arising under the Plan, to direct disbursements pursuant to the
Plan and to exercise all other powers specified herein or which may be implied from the provisions
hereof. The Plan administrator may adopt such rules for the conduct of the administration of the
Plan as it may deem appropriate. All interpretations and determinations of the Plan Administrator
shall be final and binding upon all parties and persons affected thereby. The Plan Administrator
may appoint one or more individuals and delegate such of its powers and duties as it deems
desirable to any such individual(s), in which case every reference herein made to the Plan
Administrator shall be deemed to mean or include the appointed individual(s) as to matters within
their jurisdiction.

Adopted on this 14 day of June, 2005, to be effective as of the Effective Date.

	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert C. Cornett
	 

	 	 	 	 
	 

	 	 	 	Robert C. Cornett
	 
	 	 	 	 
	 

	 	Its:
	 	Senior Vice President, Human Resources
	 
	 	 	 	 
	 

	 	Date:
	 	 06/14/2005<PAGE>

                                                                    EXHIBIT 10.1

                                 CYNOSURE, INC.

                             1992 STOCK OPTION PLAN

                                February 12, 1992

1.    Purpose.

      The purpose of this plan (the "Plan") is to secure for Cynosure, Inc. (the
"Company") and its shareholders the benefits arising from capital stock
ownership by employees, officers and directors of, and consultants or advisors
to, the Company and its parent and subsidiary corporations who are expected to
contribute to the Company's future growth and success. Except where the context
otherwise requires, the term "Company" shall include the parent and all present
and future subsidiaries of the Company as defined in Sections 424(e) and 424(f)
of the Internal Revenue Code of 1986, as amended or replaced from time to time
(the "Code"). Those provisions of the Plan which make express reference to
Section 422 shall apply only to Incentive Stock Options (as that term is defined
in the Plan).

2.    Type of Options and Administration.

      (a) Types of Options. Options granted pursuant to the Plan shall be
authorized by action of the Board of Directors of the Company (or a Committee
designated by the Board of Directors) and may be either incentive stock options
("Incentive Stock Options") meeting the requirements of Section 422 of the Code
or non-statutory options which are not intended to meet the requirements of
Section 422 of the Code.

      (b) Administration. The Plan will be administered by the Board of
Directors of the Company, whose construction and interpretation of the terms and
provisions of the Plan shall be final and conclusive. The Board of Directors may
in its sole discretion grant options to purchase shares of the Company's Common
Stock ("Common Stock") and issue shares upon exercise of such options as
provided in the Plan. The Board shall have authority, subject to the express
provisions of the Plan, to construe the respective option agreements and the
Plan, to prescribe, amend and rescind rules and regulations relating to the
Plan, to determine the terms and provisions of the respective option agreements,
which need not be identical, and to make all other determinations in the
judgment of the Board of Directors necessary or desirable for the administration
of the Plan. The Board of Directors may correct any

                                       -1-
<PAGE>

defect or supply any omission or reconcile any inconsistency in the Plan or in
any option agreement in the manner and to the extent it shall deem expedient to
carry the Plan into effect and it shall be the sole and final judge of such
expediency. No director or person acting pursuant to authority delegated by the
Board of Directors shall be liable for any action or determination under the
Plan made in good faith. The Board of Directors may, to the full extent
permitted by or consistent with applicable laws or regulations (including,
without limitation, applicable state law and Rule 16b-3 promulgated under the
Securities Exchange Act of 1934 (the "Exchange Act"), or any successor rule
("Rule 16b-3")), delegate any or all of its powers under the Plan to a committee
(the "Committee") appointed by the Board of Directors, and if the Committee is
so appointed all references to the Board of Directors in the Plan shall mean and
relate to such Committee.

      (c) Applicability of Rule 16b-3. Those provisions of the Plan which make
express reference to Rule 16b-3 shall apply only to such persons as are required
to file reports under Section 16(a) of the Exchange Act (a "Reporting Person").

