REFOCUS GROUP INC
EXHIBIT 10.1
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<TYPE>EX-10.1
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<FILENAME>a2105415zex-10_1.txt
<DESCRIPTION>EXHIBIT 10.1
<TEXT>
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                                                                    EXHIBIT 10.1

                                   PRESBY CORP

                             1997 STOCK OPTION PLAN

              (AS AMENDED AND RESTATED EFFECTIVE FEBRUARY 26, 2003)


1.0     DEFINITIONS

        The following terms shall have the following meanings unless the context
        indicates otherwise:

1.1     "BOARD" shall mean the Board of Directors of the Company.

1.2     "CHANGE IN CONTROL", except to the extent it is expressly modified in
        the Stock Option Agreement of reference, shall mean:

        (a)     an event where any "person", as such term is used in Sections
        13(d) and 14(d))2) of the Exchange Act ("Person") acquires, directly or
        indirectly, securities of the Company and, immediately following such
        acquisition, is the beneficial owner (as such term is used in section
        13(d) of the Exchange Act), directly or indirectly, of a Change in
        Control Percentage of securities of the Company; PROVIDED, HOWEVER,
        notwithstanding any provision hereof to the contrary, neither (i) the
        Company or an Affiliate, or (ii) an employee stock ownership plan, will
        be considered a "Person" for purposes of (a) or (b); or

        (b)     an event where a tender offer or exchange offer is made by any
        Person which, if successfully completed, would result in such Person
        beneficially owning (within the meaning of Rule 13d-3 promulgated under
        the Exchange Act) a Change in Control Percentage of securities of the
        Company, and sufficient securities are acquired under the offer to cause
        such Person to be the beneficial owner such Change in Control Percentage
        of securities of the Company; or

        (c)     an event where the Board ceases to consist of a majority of
        Continuing Directors; PROVIDED THAT "Continuing Director" shall mean a
        member of the Board who either (y) is a member of the Board on the
        effective date of the Plan, or (z) is nominated or appointed to serve as
        a director by a majority of the then Continuing Directors; or

        (d)     a dissolution or liquidation, or Sale of the Company; provided,
        further, that for all purposes a "Sale" shall mean the first day, as
        reasonably determined by the Board in its sole discretion, of any
        transaction (which shall include a series of transactions occurring
        within 60 days or occurring pursuant to a plan) which results in a sale,
        lease exchange or other disposition of not less than 80% in value of the
        property and assets of the Company as measured at the date of such
        event; or

        (e)     a merger or consolidation (other than a merger effecting a
        re-incorporation of the Company in another state or any other merger or
        a consolidation in which the shareholders of the surviving corporation
        and their proportionate interests therein immediately after the merger
        or consolidation are substantially identical to the shareholders of the
        Company and their proportionate interests therein immediately prior to
        the merger or consolidation) in which the Company either (x) is not the
        surviving corporation, or (y) survives only as a subsidiary of another
        corporation in a transaction in which the shareholders of the Company
        and their proportionate interests in the parent immediately after the
        transaction are not substantially identical to the

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        shareholders of the Company and their proportionate interests in the
        Company immediately prior to the transaction; PROVIDED, HOWEVER, that
        the Board may at any time prior to such a merger or consolidation
        provide by resolution that (y) shall not apply, so that survival as a
        subsidiary will not be treated as a Change in Control, if a majority of
        the board of directors of such parent immediately after the transaction
        consists of individuals who constituted a majority of the Board
        immediately prior to the transaction.

        (f)     For all purposes of this SECTION 1.2, except, without
        limitation, to the extent it is expressly modified in the Stock Option
        Agreement of reference, the term "Change in Control Percentage" means
        Twenty-five percent (25%) or more of the combined voting power of the
        Company's then outstanding securities.

1.3     "CAUSE" shall mean (i) a final, nonappealable conviction of, or a plea
        of NOLO CONTENDERE to, (x) the commission of a felony, or (y) a
        misdemeanor involving either (A) a securities law violation, or (B)
        moral turpitude, (ii) engaging in fraud, embezzlement or dishonesty,
        resulting in material economic harm to the Company, or (iii) conduct
        that constitutes gross neglect, or willful misconduct, that causes
        material economic harm, or brings substantial discredit, to the Company,
        except where such conduct in the person's reasonable and good faith
        belief was not opposed to the best interest of the Company.

