Document:

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                                  Exhibit 10.59
                              TB WOOD'S CORPORATION

               GRANT OF PREMIUM PRICED NON-QUALIFIED STOCK OPTION

         1. Grant of Option and Exercise Price. Subject to the terms and
conditions set forth herein and in the TB Wood's Corporation 1996 Stock-Based
Incentive Compensation Plan (the "Plan"), TB Wood's Corporation (the "Company")
hereby grants to____________, (the "Optionee"), a stock option (the "Option") to
purchase up to _________ shares of Common Stock of the Company, par value $.01
per share (the "Common Stock"), at an exercise price of _______ per share (the
"Exercise Price").The Option is a non-qualified stock option.

         2. Vesting of Options. One-third of the shares of Common Stock subject
to the option shall vest on the first anniversary of the date of grant of the
Option (the "Grant Date"), an additional one-third of the shares of Common Stock
subject to the option shall vest on the second anniversary of the Grant Date,
and the final one-third of the shares of Common Stock subject to the option
shall vest on the third anniversary of the Grant Date.

         3. Time of Exercise. The Option may be exercised from time to time with
respect to shares for which the Option has vested but no later than the fifth
anniversary of the Grant Date. Upon the fifth anniversary of the Grant Date, the
Optionee's right to exercise the Option shall terminate absolutely.

         4. Payment for Shares of Common Stock. Upon exercise of an Option and
before delivery of the shares of Common Stock, full payment for shares of Common
Stock purchased upon the exercise of the Option shall be made in cash or,
subject to the approval of the Company committee administering the Plan (the
"Committee"), in whole or in part in shares of Common Stock valued at the fair
market value on the date of exercise.

         5. Manner of Exercise. The Option shall be exercised by giving written
notice of exercise to the Company (Attn: Chief Financial Officer) at the
Company's main office at 440 North Fifth Avenue, Chambersburg, Pennsylvania
17201-1778. Such notice of exercise must include a statement of preference as to
the manner in which payment to the Company shall be made. Such notice shall be
deemed to have been given when hand-delivered, telecopied or mailed, first-class
postage prepaid, and shall be irrevocable once given.

         6. Issuance of Certificates. As promptly as is reasonably practicable
after the exercise of the Option as determined by the Company, a certificate for
the shares of Common Stock issuable on the exercise of the Option shall be
delivered to Optionee or to his personal representative, heir or legatee.

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         7. Nontransferability of Option. The Option may not be transferred or
assigned by Optionee otherwise than by will or the laws of descent and
distribution or be exercised other than by Optionee or, in the case of his
death, by his personal representative, heir or legatee.

         8. Taxes. Optionee shall be responsible to make appropriate provision
for all taxes required to be withheld in connection with any Option, the
exercise thereof and the transfer of the shares of Common Stock. Such
responsibility shall extend to all applicable federal, state, local or foreign
withholding taxes. In the case of exercise of the Option, the Company shall, at
the election of Optionee, have the right to retain the number of shares of
Common Stock whose aggregate fair market value equals the amount to be withheld
in satisfaction of the applicable withholding taxes.

         9. Termination of Employment. If the Optionee's employment by the
Company (or a subsidiary thereof) is terminated for any reason, all unvested
Options shall be forfeited and the Optionee shall have no further right to
exercise such Options. If the Optionee's employment by the Company (or a
subsidiary thereof) is terminated by reason of disability or retirement, all
unexercised, vested Options may be exercised pursuant to the terms of the Option
for a period of three months from the date of such termination of employment or
until the expiration of the term of the Option, whichever period is shorter;
provided, however, that if the Optionee's employment is terminated by death, all
unexercised, vested Options may be exercised pursuant to the terms of the Option
for a period of six months from the date of such termination of employment or
until the expiration of the term of the Option, whichever period is shorter. If
the Optionee's employment by the Company (or a subsidiary thereof) is terminated
for any reason other than death, disability or retirement, all unexercised,
vested options shall terminate three months from the date of such termination of
employment.

         10. Rights Prior to Exercise. Neither Optionee nor his personal
representative, heir or legatee shall have any of the rights of a stockholder
with respect to any Common Stock until the date of the issuance to him or her of
a certificate for such Common Stock as provided herein.

