DREAMWORKS ANIMATION SKG, INC.
                    2004 OMNIBUS INCENTIVE COMPENSATION PLAN

                  SECTION 1. Purpose. The purpose of this DreamWorks Animation
SKG, Inc., 2004 Omnibus Incentive Compensation Plan is to promote the interests
of DreamWorks Animation SKG, Inc., and its stockholders by (a) attracting and
retaining exceptional directors, officers, employees and consultants (including
prospective directors, officers, employees and consultants) of the Company and
its Affiliates and (b) enabling such individuals to participate in the long-term
growth and financial success of the Company.

                  SECTION 2. Definitions. As used in the Plan, the following
terms shall have the meanings set below:

                  "Affiliate" means (a) any entity that, directly or indirectly,
is controlled by, controls or is under common control with, the Company and/or
(b) any entity in which the Company has a significant equity interest, in either
case as determined by the Committee.

                  "Award" means any award that is permitted under Section 6 and
granted under the Plan.

                  "Award Agreement" means any written agreement, contract or
other instrument or document evidencing any Award, which may, but need not,
require execution or acknowledgment by a Participant.

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

                  "Cash Incentive Award" shall have the meaning specified in
Section 6(g).

                  "Change of Control" shall (a) have the meaning set forth in an
Award Agreement or (b) if there is no definition set forth in an Award
Agreement, mean the occurrence of any of the following events, not including any
events occurring prior to or in connection with an initial public offering of
Shares (including the occurrence of such initial public offering):

                  (i) during any period of 14 consecutive calendar months,
         individuals who were directors of the Company on the first day of such
         period (the "Incumbent Directors") cease for any reason to constitute a
         majority of the Board; provided, however, that any individual becoming
         a director subsequent to the first day of such period whose election,
         or nomination for election, by the Company's stockholders was approved
         by a vote of at least a majority of the Incumbent Directors shall be
         considered as though such individual were an Incumbent Director, but
         excluding, for purposes of this proviso, any such individual whose
         initial assumption of office occurs as a result of an actual or
         threatened proxy contest with respect to election or removal of
         directors or other actual or threatened solicitation of proxies or
         consents by or on behalf of a "person" (as such term is used in Section
         13(d) of the Exchange Act) (each, a "Person"), in
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        each case other than the management of the Company, the Board or the
         holders of the Company's Class B common stock, $0.01 par value;

                  (ii) the consummation of (A) a merger, consolidation,
         statutory share exchange or similar form of corporate transaction
         involving (x) the Company or (y) any of its Subsidiaries, but in the
         case of this clause (y) only if Company Voting Securities (as defined
         below) are issued or issuable (each of the events referred to in this
         clause (A) being hereinafter referred to as a "Reorganization") or (B)
         the sale or other disposition of all or substantially all the assets of
         the Company to an entity that is not an Affiliate (a "Sale") if such
         Reorganization or Sale requires the approval of the Company's
         stockholders under the law of the Company's jurisdiction of
         organization (whether such approval is required for such Reorganization
         or Sale or for the issuance of securities of the Company in such
         Reorganization or Sale), unless, immediately following such
         Reorganization or Sale, (1) all or substantially all the individuals
         and entities who were the "beneficial owners" (as such term is defined
         in Rule 13d-3 under the Exchange Act (or a successor rule thereto)) of
         the Shares or other securities eligible to vote for the election of the
         Board ("Company Voting Securities") outstanding immediately prior to
         the consummation of such Reorganization or Sale beneficially own,
         directly or indirectly, more than 50% of the combined voting power of
         the then outstanding voting securities of the corporation resulting
         from such Reorganization or Sale (including, without limitation, a
         corporation that as a result of such transaction owns the Company or
         all or substantially all the Company's assets either directly or
         through one or more subsidiaries) (the "Continuing Corporation") in
         substantially the same proportions as their ownership, immediately
         prior to the consummation of such Reorganization or Sale, of the
         outstanding Company Voting Securities (excluding any outstanding voting
         securities of the Continuing Corporation that such beneficial owners
         hold immediately following the consummation of the Reorganization or
         Sale as a result of their ownership prior to such consummation of
         voting securities of any company or other entity involved in or forming
         part of such Reorganization or Sale other than the Company), (2) no
         Person (excluding (x) any employee benefit plan (or related trust)
         sponsored or maintained by the Continuing Corporation or any
         corporation controlled by the Continuing Corporation, (y) Jeffrey
         Katzenberg and (z) David Geffen) beneficially owns, directly or
         indirectly, 20% or more of the combined voting power of the then
         outstanding voting securities of the Continuing Corporation and (3) at
         least a majority of the members of the board of directors of the
         Continuing Corporation were Incumbent Directors at the time of the
         execution of the definitive agreement providing for such Reorganization
         or Sale or, in the absence of such an agreement, at the time at which
         approval of the Board was obtained for such Reorganization or Sale;

                  (iii) the stockholders of the Company approve a plan of
complete liquidation or dissolution of the Company; or

                  (iv) any Person, corporation or other entity or "group" (as
         used in Section 14(d)(2) of the Exchange Act) (other than (A) the
         Company, (B) any trustee or
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                                                                               3

         other fiduciary holding securities under an employee benefit plan of
         the Company or an Affiliate or (C) any company owned, directly or
         indirectly, by the stockholders of the Company in substantially the
         same proportions as their ownership of the voting power of the Company
         Voting Securities) becomes the beneficial owner, directly or
         indirectly, of securities of the Company representing 20% or more of
         the combined voting power of the Company Voting Securities but only if
         the percentage so owned exceeds the aggregate percentage of the
         combined voting power of the Company Voting Securities then owned,
         directly or indirectly, by Jeffrey Katzenberg and David Geffen;
         provided, however, that for purposes of this subparagraph (iv), the
         following acquisitions shall not constitute a Change of Control: (x)
         any acquisition directly from the Company or (y) any acquisition by any
         employee benefit plan (or related trust) sponsored or maintained by the
         Company or an Affiliate.

                  "Code" means the Internal Revenue Code of 1986, as amended
from time to time, and the regulations promulgated thereunder.

                  "Committee" means the compensation committee of the Board, or
such other committee of the Board as may be designated by the Board to
administer the Plan.

                  "Company" means DreamWorks Animation SKG, Inc., a corporation
organized under the laws of Delaware, together with any successor thereto.

                  "Deferred Share Unit" means a deferred share unit Award that
represents an unfunded and unsecured promise to deliver Shares in accordance
with the terms of the applicable Award Agreement.

                  "Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor statute thereto.

                  "Exercise Price" means (a) in the case of Options, the price
specified in the applicable Award Agreement as the price-per-Share at which
Shares may be purchased pursuant to such Option or (b) in the case of SARs, the
price specified in the applicable Award Agreement as the reference
price-per-Share used to calculate the amount payable to the Participant.