1.4     "CODE" shall mean the Internal Revenue Code of 1986, as amended from
        time to time.

1.5     "COMMITTEE" shall mean (i) the Board or (ii) a committee or subcommittee
        of the Board appointed by the Board from among its members. The
        Committee may be the Board's Compensation Committee. Unless the Board
        determines otherwise, the Committee shall be comprised solely of not
        less than two members who each shall qualify as an "outside director"
        within the meaning of Section 162(m) of the Code.

1.6     "COMMON STOCK" shall mean the common stock, $.001 par value per share,
        of the Company.

1.7     "COMPANY" shall mean Presby Corp, a Delaware corporation.

1.8     "DISABILITY" shall mean a total and permanent disability as defined in
        the Company's current long term disability plan, or if the Company has
        no long term disability plan in effect at the time of reference, the
        Participant's inability to substantially perform such Participant's
        responsibilities for a period of 180 consecutive days as determined by
        an approved medical doctor mutually selected by the Company and the
        Participant, and if the parties cannot agree on a medical doctor, each
        party shall select a medical doctor and the two doctors shall select a
        third who shall be the approved medical doctor for this purpose.

1.9     "EFFECTIVE DATE" shall mean July 23, 1997.

1.10    "EMPLOYEE" shall mean an employee of either the Company, a Parent, or a
        Subsidiary.

1.11    "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
        amended from time to time, including applicable regulations thereunder.

1.12    "FAIR MARKET VALUE" shall mean:

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        (a)     if the Common Stock is readily tradeable on a national
        securities exchange or other market system, the closing price of the
        Common Stock on the date of calculation (or on the last preceding
        trading date if Common Stock was not traded on such date), or

        (b)     if the Common Stock is not readily tradeable on a national
        securities exchange or other market system, a value determined by any
        fair and reasonable means prescribed by the Board.

1.13    "INDEPENDENT CONTRACTOR" shall mean a person (other than a Non-employee
        Director) who renders services to the Company and who is carried on the
        books and records of the Company as an independent contractor,
        regardless of his or her common law status.

1.14    "ISO" shall mean an "incentive stock option" as defined in Section 422
        of the Code.

1.15    "NON-EMPLOYEE DIRECTOR" shall mean a member of the Board who is not an
        Employee.

1.16    "NONQUALIFIED STOCK OPTION" shall mean a Stock Option that does not
        qualify as an ISO.

1.17    "PARENT" shall have the meaning, in relation to the Company, as set
        forth in Section 424(e) of the Code.

1.18    "PARTICIPANT" shall mean any Employee, Non-employee Director or
        Independent Contractor to whom a Stock Option has been granted.

1.19    "PLAN" shall mean the Presby Corp 1997 Stock Option Plan (As Amended and
        Restated Effective February 26, 2003).

1.20    "RESTATEMENT EFFECTIVE DATE" shall mean February 26, 2003.

1.21    "SEPARATION" shall mean, (i) in the case of an Employee, the date on
        which the Employee ceases to have an employment relationship, with
        whichever of the Company, Parent or Subsidiary employs him, for any
        reason, including death or Disability; provided however, a Separation
        will not be considered to have occurred under this (i) while such
        Employee is on sick leave, military leave, or any other leave of absence
        approved by his employer, if the period of such leave does not exceed 90
        days, or, if longer, so long as such Employee's right to reemployment is
        guaranteed either by statute or by contract; and (ii) in the case of an
        Independent Contractor, or Non-employee Director, the earlier of (x) the
        date agreed upon in any oral or written agreement between the
        Participant and the Company, (y) the date on which the Participant gives
        the Company notice (orally or in writing), of the termination of such
        Participant's relationship with the Company, Parent or Subsidiary; or
        (z) the date specified in a written notice from the Company, Parent or
        Subsidiary delivered to a Participant advising such Participant of the
        termination of such Participant's relationship with the Company, Parent
        or Subsidiary; provided, further, that the date specified in the notice
        described in (z) cannot be earlier than the day after the date of
        delivery.

