QUIKSILVER INC
EXHIBIT 10.1
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>a19113exv10w1.htm
<DESCRIPTION>EXHIBIT 10.1
<TEXT>
<HTML>
<HEAD>
<TITLE>exv10w1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="RIGHT" style="font-size: 10pt; margin-top: 6pt">EXHIBIT
10.1</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">QUIKSILVER, INC.<BR>
2000 STOCK INCENTIVE PLAN<SUP style="font-size: 85%; vertical-align: text-top">1</SUP>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">(As amended through March&nbsp;24, 2006)

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">ARTICLE ONE
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">GENERAL PROVISIONS

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1 PURPOSE OF THE PLAN
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This 2000 Stock Incentive Plan is intended to promote the interests of Quiksilver, Inc., a
Delaware corporation, by providing eligible persons in the Corporation&#146;s service with the
opportunity to acquire a proprietary interest, or otherwise increase their proprietary interest, in
the Corporation as an incentive for them to remain in such service.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capitalized terms shall have the meanings assigned to such terms in the attached Appendix.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2 STRUCTURE OF THE PLAN
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. The Plan shall be divided into four separate equity programs:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- the Discretionary Option Grant Program under which eligible persons may, at the
discretion of the Plan Administrator, be granted options to purchase shares of Common Stock,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- the Salary Investment Option Grant Program under which eligible employees may elect
to have a portion of their base salary invested each year in special option grants,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- the Automatic Option Grant Program under which eligible non- employee Board members
shall automatically receive option grants at designated intervals over their period of
continued Board service, and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- the Director Fee Option Grant Program under which non-employee Board members may
elect to have all or any portion of their annual retainer fee otherwise payable in cash
applied to a special stock option grant.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. The provisions of Articles One and Six shall apply to all equity programs under the Plan
and shall govern the interests of all persons under the Plan.
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">1</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>All share amounts in this document have
been revised to reflect a 2 for 1 stock split effected through a stock dividend
on April&nbsp;30, 2003 and a 2 for 1 stock split effected through a stock dividend
on April&nbsp;27, 2005.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">






<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3 ADMINISTRATION OF THE PLAN
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. The Primary Committee shall have sole and exclusive authority to administer the
Discretionary Option Grant Program with respect to Section&nbsp;16 Insiders. Administration of the
Discretionary Option Grant Program with respect to all other persons eligible to participate in
that program may, at the Board&#146;s discretion, be vested in the Primary Committee or a Secondary
Committee, or the Board may retain the power to administer that program with respect to all such
persons. However, any discretionary option grants for members of the Primary Committee shall be
made by a disinterested majority of the Board.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Members of the Primary Committee or any Secondary Committee shall serve for such period of
time as the Board may determine and may be removed by the Board at any time. The Board may also at
any time terminate the functions of any Secondary Committee and reassume all powers and authority
previously delegated to such committee.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. Each Plan Administrator shall, within the scope of its administrative functions under the
Plan, have full power and authority (subject to the provisions of the Plan) to establish such rules
and regulations as it may deem appropriate for proper administration of the Discretionary Option
Grant Program and to make such determinations under, and issue such interpretations of, the
provisions of that program and any outstanding options thereunder as it may deem necessary or
advisable. Decisions of the Plan Administrator within the scope of its administrative functions
under the Plan shall be final and binding on all parties who have an interest in the Discretionary
Option Grant Program under its jurisdiction or any option or stock issuance thereunder.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. The Primary Committee shall have the sole and exclusive authority to determine which
Section&nbsp;16 Insiders and other highly compensated Employees shall be eligible for participation in
the Salary Investment Option Grant Program for one or more calendar years. However, all option
grants under the Salary Investment Option Grant Program shall be made in accordance with the
express terms of that program, and the Primary Committee shall not exercise any discretionary
functions with respect to the option grants made under that program.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. Service on the Primary Committee or the Secondary Committee shall constitute service as a
Board member, and members of each such committee shall accordingly be entitled to full
indemnification and reimbursement as Board members for their service on such committee. No member
of the Primary Committee or the Secondary Committee shall be liable for any act or omission made in
good faith with respect to the Plan or any option grants or stock issuances under the Plan.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F. Administration of the Automatic Option Grant and Director Fee Option Grant Programs shall
be self-executing in accordance with the terms of those programs, and no Plan Administrator shall
exercise any discretionary functions with respect to any option grants made under those programs.
</DIV>




<P align="center" style="font-size: 10pt">2
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.4 ELIGIBILITY
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. The persons eligible to participate in the Discretionary Option Grant Program are as
follows:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;Employees,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;non-employee members of the Board or the board of directors of any Parent or Subsidiary,
and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;consultants and other independent advisors who provide services to the Corporation (or
any Parent or Subsidiary).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Only Employees who are Section&nbsp;16 Insiders or other highly compensated individuals shall be
eligible to participate in the Salary Investment Option Grant Program.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. Each Plan Administrator shall, within the scope of its administrative jurisdiction under
the Plan, have full authority to determine, with respect to the option grants under the
Discretionary Option Grant Program, which eligible persons are to receive such grants, the time or
times when those grants are to be made, the number of shares to be covered by each such grant, the
status of the granted option as either an Incentive Option or a Non-Statutory Option, the time or
times when each option is to become exercisable, the vesting schedule (if any) applicable to the
option shares and the maximum term for which the option is to remain outstanding.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. The Plan Administrator shall have the absolute discretion to grant options in accordance
with the Discretionary Option Grant Program.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. The individuals who shall be eligible to participate in the Automatic Option Grant Program
shall be limited to (i)&nbsp;those individuals serving as non-employee Board members on the Plan
Effective Date who have not previously received an option grant from the Corporation in connection
with their Board service, (ii)&nbsp;those individuals who first become non-employee Board members after
the Plan Effective Date, whether through appointment by the Board or election by the Corporation&#146;s
stockholders, and (iii)&nbsp;those individuals who continue to serve as non-employee Board members at
one or more Annual Stockholders Meetings held after the Plan Effective Date. A non- employee Board
member who has previously been in the employ of the Corporation (or any Parent or Subsidiary) shall
not be eligible to receive an option grant under the Automatic Option Grant Program at the time he
or she first becomes a non-employee Board member, but shall be eligible to receive periodic option
grants under the Automatic Option Grant Program while he or she continues to serve as a
non-employee Board member.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F. All non-employee Board members shall be eligible to participate in the Director Fee Option
Grant Program.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.5 STOCK SUBJECT TO THE PLAN
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. The stock issuable under the Plan shall be shares of authorized but unissued or reacquired
Common Stock, including shares repurchased by the Corporation on the open market. The number of
shares of Common Stock reserved for issuance over the term of the Plan shall not exceed 31,444,836
shares. Such reserve shall consist of (i)&nbsp;the number of shares estimated to remain available for
issuance, as of the Plan Effective Date, under the Predecessor Plans as last approved by the
Corporation&#146;s stockholders, including the shares subject to outstanding options under those
Predecessor Plans, (ii)&nbsp;an increase of 2,000,000 shares approved
</DIV>