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         11. Amendments. The Committee may from time to time amend the terms of
this Option to the extent it deems appropriate to carry out the terms and
provisions of the Plan.

         12. Interpretation. The Committee shall have sole power to resolve any
dispute or disagreement arising out of this Agreement. The interpretation and
construction of any provision of this Option or the Plan made by the Committee
shall be final and conclusive and, insofar as possible, shall be consistent with
the requirements of a non-qualified stock option.

         13. Option Not to Affect Employment. The Option granted hereunder shall
not confer upon Optionee any right to continue in the employment of the Company
or any Subsidiary.

                                        TB WOOD'S CORPORATION

                                        By:____________________________
                                            Michael L. Hurt, President

Dated as of January 31, 2002

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                                  EXHIBIT 10.60

                              TB WOOD'S CORPORATION

                  1996 STOCK-BASED INCENTIVE COMPENSATION PLAN

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                              TB WOOD'S CORPORATION

                  1996 STOCK-BASED INCENTIVE COMPENSATION PLAN

1. Purpose of the Plan

         The purpose of the Plan is to assist the Company, its Subsidiaries and
Affiliates in attracting and retaining valued Employees and Non-Employee
Directors by offering them a greater stake in the Company's success and a closer
identity with it, and to encourage ownership of the Company's stock by such
Employees and Non-Employee Directors.

2. Definitions

         2.1 "Affiliate" means any entity other than the Subsidiaries in which
the Company has a substantial direct or indirect equity interest, as determined
by the Board.

         2.2 "Award" means an award of Deferred Stock, Restricted Stock, Options
or SARs under the Plan.

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

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

         2.5 "Common Stock" means the Common Stock of the Company, par value
$.01 per share, or such other class or kind of shares or other securities
resulting from the application of Section 10.

         2.6 "Company" means TB Wood's Corporation, a Delaware corporation, or
any successor corporation.

         2.7 "Committee" means the committee designated by the Board to
administer the Plan under Section 4. The Committee shall have at least two
members, each of whom shall be a member of the Board, a Non-Employee Director
and an Outside Director.

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         2.8 "Deferred Stock" means an Award made under Section 6 of the Plan to
receive Common Stock at the end of a specified Deferral Period.

         2.9 "Deferral Period" means the period during which the receipt of a
Deferred Stock Award under Section 6 of the Plan will be deferred.

         2.10 "Employee" means an officer or other key employee of the Company,
a Subsidiary or an Affiliate including a director who is such an employee.

         2.11 "Fair Market Value" means on any given date, the value per share
of the Common Stock as determined by the Committee if the Common Stock is not
traded in a public market, and, if the Common Stock is traded in a public
market, shall be, if the Common Stock is listed on a national securities
exchange or included in the NASDAQ Stock Market National Market System, the last
reported sale price thereof on such date, or, if the Common Stock is not so
listed or included, the mean between the last reported "bid" and "asked" prices
thereof on such date, as reported on NASDAQ or, if not so reported, as reported
by the National Daily Quotation Bureau, Inc. or as reported in the customary
financial reporting service, as applicable and as the Committee determines.

         2.12 "Holder" means an Employee or Non-Employee Director to whom an
Award is made.

         2.13 "Incentive Stock Option" means an Option intended to meet the
requirements of an incentive stock option as defined in section 422 of the Code
and designated as an Incentive Stock Option.

         2.14 "1934 Act" means the Securities Exchange Act of 1934, as amended.

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         2.15 "Non-Employee Director" means a member of the Board defined as
such in Rule 16b-3 promulgated by the Securities and Exchange Commission under
the 1934 Act, or any successor definition promulgated by the Securities and
Exchange Commission.

         2.16 "Non-Qualified Option" means an Option not intended to be an
Incentive Stock Option, and designated as a Non-Qualified Option.

         2.17 "Option" means any stock option granted from time to time under
Section 8 of the Plan.

         2.18 "Outside Director" means a member of the Board defined as such
under Section 162(m) of the Code and the regulations thereunder, or any
successor thereto.