                  "Fair Market Value" means (a) with respect to any property
other than Shares, the fair market value of such property determined by such
methods or procedures as shall be established from time to time by the Committee
and (b) with respect to the Shares, as of any date, (i) the mean between the
high and low sales prices of the Shares (A) as reported by the NYSE for such
date or (B) if the Shares are listed on a national stock exchange, as reported
on the stock exchange composite tape for securities traded on such stock
exchange for such date or, with respect to each of clauses (A) and (B), if there
were no sales on such date, on the closest preceding date on which there were
sales of Shares or (ii) in the event there shall be no public market for the
Shares on such date, the fair market value of the Shares as determined in good
faith by the Committee.
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                  "Incentive Stock Option" means an option to purchase Shares
from the Company that (a) is granted under Section 6 of the Plan and (b) is
intended to qualify for special Federal income tax treatment pursuant to
Sections 421 and 422 of the Code, as now constituted or subsequently amended, or
pursuant to a successor provision of the Code, and which is so designated in the
applicable Award Agreement.

                  "Independent Director" means a member of the Board who is
neither (a) an employee of the Company nor (b) an employee of any Affiliate, and
who, at the time of acting, is a "Non-Employee Director" under Rule 16b-3.

                  "IRS" means the Internal Revenue Service or any successor
thereto and includes the staff thereof.

                  "Nonqualified Stock Option" means an option to purchase Shares
from the Company that (a) is granted under Section 6 of the Plan and (b) is not
an Incentive Stock Option.

                  "NYSE" means the New York Stock Exchange.

                  "Option" means an Incentive Stock Option or a Nonqualified
Stock Option or both, as the context requires.

                  "Participant" means any director, officer, employee or
consultant (including any prospective director, officer, employee or consultant)
of the Company or its Affiliates who is eligible for an Award under Section 5
and who is selected by the Committee to receive an Award under the Plan or who
receives a Substitute Award pursuant to Section 4(c).

                  "Performance Compensation Award" means any Award designated by
the Committee as a Performance Compensation Award pursuant to Section 6(e) of
the Plan.

                  "Performance Criteria" means the criterion or criteria that
the Committee shall select for purposes of establishing the Performance Goal(s)
for a Performance Period with respect to any Performance Compensation Award
under the Plan.

                  "Performance Formula" means, for a Performance Period, the one
or more objective formulas applied against the relevant Performance Goal to
determine, with regard to the Performance Compensation Award of a particular
Participant, whether all, some portion but less than all, or none of the
Performance Compensation Award has been earned for the Performance Period.

                  "Performance Goal" means, for a Performance Period, the one or
more goals established by the Committee for the Performance Period based upon
the Performance Criteria.

                  "Performance Period" means the one or more periods of time as
the Committee may select over which the attainment of one or more Performance
Goals will
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                                                                               5


be measured for the purpose of determining a Participant's right to and the
payment of a Performance Compensation Award.

                  "Performance Unit" means an Award under Section 6(f) of the
Plan that has a value set by the Committee (or that is determined by reference
to a valuation formula specified by the Committee), which value may be paid to
the Participant by delivery of such property as the Committee shall determine,
including without limitation, cash or Shares, or any combination thereof, upon
achievement of such Performance Goals during the relevant Performance Period as
the Committee shall establish at the time of such Award or thereafter.

                  "Plan" means this DreamWorks Animation, Inc., 2004 Omnibus
Incentive Compensation Plan, as in effect from time to time.

                  "Restricted Share" means a Share delivered under the Plan that
is subject to certain transfer restrictions, forfeiture provisions and/or other
terms and conditions specified herein and in the applicable Award Agreement.

                  "RSU" means a restricted stock unit Award that is designated
as such in the applicable Award Agreement and that represents an unfunded and
unsecured promise to deliver Shares, cash, other securities, other Awards or
other property in accordance with the terms of the applicable Award Agreement.

                  "Rule 16b-3" means Rule 16b-3 as promulgated and interpreted
by the SEC under the Exchange Act or any successor rule or regulation thereto as
in effect from time to time.

                  "SAR" means a stock appreciation right Award that represents
an unfunded and unsecured promise to deliver Shares, cash, other securities,
other Awards or other property equal in value to the excess, if any, of the Fair
Market Value per Share over the Exercise Price per Share of the SAR, subject to
the terms of the applicable Award Agreement.

                  "SEC" means the Securities and Exchange Commission or any
successor thereto and shall include the staff thereof.

                  "Shares" means shares of Class A Common Stock of the Company,
$0.01 par value, or such other securities of the Company (a) into which such
shares shall be changed by reason of a recapitalization, merger, consolidation,
split-up, combination, exchange of shares or other similar transaction or (b) as
may be determined by the Committee pursuant to Section 4(b).

                  "Subsidiary" means any entity in which the Company, directly
or indirectly, possesses fifty percent (50%) or more of the total combined
voting power of all classes of its stock.

                  "Substitute Awards" shall have the meaning specified in
Section 4(c).
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                  "Substituted Options" shall have the meaning specified in
Section 6(c)(v).

                  "Substitution SARs" shall have the meaning specified in
Section 6(c)(v).

                  SECTION 3. Administration. (a) Composition of Committee. The
Plan shall be administered by the Committee, which shall be composed of two or
more directors, all of whom shall be Independent Directors and all of whom shall
(i) qualify as "outside directors" under Section 162(m) of the Code and (ii)
meet the independence requirements of the NYSE; provided, however, that, prior
to the date of the consummation of the initial public offering of Shares, the
Committee shall be composed of one or more members of the Board, as determined
by the Board.

                  (b) Authority of Committee. Subject to the terms of the Plan
and applicable law, and in addition to other express powers and authorizations
conferred on the Committee by the Plan, the Committee shall have sole and
plenary authority to administer the Plan, including, but not limited to, the
authority to (i) designate Participants, (ii) determine the type or types of
Awards to be granted to a Participant, (iii) determine the number of Shares to
be covered by, or with respect to which payments, rights or other matters are to
be calculated in connection with, Awards, (iv) determine the terms and
conditions of any Awards, (v) determine the vesting schedules of Awards and, if
certain performance criteria must be attained in order for an Award to vest or
be settled or paid, establish such performance criteria and certify whether, and
to what extent, such performance criteria have been attained, (vi) determine
whether, to what extent and under what circumstances Awards may be settled or
exercised in cash, Shares, other securities, other Awards or other property, or
canceled, forfeited or suspended and the method or methods by which Awards may
be settled, exercised, canceled, forfeited or suspended, (vii) determine
whether, to what extent and under what circumstances cash, Shares, other
securities, other Awards, other property and other amounts payable with respect
to an Award shall be deferred either automatically or at the election of the
holder thereof or of the Committee, (viii) interpret, administer, reconcile any
inconsistency in, correct any default in and/or supply any omission in, the Plan
and any instrument or agreement relating to, or Award made under, the Plan, (ix)
establish, amend, suspend or waive such rules and regulations and appoint such
agents as it shall deem appropriate for the proper administration of the Plan ,
(x) accelerate the vesting or exercisability of, payment for or lapse of
restrictions on, Awards, (xi) amend an outstanding Award or grant a replacement
Award for an Award previously granted under the Plan if, in its sole discretion,
the Committee determines that (A) the tax consequences of such Award to the
Company or the Participant differ from those consequences that were expected to
occur on the date the Award was granted or (B) clarifications or interpretations
of, or changes to, tax law or regulations permit Awards to be granted that have
more favorable tax consequences than initially anticipated and (xii) make any
other determination and take any other action that the Committee deems necessary
or desirable for the administration of the Plan.