<P align="center" style="font-size: 10pt">3
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">by the Corporation&#146;s stockholders in connection with the adoption of this Plan, (iii)&nbsp;an
increase of 2,800,000 shares approved by the Corporation&#146;s stockholders on March&nbsp;30, 2001, (iv)&nbsp;an
increase of 2,400,000 shares approved by the Corporation&#146;s stockholders on March&nbsp;26, 2002 (v)&nbsp;an
increase of 3,200,000 shares approved by the Corporation&#146;s stockholders on March&nbsp;28, 2003, (vi)&nbsp;an
increase of 5,600,000 shares approved by the Corporation&#146;s stockholders on March&nbsp;26, 2004, (vii)&nbsp;an
increase of 1,500,000 shares approved by the Corporation&#146;s stockholders on March&nbsp;24, 2005 and
(viii)&nbsp;an increase of 1,000,000 shares approved by the Corporation&#146;s stockholders on March&nbsp;24,
2006.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. No one person participating in the Plan may receive options and separately exercisable
stock appreciation rights for more than 800,000 shares of Common Stock in the aggregate per
calendar year.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. Shares of Common Stock subject to outstanding options (including options incorporated into
this Plan from the Predecessor Plans) shall be available for subsequent issuance under the Plan to
the extent (i)&nbsp;those options expire or terminate for any reason prior to exercise in full or (ii)
the options are canceled in accordance with the cancellation-regrant provisions of Article&nbsp;Two.
Unvested shares issued under the Plan and subsequently canceled or repurchased by the Corporation
at the original issue price paid per share, pursuant to the Corporation&#146;s repurchase rights under
the Plan shall be added back to the number of shares of Common Stock reserved for issuance under
the Plan and shall accordingly be available for reissuance through one or more subsequent option
grants under the Plan. However, should the exercise price of an option under the Plan be paid with
shares of Common Stock or should shares of Common Stock otherwise issuable under the Plan be
withheld by the Corporation in satisfaction of the withholding taxes incurred in connection with
the exercise of an option under the Plan, then the number of shares of Common Stock available for
issuance under the Plan shall be reduced by the gross number of shares for which the option is
exercised, and not by the net number of shares of Common Stock issued to the holder of such option.
Shares of Common Stock underlying one or more stock appreciation rights exercised under Section&nbsp;2.4
of Article&nbsp;Two, Section&nbsp;3.3 of Article&nbsp;Three, Section&nbsp;4.2 of Article&nbsp;Four or Section&nbsp;5.3 of Article
Five of the Plan shall NOT be available for subsequent issuance under the Plan.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. If any change is made to the Common Stock by reason of any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation&#146;s receipt of consideration, appropriate
adjustments shall be made by the Plan Administrator to (i)&nbsp;the maximum number and/or class of
securities issuable under the Plan, (ii)&nbsp;the number and/or class of securities for which any one
person may be granted stock options and separately exercisable stock appreciation rights under the
Plan per calendar year, (iii)&nbsp;the number and/or class of securities for which grants are
subsequently to be made under the Automatic Option Grant Program to new and continuing non-employee
Board members, (iv)&nbsp;the number and/or class of securities and the exercise price per share in
effect under each outstanding option under the Plan, and (v)&nbsp;the number and/or class of securities
and price per share in effect under each outstanding option incorporated into this Plan from the
Predecessor Plans. Such adjustments to the outstanding options are to be effected in a manner which
shall preclude the enlargement or dilution of rights and benefits under such options. The
adjustments determined by the Plan Administrator shall be final, binding and conclusive.
</DIV>


<P align="center" style="font-size: 10pt">4
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt">ARTICLE TWO
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">DISCRETIONARY OPTION GRANT PROGRAM

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 OPTION TERMS
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each option shall be evidenced by one or more documents in the form approved by the Plan
Administrator; provided, however, that each such document shall comply with the terms specified
below. Each document evidencing an Incentive Option shall, in addition, be subject to the
provisions of the Plan applicable to such options.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. EXERCISE PRICE.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;The exercise price per share shall be fixed by the Plan Administrator but shall not be less
than one hundred percent (100%) of the Fair Market Value per share of Common Stock on the option
grant date. The Plan Administrator may not reset the exercise price of outstanding options and may
not grant new options in exchange for the cancellation of outstanding options with a higher
exercise price.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;The exercise price shall become immediately due upon exercise of the option and shall,
subject to the provisions of Section&nbsp;6.1 of Article&nbsp;Six and the documents evidencing the option, be
payable in one or more of the forms specified below:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;cash or check made payable to the Corporation,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;shares of Common Stock held for the requisite period necessary to avoid a charge to the
Corporation&#146;s earnings for financial reporting purposes and valued at Fair Market Value on the
Exercise Date, or
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;to the extent the option is exercised for vested shares, through a special sale and
remittance procedure pursuant to which the Optionee shall concurrently provide irrevocable
instructions to (a)&nbsp;a Corporation-designated brokerage firm to effect the immediate sale of the
purchased shares and remit to the Corporation, out of the sale proceeds available on the settlement
date, sufficient funds to cover the aggregate exercise price payable for the purchased shares plus
all applicable Federal, state and local income and employment taxes required to be withheld by the
Corporation by reason of such exercise and (b)&nbsp;the Corporation to deliver the certificates for the
purchased shares directly to such brokerage firm in order to complete the sale.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except to the extent such sale and remittance procedure is utilized, payment of the exercise
price for the purchased shares must be made on the Exercise Date.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. EXERCISE AND TERM OF OPTIONS. Each option shall be exercisable at such time or times,
during such period and for such number of shares as shall be determined by the Plan Administrator
and set forth in the documents evidencing the option. However, no option shall have a term in
excess of ten (10)&nbsp;years measured from the option grant date.
</DIV>


<P align="center" style="font-size: 10pt">5
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. EFFECT OF TERMINATION OF SERVICE.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;The following provisions shall govern the exercise of any options held by the Optionee at
the time of cessation of Service or death:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;Any option outstanding at the time of the Optionee&#146;s cessation of Service for any reason
shall remain exercisable for such period of time thereafter as shall be determined by the Plan
Administrator and set forth in the documents evidencing the option, but no such option shall be
exercisable after the expiration of the option term.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;Any option held by the Optionee at the time of death and exercisable in whole or in part
at that time may be subsequently exercised by the personal representative of the Optionee&#146;s estate
or by the person or persons to whom the option is transferred pursuant to the Optionee&#146;s will or
the laws of inheritance or by the Optionee&#146;s designated beneficiary or beneficiaries of that
option.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;Should the Optionee&#146;s Service be terminated for Misconduct, then all outstanding options
held by the Optionee shall terminate immediately and cease to be outstanding.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;During the applicable post-Service exercise period, the option may not be exercised in
the aggregate for more than the number of vested shares for which the option is exercisable on the
date of the Optionee&#146;s cessation of Service. Upon the expiration of the applicable exercise period
or (if earlier) upon the expiration of the option term, the option shall terminate and cease to be
outstanding for any vested shares for which the option has not been exercised. However, the option
shall, immediately upon the Optionee&#146;s cessation of Service, terminate and cease to be outstanding
to the extent the option is not otherwise at that time exercisable for vested shares.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;The Plan Administrator shall have complete discretion, exercisable either at the time an
option is granted or at any time while the option remains outstanding, to:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;extend the period of time for which the option is to remain exercisable following the
Optionee&#146;s cessation of Service from the limited exercise period otherwise in effect for that
option to such greater period of time as the Plan Administrator shall deem appropriate, but in no
event beyond the expiration of the option term, and/or
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;permit the option to be exercised, during the applicable post- Service exercise period,
not only with respect to the number of vested shares of Common Stock for which such option is
exercisable at the time of the Optionee&#146;s cessation of Service but also with respect to one or more
additional installments in which the Optionee would have vested had the Optionee continued in
Service.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. STOCKHOLDER RIGHTS. The holder of an option shall have no stockholder rights with respect
to the shares subject to the option until such person shall have exercised the option, paid the
exercise price and become a holder of record of the purchased shares.
</DIV>


<P align="center" style="font-size: 10pt">6
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. REPURCHASE RIGHTS. The Plan Administrator shall have the discretion to grant options which
are exercisable for unvested shares of Common Stock. Should the Optionee cease Service while
holding such unvested shares, the Corporation shall have the right to repurchase, at the exercise
price paid per share, any or all of those unvested shares. The terms upon which such repurchase
right shall be exercisable (including the period and procedure for exercise and the appropriate
vesting schedule for the purchased shares) shall be established by the Plan Administrator and set
forth in the document evidencing such repurchase right.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F. LIMITED TRANSFERABILITY OF OPTIONS. During the lifetime of the Optionee, Incentive Options
shall be exercisable only by the Optionee and shall not be assignable or transferable other than by
will or the laws of inheritance following the Optionee&#146;s death. However, a Non-Statutory Option
may, in connection with the Optionee&#146;s estate plan, be assigned in whole or in part during the
Optionee&#146;s lifetime to one or more members of the Optionee&#146;s immediate family or to a trust
established exclusively for one or more such family members. The assigned portion may only be
exercised by the person or persons who acquire a proprietary interest in the option pursuant to the
assignment. The terms applicable to the assigned portion shall be the same as those in effect for
the option immediately prior to such assignment and shall be set forth in such documents issued to
the assignee as the Plan Administrator may deem appropriate. Notwithstanding the foregoing, the
Optionee may also designate one or more persons as the beneficiary or beneficiaries of his or her
outstanding options under this Article&nbsp;Two, and those options shall, in accordance with such
designation, automatically be transferred to such beneficiary or beneficiaries upon the Optionee&#146;s
death while holding those options. Such beneficiary or beneficiaries shall take the transferred
options subject to all the terms and conditions of the applicable agreement evidencing each such
transferred option, including (without limitation) the limited time period during which the option
may be exercised following the Optionee&#146;s death.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 INCENTIVE OPTIONS
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The terms specified below shall be applicable to all Incentive Options. Except as modified by
the provisions of this Section&nbsp;2.2, all the provisions of Articles One, Two and Seven shall be
applicable to Incentive Options. Options which are specifically designated as Non-Statutory Options
when issued under the Plan shall not be subject to the terms of this Section&nbsp;2.2.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. ELIGIBILITY. Incentive Options may only be granted to Employees.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. DOLLAR LIMITATION. The aggregate Fair Market Value of the shares of Common Stock
(determined as of the respective date or dates of grant) for which one or more options granted to
any Employee under the Plan (or any other option plan of the Corporation or any Parent or
Subsidiary) may for the first time become exercisable as Incentive Options during any one calendar
year shall not exceed the sum of One Hundred Thousand Dollars ($100,000). To the extent the
Employee holds two (2)&nbsp;or more such options which become exercisable for the first time in the same
calendar year, the foregoing limitation on the exercisability of such options as Incentive Options
shall be applied on the basis of the order in which such options are granted.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. 10% STOCKHOLDER. If any Employee to whom an Incentive Option is granted is a 10%
Stockholder, then the exercise price per share shall not be less than one hundred
</DIV>