1.22    "SHARES" shall mean Shares of the Company.

1.23    "STOCK OPTION" shall mean any ISO or Nonqualified Stock Option granted
        hereunder, except that, where it shall be appropriate to identify a
        specific type of Stock Option, reference shall be made to the specific
        type of Stock Option; and provided, further, without limitation, that a
        single Stock Option may include both ISO and Nonqualified Stock Option
        provisions.

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1.24    "STOCK OPTION AGREEMENT" shall mean a written document signed by a
        representative of the Committee evidencing the grant of a Stock Option.

1.25    "SUBSIDIARY" shall have the meaning, in relation to the Company, as set
        forth in Section 424(f) of the Code.

1.26    "VEST, VESTING, VESTED (AND SIMILAR)" shall mean the number of Shares
        which have become subject to exercise in accordance with the terms of
        the Option in question, and "unVested" means the number of Shares which
        are not exercisable on the date of reference.

2.0     PURPOSE AND TERM OF PLAN

2.1     PURPOSE. The purpose of the Plan is to provide motivation to certain
        Employees, Non-employee Directors and Independent Contractors to put
        forth maximum efforts toward the growth, profitability, and success of
        the Company by providing incentives to such Employees, Non-employee
        Directors and Independent Contractors through the ownership and
        performance of Common Stock, and to assist in aligning the interests of
        such Employees, Non-employee Directors and Independent Contractors with
        those of the Company's stockholders.

2.2     TERM. Unless terminated earlier, the Plan shall terminate on the 10th
        anniversary of the Effective Date.

3.0     ELIGIBILITY

        All Employees, Non-employee Directors and Independent Contractors shall
        be eligible to receive Stock Options, and the Committee, in its sole
        discretion, shall determine who among them shall receive Stock Options
        and become a Participant hereunder. In granting Stock Options, the
        Committee shall take into consideration the contribution the person has
        made or may be reasonably expected to make to the success of the Company
        and such other factors as the Committee shall determine. The Committee
        shall also have the authority to consult with and receive
        recommendations from officers and other personnel of the Company with
        regard to these matters.

4.0     ADMINISTRATION

4.1     RESPONSIBILITY. The Committee shall have the responsibility, in its sole
        discretion, to control, operate, manage and administer the Plan.

4.2     AUTHORITY OF THE COMMITTEE. The Committee shall have all the
        discretionary authority that may be necessary or helpful to enable it to
        discharge its responsibilities with respect to the Plan, including but
        not limited to the following:

        (a)     to determine eligibility for and the number of Stock Options
                granted under the Plan;

        (b)     to supply any omission;

        (c)     to make rules for carrying out and administering the Plan and
                make changes in such rules as it from time to time deems proper;

        (d)     except as prohibited by the terms of the Plan, to grant waivers
                of Plan, or Stock Option, or both, terms, conditions,
                restrictions, and limitations;

        (e)     to grant Stock Options in replacement of Stock Options
                previously granted;

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        (f)     with the consent of the affected Participant, to effect the
                cancellation of any or all outstanding Stock Options of such
                Participant and to grant, in substitution, to such Participant
                new Stock Options covering the same or different number of
                Shares, with the same or a different exercise price; and

        (g)     to take any and all other actions it deems necessary or
                advisable for the proper operation or administration of the
                Plan.

4.3     ACTION BY THE COMMITTEE. The Committee may act only by a majority of its
        members. Any determination of the Committee may be made, without a
        meeting, by a writing or writings signed by of the members of the
        Committee. In addition, the Committee may authorize any one or more of
        its members to execute and deliver documents on behalf of the Committee.

4.4     DELEGATION OF AUTHORITY. The Committee may delegate to one or more of
        its members, or to one or more agents, such administrative duties as it
        may deem advisable. In addition, the Committee, or any person to whom it
        has delegated duties as aforesaid, may employ one or more persons to
        render advice with respect to any responsibility the Committee or such
        person may have under the Plan. The Committee may employ such legal or
        other counsel, consultants and agents, who may also serve in that
        capacity with respect to the Company, as it determines to be desirable
        for the administration of the Plan and may rely upon any opinion or
        computation received from any such counsel, consultant or agent.
        Expenses incurred by or on behalf of the Committee in carrying out its
        duties shall be paid by the Company.