                  (c) Committee Decisions. Unless otherwise expressly provided
in the Plan, all designations, determinations, interpretations and other
decisions under or with respect to the Plan or any Award shall be within the
sole and plenary discretion of the Committee, may be made at any time and shall
be final, conclusive and binding upon all
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                                                                               7


Persons, including the Company, any Affiliate, any Participant, any holder or
beneficiary of any Award and any stockholder.

                  (d) Indemnification. No member of the Board, the Committee or
any employee of the Company (each such person, a "Covered Person") shall be
liable for any action taken or omitted to be taken or any determination made in
good faith with respect to the Plan or any Award hereunder. Each Covered Person
shall be indemnified and held harmless by the Company against and from (i) any
loss, cost, liability or expense (including attorneys' fees) that may be imposed
upon or incurred by such Covered Person in connection with or resulting from any
action, suit or proceeding to which such Covered Person may be a party or in
which such Covered Person may be involved by reason of any action taken or
omitted to be taken under the Plan or any Award Agreement and (ii) any and all
amounts paid by such Covered Person, with the Company's approval, in settlement
thereof, or paid by such Covered Person in satisfaction of any judgment in any
such action, suit or proceeding against such Covered Person; provided that the
Company shall have the right, at its own expense, to assume and defend any such
action, suit or proceeding, and, once the Company gives notice of its intent to
assume the defense, the Company shall have sole control over such defense with
counsel of the Company's choice. The foregoing right of indemnification shall
not be available to a Covered Person to the extent that a court of competent
jurisdiction in a final judgment or other final adjudication, in either case not
subject to further appeal, determines that the acts or omissions of such Covered
Person giving rise to the indemnification claim resulted from such Covered
Person's bad faith, fraud or willful criminal act or omission or that such right
of indemnification is otherwise prohibited by law or by the Company's Restated
Certificate of Incorporation or Restated Bylaws. The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification to
which Covered Persons may be entitled under the Company's Restated Certificate
of Incorporation or Restated Bylaws, as a matter of law, or otherwise, or any
other power that the Company may have to indemnify such persons or hold them
harmless.

                  (e) Delegation of Authority to Senior Officers. The Committee
may delegate, on such terms and conditions as it determines in its sole and
plenary discretion, to one or more senior officers of the Company the authority
to make grants of Awards to officers (other than executive officers), employees
and consultants of the Company and its Affiliates (including any prospective
officer, employee or consultant).

                  (f) Awards to Independent Directors. Notwithstanding anything
to the contrary contained herein, the Board may, in its sole and plenary
discretion, at any time and from time to time, grant Awards to Independent
Directors or administer the Plan with respect to such Awards. In any such case,
the Board shall have all the authority and responsibility granted to the
Committee herein.

                  SECTION 4. Shares Available for Awards. (a) Shares Available.
Subject to adjustment as provided in Section 4(b), (i) the aggregate number of
Shares that may be delivered pursuant to Awards granted under the Plan shall be
15,000,000, of which the maximum number of Shares that may be delivered pursuant
to Incentive Stock Options granted under the Plan shall be 5,000,000 and (ii)
the maximum number of
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Shares with respect to which Awards may be granted to any Participant in any
fiscal year of the Company shall be 2,000,000. If, after the effective date of
the Plan, any Award granted under the Plan is forfeited, or otherwise expires,
terminates or is canceled without the delivery of Shares, then the Shares
covered by such forfeited, expired, terminated or canceled Award shall again
become available to be delivered pursuant to Awards under the Plan. If Shares
issued upon exercise, vesting or settlement of an Award, or Shares owned by a
Participant (which are not subject to any pledge or other security interest and
which have been owned by the Participant for at least six months), are
surrendered or tendered to the Company in payment of the Exercise Price of an
Award or any taxes required to be withheld in respect of an Award, in each case,
in accordance with the terms and conditions of the Plan and any applicable Award
Agreement, such surrendered or tendered Shares shall again become available to
be delivered pursuant to Awards under the Plan; provided, however, that in no
event shall such Shares increase the number of Shares that may be delivered
pursuant to Incentive Stock Options granted under the Plan.

                  (b) Adjustments for Changes in Capitalization and Similar
Events. In the event that the Committee determines that any dividend or other
distribution (whether in the form of cash, Shares, other securities or other
property), recapitalization, stock split, reverse stock split, reorganization,
merger, consolidation, split-up, spin-off, combination, repurchase or exchange
of Shares or other securities of the Company, issuance of warrants or other
rights to purchase Shares or other securities of the Company, or other similar
corporate transaction or event affects the Shares such that an adjustment is
determined by the Committee in its discretion to be appropriate or desirable,
then the Committee shall, (i) in such manner as it may deem equitable or
desirable, adjust any or all of (A) the number of Shares or other securities of
the Company (or number and kind of other securities or property) with respect to
which Awards may be granted, including (1) the aggregate number of Shares that
may be delivered pursuant to Awards granted under the Plan, as provided in
Section 4(a) and (2) the maximum number of Shares or other securities of the
Company (or number and kind of other securities or property) with respect to
which Awards may be granted to any Participant in any fiscal year of the Company
and (B) the terms of any outstanding Award, including (1) the number of Shares
or other securities of the Company (or number and kind of other securities or
property) subject to outstanding Awards or to which outstanding Awards relate
and (2) the Exercise Price with respect to any Award or (ii) if deemed
appropriate or desirable, make provision for a cash payment to the holder of an
outstanding Award in consideration for the cancelation of such Award, including,
in the case of an outstanding Option or SAR, a cash payment to the holder of
such Option or SAR in consideration for the cancelation of such Option or SAR in
an amount equal to the excess, if any, of the Fair Market Value (as of a date
specified by the Committee) of the Shares subject to such Option or SAR over the
aggregate Exercise Price of such Option or SAR (it being understood that, in
such event, any Option or SAR having a per Share Exercise Price equal to, or in
excess of, the Fair Market Value of a Share subject to such Option or SAR may be
canceled and terminated without any payment or consideration therefor).

                  (c) Substitute Awards. Awards may, in the discretion of the
Committee, be granted under the Plan in assumption of, or in substitution for,
outstanding awards previously granted by the Company or any of its Affiliates or
a company acquired by
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the Company or with which the Company combines ("Substitute Awards"). The number
of Shares underlying any Substitute Awards shall be counted against the
aggregate number of Shares available for Awards under the Plan; provided,
however, that Substitute Awards issued in connection with the assumption of, or
in substitution for, outstanding awards previously granted by an entity that is
acquired by the Company or any of its Affiliates through a merger or acquisition
shall not be counted against the aggregate number of Shares available for Awards
under the Plan; provided further, however, that Substitute Awards issued in
connection with the assumption of, or in substitution for, outstanding stock
options intended to qualify for special tax treatment under Sections 421 and 422
of the Code that were previously granted by an entity that is acquired by the
Company or any of its Affiliates through a merger or acquisition shall be
counted against the aggregate number of Shares available for Incentive Stock
Options under the Plan.

