As filed with the Securities and Exchange Commission on January 17, 2007

                                          Registration No. 333-
                                                               ..........
..........................................................................
..........................................................................

                   SECURITIES AND EXCHANGE COMMISSION
                         WASHINGTON, D.C.  20549

                                FORM S-8

                         REGISTRATION STATEMENT
                                 UNDER
                       THE SECURITIES ACT OF 1933

                         Excel Technology, Inc.
                         ......................
         (Exact name of registrant as specified in its charter)

                                Delaware
                                ........
     (State or other jurisdiction of incorporation or organization)

                               11-2780242
                               ..........
                (I.R.S. employer identification number)

                            41 Research Way
                     East Setauket, New York  11733
            ..................................................
           (Address of principal executive offices) (Zip code)

      Excel Technology, Inc. 2006 Stock Option/Stock Issuance Plan
      ............................................................
                        (Full title of the plan)

                Antoine Dominic, Chief Executive Officer
                         Excel Technology, Inc.
                            41 Research Way
                     East Setauket, New York 11733
                ........................................
                (Name and address of agent for service)

                             (631) 784-6175
                             ..............
     (Telephone number, including area code, of agent for service)

                              - copy to -
                        Howard S. Breslow, Esq.
                         Breslow & Walker, LLP
                        100 Jericho Quadrangle
                        Jericho, New York 11753
                            (516) 822-6505
..........................................................................
..........................................................................


                     CALCULATION OF REGISTRATION FEE

    Title of      Amount to be    Proposed       Proposed     Amount of
 securities to   registered (1)    maximum        maximum   registration
 be registered                  offering price   aggregate       fee
     price                      per share (2)
................ .............. ...............  ...........  ............
 Common Stock,
par value $.001
   per share
("Common Stock")    750,000        $25.61       $19,207,500     $2055.20


(1)  Represents shares of common stock issuable under the Excel
     Technology 2006 Stock Option /Stock Issuance Plan(the "Plan").  This
     Registration Statement also covers such additional shares of Common
     Stock as may be issuable in accordance with the terms of the Plan by
     reason of any stock dividend, stock split, recapitalization, or
     other similar transaction without receipt of consideration which
     results in an increase in the number of shares of the outstanding
     Common Stock.

(2)  Pursuant to Rule 457(h), the proposed maximum offering price per
     share and the proposed maximum aggregate offering price have been
     calculated with respect to 750,000 shares, on the basis of
     $25.61, the average of the high and low prices of the Common
     Stock as quoted on Nasdaq National Market System on January 11,
     2007.


                                 PART II

           INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3.  Incorporation of Documents by Reference
         .......................................

         The following documents previously filed by Excel Technology,
Inc. (the "Company") with the Securities and Exchange Commission (the
"Commission") pursuant to the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), are incorporated herein by reference:

         (a)  The Company's Annual Report on Form 10-K, as amended, for
              the year ended December 31, 2005;

         (b)  All other reports filed pursuant to Section 13(a) or 15(d)
              of the Exchange Act since December 31, 2005; and

         (c)  The description of the Common Stock contained in the
              Company's Registration Statement on Form 8-A, including any
              amendment or report filed with the Commission for the
              purpose of updating such description.

          In addition, all documents and reports subsequently filed by
the Company pursuant to Section 13(a), 13(c), 14 or 15 (d) of the
Exchange Act prior to the filing of a post-effective amendment to this
Registration Statement which indicates that all securities offered hereby
have been sold or which deregisters all such securities then remaining
unsold shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the date of filing of
such documents.  Any statement contained herein or in any document
incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Registration
Statement to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement.  Any such
statement so modified or superseded shall not be deemed to constitute a
part of this Registration Statement, except as modified or superseded.

Item 4.  Description of Securities
         .........................

         Not applicable.

Item 5.  Interests of Named Experts and Counsel
         ......................................

         The validity of the securities offered hereby will be passed
upon for the Company by Breslow & Walker, LLP, New York, New York.
Howard S. Breslow, a partner in Breslow and Walker, LLP, was a director
of the Company until December 6, 2006.  As of the date hereof, Mr.
Breslow owns 12,000 shares of the Company's common stock and options to
purchase 80,000 shares of the Company's common stock.

Item 6.  Indemnification of Directors and Officers
         .........................................

         Section 102(b)(7) of the Delaware General Corporation Law
permits a corporation to provide in its certificate of incorporation that
a director of the corporation shall not be personally liable to the
corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of
the director's duty of loyalty to the corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) for unlawful payments of
dividends or unlawful stock repurchases, redemptions or other
distributions, or (iv) for any transaction from which the director
derived an improper personal benefit.  Article SIXTH of the Company's
Certificate of Incorporation provides for such limitation of liability.

         In addition, Section 145 of the Delaware General Corporation Law
empowers a corporation to indemnify any officer or director against
expenses incurred by him in connection with any action in which he is
made a party by reason of his being or having been a director, officer,
employee or agent of such corporation, provided that it is determined
that he acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful.  The Delaware General Corporation Law
provides that Section 145 is not exclusive of other rights to which those
seeking indemnification may be entitled under any bylaw, agreement, vote
of stockholders or disinterested directors or otherwise. Section 145 also
empowers a corporation  to advance to an officer or director the expenses
of defending claims upon receipt of his undertaking to repay any amount
to which it is later determined he is not entitled.

          The above discussion of the Delaware General Corporation Law
and of the Company's Certificate of Incorporation is not intended to be
exhaustive and is qualified in its entirety by such statute and the
Company's Certificate of Incorporation.

          The officers and directors of the Company are covered by
officers' and directors' liability insurance.

Item 7.  Exemption from Registration Claimed
         ...................................

          Not applicable.


Item 8.  Exhibits
         ........

                                                            Sequentially
                                                            Numbered Page
Exhibit                        Description                  Where Located
........                        ...........                  .............

 5           Opinion of Breslow & Walker, LLP as to the
             legality of the securities being registered           10

 23(a)       Consent of KPMG LLP                                   11

 23(b)       Consent of Breslow & Walker, LLP (included in
             Exhibit 5)                                             -
 24          Powers of Attorney - included in signature page
             hereof                                                 7

 99          Excel Technology, Inc. 2006 Stock Option/Stock
             Issuance Plan                                         12


Item 9.  Undertakings
         ............

