Document:

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                                                                   Exhibit 10(i)

                            Alberto-Culver Company

                     Executive Deferred Compensation Plan

             (As amended and restated through September 23, 1999)
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                               Table of Contents
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                                                              Exhibit 10(i)
I.   Establishment, Definitions and Purpose
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Preamble.................................................................  1
Definitions..............................................................  1
Purpose..................................................................  2

II.  Participation

Participation, Notification and Election.................................  2
Deferral Procedure.......................................................  3
Deferral Agreement Termination...........................................  3
Establishment of Accounts................................................  3
Account Valuation and Earnings...........................................  3
Benefit Payments.........................................................  4
Conditional Matching Contributions.......................................  4

III. General Provisions

Funding..................................................................  5
Vesting..................................................................  5
In-Service Withdrawals...................................................  5
Beneficiary Designation..................................................  6
Death Benefits...........................................................  6
Administration...........................................................  6
Administrative Fees and Expenses.........................................  6
Claims Procedure.........................................................  7
Tax Liability............................................................  7

IV.  Exempt Status.......................................................  7

V. Indemnification.......................................................  7

VI. Amendment and Termination............................................  7

VII. Miscellaneous

Nonassignability.........................................................  8
No Contract of Employment................................................  8
Participant Litigation...................................................  8
Participant and Beneficiary Duties.......................................  8
Governing Law............................................................  8
Validity.................................................................  9
Notices..................................................................  9
Successors...............................................................  9

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I. Establishment, Definitions and Purpose

1.1 Preamble

Pursuant to this plan document, Alberto-Culver Company will maintain an unfunded
deferred compensation plan, to be established as of January 1, 1999, and to be
known as the Alberto-Culver Company Executive Deferred Compensation Plan
("Plan"). Under the terms of the Plan, eligible employees of the Alberto-Culver
Company and certain of its domestic subsidiaries are allowed to defer a portion
of their Compensation.  Participants and their beneficiaries shall have no
interest in any Company assets as a source of funds to satisfy the benefit
obligations under the Plan. The Plan constitutes an unsecured promise by the
Company to make benefit payments in the future and Participants shall have the
status of general unsecured creditors of the Company.

1.2 Definitions

Capitalized terms are generally defined in the Section where used. The following
terms appear in several Sections and are defined below for convenient reference:

a) "Beneficiary" - An individual or individuals or trust who are designated in
    the most recent writing by the Participant to receive his/her benefit in the
    event of the Participant's death. If more than one Beneficiary survives the
    Participant, such benefit payments shall be made equally to all such
    Beneficiaries, unless otherwise indicated by the Participant on the
    beneficiary form.

b) "Code" - The Internal Revenue Code of 1986, as amended.

c) "Compensation" - The salary and commissions, where applicable, of an employee
    as set by the Company for a Plan Year, exclusive of any amounts payable
    under bonus and incentive plans, severance plans, option plans, and any
    other benefit or welfare plan of the Company now or hereafter existing.

d) "Company" - Alberto-Culver Company and any direct or indirect domestic
    subsidiaries which, with the consent of Alberto-Culver Company, adopts this
    Plan by resolution of its board of directors. On the date hereof, Sally
    Beauty Company, Inc., Alberto-Culver USA, Inc., St. Ives Laboratories, Inc.,
    and Alberto-Culver International, Inc. have adopted this Plan with the
    consent of Alberto-Culver Company.

e) "ERISA" - The Employee Retirement Income Security Act of 1974, as amended.

f) "Highly Compensated Employee" - an employee of the Company who is determined
    to be a Highly Compensated Employee within the meaning of Code section
    414(q) (or any successor provision), as adjusted by the Internal Revenue
    Service from time to time.

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g) "Participant" - A Highly Compensated Employee who meets the participation
    requirements set forth in Section 2.1 and elects to participate in the Plan
    in accordance herewith.

h) "Plan Administrator" - An individual selected from time to time by the
    Compensation Committee of the Board of Directors of the Alberto-Culver
    Company (the "Compensation Committee") to administer the Plan and perform
    all accounting and administrative functions in connection therewith.

i) "Plan Year" - Each 12 consecutive month period commencing on January 1 and
    ending on December 31.

j) "Deferral Agreement Form" - A written agreement between a Participant and the
    Company to defer receipt of future Compensation. The Plan Administrator may
    amend this form from time to time.

1.3 Purpose

Alberto-Culver Company and certain of its domestic subsidiaries sponsor 401(k)
plans known as the Alberto-Culver 401(k) Savings Plan and the Sally Beauty
401(k) Savings Plan (collectively, the "401(k) Plans") for the benefit of their
U.S. employees and their beneficiaries. Each of the 401(k) Plans operate as a
"qualified plan", as defined under the Code, and therefore are subject to
deferral limitations contained therein. The Plan is established to mitigate the
effect of these limitations by allowing Participants to defer a greater portion
of their Compensation and the earnings thereon than is permitted solely under
the 401(k) Plans.

II. Participation

2.1 Participation, Notification and Election

The Plan Administrator shall provide notification to the Highly Compensated
Employees of their eligibility to participate in the Plan. The determination of
whether an employee is a Highly Compensated Employee will be calculated based
upon such employee's applicable compensation earned in the preceding calendar
year. The determination of whether a new hire is a Highly Compensated Employee
will be calculated based upon such new hire's initial annual salary (without
regard to commissions, if any) at the time of hire. The Plan Administrator shall
further provide eligible employees with a Deferral Agreement Form. Eligible
employees shall elect on the Deferral Agreement Form for the applicable Plan
Year, the (i) percentage of Compensation to be deferred in that Plan Year, (ii)
commencement date of distributions with respect to deferrals made in such Plan
Year, (iii) method of distribution which may be either a single-sum distribution
or equal annual distribution installments which can be no more than five, (iv)
any other elections required by the Plan Administrator and set forth on the
Deferral Agreement Form. A Participant is not permitted to (i) defer
Compensation for a pay period which has commenced prior to the date on which the
Deferral Agreement Form is signed by the Participant and delivered to the Plan
Administrator and (ii) with the exception of the Participant's termination of
employment with the Company, defer Compensation for a period of time less than
three years from the commencement date of such deferrals. Deferrals with respect
to future Compensation may be terminated pursuant to Section 2.3.

