DIGI INTERNATIONAL INC
STOCK OPTION PLAN
<DOCUMENT>
<TYPE>EX-10.(A)
<SEQUENCE>2
<FILENAME>c99925exv10wxay.txt
<DESCRIPTION>STOCK OPTION PLAN
<TEXT>
<PAGE>

                                                                   EXHIBIT 10(a)

                             DIGI INTERNATIONAL INC.

                                STOCK OPTION PLAN
                             AS AMENDED AND RESTATED
                            AS OF SEPTEMBER 28, 2005

1. Purpose of Plan. The purpose of this Digi International Inc. Stock Option
Plan (the "Plan"), is to promote the interests of Digi International Inc., a
Delaware corporation (the "Company"), and its stockholders by providing key
personnel of the Company and its subsidiaries with an opportunity to acquire a
proprietary interest in the Company and thereby develop a stronger incentive to
put forth maximum effort for the continued success and growth of the Company and
its subsidiaries. In addition, the opportunity to acquire a proprietary interest
in the Company will aid in attracting and retaining key personnel of outstanding
ability.

2. Administration of Plan. This Plan shall be administered by a committee of two
or more directors (the "Committee") appointed by the Company's board of
directors (the "Board"). No person shall serve as a member of the Committee
unless such person shall be a "Non-Employee Director" as that term is defined in
Rule 16b-3(a)(3)(i), promulgated under the Securities Exchange Act of 1934, as
amended (the "Act"), or any successor statute or regulation comprehending the
same subject matter. A majority of the members of the Committee shall constitute
a quorum for any meeting of the Committee, and the acts of a majority of the
members present at any meeting at which a quorum is present or the acts
unanimously approved in writing by all members of the Committee shall be the
acts of the Committee. Subject to the provisions of this Plan, the Committee may
from time to time adopt such rules for the administration of this Plan as it
deems appropriate. The decision of the Committee on any matter affecting this
Plan or the rights and obligations arising under this Plan or any option granted
hereunder, shall be final, conclusive and binding upon all persons, including
without limitation the Company, stockholders, employees and optionees. To the
full extent permitted by law, (i) no member of the Committee or the CEO Stock
Option Committee (as defined in this paragraph 2) shall be liable for any action
or determination taken or made in good faith with respect to this Plan or any
option granted hereunder and (ii) the members of the Committee and the CEO Stock
Option Committee shall be entitled to indemnification by the Company against and
from any loss incurred by such member or person by reason of any such actions
and determinations. The Committee may delegate all or any part of its authority
under this Plan to a one person committee consisting of the Chief Executive
Officer of the Company as its sole member (the "CEO Stock Option Committee") for
purposes of granting and administering awards granted to persons other than
persons who are then subject to the reporting requirements of Section 16 of the
Exchange Act ("Section 16 Individuals").

3. Shares Subject to Plan. The shares that may be made subject to options
granted under this Plan shall be authorized and unissued shares of common stock
(the "Common Shares") of the Company, $.01 par value, or Common Shares held in
treasury, and they shall not exceed 4,129,400 in the aggregate, except that, if
any option lapses or terminates for any reason before such option has been
completely exercised, the Common Shares

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covered by the unexercised portion of such option may again be made subject to
options granted under this Plan. Appropriate adjustments in the number of shares
and in the purchase price per share may be made by the Committee in its sole
discretion to give effect to adjustments made in the number of outstanding
Common Shares of the Company through a merger, consolidation, recapitalization,
reclassification, combination, stock dividend, stock split or other relevant
change, provided that fractional shares shall be rounded to the nearest whole
share.

4. Eligible Participants. Options may be granted under this Plan to any key
employee of the Company or any subsidiary thereof, including any such employee
who is also an officer or director of the Company or any subsidiary thereof.
Nonstatutory stock options, as defined in paragraph 5(a) hereof, also shall be
granted to directors of the Company who are not employees of the Company or any
subsidiary thereof (the "Outside Directors") in accordance with paragraph 6
hereof and may also be granted to other individuals or entities who are not
"employees" but who provide services to the Company or a parent or subsidiary
thereof in the capacity of an Outside Director, advisor or consultant.
References herein to "employed," "employment" and similar terms (except
"employee") shall include the providing of services in any such capacity or as a
director. The employees and other individuals and entities to whom options may
be granted pursuant to this paragraph 4 are referred to herein as "Eligible
Participants."