         2.19 "Performance Goal" means a goal intending to comply with the
performance goal requirements of Treasury Regulations ss. 1.162-27 (e) (2) that
must be met by the end of a period specified by the Committee (but that is
substantially uncertain to be met before the grant of the Award) based upon: (i)
the price of Common Stock, (ii) the market share of the Company, its
Subsidiaries or Affiliates (or any business unit thereof), (iii) sales by the
Company, its Subsidiaries or Affiliates (or any business unit thereof), (iv)
earnings per share of Common Stock, (v) return on shareholder equity of the
Company, or (vi) costs of the Company, its Subsidiaries or Affiliates (or any
business unit thereof).

         2.20 "Plan" means the TB Wood's Corporation 1996 Stock-Based Incentive
Compensation Plan herein set forth, as amended from time to time.

         2.21 "Restricted Stock" means Common Stock awarded by the Committee
under Section 7 of the Plan.

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         2.22 "Restriction Period" means the period during which Restricted
Stock awarded under Section 7 of the Plan is subject to forfeiture.

         2.23 "SAR" means a stock appreciation right awarded by the Committee
under Section 9 of the Plan.

         2.24 "Retirement" means retirement from the active employment or
service of the Company, a Subsidiary or an Affiliate pursuant to the relevant
provisions of the applicable pension plan of such entity or as otherwise
determined by the Board.

         2.25 "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company (or any subsequent
parent of the Company) if each of the corporations other than the last
corporation in the unbroken chain owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

         2.26 "Ten Percent Shareholder" means a person who on any given date
owns, either directly or indirectly (taking into account the attribution rules
contained in section 424(d) of the Code), stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company or a
Subsidiary.

         3. Eligibility

         Any Employee or Non-Employee Director is eligible to receive an Award.

         4. Administration and Implementation of Plan

         4.1 The Plan shall be administered by the Committee, which shall have
full power to interpret and administer the Plan and full authority to act in
selecting the Employees and Non-Employee Directors to whom Awards will be
granted, in determining the type and amount of Awards to be granted to each such
Employee or Non-Employee Director, the terms and conditions of Awards granted
under the Plan and the terms of agreements which will be entered into with
Holders.

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         4.2 The Committee's powers shall include, but not be limited to, the
power to determine whether, to what extent and under what circumstances an Award
may be exchanged for cash, Restricted Stock, Deferred Stock or some combination
thereof; to determine whether, to what extent and under what circumstances an
Award is made and operates on a tandem basis with other Awards made hereunder;
to determine whether, to what extent and under what circumstances Common Stock
or cash payable with respect to an Award shall be deferred, either automatically
or at the election of the Holder (including the power to add deemed earnings to
any such deferral); and to determine the effect, if any, of a change in control
of the Company upon outstanding Awards; and to grant Awards (other than
Incentive Stock Options) that are transferable by the Holder.

         4.3 The Committee shall have the power to adopt regulations for
carrying out the Plan and to make changes in such regulations as it shall, from
time to time, deem advisable. The Committee shall have the power unilaterally
and without approval of a Holder to amend an existing Award in order to carry
out the purposes of the Plan provided such an amendment does not take away any
benefit granted to a Holder by the Award and provided the amended Award comports
with the terms of the Plan. Any interpretation by the Committee of the terms and
provisions of the Plan and the administration thereof, and all action taken by
the Committee, shall be final and binding on Holders.

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         4.4 The Committee may condition the grant of any Award or the lapse of
any Deferral Period or Restriction Period (or any combination thereof) upon the
Holder's achievement of a Performance Goal that is established by the Committee
before the grant of the Award. The Committee shall have discretion to determine
the specific targets with respect to various categories of Performance Goals set
forth in the definition thereof. Before granting an award or permitting the
lapse of any Deferral Period or Restriction Period subject to this Section, the
Committee shall certify that an individual has satisfied the applicable
Performance Goal.

         5. Shares of Stock Subject to the Plan

         5.1 Subject to adjustment as provided in Section 10, the total number
of shares of Common Stock available for Awards under the Plan shall be 1,000,000
shares.

