2002 Stock Option and Restricted Stock and Unit Award Plan - AnnTaylor Stores Corp.


                                      THE
                         ANNTAYLOR STORES CORPORATION
                       2002 STOCK OPTION AND RESTRICTED
                           STOCK AND UNIT AWARD PLAN

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                        Table of Contents
Section                                                      Page
1.  Purpose....................................................1
2.  Definitions................................................1
3.  Administration.............................................3
4.  Eligibility................................................4
5.  Stock......................................................4
6.  Terms and Conditions of Options............................5
7.  Terms and Conditions of Restricted Stock Awards and 
    Restricted Unit Awards.....................................9
8.  Withholding Taxes.........................................11
9.  Term of Plan..............................................12
10.  Amendment and Termination of the Plan....................12
11.  Effective Date...........................................12
12.  Miscellaneous............................................12
13.  Governing Law............................................13
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                    List of Defined Terms
Term                                                     Section
Acceleration Event.....................................6(i)(2)
Board........................................................3
Cause........................................................2
Code.........................................................1
Committee ...................................................3
Common Stock.................................................2
Corporation..................................................1
Disability ..................................................2
Exchange Act ................................................3
Executive Officers...........................................3
Fair Market Value ...........................................2
Grantee......................................................2
Grants.......................................................3
Incentive Stock Option.......................................1
Nonqualified Stock Options...................................1
Option Agreements ...........................................3
Option Price.................................................3
Optionee ....................................................4
Option ......................................................2
Plan ........................................................1
Restricted Award Agreement ..................................3
Restricted Period ........................................7(b)
Restricted Share ............................................2
Restricted Stock Award ..................................... 3
Restricted Unit .............................................2
Restricted Unit Award .......................................3
Rule 16b-3 ..................................................3
Subsidiary Corporation ......................................2

 
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                       THE ANNTAYLOR STORES CORPORATION
                               2002 STOCK OPTION
                   AND RESTRICTED STOCK AND UNIT AWARD PLAN
1.    Purpose.
      This 2002 Stock Option and Restricted Stock and Unit Award Plan (the
"Plan"), is intended to encourage stock ownership by employees of AnnTaylor
Stores Corporation (the "Corporation"), its divisions and Subsidiary
Corporations, so that they may acquire or increase their proprietary interest
in the Corporation, and to encourage such employees to remain in the employ
of the Corporation, its divisions and Subsidiary Corporations, and to put
forth maximum efforts for the success of the business.  The Plan is also
intended to encourage directors of the Corporation who are not employees or
officers of the Corporation or its Subsidiary Corporations ("Eligible
Directors") to acquire or increase a proprietary interest in the Corporation,
to further promote and strengthen the interest of such Eligible Directors in
the development and financial success of the Corporation, and to assist the
Corporation in attracting and retaining highly qualified directors by
providing such directors options to purchase shares of Common Stock.  It is
further intended that no Option granted pursuant to this Plan shall
constitute an "incentive stock option" ("Incentive Stock Option") within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended
("Code"), and all Options so granted shall constitute "nonqualified stock
options" ("Nonqualified Stock Options").


2.    Definitions.
      As used in this Plan, the following words and phrases shall have the
meanings indicated:

     (a)  "CAUSE" used in  connection  with the  termination  of  employment  or
          service  of a Grantee,  shall  mean a  termination  of  employment  or
          service of the Grantee by the  Corporation or a division or Subsidiary
          Corporation  due to (i) the  Grantee's  failure to render  services in
          accordance  with the terms of such  Grantee's  employment  or service,
          which failure amounts to a material neglect of such Grantee's  duties,
          (ii)   the   commission   by  the   Grantee   of  an  act  of   fraud,
          misappropriation    (including   the   unauthorized    disclosure   of
          confidential or proprietary  information) or embezzlement,  or (iii) a
          conviction of or guilty plea or confession to any felony.


     (b)  "COMMON  STOCK" shall mean shares of the  Corporation's  Common Stock,
          par value $.0068 per share.


     (c)  "DISABILITY"  shall  mean  a  Grantee's  inability  to  engage  in any
          substantial  gainful activity by reason of any medically  determinable
          physical or mental  impairment that can be expected to result in death

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          or that has lasted or can be expected to last for a continuous  period
          of not less than twelve (12) months.