5. Terms and Conditions of Employee Options.

            (a) Subject to the terms and conditions of this Plan, the Committee
      may, from time to time prior to December 1, 2006, grant to such Eligible
      Participants as the Committee may determine options to purchase such
      number of Common Shares of the Company on such terms and conditions as the
      Committee may determine; provided, however, that no Eligible Participant
      may be granted options with respect to more than 250,000 Common Shares
      during any calendar year. In determining the Eligible Participants to whom
      options shall be granted and the number of Common Shares to be covered by
      each option, the Committee may take into account the nature of the
      services rendered by the respective Eligible Participants, their present
      and potential contributions to the success of the Company, and such other
      factors as the Committee in its sole discretion shall deem relevant. The
      date and time of approval by the Committee of the granting of an option
      shall be considered the date and the time of the grant of such option. The
      Committee in its sole discretion may designate whether an option granted
      to an employee is to be considered an "incentive stock option" (as that
      term is defined in Section 422 of the Internal Revenue Code of 1986, as
      amended, or any amendment thereto (the "Code")) or a nonstatutory stock
      option (an option granted under this Plan that is not intended to be an
      "incentive stock option"). The Committee may grant both incentive stock
      options and nonstatutory stock options to the same employee. However, if
      an incentive stock option and a nonstatutory stock option are awarded
      simultaneously, such options shall be deemed to have been awarded in
      separate grants, shall be clearly identified, and in no event shall the
      exercise of one such option affect the right to exercise the other. To the
      extent that the aggregate Fair Market Value (as defined in paragraph 5(c))
      of Common Shares with respect to which incentive stock

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<PAGE>

      options (determined without regard to this sentence) are exercisable for
      the first time by any individual during any calendar year (under all plans
      of the Company and its parent and subsidiary corporations) exceeds
      $100,000, such options shall be treated as nonstatutory stock options.

            (b) The purchase price of each Common Share subject to an option
      granted pursuant to this paragraph 5 shall be fixed by the Committee. For
      nonstatutory stock options, such purchase price may be set at not less
      than 50% of the Fair Market Value (as defined below) of a Common Share on
      the date of grant. For incentive stock options, such purchase price shall
      be no less than 100% of the Fair Market Value of a Common Share on the
      date of grant, provided that if such incentive stock option is granted to
      an employee who owns, or is deemed under Section 424(d) of the Code to
      own, at the time such option is granted, stock of the Company (or of any
      parent or subsidiary of the Company) possessing more than 10% of the total
      combined voting power of all classes of stock therein (a "10%
      Stockholder"), such purchase price shall be no less than 110% of the Fair
      Market Value of a Common Share on the date of grant.

            (c) For purposes of this Plan, the "Fair Market Value" of a Common
      Share at a specified date shall, unless otherwise expressly provided in
      this Plan, mean the closing sale price of a Common Share on the date
      immediately preceding such date or, if no sale of such shares shall have
      occurred on that date, on the next preceding day on which a sale of such
      shares occurred, on the Composite Tape for New York Stock Exchange listed
      shares or, if such shares are not quoted on the Composite Tape for New
      York Stock Exchange listed shares, on the principal United States
      securities exchange registered under the Act, on which the shares are
      listed, or, if such shares are not listed on any such exchange, on the
      Nasdaq Stock Market or any similar system then in use or, if such shares
      are not included on the Nasdaq Stock Market or any similar system then in
      use, the mean between the closing "bid" and the closing "asked" quotation
      of such a share on the date immediately preceding the date as of which
      such Fair Market Value is being determined, or, if no closing bid or asked
      quotation is made on that date, on the next preceding day on which a
      quotation is made, on an NASD System or any similar system then in use,
      provided that if the shares in question are not quoted on any such system,
      Fair Market Value shall be what the Committee determines in good faith to
      be 100% of the fair market value of such a share as of the date in
      question. Notwithstanding anything stated in this paragraph, if the
      applicable securities exchange or system has closed for the day by the
      time the determination is being made, all references in this paragraph to
      the date immediately preceding the date in question shall be deemed to be
      references to the date in question.

            (d) Each option agreement provided for in paragraph 14 hereof shall
      specify when each option granted under this Plan shall become exercisable.