A.       The undersigned Company hereby undertakes that it will:

         (1)  File, during any period in which it offers or sells
         securities, a post-effective amendment to the registration
         statement to:

              (i)  Include any prospectus required by Section 10(a)(3) of
         the Securities Act of 1933;

              (ii) Reflect in the prospectus any facts or events arising
         after the effective date of the registration statement (or the
         most recent post-effective amendment thereof) which,
         individually or in the aggregate, represent a fundamental change
         in the information set forth in the registration statement.
         Notwithstanding the foregoing, any increase or decrease in
         volume of securities offered (if the total dollar value of
         securities offered would not exceed that which was registered)
         and any deviation from the low or high end of the estimated
         maximum offering range may be reflected in the form of
         prospectus filed with the Commission pursuant to Rule 424(b) if,
         in the aggregate, the changes in volume and price represent no
         more than a 20 percent change in the maximum aggregate offering
         price set forth in the "Calculation of Registration Fee" table
         in the effective registration statement; and

              (iii)  Include any material information with respect to the
         plan of distribution not previously disclosed in the
         registration statement or any material change to such
         information in the registration statement;

         (2)  For the purpose of determining any liability under the
         Securities Act of 1933, treat each such post-effective amendment
         as a new registration statement for the securities offered in
         the registration statement, and the offering of the securities
         at that time as the initial bona fide offering of those
         securities; and

         (3)  File a post-effective amendment to remove from registration
         any of the securities that remain unsold at the end of the
         offering;

provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the Company
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in this registration statement.

B.       The Company hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the
Company's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.

C.       Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Company pursuant to the foregoing provisions,
or otherwise, the Company has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed in
the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than
payment by the Company of expenses incurred or paid by a director,
officer or controlling person of the Company in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered,
the Company will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act of 1933 and will be
governed by final adjudication of such issue.



                               SIGNATURES
                               ..........

         Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused
this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of East Setauket,
State of New York, as of this 17th day of January, 2007.

                                 EXCEL TECHNOLOGY, INC.

                            By:  /s/ Antoine Dominic
                                 ........................................
                                 Antoine Dominic, Chief Executive Officer


         Each person whose signature appears below constitutes and
appoints Antoine Dominic and J. Donald Hill, and each of them, with full
power of substitution,  his true and lawful attorney-in-fact and agents
to do any and all acts and things in his name and on his behalf in his
capacities indicated below which they or either of them may deem
necessary or advisable to enable Excel Technology, Inc. to comply with
the Securities Act of 1933, as amended, and any rules, regulations and
requirements of the Securities and Exchange Commission in connection with
this Registration Statement including specifically, but not limited to,
power and authority to sign for him in his name in the capacities stated
below, any and all amendments (including post-effective amendments) to do
and perform each and every act and thing requisite and necessary to be
done in such connection, as fully to all intents and purposes as we might
or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, or his substitute or substitutes, may
lawfully do or cause to be done by virtue thereof.


         Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

Signature                           Title                      Date
.....................  .................................. ................
/s/ J. Donald Hill    Chairman of the Board and Director January 17, 2007
.....................
J. Donald Hill

/s/ Antoine Dominic   Chief Executive Officer,           January 17, 2007
.....................  President,and Chief Operating
Antoine Dominic       Officer (Principal Executive
                      Officer) and Director


/s/ Alice Varisano    Chief Financial Officer            January 17, 2007
.....................  (Principal Financial and
Alice Varisano        Accounting Officer)

/s/ Steven Georgiev   Director                           January 17, 2007
.....................
Steven Georgiev

/s/ Donald E. Weeden  Director                           January 17, 2007
.....................
Donald E. Weeden

/s/ Ira J. Lamel      Director                           January 17, 2007
.....................
Ira J. Lamel



                             EXHIBIT INDEX
                             .............

                                                             Sequentially
                                                            Numbered Page
Exhibit                        Description                  Where Located
........                        ...........                  .............

 5           Opinion of Breslow & Walker, LLP as to the
             legality of the securities being registered           10

 23(a)       Consent of KPMG LLP                                   11

 23(b)       Consent of Breslow & Walker, LLP (included in
             Exhibit 5)                                             -
 24          Powers of Attorney - included in signature page
             hereof                                                 7

 99          Excel Technology, Inc. 2006 Stock Option/Stock
             Issuance Plan                                         12




                                                               Exhibit 5



January 17, 2007

Board of Directors
Excel Technology, Inc.
41 Research Way
East Setauket, NY 11733

Gentlemen:

     We have acted as counsel to Excel Technology, Inc. (the "Company")
in connection with the preparation and filing of a Registration Statement
on Form S-8 (the "Registration Statement") with the Securities and
Exchange Commission (the "Commission") covering the offering of up to
750,000 shares (the "Shares") of the Company's common stock, par value
$0.001 per share, pursuant to the exercise of options granted or which
may be granted under its 2006 Stock Option/Stock Issuance Plan (the
"Plan").  The Company has requested that we furnish this opinion for
inclusion as an exhibit to the Registration Statement.

     In connection with this opinion, we have examined the Registration
Statement and the Company's Certificate of Incorporation and Bylaws, each
as amended, and such other documents, records, certificates, memoranda
and other instruments as we deem necessary as a basis for this opinion.
We have assumed the genuineness and authenticity of all documents
submitted to us as originals, the conformity to originals of all
documents submitted to us as copies thereof, and the due execution and
delivery of all documents where due execution and delivery are a
prerequisite to the effectiveness thereof.  We also have assumed that on
the dates the options are exercised and/or shares are issued (i) the
Shares will continue to be validly authorized, and (ii) the options will
constitute valid, legal and binding obligations of the Company.

     On the basis of the foregoing, and in reliance thereon, we are of
the opinion that the Shares, when issued and sold in accordance with the
Plan, the options, the Registration Statement and the related prospectus,
will be validly issued, fully paid and nonassessable.

     We consent to the filing of this opinion as an exhibit to the
Registration Statement.  In giving such consent, we do not consider that
we are "experts" within the meaning of such term as used in the
Securities Act of 1933, as amended, or the rules and regulations of the
Commission promulgated thereunder, with respect to any part of the
Registration Statement, including this opinion.