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2.2 Deferral Procedure

Upon receipt of a properly completed and timely executed Deferral Agreement
Form, the Company will withhold from each paycheck, the designated percentage of
the Participant's Compensation. Changes in salary during the Plan Year shall be
subject to the same Compensation deferral percentage as previously elected and
indicated on the Deferral Agreement Form. The deferral amount shall not be
included as wages subject to federal income tax on the Participant's federal
income tax withholding statement. Participant deferrals shall be subject to
employment taxes, including Federal Insurance Contributions Act contributions,
and any state or local taxes as required. The Participant must elect to defer
not less than 1% and not more than 100% of his/her Compensation. Such deferral
percentages must be in 1% increments.

All elections shall be made before the beginning of the Plan Year in which the
services are to be performed with the exception of a new hire. A new hire will
be allowed to participate in the Plan provided such employee submits a Deferral
Agreement Form within 30 days of the date of hire. In such an event, the new
employee shall become a Participant on the first day of the first payroll period
beginning in the next calender quarter following the date on which the Deferral
Agreement Form is submitted to the Plan Administrator. If a new employee fails
to submit a Deferred Agreement Form within such 30 day period, the new employee
will not be allowed to participate in the Plan until the beginning of the next
Plan Year. A Participant's Deferral Agreement Form shall continue to remain in
effect for that Plan Year unless terminated, as provided in Section 2.3. Each
Plan Year, Participants will be required to complete a new Deferral Agreement
Form prior to the commencement of such Plan Year if they wish to defer income
for that Plan Year.

2.3 Deferral Agreement Termination

The Participant shall have the right to terminate his/her deferral upon written
notice to the Plan Administrator. The deferral termination shall not apply to
Compensation already earned. Such termination shall be effective on the first
day of the first payroll period beginning in the next calendar quarter following
the date on which the termination request is received by the Plan Administrator.
Once a termination request has been submitted for a Plan Year, the Participant
may not re-elect to defer any amounts under the Plan until the next Plan Year.

2.4 Establishment of Accounts

Each Participant shall have an account established by the Plan Administrator and
Participant statements will be distributed to Participants in the Plan on a
quarterly basis. The Company will maintain an accrual for the aggregate amount
of deferred benefits under the Plan on the Company's accounting records.

2.5 Account Valuation and Earnings

The account established for each Participant under Section 2.4 will be valued on
a quarterly basis. The deferred benefit account for each Participant shall be
adjusted quarterly to reflect a reasonable fixed annual rate of interest as
determined by the Compensation Committee. This rate

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may be prospectively adjusted on an annual or more frequent basis as deemed
appropriate by the Compensation Committee. The rate chosen by the Compensation
Committee from time to time shall apply to the entire balance of all
Participants' accounts.

2.6 Benefit Payments

The account established for each Participant under Section 2.4 shall be payable
to the Participant as provided in the Deferral Agreement Form. In the event of
any of the following occurrences, the account established for each Participant
under Section 2.4 shall be payable to the Participant or Beneficiary no later
than 90 days after the last day of the month in which the Plan Administrator
receives notification that:

(a) the Participant terminates employment with the Company and has not elected a
    future deferral  payment date; or
(b) the Plan is terminated (unless a successor plan is instituted).

2.7 Conditional Matching Contributions

If the following conditions have been satisfied, Participants may be entitled to
a matching contribution from the Company:

(a) Participant, in the applicable Plan Year, defers in either the Alberto-
    Culver 401(k) Savings Plan or the Sally Beauty 401(k) Savings Plan a
    percentage of his or her 401(k) Compensation which is greater than or equal
    to the percentage which will maximize the Company's match under such 401(k)
    Plan; and

(b) The Company is required to and does refund all or a portion of a
    Participant's deferred 401(k) Compensation ("Refund") so that the
    Participant does not receive the maximum matching contribution to which such
    Participant would have otherwise been entitled had no Refund been      made;
    and

(c) Participant executed a Deferral Agreement Form prior to the beginning of the
    applicable Plan Year in which he or she elected to defer in this Plan the
    difference between the percentage of his or her 401(k) Compensation that
    would have maximized his or her matching contribution paid by the Company
    under the applicable 401(k) Plan and the percentage of his or her 401(k)
    Compensation that has actually been deferred under such Plan after taking
    into account any Refund (the "Difference").

If all of the foregoing conditions have been satisfied, pursuant to an election
made by the Participant on the Deferral Agreement Form, such Participant will
contribute into this Plan, in no more than four substantially equal installments
deducted from his or her paychecks immediately following the date of the Refund,
the Difference.  Within 60 days after the Difference has been fully credited
into the Plan by payroll deductions, the Participant shall be credited a
matching

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contribution into his or her account maintained hereunder equal to the
difference between the maximum match such Participant would have been entitled
under the applicable 401(k) Plan had no Refund been made and the matching
contribution actually given to the Participant under such 401(k) Plan. Matching
contributions credited pursuant to this Section 2.7 shall be 100% vested upon
receipt of such contribution by the Participant. Matching contributions and the
Difference must be deferred until the earlier of (i) the Participant's
termination of employment with the Company, (ii) the Participant's death or
(iii) the Plan's termination (unless a successor plan is instituted).