            (e) Each option granted pursuant to this paragraph 5 and all rights
      to purchase shares thereunder shall cease on the earliest of:

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<PAGE>

                  (i) ten years after the date such option is granted (or in the
            case of an incentive stock option granted to a 10% Stockholder, five
            years after the date such option is granted) or on such date prior
            thereto as may be fixed by the Committee on or before the date such
            option is granted;

                  (ii) the expiration of the period after the termination of the
            optionee's employment within which the option is exercisable as
            specified in paragraph 8(b) or 8(c), whichever is applicable; or

                  (iii) the date, if any, fixed for cancellation pursuant to
            paragraph 9 of this Plan.

In no event shall any option be exercisable at any time after its original
expiration date. When an option is no longer exercisable, it shall be deemed to
have lapsed or terminated and will no longer be outstanding.

6. Terms and Conditions of Outside Director Options.

            (a) Subject to the terms and conditions of this Plan, the Committee
      shall grant options to each Outside Director who is not on the date such
      option would be granted the beneficial owner (as defined in Rule 13d-3
      under the Act) of more than 5% of the outstanding Common Shares, on the
      terms and conditions set forth in this paragraph 6. During the term of
      this Plan and provided that sufficient Common Shares are available
      pursuant to paragraph 3:

                  (i) each person who is elected to be an Outside Director and
            who was not at any time previously a director of the Company shall
            be granted a nonstatutory stock option. The date such person is
            elected to be an Outside Director of the Company shall be the date
            of grant for such options granted pursuant to this subparagraph
            6(a)(i). The number of Common Shares covered by each such option
            shall be 7,500;

                  (ii) each person who is an Outside Director at the conclusion
            of an Annual Meeting of Stockholders shall be granted a nonstatutory
            stock option on the date of such Annual Meeting of Stockholders. The
            date of such Annual Meeting of Stockholders shall also be the date
            of grant for options granted pursuant to this subparagraph 6(a)(ii).
            The number of Common Shares covered by each such option shall be
            9,500;

                  (iii) each person who is elected to be an Outside Director
            between Annual Meetings of Stockholders shall be granted a
            nonstatutory stock option. The date such person is elected to be an
            Outside Director of the Company by the Board shall be the date of
            grant for such options granted pursuant to this subparagraph
            6(a)(iii). The number of Common Shares covered by each such option
            shall be 9,500 multiplied by a fraction, the numerator of which
            shall be 12 minus the number of whole 30-day months that have
            elapsed from the date of the most recent Annual Meeting

                                       4
<PAGE>

            of Stockholders to the date such person is elected to be an Outside
            Director, and the denominator of which shall be 12;

                  (iv) each person who is an Outside Director at the conclusion
            of an Annual Meeting of Stockholders may elect in writing to be
            granted a nonstatutory stock option on the date of such Annual
            Meeting of Stockholders in lieu of all cash compensation to which
            such Outside Director would be entitled for the Board year of the
            Company commencing with such Annual Meeting of Stockholders. The
            date of such Annual Meeting of Stockholders shall also be the date
            of grant for options granted pursuant to this subparagraph 6(a)(iv).
            The number of Common Shares covered by each such option shall be
            3,500. Any such election by an Outside Director shall be subject to
            prior approval by the Committee; and

                  (v) each person who is elected to be an Outside Director
            between Annual Meetings of Stockholders may elect in writing to be
            granted a nonstatutory stock option in lieu of all cash compensation
            to which such Outside Director would otherwise be entitled for the
            period commencing with the date such person is elected to be an
            Outside Director of the Company by the Board and ending on the date
            of the next Annual Meeting of Stockholders. The date such person is
            elected to be an Outside Director of the Company by the Board shall
            be the date of grant for such options granted pursuant to this
            subparagraph 6(a)(v). The number of Common Shares covered by each
            such option shall be 3,500 multiplied by a fraction, the numerator
            of which shall be 12 minus the number of whole 30-day months that
            have elapsed from the date of the most recent Annual Meeting of
            Stockholders to the date such person is elected to be an Outside
            Director, and the denominator of which shall be 12. Such election by
            an Outside Director shall be subject to prior approval by the
            Committee.

            (b) The purchase price of each Common Share subject to an option
      granted to an Outside Director pursuant to this paragraph 6 shall be the
      Fair Market Value of a Common Share on the date of grant.