                                             Sincerely,

                                             /s/ Breslow & Walker, LLP

                                             Breslow & Walker, LLP


                                                               EXHIBIT 23

        CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



The Board of Directors and Stockholders
Excel Technology, Inc.:


     We consent to the incorporation by reference in this registration
statement on Form S-8 of Excel Technology, Inc. of our reports dated
February 15, 2006, with respect to the consolidated balance sheets of
Excel Technology, Inc. and subsidiaries as of December 31, 2005 and 2004,
and the related consolidated statements of income, stockholders' equity
and comprehensive income and cash flows  for each of the years in the
three-year period ended December 31, 2005, and the related financial
statement schedule, management's assessment of the effectiveness of
internal control over financial reporting as of December 31, 2005, and
the effectiveness of internal control over financial reporting as of
December 31, 2005, which reports appear in the December 31, 2005 Annual
Report on Form 10-K of Excel Technology, Inc.



                                                           /s/ KPMG LLP



Melville, New York
January 17, 2007







                                                               EXHIBIT 99

                         EXCEL TECHNOLOGY, INC.
                        (a Delaware Corporation)

                  2006 STOCK OPTION/STOCK ISSUANCE PLAN

                              ARTICLE ONE
                           GENERAL PROVISIONS
                           ..................

     I.   PURPOSE OF THE PLAN
          This 2006 Stock Option/Stock Issuance Plan is intended to
promote the interests of Excel Technology Inc, a Delaware corporation, by
providing eligible persons with the opportunity to acquire a proprietary
interest, or otherwise increase their proprietary interest, in the
Corporation as an incentive for them to remain in the service of the
Corporation.

          Capitalized terms herein shall have the meanings assigned to
such terms in the attached Appendix.

     II.  STRUCTURE OF THE PLAN
          A.    The Plan shall be divided into two (2) separate equity
programs:
          (i)   the Option Grant Program under which eligible persons
may, at the discretion of the Committee, be granted options to purchase
shares of Common Stock, and

          (ii)  the Stock Issuance Program under which eligible persons
may, at the discretion of the Committee, be issued shares of Common Stock
directly.

          B.    The provisions of Articles One and Four shall apply to
both equity programs under the Plan and shall accordingly govern the
interests of all persons under the Plan.

     III. ADMINISTRATION OF THE PLAN

          A.    The Plan shall be administered by the Committee.  Members
of the Committee shall serve for such period of time as the Board may
determine and shall be subject to removal by the Board at any time.

          B.    The Committee shall have full power and authority
(subject to the provisions of the Plan) to establish such rules and
regulations as it may deem appropriate for proper administration of the
Plan and to make such determinations under, and issue such
interpretations of, the Plan and any outstanding options and awards of
shares of Common Stock thereunder as it may deem necessary or advisable.
Decisions of the Committee shall be final and binding on all parties who
have an interest in the Plan or any option or issuance of shares of
Common Stock thereunder.

          c.    The Committee may delegate to one or more officers of the
Corporation the authority to grant options under the Option Grant Program
and/or shares of Common Stock under the Stock Issuance Program to
eligible persons who are not subject to the requirements of Section 16 of
the Exchange Act or Section 162(m) of the Code and the rules and
regulations thereunder, provided that the Committee shall have fixed the
total number of shares of Common Stock subject to such grants.  Any such
delegation shall be subject to the limitations of Section 157(c) of the
Delaware General Corporation Law.  The Committee may revoke any such
allocation or delegation at any time for any reason with or without prior
notice.

          D.    No member of the Board or the Committee, nor any officer
or employee of the Corporation acting on behalf of the Board or the
Committee, shall be personally liable for any action, determination or
interpretation taken or made with respect to the Plan, and all members of
the Board or the Committee and all officers or employees of the
Corporation acting on their behalf shall, to the extent permitted by law,
be fully indemnified and protected by the Corporation in respect of any
such action, determination or interpretation.

          E.    The Committee may employ attorneys, consultants,
accountants or other persons, and the Committee and the Corporation and
its officers and directors shall be entitled to rely upon the advice,
opinions or valuations of any such persons.

     IV.  ELIGIBILITY

          A.    The persons eligible to participate in the Plan are as
follows:
          (i)   Employees,

          (ii)  non-employee members of the Board or the non-employee
members of the board of directors of any Parent or Subsidiary, and

          (iii) consultants and other independent advisors who provide
services to the Corporation (or any Parent or Subsidiary).

          B.    The Committee shall have full authority to determine (i)
with respect to the grants under the Option Grant Program, which eligible
persons are to receive the option grants, the time or times when those
grants are to be made, the number of shares to be covered by each such
grant, the status of the granted option as either an Incentive Option or
a Non-Statutory Option, the time or times when each option is to become
exercisable, the vesting schedule (if any) applicable to the option
shares and the maximum term for which the option is to remain
outstanding, and (ii) with respect to stock issuances under the Stock
Issuance Program, which eligible persons are to receive such stock
issuances, the time or times when such issuances are to be made, the
number of shares to be issued to each Participant, the vesting schedule
(if any) applicable to the issued shares, the consideration (if any) to
be paid by the Participant for such shares, whether such award shall be a
Performance Award, and if it is a Performance Award, the terms of such
Performance Award consistent with Section I.C. of Article Three.

          C.    The Committee shall have the absolute discretion either
to grant options in accordance with the Option Grant Program or to effect
stock issuances in accordance with the Stock Issuance Program.

          D.    Subject to Section V.C. of this Article One relating to
changes made to Common Stock by reason of certain events, no Employee
shall be eligible to be granted options covering more than two hundred
thousand  (200,000) shares of Common Stock during any one calendar year.

          E.    Subject to Section V.C. of this Article One relating to
changes made to Common Stock by reason of certain events, the maximum
number of shares of Common Stock that may be issued to any Employee in
connection with Performance Awards under the Stock Issuance Program
during any calendar year shall be two hundred thousand (200,000) shares.

     V.   STOCK SUBJECT TO THE PLAN

          A.    The stock issuable under the Plan shall be shares of
authorized but unissued or reacquired Common Stock.  The maximum number
of shares of Common Stock which may be issued over the term of the Plan
shall not exceed seven hundred and fifty thousand (750,000) shares.

          B.    Shares of Common Stock subject to outstanding options
shall be available for subsequent issuance under the Plan to the extent
(i) the options expire or terminate for any reason prior to exercise in
full or (ii) the options are canceled in accordance with the
cancellation-regrant provisions of Article Two.  Unvested shares issued
under the Plan and subsequently repurchased by the Corporation, at the
option exercise price or direct issue price paid per share, pursuant to
the Corporation's repurchase rights under the Plan shall be added back to
the number of shares of Common Stock reserved for issuance under the Plan
and shall accordingly be available for reissuance through one or more
subsequent option grants or direct stock issuances under the Plan.