<P align="center" style="font-size: 10pt">7
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">ten percent (110%) of the Fair Market Value per share of Common Stock on the option grant
date, and the option term shall not exceed five (5)&nbsp;years measured from the option grant date.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 CORPORATE TRANSACTION/CHANGE IN CONTROL
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. In the event of any Corporate Transaction, each outstanding option shall automatically
accelerate so that each such option shall, immediately prior to the effective date of the Corporate
Transaction, become fully exercisable for the total number of shares of Common Stock at the time
subject to such option and may be exercised for any or all of those shares as fully vested shares
of Common Stock. However, an outstanding option shall NOT become exercisable on such an accelerated
basis if and to the extent: (i)&nbsp;such option is, in connection with the Corporate Transaction, to be
assumed by the successor corporation (or parent thereof) or (ii)&nbsp;such option is to be replaced with
a cash incentive program of the successor corporation which preserves the spread existing at the
time of the Corporate Transaction on any shares for which the option is not otherwise at that time
exercisable and provides for subsequent payout in accordance with the same exercise/vesting
schedule applicable to those option shares or (iii)&nbsp;the acceleration of such option is subject to
other limitations imposed by the Plan Administrator at the time of the option grant.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. All outstanding repurchase rights shall automatically terminate, and the shares of Common
Stock subject to those terminated rights shall immediately vest in full, in the event of any
Corporate Transaction, except to the extent: (i)&nbsp;those repurchase rights are to be assigned to the
successor corporation (or parent thereof) in connection with such Corporate Transaction or (ii)
such accelerated vesting is precluded by other limitations imposed by the Plan Administrator at the
time the repurchase right is issued.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. Immediately following the consummation of the Corporate Transaction, all outstanding
options shall terminate and cease to be outstanding, except to the extent assumed by the successor
corporation (or parent thereof).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. Each option which is assumed in connection with a Corporate Transaction shall be
appropriately adjusted, immediately after such Corporate Transaction, to apply to the number and
class of securities which would have been issuable to the Optionee in consummation of such
Corporate Transaction had the option been exercised immediately prior to such Corporate
Transaction. Appropriate adjustments to reflect such Corporate Transaction shall also be made to
(i)&nbsp;the exercise price payable per share under each outstanding option, provided the aggregate
exercise price payable for such securities shall remain the same, (ii)&nbsp;the maximum number and/or
class of securities available for issuance over the remaining term of the Plan and (iii)&nbsp;the
maximum number and/or class of securities for which any one person may be granted stock options,
separately exercisable stock appreciation rights and direct stock issuances under the Plan per
calendar year and (iv)&nbsp;the maximum number and/or class of securities by which the share reserve is
to increase automatically each calendar year.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. The Plan Administrator shall have the discretionary authority to structure one or more
outstanding options under the Discretionary Option Grant Program so that those options shall,
immediately prior to the effect date of such Corporate Transaction, become fully exercisable for
the total number of shares of Common Stock at the time subject to those options
</DIV>


<P align="center" style="font-size: 10pt">8
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">and may be exercised for any or all of those shares as fully vested shares of Common Stock,
whether or not those options are to be assumed in the Corporate Transaction. In addition, the Plan
Administrator shall have the discretionary authority to structure one or more of the Corporation&#146;s
repurchase rights under the Discretionary Option Grant Program so that those rights shall not be
assignable in connection with such Corporate Transaction and shall accordingly terminate upon the
consummation of such Corporate Transaction, and the shares subject to those terminated rights shall
thereupon vest in full.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F. The Plan Administrator shall have full power and authority to structure one or more
outstanding options under the Discretionary Option Grant Program so that those options shall become
fully exercisable for the total number of shares of Common Stock at the time subject to those
options in the event the Optionee&#146;s Service is subsequently terminated by reason of an Involuntary
Termination within a designated period (not to exceed eighteen (18)&nbsp;months) following the effective
date of any Corporate Transaction in which those options are assumed and do not otherwise
accelerate. Any options so accelerated shall remain exercisable for fully vested shares until the
earlier of (i)&nbsp;the expiration of the option term or (ii)&nbsp;the expiration of the one (1)&nbsp;year period
measured from the effective date of the Involuntary Termination. In addition, the Plan
Administrator may structure one or more of the Corporation&#146;s repurchase rights so that those rights
shall immediately terminate with respect to any shares held by the Optionee at the time of such
Involuntary Termination, and the shares subject to those terminated repurchase rights shall
accordingly vest in full at that time.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G. The Plan Administrator shall have the discretionary authority to structure one or more
outstanding options under the Discretionary Option Grant Program so that those options shall,
immediately prior to the effect date of a Change in Control, become fully exercisable for the total
number of shares of Common Stock at the time subject to those options and may be exercised for any
or all of those shares as fully vested shares of Common Stock. In addition, the Plan Administrator
shall have the discretionary authority to structure one or more of the Corporation&#146;s repurchase
rights under the Discretionary Option Grant Program so that those rights shall terminate
automatically upon the consummation of such Change in Control, and the shares subject to those
terminated rights shall thereupon vest in full. Alternatively, the Plan Administrator may condition
the automatic acceleration of one or more outstanding options under the Discretionary Option Grant
Program and the termination of one or more of the Corporation&#146;s outstanding repurchase rights under
such program upon the subsequent termination of the Optionee&#146;s Service by reason of an Involuntary
Termination within a designated period (not to exceed eighteen (18)&nbsp;months) following the effective
date of such Change in Control. Each option so accelerated shall remain exercisable for fully
vested shares until the earlier of (i)&nbsp;the expiration of the option term or (ii)&nbsp;the expiration of
the one (1)&nbsp;year period measured from the effective date of Optionee&#146;s cessation of Service.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;H. The portion of any Incentive Option accelerated in connection with a Corporate Transaction
or Change in Control shall remain exercisable as an Incentive Option only to the extent the
applicable One Hundred Thousand Dollar ($100,000) limitation is not exceeded. To the extent such
dollar limitation is exceeded, the accelerated portion of such option shall be exercisable as a
Nonstatutory Option under the Federal tax laws.
</DIV>


<P align="center" style="font-size: 10pt">9
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I. The outstanding options shall in no way affect the right of the Corporation to adjust,
reclassify, reorganize or otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4 STOCK APPRECIATION RIGHTS
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. The Plan Administrator shall have full power and authority to grant to selected Optionees
tandem stock appreciation rights and/or limited stock appreciation rights.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. The following terms shall govern the grant and exercise of tandem stock appreciation
rights:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;One or more Optionees may be granted the right, exercisable upon such terms as the Plan
Administrator may establish, to elect between the exercise of the underlying option for shares of
Common Stock and the surrender of that option in exchange for a distribution from the Corporation
in an amount equal to the excess of (a)&nbsp;the Fair Market Value (on the option surrender date) of the
number of shares in which the Optionee is at the time vested under the surrendered option (or
surrendered portion thereof) over (b)&nbsp;the aggregate exercise price payable for such shares.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;No such option surrender shall be effective unless it is approved by the Plan
Administrator, either at the time of the actual option surrender or at any earlier time. If the
surrender is so approved, then the distribution to which the Optionee shall be entitled may be made
in shares of Common Stock valued at Fair Market Value on the option surrender date, in cash, or
partly in shares and partly in cash, as the Plan Administrator shall in its sole discretion deem
appropriate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;If the surrender of an option is not approved by the Plan Administrator, then the
Optionee shall retain whatever rights the Optionee had under the surrendered option (or surrendered
portion thereof) on the option surrender date and may exercise such rights at any time prior to the
later of (a)&nbsp;five (5)&nbsp;business days after the receipt of the rejection notice or (b)&nbsp;the last day
on which the option is otherwise exercisable in accordance with the terms of the documents
evidencing such option, but in no event may such rights be exercised more than ten (10)&nbsp;years after
the option grant date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. The following terms shall govern the grant and exercise of limited stock appreciation
rights:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;One or more Section&nbsp;16 Insiders may be granted limited stock appreciation rights with
respect to their outstanding options.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;Upon the occurrence of a Hostile Take-Over, each individual holding one or more options
with such a limited stock appreciation right shall have the unconditional right (exercisable for a
thirty (30)-day period following such Hostile Take-Over) to surrender each such option to the
Corporation. In return for the surrendered option, the Optionee shall receive a cash distribution
from the Corporation in an amount equal to the excess of (A)&nbsp;the Take-Over Price of the shares of
Common Stock at the time subject to such option (whether or not the Optionee is otherwise vested in
those shares) over (B)&nbsp;the aggregate exercise
</DIV>