3.    Eligibility.

      (a) General. Options may be granted to persons who are, at the time of
grant, employees, officers or directors of, or consultants or advisors to, the
Company; provided, that the class of employees to whom incentive Stock Options
may be granted shall be limited to all employees of the Company. A person who
has been granted an option may, if he or she is otherwise eligible, be granted
additional options if the Board of Directors shall so determine.

      (b) Grant of Options to Directors and Officers. From and after the
registration of the Common Stock of the Company under the Exchange Act, the
selection of a director or an officer (as the terms "director" and "officer" are
defined for purposes of Rule 16b-3) as a recipient of an option, the timing of
the option grant, the exercise price of the option and the number of shares
subject to the option shall be determined either (i) by the Board of Directors,
of which all members shall be "disinterested persons" (as hereinafter defined),
or (ii) by two or more directors having full authority to act in the matter,
each of whom shall be a "disinterested person." For the purposes of the Plan, a
director shall be deemed to be a "disinterested person"  only if such person
qualifies as a "disinterested person" within the meaning of Rule 16b-3, as such
term is interpreted from time to time.

                                       -2-
<PAGE>

4.    Stock Subject to Plan.

      Subject to adjustment as provided in Section 15 below, the maximum number
of shares of Common Stock of the Company which may be issued and sold under the
Plan is 1,500,000 shares. If an option granted under the Plan shall expire or
terminate for any reason without having been exercised in full, the unpurchased
shares subject to such option shall again be available for subsequent option
grants under the Plan. If shares issued upon exercise of an option under the
Plan are tendered to the Company in payment of the exercise price of an option
granted under the Plan, such tendered shares shall again be available for
subsequent option grants under the Plan; provided, that in no event shall (i)
the total number of shares issued pursuant to the exercise of Incentive Stock
Options under the Plan, on a cumulative basis, exceed the maximum number of
shares authorized for issuance under the Plan exclusive of shares made available
for issuance pursuant to this sentence or (ii) the total number of shares issued
pursuant to the exercise of options, on a cumulative basis, exceed the maximum
number of shares authorized for issuance under the Plan exclusive of shares made
available for issuance pursuant to this sentence.

5.    Forms of Option Agreements.

      As a condition to the grant of an option under the Plan, each recipient of
an option shall execute an option agreement in such form not inconsistent with
the Plan as may be approved by the Board of Directors. Such option agreements
may differ among recipients.

6.    Purchase Price.

      (a) General. The purchase price per share of stock deliverable upon the
exercise of an option shall be determined by the Board of Directors, provided,
however, that in the case of an Incentive Stock Option, the exercise price shall
not be less than 100% of the fair market value of such stock, as determined by
the Board of Directors, at the time of grant of such option, or less than 110%
of such fair market value in the case of options described in Section 11(b).

      (b) Payment of Purchase Price. Options granted under the Plan may provide
for the payment of the exercise price by delivery of cash or a check to the
order of the Company in an amount equal to the exercise price of such options,
or, to the extent provided in the applicable option agreement, (i) by delivery
to the Company of shares of Common Stock of the Company already owned by the
optionee having a fair market value equal in amount to the exercise price of the
options being exercised,

                                       -3-
<PAGE>

(ii) by any other means (including, without limitation, by delivery of a
promissory note of the optionee payable on such terms as are specified by the
Board of Directors) which the Board of Directors determines are consistent with
the purpose of the Plan and with applicable laws and regulations (including,
without limitation, the provisions of Rule 16b-3 and Regulation T promulgated by
the Federal Reserve Board) or (iii) by any combination of such methods of
payment. The fair market value of any shares of the Company's Common Stock or
other non-cash consideration which may be delivered upon exercise of an option
shall be determined by the Board of Directors.

7.    Option Period.

      Each option and all rights thereunder shall expire on such date as shall
be set forth in the applicable option agreement, except that, in the case of an
Incentive Stock Option, such date shall not be later than ten years after the
date on which the option is granted and, in all cases, options shall be subject
to earlier termination as provided in the Plan.