          C.    Should any change be made to the Common Stock by reason
of any stock split, stock dividend, recapitalization, combination of
shares, exchange of shares or other change affecting the outstanding
Common Stock as a class without the Corporation's receipt of
consideration, appropriate adjustments shall be made by the Committee to
(i) the maximum number and/or class of securities issuable under the Plan
and (ii) the number and/or class of securities and the exercise price per
share in effect under each outstanding option in order to prevent the
dilution or enlargement of benefits thereunder.  The adjustments
determined by the Committee shall be final, binding and conclusive.


                               ARTICLE TWO
                          OPTION GRANT PROGRAM
                          ....................

     I.   OPTION TERMS

          Each option shall be evidenced by one or more documents in the
form approved by the Committee; provided, however, that each such
document shall comply with the terms specified below.  Each document
evidencing an Incentive Option shall, in addition, be subject to the
provisions of the Plan applicable to such options.

          A.    Exercise Price.

          1.    The exercise price per share shall be fixed by the
Committee, and shall in no event be less than the Fair Market Value per
share of Common Stock on the option grant date.

          2.    The exercise price shall become immediately due upon
exercise of the option and shall, subject to the provisions of Section I
of Article Four and the documents evidencing the option, be payable in
cash or check made payable to the Corporation.  Should the Common Stock
be registered under Section 12(g) of the 1934 Act at the time the option
is exercised, then the exercise price may also be paid as follows:

          (i)   in shares of Common Stock (including shares that are
subject to risk of forfeiture or restrictions on transfer ("Restricted
Shares")) held for the requisite period necessary to avoid a charge to
the Corporation's earnings for financial reporting purposes and valued at
Fair Market Value on the Exercise Date, provided that, unless otherwise
determined by the Committee, if Restricted Shares are surrendered, shares
received by the Optionee upon exercise of the Options, equal in number to
the Restricted Shares surrendered, shall be subject to the same risks of
forfeiture or restrictions on transfer as those that applied to the
Restricted Shares surrendered by the Optionee, or

          (ii)  to the extent the option is exercised for vested shares,
through a special sale and remittance procedure pursuant to which the
Optionee shall concurrently provide irrevocable instructions (A) to a
Corporation-designated brokerage firm to effect the immediate sale of the
purchased shares and remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
exercise price payable for the purchased shares plus all applicable
Federal, state and local income and employment taxes required to be
withheld by the Corporation by reason of such exercise and (B) to the
Corporation to deliver the certificates for the purchased shares directly
to such brokerage firm in order to complete the sale.

Except to the extent such sale and remittance procedure is utilized,
payment of the exercise price for the purchased shares must be made on
the Exercise Date.

          B.    Exercise and Term of Options.  Each option shall be
exercisable at such time or times, during such period and for such number
of shares as shall be determined by the Committee and set forth in the
documents evidencing the option grant.  However, no option shall have a
term in excess of ten (10) years measured from the option grant date.

          C.    Effect of Termination of Service.

          1.    The following provisions shall govern the exercise of any
options held by the Optionee at the time of cessation of Service or
death:

           (i)  Should the Optionee cease to remain in Service for any
reason other than death, Disability or Misconduct, then, subject to
Section I. C. 2.  (i) and (ii) of this Article Two, the Optionee shall
have a period of three (3) months following the date of such cessation of
Service during which to exercise each outstanding option held by such
Optionee; provided, however, that if such Optionee is an executive
officer, then such Optionee may exercise such Options at any time within
twelve (12) months from the date of termination of such Service.

          (ii)  Should Optionee's Service terminate by reason of
Disability, then the Optionee shall have a period of twelve (12) months
following the date of such cessation of Service during which to exercise
each outstanding option held by such Optionee.

          (iii) If the Optionee dies while holding an outstanding option,
then the personal representative of his or her estate or the person or
persons to whom the option is transferred pursuant to the Optionee's will
or the laws of inheritance shall have a twelve (12)-month period
following the date of the Optionee's death to exercise such option.

          (iv)  Under no circumstances, however, shall any such option be
exercisable after the specified expiration of the option term.

          (v)   Subject to Section I.C.2.(i) and (ii) of this Article
Two, during the applicable post-Service exercise period, the option may
not be exercised in the aggregate for more than the number of vested
shares for which the option is exercisable on the date of the Optionee's
cessation of Service.  Upon the expiration of the applicable exercise
period or (if earlier) upon the expiration of the option term, the option
shall terminate and cease to be outstanding for any vested shares for
which the option has not been exercised.  However, the option shall,
immediately upon the Optionee's cessation of Service, terminate and cease
to be outstanding with respect to any and all option shares for which the
option is not otherwise at the time exercisable or in which the Optionee
is not otherwise at that time vested.

          (vi)  Should Optionee's Service be terminated for Misconduct,
then all outstanding options held by the Optionee shall terminate
immediately and cease to remain outstanding.

          2.    The Committee shall have the discretion, exercisable
either at the time an option is granted or at any time while the option
remains outstanding, to:

          (i)   extend the period of time for which the option is to
remain exercisable following Optionee's cessation of Service or death
from the limited period otherwise in effect for that option to such
greater period of time as the Committee shall deem appropriate, but in no
event beyond the expiration of the option term, and/or

          (ii)  permit the option to be exercised, during the applicable
post-Service exercise period, not only with respect to the number of
vested shares of Common Stock for which such option is exercisable at the
time of the Optionee's cessation of Service but also with respect to one
or more additional installments in which the Optionee would have vested
under the option had the Optionee continued in Service.

          D.    Stockholder Rights.  The holder of an option shall have
no stockholder rights with respect to the shares subject to the option
until such person shall have exercised the option, paid the exercise
price and become a holder of record of the purchased shares.

          E.    Unvested Shares.  The Committee shall have the discretion
to grant options which are exercisable for unvested shares of Common
Stock.  Should the Optionee cease Service while holding such unvested
shares, the Corporation shall have the right to repurchase, at the
exercise price paid per share, any or all of those unvested shares.  The
terms upon which such repurchase right shall be exercisable (including
the period and procedure for exercise and the appropriate vesting
schedule for the purchased shares) shall be established by the Committee
and set forth in the document evidencing such repurchase right.  The
Committee may not impose a vesting schedule upon any option grant or the
shares of Common Stock subject to that option which is more restrictive
than twenty percent (20%) per year vesting, with the initial vesting to
occur not later than one (1) year after the option grant date.  However,
such limitation shall not be applicable to any option grants made to
individuals who are officers of the Corporation, non-employee Board
members or independent consultants.