     (d)  "FAIR MARKET  VALUE" per share as of a particular  date shall mean (i)
          the closing  sales price per share of Common  Stock as reported on the
          New York Stock Exchange (or if the shares of Common Stock are not then
          traded on such exchange, on the principal national securities exchange
          on which they are then  traded) for the last  preceding  date on which
          there was a sale of such Common Stock on such exchange, or (ii) if the
          shares of Common  Stock are not then  traded on a national  securities
          exchange but are traded on an over-the-counter  market, the average of
          the  closing  bid and asked  prices for the shares of Common  Stock in
          such over-  the-counter  market for the last  preceding  date on which
          there was a sale of such Common Stock in such market,  or (iii) if the
          shares of Common  Stock are not then  listed on a national  securities
          exchange or traded in an  over-the-counter  market,  such value as the
          Committee in its discretion may determine.


     (e)  "GRANTEE"  shall  mean a person to whom an  Option,  Restricted  Stock
          Award or Restricted Unit Award has been granted.


     (f)  "OPTION"  shall  mean the  right,  granted  to a Grantee  pursuant  to
          Section 3, to purchase a specified  number of shares of Common  Stock,
          on the terms and  subject to the  restrictions  set forth in this Plan
          and by the Committee upon the grant of the Option to the Grantee.


     (g)  "RESTRICTED  SHARE" shall mean a share of Common  Stock,  awarded to a
          Grantee  pursuant  to  Section  3,  that is  subject  to the terms and
          restrictions  set  forth in this  Plan and by the  Committee  upon the
          award of the Restricted Share to the Grantee.


     (h)  "RESTRICTED UNIT" shall mean the right,  awarded to a Grantee pursuant
          to Section  3, to  receive an amount in cash equal to the Fair  Market
          Value of one share of Common  Stock,  on the terms and  subject to the
          restrictions  set  forth in this  Plan and by the  Committee  upon the
          award of the Restricted Unit to the Grantee.


     (i)  "RETIREMENT"  shall have such meaning as the Committee shall determine
          from time to time.


     (j)  "SUBSIDIARY  CORPORATION"  shall mean any corporation  (other than the
          Corporation) in an unbroken chain of  corporations  beginning with the
          employer corporation if, at the time of granting an Option, Restricted
          Stock Award or Restricted Unit Award,  each of the corporations  other
          than the last  corporation in the unbroken chain owns stock possessing


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          fifty percent (50%) or more of the total combined  voting power of all
          classes of stock in one of the other corporations in such chain.


3.    Administration.

      The Plan shall be administered by the Compensation Committee (the
"Committee") of the Board of Directors of the Corporation (the "Board").  The
Committee shall consist of two or more members of the Board, each of whom
shall be both an "outside director" within the meaning of Section 162(m) of
the Code and a "nonemployee director" within the meaning of Rule 16b-3, as
from time to time amended ("Rule 16b-3"), promulgated under Section 16 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act").


      The Committee shall have the authority in its discretion, subject to and
not inconsistent with the express provisions of the Plan, to administer the
Plan and to exercise all the powers and authorities either specifically
granted to it under the Plan or necessary or advisable in the administration
of the Plan, including, without limitation, the authority to grant Options
and make awards of Restricted Shares and Restricted Units ("Restricted Stock
Awards" and "Restricted Unit Awards", respectively, and sometimes
collectively with the grant of Options, "Grants"); to determine the purchase
price of the shares of Common Stock covered by each Option (the "Option
Price"); to determine the persons to whom, and the time or times at which,
Options, Restricted Stock Awards and Restricted Unit Awards shall be granted;
to determine the number of shares to be covered by each Option, and to
determine the number of Restricted Shares and Restricted Units to be covered
by each Restricted Stock Award and Restricted Unit Award; to interpret the
Plan; to prescribe, amend and rescind rules and regulations relating to the
Plan; to determine the terms and provisions of the agreements (which need not
be identical) entered into in connection with grants of Options ("Option
Agreements") and Restricted Stock Awards and Restricted Unit Awards
("Restricted Award Agreements"); and to make all other determinations deemed
necessary or advisable for the administration of the Plan.