4.5     DETERMINATIONS AND INTERPRETATIONS BY THE COMMITTEE. All determinations
        under, and interpretations of, any provision of the Plan or any Stock
        Option made by the Committee shall be in its sole discretion and shall
        be final, binding and conclusive on the Company and all affected
        parties.

4.6     LIABILITY. No member of the Board, no member of the Committee and no
        employee of the Company shall be liable for any act or failure to act
        hereunder, except in circumstances involving his or her bad faith, gross
        negligence or willful misconduct, or for any act or failure to act
        hereunder by any other member or employee or by any agent to whom duties
        in connection with the administration of the Plan have been delegated.

4.7     INDEMNIFICATION. The Company shall indemnify members of the Committee
        and any agent of the Committee who is an employee of the Company,
        against any and all claims, loss, damage, liability or expense
        (including attorneys' fees, the costs of settling any suit, PROVIDED
        such settlement is approved by independent legal counsel selected by the
        Company, and amounts paid in satisfaction of a judgment) to which they
        may be subjected by reason of any act or failure to act with respect to
        their duties on behalf of the Plan, unless such amount(s) are judicially
        determined to have arisen out of such person's gross negligence or
        willful misconduct.

4.8     NOTICE. Whenever any notice is required or permitted under this Plan,
        such notice must be in writing and personally delivered or sent by mail
        or delivery by a nationally recognized courier service. Any notice
        required or permitted to be delivered under this Plan shall be deemed to
        be delivered on the date on which it is personally delivered, or, if
        mailed, whether actually received or not, on the third business day
        after it is deposited in the United States mail, certified or
        registered, postage prepaid, addressed to the person who is to receive
        it at the address that such person has previously specified in
        accordance with this Subsection, or, if by courier, seventy-two (72)
        hours after it is sent, addressed as described in this Subsection. The
        Company or the Participant may change, at any time and from time to
        time, by written notice to the other, the address that it or he had
        previously specified for receiving notices; PROVIDED FURTHER, that a
        Participant who is not an Employee must file such written notice with
        the Administrator. Until changed in accordance with this Plan, the
        Company and the Participant shall be deemed to have specified as its and
        his address for receiving notices (i) as to the Company, the principal
        executive offices of the Company, and (ii) as to the Participant, (x)
        where the Participant is an Employee, the

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        most current address of the Participant set forth in the Company's
        employment records, and (y) where Participant is not an Employee, the
        address set forth in the most recent notice.

5.0     SHARES SUBJECT TO PLAN

5.1     AVAILABLE SHARES. The aggregate number of Shares which shall be
        available for grants of Stock Options under the Plan subsequent to the
        Restatement Effective Date, and during its term, shall be 8,774,000
        Shares. Such Shares available for issuance under the Plan may be either
        authorized but unissued Shares, Shares held in the Company's treasury,
        or both, at the discretion of the Company. To the extent any Stock
        Option shall terminate, expire, or be canceled, the Shares remaining
        subject to such Stock Option shall again be available for grants of
        Stock Options under the Plan. Notwithstanding any provision of the Plan
        to the contrary, no person may receive one or more Stock Options to
        purchase more than a maximum of 5,350,000 Shares under the Plan and, for
        this purpose only, Stock Options that are exchanged, canceled or
        repriced, as well as their successors shall be counted against the
        maximum Shares.