         5.2 The maximum number of Awards that may be awarded to any Employee
under the Plan during any calendar year shall not exceed 100,000 shares (the
"Individual Limit"). Subject to Section 5.3 and Section 10, any Award that is
cancelled or repriced by the Committee shall count against the Individual Limit.
Notwithstanding the foregoing, the Individual Limit may be adjusted to reflect
the effect of any transaction or event described in Section 10.

         5.3 Any shares of Common Stock issued by the Company through the
assumption or substitution of outstanding grants from an acquired company shall
not (i) reduce the shares of Common Stock available for Awards under the Plan,
or (ii) be counted against the Individual Limit. Any shares of Common Stock
issued hereunder may consist, in whole or in part, of authorized and unissued
shares or treasury shares. If any shares of Common Stock subject to any Award
granted hereunder are forfeited or such Award otherwise terminates without the
issuance of such shares or the payment of other consideration in lieu of such
shares, the shares subject to such Award, to the extent of any such forfeiture
or termination, shall again be available for Awards under the Plan (provided
that an Award so forfeited or terminated shall be counted against the Individual
Limit).

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         6. Deferred Stock

         An Award of Deferred Stock is an agreement by the Company to deliver to
the Holder a specified number of shares of Common Stock at the end of a
specified Deferral Period. Such an Award shall be subject to the following terms
and conditions.

         6.1 Deferred Stock Awards shall be evidenced by Deferred Stock
agreements. Such agreements shall conform to the requirements of the Plan and
may contain such other provisions as the Committee shall deem advisable.

         6.2 Upon determination of the number of shares of Deferred Stock to be
awarded to a Holder, the Committee shall direct that the same be credited to the
Holder's account on the books of the Company but that issuance and delivery of
the same shall be deferred until the date or dates provided in Section 6.5
hereof. Prior to issuance and delivery hereunder, the Holder shall have no
rights as a stockholder with respect to any shares of Deferred Stock credited to
the Holder's account.

         6.3 Amounts equal to any dividends declared during the Deferral Period
with respect to the number of shares covered by a Deferred Stock Award will be
paid to the Holder currently, or deferred and deemed to be reinvested in
additional Deferred Stock, or otherwise reinvested on such terms as are
determined at the time of the Award by the Committee, in its sole discretion,
and specified in the Deferred Stock agreement.

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         6.4 The Committee may condition the grant of an Award of Deferred Stock
or the expiration of the Deferral Period upon the Holder's achievement of one or
more Performance Goal(s) specified in the Deferred Stock agreement. If the
Holder fails to achieve the specified Performance Stock Goal(s), the Committee
shall not grant the Deferred Stock Award to the Holder, or the Holder shall
forfeit the Award and no Common Stock shall be transferred to him pursuant to
the Deferred Stock Award. Dividends paid during the Deferral Period on Deferred
Stock subject to a Performance Goal shall be reinvested in additional Deferred
Stock and the lapse of the Deferral Period for such Deferred Stock shall be
subject to the Performance Goal(s) previously established by the Committee.

         6.5 The Deferred Stock agreement shall specify the duration of the
Deferral Period taking into account termination of employment or service on
account of death, disability, Retirement or other cause. The Deferral Period may
consist of one or more installments. At the end of the Deferral Period or any
installment thereof the shares of Deferred Stock applicable to such installment
credited to the account of a Holder shall be issued and delivered to the Holder
(or, where appropriate, the Holder's legal representative) in accordance with
the terms of the Deferred Stock agreement. The Committee may, in its sole
discretion, accelerate the delivery of all or any part of a Deferred Stock Award
or waive the deferral limitations for all or any part of a Deferred Stock Award.

         7. Restricted Stock

         An Award of Restricted Stock is a grant by the Company of a specified
number of shares of Common Stock to the Holder, which shares are subject to
forfeiture upon the happening of specified events. Such an Award shall be
subject to the following terms and conditions:

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         7.1 Restricted Stock shall be evidenced by Restricted Stock agreements.
Such agreements shall conform to the requirements of the Plan and may contain
such other provisions as the Committee shall deem advisable.