<P align="center" style="font-size: 10pt">10
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">price payable for those shares. Such cash distribution shall be paid within five (5)&nbsp;days
following the option surrender date.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;At the time such limited stock appreciation right is granted, the Plan Administrator
shall pre-approve any subsequent exercise of that right in accordance with the terms of this
Paragraph&nbsp;C. Accordingly, no further approval of the Plan Administrator or the Board shall be
required at the time of the actual option surrender and cash distribution.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">ARTICLE THREE
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">SALARY INVESTMENT OPTION GRANT PROGRAM

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 OPTION GRANTS
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Primary Committee shall have the sole and exclusive authority to determine the calendar
year or years (if any) for which the Salary Investment Option Grant Program is to be in effect and
to select the Section&nbsp;16 Insiders and other highly compensated Employees eligible to participate in
the Salary Investment Option Grant Program for such calendar year or years. Each selected
individual who elects to participate in the Salary Investment Option Grant Program must, prior to
the start of each calendar year of participation, file with the Plan Administrator (or its
designate) an irrevocable authorization directing the Corporation to reduce his or her base salary
for that calendar year by an amount not less than Ten Thousand Dollars ($10,000.00) nor more than
Fifty Thousand Dollars ($50,000.00). Each individual who files such a timely authorization shall
automatically be granted an option under the Salary Investment Grant Program on the first trading
day in January of the calendar year for which the salary reduction is to be in effect.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 OPTION TERMS
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each option shall be a Non-Statutory Option evidenced by one or more documents in the form
approved by the Plan Administrator; provided, however, that each such document shall comply with
the terms specified below.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. EXERCISE PRICE.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;The exercise price per share shall be thirty-three and one-third percent (33-1/3%) of the
Fair Market Value per share of Common Stock on the option grant date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;The exercise price shall become immediately due upon exercise of the option and shall be
payable in one or more of the alternative forms authorized under the Discretionary Option Grant
Program. Except to the extent the sale and remittance procedure specified thereunder is utilized,
payment of the exercise price for the purchased shares must be made on the Exercise Date.
</DIV>

<P align="center" style="font-size: 10pt">11
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. NUMBER OF OPTION SHARES. The number of shares of Common Stock subject to the option shall
be determined pursuant to the following formula (rounded down to the nearest whole number):
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="20%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="73%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">X
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">= A divided by (B x 66-2/3%), where</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">X
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">is the number of option shares,</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">A is the dollar amount of the reduction in the Optionee&#146;s base salary
for the calendar year to be in effect pursuant to this program, and B
is the Fair Market Value per share of Common Stock on the option
grant date.</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. EXERCISE AND TERM OF OPTIONS. The option shall become exercisable in a series of twelve
(12)&nbsp;successive equal monthly installments upon the Optionee&#146;s completion of each calendar month of
Service in the calendar year for which the salary reduction is in effect. Each option shall have a
maximum term of ten (10)&nbsp;years measured from the option grant date.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. EFFECT OF TERMINATION OF SERVICE. Should the Optionee cease Service for any reason while
holding one or more options under this Article&nbsp;Three, then each such option shall remain
exercisable, for any or all of the shares for which the option is exercisable at the time of such
cessation of Service, until the earlier of (i)&nbsp;the expiration of the ten (10)-year option term or
(ii)&nbsp;the expiration of the three (3)-year period measured from the date of such cessation of
Service. Should the Optionee die while holding one or more options under this Article&nbsp;Three, then
each such option may be exercised, for any or all of the shares for which the option is exercisable
at the time of the Optionee&#146;s cessation of Service (less any shares subsequently purchased by
Optionee prior to death), by the personal representative of the Optionee&#146;s estate or by the person
or persons to whom the option is transferred pursuant to the Optionee&#146;s will or the laws of
inheritance or by the designated beneficiary or beneficiaries of such option. Such right of
exercise shall lapse, and the option shall terminate, upon the earlier of (i)&nbsp;the expiration of the
ten (10)-year option term or (ii)&nbsp;the three (3)- year period measured from the date of the
Optionee&#146;s cessation of Service. However, the option shall, immediately upon the Optionee&#146;s
cessation of Service for any reason, terminate and cease to remain outstanding with respect to any
and all shares of Common Stock for which the option is not otherwise at that time exercisable.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3 CORPORATE TRANSACTION/CHANGE IN CONTROL/HOSTILE TAKE-OVER
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. In the event of any Corporate Transaction while the Optionee remains in Service, each
outstanding option held by such Optionee under this Salary Investment Option Grant Program shall
automatically accelerate so that each such option shall, immediately prior to the effective date of
the Corporate Transaction, become fully exercisable for the total number of shares of Common Stock
at the time subject to such option and may be exercised for any or all of those shares as
fully-vested shares of Common Stock. Each such outstanding option shall terminate immediately
following the Corporate Transaction, except to the extent assumed by the
</DIV>


<P align="center" style="font-size: 10pt">12
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">successor corporation (or parent thereof) in such Corporate Transaction. Any option so assumed
and shall remain exercisable for the fully-vested shares until the earlier of (i)&nbsp;the expiration of
the ten (10)-year option term or (ii)&nbsp;the expiration of the three (3)-year period measured from the
date of the Optionee&#146;s cessation of Service.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. In the event of a Change in Control while the Optionee remains in Service, each outstanding
option held by such Optionee under this Salary Investment Option Grant Program shall automatically
accelerate so that each such option shall immediately become fully exercisable for the total number
of shares of Common Stock at the time subject to such option and may be exercised for any or all of
those shares as fully-vested shares of Common Stock. The option shall remain so exercisable until
the earliest to occur of (i)&nbsp;the expiration of the ten (10)-year option term, (ii)&nbsp;the expiration
of the three (3)-year period measured from the date of the Optionee&#146;s cessation of Service, (iii)
the termination of the option in connection with a Corporate Transaction or (iv)&nbsp;the surrender of
the option in connection with a Hostile Take-Over.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. Upon the occurrence of a Hostile Take-Over, the Optionee shall have a thirty (30)-day
period in which to surrender to the Corporation each outstanding option granted him or her under
the Salary Investment Option Grant Program. The Optionee shall in return be entitled to a cash
distribution from the Corporation in an amount equal to the excess of (i)&nbsp;the Take-Over Price of
the shares of Common Stock at the time subject to the surrendered option (whether or not the
Optionee is otherwise at the time vested in those shares) over (ii)&nbsp;the aggregate exercise price
payable for such shares. Such cash distribution shall be paid within five (5)&nbsp;days following the
surrender of the option to the Corporation. The Primary Committee shall, at the time the option
with such limited stock appreciation right is granted under the Salary Investment Option Grant
Program, pre-approve any subsequent exercise of that right in accordance with the terms of this
Paragraph&nbsp;C. Accordingly, no further approval of the Primary Committee or the Board shall be
required at the time of the actual option surrender and cash distribution.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. Each option which is assumed in connection with a Corporate Transaction shall be
appropriately adjusted, immediately after such Corporate Transaction, to apply to the number and
class of securities which would have been issuable to the Optionee in consummation of such
Corporate Transaction had the option been exercised immediately prior to such Corporate
Transaction. Appropriate adjustments shall also be made to the exercise price payable per share
under each outstanding option, provided the aggregate exercise price payable for such securities
shall remain the same.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. The grant of options under the Salary Investment Option Grant Program shall in no way
affect the right of the Corporation to adjust, reclassify, reorganize or otherwise change its
capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all
or any part of its business or assets.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4 REMAINING TERMS
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The remaining terms of each option granted under the Salary Investment Option Grant Program
shall be the same as the terms in effect for option grants made under the Discretionary Option
Grant Program.
</DIV>



<P align="center" style="font-size: 10pt">13
</DIV>


<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="center" style="font-size: 10pt; margin-top: 18pt">ARTICLE FOUR
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">AUTOMATIC OPTION GRANT PROGRAM