5.2     ADJUSTMENT TO SHARES. If there is any change in the Common Stock of the
        Company, through merger, consolidation, reorganization,
        recapitalization, stock dividend, stock split, reverse stock split,
        split up, spin-off, combination of Shares, exchange of Shares, dividend
        in kind or other like change in capital structure or distribution (other
        than normal cash dividends) to stockholders of the Company, then an
        adjustment shall be made (i) in the Shares available for grant and the
        maximum number of Shares which a person may receive (as described in
        Section 5.1) so that the same proportion of the Company's issued and
        outstanding Shares continue to be available and subject to being awarded
        to any person, and (ii) in the number of Shares and the exercise price
        so that as to each outstanding Stock Option the same proportion of the
        Company's issued and outstanding Shares shall remain subject to purchase
        at the same aggregate exercise price. In addition, in the event of any
        such change or distribution, in order to prevent dilution or enlargement
        of Participants' rights under the Plan, the Committee shall have the
        authority to adjust, in an equitable manner, the number and kind of
        Shares that may be issued under the Plan, the number and kind of Shares
        subject to outstanding Stock Options, the exercise price applicable to
        outstanding Stock Options. Notwithstanding anything contained in the
        Plan, no adjustment shall be made under this Section 5.2 if the change
        or distribution described in this Section 5.2 (i) occurs prior to the
        first day on which the Company is subject to the Exchange Act, and (ii)
        is directly related to a transaction the primary purpose of which is to
        cause a substantial investment to be made in the Company. In addition,
        any adjustment with respect to an ISO due to a change or distribution
        described in this Section 5.2 shall comply with the rules of Code
        Section 424(a), and in no event shall any adjustment be made which would
        render any ISO granted hereunder other than an incentive stock option
        for purposes of Code Section 422.

5.3     NO LIMITATION. Without limiting the generality of the foregoing, the
        existence of outstanding Stock Options shall not affect in any manner
        the right or power of the Company to make, authorize or consummate (i)
        any or all adjustments, recapitalizations, reorganizations or other
        changes in the Company's capital structure or its business; (ii) any
        merger or consolidation of the Company; (iii) any issue by the Company
        of debt securities, or preferred or preference stock that would rank
        above the Shares subject to outstanding Stock Option; (iv) the
        dissolution or liquidation of the Company; (v) any sale, transfer or
        assignment of all or any part of the assets or business of the Company;
        or (vi) any other corporate act or proceeding, whether of a similar
        character or otherwise.

6.0     STOCK OPTIONS

6.1     IN GENERAL. With respect to Employees who become Participants, the
        Committee may grant such Participant ISOs or Nonqualified Stock Options
        or a combination of both; and with respect to Non-employee Directors and
        Independent Contractors who become Participants, the Committee may grant
        such Participants only Nonqualified Stock Options. Each Stock Option
        granted under the Plan shall be evidenced by a Stock Option Agreement
        and shall clearly state whether it is an

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        ISO or a Non-qualified Stock Option. In the event a provision of a Stock
        Option Agreement is not permitted under the provisions of the Plan, the
        provision of the Plan shall prevail.

6.2     EXERCISE PRICE. The Committee shall specify the exercise price of each
        Stock Option in the Stock Option Agreement; PROVIDED, HOWEVER, that the
        exercise price of any ISO shall not be less than 100 percent of Fair
        Market Value of the Shares on the date of grant.

6.3     TERM OF STOCK OPTION. The Committee shall specify the term of each Stock
        Option in the Stock Option Agreement; PROVIDED, HOWEVER, that (i) no ISO
        shall continue beyond the 10th anniversary of its date of grant, and
        (ii) no Nonqualified Stock Option shall continue beyond the 15th
        anniversary of its date of grant.

6.4     VESTING SCHEDULE. The Committee shall specify the date or dates on which
        the Stock Option becomes Vested, and thus exercisable, with respect to a
        designated number of Shares. The Committee, in its sole discretion, may
        accelerate the Vesting of part, or all, of any Stock Option.

6.5     EXERCISE OF STOCK OPTIONS. An Option shall be deemed exercised when (i)
        the Committee has received written notice of such exercise in accordance
        with the terms of the Stock Option and this Plan, (ii) full payment of
        the aggregate exercise price of the Shares as to which the Stock Option
        is exercised has been made and (iii) arrangement that are satisfactory
        to the Committee in its sole discretion, have been made for the
        Participant's payment of withholding and employment taxes. The Stock
        Option exercise price may be paid in cash or, in the sole discretion of
        the Committee, by the delivery of shares of Common Stock then owned by
        the Participant (which delivery may take the form of a notational
        exchange), by the retention of Shares which otherwise would be delivered
        as a result of the exercise of the Stock Option, through what is
        commonly referred to as a "broker assisted" exercise, by delivery of a
        promissory note, or by a combination of these methods; PROVIDED,
        however, that with respect to ISOs, all such discretionary
        determinations by the Committee shall be made at the time of grant and
        specified in the Stock Option Agreement.