      The determinations of the Committee shall be binding and conclusive on
all parties.  The Committee may delegate to one or more of its members or to
one or more agents such administrative duties as it may deem advisable, and
the Committee or any person to whom it has delegated duties as aforesaid may
employ one or more persons to render advice with respect to any
responsibility the Committee or such person may have under the Plan.  The
Committee shall have the authority in its discretion to delegate to specified
officers of the Corporation the power to make Grants, including to determine
the terms of such Grants, and the power to extend the exercisability of
Options pursuant to Section 6(f) or 6(g) hereof, in each case consistent with
the terms of this Plan and subject to such restrictions, if any, as the
Committee may specify when making such delegation; provided that the
                                                   --------
delegates shall not have authority to make Grants to, or extend the
exercisability of Options held by, such delegates or any Executive Officer
(as defined below in this Section 3).

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      The Board shall fill all vacancies, however caused, in the Committee.
The Board may from time to time appoint additional members to the Committee,
and may at any time remove one or more Committee members and substitute
others.  One member of the Committee shall be selected by the Board as
chairman.  The Committee shall hold its meetings at such times  and  places
as it shall deem advisable.  All determinations of the Committee shall be
made by a majority of its members either present in person or participating
by conference telephone at any meeting or by written consent, except that,
with respect to Grantees who are executive officers of the Corporation within
the meaning of Rule 3-b7 promulgated under Section 3 of the Exchange Act
("Executive Officers"), all action of the Committee shall be taken solely by
those members of the Committee who are "outside directors" and "nonemployee
directors" as defined above, even if less than a majority of the Committee.
The Committee may appoint a secretary and make such rules and regulations for
the conduct of its business as it shall deem advisable, and shall keep
minutes of its meetings.

      No member of the Board or Committee shall be liable for any action taken
or determination made in good faith with respect to the Plan or any Grant
made hereunder.


4.    Eligibility.

      Options, Restricted Stock Awards and Restricted Unit Awards may be
granted to employees (including, without limitation, officers who are
employees) of the Corporation or its present or future divisions and
Subsidiary Corporations, and to directors (whether or not employees) of the
Corporation or its present or future divisions and Subsidiary Corporations.
In determining the persons to whom Options, Restricted Stock Awards and
Restricted Unit Awards shall be granted and the number of shares to be
covered by each Option, and the number of Restricted Shares and Restricted
Units to be covered by each Restricted Stock Award and Restricted Unit Award,
the Committee shall take into account the duties of the respective persons,
their present and potential contributions to the success of the Corporation
and such other factors as the Committee shall deem relevant in connection
with accomplishing the purpose of the Plan.  A person to whom an Option has
been granted hereunder is sometimes referred to herein as an "Optionee".

      A Grantee shall be eligible to receive more than one Grant during the
term of the Plan, but only on the terms and subject to the restrictions
hereinafter set forth.


5.    Stock.

      The shares of Common Stock subject to Options and Restricted Stock
Awards hereunder shall be shares of the Corporation that are held by the
Corporation as treasury shares.  Subject to the next sentence, the aggregate
number of shares of Common Stock as to which Options may be granted from time
to time under this Plan shall not exceed 1,650,000; the aggregate number of
shares of Common Stock as to which Restricted Stock Awards may be granted
from time to time shall not exceed 350,000; and the number of Restricted
Units that may be granted from time to time shall not exceed 50,000.  The
limitations established by the preceding sentence shall be subject to


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adjustment as provided in Section 6(i) hereof.  No single employee may be
granted Options covering more than 400,000 shares of Common Stock, or
Restricted Stock Awards or Restricted Unit Awards (constituting performance
based compensation within the meaning of Section 162(m) of the Code) covering
more than 100,000 shares of Common Stock, (subject to any adjustments
pursuant to Section 6(i) below) during any fiscal year of the Company.

      If any shares subject to an Option Grant or Restricted Stock Award are
forfeited, canceled, exchanged or surrendered or if a Grant otherwise
terminates or expires without a distribution of shares to the Grantee, the
shares of Common Stock with respect to such Grant shall, to the extent of any
such forfeiture, cancellation, exchange, surrender, termination or
expiration, again be available for Grants under the Plan.  If any Restricted
Units are  forfeited, canceled, exchanged or surrendered or if a Restricted
Unit Award otherwise terminates or expires without any payment being required
to be made with respect to any of the Restricted Units subject thereto, then
such Restricted Units shall, to the extent of any such forfeiture,
cancellation, exchange, surrender, termination or expiration, again be
available for Grants under the Plan.