          F.    Limited Transferability of Options.  During the lifetime
of the Optionee, the option shall be exercisable only by the Optionee and
shall not be assignable or transferable other than by will or by the laws
of descent and distribution following the Optionee's death.

          G.    Withholding.  The Corporation's obligation to deliver
shares of Common Stock upon the exercise of any options granted under the
Plan shall be subject to the satisfaction of all applicable Federal,
state and local income and employment tax withholding requirements.

     II.  INCENTIVE OPTIONS

          The terms specified below shall be applicable to all Incentive
Options.  Except as modified by the provisions of this Section II, all
the provisions of the Plan shall be applicable to Incentive Options.
Options which are specifically designated as Non-Statutory Options shall
not be subject to the terms of this Section II.

          A.    Eligibility.  Incentive Options may only be granted to
Employees.

          B.    Dollar Limitation.  The aggregate Fair Market Value of
the shares of Common Stock (determined as of the respective date or dates
of grant) for which one or more options granted to any Employee under the
Plan (or any other option plan of the Corporation or any Parent or
Subsidiary) may for the first time become exercisable as Incentive
Options during any one (1) calendar year shall not exceed the sum of One
Hundred Thousand Dollars ($100,000).  To the extent the Employee holds
two (2) or more such options which become exercisable for the first time
in the same calendar year, the foregoing limitation on the exercisability
of such options as Incentive Options shall be applied on the basis of the
order in which such options are granted.

          C.    10% Stockholder.  If any Employee to whom an Incentive
Option is granted is a 10% Stockholder, then (i) the option term shall
not exceed five (5) years measured from the option grant date and (ii)
the exercise price per share shall not be less than one hundred ten
percent (110%) of the Fair Market Value per share of Common Stock on the
option grant date.

     III. CORPORATE TRANSACTION

          A.    The shares subject to each option outstanding under the
Plan at the time of a Corporate Transaction shall automatically vest in
full so that each such option shall, immediately prior to the effective
date of the Corporate Transaction, become fully exercisable for all of
the shares of Common Stock at the time subject to that option and may be
exercised for any or all of those shares as fully-vested shares of Common
Stock.

          B.    All outstanding repurchase rights shall also terminate
automatically, and the shares of Common Stock subject to those terminated
rights shall immediately vest in full, in the event of any Corporate
Transaction.

          C.    Immediately following the consummation of the Corporate
Transaction, all outstanding options shall terminate and cease to be
outstanding, except to the extent assumed by the successor corporation
(or parent thereof).

          D.    Each option which is assumed in connection with a
Corporate Transaction shall be appropriately adjusted by the Committee,
immediately after such Corporate Transaction, to apply to the number and
class of securities which would have been issuable to the Optionee in
consummation of such Corporate Transaction, had the option been exercised
immediately prior to such Corporate Transaction.  Appropriate adjustments
shall also be made by the Committee to (i) the number and class of
securities available for issuance under the Plan following the
consummation of such Corporate Transaction and (ii) the exercise price
payable per share under each outstanding option, provided the aggregate
exercise price payable for such securities shall remain the same.

          E.    The Committee shall have the discretion, exercisable
either at the time the option is granted or at any time while the option
remains outstanding, to provide for the automatic acceleration (in whole
or in part) of one or more outstanding options (and the immediate
termination of the Corporation's repurchase rights with respect to the
shares).

                             ARTICLE THREE
                         STOCK ISSUANCE PROGRAM
                         ......................

     I.   STOCK ISSUANCE TERMS

          Shares of Common Stock may be issued by the Committee under the
Stock Issuance Program through direct and immediate issuances without any
intervening option grants.  Each such stock issuance shall be evidenced
by a Stock Issuance Agreement which complies with the terms specified
below.

          A.    Payment for Shares.

          The Committee may, but need not, require a Participant to pay
an amount per share determined by the Committee as a condition for
receiving an issuance of shares of Common Stock under the Stock Issuance
Program.

          B.    Vesting Provisions.

          1.    Shares of Common Stock issued under the Stock Issuance
Program may, in the discretion of the Committee, be fully and immediately
vested upon issuance or may vest in one or more installments over the
Participant's period of Service or upon attainment of specified
performance objectives.  However, the Committee may not impose a vesting
schedule upon any stock issuance effected under the Stock Issuance
Program (other than in connection with a Performance Award) which is more
restrictive than twenty percent (20%) per year vesting, with initial
vesting to occur not later than one (1) year after the issuance date.
Such limitation shall not apply to any Common Stock issuances made to the
officers of the Corporation, non-employee Board members or independent
consultants.

          2.    Any new, substituted or additional securities or other
property (including money paid other than as a regular cash dividend)
which the Participant may have the right to receive with respect to the
Participant's unvested shares of Common Stock by reason of any stock
dividend, stock split, recapitalization, combination of shares, exchange
of shares or other change affecting the outstanding Common Stock as a
class without the Corporation's receipt of consideration shall be issued
subject to (i) the same vesting requirements applicable to the
Participant's unvested shares of Common Stock and (ii) such escrow
arrangements as the Committee shall deem appropriate.

          3.    The Participant shall have full stockholder rights with
respect to any shares of Common Stock issued to the Participant under the
Stock Issuance Program, whether or not the Participant's interest in
those shares is vested.  Accordingly, the Participant shall have the
right to vote such shares and to receive any regular cash dividends paid
on such shares.

          4.    Should the Participant cease to remain in Service while
holding one or more unvested shares of Common Stock issued under the
Stock Issuance Program or should the performance objectives not be
attained with respect to one or more such unvested shares of Common
Stock, then, subject to Section I. B. 5. of this Article Three, those
shares shall be immediately surrendered to the Corporation for
cancellation, and the Participant shall have no further stockholder
rights with respect to those shares.  To the extent the surrendered
shares were previously issued to the Participant for consideration paid
in cash or cash equivalent (including the Participant's purchase-money
indebtedness), the Corporation shall repay to the Participant the cash
consideration paid for the surrendered shares and shall cancel the unpaid
principal balance of any outstanding purchase-money note of the
Participant attributable to such surrendered shares.