6.6     RESTRICTIONS RELATING TO ISOs. In addition to all other provisions
        hereof, ISOs shall comply with all of the requirements of Section 422 of
        the Code. Accordingly, ISOs may be granted only to Participants who are
        Employees. The aggregate Fair Market Value (determined as of the time
        the ISO is granted) of the Shares with respect to which ISOs (under all
        option plans of the Company and of any Parent and any Subsidiary) are
        exercisable for the first time by a Participant during any calendar year
        shall not exceed $100,000. The Committee shall not grant ISOs to any
        Employee who, at the time the ISO is granted, owns stock possessing
        (after the application of the attribution rules of Code Section 424(d))
        more than 10 percent of the total combined voting power of all classes
        of stock of the Company or of any Parent or Subsidiary unless the
        exercise price of the ISO is fixed at not less than 110 percent of the
        Fair Market Value of the Shares on the date of grant and the exercise of
        such ISO is prohibited by its terms after the 5th anniversary of the
        ISO's date of grant. In addition, no ISO shall be issued to a
        Participant in tandem with a Nonqualified Stock Option issued to such
        Participant.

6.7     ADDITIONAL TERMS AND CONDITIONS. The Committee may establish such other
        terms, conditions, restrictions and/or limitations, not expressly
        prohibited by the terms of the Plan, as it shall, in its sole
        discretion, deem appropriate.

7.0     CHANGE IN CONTROL.

7.1     ACCELERATED VESTING. Unless otherwise provided in the Stock Option
        Agreement, in the event of a Change in Control, each outstanding Stock
        Option will become fully Vested on the day before such Change in
        Control, or on such earlier date selected by the Committee but, in each
        case, only where such Change in Control actually occurs. Notwithstanding
        any provisions hereof to the contrary, if any Stock Option is
        accelerated under this Section 7.1, the portion of such Stock Option
        that may be exercised to acquire Shares that the Participant would not
        be entitled to acquire but for such acceleration (the "Acceleration
        Shares") is limited to that number of Acceleration

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        Shares that can be acquired without causing the Participant to have an
        "excess parachute payment" as determined under section 280G of the Code,
        determined by taking into account all of the Participant's "parachute
        payments" determined under section 280G of the Code. If as a result of
        this limitation, Shares that the Participant may acquire shall be the
        last shares that the Participant would have been entitled to acquire had
        such Option not been accelerated.

7.2     CANCELLATION AND CASHOUT. Notwithstanding any provision of this Plan to
        the contrary, unless expressly provided to the contrary in a Stock
        Option Agreement, in the event of a Change in Control, the Committee may
        either (i) by giving written notice ("CANCELLATION NOTICE"), cancel,
        effective as of the date set forth in the Cancellation Notice (which may
        be no earlier than 15 days after delivery of the Cancellation Notice,
        nor later than the date of the consummation of such Change in Control),
        all or any portion of the Vested portion of such Stock Option (including
        a portion which has become Vested by acceleration) which remains
        unexercised on such date, or (ii) by giving written notice ("CASHOUT
        NOTICE"), cancel, effective as of the date set forth in the notice
        (which may be immediately upon delivery of the Cashout Notice, but no
        later than the date of consummation of such Change in Control), all or
        any portion of the Vested portion of such Stock Option (including a
        portion which has become Vested by acceleration) in exchange for the
        payment of the Change in Control Price, which payment may be made in
        cash or in property payable in the transaction, or both. The "Change in
        Control" price shall mean the highest price per Share paid or offered in
        any transaction related to the Change in Control at any time during the
        60 day period immediately preceding the Change in Control, as determined
        by the Committee.