For purposes of this Section 2.7, the term "401(k) Compensation" shall be
defined as the term "Compensation" is defined in the applicable 401(k) Plan.

III. General Provisions

3.1 Funding

All amounts paid under the Plan shall be paid in cash from the general assets of
the Company. Such amounts shall be reflected on the accounting records of the
Company, but shall not be construed to create or require the creation of a
trust, custodial account or escrow account. No Participant shall have any right,
title, or interest in any assets, accounts or funds that the Company may
establish to aid in providing benefits under the Plan or otherwise. The Plan
does not create a trust or establish any fiduciary relationships between the
Company and the Participant or Beneficiary of the Plan, nor will any interest
other than that of an unsecured creditor exist.

3.2 Vesting

A Participant is always 100% vested in such Participant's own contributions and
the earnings thereon and any matching contributions and earnings thereon.

3.3 In-Service Withdrawals

Except as described in this Section 3.3, the date upon which deferral
distributions commence and the number of equal annual installments payable
starting on such commencement date shall be irrevocable. The Participant may
request to receive an early distribution of all or a portion of the balance of
the account owed to the  Participant. A single-sum payment will be paid to
Participants who request such distribution. An early distribution paid to a
Participant shall result in a penalty equal to 10% of such early distribution.
The Participant will forfeit all right, title and interest to an amount equal to
such penalty. The early distribution shall be paid to the Participant net of the
10% penalty and any required withholding taxes pursuant to Section 3.9.

Notwithstanding the preceding paragraph, any request for an early distribution
on account of an "Unforeseeable Emergency" shall not bear the 10% early
distribution penalty. For purposes of this Section 3.3, an Unforeseeable
Emergency is a severe financial hardship to the Participant

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resulting from a sudden and unexpected illness or accident of the Participant or
of a dependent (as defined in Section 152(a) of the Code) of the Participant,
loss of the Participant's property due to casualty, or other similar
extraordinary and unforeseeable circumstances beyond the control of the
Participant. The determination of whether a request for an early distribution is
on account of an Unforeseeable Emergency shall be made by the sole discretion of
the Plan Administrator who shall apply the standards prescribed under Section
457 of the Code.

Any early distribution on account of an Unforeseeable Emergency may not be made
to the extent such hardship is or may be relieved by (i) reimbursement or
compensation by insurance or otherwise, (ii) liquidation of the Participant's
assets, to the extent the liquidation of such assets would not itself cause
severe financial hardship, (iii) obtaining a loan either within the provisions
of the 401(k) Plans or from a third party lender or (iv) cessation of deferrals
under the Plan. Early distributions because of an Unforeseeable Emergency will
only be permitted to the extent reasonably needed to satisfy the emergency need
in addition to any amounts necessary to pay any federal, state or local income
taxes reasonably anticipated to result from the early distribution.

3.4 Beneficiary Designation

Each Participant shall have the right to designate a Beneficiary to receive
death benefits under the Plan.  If no Beneficiary designation is made or if no
such designated Beneficiary survives the Participant, the Plan Administrator
shall direct benefit payments to be made to the Participant's spouse or to the
Participant's estate if no spouse is living.

3.5 Death Benefits

Death benefits shall be paid as a single-sum to the Participant's Beneficiary
within 90 days after the last day of the month in which the later event occurs
(i) written notice is given to the Plan Administrator of Participant's death and
(ii) a proper Beneficiary has been determined by the Plan Administrator.

3.6 Administration

The Plan shall be administered by the Plan Administrator, subject to the
oversight of the Compensation Committee. The Plan Administrator shall have full
power to construe, administer and interpret the Plan and full power to adopt
such rules and regulations as he/she may deem necessary or desirable to
administer the Plan.  Subject to Compensation Committee review, which decision
to review shall be in the sole discretion of the Compensation Committee, the
Plan Administrator's decisions are final and binding on all parties.

3.7 Administrative Fees and Expenses

All fees and expenses incurred by the Plan in connection with the administration
of the Plan shall be paid by the Company.

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3.8 Claims Procedure

If a claim for benefits by a Participant or his/her Beneficiary (the
"Applicant") is denied, the Plan Administrator shall furnish the Applicant
within 90 days after receipt of such claim (or within 180 days after receipt if
the Plan Administrator notifies the Applicant prior to the end of the 90 day
period that special circumstances require an extension of time), a written
notice which specifies the reason for the denial, refers to the pertinent
provisions of the Plan on which the denial is based, describes any additional
material or information necessary for properly completing the claim and explains
why such material or information is necessary, and explains the claim review
procedures of this Section 3.8.  If, within 60 days after receipt of such
notice, the Applicant so requests in writing, the Plan Administrator shall
review such decision.  The Plan Administrator's decision on review shall be in
writing, and shall include specific reasons for the decision, written in a
manner calculated to be understood by the Applicant, and shall include specific
references to the pertinent provisions of the Plan on which the decision is
based.  It shall be delivered to the Applicant within 60 days after the request
for review is received, unless extraordinary circumstances require a longer
period, but in no event more than 120 days after the request for review is
received.

3.9 Tax Liability

The Company will withhold all required taxes from any payment of benefits.

IV. Exempt Status

The Plan constitutes an unfunded supplemental retirement plan and is fully
exempt from Parts 2, 3, and 4 of Title I of ERISA. The Plan shall be governed
and construed in accordance with Title I of ERISA.

V. Indemnification

The Plan Administrator, employees, officers and directors of the Company shall
not be held liable for, and shall be indemnified and held harmless by the
Company against, any loss, expense or liability relating to the Plan which
arises from any action or determination made in good faith.