8.    Exercise of Options.

      Each option granted under the Plan shall be exercisable either in full or
in installments at such time or times and during such period as shall be set
forth in the agreement evidencing such option, subject to the provisions of the
Plan.

9.    Nontransferability of Options.

      Incentive Stock Options, and all options granted to Reporting Persons,
shall not be assignable or transferable by the person to whom they are granted,
either voluntarily or by operation of law, except by will or the laws of descent
and distribution, and, during the life of the optionee, shall be exercisable
only by the optionee; provided, however, that non-statutory options may be
transferred pursuant to a qualified domestic relations order (as defined in Rule
16b-3).

10.   Effect of Termination of Employment or Other Relationship.

      Except as provided in Section 11 (d) with respect to Incentive Stock
Options, and subject to the provisions of the Plan, the Board of Directors shall
determine the period of time during which an optionee may exercise an option
following (i) the termination of the optionee's employment or other relationship
with the Company or (ii) the death or disability of the optionee. Such periods
shall be set forth in the agreement evidencing such option.

                                       -4-

<PAGE>

11.   Incentive Stock Options.

      Options granted under the Plan which are intended to be Incentive Stock
Options shall be subject to the following additional terms and conditions:

      (a) Express Designation. All Incentive Stock Options granted under the
Plan shall, at the time of grant, be specifically designated as such in the
option agreement covering such Incentive Stock Options.

      (b) 10% Shareholder. If any employee to whom an Incentive Stock Option is
to be granted under the Plan is, at the time of the grant of such option, the
owner of stock possessing more than 10% of the total combined voting power of
all classes of stock of the Company (after taking into account the attribution
of stock ownership rules of Section 424(d) of the Code), then the following
special provisions shall be applicable to the Incentive Stock Option granted to
such individual:

            (i) The purchase price per share of the Common Stock subject to such
      incentive Stock Option shall not be less than 110% of the fair market
      value of one share of Common Stock at the time of grant; and

            (ii) the option exercise period shall not exceed five years from the
      date of grant.

      (c) Dollar Limitation. For so long as the Code shall so provide, options
granted to any employee under the Plan (and any other incentive stock option
plans of the Company) which are intended to constitute Incentive Stock Options
shall not constitute Incentive Stock Options to the extent that such options, in
the aggregate, become exercisable for the first time in any one calendar year
for shares of Common Stock with an aggregate fair market value (determined as of
the respective date or dates of grant) of more than $100,000.

      (d) Termination of Employment, Death or Disability. No Incentive Stock
Option may be exercised unless, at the time of such exercise, the optionee is,
and has been continuously since the date of grant of his or her option, employed
by the Company, except that:

            (i) an Incentive Stock Option may be exercised within the period of
      three months after the date the optionee ceases to be an employee of the
      Company (or within such lesser period as may be specified in the
      applicable option agreement), provided, that the agreement with respect to
      such option

                                       -5-

<PAGE>

      may designate a longer exercise period and that the exercise after such
      three-month period shall be treated as the exercise of a non-statutory
      option under the Plan;

            (ii) if the optionee dies while in the employ of the Company, or
      within three months after the optionee ceases to be such an employee, the
      Incentive Stock Option may be exercised by the person to whom it is
      transferred by will or the laws of descent and distribution within the
      period of one year after the date of death (or within such lesser period
      as may be specified in the applicable option agreement); and

            (iii) if the optionee becomes disabled (within the meaning of
      Section 22(e)(3) of the Code or any successor provision thereto) while in
      the employ of the Company, the Incentive Stock Option may be exercised
      within the period of one year after the date the optionee ceases to be
      such an employee because of such disability (or within such lesser period
      as may be specified in the applicable option agreement).

For all purposes of the Plan and any option granted hereunder, "employment"
shall be defined in accordance with the provisions of Section 1.421-7(h) of the
Income Tax Regulations (or any successor regulations). Notwithstanding the
foregoing provisions, no Incentive Stock Option may be exercised after its
expiration date.