                  (d) Sources of Shares Deliverable Under Awards. Any Shares
delivered pursuant to an Award may consist, in whole or in part, of authorized
and unissued Shares or of treasury Shares.

                  SECTION 5. Eligibility. Any director, officer, employee or
consultant (including any prospective director, officer, employee or consultant)
of the Company or any of its Affiliates shall be eligible to be designated a
Participant.

                  SECTION 6. Awards. (a) Types of Awards. Awards may be made
under the Plan in the form of (i) Options, (ii) SARs, (iii) Restricted Shares,
(iv) RSUs, (v) Performance Units, (vi) Cash Incentive Awards, (vii) Deferred
Share Units and (viii) other equity-based or equity-related Awards that the
Committee determines are consistent with the purpose of the Plan and the
interests of the Company. Awards may be granted in tandem with other Awards. No
Incentive Stock Option (other than an Incentive Stock Option that may be assumed
or issued by the Company in connection with a transaction to which Section
424(a) of the Code applies) may be granted to a person who is ineligible to
receive an Incentive Stock Option under the Code.

                  (b) Options. (i) Grant. Subject to the provisions of the Plan,
the Committee shall have sole and plenary authority to determine the
Participants to whom Options shall be granted, the number of Shares to be
covered by each Option, whether the Option will be an Incentive Stock Option or
a Nonqualified Stock Option and the conditions and limitations applicable to the
vesting and exercise of the Option. In the case of Incentive Stock Options, the
terms and conditions of such grants shall be subject to and comply with such
rules as may be prescribed by Section 422 of the Code and any regulations
related thereto, as may be amended from time to time. All Options granted under
the Plan shall be Nonqualified Stock Options unless the applicable Award
Agreement expressly states that the Option is intended to be an Incentive Stock
Option. If an Option is intended to be an Incentive Stock Option, and if for any
reason such Option (or any portion thereof) shall not qualify as an Incentive
Stock Option, then, to the extent of such nonqualification, such Option (or
portion thereof) shall be regarded as a Nonqualified Stock Option appropriately
granted under the Plan, provided that such Option (or portion thereof) otherwise
complies with the Plan's requirements relating to Nonqualified Stock Options.
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                  (ii) Exercise Price. Except as otherwise established by the
Committee at the time an Option is granted and set forth in the applicable Award
Agreement, the Exercise Price of each Share covered by an Option shall be not
less than 100% of the Fair Market Value of such Share (determined as of the date
the Option is granted); provided, however, that (A) except as otherwise
established by the Committee at the time an Option is granted and set forth in
the applicable Award Agreement, the Exercise Price of each Share covered by an
Option that is granted effective as of the Company's initial public offering of
Shares shall be the initial public offering price per Share and (B) in the case
of an Incentive Stock Option granted to an employee who, at the time of the
grant of such Option, owns stock representing more than 10% of the voting power
of all classes of stock of the Company or any Affiliate, the per Share Exercise
Price shall be no less than 110% of the Fair Market Value per Share on the date
of the grant. Options are intended to qualify as "qualified performance-based
compensation" under Section 162(m) of the Code.

                  (iii) Vesting and Exercise. Each Option shall be vested and
exercisable at such times, in such manner and subject to such terms and
conditions as the Committee may, in its sole and plenary discretion, specify in
the applicable Award Agreement or thereafter. Except as otherwise specified by
the Committee in the applicable Award Agreement, an Option may only be exercised
to the extent that it has already vested at the time of exercise. Except as
otherwise specified by the Committee in the Award Agreement, Options shall
become vested and exercisable with respect to one-fourth of the Shares subject
to such Options on each of the first four anniversaries of the date of grant. An
Option shall be deemed to be exercised when written or electronic notice of such
exercise has been given to the Company in accordance with the terms of the Award
by the person entitled to exercise the Award and full payment pursuant to
Section 6(b)(iv) for the Shares with respect to which the Award is exercised has
been received by the Company. Exercise of an Option in any manner shall result
in a decrease in the number of Shares that thereafter may be available for sale
under the Option and, except as expressly set forth in Section 4(c), in the
number of Shares that may be available for purposes of the Plan, by the number
of Shares as to which the Option is exercised. The Committee may impose such
conditions with respect to the exercise of Options, including, without
limitation, any relating to the application of Federal or state securities laws,
as it may deem necessary or advisable.

                  (iv) Payment. (A) No Shares shall be delivered pursuant to any
exercise of an Option until payment in full of the aggregate Exercise Price
therefor is received by the Company, and the Participant has paid to the Company
an amount equal to any Federal, state, local and foreign income and employment
taxes required to be withheld. Such payments may be made in cash (or its
equivalent) or, in the Committee's sole and plenary discretion, (1) by
exchanging Shares owned by the Participant (which are not the subject of any
pledge or other security interest and which have been owned by such Participant
for at least six months) or (2) if there shall be a public market for the Shares
at such time, subject to such rules as may be established by the Committee,
through delivery of irrevocable instructions to a broker to sell the Shares
otherwise deliverable upon the exercise of the Option and to deliver promptly to
the Company an amount equal to the aggregate Exercise Price, or by a combination
of the foregoing;
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provided that the combined value of all cash and cash equivalents and the Fair
Market Value of any such Shares so tendered to the Company as of the date of
such tender is at least equal to such aggregate Exercise Price and the amount of
any Federal, state, local or foreign income or employment taxes required to be
withheld, if applicable.

                  (B) Wherever in the Plan or any Award Agreement a Participant
is permitted to pay the Exercise Price of an Option or taxes relating to the
exercise of an Option by delivering Shares, the Participant may, subject to
procedures satisfactory to the Committee, satisfy such delivery requirement by
presenting proof of beneficial ownership of such Shares, in which case the
Company shall treat the Option as exercised without further payment and shall
withhold such number of Shares from the Shares acquired by the exercise of the
Option.

                  (v) Expiration. Except as otherwise set forth in the
applicable Award Agreement, each Option shall expire immediately, without any
payment, upon the earlier of (A) the tenth anniversary of the date the Option is
granted and (B) 90 days after the date the Participant who is holding the Option
ceases to be a director, officer, employee or consultant of the Company or one
of its Affiliates. In no event may an Option be exercisable after the tenth
anniversary of the date the Option is granted.

                  (vi) Buyout. The Committee may, in its sole and plenary
discretion, at any time buy out for a payment in cash or the delivery of Shares
or other property (including another Award), an Option previously granted, based
on such terms and conditions as the Committee shall establish and communicate to
the holder of the Option at the time that such offer is made. If the Committee
so determines, the consent of the affected Participant shall not be required to
effect such buyout.

                  (c) SARs. (i) Grant. Subject to the provisions of the Plan,
the Committee shall have sole and plenary authority to determine the
Participants to whom SARs shall be granted, the number of Shares to be covered
by each SAR, the Exercise Price thereof and the conditions and limitations
applicable to the exercise thereof. SARs may be granted in tandem with another
Award, in addition to another Award or freestanding and unrelated to another
Award. SARs granted in tandem with, or in addition to, an Award may be granted
either at the same time as the Award or at a later time.