            (c)(i) Subject to the provisions of paragraphs 6(d) and 6(e) hereof,
      (x) options granted to Outside Directors pursuant to subparagraph 6(a)(ii)
      and (iv) and (y) options granted to Outside Directors pursuant to
      subparagraph 6(a)(i) if the date of grant of such options is the date of
      an Annual Meeting of Stockholders shall vest and become exercisable in
      accordance with the following schedule:

<TABLE>
<CAPTION>
   Annual Meeting                       Cumulative Percentage
  of Stockholders                       Becoming Exercisable
--------------------                    --------------------
<S>                                     <C>
One Year After Grant                             50%
Two Years After Grant                           100%
</TABLE>

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<PAGE>

                  (ii) Subject to the provisions of paragraph 6(d) and 6(e)
            hereof, (x) the options granted to Outside Directors pursuant to
            subparagraphs 6(a)(iii) and (v) and (y) options granted to Outside
            Directors pursuant to subparagraph 6(a)(i) if the date of grant of
            such options is a date other than the date of an Annual Meeting of
            Stockholders shall vest and become exercisable in accordance with
            the following schedule:

<TABLE>
<CAPTION>
 Anniversary of the                    Cumulative Percentage
   Date of Grant                       Becoming Exercisable
--------------------                   --------------------
<S>                                    <C>
One Year After Grant                             50%
Two Years After Grant                           100%
</TABLE>

            (d) Notwithstanding the vesting schedules set forth in paragraph
      6(c) hereof, an option held by an Outside Director shall vest and become
      immediately exercisable upon the latest of (i) the date on which such
      Outside Director attains 62 years of age, (ii) the date on which such
      Outside Director has completed five years of Service (as hereinafter
      defined) and (iii) the first anniversary of the date of grant of such
      option or, if applicable, the Annual Meeting of Stockholders next
      succeeding the Annual Meeting at which such option was granted. Any option
      granted to an Outside Director on or after the first accelerated vesting
      date for such Outside Director shall automatically vest on the Annual
      Meeting of Stockholders next succeeding the Annual Meeting at which such
      option was granted. As used herein, "Service" shall mean service to the
      Company or any subsidiary thereof in the capacity of any advisor,
      consultant, employee, officer or director, and Service as a director from
      an Annual Meeting of Stockholders to the next succeeding Annual Meeting
      shall constitute a year of Service, notwithstanding that such period may
      actually be more or less than one year.

            (e) Each option granted to an Outside Director pursuant to this
      paragraph 6 and all rights to purchase shares thereunder shall terminate
      on the earliest of:

                  (i) ten years after the date such option is granted;

                  (ii) the expiration of the period specified in paragraph 8(b)
            or 8(c), whichever is applicable, after an Outside Director ceases
            to be a director of the Company; or

                  (iii) the date, if any, fixed for cancellation pursuant to
            paragraph 9 of this Plan.

In no event shall such option be exercisable at any time after its original
expiration date. When an option is no longer exercisable, it shall be deemed to
have lapsed or terminated and will no longer be outstanding.

                                       6
<PAGE>

            (f) The provisions of this Section 6 are not intended to be
      exclusive; the Committee, in its discretion, may grant additional Options
      to an Outside Director.

7. Manner of Exercising Options. A person entitled to exercise an option granted
under this Plan may, subject to its terms and conditions and the terms and
conditions of this Plan, exercise it in whole at any time, or in part from time
to time, by delivery to the Company at its principal executive office, to the
attention of its President, of written notice of exercise, specifying the number
of shares with respect to which the option is being exercised, accompanied by
payment in full of the purchase price of the shares to be purchased at the time.
The purchase price of each share on the exercise of any option shall be paid in
full in cash (including check, bank draft or money order) at the time of
exercise or, at the discretion of the holder of the option, by delivery to the
Company of unencumbered Common Shares having an aggregate Fair Market Value on
the date of exercise equal to the purchase price, or by a combination of cash
and such unencumbered Common Shares. Provided, however, that a person exercising
a stock option shall not be permitted to pay any portion of the purchase price
with stock if, in the opinion of the Committee, payment in such manner could
have adverse financial accounting consequences for the Company. No shares shall
be issued until full payment therefor has been made, and the granting of an
option to an individual shall give such individual no rights as a stockholder
except as to shares issued to such individual.