          5.    The Committee may in its discretion waive the surrender
and cancellation of one or more unvested shares of Common Stock (or other
assets attributable thereto) which would otherwise occur upon the non-
completion of the vesting schedule applicable to such shares (unless the
shares were issued in connection with a Performance Award and vesting was
contingent on meeting performance goals).  Such waiver shall result in
the immediate vesting of the Participant's interest in the shares of
Common Stock as to which the waiver applies.  Such waiver may be effected
at any time, whether before or after the Participant's cessation of
Service.

         C.    Performance Awards.

          1.    If the Committee determines that any shares of Common
Stock to be issued under the Stock Issuance Program to an eligible
Employee should qualify as "performance-based compensation" for purposes
of Section 162(m) of the Code, the grant or vesting of such award (each,
a "Performance Award") shall be contingent upon achievement of pre-
established performance goals and other terms set forth in this Section
I.C. of this Article III.

          (i)   The performance goals for such Performance Awards shall
consist of one or more business criteria and a targeted level or levels
of performance with respect to each of such criteria, as specified by the
Committee consistent with this Section I.C. of this Article III.  The
performance goals shall be objective and shall otherwise meet the
requirements of Section 162(m) of the Code and regulations thereunder
(including Treasury Regulation 1.162-27 and successor regulations
thereto), including the requirement that the level or levels of
performance targeted by the Committee result in the achievement of
performance goals being "substantially uncertain."  The Committee may
determine that such Performance Awards shall be granted or vested upon
achievement of any one performance goal or that two or more of the
performance goals must be achieved as a condition to grant or vesting.
Performance goals may differ for Performance Awards granted to any one
Participant or to different Participants.

          (ii)  One or more of the following business criteria for the
Corporation and/or for specified Subsidiaries or affiliates or divisions
or other business units or lines of business of the Corporation and/or of
its Subsidiaries or affiliates shall be used by the Committee in
establishing performance goals for such Performance Awards:  appreciation
in value of the Corporation's common stock; total shareholder return;
pretax earnings; return on capital, equity or assets; earnings
measures/ratios (on a gross, net, pretax or posttax basis), including
basic earnings per share, diluted earnings per share, total earnings,
operating earnings, earnings growth, earnings before interest and taxes,
and earnings before interest, taxes, depreciation and amortization;
operating income; net income; pro forma net income; economic value
created or economic profit; operating profit; sales; sales growth; gross
margin; direct margin; book value; revenues; expenses (including expense
ratio); loss ratio; new business production; capital markets and/or
acquisition transactions; investment programs initiated; per period or
cumulative cash flow (including but not limited to operating cash flow
and free cash flow); cash flow return on investment; operating margin;
net profit margin; inventory turns; financial return ratios; market
share; balance sheet measurements such as receivable turnover;
improvement in or attainment of expense levels; improvement in or
attainment of working capital levels; debt reduction; strategic
innovation; strategic plan development and implementation; customer or
employee satisfaction; improvements in productivity; and any combination
of the foregoing.  Performance goals may be expressed as absolute or
relative goals, goals compared to past performance, goals compared to the
performance of a published or special index or benchmark deemed
applicable by the Committee, goals compared to the performance of peer
companies, or otherwise as determined by the Committee.

          (iii)  Achievement of performance goals in respect of such
Performance Awards shall be measured over a performance period, as
specified by the Committee.  A performance goal shall be established not
later than the earlier of (A) 90 days after the beginning of any
performance period applicable to such Performance Award or (B) the date
on which 25% of such performance period has elapsed.

          (iv)  The Committee may, in its discretion, reduce the number
of shares of Common Stock otherwise issued or vesting in connection with
such Performance Awards, but may not exercise discretion to increase any
such amount payable to the Participant in respect of a Performance Award.

          (v)   In all cases, the maximum Performance Award of any
Participant shall be subject to the limitation set forth in Section IV.E.
of Article One.

          (vi)  The Committee is authorized to make adjustments in the
terms and conditions of, and the criteria included in, the authorization
of Performance Awards and performance goals in recognition of unusual,
nonrecurring or non-operational events, including without limitation
stock splits, stock dividends, mergers, consolidations, large, special
and non-recurring dividends, the effects of currency fluctuations,
litigation or claim judgments or settlements, accruals for reorganization
and restructuring programs, asset write-downs, acquisitions and
dispositions of businesses and assets, and any or all items that are
excluded from the calculation of non-GAAP earnings as reflected in any
Corporation press release and Form 8-K filing relating to an earnings
announcement, affecting the Corporation and its Subsidiaries or any
business unit thereof, or the financial statements of the Corporation or
any Subsidiary, or in response to changes in applicable laws,
regulations, accounting principles, tax rates and regulations or business
conditions or in view of the Committee's assessment of the business
strategy of the Corporation, any Subsidiary or affiliate or business unit
thereof, performance of comparable organizations, economic and business
conditions, and any other circumstances deemed relevant; provided,
however, that no such adjustment shall be authorized or made if and to
the extent that the existence or exercise of such authority would cause a
Performance Award to fail to qualify as "performance-based compensation"
under Section 162(m) of the Code.

          2.    Determinations by the Committee as to the establishment
of performance goals for Performance Awards, the amount potentially
payable in respect of Performance Awards, the level of actual achievement
of the specified performance goals relating to Performance Awards and the
amount of any final Performance Award shall be recorded in writing.
Specifically, the Committee shall certify in writing, in a manner
conforming to applicable regulations under Section 162(m) of the Code,
prior to issuance or vesting of each such Performance Award, that the
performance objective relating to the Performance Award and other
material terms of the Performance Award upon which issuance or vesting of
the Performance Award was conditioned have been satisfied.

     II.  CORPORATE TRANSACTION

          Upon the occurrence of a Corporate Transaction, all outstanding
repurchase rights under the Stock Issuance Program shall terminate
automatically, and the shares of Common Stock subject to those terminated
rights shall immediately vest in full.

     III. SHARE ESCROW/LEGENDS

          Unvested shares may, in the Committee's discretion, be held by
a custodian designated by the Corporation until the Participant's
interest in such shares vests or may be issued directly to the
Participant with restrictive legends on the certificates evidencing those
unvested shares.

                             ARTICLE FOUR
                             MISCELLANEOUS
                             .............
     I.   FINANCING

          The Committee may permit any Optionee or Participant to pay the
option exercise price under the Option Grant Program or the purchase
price of shares issued under the Stock Issuance Program by delivering a
full-recourse, interest bearing promissory note payable in one or more
installments.  The terms of any such promissory note (including the
interest rate and the terms of repayment) shall be established by the
Committee in its sole discretion.  In no event may the maximum credit
available to the Optionee or Participant exceed the sum of (i) the
aggregate option exercise price or purchase price payable for the
purchased shares (less the par value of those shares) plus (ii) any
Federal, state and local income and employment tax liability incurred by
the Optionee or the Participant in connection with the option exercise or
share purchase.