12.   Additional Provisions.

      (a) Additional Option Provisions. The Board of Directors may, in its sole
discretion, include additional provisions in option agreements covering options
granted under the Plan, including without limitation restrictions on transfer,
repurchase rights, commitments to pay cash bonuses, to make, arrange for or
guaranty loans or to transfer other property to optionees upon exercise of
options, or such other provisions as shall be determined by the Board of
Directors; provided that such additional provisions shall not be inconsistent
with any other term or condition of the Plan and such additional provisions
shall not cause any Incentive Stock Option granted under the Plan to fail to
qualify as an Incentive Stock Option within the meaning of Section 422 of the
Code.

      (b) Acceleration, Extension, Etc. The Board of Directors may, in its sole
discretion, (i) accelerate the date or dates on which all or any particular
option or options granted under the Plan may be exercised or (ii) extend the
dates during which all, or any particular, option or options granted under the
Plan may be exercised;

                                       -6-

<PAGE>

provided, however, that no such extension shall be permitted if it would cause
the Plan to fail to comply with Section 422 of the Code or with Rule 16b-3.

13.   General Restrictions.

      (a) Investment Representations. The Company may require any person to whom
an option is granted, as a condition of exercising such option, to give written
assurances in substance and form satisfactory to the Company to the effect that
such person is acquiring the Common Stock subject to the option for his or her
own account for investment and not with any present intention of selling or
otherwise distributing the same, and to such other effects as the Company deems
necessary or appropriate in order to comply with federal and applicable state
securities laws, or with covenants or representations made by the Company in
connection with any public offering of its Common Stock.

      (b) Compliance With Securities Laws. Each option shall be subject to the
requirement that if, at any time, counsel to the Company shall determine that
the listing, registration or qualification of the shares subject to such option
upon any securities exchange or under any state or federal law, or the consent
or approval of any governmental or regulatory body, or that the disclosure of
non-public information or the satisfaction of any other condition is necessary
as a condition of, or in connection with, the issuance or purchase of shares
thereunder, such option may not be exercised, in whole or in part, unless such
listing, registration, qualification, consent or approval, or satisfaction of
such condition shall have been effected or obtained on conditions acceptable to
the Board of Directors. Nothing herein shall be deemed to require the Company to
apply for or to obtain such listing, registration or qualification, or to
satisfy such condition.

14.   Rights as a Shareholder.

      The holder of an option shall have no rights as a shareholder with respect
to any shares covered by the option (including, without limitation, any rights
to receive dividends or non-cash distributions with respect to such shares)
until the date of issue of a stock certificate to him or her for such shares. No
adjustment shall be made for dividends or other rights for which the record date
is prior to the date such stock certificate is issued.

                                       -7-
<PAGE>

15.   Adjustment Provisions for Recapitalizations and Related Transactions.

      (a) General. If, through or as a result of any merger, consolidation, sale
of all or substantially all of the assets of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other similar transaction, (i) the outstanding shares of Common Stock
are increased, decreased or exchanged for a different number or kind of shares
or other securities of the Company, or (ii) additional shares or new or
different shares or other securities of the Company or other non-cash assets are
distributed with respect to such shares of Common Stock or other securities, an
appropriate and proportionate adjustment may be made in (x) the maximum number
and kind of shares reserved for issuance under the Plan, (y) the number and kind
of shares or other securities subject to any then outstanding options under the
Plan, and (z) the price for each share subject to any then outstanding options
under the Plan, without changing the aggregate purchase price as to which such
options remain exercisable. Notwithstanding the foregoing, no adjustment shall
be made pursuant to this Section 15 if such adjustment would cause the Plan to
fail to comply with Section 422 of the Code or with Rule 16b-3.

      (b) Board Authority to Make Adjustments. Any adjustments under this
Section 15 will be made by the Board of Directors, whose determination as to
what adjustment, if any, will be made and the extent thereof will be
binding and adjustment, if any, will be made and the extent thereof will be
final, binding and conclusive. No fractional shares will be issued under the
plan on account of any such adjustments.