VI. Amendment and Termination

The Company has established the Plan with the intention and expectation to
maintain the Plan for an indefinite period of time. However, Alberto-Culver
Company, through action by either the Compensation Committee or the Board of
Directors of the Alberto-Culver Company, reserves the right to amend or to
terminate the Plan at any time without Participant or Beneficiary consent.  No
amendment, however, may reduce the balance in a Participant's account.
Participants and Beneficiaries shall be notified of such amendment or
termination as soon as reasonably practical, but any delay in giving such notice
shall not affect the effectiveness of the amendment or termination.  The Company
shall have the absolute right to pay each Participant his/her entire

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interest in the Plan in a single-sum upon termination of the Plan.

VII. Miscellaneous

7.1 Nonassignability

Neither a Participant nor any other person shall have any right to commute,
sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber,
transfer, hypothecate or convey in advance of actual receipt the amounts, if
any, payable hereunder, or any part thereof, which are, and all rights to which
are, expressly declared to be nonassignable and nontransferable.  No part of the
amounts payable shall, prior to actual payment, be subject to garnishment,
seizure or sequestration for the payment of any debts owed by a Participant or
any other person, nor be transferable by operation of law in the event of a
Participant's or any other person's bankruptcy or insolvency.  Notwithstanding
the foregoing, the Company shall have the right to offset any amount owed to it
against the amount payable to a Participant or his Beneficiary, or to defer
payment until any dispute with respect to any amount owed has been resolved.

7.2 No Contract of Employment

The terms and conditions of this Plan shall not be deemed to constitute a
contract of employment between the Company and the Participant, and neither the
Participant nor the Participant's Beneficiary shall have any rights against the
Company except as may otherwise be specifically provided herein.  Moreover,
nothing in this Plan shall be deemed to give a Participant the right to be
retained in the service of the Company or to interfere with the right of the
Company to discipline or discharge him/her at any time.

7.3 Participant Litigation

In any action or proceeding regarding the Plan, Participants, employees or
former employees of the Company, their Beneficiaries or any other persons having
or claiming to have an interest in this Plan shall not be necessary parties and
shall not be entitled to any notice or process.  Any final judgment which is not
appealed or appealable and may be entered in any such action or proceeding shall
be binding and conclusive on the parties hereto and all persons having or
claiming to have any interest in this Plan.

7.4 Participant and Beneficiary Duties

Persons entitled to benefits under the Plan shall file with the Plan
Administrator from time to time such person's post office address and each
change of post office address.  Each such person entitled to benefits under the
Plan also shall furnish the Plan Administrator with all appropriate documents,
evidence, data or information which the Plan Administrator considers necessary
or desirable in administering the Plan.

7.5 Governing Law

The provisions of this Plan shall be construed and interpreted according to the
laws of the State of Illinois to the extent not pre-empted by the laws of the
United States.

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7.6 Validity

In case any provision of this Plan shall be held illegal or invalid for any
reason, such illegality or invalidity shall not affect the remaining parts
hereof, but this Plan shall be construed and enforced as if such illegal and
invalid provision had never been inserted herein.

7.7 Notices

Any notice or filing required or permitted to be given to the Plan Administrator
or the Company under the Plan shall be sufficient if in writing and hand
delivered, or sent by registered or certified mail to the Alberto-Culver Company
at its principal executive offices attention Plan Administrator with a copy to
the General Counsel of Alberto-Culver Company. Notices shall be deemed given as
of the date of delivery or, if delivery is made by mail, as of the date shown on
the postmark on the receipt for registration or certification.  Any notice
required or permitted to be given to a Participant shall be sufficient if in
writing and hand delivered or sent by first class mail to the Participant at the
last address listed on the records of the Company.

7.8 Successors

The provisions of this Plan shall bind and inure to the benefit of Company and
its successors and assigns.  The term successors as used herein shall include
any corporate or other business entity which shall, whether by merger,
consolidation, purchase or otherwise acquire all or substantially all of the
business and assets of the Company, and successors of any such corporation or
other business entity.

                                       9<PAGE>   1
                                                                    EXHIBIT 10.1

                         OPTICAL TECHNOLOGY GROUP, INC.

                            1998 STOCK INCENTIVE PLAN

1.   Purpose

The purpose of this 1998 Stock Incentive Plan (the "Plan") of Optical Technology
Group, Inc., a Delaware corporation (the "Company"), is to advance the interests
of the Company's stockholders by enhancing the Company's ability to attract,
retain and motivate persons who make (or are expected to make) important
contributions to the Company by providing such persons with equity ownership
opportunities and performance-based incentives and thereby better aligning the
interests of such persons with those of the Company's stockholders. Except where
the context otherwise requires, the term "Company" shall include any present or
future subsidiary corporations of Optical Technology Group, Inc. as defined in
Section 424(f) of the Internal Revenue Code of 1986, as amended, and any
regulations promulgated thereunder (the "Code").

2.   Eligibility

All of the Company's employees, officers, directors, consultants and advisors
(and any individuals who have accepted an offer for employment) are eligible to
be granted options, restricted stock awards, or other stock-based awards (each,
an "Award") under the Plan. Each person who has been granted an Award under the
Plan shall be deemed a "Participant".

3.   Administration, Delegation

     (a)  Administration by Board of Directors. The Plan will be administered by
the Board of Directors of the Company (the "Board"). The Board shall have
authority to grant Awards and to adopt, amend and repeal such administrative
rules, guidelines and practices relating to the Plan as it shall deem advisable.
The Board may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Award 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. All decisions by the Board shall be made in the
Board's sole discretion and shall be final and binding on all persons having or
claiming any interest in the Plan or in any Award. No director or person acting
pursuant to the authority delegated by the Board shall be liable for any action
or determination relating to or under the Plan made in good faith.