         7.2 Upon determination of the number of shares of Restricted Stock to
be granted to the Holder, the Committee shall direct that a certificate or
certificates representing the number of shares of Common Stock be issued to the
Holder with the Holder designated as the registered owner. The certificate(s)
representing such shares shall be legended as to sale, transfer, assignment,
pledge or other encumbrances during the Restriction Period and deposited by the
Holder, together with a stock power endorsed in blank, with the Company, to be
held in escrow during the Restriction Period.

         7.3 During the Restriction Period the Holder shall have the right to
receive dividends from and to vote the shares of Restricted Stock.

         7.4 The Committee may condition the grant of an Award of Restricted
Stock or the expiration of the Restriction Period upon the Holder's achievement
of one or more Performance Goals(s) specified in the Restricted Stock agreement.
If the Holder fails to achieve the specified Performance Goal(s), the Committee
shall not grant the Restricted Stock to the Holder, or the Holder shall forfeit
the Award of Restricted Stock and the Common Stock shall be forfeited to the
Company.

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         7.5 The Restricted Stock agreement shall specify the duration of the
Restriction Period and the performance, employment or other conditions
(including termination of employment or service on account of death, disability,
Retirement or other cause) under which the Restricted Stock may be forfeited to
the Company. At the end of the Restriction Period the restrictions imposed
hereunder shall lapse with respect to the number of shares of Restricted Stock
as determined by the Committee, and the legend shall be removed and such number
of shares delivered to the Holder (or, where appropriate, the Holder's legal
representative). The Committee may, in its sole discretion, modify or accelerate
the vesting and delivery of shares of Restricted Stock.

         8. Options

         Options give an Employee or a Non-Employee Director the right to
purchase a specified number of shares of Common Stock from the Company for a
specified time period at a fixed (or other determinable) price. Options may be
either Incentive Stock Options or Non-Qualified Stock Options. The grant of
Options shall be subject to the following terms and conditions:

         8.1 Option Grants: Options shall be evidenced by Option agreements.
Such agreements shall conform to the requirements of the Plan, and may contain
such other provisions as the Committee shall deem advisable.

         8.2 Option Price: The price per share at which Common Stock may be
purchased upon exercise of an Option shall be determined by the Committee, but,
in the case of grants of Incentive Stock Options, shall be not less than the
Fair Market Value of a share of Common Stock on the date of grant. In the case
of any Incentive Stock Option granted to a Ten Percent Shareholder, the option
price per share shall not be less than 110% of the Fair Market Value of a share
of Common Stock on the date of grant. The option price per share for
Non-Qualified Options may be less than the Fair Market Value of a share of
Common Stock on the date of grant.

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         8.3 Term of Options: The Option agreements shall specify when an Option
may be exercisable and the terms and conditions applicable thereto. The term of
an Option shall in no event be greater than ten years (five years in the case of
an Incentive Stock Option granted to a Ten Percent Shareholder) and no Option
may be exercisable sooner than six months from date of grant.

         8.4 Incentive Stock Options: Each provision of the Plan and each Option
agreement relating to an Incentive Stock Option shall be construed so that each
Incentive Stock Option shall be an incentive stock option as defined in section
422 of the Code, and any provisions of the Option agreement thereof that cannot
be so construed shall be disregarded. In no event may a Holder be granted an
Incentive Stock Option which does not comply with the grant and vesting
limitations prescribed by section 422 (d) of the Code. Incentive Stock Options
may not be granted to employees of Affiliates or Non-Employee Directors.

         8.5 Restrictions on Transferability: No Incentive Stock Option shall be
transferable otherwise than by will or the laws of descent and distribution and,
during the lifetime of the Holder, shall be exercisable only by the Holder. Upon
the death of a Holder, the person to whom the rights have passed by will or by
the laws of descent and distribution may exercise an Incentive Stock Option only
in accordance with this Section 8.