6.    Terms and Conditions of Options.

      Each Option granted pursuant to the Plan shall be evidenced by a written
Option Agreement between the Corporation and the Optionee, which agreement
shall comply with and be subject to the following terms and conditions (and
with such other terms and conditions not inconsistent with the terms of this
Plan as the Committee, in its discretion, shall establish):


     (a)  NUMBER OF SHARES.  Each  Option  Agreement  shall  state the number of
          shares of Common Stock to which the Option relates.


     (b)  TYPE OF OPTION. Each Option Agreement shall specifically state that no
          portion of the Option  constitutes  an Incentive  Stock Option and the
          entire Option constitutes a Nonqualified Stock Option.


     (c)  OPTION  PRICE.  Each Option  Agreement  shall state the Option  Price,
          which  shall be not less than one hundred  percent  (100%) of the Fair
          Market Value of the shares of Common Stock of the  Corporation  on the
          date of grant of the  Option.  The  Option  Price  shall be subject to
          adjustment  as provided in Section 6(i) hereof.  The date on which the
          Committee  adopts a resolution  expressly  granting an Option shall be
          considered  the day on which  such  Option  is  granted,  unless  such
          resolution expressly provides for a specific later date.


     (d)  MEDIUM AND TIME OF PAYMENT. The Option Price shall be paid in full, at
          the time of  exercise,  (i) in cash,  (ii) in shares  of Common  Stock
          having a Fair Market  Value equal to such Option Price  provided  that
          such  shares have been held by the Grantee for at least six (6) months


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          prior to such  exercise,  or (iii) in a combination of cash and shares
          provided  that such  shares have been held by the Grantee for at least
          six (6) months prior to such exercise,  or (iv) in the sole discretion
          of the Committee,  through a cashless exercise  procedure  involving a
          broker; provided, however, that such method and time for payment shall
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          be permitted by and be in compliance with applicable law.


     (e)  TERM AND  EXERCISE  OF OPTIONS.  Except as  provided  in Section  6(i)
          hereof or unless  otherwise  determined by the  Committee,  the shares
          covered by an Option shall  become  exercisable  over such period,  in
          cumulative installments or otherwise, or upon the satisfaction of such
          performance  goals  or  other  conditions,   as  the  Committee  shall
          determine;  provided,  however,  that  the  Committee  shall  have the
          authority to accelerate  the  exercisability  of all or any portion of
          any outstanding  Option at such time and under such  circumstances  as
          it, in its sole discretion,  deems appropriate,  and provided further,
          however,  that such  exercise  period  shall not exceed ten (10) years
          from the date of grant of such Option.  The  exercise  period shall be
          subject to earlier  termination  as provided in Sections 6(f) and 6(g)
          hereof.  An Option may be  exercised,  as to any or all full shares of
          Common Stock as to which the Option has become exercisable,  by giving
          written notice of such exercise to the Committee;  provided,  however,
          that an Option may not be  exercised  at any one time as to fewer than
          100  shares  (or such  number of shares as to which the Option is then
          exercisable if such number of shares is less than 100).


     (f)  TERMINATION.  Except as provided in this  Section  6(f) and in Section
          6(g)  hereof,  an Option may not be  exercised  unless the Optionee is
          then  in  the  employ  or  service  of the  Corporation  or one of its
          divisions  or  Subsidiary  Corporations,  and unless the  Optionee has
          remained  continuously  so  employed  or in service  since the date of
          grant of the Option. In the event that the employment or service of an
          Optionee  shall  terminate  or cease  other  than by  reason of death,
          Disability  or  Retirement,  all Options  theretofore  granted to such
          Optionee shall,  to the extent not theretofore  exercised or canceled,
          terminate  immediately upon such separation of employment or cessation
          of service, as applicable;  provided,  however, that the Committee may
                                      --------   -------
          in its discretion  extend the period for exercise of Options that were
          exercisable  at the time of  separation  of employment or cessation of
          service to a date later than such separation or cessation date, but in
          any event not  beyond  the date on which the  Option  would  otherwise
          expire pursuant to Section 6(e) hereof.  Nothing in the Plan or in any
          Option  granted  pursuant  hereto shall confer upon an individual  any
          right to continue in the employ or service of the  Corporation  or any
          of its  divisions or Subsidiary  Corporations  or interfere in any way
          with the right of the  Corporation  or any such division or Subsidiary
          Corporation to terminate such employment.