     (b)  Delegation to Executive Officers. To the extent permitted by
applicable law, the Board may delegate to one or more executive officers of the
Company the power to make Awards and exercise such other powers under the Plan
as the Board may determine, provided that the Board shall fix the maximum number
of shares subject to Awards and the maximum number of shares for any one
Participant to be made by such executive officers.

     (c)  Appointment of Committees. To the extent permitted by applicable law,
the Board may delegate any or all of its powers under the Plan to one or more
committees or subcommittees of the Board (a "Committee"). If and when the common
stock, $.01 par value

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per share, of the Company (the "Common Stock") is registered under the
Securities Exchange Act of 1934 (the "Exchange Act"), the Board shall appoint
one such Committee of not less than two members, each member of which shall be
an "outside director" within the meaning of Section 162(m) of the Code and a
"non-employee director" as defined in Rule 16b-3 promulgated under the Exchange
Act." All references in the Plan to the "Board" shall mean the Board or a
Committee of the Board or the executive officer referred to in Section 3(b) to
the extent that the Board's powers or authority under the Plan have been
delegated to such Committee or executive officer.

4.   Stock Available for Awards

     (a)  Number of Shares. Subject to adjustment under Section 8, Awards may be
made under the Plan for up to 2,264,706 shares of Common Stock. If any Award
expires or is terminated, surrendered or canceled without having been fully
exercised or is forfeited in whole or in part or results in any Common Stock not
being issued, the unused Common Stock covered by such Award shall again be
available for the grant of Awards under the Plan, subject, however, in the case
of Incentive Stock Options (as hereinafter defined), to any limitation required
under the Code. Shares issued under the Plan may consist in whole or in part of
authorized but unissued shares or treasury shares.

     (b)  Per-Participant Limit. Subject to adjustment under Section 8, for
Awards granted after the Common Stock is registered under the Exchange Act, the
maximum number of shares of Common Stock with respect to which an Award may be
granted to any Participant under the Plan shall be 250,000 per calendar year.
The per-Participant limit described in this Section 4(b) shall be construed and
applied consistently with Section 162(m) of the Code.

5.   Stock Options.

     (a)  General. The Board may grant options to purchase Common Stock (each,
an "Option") and determine the number of shares of Common Stock to be covered by
each Option, the exercise price of each Option and the conditions and
limitations applicable to the exercise of each Option, including conditions
relating to applicable federal or state securities laws, as it considers
necessary or advisable. An Option which is not intended to be an Incentive Stock
Option (as hereinafter defined) shall be designated a "Nonstatutory Stock
Option."

     (b)  Incentive Stock Options. An Option that the Board intends to be an
"incentive stock option" as defined in Section 422 of the Code (an "Incentive
Stock Option") shall only be granted to employees of the Company and shall be
subject to and shall be construed consistently with the requirements of Section
422 of the Code. The Company shall have no liability to a Participant, or any
other party, if an Option (or any part thereof) which is intended to be an
Incentive Stock Option is not an Incentive Stock Option.

     (c)  Exercise Price. The Board shall establish the exercise price at the
time each Option is granted and specify it in the applicable option agreement.

     (d)  Duration of Options. Each Option shall be exercisable at such times
and subject to such terms and conditions as the Board may specify in the
applicable option agreement.

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<PAGE>   3

     (e)  Exercise of Option. Options may be exercised by delivery to the
Company of a written notice of exercise signed by the proper person or by any
other form of notice (including electronic notice) approved by the Board
together with payment in full as specified in Section 5(f) for the number of
shares for which the Option is exercised.

     (f)  Payment Upon Exercise. Common Stock purchased upon the exercise of an
Option granted under the Plan shall be paid for as follows:

          (1)  in cash or by check, payable to the order of the Company;

          (2)  except as the Board may, in its sole discretion, otherwise
provide in an option agreement, (i) delivery of an irrevocable and unconditional
undertaking by a creditworthy broker to deliver promptly to the Company
sufficient funds to pay the exercise price, or (ii) delivery by the Participant
to the Company of a copy of irrevocable and unconditional instructions to a
creditworthy broker to deliver promptly to the Company cash or a check
sufficient to pay the exercise price;

          (3)  while the Common Stock is registered under the Exchange Act,
delivery of shares of Common Stock owned by the Participant valued at their fair
market value as determined by (or in a manner approved by) the Board in good
faith ("Fair Market Value"), which Common Stock was owned by the Participant at
least six months prior to such delivery;

          (4)  to the extent permitted by the Board, in its sole discretion (i)
by delivery of a promissory note of the Participant to the Company on terms
determined by the Board, or (ii) by payment of such other lawful consideration
as the Board may determine; or

          (5)  any combination of the above permitted forms of payment.

6.   Restricted Stock

     (a)  Grants. The Board may grant Awards entitling recipients to acquire
shares of Common Stock, subject to the right of the Company to repurchase all or
part of such shares at their issue price or other stated or formula price (or to
require forfeiture of such shares if issued at no cost) from the recipient in
the event that conditions specified by the Board in the applicable Award are not
satisfied prior to the end of the applicable restriction period or periods
established by the Board for such Award (each, "Restricted Stock Award").

     (b)  Terms and Conditions. The Board shall determine the terms and
conditions of any such Restricted Stock Award, including the conditions for
repurchase (or forfeiture) and the issue price, if any. Any stock certificates
issued in respect of a Restricted Stock Award shall be registered in the name of
the Participant and, unless otherwise determined by the Board, deposited by the
Participant, together with a stock power endorsed in blank, with the Company (or
its designee). At the expiration of the applicable restriction periods, the
Company (or such designee) shall deliver the certificates no longer subject to
such restrictions to the Participant or if the Participant has died, to the
beneficiary designated, in a manner determined by the Board, by a Participant to
receive amounts due or exercise rights of the Participant in the event of the
Participant's death (the "Designated Beneficiary"). In the absence of an
effective designation by a Participant, Designated Beneficiary shall mean the
Participant's estate.