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 OPTION TERMS
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. GRANT DATES. Option grants shall be made on the dates specified below:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;Each individual who is first elected or appointed as a non-employee Board member at any
time after the Plan Effective Date shall automatically be granted, on the date of such initial
election or appointment, a Non-Statutory Option to purchase 60,000 shares of Common Stock, provided
that individual has not previously been in the employ of the Corporation or any Parent or
Subsidiary.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;On the date of each Annual Stockholders Meeting, beginning with the Annual Stockholders
Meeting coinciding with the Plan Effective Date, each individual who is to continue to serve as a
non-employee Board member, whether or not that individual is standing for re-election to the Board
at that particular Annual Meeting, shall automatically be granted a Non-Statutory Option to
purchase 20,000 shares of Common Stock, provided such individual has served as a non-employee Board
member for at least six (6)&nbsp;months. There shall be no limit on the number of such 20,000-share
option grants any one non-employee Board member may receive over his or her period of Board
service, and non-employee Board members who have previously been in the employ of the Corporation
(or any Parent or Subsidiary) or who have previously received stock options in connection with
their Board service prior to the Plan Effective Date shall be eligible to receive one or more such
annual option grants over their period of continued Board service.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. EXERCISE PRICE.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;The exercise price per share shall be equal to one hundred percent (100%) of the Fair
Market Value per share of Common Stock on the option grant date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;The exercise price shall be payable in one or more of the alternative forms authorized
under the Discretionary Option Grant Program. Except to the extent the sale and remittance
procedure specified thereunder is utilized, payment of the exercise price for the purchased shares
must be made on the Exercise Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. OPTION TERM. Each option shall have a term of ten (10)&nbsp;years measured from the option grant
date.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. EXERCISE AND VESTING OF OPTIONS. Each option shall be immediately exercisable for any or
all of the option shares. However, any unvested shares purchased under the option shall be subject
to repurchase by the Corporation, at the exercise price paid per share, upon the Optionee&#146;s
cessation of Board service prior to vesting in those shares. The shares subject to each initial
60,000-share grant shall vest, and the Corporation&#146;s repurchase right shall lapse, in a series of
three (3)&nbsp;successive equal annual installments upon the Optionee&#146;s completion of each year of
service as a Board member over the three (3)&nbsp;year period
</DIV>




<P align="center" style="font-size: 10pt">14
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">measured from the option grant date. The shares subject to each annual 20,000-share option
grant shall be fully vested as of the grant date.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. LIMITED TRANSFERABILITY OF OPTIONS. Each option under this Article&nbsp;Five may, in connection
with the Optionee&#146;s estate plan, be assigned in whole or in part during the Optionee&#146;s lifetime to
one or more members of the Optionee&#146;s immediate family or to a trust established exclusively for
one or more such family members. The assigned portion may only be exercised by the person or
persons who acquire a proprietary interest in the option pursuant to the assignment. The terms
applicable to the assigned portion shall be the same as those in effect for the option immediately
prior to such assignment and shall be set forth in such documents issued to the assignee as the
Plan Administrator may deem appropriate. The Optionee may also designate one or more persons as the
beneficiary or beneficiaries of his or her outstanding options under this Article&nbsp;Five, and those
options shall, in accordance with such designation, automatically be transferred to such
beneficiary or beneficiaries upon the Optionee&#146;s death while holding those options. Such
beneficiary or beneficiaries shall take the transferred options subject to all the terms and
conditions of the applicable agreement evidencing each such transferred option, including (without
limitation) the limited time period during which the option may be exercised following the
Optionee&#146;s death.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F. TERMINATION OF BOARD SERVICE. The following provisions shall govern the exercise of any
options held by the Optionee at the time the Optionee ceases to serve as a Board member:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;The Optionee (or, in the event of Optionee&#146;s death, the personal representative of the
Optionee&#146;s estate or the person or persons to whom the option is transferred pursuant to the
Optionee&#146;s will or the laws of inheritance or the designated beneficiary or beneficiaries of such
option) shall have a twelve (12)-month period following the date of such cessation of Board service
in which to exercise each such option.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;During the twelve (12)-month exercise period, the option may not be exercised in the
aggregate for more than the number of vested shares of Common Stock for which the option is
exercisable at the time of the Optionee&#146;s cessation of Board service.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;Should the Optionee cease to serve as a Board member by reason of death or Permanent
Disability, then all shares at the time subject to the option shall immediately vest so that such
option may, during the twelve (12)-month exercise period following such cessation of Board service,
be exercised for all or any portion of those shares as fully-vested shares of Common Stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;In no event shall the option remain exercisable after the expiration of the option term.
Upon the expiration of the twelve (12)-month exercise period or (if earlier) upon the expiration of
the option term, the option shall terminate and cease to be outstanding for any vested shares for
which the option has not been exercised. However, the option shall, immediately upon the Optionee&#146;s
cessation of Board service for any reason other than death or Permanent Disability, terminate and
cease to be outstanding to the extent the option is not otherwise at that time exercisable for
vested shares.
</DIV>

<P align="center" style="font-size: 10pt">15
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 CORPORATE TRANSACTION/CHANGE IN CONTROL/HOSTILE TAKE-OVER
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. In the event of any Corporate Transaction, the shares of Common Stock at the time subject
to each outstanding option but not otherwise vested shall automatically vest in full so that each
such option shall, immediately prior to the effective date of the Corporate Transaction, become
fully exercisable for all of the option shares as fully-vested shares of Common Stock and may be
exercised for all or any portion of those vested shares. Immediately following the consummation of
the Corporate Transaction, each automatic option grant shall terminate and cease to be outstanding,
except to the extent assumed by the successor corporation (or parent thereof).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. In connection with any Change in Control, the shares of Common Stock at the time subject to
each outstanding option but not otherwise vested shall automatically vest in full so that each such
option shall, immediately prior to the effective date of the Change in Control, become fully
exercisable for all of the option shares as fully-vested shares of Common Stock and may be
exercised for all or any portion of those vested shares. Each such option shall remain exercisable
for such fully-vested option shares until the expiration or sooner termination of the option term
or the surrender of the option in connection with a Hostile Take-Over.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. All outstanding repurchase rights shall automatically terminate, and the shares of Common
Stock subject to those terminated rights shall immediately vest in full, in the event of any
Corporate Transaction or Change in Control.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. Upon the occurrence of a Hostile Take-Over, the Optionee shall have a thirty (30)-day
period in which to surrender to the Corporation each of his or her outstanding automatic option
grants. The Optionee shall in return be entitled to a cash distribution from the Corporation in an
amount equal to the excess of (i)&nbsp;the Take-Over Price of the shares of Common Stock at the time
subject to each surrendered option (whether or not the Optionee is otherwise at the time vested in
those shares) over (ii)&nbsp;the aggregate exercise price payable for such shares. Such cash
distribution shall be paid within five (5)&nbsp;days following the surrender of the option to the
Corporation. No approval or consent of the Board or any Plan Administrator shall be required at the
time of the actual option surrender and cash distribution.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. Each option which is assumed in connection with a Corporate Transaction shall be
appropriately adjusted, immediately after such Corporate Transaction, to apply to the number and
class of securities which would have been issuable to the Optionee in consummation of such
Corporate Transaction had the option been exercised immediately prior to such Corporate
Transaction. Appropriate adjustments shall also be made to the exercise price payable per share
under each outstanding option, provided the aggregate exercise price payable for such securities
shall remain the same.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F. The grant of options under the Automatic Option Grant Program shall in no way affect the
right of the Corporation to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any
part of its business or assets.
</DIV>


<P align="center" style="font-size: 10pt">16
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 REMAINING TERMS
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The remaining terms of each option granted under the Automatic Option Grant Program shall be
the same as the terms in effect for option grants made under the Discretionary Option Grant
Program.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">ARTICLE FIVE
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">DIRECTOR FEE OPTION GRANT PROGRAM

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 OPTION GRANTS
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Primary Committee shall have the sole and exclusive authority to determine the calendar
year or years for which the Director Fee Option Grant Program is to be in effect. For each such
calendar year the program is in effect, each non-employee Board member may elect to apply all or
any portion of the annual retainer fee otherwise payable in cash for his or her service on the
Board for that year to the acquisition of a special option grant under this Director Fee Option
Grant Program. Such election must be filed with the Corporation&#146;s Chief Financial Officer prior to
first day of the calendar year for which the annual retainer fee which is the subject of that
election is otherwise payable. Each non-employee Board member who files such a timely election
shall automatically be granted an option under this Director Fee Option Grant Program on the first
trading day in January in the calendar year for which the annual retainer fee which is the subject
of that election would otherwise be payable in cash.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 OPTION TERMS
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each option shall be a Non-Statutory Option governed by the terms and conditions specified
below.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. EXERCISE PRICE.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;The exercise price per share shall be thirty-three and one-third percent (33- 1/3 %)
of the Fair Market Value per share of Common Stock on the option grant date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;The exercise price shall become immediately due upon exercise of the option and shall be
payable in one or more of the alternative forms authorized under the Discretionary Option Grant
Program. Except to the extent the sale and remittance procedure specified thereunder is utilized,
payment of the exercise price for the purchased shares must be made on the Exercise Date.
</DIV>