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     (g)  DEATH,  DISABILITY OR RETIREMENT OF OPTIONEE. If an Optionee shall die
          while  employed by or in service to the  Corporation  or a  Subsidiary
          Corporation,   or  if  the  Optionee's  employment  or  service  shall
          terminate or cease by reason of Disability or Retirement,  all Options
          theretofore granted to such Optionee, to the extent exercisable on the
          date of death or  separation,  may be  exercised by the Optionee or by
          the  Optionee's  estate  or by a  person  who  acquired  the  right to
          exercise such Option by bequest or  inheritance or otherwise by reason
          of the death or Disability  of the Optionee,  at any time within three
          (3)  years  after  the date of  death  or  termination  by  reason  of
          Disability or  Retirement,  or at such later time as the Committee may
          in its discretion  determine,  but in any event not beyond the date on
          which the Option  would  otherwise  expire  pursuant  to Section  6(e)
          hereof.


     (h)  NONTRANSFERABILITY  OF OPTIONS.  Options  granted under the Plan shall
          not be  transferable  except  (i) by will or the laws of  descent  and
          distribution,  or (ii) as specifically  provided below in this Section
          (6)(h).  Any  Optionee  may  transfer  Nonstatutory  Stock  Options to
          members of his or her Immediate  Family (as defined  below) if (x) the
          option agreement pursuant to which the Option was granted so provides,
          (y) such agreement was approved by the Board or the Committee, and (z)
          the  Optionee  does not receive any  consideration  for the  transfer.
          "Immediate  Family" means children,  grandchildren,  and spouse of the
          Optionee or one or more trusts for the benefit of such family  members
          or  partnerships  in which such family  members are the only partners.
          Any Nonstatutory Stock Option agreement may be amended to provided for
          the  transferability  feature as outlined  above,  provided  that such
          amendment  is approved by the Board or the  Committee.  Any Option not
          granted  pursuant  to an option  agreement  expressly  permitting  its
          transfer  shall  not  be  transferable.  During  the  lifetime  of the
          Optionee,  Options may be exercised only by the Optionee, the guardian
          or  legal  representative  of  the  Optionee,  or  the  transferee  as
          permitted under this Section 6(h).


     (i)  EFFECT OF CERTAIN CHANGES. (1) If there is any change in the shares of
          Common Stock through the declaration of stock dividends, distributions
          made  with  respect  to shares  of  Common  Stock,  recapitalizations,
          restructurings,  stock splits,  or  combinations  or exchanges of such
          shares,  or the like,  then the  number  of shares of Common  Stock or
          other securities  available for Options, the kind and amount of shares
          and other securities covered by outstanding Options, and/or the Option
          Price,  as  appropriate,  shall be  adjusted as  necessary  to reflect
          equitably  such  change  in the  shares  of  Common  Stock;  provided,
          however,  that any fractional  shares  resulting from such  adjustment
          shall be eliminated.

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      (2)   If an Acceleration Event (as defined below) shall occur while
unexercisable Options remain outstanding under the Plan, such Options not
therefore exercisable by their terms shall become exercisable in full.  An
"Acceleration Event" shall occur if:


          (A) any "person" (as such term is used in Sections  13(d) and 14(d) of
     the  Exchange  Act),  other  than any  person  who on the date  hereof is a
     director  or officer of the  Corporation,  any  trustee or other  fiduciary
     holding  securities under an employee  benefit plan of the Corporation,  or
     any corporation owned,  directly or indirectly,  by the stockholders of the
     Corporation in  substantially  the same  proportions as their  ownership of
     stock of the Corporation,  is or becomes the "beneficial owner" (as defined
     in  Rule  13d-3  under  the  Exchange  Act),  directly  or  indirectly,  of
     securities  of the  Corporation  representing  20% or more of the  combined
     voting power of the Corporation's then outstanding securities;


          (B) during any period of two consecutive years, individuals who at the
     beginning of such period  constitute the Board, and any new director (other
     than a director  designated  by a person who has entered  into an agreement
     with the Corporation to effect a transaction described in clause (A) or (C)
     of this  Section  6(i)(2)  whose  election by the Board or  nomination  for
     election by the  Corporation's  stockholders  was  approved by a vote of at
     least  two-thirds  (2/3) of the  directors  then still in office who either
     were  directors  at the  beginning  of the  period  or  whose  election  or
     nomination for election was previously so approved, cease for any reason to
     constitute at least a majority thereof; or

          (C) there is consummated a merger or  consolidation of the Corporation
     with any other  entity  other than a merger or  consolidation  which  would
     result in the voting securities of the Corporation  outstanding immediately
     prior thereto  continuing to represent (either by remaining  outstanding or
     by being  converted  into voting  securities of the surviving  entity) more
     than 80% of the  combined  voting  power of the  voting  securities  of the
     Corporation or such surviving  entity  outstanding  immediately  after such
     merger or consolidation; or

          (D) the  stockholders  of the  Corporation  approve a plan of complete
     liquidation of the  Corporation or an agreement for the sale or disposition
     by the Corporation of all or substantially all of the Corporation's assets.