8. Transferability and Termination of Options.

            (a) During the lifetime of an optionee, only such optionee or his or
      her guardian or legal representative may exercise options granted under
      this Plan, and no option granted under this Plan shall be assignable or
      transferable by the optionee otherwise than by will or the laws of descent
      and distribution or pursuant to a domestic relations order as defined in
      the Code or Title I of the Employee Retirement Income Security Act
      ("ERISA"), or the rules thereunder; provided, however, that any optionee
      may transfer a nonstatutory stock option granted under this Plan to a
      member or members of his or her immediate family (i.e., his or her
      children, grandchildren and spouse) or to one or more trusts for the
      benefit of such family members or partnerships in which such family
      members are the only partners, if (i) the option agreement with respect to
      such options, which must be approved by the Committee, expressly so
      provides either at the time of initial grant or by amendment to an
      outstanding option agreement and (ii) the optionee does not receive any
      consideration for the transfer. Any options held by any such transferee
      shall continue to be subject to the same terms and conditions that were
      applicable to such options immediately prior to their transfer and may be
      exercised by such transferee as and to the extent that such option has
      become exercisable and has not terminated in accordance with the
      provisions of the Plan and the applicable option agreement. For purposes
      of any provision of this Plan relating to notice to an optionee or to
      vesting or termination of an option upon the death, disability or
      termination of employment of an optionee, the references to "optionee"
      shall mean the original grantee of an option and not any transferee.

                                       7
<PAGE>

            (b) During the lifetime of an optionee, an option may be exercised
      only while the optionee is employed by the Company or a parent or
      subsidiary thereof, and only if such optionee has been continuously so
      employed since the date the option was granted, except that:

                  (i) unless otherwise provided in a stock option agreement, an
            option granted to an optionee who is not an Outside Director shall
            continue to be exercisable for three months after termination of
            such optionee's employment but, unless otherwise provided in a stock
            option agreement, only to the extent that the option was exercisable
            immediately prior to such optionee's termination of employment, and
            unless otherwise provided in a stock option agreement, an option
            granted to an optionee who is an Outside Director shall continue to
            be exercisable after such Outside Director ceases to be a director
            of the Company but, unless otherwise provided in a stock option
            agreement, only to the extent that the option was exercisable
            immediately prior to such Outside Director's ceasing to be a
            director;

                  (ii) in the case of an optionee who is disabled (within the
            meaning of Section 22(e)(3) of the Code) while employed, the option
            granted to such optionee may be exercised within one year after
            termination of such optionee's employment; and

                  (iii) as to any optionee whose termination occurs following a
            declaration pursuant to paragraph 9 of this Plan, the option granted
            to such optionee may be exercised at any time permitted by such
            declaration.

            (c) An option may be exercised after the death of the optionee, but
      only within one year after the death of such optionee.

            (d) In the event of the disability (within the meaning of Section
      22(e)(3) of the Code) or death of an optionee, any option granted to such
      optionee that was not previously exercisable shall become immediately
      exercisable in full if the disabled or deceased optionee shall have been
      continuously employed by the Company or a parent or subsidiary thereof
      between the date such option was granted and the date of such disability,
      or, in the event of death, a date not more than three months prior to such
      death.

9. Dissolution, Liquidation, Merger. In the event of (a) a proposed merger or
consolidation of the Company with or into any other corporation, regardless of
whether the Company is the surviving corporation, unless appropriate provision
shall have been made for the protection of the outstanding options granted under
this Plan by the substitution, in lieu of such options, of options to purchase
appropriate voting common stock (the "Survivor's Stock") of the corporation
surviving any such merger or consolidation or, if appropriate, the parent
corporation of the Company or such surviving corporation, or, alternatively, by
the delivery of a number of shares of the Survivor's Stock which has a Fair
Market Value as of the effective date of such merger or consolidation equal to
the product of (i) the excess of (x) the Event Proceeds per Common Share (as
hereinafter

                                       8
<PAGE>

defined) covered by the option as of such effective date, over (y) the option
price per Common Share, times (ii) the number of Common Shares covered by such
option, or (b) the proposed dissolution or liquidation of the Company (such
merger, consolidation, dissolution or liquidation being herein called an
"Event"), the Committee shall declare, at least ten days prior to the actual
effective date of an Event, and provide written notice to each optionee of the
declaration, that each outstanding option, whether or not then exercisable,
shall be cancelled at the time of, or immediately prior to the occurrence of,
the Event (unless it shall have been exercised prior to the occurrence of the
Event) in exchange for payment to the holder of each cancelled option, within
ten days after the Event, of cash equal to the amount (if any), for each Common
Share covered by the cancelled option, by which the Event Proceeds per Common
Share (as hereinafter defined) exceeds the exercise price per Common Share
covered by such option. At the time of the declaration provided for in the
immediately preceding sentence, each option shall immediately become exercisable
in full and each holder of an option shall have the right, during the period
preceding the time of cancellation of the option, to exercise his or her option
as to all or any part of the Common Shares covered thereby. Each outstanding
option granted pursuant to this Plan that shall not have been exercised prior to
the Event shall be cancelled at the time of, or immediately prior to, the Event,
as provided in the declaration, and this Plan shall terminate at the time of
such cancellation, subject to the payment obligations of the Company provided in
this paragraph 9. For purposes of this paragraph, "Event Proceeds per Common
Share" shall mean the cash plus the fair market value, as determined in good
faith by the Committee, of the non-cash consideration to be received per Common
Share by the stockholders of the Company upon the occurrence of the Event.