                  (ii) Exercise Price. Except as otherwise established by the
Committee at the time a SAR is granted and set forth in the applicable Award
Agreement, the Exercise Price of each Share covered by a SAR shall be not less
than 100% of the Fair Market Value of such Share (determined as of the date the
SAR is granted). SARs are intended to qualify as "qualified performance-based
compensation" under Section 162(m) of the Code.

                  (iii) Exercise. A SAR shall entitle the Participant to receive
an amount equal to the excess, if any, of the Fair Market Value of a Share on
the date of exercise of the SAR over the Exercise Price thereof. The Committee
shall determine, in its sole and
<PAGE>
                                                                              12


plenary discretion, whether a SAR shall be settled in cash, Shares, other
securities, other Awards, other property or a combination of any of the
foregoing.

                  (iv) Other Terms and Conditions. Subject to the terms of the
Plan and any applicable Award Agreement, the Committee shall determine, at or
after the grant of a SAR, the vesting criteria, term, methods of exercise,
methods and form of settlement and any other terms and conditions of any SAR.
Any such determination by the Committee may be changed by the Committee from
time to time and may govern the exercise of SARs granted or exercised
thereafter. The Committee may impose such conditions or restrictions on the
exercise of any SAR as it shall deem appropriate or desirable.

                  (v) Substitution SARs. Only in the event the Company is not
accounting for equity compensation under Accounting Principles Board Opinion No.
25, "Accounting for Stock Issued to Employees", the Committee shall have the
ability to substitute, without the consent of the affected Participant or any
holder or beneficiary of SARs, SARs settled in Shares (or SARs settled in Shares
or cash in the Committee's discretion) ("Substitution SARs") for outstanding
Nonqualified Stock Options ("Substituted Options"); provided that (A) the
substitution shall not otherwise result in a modification of the terms of any
Substituted Option, (B) the number of Shares underlying the Substitution SARs
shall be the same as the number of Shares underlying the Substituted Options and
(C) the Exercise Price of the Substitution SARs shall be equal to the Exercise
Price of the Substituted Options. If, in the opinion of the Company's auditors,
this provision creates adverse accounting consequences for the Company, it shall
be considered null and void.

                  (d) Restricted Shares and RSUs. (i) Grant. Subject to the
provisions of the Plan, the Committee shall have sole and plenary authority to
determine the Participants to whom Restricted Shares and RSUs shall be granted,
the number of Restricted Shares and RSUs to be granted to each Participant, the
duration of the period during which, and the conditions, if any, under which,
the Restricted Shares and RSUs may vest or may be forfeited to the Company and
the other terms and conditions of such Awards.

                  (ii) Transfer Restrictions. Restricted Shares and RSUs may not
be sold, assigned, transferred, pledged or otherwise encumbered except as
provided in the Plan or as may be provided in the applicable Award Agreement;
provided, however, that the Committee may in its discretion determine that
Restricted Shares and RSUs may be transferred by the Participant. Certificates
issued in respect of Restricted Shares shall be registered in the name of the
Participant and deposited by such Participant, together with a stock power
endorsed in blank, with the Company or such other custodian as may be designated
by the Committee or the Company, and shall be held by the Company or other
custodian, as applicable, until such time as the restrictions applicable to such
Restricted Shares lapse. Upon the lapse of the restrictions applicable to such
Restricted Shares, the Company or other custodian, as applicable, shall deliver
such certificates to the Participant or the Participant's legal representative.
<PAGE>
                                                                              13


                  (iii) Payment/Lapse of Restrictions. Each RSU shall have a
value equal to the Fair Market Value of a Share. RSUs shall be paid in cash,
Shares, other securities, other Awards or other property, as determined in the
sole and plenary discretion of the Committee, upon the lapse of restrictions
applicable thereto, or otherwise in accordance with the applicable Award
Agreement. If a Restricted Share or an RSU is intended to qualify as "qualified
performance-based compensation" under Section 162(m) of the Code, all
requirements set forth in Section 6(e) must be satisfied in order for the
restrictions applicable thereto to lapse.

                  (e) Performance Compensation Awards. (i) General. The
Committee shall have the authority, at the time of grant of any Award, to
designate such Award (other than Options and SARs) as a Performance Compensation
Award in order to qualify such Award as "qualified performance-based
compensation" under Section 162(m) of the Code. Options and SARs granted under
the Plan shall not be included among Awards that are designated as Performance
Compensation Awards under this Section 6(e).

                  (ii) Eligibility. The Committee shall, in its sole discretion,
designate within the first 90 days of a Performance Period (or, if shorter,
within the maximum period allowed under Section 162(m) of the Code) which
Participants will be eligible to receive Performance Compensation Awards in
respect of such Performance Period. However, designation of a Participant
eligible to receive an Award hereunder for a Performance Period shall not in any
manner entitle the Participant to receive payment in respect of any Performance
Compensation Award for such Performance Period. The determination as to whether
or not such Participant becomes entitled to payment in respect of any
Performance Compensation Award shall be decided solely in accordance with the
provisions of this Section 6(e). Moreover, designation of a Participant eligible
to receive an Award hereunder for a particular Performance Period shall not
require designation of such Participant eligible to receive an Award hereunder
in any subsequent Performance Period and designation of one person as a
Participant eligible to receive an Award hereunder shall not require designation
of any other person as a Participant eligible to receive an Award hereunder in
such period or in any other period.

                  (iii) Discretion of Committee with Respect to Performance
Compensation Awards. With regard to a particular Performance Period, the
Committee shall have full discretion to select the length of such Performance
Period, the type(s) of Performance Compensation Awards to be issued, the
Performance Criteria that will be used to establish the Performance Goal(s), the
kind(s) and/or level(s) of the Performance Goals(s) that is (are) to apply to
the Company or any of its Subsidiaries, Affiliates, divisions or operational
units, or any combination of the foregoing, and the Performance Formula. Within
the first 90 days of a Performance Period (or, if shorter, within the maximum
period allowed under Section 162(m) of the Code), the Committee shall, with
regard to the Performance Compensation Awards to be issued for such Performance
Period, exercise its discretion with respect to each of the matters enumerated
in the immediately preceding sentence and record the same in writing.
<PAGE>
                                                                              14


                  (iv) Performance Criteria. Notwithstanding the foregoing, the
Performance Criteria that will be used to establish the Performance Goal(s)
shall be based on the attainment of specific levels of performance of the
Company or any of its Subsidiaries, Affiliates, divisions or operational units,
or any combination of the foregoing, and shall be limited to the following: (A)
net income before or after taxes, (B) earnings before or after taxes (including
earnings before interest, taxes, depreciation and amortization), (C) operating
income, (D) earnings per share, (E) return on shareholders' equity, (F) return
on investment, (G) return on assets, (H) level or amount of acquisitions, (I)
share price, (J) profitability/profit margins, (K) market share, (L) revenues or
sales (based on units and/or dollars), (M) costs, (N) cash flow, (O) working
capital and (P) completion of production or stages of production within
specified time and/or budget parameters. Such performance criteria may be
applied on an absolute basis and/or be relative to one or more peer companies of
the Company or indices or any combination thereof. To the extent required under
Section 162(m) of the Code, the Committee shall, within the first 90 days of the
applicable Performance Period (or, if shorter, within the maximum period allowed
under Section 162(m) of the Code), define in an objective fashion the manner of
calculating the Performance Criteria it selects to use for such Performance
Period.