<P align="center" style="font-size: 10pt">17
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. NUMBER OF OPTION SHARES. The number of shares of Common Stock subject to the option shall
be determined pursuant to the following formula (rounded down to the nearest whole number):
</DIV>




<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 45%">X&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; = A divided by (B x 66-2/3%), where
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 45%">X&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; is the number of option shares,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 45%">A is the portion of the annual retainer fee subject to the
non-employee Board member&#146;s election, and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 45%">B is the Fair Market Value per share of Common Stock on the
option grant date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. EXERCISE AND TERM OF OPTIONS. The option shall become exercisable in a series of twelve
(12)&nbsp;equal monthly installments upon the Optionee&#146;s completion of each month of Board service over
the twelve (12)-month period measured from the grant date. Each option shall have a maximum term of
ten (10)&nbsp;years measured from the option grant date.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. LIMITED TRANSFERABILITY OF OPTIONS. Each option under this Article&nbsp;Five may, in connection
with the Optionee&#146;s estate plan, be assigned in whole or in part during the Optionee&#146;s lifetime to
one or more members of the Optionee&#146;s immediate family or to a trust established exclusively for
one or more such family members. The assigned portion may only be exercised by the person or
persons who acquire a proprietary interest in the option pursuant to the assignment. The terms
applicable to the assigned portion shall be the same as those in effect for the option immediately
prior to such assignment and shall be set forth in such documents issued to the assignee as the
Plan Administrator may deem appropriate. The Optionee may also designate one or more persons as the
beneficiary or beneficiaries of his or her outstanding options under this Article&nbsp;Five, and those
options shall, in accordance with such designation, automatically be transferred to such
beneficiary or beneficiaries upon the Optionee&#146;s death while holding those options. Such
beneficiary or beneficiaries shall take the transferred options subject to all the terms and
conditions of the applicable agreement evidencing each such transferred option, including (without
limitation) the limited time period during which the option may be exercised following the
Optionee&#146;s death.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. TERMINATION OF BOARD SERVICE. Should the Optionee cease Board service for any reason (other
than death or Permanent Disability) while holding one or more options under this Director Fee
Option Grant Program, then each such option shall remain exercisable, for any or all of the shares
for which the option is exercisable at the time of such cessation of Board service, until the
earlier of (i)&nbsp;the expiration of the ten (10)-year option term or (ii)&nbsp;the expiration of the three
(3)-year period measured from the date of such cessation of Board service. However, each option
held by the Optionee under this Director Fee Option Grant Program at the time of his or her
cessation of Board service shall immediately terminate and cease to remain outstanding with respect
to any and all shares of Common Stock for which the option is not otherwise at that time
exercisable.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F. DEATH OR PERMANENT DISABILITY. Should the Optionee&#146;s service as a Board member cease by
reason of death or Permanent Disability, then each option held by such Optionee under this Director
Fee Option Grant Program shall immediately become exercisable for all the shares of Common Stock at
the time subject to that option, and the option may be exercised for any or all of those shares as
fully-vested shares until the earlier of (i)&nbsp;the
</DIV>





<P align="center" style="font-size: 10pt">18
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">expiration of the ten (10)-year option term or (ii)&nbsp;the expiration of the three (3)-year
period measured from the date of such cessation of Board service. Should the Optionee die while
holding such option, then the option may be exercised by the personal representative of the
Optionee&#146;s estate or by the person or persons to whom the option is transferred pursuant to the
Optionee&#146;s will or the laws of inheritance or by the designated beneficiary or beneficiaries of
that option.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Should the Optionee die after cessation of Board service but while holding one or more options
under this Director Fee Option Grant Program, then each such option may be exercised, for any or
all of the shares for which the option is exercisable at the time of the Optionee&#146;s cessation of
Board service (less any shares subsequently purchased by Optionee prior to death), by the personal
representative of the Optionee&#146;s estate or by the person or persons to whom the option is
transferred pursuant to the Optionee&#146;s will or the laws of inheritance or by the designated
beneficiary or beneficiaries of such option. Such right of exercise shall lapse, and the option
shall terminate, upon the earlier of (i)&nbsp;the expiration of the ten (10)-year option term or (ii)
the three (3)- year period measured from the date of the Optionee&#146;s cessation of Board service.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 CORPORATE TRANSACTION/CHANGE IN CONTROL/HOSTILE TAKE-OVER
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. In the event of any Corporate Transaction while the Optionee remains a Board member, each
outstanding option held by such Optionee under this Director Fee Option Grant Program shall
automatically accelerate so that each such option shall, immediately prior to the effective date of
the Corporate Transaction, become fully exercisable for the total number of shares of Common Stock
at the time subject to such option and may be exercised for any or all of those shares as
fully-vested shares of Common Stock. Each such outstanding option shall terminate immediately
following the Corporate Transaction, except to the extent assumed by the successor corporation (or
parent thereof) in such Corporate Transaction. Any option so assumed and shall remain exercisable
for the fully-vested shares until the earlier of (i)&nbsp;the expiration of the ten (10)-year option
term or (ii)&nbsp;the expiration of the three (3)-year period measured from the date of the Optionee&#146;s
cessation of Board service.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. In the event of a Change in Control while the Optionee remains in Service, each outstanding
option held by such Optionee under this Director Fee Option Grant Program shall automatically
accelerate so that each such option shall immediately become fully exercisable for the total number
of shares of Common Stock at the time subject to such option and may be exercised for any or all of
those shares as fully-vested shares of Common Stock. The option shall remain so exercisable until
the earliest to occur of (i)&nbsp;the expiration of the ten (10)-year option term, (ii)&nbsp;the expiration
of the two (2)-year period measured from the date of the Optionee&#146;s cessation of Board service,
(iii)&nbsp;the termination of the option in connection with a Corporate Transaction or (iv)&nbsp;the
surrender of the option in connection with a Hostile Take-Over.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. Upon the occurrence of a Hostile Take-Over, the Optionee shall have a thirty (30)-day
period in which to surrender to the Corporation each outstanding option granted him or her under
the Director Fee Option Grant Program. The Optionee shall in return be entitled to a cash
distribution from the Corporation in an amount equal to the excess of (i)&nbsp;the Take-Over Price of
the shares of Common Stock at the time subject to each surrendered option (whether or
</DIV>




<P align="center" style="font-size: 10pt">19
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">not the Optionee is otherwise at the time vested in those shares) over (ii)&nbsp;the aggregate
exercise price payable for such shares. Such cash distribution shall be paid within five (5)&nbsp;days
following the surrender of the option to the Corporation. No approval or consent of the Board or
any Plan Administrator shall be required at the time of the actual option surrender and cash
distribution.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. The grant of options under the Director Fee Option Grant Program shall in no way affect the
right of the Corporation to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any
part of its business or assets.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4 REMAINING TERMS
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The remaining terms of each option granted under this Director Fee Option Grant Program shall
be the same as the terms in effect for option grants made under the Discretionary Option Grant
Program.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">ARTICLE SIX
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">MISCELLANEOUS

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 FINANCING
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Plan Administrator may permit any Optionee or Participant to pay the option exercise price
under the Discretionary Option Grant Program by delivering a full-recourse, interest bearing
promissory note payable in one or more installments. The terms of any such promissory note
(including the interest rate and the terms of repayment) shall be established by the Plan
Administrator in its sole discretion. In no event may the maximum credit available to the Optionee
or Participant exceed the sum of (i)&nbsp;the aggregate option exercise price (less the par value of
those shares) plus (ii)&nbsp;any Federal, state and local income and employment tax liability incurred
by the Optionee or the Participant in connection with the option exercise.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 TAX WITHHOLDING
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. The Corporation&#146;s obligation to deliver shares of Common Stock upon the exercise of options
under the Plan shall be subject to the satisfaction of all applicable Federal, state and local
income and employment tax withholding requirements.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. The Plan Administrator may, in its discretion, provide any or all holders of Non-Statutory
Options under the Plan (other than the options granted or the shares issued under the Automatic
Option Grant or Director Fee Option Grant Program) with the right to use shares of Common Stock in
satisfaction of all or part of the Withholding Taxes to which such holders may become subject in
connection with the exercise of their options. Such right may be provided to any such holder in
either or both of the following formats:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock Withholding: The election to have the Corporation withhold, from the shares of Common
Stock otherwise issuable upon the exercise of such Non-Statutory Option, a portion of those shares
with an aggregate Fair Market Value equal to the percentage of the Withholding Taxes (not to exceed
one hundred percent (100%)) designated by the holder.
</DIV>