16.   Merger, Consolidation, Asset Sale, Liquidation, etc.

      (a) General. In the event of a consolidation or merger or sale of all or
substantially all of the assets of the Company in which outstanding shares of
Common Stock are exchanged for securities, cash or other property of any other
corporation or business entity or in the event of a liquidation of the Company,
the Board of Directors of the Company, or the board of directors of any
corporation assuming the obligations of the Company, may, in its discretion,
take any one or more of the following actions, as to outstanding options: (i)
provide that such options shall be assumed, or equivalent options shall be
substituted, by the acquiring or succeeding corporation (or an affiliate
thereof), provided that any such options substituted for Incentive Stock Options
shall meet the requirements of Section 424(a) of the Code, (ii) upon written
notice to the optionees, provide that all unexercised options will terminate
immediately prior to the consummation of such transaction unless exercised by
the optionee within a specified period following the date of such notice, (iii)
in the event of a merger under the terms of which holders of the Common Stock of
the Company will receive upon

                                       -8-

<PAGE>

consummation thereof a cash payment for each share surrendered in the merger
(the "Merger Price"), make or provide for a cash payment to the optionees equal
to the difference between (A) the Merger Price times the number of shares of
Common Stock subject to such outstanding options (to the extent then exercisable
at prices not in excess of the Merger Price) and (B) the aggregate exercise
price of all such outstanding options in exchange for the termination of such
options, and (iv) provide that all or any outstanding options shall become
exercisable in full immediately prior to such event.

      (b) Substitute Options. The Company may grant options under the Plan in
substitution for options held by employees of another corporation who become
employees of the Company, or a subsidiary of the Company, as the result of a
merger or consolidation of the employing corporation with the Company or a
subsidiary of the Company, or as a result of the acquisition by the Company, or
one of its subsidiaries, of property or stock of the employing corporation. The
Company may direct that substitute options be granted on such terms and
conditions as the Board of Directors considers appropriate in the circumstances.

17.   No Special Employment Rights.

      Nothing contained in the Plan or in any option shall confer upon any
optionee any right with respect to the continuation of his or her employment by
the Company or interfere in any way with the right of the Company at any time to
terminate such employment or to increase or decrease the compensation of the
optionee.

18.   Other Employee Benefits.

      Except as to plans which by their terms include such amounts as
compensation, the amount of any compensation deemed to be received by an
employee as a result of the exercise of an option or the sale of shares received
upon such exercise will not constitute compensation with respect to which any
other employee benefits of such employee are determined, including, without
limitation, benefits under any bonus, pension, profit-sharing, life insurance or
salary continuation plan, except as otherwise specifically determined by the
Board of Directors.

19.   Amendment of the Plan.

      (a) The Board of Directors may at any time, and from time to time, modify
or amend the Plan in any respect, except that if at any time the approval of the
shareholders of the Company is required under Section 422 of the Code or any

                                       -9-
<PAGE>

successor provision with respect to Incentive Stock Options, or under Rule
16b-3, the Board of Directors may not effect such modification or amendment
without such approval.

      (b) The termination or any modification or amendment of the Plan shall
not, without the consent of an optionee, affect his or her rights under an
option previously granted to him or her. With the consent of the optionee
affected, the Board of Directors may amend outstanding option agreements in a
manner not inconsistent with the Plan. The Board of Directors shall have the
right to amend or modify (i) the terms and provisions of the Plan and of any
outstanding Incentive Stock Options granted under the Plan to the extent
necessary to qualify any or all such options for such favorable federal income
tax treatment (including deferral of taxation upon exercise) as may be afforded
incentive stock options under Section 422 of the Code and (ii) the terms and
provisions of the Plan and of any outstanding option to the extent necessary to
ensure the qualification of the Plan under Rule 16b-3.