10. Substitution Options. Options may be granted under this Plan from time to
time in substitution for stock options held by employees of other corporations
who are about to become employees of the Company or a subsidiary of the Company,
or whose employer is about to become a subsidiary of the Company, as the result
of a merger or consolidation of the Company or a subsidiary of the Company with
another corporation, the acquisition by the Company or a subsidiary of the
Company of all or substantially all the assets of another corporation or the
acquisition by the Company or a subsidiary of the Company of at least 50% of the
issued and outstanding stock of another corporation. The terms and conditions of
the substitute options so granted may vary from the terms and conditions set
forth in this Plan to such extent as the Board at the time of the grant may deem
appropriate to conform, in whole or in part, to the provisions of the stock
options in substitution for which they are granted, but with respect to stock
options which are incentive stock options, no such variation shall be permitted
which affects the status of any such substitute option as an incentive stock
option under Section 422A of the Code.

11. Tax Withholding. Delivery of Common Shares upon exercise of any nonstatutory
stock option granted under this Plan shall be subject to any required
withholding taxes. A person exercising such an option may, as a condition
precedent to receiving the Common Shares, be required to pay the Company a cash
amount equal to the amount of any required withholdings. In lieu of all or any
part of such a cash payment, the Committee may, but shall not be required to,
permit the optionee to elect to cover all or any part of the required
withholdings, and to cover any additional withholdings up to the amount needed
to cover such optionee's full FICA and federal, state and local income tax
liability with respect to

                                       9
<PAGE>

income arising from the exercise of the option, through a reduction of the
number of Common Shares delivered to the person exercising the option or through
a subsequent return to the Company of shares delivered to the person exercising
the option.

12. Termination of Employment. Neither the transfer of employment of an optionee
between any combination of the Company, a parent corporation or a subsidiary
thereof, nor a leave of absence granted to such optionee and approved by the
Committee, shall be deemed a termination of employment for purposes of this
Plan. The terms "parent" or "parent corporation" and "subsidiary" as used in
this Plan shall have the meaning ascribed to "parent corporation" and
"subsidiary corporation", respectively, in Sections 424(e) and (f) of the Code.

13. Other Terms and Conditions. The Committee shall have the power, subject to
the other limitations contained herein, to fix any other terms and conditions
for the grant or exercise of any option under this Plan. Nothing contained in
this Plan, or in any option granted pursuant to this Plan, shall confer upon any
optionee any right to continued employment by the Company or any parent or
subsidiary of the Company or limit in any way the right of the Company or any
such parent or subsidiary to terminate an optionee's employment at any time.

14. Option Agreements. All options granted under this Plan shall be evidenced by
a written agreement in such form or forms as the Committee may from time to time
determine, which agreement shall, among other things, designate whether the
options being granted thereunder are nonstatutory stock options or incentive
stock options under Section 422 of the Code.

15. Amendment and Discontinuance of Plan. The Board may at any time amend,
suspend or discontinue this Plan; provided, however, that no amendment by the
Board shall, without further approval of the Stockholders of the Company, if
required in order for the Plan to continue to meet the requirements of the Code:

            (a) change the persons eligible to receive options;

            (b) except as provided in paragraph 3 hereof, increase the total
            number of Common Shares of the Company which may be made subject to
            options granted under this Plan;

            (c) except as provided in paragraph 3 hereof, change the minimum
            purchase price for the exercise of an option; or

            (d) extend the term of this Plan beyond December 1, 2006.

No amendment to this Plan shall, without the consent of the holder of the
option, alter or impair any options previously granted under this Plan.

16. Effective Date. This Plan shall be effective July 26, 1989.

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</TEXT>
</DOCUMENT>