8.0     TERMINATION OF STOCK OPTION FOLLOWING SEPARATION

8.1     SEPARATION DUE TO DEATH OR DISABILITY. Unless otherwise provided in the
        Stock Option Agreement, if a Participant Separates due to death or
        Disability then, on the date of such Separation, (i) all unVested Stock
        Options granted under such Stock Option Agreement shall immediately
        become Vested Stock Options, and (ii) all Stock Options under such Stock
        Option Agreement shall expire on the earlier of the (a) the date they
        would expire solely by reason of the passage of time, and (b) the 1st
        anniversary of such date of Separation.

8.2     SEPARATION FOR CAUSE. Unless otherwise expressly provided in the Stock
        Option Agreement, if a Participant Separates for Cause, all outstanding
        Stock Options of such Participant, both Vested and unVested, shall
        immediately expire at the time such Participant is notified of such
        Separation.

8.3     OTHER SEPARATION. Unless otherwise expressly provided in the Stock
        Option Agreement, if a Participant Separates for any reason other than
        for Cause or due to death or Disability, then (i) all unVested Stock
        Options shall immediately expire on the date of such Separation, and
        (ii) all Vested Stock Options shall expire on the earlier of (a) the
        date they would expire solely by reason of the passage of time, and (b)
        the 90th day following such Separation.

9.0     WITHHOLDING AND TAX CONSEQUENCE

9.1     WITHHOLDING. Upon the date of exercise of a Stock Option and, following
        written notice from the Company, upon a disqualifying disposition of a
        Share acquired through the exercise of an ISO, each Participant shall be
        required to pay to the Company (or other employer) in cash the amount,
        if any, which the Company determines to be necessary in order to comply
        with applicable federal or state tax withholding requirements, and the
        collection of employment taxes. The Company (or other employer) shall
        have the authority to enter into arrangements with such Participant to
        collect the withholding in some other manner, including payroll
        deductions, or retention of Shares. If Shares are retained, they shall
        not have a Fair Market Value on the date of retention in excess of the
        minimum amount of withholding and employment taxes required to be
        collected by the Company (or other employee).

9.2     NO GUARANTEE OF TAX CONSEQUENCES. Without limitation, no person
        connected with the Plan in any capacity, makes any representation,
        commitment, or guarantee that any tax treatment,

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        including, but not limited to, federal, state and local income, estate
        and gift tax treatment, will be applicable with respect to Stock
        Options.

10.0    AMENDMENT AND TERMINATION

10.1    TERMINATION OF PLAN. The Board may suspend or terminate the Plan at any
        time without prior notice.

10.2    AMENDMENT. The Board may amend the Plan or any Stock Option at any time
        without prior notice; PROVIDED, HOWEVER, that no such action shall,
        except as expressly permitted in this Plan or in such Stock Option,
        substantially impair any outstanding Stock Option without the consent of
        the affected Participant. In addition, no amendment of the Plan shall,
        without approval of the stockholders of the Company, (i) increase the
        total number of Shares which may be issued under the Plan or the maximum
        number of Shares with respect to all Stock Options that may be granted
        to any person, or (ii) modify the requirements as to eligibility to
        receive for Stock Options.

11.0    MISCELLANEOUS

11.1    TRANSFERABILITY. Each Stock Option granted under the Plan to a
        Participant shall not be transferable otherwise than by will or the laws
        of descent and distribution, and shall be exercisable, during the
        Participant's lifetime, only by the Participant. In the event of the
        death of a Participant, such Participant's Stock Option shall be
        exercisable only by the executor or administrator of the estate of the
        deceased Participant or the person or persons to whom the deceased
        Participant's rights under the Stock Option shall pass by will or the
        laws of descent and distribution. Notwithstanding the foregoing, the
        Committee, in its discretion, may permit the transferability of a Stock
        Option (other than an ISO) by a Participant solely to members of the
        Participant's immediate family or trusts or family partnerships for the
        benefit of such persons, and subject to such terms, conditions,
        restrictions and/or limitations, if any, as the Committee may establish
        and include in the Stock Option Agreement.

11.2    LISTING OF SHARES AND RELATED MATTERS. If at any time the Committee
        shall determine that the listing, registration or qualification of the
        Shares subject to any Stock Option on any securities exchange or under
        any applicable law, or the consent or approval of any governmental
        regulatory authority, is necessary or desirable as a condition of, or in
        connection with, the granting of a Stock Option, or the issuance of
        Shares thereunder, such Stock Option may not be exercised, in whole or
        in part, unless such listing, registration, qualification, consent or
        approval shall have been effected or obtained free of any conditions not
        acceptable to the Committee.