                  (v) Modification of Performance Goals. The Committee is
authorized at any time during the first 90 days of a Performance Period (or, if
shorter, within the maximum period allowed under Section 162(m) of the Code), or
any time thereafter (but only to the extent the exercise of such authority after
such 90-day period (or such shorter period, if applicable) would not cause the
Performance Compensation Awards granted to any Participant for the Performance
Period to fail to qualify as "qualified performance-based compensation" under
Section 162(m) of the Code), in its sole and plenary discretion, to adjust or
modify the calculation of a Performance Goal for such Performance Period to the
extent permitted under Section 162(m) of the Code (A) in the event of, or in
anticipation of, any unusual or extraordinary corporate item, transaction, event
or development affecting the Company, or any of its Affiliates, Subsidiaries,
divisions or operating units (to the extent applicable to such Performance Goal)
or (B) in recognition of, or in anticipation of, any other unusual or
nonrecurring events affecting the Company or any of its Affiliates,
Subsidiaries, divisions or operating units (to the extent applicable to such
Performance Goal), or the financial statements of the Company or any of its
Affiliates, Subsidiaries, divisions or operating units (to the extent applicable
to such Performance Goal), or of changes in applicable rules, rulings,
regulations or other requirements of any governmental body or securities
exchange, accounting principles, law or business conditions.

                  (vi) Payment of Performance Compensation Awards. (A) Condition
to Receipt of Payment. A Participant must be employed by the Company on the last
day of a Performance Period to be eligible for payment in respect of a
Performance Compensation Award for such Performance Period. Notwithstanding the
foregoing, in the discretion of the Committee, Performance Compensation Awards
may be paid to Participants who have retired or whose employment has terminated
after the beginning of the Performance Period for which a Performance
Compensation Award is made, or to the designee or estate of a Participant who
died prior to the last day of a Performance Period.
<PAGE>
                                                                              15


                  (B) Limitation. A Participant shall be eligible to receive
payments in respect of a Performance Compensation Award only to the extent that
(1) the Performance Goal(s) for such period are achieved and certified by the
Committee in accordance with Section 6(e)(vi)(C) and (2) the Performance Formula
as applied against such Performance Goal(s) determines that all or some portion
of such Participant's Performance Compensation Award has been earned for the
Performance Period.

                  (C) Certification. Following the completion of a Performance
Period, the Committee shall meet to review and certify in writing whether, and
to what extent, the Performance Goals for the Performance Period have been
achieved and, if so, to calculate and certify in writing that amount of the
Performance Compensation Awards earned for the period based upon the Performance
Formula. The Committee shall then determine the actual size of each
Participant's Performance Compensation Award for the Performance Period and, in
so doing, may apply negative discretion as authorized by Section 6(e)(vi)(D).

                  (D) Negative Discretion. In determining the actual size of an
individual Performance Compensation Award for a Performance Period, the
Committee may, in its sole and plenary discretion, reduce or eliminate the
amount of the Award earned in the Performance Period, even if applicable
Performance Goals have been attained.

                  (E) Timing of Award Payments. The Performance Compensation
Awards granted for a Performance Period shall be paid to Participants as soon as
administratively possible following completion of the certifications required by
Section 6(e)(vi)(C), unless the Committee shall determine that any Performance
Compensation Award shall be deferred.

                  (F) Discretion. In no event shall any discretionary authority
granted to the Committee by the Plan be used to (1) grant or provide payment in
respect of Performance Compensation Awards for a Performance Period if the
Performance Goals for such Performance Period have not been attained, (2)
increase a Performance Compensation Award for any Participant at any time after
the first 90 days of the Performance Period (or, if shorter, the maximum period
allowed under Section 162(m)) or (3) increase a Performance Compensation Award
above the maximum amount payable under Sections 4(a) or 6(g) of the Plan.

                  (f) Performance Units. (i) Grant. Subject to the provisions of
the Plan, the Committee shall have sole and plenary authority to determine the
Participants to whom Performance Units shall be granted.

                  (ii) Value of Performance Units. Each Performance Unit shall
have an initial value that is established by the Committee at the time of grant.
The Committee shall set Performance Goals in its discretion which, depending on
the extent to which they are met during a Performance Period, will determine the
number and/or value of Performance Units that will be paid out to the
Participant.
<PAGE>
                                                                              16


                  (iii) Earning of Performance Units. Subject to the provisions
of the Plan, after the applicable Performance Period has ended, the holder of
Performance Units shall be entitled to receive a payout of the number and value
of Performance Units earned by the Participant over the Performance Period, to
be determined by the Committee, in its sole and plenary discretion, as a
function of the extent to which the corresponding Performance Goals have been
achieved.

                  (iv) Form and Timing of Payment of Performance Units. Subject
to the provisions of the Plan, the Committee, in its sole and plenary
discretion, may pay earned Performance Units in the form of cash or in Shares
(or in a combination thereof) that has an aggregate Fair Market Value equal to
the value of the earned Performance Units at the close of the applicable
Performance Period. Such Shares may be granted subject to any restrictions in
the applicable Award Agreement deemed appropriate by the Committee. The
determination of the Committee with respect to the form and timing of payout of
such Awards shall be set forth in the applicable Award Agreement. If a
Performance Unit is intended to qualify as "qualified performance-based
compensation" under Section 162(m) of the Code, all requirements set forth in
Section 6(e) must be satisfied in order for a Participant to be entitled to
payment.

                  (g) Cash Incentive Awards. Subject to the provisions of the
Plan, the Committee, in its sole and plenary discretion, shall have the
authority to grant Cash Incentive Awards. The Committee shall establish Cash
Incentive Award levels to determine the amount of a Cash Incentive Award payable
upon the attainment of Performance Goals. No Cash Incentive Award under the Plan
shall exceed $6,000,000 during any Performance Period. If a Cash Incentive Award
is intended to qualify as "qualified performance-based compensation" under
Section 162(m) of the Code, all requirements set forth in Section 6(e) must be
satisfied in order for a Participant to be entitled to payment.

                  (h) Other Stock-Based Awards. Subject to the provisions of the
Plan, the Committee shall have the sole and plenary authority to grant to
Participants other equity-based or equity-related Awards (including, but not
limited to, Deferred Share Units and fully-vested Shares) in such amounts and
subject to such terms and conditions as the Committee shall determine, provided
that any such Awards must comply, to the extent deemed desirable by the
Committee, with Rule 16b-3 and applicable law.

                  (i) Dividend Equivalents. In the sole and plenary discretion
of the Committee, an Award, other than an Option or SAR or a Cash Incentive
Award, may provide the Participant with dividends or dividend equivalents,
payable in cash, Shares, other securities, other Awards or other property, on a
current or deferred basis, on such terms and conditions as may be determined by
the Committee in its sole and plenary discretion, including, without limitation,
payment directly to the Participant, withholding of such amounts by the Company
subject to vesting of the Award or reinvestment in additional Shares, Restricted
Shares or other Awards.