                                      -3-
<PAGE>   4

7.   Other Stock-Based Awards

The Board shall have the right to grant other Awards based upon the Common Stock
having such terms and conditions as the Board may determine, including the grant
of shares based upon certain conditions, the grant of securities convertible
into Common Stock and the grant of stock appreciation rights.

8.   Adjustments for Changes in Common Stock and Certain Other Events

     (a)  Changes in Capitalization. In the event of any stock split, reverse
stock split, stock dividend, recapitalization, combination of shares,
reclassification of shares, spin-off or other similar change in capitalization
or event, or any distribution to holders of Common Stock other than a normal
cash dividend, (i) the number and class of securities available under this Plan,
(ii) the per-Participant limit set forth in Section 4(b), (iii) the number and
class of securities and exercise price per share subject to each outstanding
Option, (iv) the repurchase price per share subject to each outstanding
Restricted Stock Award, and (v) the terms of each other outstanding Award shall
be appropriately adjusted by the Company (or substituted Awards may be made, if
applicable) to the extent the Board shall determine, in good faith, that such an
adjustment (or substitution) is necessary and appropriate. If this Section 8(a)
applies and Section 8(c) also applies to any event, Section 8(c) shall be
applicable to such event, and this Section 8(a) shall not be applicable.

     (b)  Liquidation or Dissolution. In the event of a proposed liquidation or
dissolution of the Company, the Board shall upon written notice to the
Participants provide that all then unexercised Options will (i) become
exercisable in full as of a specified time at least 10 business days prior to
the effective date of such liquidation or dissolution and (ii) terminate
effective upon such liquidation or dissolution, except to the extent exercised
before such effective date. The Board may specify the effect of a liquidation or
dissolution on any Restricted Stock Award or other Award granted under the Plan
at the time of the grant of such Award.

     (c)  Acquisition and Change in Control Events

          (1)  Definitions

               (a)  An "Acquisition Event" shall mean:

                    (i)  any merger or consolidation of the Company with or into
                         another entity as a result of which the Common Stock is
                         converted into or exchanged for the right to receive
                         cash, securities or other property; or

                    (ii) any exchange of shares of the Company for cash,
                         securities or other property pursuant to a statutory
                         share exchange transaction.

               (b)  A "Change in Control Event" shall mean:

                                      -4-
<PAGE>   5

                    (i)  the acquisition by an individual, entity or group
                         (within the meaning of Section 13(d)(3) or 14(d)(2) of
                         the Securities Exchange Act of 1934, as amended (the
                         "Exchange Act")) (a "Person") of beneficial ownership
                         of any capital stock of the Company if, after such
                         acquisition, such Person beneficially owns (within the
                         meaning of Rule 13d-3 promulgated under the Exchange
                         Act) 30% or more of either (x) the then-outstanding
                         shares of common stock of the Company (the "Outstanding
                         Company Common Stock") or (y) the combined voting power
                         of the then-outstanding securities of the Company
                         entitled to vote generally in the election of directors
                         (the "Outstanding Company Voting Securities");
                         provided, however, that for purposes of this subsection
                         (i), the following acquisitions shall not constitute a
                         Change in Control Event: (A) any acquisition directly
                         from the Company (excluding an acquisition pursuant to
                         the exercise, conversion or exchange of any security
                         exercisable for, convertible into or exchangeable for
                         common stock or voting securities of the Company,
                         unless the Person exercising, converting or exchanging
                         such security acquired such security directly from the
                         Company or an underwriter or agent of the Company), (B)
                         any acquisition by any employee benefit plan (or
                         related trust) sponsored or maintained by the Company
                         or any corporation controlled by the Company, (C) any
                         acquisition by any corporation pursuant to a Business
                         Combination (as defined below) which complies with
                         clauses (x) and (y) of subsection (iii) of this
                         definition or (D) any acquisition by Richard A. Kay
                         ("Exempt Party") of any Shares of Common Stock; or

                    (ii) such time as the Continuing Directors (as defined
                         below) do not constitute a majority of the Board (or,
                         if applicable, the Board of Directors of a successor
                         corporation to the Company), where the term "Continuing
                         Director" means at any date a member of the Board (x)
                         who was a member of the Board on the date of the
                         initial adoption of this Plan by the Board or (y) who
                         was nominated or elected subsequent to such date by at
                         least a majority of the directors who were Continuing
                         Directors at the time of such nomination or election or
                         whose election to the Board was recommended or endorsed
                         by at least a majority of the directors who were
                         Continuing Directors at the time of such nomination or
                         election; provided, however, that there shall be
                         excluded from this clause (y) any individual whose
                         initial assumption of office occurred as a result of an
                         actual or threatened election contest with respect to
                         the election or removal of

                                      -5-
<PAGE>   6

                         directors or other actual or threatened solicitation of
                         proxies or consents, by or on behalf of a person other
                         than the Board; or