         8.6 Payment of Option Price: The option price of the shares of Common
Stock issuable upon the exercise of an Option shall be paid in full in cash at
the time of the exercise or, with the consent of the Committee, in whole or in
part in Common Stock valued at Fair Market Value on the date of exercise. With

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the consent of the Committee, payment upon the exercise of a Non-Qualified
Option may be made in whole or in part by Restricted Stock (based on the fair
market value of the Restricted Stock on the date the Option is exercised, as
determined by the Committee). In such case the Common Stock to which the Option
relates shall be subject to the same forfeiture restrictions originally imposed
on the Restricted Stock exchanged therefor.

         8.7 Termination by Death: If a Holder's employment by or service for
the Company, a Subsidiary or Affiliate terminates by reason of death, any Option
granted to such Holder may thereafter be exercised (to the extent such Option
was exercisable at the time of death or on such accelerated basis as the
Committee may determine at or after grant) by, where appropriate, the Holder's
transferee or by the Holder's legal representative, for a period of six months
(or such other period as determined by the Committee) from the date of death or
until the expiration of the stated term of the Option, whichever period is
shorter.

         8.8 Termination by Reason of Retirement or Disability: If a Holder's
employment by or service for the Company, a Subsidiary or Affiliate terminates
by reason of disability (as determined by the Committee) or Retirement, any
unexercised Option granted to the Holder may thereafter be exercised by the
Holder (or, where appropriate, the Holder's transferee or legal representative),
to the extent it was exercisable at the time of termination or on such
accelerated basis as the Committee may determine at or after grant, for a period
of 3 months (or such other period as determined by the Committee) from the date
of such termination of employment or until the expiration of the stated term of
the Option, whichever period is shorter.

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         8.9 Other Termination: If a Holder's employment by or service for the
Company, a Subsidiary or Affiliate terminates for any reason other than death,
disability or Retirement, all unexercised Options awarded to the Holder shall
terminate on the date of such termination of employment or service, unless the
Committee permits the Options to be exercisable for some period of time after
such termination.

         9. Stock Appreciation Rights

         SARs give the Holder the right to receive, upon exercise of the SAR,
the increase in the Fair Market Value of a specified number of shares of Common
Stock from the date of grant of the SAR to the date of exercise. The grant of
SARs shall be subject to the following terms and conditions:

         9.1 SARs are rights to receive a payment in cash, Common Stock,
Restricted Stock or Deferred Stock as selected by the Committee. The value of
these rights, which are determined by the appreciation in the number of shares
of Common Stock subject to the SAR, shall be evidenced by SAR agreements. Such
agreements shall conform to the requirements of the Plan and may contain such
other provisions as the Committee shall deem advisable. An SAR may be granted in
tandem with all or a portion of a related Option under the Plan ("Tandem SAR"),
or may be granted separately ("Freestanding SAR"). A Tandem SAR may be granted
either at the time of the grant of the Option or at any time thereafter during
the term of the Option and shall be exercisable only to the extent that the
related Option is exercisable. In no event shall any SAR be exercisable within
the first six months of its grant.

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         9.2 The base price of a Tandem SAR shall be the option price under the
related Option. The base price of a Freestanding SAR shall be not less than 100%
of the Fair Market Value of the Common Stock on the date of grant of the
Freestanding SAR.

         9.3 An SAR shall entitle the recipient to receive a payment equal to
the excess of the Fair Market Value of the shares of Common Stock covered by the
SAR on the date of exercise over the base price of the SAR. Such payment may be
in cash, in shares of Common Stock, Deferred Stock, Restricted Stock or any
combination, as the Committee shall determine. Upon exercise of a Tandem SAR as
to some or all of the shares of Common Stock covered by the grant, the related
Option shall be cancelled automatically to the extent of the number of shares of
Common Stock covered by such exercise, and such shares shall no longer be
available for purchase under the Option pursuant to Section 8. Conversely, if
the related Option is exercised as to some or all of the shares of Common Stock
covered by the grant, the related Tandem SAR, if any, shall be cancelled
automatically to the extent of the number of shares of Common Stock covered by
the Option exercised.

         9.4 SARs shall be subject to the same terms and conditions applicable
to Options as stated in sections 8.3, 8.5, 8.7, 8.8 and 8.9. SARs shall also be
subject to such other terms and conditions not inconsistent with the Plan as
shall be determined by the Committee.