     II.  EFFECTIVE DATE AND TERM OF PLAN

          A.    The Plan shall become effective when adopted by the
Board, but no option granted under the Plan may be exercised, and no
shares shall be issued under the Plan, until the Plan is approved by the
Corporation's stockholders.  If such stockholder approval is not obtained
within twelve (12) months after the date of the Board's adoption of the
Plan, then all options previously granted under the Plan shall terminate
and cease to be outstanding, and no further options shall be granted and
no shares shall be issued under the Plan.  Subject to such limitation,
the Committee may grant options and issue shares under the Plan at any
time after the effective date of the Plan and before the date fixed
herein for termination of the Plan.

          B.    The Plan shall terminate upon the earliest of (i) the
expiration of the ten (10)-year period measured from the date the Plan is
adopted by the Board, (ii) the date on which all shares available for
issuance under the Plan shall have been issued as vested shares or (iii)
the termination of all outstanding options in connection with a Corporate
Transaction.  All options and unvested stock issuances outstanding at
that time under the Plan shall continue to have full force and effect in
accordance with the provisions of the documents evidencing such options
or issuances.

          C.    The Corporation intends that the Plan will be submitted
for reapproval by the Corporation's stockholders no later than the first
meeting of stockholders that occurs in the fifth year following the year
in which the Corporation's stockholders previously approved the Plan.

     III. AMENDMENT OF THE PLAN

          A.    The Board shall have complete and exclusive power and
authority to amend or modify the Plan in any or all respects.  However,
no such amendment or modification shall adversely affect the rights and
obligations with respect to options or unvested stock issuances at the
time outstanding under the Plan unless the Optionee or the Participant
consents to such amendment or modification.  In addition, certain
amendments may require stockholder approval pursuant to Section 162(m) or
422 of the Code or pursuant to other applicable laws and regulations or
the rules of any stock exchange on which the shares of Common Stock may
be listed or quoted.

          B.    Options may be granted under the Option Grant Program and
shares may be issued under the Stock Issuance Program which are in each
instance in excess of the number of shares of Common Stock then available
for issuance under the Plan, provided any excess shares actually issued
under those programs shall be held by a custodian designated by the
Corporation until there is obtained stockholder approval of an amendment
sufficiently increasing the number of shares of Common Stock available
for issuance under the Plan.  If such stockholder approval is not
obtained within twelve (12) months after the date the first such excess
shares are made, then (i) any unexercised options granted on the basis of
such excess shares shall terminate and cease to be outstanding and (ii)
the Corporation shall promptly refund to the Optionees and the
Participants the exercise or purchase price paid for any excess shares
issued under the Plan and held by a custodian designated by the
Corporation, together with interest (at the applicable Short Term Federal
Rate) for the period the shares were held by the custodian, and such
shares shall thereupon be automatically canceled and cease to be
outstanding.

     IV.  USE OF PROCEEDS

          Any cash proceeds received by the Corporation from the sale of
shares of Common Stock under the Plan shall be used for general corporate
purposes.

     V.   WITHHOLDING

          The Corporation's obligation to deliver shares of Common Stock
upon the exercise of any options or upon the vesting of any shares issued
under the Plan shall be subject to the satisfaction of all applicable
Federal, state and local income and employment tax withholding
requirements.

      VI. REGULATORY APPROVALS

          The implementation of the Plan, the granting of any options
under the Plan and the issuance of any shares of Common Stock (i) upon
the exercise of any option or (ii) under the Stock Issuance Program shall
be subject to the Corporation's procurement of all approvals and permits
required by regulatory authorities having jurisdiction over the Plan, the
options granted under it and the shares of Common Stock issued pursuant
to it.

     VII. NO EMPLOYMENT OR SERVICE RIGHTS

          Nothing in the Plan shall confer upon the Optionee or the
Participant any right to continue in Service for any period of specific
duration or interfere with or otherwise restrict in any way the rights of
the Corporation (or any Parent or Subsidiary employing or retaining such
person) or of the Optionee or the Participant, which rights are hereby
expressly reserved by each, to terminate such person's Service at any
time for any reason, with or without cause.

     VIII. FINANCIAL REPORTS

           The Corporation shall deliver a balance sheet and an income
statement at least annually to each individual holding an outstanding
option under the Plan, unless such individual is a key Employee whose
duties in connection with the Corporation (or any Parent or Subsidiary)
assure such individual access to equivalent information.

     IX.   GOVERNING LAW

           The validity, construction, and effect of the Plan and any
rules and regulations or documents hereunder shall be determined in
accordance with the laws (including those governing contracts) of
Delaware, without giving effect to principles of conflicts of laws.

                               APPENDIX
                               ........

     The following definitions shall be in effect under the Plan:

     A.  Board shall mean the Corporation's Board of Directors.
         .....

     B.  Code shall mean the Internal Revenue Code of 1986, as amended.
         ....

     C.  Committee shall mean the Compensation Committee of the Board.
         .........
The Committee shall have at least two members, each of whom shall be a
"non-employee director" as defined in Rule 16b-3 under the Exchange Act
and an "outside director" as defined in Section 162(m) of the Code and
the regulations thereunder, and, if applicable, meet the independence
requirements of the applicable stock exchange, quotation system or other
self-regulatory organization on which the shares of Common Stock are
traded.  However, no act of the Committee shall be void or deemed to be
without authority due to the failure of a member to meet any
qualification requirement at the time the action is taken.

     D.  Common Stock shall mean the Corporation's common stock.
         ............

     E.  Corporate Transaction shall mean either of the following
         .....................
stockholder-approved transactions to which the Corporation is a party:

         (a) a merger or consolidation in which securities possessing
     more than fifty percent (50%) of the total combined voting power of
     the Corporation's outstanding securities are transferred to a
     person or persons different from the persons holding those
     securities immediately prior to such transaction, or

         (b) the sale, transfer or other disposition of all or
     substantially all of the Corporation's assets in complete
     liquidation or dissolution of the Corporation.