<P align="center" style="font-size: 10pt">20
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock Delivery: The election to deliver to the Corporation, at the time the Non-Statutory
Option is exercised, one or more shares of Common Stock previously acquired by such holder (other
than in connection with the option exercise or share vesting triggering the Withholding Taxes) with
an aggregate Fair Market Value equal to the percentage of the Withholding Taxes (not to exceed one
hundred percent (100%)) designated by the holder.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3 EFFECTIVE DATE AND TERM OF THE PLAN
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. The Plan shall become effective immediately on the Plan Effective Date. However, the Salary
Investment Option Grant Program and the Director Fee Option Grant Program shall not be implemented
until such time as the Primary Committee may deem appropriate. Options may be granted under the
Discretionary Option Grant at any time on or after the Plan Effective Date, and the initial option
grants under the Automatic Option Grant Program shall also be made on the Plan Effective Date to
any non-employee Board members eligible for such a grant at that time. However, no options granted
under the Plan may be exercised, and no shares shall be issued under the Plan, until the Plan is
approved by the Corporation&#146;s stockholders. If such stockholder approval is not obtained within
twelve (12)&nbsp;months after the Plan Effective Date, then all options previously granted under this
Plan shall terminate and cease to be outstanding, and no further options shall be granted and no
shares shall be issued under the Plan.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. The Plan shall serve as the successor to each of the Predecessor Plans, and no further
option grants shall be made under the Predecessor Plans after the Plan Effective Date. All options
outstanding under the Predecessor Plans on the Plan Effective Date shall be incorporated into the
Plan at that time and shall be treated as outstanding options under the Plan. However, each
outstanding option so incorporated shall continue to be governed solely by the terms of the
documents evidencing such option, and no provision of the Plan shall be deemed to affect or
otherwise modify the rights or obligations of the holders of such incorporated options with respect
to their acquisition of shares of Common Stock.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. One or more provisions of the Plan, including (without limitation) the option/vesting
acceleration provisions of Article&nbsp;Two relating to Corporate Transactions, may, in the Plan
Administrator&#146;s discretion, be extended to one or more options incorporated from the Predecessor
Plans which do not otherwise contain such provisions.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. The Plan shall terminate upon the earliest to occur of (i)&nbsp;March&nbsp;31, 2010, (ii)&nbsp;the date on
which all shares available for issuance under the Plan shall have been issued as fully- vested
shares or (iii)&nbsp;the termination of all outstanding options in connection with a Corporate
Transaction. Should the Plan terminate on March&nbsp;31, 2010, then all option grants and unvested stock
issuances outstanding at that time shall continue to have force and effect in accordance with the
provisions of the documents evidencing such grants or issuances.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4 AMENDMENT OF THE PLAN
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Except as provided below, the Board shall have complete and exclusive power and authority
to amend or modify the Plan in any or all respects. However, no such amendment or modification
shall (i)&nbsp;adversely affect the rights and obligations with respect to
</DIV>




<P align="center" style="font-size: 10pt">21
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">stock options or unvested stock issuances at the time outstanding under the Plan unless the
Optionee consents to such amendment or modification or (ii)&nbsp;unless approved by the stockholders,
permit the Plan Administrator to reset the exercise price of outstanding options or grant new
options in exchange for the cancellation of outstanding options with a higher exercise price. In
addition, if an amendment would (i)&nbsp;materially increase the benefits accruing to participants under
the Plan, (ii)&nbsp;materially increase the aggregate number of securities that may be issued under the
Plan or (iii)&nbsp;materially modify the requirements as to eligibility for participation in the Plan,
then to the extent required by applicable law, or deemed necessary or advisable by the Plan
Administrator or the Board of Directors, such amendment shall be subject to stockholder approval.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Options to purchase shares of Common Stock may be granted under the Discretionary Option
Grant and Salary Investment Option Grant Programs that are in each instance in excess of the number
of shares then available for issuance under the Plan, provided any excess shares actually issued
under those programs shall be held in escrow until there is obtained stockholder approval of an
amendment sufficiently increasing the number of shares of Common Stock available for issuance under
the Plan. If such stockholder approval is not obtained within twelve (12)&nbsp;months after the date the
first such excess issuances are made, then (i)&nbsp;any unexercised options granted on the basis of such
excess shares shall terminate and cease to be outstanding and (ii)&nbsp;the Corporation shall promptly
refund to the Optionees and the Participants the exercise price paid for any excess shares issued
under the Plan and held in escrow, together with interest (at the applicable Short Term Federal
Rate) for the period the shares were held in escrow, and such shares shall thereupon be
automatically cancelled and cease to be outstanding.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5 USE OF PROCEEDS
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any cash proceeds received by the Corporation from the sale of shares of Common Stock under
the Plan shall be used for general corporate purposes.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.6 REGULATORY APPROVALS
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. The implementation of the Plan, the granting of any stock option under the Plan and the
issuance of any shares of Common Stock upon the exercise of any granted option shall be subject to
the Corporation&#146;s procurement of all approvals and permits required by regulatory authorities
having jurisdiction over the Plan, the stock options granted under it and the shares of Common
Stock issued pursuant to it.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. No shares of Common Stock or other assets shall be issued or delivered under the Plan
unless and until there shall have been compliance with all applicable requirements of Federal and
state securities laws, including the filing and effectiveness of the Form S-8 registration
statement for the shares of Common Stock issuable under the Plan, and all applicable listing
requirements of any stock exchange (or the Nasdaq National Market, if applicable) on which Common
Stock is then listed for trading.
</DIV>


<P align="center" style="font-size: 10pt">22
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.7 NO EMPLOYMENT/SERVICE RIGHTS
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nothing in the Plan shall confer upon the Optionee or the Participant any right to continue in
Service for any period of specific duration or interfere with or otherwise restrict in any way the
rights of the Corporation (or any Parent or Subsidiary employing or retaining such person) or of
the Optionee or the Participant, which rights are hereby expressly reserved by each, to terminate
such person&#146;s Service at any time for any reason, with or without cause.
</DIV>


<P align="center" style="font-size: 10pt">23
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt">APPENDIX
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following definitions shall be in effect under the Plan:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. AUTOMATIC OPTION GRANT PROGRAM shall mean the automatic option grant program in effect
under Article&nbsp;Four of the Plan.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. BOARD shall mean the Corporation&#146;s Board of Directors.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. CHANGE IN CONTROL shall mean a change in ownership or control of the Corporation effected
through either of the following transactions:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;the acquisition, directly or indirectly by any person or related group of persons (other
than the Corporation or a person that directly or indirectly controls, is controlled by, or is
under common control with, the Corporation), of beneficial ownership (within the meaning of Rule
13d-3 of the 1934 Act) of securities possessing more than fifty percent (50%) of the total combined
voting power of the Corporation&#146;s outstanding securities pursuant to a tender or exchange offer
made directly to the Corporation&#146;s stockholders, or
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;a change in the composition of the Board over a period of thirty-six (36)&nbsp;consecutive
months or less such that a majority of the Board members ceases, by reason of one or more contested
elections for Board membership, to be comprised of individuals who either (A)&nbsp;have been Board
members continuously since the beginning of such period or (B)&nbsp;have been elected or nominated for
election as Board members during such period by at least a majority of the Board members described
in clause (A)&nbsp;who were still in office at the time the Board approved such election or nomination.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. CODE shall mean the Internal Revenue Code of 1986, as amended.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. COMMON STOCK shall mean the Corporation&#146;s common stock.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F. CORPORATE TRANSACTION shall mean either of the following stockholder- approved transactions
to which the Corporation is a party:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&#096;a merger or consolidation in which securities possessing more than fifty percent (50%) of
the total combined voting power of the Corporation&#146;s outstanding securities are transferred to a
person or persons different from the persons holding those securities immediately prior to such
transaction, or
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;the sale, transfer or other disposition of all or substantially all of the Corporation&#146;s
assets in complete liquidation or dissolution of the Corporation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G. CORPORATION shall mean Quiksilver, Inc., a Delaware corporation, and any corporate
successor to all or substantially all of the assets or voting stock of Quiksilver, Inc. which shall
by appropriate action adopt the Plan.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;H. DIRECTOR FEE OPTION GRANT PROGRAM shall mean the special stock option grant in effect for
non-employee Board members under Article&nbsp;Five of the Plan.
</DIV>