      Following the Acceleration Event, the Committee shall provide for the
cancellation of all Options then outstanding.  Upon such cancellation, the
Corporation shall make, in exchange therefor, a cash payment for each such
Option in an amount per share equal to the difference between the per share
exercise price of such Option and the Fair Market Value of a share of Common


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Stock on the date during the prior sixty-day period that produces the highest
Fair Market Value.

     (3)   In the event of a change in the Common Stock of the Corporation as
presently constituted which is limited to a change of all of its authorized
shares with par value into the same number of shares with a different par
value or without par value, the shares resulting from any such change shall
be deemed to be the Common Stock within the meaning of the Plan.


     (4)   The foregoing adjustments shall be made by the Committee, whose
determination in that respect shall be final, binding and conclusive.

     (5)   Except as hereinbefore expressly provided in this Section 6(i), the
Optionee shall have no rights by reason of any subdivision or consolidation
of shares of stock of any class or the payment of any stock dividend or any
other increase or decrease in the number of shares of stock of any class or
by reason of any dissolution, liquidation, merger, or consolidation or
spin-off of assets or stock of another corporation; and any issue by the
Corporation of shares of stock of any class, or securities convertible into
shares of stock of any class, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of shares of
Common Stock subject to the Option.  The grant of an Option pursuant to the
Plan shall not affect in any way the right or power of the Corporation to
make adjustments, reclassifications, reorganizations or changes of its
capital or business structures or to merge or to consolidate or to dissolve,
liquidate or sell, or transfer all or part of its business or assets.

     (j)  RIGHTS AS A  STOCKHOLDER.  An  Optionee or a  transferee  of an Option
          shall  have no rights as a  stockholder  with  respect  to any  shares
          covered  by the  Option  until  the  date of the  issuance  of a stock
          certificate for such shares. No adjustment shall be made for dividends
          (ordinary  or  extraordinary,  whether  in cash,  securities  or other
          property) or distribution of other rights for which the record date is
          prior to the date such stock certificate is issued, except as provided
          in Section 6(i) hereof.

     (k)  OTHER PROVISIONS.  The Option Agreements authorized under the Plan may
          contain  such  other  provisions,  including  without  limitation  the
          imposition of (1) restrictions  upon the exercise of an Option and (2)
          provisions  that will result in the forfeiture of an Option and/or the
          shares  acquired   thereunder  in  the  event  the  Optionee  breaches
          covenants   relating   to    non-competition,    confidentiality   and
          non-solicitation  of employees and customers,  as the Committee  shall
          deem advisable.


7.    Terms and Conditions of Restricted Stock Awards and Restricted Unit
      Awards.


      Each Restricted Stock Award and Restricted Unit Award granted under the
Plan shall be evidenced by a written Restricted Award Agreement between the


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Corporation and the Grantee, which agreement shall comply with, and be
subject to, the following terms and conditions (and with such other terms and
conditions not inconsistent with the terms of this Plan as the Committee, in
its discretion, shall establish):

     (a)  NUMBER OF SHARES AND UNITS.  The Committee  shall determine the number
          of  Restricted  Shares  to be  awarded  to a Grantee  pursuant  to the
          Restricted  Stock  Award  and the  number  of  Restricted  Units to be
          awarded to a Grantee pursuant to a Restricted Unit Award.