                  SECTION 7. Amendment and Termination. (a) Amendments to the
Plan. Subject to any government regulation, to any requirement that must be
satisfied if
<PAGE>
                                                                              17


the Plan is intended to be a shareholder approved plan for purposes of Section
162(m) of the Code and to the rules of the NYSE or any successor exchange or
quotation system on which the Shares may be listed or quoted, the Plan may be
amended, modified or terminated by the Board without the approval of the
stockholders of the Company except that stockholder approval shall be required
for any amendment that would (i) increase the maximum number of Shares for which
Awards may be granted under the Plan or increase the maximum number of Shares
that may be delivered pursuant to Incentive Stock Options granted under the
Plan; provided, however, that any adjustment under Section 4(b) shall not be
increases for purposes of this Section 7(a) or (ii) change the class of
employees or other individuals eligible to participate in the Plan. No
modification, amendment or termination of the Plan may, without the consent of
the Participant to whom any Award shall theretofore have been granted,
materially and adversely affect the rights of such Participant (or his or her
transferee) under such Award, unless otherwise provided by the Committee in the
applicable Award Agreement.

                  (b) Amendments to Awards. The Committee may waive any
conditions or rights under, amend any terms of, or alter, suspend, discontinue,
cancel or terminate any Award theretofore granted, prospectively or
retroactively; provided, however, that, except as set forth in Section
6(e)(vi)(D), unless otherwise provided by the Committee in the applicable Award
Agreement, any such waiver, amendment, alteration, suspension, discontinuance,
cancelation or termination that would materially and adversely impair the rights
of any Participant or any holder or beneficiary of any Award theretofore granted
shall not to that extent be effective without the consent of the impaired
Participant, holder or beneficiary.

                  (c) Adjustment of Awards Upon the Occurrence of Certain
Unusual or Nonrecurring Events. The Committee is hereby authorized to make
adjustments in the terms and conditions of, and the criteria included in, Awards
in recognition of unusual or nonrecurring events (including, without limitation,
the events described in Section 4(b) hereof or the occurrence of a Change of
Control) affecting the Company, any Affiliate, or the financial statements of
the Company or any Affiliate, or of changes in applicable rules, rulings,
regulations or other requirements of any governmental body or securities
exchange, accounting principles or law (i) whenever the Committee, in its sole
and plenary discretion, determines that such adjustments are appropriate or
desirable, including, without limitation, providing for a substitution or
assumption of Awards, accelerating the exercisability of, lapse of restrictions
on, or termination of, Awards or providing for a period of time for exercise
prior to the occurrence of such event and (ii) if deemed appropriate or
desirable by the Committee, in its sole and plenary discretion, by providing for
a cash payment to the holder of an Award in consideration for the cancelation of
such Award, including, in the case of an outstanding Option or SAR, a cash
payment to the holder of such Option or SAR in consideration for the cancelation
of such Option or SAR in an amount equal to the excess, if any, of the Fair
Market Value (as of a date specified by the Committee) of the Shares subject to
such Option or SAR over the aggregate Exercise Price of such Option or SAR (it
being understood that, in such event, any Option or SAR having a per Share
Exercise Price equal to, or in excess of, the Fair Market Value of a Share
subject to such Option or SAR may be canceled and terminated without any payment
or consideration therefor).
<PAGE>
                                                                              18


                  SECTION 8. Change of Control. Unless otherwise provided in the
applicable Award Agreement, in the event of a Change of Control after the date
of the adoption of the Plan, unless provision is made in connection with the
Change of Control for (a) assumption of Awards previously granted or (b)
substitution for such Awards of new awards covering stock of a successor
corporation or its "parent corporation" (as defined in Section 424(e) of the
Code) or "subsidiary corporation" (as defined in Section 424(f) of the Code)
with appropriate adjustments as to the number and kinds of shares and the
Exercise Prices, if applicable, (i) any outstanding Options or SARs then held by
Participants that are unexercisable or otherwise unvested shall automatically be
deemed exercisable or otherwise vested, as the case may be, as of immediately
prior to such Change of Control, (ii) all Performance Units and Cash Incentive
Awards shall be paid out as if the date of the Change of Control were the last
day of the applicable Performance Period and "target" performance levels had
been attained and (iii) all other outstanding Awards (i.e., other than Options,
SARs, Performance Units and Cash Incentive Awards) then held by Participants
that are unexercisable, unvested or still subject to restrictions or forfeiture,
shall automatically be deemed exercisable or vested and all restrictions and
forfeiture provisions related thereto shall lapse as of immediately prior to
such Change of Control.

                  SECTION 9. General Provisions. (a) Nontransferability. Except
as otherwise specified in the applicable Award Agreement, during the
Participant's lifetime each Award (and any rights and obligations thereunder)
shall be exercisable only by the Participant, or, if permissible under
applicable law, by the Participant's legal guardian or representative, and no
Award (or any rights and obligations thereunder) may be assigned, alienated,
pledged, attached, sold or otherwise transferred or encumbered by a Participant
otherwise than by will or by the laws of descent and distribution, and any such
purported assignment, alienation, pledge, attachment, sale, transfer or
encumbrance shall be void and unenforceable against the Company or any
Affiliate; provided that (i) the designation of a beneficiary shall not
constitute an assignment, alienation, pledge, attachment, sale, transfer or
encumbrance and (ii) the Board or the Committee may permit further
transferability, on a general or specific basis, and may impose conditions and
limitations on any permitted transferability; provided, however, that Incentive
Stock Options granted under the Plan shall not be transferable in any way that
would violate Section 1.422-2(a)(2) of the Treasury Regulations. All terms and
conditions of the Plan and all Award Agreements shall be binding upon any
permitted successors and assigns.

                  (b) No Rights to Awards. No Participant or other Person shall
have any claim to be granted any Award, and there is no obligation for
uniformity of treatment of Participants or holders or beneficiaries of Awards.
The terms and conditions of Awards and the Committee's determinations and
interpretations with respect thereto need not be the same with respect to each
Participant and may be made selectively among Participants, whether or not such
Participants are similarly situated.

                  (c) Share Certificates. All certificates for Shares or other
securities of the Company or any Affiliate delivered under the Plan pursuant to
any Award or the exercise thereof shall be subject to such stop transfer orders
and other restrictions as the Committee may deem advisable under the Plan, the
applicable Award Agreement or the
<PAGE>
                                                                              19


rules, regulations and other requirements of the SEC, the NYSE or any other
stock exchange or quotation system upon which such Shares or other securities
are then listed or reported and any applicable Federal or state laws, and the
Committee may cause a legend or legends to be put on any such certificates to
make appropriate reference to such restrictions.

                  (d) Withholding. (i) Authority to Withhold. A Participant may
be required to pay to the Company or any Affiliate, and the Company or any
Affiliate shall have the right and is hereby authorized to withhold from any
Award, from any payment due or transfer made under any Award or under the Plan
or from any compensation or other amount owing to a Participant, the amount (in
cash, Shares, other securities, other Awards or other property) of any
applicable withholding taxes in respect of an Award, its exercise or any payment
or transfer under an Award or under the Plan and to take such other action as
may be necessary in the opinion of the Committee or the Company to satisfy all
obligations for the payment of such taxes.