11.3    NO RIGHT, TITLE, OR INTEREST IN COMPANY ASSETS. Nothing contained in the
        Plan, and no action taken pursuant to its provisions, shall create or be
        construed to create a trust of any kind, or a fiduciary relationship
        between the Company and any Participant, beneficiary, legal
        representative or any other person. To the extent, if any, that any
        person acquires a right to receive payments from the Company under the
        Plan, such right shall be no greater than the right of an unsecured
        general creditor of the Company.

11.4    NO RIGHT TO CONTINUED EMPLOYMENT OR SERVICE OR TO GRANTS. The
        Participant's rights, if any, to continue to serve the Company as a
        director, officer, employee, independent contractor or otherwise, shall
        not be enlarged or otherwise affected by his or her designation as a
        Participant under the Plan, nor, without limitation, shall such
        designation interfere with the Company's rights to terminate his
        employment, consulting relationship or Director status, nor shall any
        provision hereof confer an employment relationship on an Independent
        Contractor.

11.5    AWARDS SUBJECT TO FOREIGN LAWS. The Committee may grant Stock Options to
        individual Participants who are subject to the tax laws of nations other
        than the United States, and such Stock Options may have terms and
        conditions as determined by the Committee as necessary to comply

                                        9
<Page>

        with applicable foreign laws. The Committee may take any action which it
        deems advisable to obtain approval of such Stock Options by the
        appropriate foreign governmental entity; PROVIDED, HOWEVER, that no such
        Stock Options may be granted pursuant to this Section 11.6 and no action
        may be taken which would result in a violation of the Exchange Act, the
        Code or any other applicable law.

11.6    GOVERNING LAW. THE PLAN, ALL STOCK OPTIONS GRANTED HEREUNDER, AND ALL
        ACTIONS TAKEN IN CONNECTION HEREWITH SHALL BE GOVERNED BY AND CONSTRUED
        IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REFERENCE TO
        PRINCIPLES OF CONFLICT OF LAWS, EXCEPT AS SUPERSEDED BY APPLICABLE
        FEDERAL LAW.

11.7    OTHER BENEFITS. Neither the grant of a Stock Option, nor income
        recognized as a result of its exercise, shall be considered compensation
        for purposes of computing benefits under any retirement plan of the
        Company or any Parent or Subsidiary nor affect any benefits or
        compensation under any other benefit or compensation plan of the Company
        or any Parent or Subsidiary now or subsequently in effect.

11.8    FULL SATISFACTION. Any issuance or transfer of Shares to a Participant
        or to his legal representative, heir, legatee, or distributee, in
        accordance with the provisions of this Plan or the applicable Stock
        Option, shall, to the extent thereof be in full satisfaction of all
        claims of such persons under the Plan. The Committee may require any
        Participant, legal representative, heir, legatee or distributee as a
        condition precedent to such issuance or transfer of Shares, to execute a
        release and receipt for such issuance or transfer of Share in such form
        as it shall determine.

11.9    NO FRACTIONAL SHARES. No fractional Shares shall be issued or delivered
        pursuant to the Plan or any Stock Option, instead an amount equal to the
        fractional Fair Market Value of a Share shall be paid in cash.

11.10   SEVERABILITY. If any provision of this Plan, or any Stock Option, is
        held to be illegal or invalid for any reason, the illegality or
        invalidity shall not affect the remaining provisions of this Plan or any
        Stock Option, but such provision shall be fully severable, and the Plan
        or Stock Option, as applicable, shall be construed and enforced as if
        the illegal or invalid provision had never been included in the Plan or
        Stock Option, as applicable.

11.11   CONSTRUCTION. The Section titles and headings are included for
        convenience of reference only and are not to be considered in
        construction of this Plan's provisions. Words used in the masculine
        shall apply to the feminine where applicable, and wherever the context
        of this Stock Option dictates, the plural shall be read as the singular
        and the singular as the plural.

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</TEXT>
</DOCUMENT>