     (b)  NONTRANSFERABILITY.  Except as set forth in subsections (f) and (g) of
          this  Section 7, a Grantee  may not sell,  assign,  transfer,  pledge,
          hypothecate  or  otherwise   dispose  of  any  Restricted   Shares  or
          Restricted  Units  awarded to said  Grantee  under  this Plan,  or any
          interest  therein,   except  by  will  or  the  laws  of  descent  and
          distribution,  until the  Restricted  Period (as defined  below) shall
          have elapsed.  The Committee  may also in its  discretion  impose such
          other  restrictions  and  conditions  on  Restricted  Shares and Units
          awarded as it deems  appropriate  including  without  limitation,  the
          imposition  of  provisions  that  will  result  in the  forfeiture  of
          Restricted  Shares  and  Units  in  the  event  the  Grantee  breaches
          covenants   relating   to    non-competition,    confidentiality   and
          non-solicitation  of  employees  and  customers.  In  determining  the
          Restricted  Period of an award,  the  Committee  may provide  that the
          restrictions shall lapse with respect to specified  percentages of the
          awarded  shares or units on  successive  anniversaries  of the date of
          such award or upon the  satisfaction  of such other  conditions as the
          Committee may impose. In no event shall the Restricted Period end with
          respect to a Restricted  Stock Award or Restricted Unit Award prior to
          the satisfaction by the Grantee of any liability arising under Section
          8  hereof.  Any  attempt  to  dispose  of  any  Restricted  Shares  in
          contravention  of any  such  restrictions  shall  be null and void and
          without effect. The period during which such restrictions on transfer,
          and such other restrictions as the Committee may impose, are in effect
          is referred to as the "Restricted Period".

     (c)  CERTIFICATES REPRESENTING RESTRICTED SHARES. The Corporation shall not
          be required to issue stock certificates representing Restricted Shares
          awarded  to a Grantee  until the  Restricted  Period  related  to such
          shares has lapsed. If any stock certificates  representing  Restricted
          Shares awarded  pursuant to a Restricted  Stock Award are issued prior
          to the lapse of the Restricted  Period,  such stock  certificate shall
          bear  an  appropriate  legend  referring  to such  restrictions.  Such
          certificates may be retained by the Corporation  during the Restricted
          Period.

     (d)  TERMINATION.  If the Grantee's  continuous  employment or service with
          the  Corporation  or any of its divisions or  Subsidiary  Corporations
          shall  terminate  for  any  reason  prior  to  the  expiration  of the


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          Restricted  Period  applicable to any Restricted  Shares or Restricted
          Units granted to such  Grantee,  or prior to the  satisfaction  of any
          other  conditions  established  by the  Committee  applicable  to such
          Grant,  any such Restricted  Shares or Restricted Units then remaining
          subject to  restrictions  (after taking into account the provisions of
          subsections  (f)  and  (g) of  this  Section  7)  shall  thereupon  be
          forfeited  by the  Grantee  and any such  Restricted  Shares  shall be
          transferred  to, and reacquired by, the  Corporation or its Subsidiary
          Corporation   at  no  cost  to  the   Corporation  or  the  Subsidiary
          Corporation. In such event, the Grantee, or in the event of his death,
          his personal  representative,  shall, with respect to any such shares,
          forthwith  deliver  to the  Secretary  of the  Corporation  any  stock
          certificates  in the  possession  of  the  Grantee  or  the  Grantee's
          representative representing the Restricted Shares remaining subject to
          such  restrictions,  accompanied by such  instruments of transfer,  if
          any,  as  may   reasonably   be  required  by  the  Secretary  of  the
          Corporation.

     (e)  RIGHTS AS A  STOCKHOLDER.  Upon  receipt by a Grantee of a  Restricted
          Stock Award,  the Grantee  shall possess all incidents of ownership of
          the Restricted  Shares  (subject to subsection (b) of this Section 7),
          including the right to receive or reinvest  dividends  with respect to
          such shares and to vote such shares.


     (f)  EFFECT  OF  CERTAIN  CHANGES.  The  number  of  Restricted  Shares  or
          Restricted Units subject to a Grant shall be appropriately adjusted by
          the Committee in the event of any change in the shares of Common Stock
          set forth in Section  6(i)(1).  Upon the occurrence of an Acceleration
          Event,  as  defined  in  Section  6(i)(2),   all   restrictions   then
          outstanding  with respect to a Restricted  Stock Award and  Restricted
          Unit Award shall  automatically  expire and be of no further force and
          effect.


     (g)  OTHER  PROVISIONS.  The Committee  shall have the  authority  (and the
          Restricted  Award  Agreement  may so  provide)  to  cancel  all or any
          portion of any outstanding  restrictions  and conditions  prior to the
          expiration of the  Restricted  Period with respect to all or part of a
          Restricted  Stock  Award or  Restricted  Unit  Award on such terms and
          conditions as the Committee may deem appropriate. The Restricted Award
          Agreements  authorized  under  this  Plan  shall  contain  such  other
          provisions  not  inconsistent  with the terms hereof as the  Committee
          shall deem advisable.