                   (iii) the consummation of a merger, consolidation,
                         reorganization or statutory share exchange involving
                         the Company or a sale or other disposition of all or
                         substantially all of the assets of the Company (a
                         "Business Combination"), unless, immediately following
                         such Business Combination, each of the following two
                         conditions is satisfied: (x) all or substantially all
                         of the individuals and entities who were the beneficial
                         owners of the Outstanding Company Common Stock and
                         Outstanding Company Voting Securities immediately prior
                         to such Business Combination beneficially own, directly
                         or indirectly, more than 50% of the then-outstanding
                         shares of common stock and the combined voting power of
                         the then-outstanding securities entitled to vote
                         generally in the election of directors, respectively,
                         of the resulting or acquiring corporation in such
                         Business Combination (which shall include, without
                         limitation, a corporation which as a result of such
                         transaction owns the Company or substantially all of
                         the Company's assets either directly or through one or
                         more subsidiaries) (such resulting or acquiring
                         corporation is referred to herein as the "Acquiring
                         Corporation") in substantially the same proportions as
                         their ownership of the Outstanding Company Common Stock
                         and Outstanding Company Voting Securities,
                         respectively, immediately prior to such Business
                         Combination and (y) no Person (excluding the Acquiring
                         Corporation or any employee benefit plan (or related
                         trust) maintained or sponsored by the Company or by the
                         Acquiring Corporation or the Exempt Person)
                         beneficially owns, directly or indirectly, 30% or more
                         of the then-outstanding shares of common stock of the
                         Acquiring Corporation, or of the combined voting power
                         of the then-outstanding securities of such corporation
                         entitled to vote generally in the election of directors
                         (except to the extent that such ownership existed prior
                         to the Business Combination).

          (2)  Effect on Options

               (a)  Acquisition Event. Upon the occurrence of an Acquisition
                    Event (regardless of whether such event also constitutes a
                    Change in Control Event), or the execution by the Company of
                    any agreement with respect to an Acquisition Event
                    (regardless of whether such

                                      -6-
<PAGE>   7

                    event will result in a Change in Control Event), the Board
                    shall provide that all outstanding Options shall be assumed,
                    or equivalent options shall be substituted, by the acquiring
                    or succeeding corporation (or an affiliate thereof);
                    provided that if such Acquisition Event also constitutes a
                    Change in Control Event, except to the extent specifically
                    provided to the contrary in the instrument evidencing any
                    Option or any other agreement between a Participant and the
                    Company, such assumed or substituted options shall be
                    immediately exercisable in full upon the occurrence of such
                    Acquisition Event for all Options held by Participants that
                    have had a relationship with the Company as an employee,
                    officer, director, consultant or advisor for one year prior
                    to such Change in Control Event. For purposes hereof, an
                    Option shall be considered to be assumed if, following
                    consummation of the Acquisition Event, the Option confers
                    the right to purchase, for each share of Common Stock
                    subject to the Option immediately prior to the consummation
                    of the Acquisition Event, the consideration (whether cash,
                    securities or other property) received as a result of the
                    Acquisition Event by holders of Common Stock for each share
                    of Common Stock held immediately prior to the consummation
                    of the Acquisition Event (and if holders were offered a
                    choice of consideration, the type of consideration chosen by
                    the holders of a majority of the outstanding shares of
                    Common Stock); provided, however, that if the consideration
                    received as a result of the Acquisition Event is not solely
                    common stock of the acquiring or succeeding corporation (or
                    an affiliate thereof), the Company may, with the consent of
                    the acquiring or succeeding corporation, provide for the
                    consideration to be received upon the exercise of Options to
                    consist solely of common stock of the acquiring or
                    succeeding corporation (or an affiliate thereof) equivalent
                    in fair market value to the per share consideration received
                    by holders of outstanding shares of Common Stock as a result
                    of the Acquisition Event.

                         Notwithstanding the foregoing, if the acquiring or
                    succeeding corporation (or an affiliate thereof) does not
                    agree to assume, or substitute for, such Options, then the
                    Board shall, upon written notice to the Participants,
                    provide that all then unexercised Options will become
                    exercisable in full as of a specified time prior to the
                    Acquisition Event and will terminate immediately prior to
                    the consummation of such Acquisition Event, except to the
                    extent exercised by the Participants before the consummation
                    of such Acquisition Event; provided, however, in the event
                    of an Acquisition Event under the terms of which holders of
                    Common Stock will receive upon consummation thereof a cash
                    payment for each share of Common Stock surrendered pursuant
                    to such Acquisition Event (the "Acquisition Price"), then
                    the Board may

                                      -7-
<PAGE>   8

                    instead provide that all outstanding Options shall terminate
                    upon consummation of such Acquisition Event and that each
                    Participant shall receive, in exchange therefor, a cash
                    payment equal to the amount (if any) by which (A) the
                    Acquisition Price multiplied by the number of shares of
                    Common Stock subject to such outstanding Options (whether or
                    not then exercisable), exceeds (B) the aggregate exercise
                    price of such Options.

               (b)  Change in Control Event that is not an Acquisition Event.
                    Upon the occurrence of a Change in Control Event that does
                    not also constitute an Acquisition Event, except to the
                    extent specifically provided to the contrary in the
                    instrument evidencing any Option or any other agreement
                    between a Participant and the Company, all Options
                    then-outstanding shall automatically become immediately
                    exercisable in full for all Options held by Participants
                    that have had a relationship with the Company as an
                    employee, officer, director, consultant or advisor for one
                    year prior to such Change in Control Event.

          (3)  Effect on Restricted Stock Awards

               (a)  Acquisition Event that is not a Change in Control Event.
                    Upon the occurrence of an Acquisition Event that is not a
                    Change in Control Event, the repurchase and other rights of
                    the Company under each outstanding Restricted Stock Award
                    shall inure to the benefit of the Company's successor and
                    shall apply to the cash, securities or other property which
                    the Common Stock was converted into or exchanged for
                    pursuant to such Acquisition Event in the same manner and to
                    the same extent as they applied to the Common Stock subject
                    to such Restricted Stock Award.

               (b)  Change in Control Event. Upon the occurrence of a Change in
                    Control Event (regardless of whether such event also
                    constitutes an Acquisition Event), except to the extent
                    specifically provided to the contrary in the instrument
                    evidencing any Restricted Stock Award or any other agreement
                    between a Participant and the Company, all restrictions and
                    conditions on all Restricted Stock Awards then-outstanding
                    shall automatically be deemed terminated or satisfied for
                    all Options held by Participants that have had a
                    relationship with the Company as an employee, officer,
                    director, consultant or advisor for one year prior to such
                    Change in Control Event.