                  (ii) Alternative Ways to Satisfy Withholding Liability.
Without limiting the generality of clause (i) above, a Participant may satisfy,
in whole or in part, the foregoing withholding liability by delivery of Shares
owned by the Participant (which are not subject to any pledge or other security
interest and which have been owned by the Participant for at least six months)
having a Fair Market Value equal to such withholding liability or by having the
Company withhold from the number of Shares otherwise issuable pursuant to the
exercise of the Option or SAR, or the lapse of the restrictions on any other
Awards (in the case of SARs and other Awards, if such SARs and other Awards are
settled in Shares), a number of Shares having a Fair Market Value equal to such
withholding liability.

                  (e) Award Agreements. Each Award hereunder shall be evidenced
by an Award Agreement, which shall be delivered to the Participant and shall
specify the terms and conditions of the Award and any rules applicable thereto,
including, but not limited to, the effect on such Award of the death, disability
or termination of employment or service of a Participant and the effect, if any,
of such other events as may be determined by the Committee.

                  (f) No Limit on Other Compensation Arrangements. Nothing
contained in the Plan shall prevent the Company or any Affiliate from adopting
or continuing in effect other compensation arrangements, which may, but need
not, provide for the grant of options, restricted stock, shares and other types
of equity-based awards (subject to stockholder approval if such approval is
required), and such arrangements may be either generally applicable or
applicable only in specific cases.

                  (g) No Right to Employment. The grant of an Award shall not be
construed as giving a Participant the right to be retained as a director,
officer, employee or consultant of or to the Company or any Affiliate, nor shall
it be construed as giving a Participant any rights to continued service on the
Board. Further, the Company or an Affiliate may at any time dismiss a
Participant from employment or discontinue any
<PAGE>
                                                                              20


consulting relationship, free from any liability or any claim under the Plan,
unless otherwise expressly provided in the Plan or in any Award Agreement.

                  (h) No Rights as Stockholder. No Participant or holder or
beneficiary of any Award shall have any rights as a stockholder with respect to
any Shares to be distributed under the Plan until he or she has become the
holder of such Shares. In connection with each grant of Restricted Shares,
except as provided in the applicable Award Agreement, the Participant shall not
be entitled to the rights of a stockholder in respect of such Restricted Shares.
Except as otherwise provided in Section 4(b), Section 7(c) or the applicable
Award Agreement, no adjustments shall be made for dividends or distributions on
(whether ordinary or extraordinary, and whether in cash, Shares, other
securities or other property), or other events relating to, Shares subject to an
Award for which the record date is prior to the date such Shares are delivered.

                  (i) Governing Law. The validity, construction and effect of
the Plan and any rules and regulations relating to the Plan and any Award
Agreement shall be determined in accordance with the laws of the State of
Delaware, without giving effect to the conflict of laws provisions thereof.

                  (j) Severability. If any provision of the Plan or any Award is
or becomes or is deemed to be invalid, illegal or unenforceable in any
jurisdiction or as to any Person or Award, or would disqualify the Plan or any
Award under any law deemed applicable by the Committee, such provision shall be
construed or deemed amended to conform to the applicable laws, or if it cannot
be construed or deemed amended without, in the determination of the Committee,
materially altering the intent of the Plan or the Award, such provision shall be
construed or deemed stricken as to such jurisdiction, Person or Award and the
remainder of the Plan and any such Award shall remain in full force and effect.

                  (k) Other Laws. The Committee may refuse to issue or transfer
any Shares or other consideration under an Award if, acting in its sole and
plenary discretion, it determines that the issuance or transfer of such Shares
or such other consideration might violate any applicable law or regulation or
entitle the Company to recover the same under Section 16(b) of the Exchange Act,
and any payment tendered to the Company by a Participant, other holder or
beneficiary in connection with the exercise of such Award shall be promptly
refunded to the relevant Participant, holder or beneficiary. Without limiting
the generality of the foregoing, no Award granted hereunder shall be construed
as an offer to sell securities of the Company, and no such offer shall be
outstanding, unless and until the Committee in its sole and plenary discretion
has determined that any such offer, if made, would be in compliance with all
applicable requirements of the U.S. Federal and any other applicable securities
laws.

                  (l) No Trust or Fund Created. Neither the Plan nor any Award
shall create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any Affiliate, on one hand, and a
Participant or any other Person, on the other. To the extent that any Person
acquires a right to receive
<PAGE>
                                                                              21


payments from the Company or any Affiliate pursuant to an Award, such right
shall be no greater than the right of any unsecured general creditor of the
Company or any Affiliate.

                  (m) No Fractional Shares. No fractional Shares shall be issued
or delivered pursuant to the Plan or any Award, and the Committee shall
determine whether cash, other securities or other property shall be paid or
transferred in lieu of any fractional Shares or whether such fractional Shares
or any rights thereto shall be canceled, terminated or otherwise eliminated.

                  (n) Requirement of Consent and Notification of Election Under
Section 83(b) of the Code or Similar Provision. No election under Section 83(b)
of the Code (to include in gross income in the year of transfer the amounts
specified in Section 83(b) of the Code) or under a similar provision of law may
be made unless expressly permitted by the terms of the applicable Award
Agreement or by action of the Committee in writing prior to the making of such
election. If an Award recipient, in connection with the acquisition of Shares
under the Plan or otherwise, is expressly permitted under the terms of the
applicable Award Agreement or by such Committee action to make such an election
and the Participant makes the election, the Participant shall notify the
Committee of such election within ten days of filing notice of the election with
the IRS or other governmental authority, in addition to any filing and
notification required pursuant to regulations issued under Section 83(b) of the
Code or other applicable provision.

                  (o) Requirement of Notification Upon Disqualifying Disposition
Under Section 421(b) of the Code. If any Participant shall make any disposition
of Shares delivered pursuant to the exercise of an Incentive Stock Option under
the circumstances described in Section 421(b) of the Code (relating to certain
disqualifying dispositions) or any successor provision of the Code, such
Participant shall notify the Company of such disposition within ten days of such
disposition.

                  (p) Headings. Headings are given to the Sections and
subsections of the Plan solely as a convenience to facilitate reference. Such
headings shall not be deemed in any way material or relevant to the construction
or interpretation of the Plan or any provision thereof.

                  SECTION 10. Term of the Plan. (a) Effective Date. The Plan
shall be effective as of the date of its adoption by the Board; provided,
however, that no Incentive Stock Options may be granted under the Plan unless it
is approved by the Company's stockholders within twelve (12) months before or
after the date the Plan is adopted.

                  (b) Expiration Date. No Award shall be granted under the Plan
after the tenth anniversary of the date the Plan is approved under Section
10(a). Unless otherwise expressly provided in the Plan or in an applicable Award
Agreement, any Award granted hereunder may, and the authority of the Board or
the Committee to amend, alter, adjust, suspend, discontinue or terminate any
such Award or to waive any conditions or rights under any such Award shall,
nevertheless continue thereafter.

Source: OneCLE Business Contracts.