20.   Withholding.

      (a) The Company shall have the right to deduct from payments of any kind
otherwise due to the optionee any federal, state or local taxes of any kind
required by law to be withheld with respect to any shares issued upon exercise
of options under the Plan. Subject to the prior approval of the Company, which
may be withheld by the Company in its sole discretion, the optionee may elect to
satisfy such obligations, in whole or in part, (i) by causing the Company to
withhold shares of Common Stock otherwise issuable pursuant to the exercise of
an option or (ii) by delivering to the Company shares of Common Stock already
owned by the optionee. The shares so delivered or withheld shall have a fair
market value equal to such withholding obligation. The fair market value of the
shares used to satisfy such withholding obligation shall be determined by the
Company as of the date that the amount of tax to be withheld is to be
determined. An optionee who has made an election pursuant to this Section 20(a)
may only satisfy his or her withholding obligation with shares of Common Stock
which are not subject to any repurchase, forfeiture, unfulfilled vesting or
other similar requirements.

      (b) Notwithstanding the foregoing, in the case of a Reporting Person, no
election to use shares for the payment of withholding taxes shall be effective
unless made in compliance with any applicable requirements of Rule 16b-3.

                                      -10-
<PAGE>

21.   Cancellation and New Grant of Options, Etc.

      The Board of Directors shall have the authority to effect, at any time and
from time to time, with the consent of the affected optionees, (i) the
cancellation of any or all outstanding options under the Plan and the grant in
substitution therefor of new options under the Plan covering the same or
different numbers of shares of Common Stock and having an option exercise price
per share which may be lower or higher than the exercise price per share of the
cancelled options or (ii) the amendment of the terms of any and all outstanding
options under the Plan to provide an option exercise price per share which is
higher or lower than the then-current exercise price per share of such
outstanding options.

22.   Effective Date and Duration of the Plan.

      (a) Effective Date. The Plan shall become effective when adopted by the
Board of Directors, but no Incentive Stock Option granted under the Plan shall
become exercisable unless and until the Plan shall have been approved by the
Company's shareholders. If such shareholder approval is not obtained within
twelve months after the date of the Board's adoption of the Plan, no options
previously granted under the Plan shall be deemed to be Incentive Stock Options
and no Incentive Stock Options shall be granted thereafter. Amendments to the
Plan not requiring shareholder approval shall become effective when adopted by
the Board of Directors; amendments requiring shareholder approval (as provided
in Section 19) shall become effective when adopted by the Board of Directors,
but no Incentive Stock Option granted after the date of such amendment shall
become exercisable (to the extent that such amendment to the Plan was required
to enable the Company to grant such Incentive Stock Option to a particular
optionee) unless and until such amendment shall have been approved by the
Company's shareholders. If such shareholder approval is not obtained within
twelve months of the Board's adoption of such amendment, any Incentive Stock
Options granted on or after the date of such amendment shall terminate to the
extent that such amendment to the Plan was required to enable the Company to
grant such option to a particular optionee. Subject to this limitation, options
may be granted under the Plan at any time after the effective date and before
the date fixed for termination of the Plan.

      (b) Termination. Unless sooner terminated in accordance with Section 16,
the Plan shall terminate, with respect to Incentive Stock Options, upon the
earlier of (i) the close of business on the day next preceding the tenth
anniversary of the date of its adoption by the Board of Directors, or (ii) the
date on which all shares available for issuance under the Plan shall have been
issued pursuant to the exercise or can-

                                      -11-
<PAGE>

cellation, of options granted under the Plan. Unless sooner terminated in
accordance with Section 16, the Plan shall terminate with respect to options
which are not incentive Stock Options on the date specified in (ii) above. If
the date of termination is determined under (i) above, then options outstanding
on such date shall continue to have force and effect in accordance with the
provisions of the instruments evidencing such options.

23.   Provision for Foreign Participants.

      The Board of Directors may, without amending the Plan, modify awards or
options granted to participants who are foreign nationals or employed outside
the United States to recognize differences in laws, rules, regulations or
customs of such foreign jurisdictions with respect to tax, securities, currency,
employee benefit or other matters.

                                    Adopted by the Board of Directors on
                                    February 12, 1992.

                                    Approved by the Stockholders on
                                    February 12, 1992.

                                      -12-

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