<P align="center" style="font-size: 10pt">24
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I. DISCRETIONARY OPTION GRANT PROGRAM shall mean the discretionary option grant program in
effect under the Plan.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;J. ELIGIBLE DIRECTOR shall mean a non-employee Board member eligible to participate in the
Automatic Option Grant Program in accordance with the eligibility provisions of Articles One and
Four.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;K. EMPLOYEE shall mean an individual who is in the employ of the Corporation (or any Parent or
Subsidiary), subject to the control and direction of the employer entity as to both the work to be
performed and the manner and method of performance.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;L. EXERCISE DATE shall mean the date on which the Corporation shall have received written
notice of the option exercise.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;M. FAIR MARKET VALUE per share of Common Stock on any relevant date shall be determined in
accordance with the following provisions:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;If the Common Stock is at the time traded on the Nasdaq National Market, then the Fair
Market Value shall be the closing selling price per share of Common Stock on the date in question,
as such price is reported by the National Association of Securities Dealers on the Nasdaq National
Market. If there is no closing selling price for the Common Stock on the date in question, then the
Fair Market Value shall be the closing selling price on the last preceding date for which such
quotation exists.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;If the Common Stock is at the time listed on any Stock Exchange, then the Fair Market
Value shall be the closing selling price per share of Common Stock on the date in question on the
Stock Exchange determined by the Plan Administrator to be the primary market for the Common Stock,
as such price is officially quoted in the composite tape of transactions on such exchange. If there
is no closing selling price for the Common Stock on the date in question, then the Fair Market
Value shall be the closing selling price on the last preceding date for which such quotation
exists.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;N. HOSTILE TAKE-OVER shall mean the acquisition, directly or indirectly, by any person or
related group of persons (other than the Corporation or a person that directly or indirectly
controls, is controlled by, or is under common control with, the Corporation) of beneficial
ownership (within the meaning of Rule&nbsp;13d-3 of the 1934 Act) of securities possessing more than
fifty percent (50%) of the total combined voting power of the Corporation&#146;s outstanding securities
pursuant to a tender or exchange offer made directly to the Corporation&#146;s stockholders which the
Board does not recommend such stockholders to accept.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;O. INCENTIVE OPTION shall mean an option which satisfies the requirements of Code Section&nbsp;422.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;P. INVOLUNTARY TERMINATION shall mean the termination of the Service of any individual which
occurs by reason of:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;such individual&#146;s involuntary dismissal or discharge by the Corporation for reasons other
than Misconduct, or
</DIV>

<P align="center" style="font-size: 10pt">25
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;such individual&#146;s voluntary resignation following (A)&nbsp;a change in his or her position
with the Corporation which materially reduces his or her duties and responsibilities or the level
of management to which he or she reports, (B)&nbsp;a reduction in his or her level of compensation
(including base salary, fringe benefits and target bonus under any corporate-performance based
bonus or incentive programs) by more than twenty percent (20%) or (C)&nbsp;a relocation of such
individual&#146;s place of employment by more than fifty (50)&nbsp;miles, provided and only if such change,
reduction or relocation is effected by the Corporation without the individual&#146;s consent.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Q. MISCONDUCT shall mean the commission of any act of fraud, embezzlement or dishonesty by the
Optionee or Participant, any unauthorized use or disclosure by such person of confidential
information or trade secrets of the Corporation (or any Parent or Subsidiary), or any other
intentional misconduct by such person adversely affecting the business or affairs of the
Corporation (or any Parent or Subsidiary) in a material manner. The foregoing definition shall not
be deemed to be inclusive of all the acts or omissions which the Corporation (or any Parent or
Subsidiary) may consider as grounds for the dismissal or discharge of any Optionee, Participant or
other person in the Service of the Corporation (or any Parent or Subsidiary).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;R. 1934 ACT shall mean the Securities Exchange Act of 1934, as amended.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;S. NON-STATUTORY OPTION shall mean an option not intended to satisfy the requirements of Code
Section&nbsp;422.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;T. OPTIONEE shall mean any person to whom an option is granted under the Discretionary Option
Grant, Salary Investment Option Grant, Automatic Option Grant or Director Fee Option Grant Program.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;U. PARENT shall mean any corporation (other than the Corporation) in an unbroken chain of
corporations ending with the Corporation, provided each corporation in the unbroken chain (other
than the Corporation) owns, at the time of the determination, stock possessing fifty percent (50%)
or more of the total combined voting power of all classes of stock in one of the other corporations
in such chain.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;V. PERMANENT DISABILITY OR PERMANENTLY DISABLED shall mean the inability of the Optionee or
the Participant to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment expected to result in death or to be of continuous
duration of twelve (12)&nbsp;months or more. However, solely for purposes of the Automatic Option Grant
and Director Fee Option Grant Programs, Permanent Disability or Permanently Disabled shall mean the
inability of the non-employee Board member to perform his or her usual duties as a Board member by
reason of any medically determinable physical or mental impairment expected to result in death or
to be of continuous duration of twelve (12)&nbsp;months or more.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;W. PLAN shall mean the Corporation&#146;s 2000 Stock Incentive Plan, as set forth in this document.
</DIV>


<P align="center" style="font-size: 10pt">26
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;X. PLAN ADMINISTRATOR shall mean the particular entity, whether the Primary Committee, the
Board or the Secondary Committee, which is authorized to administer the Discretionary Option Grant
Program with respect to one or more classes of eligible persons, to the extent such entity is
carrying out its administrative functions under those programs with respect to the persons under
its jurisdiction.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Y. PLAN EFFECTIVE DATE shall mean March&nbsp;31, 2000.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Z. PREDECESSOR PLANS shall mean the Corporation&#146;s (i)&nbsp;1996 Stock Option Plan, (ii)&nbsp;the 1998
Nonemployee Directors&#146; Stock Option Plan, (iii)&nbsp;the 1995 Nonemployee Directors&#146; Stock Option Plan
and (iv)&nbsp;the 1992 Nonemployee Directors&#146; Stock Option Plan, as each of those plans is in effect
immediately prior to the Plan Effective Date hereunder.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;AA. PRIMARY COMMITTEE shall mean the committee of two (2)&nbsp;or more non- employee Board members
appointed by the Board to administer the Discretionary Option Grant Program with respect to Section
16 Insiders and to administer the Salary Investment Option Grant Program solely with respect to the
selection of the eligible individuals who may participate in such program.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BB. SALARY INVESTMENT OPTION GRANT PROGRAM shall mean the salary investment option grant
program in effect under Article&nbsp;Three of the Plan.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CC. SECONDARY COMMITTEE shall mean a committee of one or more Board members appointed by the
Board to administer the Discretionary Option Grant Program with respect to eligible persons other
than Section&nbsp;16 Insiders.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DD. SECTION 16 INSIDER shall mean an officer or director of the Corporation subject to the
short-swing profit liabilities of Section&nbsp;16 of the 1934 Act.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EE. SERVICE shall mean the performance of services for the Corporation (or any Parent or
Subsidiary) by a person in the capacity of an Employee, a non-employee member of the board of
directors or a consultant or independent advisor, except to the extent otherwise specifically
provided in the documents evidencing the option grant.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FF. STOCK EXCHANGE shall mean either the American Stock Exchange or the New York Stock
Exchange.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;GG. SUBSIDIARY shall mean any corporation (other than the Corporation) in an unbroken chain of
corporations beginning with the Corporation, provided each corporation (other than the last
corporation) in the unbroken chain owns, at the time of the determination, stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;HH. TAKE-OVER PRICE shall mean the greater of (i)&nbsp;the Fair Market Value per share of Common
Stock on the date the option is surrendered to the Corporation in connection with a Hostile
Take-Over or (ii)&nbsp;the highest reported price per share of Common Stock paid by the tender offeror
in effecting such Hostile Take-Over. However, if the
</DIV>




<P align="center" style="font-size: 10pt">27
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">surrendered option is an Incentive Option, the Take-Over Price shall not exceed the clause (i)
price per share.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;II. 10% STOCKHOLDER shall mean the owner of stock (as determined under Code Section&nbsp;424(d))
possessing more than ten percent (10%) of the total combined voting power of all classes of stock
of the Corporation (or any Parent or Subsidiary).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JJ. WITHHOLDING TAXES shall mean the Federal, state and local income and employment
withholding taxes to which the holder of Non-Statutory Options may become subject in connection
with the exercise of those options.
</DIV>



<P align="center" style="font-size: 10pt">28
</DIV>


</BODY>
</HTML>
</TEXT>
</DOCUMENT>