8.    Withholding Taxes.

      When a Grantee or other person becomes entitled to receive shares of
Common Stock pursuant to the exercise of an Option or upon the lapse of
restrictions relating to a Restricted Stock Award, or to receive a cash
payment with respect to a Restricted Unit Award upon the lapse of
restrictions relating thereto, the Corporation shall have the right to

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require the Grantee or such other person to remit to the Corporation an
amount sufficient to satisfy any federal, state and local withholding tax
requirements related thereto. Unless otherwise prohibited by the Committee or
by applicable law, satisfaction of the withholding tax obligation may be
accomplished by any of the following methods or by a combination of such
methods:  (a) tendering a cash payment, (b) authorizing the Company to
withhold from the shares of Common Stock or cash otherwise payable (1) one or
more of such shares having an aggregate Fair Market Value, determined as of
the date the withholding tax obligation arises, less than or equal to the
amount of the total withholding tax obligation or (2) cash in an amount less
than or equal to the amount of the total withholding tax obligation and (c)
delivering to the Company shares of Common Stock (provided that such shares
shall have been held for at least six (6) months) having an aggregate Fair
Market Value, determined as of the date the withholding tax obligation
arises, less than or equal to the amount of the total withholding tax
obligation.

9.    Term of Plan.

      Unless terminated earlier by the Board, the term of this Plan shall be
ten (10) years from the date the Plan was adopted.  No Option, Restricted
Stock Award or Restricted Unit Award shall be granted pursuant to this Plan
later than January 29, 2012, but Options and Restricted Stock and Unit Awards
theretofore granted may extend beyond that date in accordance with their
terms.

10.    Amendment and Termination of the Plan.

      The Board may, at any time and from time to time, suspend, terminate,
modify or amend the Plan.  Except as provided in Section 6 hereof, no
suspension, termination, modification or amendment of the Plan may adversely
affect any Grant previously made, unless the written consent of the Grantee
is obtained.

11.    Effective Date.

      The Plan shall take effect on January 29, 2002, the date of its adoption
      by the Board of Directors.

12.    Miscellaneous.

     (a)  Effect of  Headings.  The section and  subsection  headings  contained
          herein are for convenience  only and shall not affect the construction
          hereof.

     (b)  Compliance with Legal Requirements. The Plan and the other obligations
          of the  Corporation  under the Plan and any agreement shall be subject
          to all applicable  federal and state laws, rules and regulations,  and
          to such approvals by any regulatory or  governmental  agency as may be
          required.  The  Corporation,  in  its  discretion,  may  postpone  the
          issuance  or  delivery  of  Common   Stock  under  any  Grant  as  the
          Corporation may consider  appropriate,  and may require any Grantee to

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          make such  representations  and  furnish  such  information  as it may
          consider  appropriate  in connection  with the issuance or delivery of
          Common  Stock  in  compliance   with   applicable   laws,   rules  and
          regulations.

     (c)  No  Right  To  Continued  Employment.  Nothing  in the  Plan or in any
          agreement  entered into pursuant  hereto shall confer upon any Grantee
          the right to continue in the employ or service of the  Corporation  or
          any of its divisions or Subsidiary Corporations, to be entitled to any
          remuneration  or benefits not set forth in the Plan or such  agreement
          or to interfere with or limit in any way the right of the  Corporation
          or such division or Subsidiary Corporation to terminate such Grantee's
          employment.

     (d)  Grantee  Rights.  No Grantee shall have any claim to be made any Grant
          under the Plan, and there is no obligation for uniformity of treatment
          for Grantees.  Except as provided  specifically herein, a Grantee or a
          transferee  of a Grant  shall  have no  rights as a  stockholder  with
          respect  to any  shares  covered  by any  Grant  until the date of the
          issuance of a stock certificate for such shares.

     (e)  Beneficiary.   A  Grantee  may  file  with  the  Committee  a  written
          designation  of a beneficiary on such form as may be prescribed by the
          Committee  and  may,   from  time  to  time,   amend  or  revoke  such
          designation.  If no designated  beneficiary  survives the Grantee, the
          executor or  administrator  of the Grantee's estate shall be deemed to
          be the Grantee's beneficiary.

13.    Governing Law.

      The Plan shall be construed and administered in accordance with the laws
of the state of Delaware without regard to its principles of conflicts of law.

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