         10. Adjustments upon Changes in Capitalization

         In the event of a reorganization, recapitalization, stock split,
spin-off, split-off, split-up, stock dividend, issuance of stock rights,
combination of shares, merger, consolidation or any other change in the
corporate structure of the Company affecting Common Stock, or any distribution
to stockholders other than a cash dividend, the Board shall make appropriate
adjustment in the number and kind of shares authorized by the Plan and any
adjustments to outstanding Awards as it determines appropriate. No fractional
shares of Common Stock shall be issued pursuant to such an adjustment. The Fair
Market Value of any fractional shares resulting from adjustments pursuant to
this Section shall, where appropriate, be paid in cash to the Holder.

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         11. Effective Date, Termination and Amendment

         The Plan is amended and restated, effective on January 31, 1996. The
Plan shall remain in full force and effect until the earlier of ten years from
the date of its adoption by the Board, or the date it is terminated by the
Board. The Board shall have the power to amend, suspend or terminate the Plan at
any time, provided that no such amendment shall be made without stockholder
approval which shall:

         11.1 Increase (except as provided in Section 10) the total number of
shares available for issuance pursuant to the Plan;

         11.2 Change the class of employees eligible to be Holders;

         11.3 Modify the Individual Limit (except as provided in Section 10) or
the categories of Performance Goals set forth in Section 4.4;

         11.4 Change the provisions of this Section 11; or

         11.5 Make any other change for which shareholder approval is required
under section 16(b) or any successor provision of the 1934 Act.

         Termination of the Plan pursuant to this Section 11 shall not affect
Awards outstanding under the Plan at the time of termination.

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         12. Transferability

         Except as provided below, Awards may not be pledged, assigned or
transferred for any reason during the Holder's lifetime, and any attempt to do
so shall be void and the relevant award shall be forfeited. The Committee may
grant Awards (except Incentive Stock Options) that are transferable by the
Holder during his lifetime, but such Awards shall be transferable only to the
extent specifically provided in the agreement entered into with the Holder. The
transferee of the Holder shall, in all cases, be subject to the provisions of
the agreement between the Company and the Holder.

         13. General Provisions

         13.1 Nothing contained in the Plan, or any Award granted pursuant to
the Plan, shall confer upon any Employee or Non-Employee Director any right with
respect to continuance of employment by or service for the Company, a Subsidiary
or Affiliate, nor interfere in any way with the right of the Company, a
Subsidiary or Affiliate to terminate the employment or service of any Employee
or Non-Employee Director at any time.

         13.2 For purposes of this Plan, transfer of employment between the
Company and its Subsidiaries and Affiliates shall not be deemed a termination of
employment.

         13.3 Holders shall be responsible to make appropriate provisions for
all taxes required to be withheld in connection with any Award, the exercise
thereof and the transfer of shares of Common Stock pursuant to this Plan. Such
responsibility shall extend to all applicable Federal, state, local or foreign
withholding taxes. In the case of the payment of Awards in the form of Common
Stock, or the exercise of Options or SARs, the Company shall, at the election of
the Holder and with the consent of the Committee, have the right to retain the
number of shares of Common Stock whose Fair Market Value equals the amount to be
withheld in satisfaction of the applicable withholding taxes. Agreements
evidencing such Awards shall contain appropriate provisions to effect
withholding in this manner.

                                      -16-
<PAGE>

         13.4 Without amending the Plan, Awards may be granted to Employees who
are foreign nationals or employed outside the United States or both, on such
terms and conditions different from those specified in the Plan as may, in the
judgment of the Committee, be necessary or desirable to further the purpose of
the Plan.

         13.5 To the extent that Federal laws (such as the 1934 Act, the Code or
the Employee Retirement Income Security Act of 1974) do not otherwise control,
the Plan and all determinations made and actions taken pursuant hereto shall be
governed by the law of Delaware and construed accordingly.

         13.6 The Committee may amend any outstanding Awards to the extent it
deems appropriate. Such amendment may be made by the Committee without the
consent of the Holder, except in the case of amendments adverse to the Holder,
in which case the Holder's consent is required to any such amendment.

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