Amended & Restated 1994 Restricted Stock Plan

FERROFLUIDICS CORPORATION
AMENDED AND RESTATED 1994 RESTRICTED STOCK PLAN


SECTION 1. General Purpose of the Plan; Definitions.
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The name of the plan is the Ferrofluidics Corporation Amended and Restated 1994 Restricted Stock Plan (the "Plan"). The purpose of the Plan is to encourage and enable the officers and employees of Ferrofluidics Corporation (the "Company") and its Subsidiaries, upon whose judgment, initiative and efforts the Company largely depends for the successful conduct of its business, to acquire a proprietary interest in the Company. It is anticipated that providing such persons with a direct stake in the Company's welfare will assure a closer identification of their interests with those of the Company, thereby stimulating their efforts on the Company's behalf and strengthening their desire to remain with the Company.


The following terms shall be defined as set forth below:


"Act" means the Securities Exchange Act of 1934, as amended.


"Administrator" means the Board or the Committee.


"Award" means an award granted pursuant to Section 5.


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


"Cause" means and shall be limited to a vote of the Board resolving
that the participant should be dismissed as a result of (i) any material
breach by the participant of any agreement to which the participant and the
Company are parties, (ii) any act (other than retirement) or omission to
act by the participant which may have a material and adverse effect on the
business of the Company or any Subsidiary or on the participant's ability
to perform services for the Company or any Subsidiary, including, without
limitation, the commission of any crime (other than ordinary traffic
violations), or (iii) any material misconduct or neglect of duties by the
participant in connection with the business or affairs of the Company or
any Subsidiary.


"Code" means the Internal Revenue Code of 1986, as amended, and any
successor Code, and related rules, regulations and interpretations.


"Committee" means a committee of two or more Non-Employee Directors
appointed by the Board to administer the Plan.


"Disability" means disability as set forth in Section 22(e)(3) of the
Code.


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"Effective Date" means the date on which the Plan is approved by the
Board or, if approved by the shareholders, the date of such shareholder
approval, as set forth in Section 12.


"Fair Market Value" on any given date means the last reported sale
price at which Stock is traded on such date or, if no Stock is traded on
such date, the most recent date on which Stock was traded, as reflected on
the principal stock exchange or, if applicable, any other national stock
exchange on which the Stock is traded or admitted to trading.


"Non-Employee Director" means a member of the Board who is a
"Non-Employee Director" within the meaning of Rule 16b-3(b)(3)(i)
promulgated under the Act, or any successor definition under said rule.


"Stock" means the Common Stock, $.004 par value per share, of the
Company, subject to adjustments pursuant to Section 3.


"Subsidiary" means any corporation or other entity (other than the
Company) in any unbroken chain of corporations or other entities, beginning
with the Company, if each of the corporations or entities (other than the
last corporation or entity in the unbroken chain) owns stock or other
interests possessing 50% or more of the total combined voting power of all
classes of stock or other interests in one of the other corporations or
entities in the chain.


SECTION 2. Administration of Plan; Authority to Select Participants and
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Determine Awards.
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(a) POWERS OF ADMINISTRATOR. The Administrator shall have the power and authority to grant Awards consistent with the terms of the Plan, including the power and authority:


(i) to select the officers and other employees of the Company and
its Subsidiaries to whom Awards may from time to time be
granted;


(ii) to determine the time or times of grant, and the extent, if
any, of Awards granted to any one or more participants;


(iii) to determine the number of shares to be covered by any Award;


(iv) to determine and modify the terms and conditions, including
restrictions, not inconsistent with the terms of the Plan, of
any Award, which terms and conditions may differ among
individual Awards and participants, and to approve the form of
written instruments evidencing the Awards;


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(v) to determine whether, to what extent, and under what
circumstances Stock and other amounts payable with respect to
an Award shall be deferred either automatically or at the
election of the participant and whether and to what extent the
Company shall pay or credit amounts equal to interest (at rates
determined by the Administrator) or dividends or deemed
dividends on such deferrals; and


(vi) to adopt, alter and repeal such rules, guidelines and practices
for administration of the Plan and for its own acts and
proceedings as it shall deem advisable; to interpret the terms
and provisions of the Plan and any Award (including related
written instruments); to make all determinations it deems
advisable for the administration of the Plan; to decide all
disputes arising in connection with the Plan; and to otherwise
supervise the administration of the Plan.


All decisions and interpretations of the Administrator shall be binding on all persons, including the Company and Plan participants.


(b) DELEGATION OF AUTHORITY TO GRANT AWARDS. The Administrator, in its discretion, may delegate to the Chief Executive Officer of the Company all or part of the Administrator's authority and duties with respect to Awards, including the granting thereof, to individuals who are not subject to the reporting and other provisions of Section 16 of the Act. The Administrator may revoke or amend the terms of a delegation at any time but such action shall not invalidate any prior actions of the Administrator's delegate or delegates that were consistent with the terms of the Plan.


SECTION 3. Shares Issuable under the Plan; Mergers; Substitution.
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(a) SHARES ISSUABLE. The maximum number of shares of Stock reserved and available for issuance under the Plan shall be such aggregate number of shares of Common Stock as does not exceed five percent (5%) of the total number of outstanding shares of Common Stock (which limit shall be applied in the case of each Award on the basis of the total number of outstanding shares of Common Stock at the time of such Award), subject to adjustment as provided for in Section 3(b) her ...