          (4)  Effect on Other Awards

               (a)  Acquisition Event that is not a Change in Control Event. The
                    Board shall specify the effect of an Acquisition Event that
                    is not a

                                      -8-
<PAGE>   9

                    Change in Control Event on any other Award granted under the
                    Plan at the time of the grant of such Award.

               (b)  Change in Control Event. Upon the occurrence of a Change in
                    Control Event (regardless of whether such event also
                    constitutes an Acquisition Event), except to the extent
                    specifically provided to the contrary in the instrument
                    evidencing any other Award or any other agreement between a
                    Participant and the Company, all other Awards shall become
                    exercisable, realizable or vested in full, or shall be free
                    of all conditions or restrictions, as applicable to each
                    such Award for all Options held by Participants that have
                    had a relationship with the Company as an employee, officer,
                    director, consultant or advisor for one year prior to such
                    Change in Control Event.

9.   General Provisions Applicable to Awards

     (a)  Transferability of Awards. Except as the Board may otherwise determine
or provide in an Award, Awards shall not be sold, assigned, transferred, pledged
or otherwise encumbered 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 Participant, shall be exercisable only
by the Participant. References to a Participant, to the extent relevant in the
context, shall include references to authorized transferees.

     (b)  Documentation. Each Award shall be evidenced by a written instrument
in such form as the Board shall determine. Each Award may contain terms and
conditions in addition to those set forth in the Plan.

     (c)  Board Discretion. Except as otherwise provided by the Plan, each Award
may be made alone or in addition or in relation to any other Award. The terms of
each Award need not be identical, and the Board need not treat Participants
uniformly.

     (d)  Termination of Status. The Board shall determine the effect on an
Award of the disability, death, retirement, authorized leave of absence or other
change in the employment or other status of a Participant and the extent to
which, and the period during which, the Participant, the Participant's legal
representative, conservator, guardian or Designated Beneficiary may exercise
rights under the Award.

     (e)  Withholding. Each Participant shall pay to the Company, or make
provision satisfactory to the Board for payment of, any taxes required by law to
be withheld in connection with Awards to such Participant no later than the date
of the event creating the tax liability. Except as the Board may otherwise
provide in an Award, Participants may satisfy such tax obligations in whole or
in part by delivery of shares of Common Stock, including shares retained from
the Award creating the tax obligation, valued at their Fair Market Value. The
Company may, to the extent permitted by law and to the extent not otherwise
paid, deduct any such tax obligations from any payment of any kind otherwise due
to a Participant.

                                      -9-
<PAGE>   10

     (f)  Amendment of Award. The Board may amend, modify or terminate any
outstanding Award, including but not limited to, substituting therefor another
Award of the same or a different type, changing the date of exercise or
realization, and converting an Incentive Stock Option to a Nonstatutory Stock
Option, provided that the Participant's consent to such action shall be required
unless the Board determines that the action, taking into account any related
action, would not materially and adversely affect the Participant.

     (g)  Conditions on Delivery of Stock. The Company will not be obligated to
deliver any shares of Common Stock pursuant to the Plan or to remove
restrictions from shares previously delivered under the Plan until (i) all
conditions of the Award have been met or removed to the satisfaction of the
Company, (ii) in the opinion of the Company's counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied,
including any applicable securities laws and any applicable stock exchange or
stock market rules and regulations, and (iii) the Participant has executed and
delivered to the Company such representations or agreements as the Company may
consider appropriate to satisfy the requirements of any applicable laws, rules
or regulations.

     (h)  Acceleration. The Board may at any time provide that any Options shall
become immediately exercisable in full or in part, that any Restricted Stock
Awards shall be free of restrictions in full or in part or that any other Awards
may become exercisable in full or in part or free of some or all restrictions or
conditions, or otherwise realizable in full or in part, as the case may be.

10.  Miscellaneous

     (a)  No Right To Employment or Other Status. No person shall have any claim
or right to be granted an Award, and the grant of an Award shall not be
construed as giving a Participant the right to continued employment or any other
relationship with the Company. The Company expressly reserves the right at any
time to dismiss or otherwise terminate its relationship with a Participant free
from any liability or claim under the Plan, except as expressly provided in the
applicable Award.

     (b)  No Rights As Stockholder. Subject to the provisions of the applicable
Award, no Participant or Designated Beneficiary shall have any rights as a
stockholder with respect to any shares of Common Stock to be distributed with
respect to an Award until becoming the record holder of such shares.
Notwithstanding the foregoing, in the event the Company effects a split of the
Common Stock by means of a stock dividend and the exercise price of and the
number of shares subject to such Option are adjusted as of the date of the
distribution of the dividend (rather than as of the record date for such
dividend), then an optionee who exercises an Option between the record date and
the distribution date for such stock dividend shall be entitled to receive, on
the distribution date, the stock dividend with respect to the shares of Common
Stock acquired upon such Option exercise, notwithstanding the fact that such
shares were not outstanding as of the close of business on the record date for
such stock dividend.

     (c)  Effective Date and Term of Plan. The Plan shall become effective on
the date on which it is adopted by the Board. No Awards shall be granted under
the Plan after the completion of ten years from the earlier of (i) the date on
which the Plan was adopted by the

                                      -10-
<PAGE>   11

Board or (ii) the date the Plan was approved by the Company's stockholders, but
Awards previously granted may extend beyond that date.

     (d)  Amendment of Plan. The Board may amend, suspend or terminate the Plan
or any portion thereof at any time.

     (e)  Governing Law. The provisions of the Plan and all Awards made
hereunder shall be governed by and interpreted in accordance with the laws of
the State of Delaware, without regard to any applicable conflicts of law.

                                      -11-

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