     F.  Corporation shall mean Excel Technology, Inc, a Delaware
         ...........
corporation.

     G.  Disability shall mean the inability of the Optionee or the
         ..........
Participant to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment and shall be
determined by the Committee on the basis of such medical evidence as the
Committee deems warranted under the circumstances.

     H.  Employee shall mean an individual who is in the employ of the
         ........
Corporation (or any Parent or Subsidiary), subject to the control and
direction of the employer entity as to both the work to be performed and
the manner and method of performance.

     I.  Exercise Date shall mean the date on which the Corporation shall
         .............
have received written notice of the option exercise.

     J.  Fair Market Value per share of Common Stock on any relevant date
         .................
shall be determined by the Committee in accordance with the following
provisions:

         (a) If the Common Stock is at the time traded on the Nasdaq
     National Market, then the Fair Market Value shall be the closing
     selling price per share of Common Stock on the date in question, as
     such price is reported by the National Association of Securities
     Dealers on the Nasdaq National Market.  If there is no closing
     selling price for the Common Stock on the date in question, then the
     Fair Market Value shall be the closing selling price on the last
     preceding date for which such quotation exists.

         (b) If the Common Stock is at the time listed on any Stock
     Exchange, then the Fair Market Value shall be the closing selling
     price per share of Common Stock on the date in question on the Stock
     Exchange determined by the Committee to be the primary market for
     the Common Stock, as such price is officially quoted in the
     composite tape of transactions on such exchange.  If there is no
     closing selling price for the Common Stock on the date in question,
     then the Fair Market Value shall be the closing selling price on the
     last preceding date for which such quotation exists.

         (c) If the Common Stock is at the time neither listed on any
     Stock Exchange nor traded on the Nasdaq National Market, then the
     Fair Market Value shall be determined by the Committee after taking
     into account such factors as the Committee shall deem appropriate.

     K.  Incentive Option shall mean an option which satisfies the
         ................
requirements of Code Section 422.

     L.  Misconduct shall mean the commission of any act of fraud,
         ..........
embezzlement or dishonesty by the Optionee or Participant, any
unauthorized use or disclosure by such person of confidential information
or trade secrets of the Corporation (or any Parent or Subsidiary), or any
other intentional misconduct by such person adversely affecting the
business or affairs of the Corporation (or any Parent or Subsidiary) in a
material manner.  The foregoing definition shall not be deemed to be
inclusive of all the acts or omissions which the Corporation (or any
Parent or Subsidiary) may consider as grounds for the dismissal or
discharge of any Optionee, Participant or other person in the Service of
the Corporation (or any Parent or Subsidiary).

     M.  1934 Act shall mean the Securities Exchange Act of 1934, as
         ........
amended.

     N.  Non-Statutory Option shall mean an option not intended to
         ....................
satisfy the requirements of Code Section 422.

     O.  Option Grant Program shall mean the option grant program in
         ....................
effect under the Plan.

     P.  Optionee shall mean any person to whom an option is granted
         ........
under the Plan.

     Q.  Parent shall mean any corporation (other than the Corporation)
         ......
in an unbroken chain of corporations ending with the Corporation,
provided each corporation in the unbroken chain (other than the
Corporation) owns, at the time of the determination, stock possessing
fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.

     R.  Participant shall mean any person who is issued shares of Common
         ...........
Stock under the Stock Issuance Program.

     S.  Performance Award shall mean a Performance Award as that term is
         .................
defined in Section I.C.1. of Article Three.

     T.  Plan shall mean the Corporation's 2006 Stock Option/Stock
         ....
Issuance Plan, as set forth in this document.

      U. Service shall mean the provision of services to the Corporation
         .......
(or any Parent or Subsidiary) by a person in the capacity of an Employee,
a non-employee member of the board of directors or a consultant or
independent advisor, except to the extent otherwise specifically provided
in the documents evidencing the option grant.

     V.  Stock Exchange shall mean either the American Stock Exchange or
         ..............
the New York Stock Exchange or the Nasdaq Stock Market LLC.

     W.  Stock Issuance Agreement shall mean the agreement entered into
         ........................
by the Corporation and the Participant at the time of issuance of shares
of Common Stock under the Stock Issuance Program.

     X.  Stock Issuance Program shall mean the stock issuance program in
         ......................
effect under the Plan.

     Y.  Subsidiary shall mean any corporation (other than the
         ..........
Corporation) in an unbroken chain of corporations beginning with the
Corporation, provided each corporation (other than the last corporation)
in the unbroken chain owns, at the time of the determination, stock
possessing fifty percent (50%) or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain.

     Z.  10% Stockholder shall mean the owner of stock (as determined
         ...............
under Code Section 424(d)) possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Corporation
(or any Parent or Subsidiary).
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As filed with the Securities and Exchange Commission on January 17, 2007

                                          Registration No. 333-
                                                               ..........
..........................................................................
..........................................................................

                   SECURITIES AND EXCHANGE COMMISSION
                         WASHINGTON, D.C.  20549

                                FORM S-8

                         REGISTRATION STATEMENT
                                 UNDER
                       THE SECURITIES ACT OF 1933

                         Excel Technology, Inc.
                         ......................
         (Exact name of registrant as specified in its charter)

                                Delaware
                                ........
     (State or other jurisdiction of incorporation or organization)

                               11-2780242
                               ..........
                (I.R.S. employer identification number)

                            41 Research Way
                     East Setauket, New York  11733
            ..................................................
           (Address of principal executive offices) (Zip code)

      Excel Technology, Inc. 2006 Stock Option/Stock Issuance Plan
      ............................................................
                        (Full title of the plan)

                Antoine Dominic, Chief Executive Officer
                         Excel Technology, Inc.
                            41 Research Way
                     East Setauket, New York 11733
                ........................................
                (Name and address of agent for service)

                             (631) 784-6175
                             ..............
     (Telephone number, including area code, of agent for service)

                              - copy to -
                        Howard S. Breslow, Esq.
                         Breslow & Walker, LLP
                        100 Jericho Quadrangle
                        Jericho, New York 11753
                            (516) 822-6505
..........................................................................
..........................................................................

                     CALCULATION OF REGISTRATION FEE

    Title of      Amount to be    Proposed       Proposed     Amount of
 securities to   registered (1)    maximum        maximum   registration
 be registered                  offering price   aggregate       fee
     price                      per share (2)
................ .............. ...............  ...........  ............
 Common Stock,
par value $.001
   per share
("Common Stock")    750,000        $25.61       $19,207,500     $2055.20

(1)  Represents shares of common stock issuable under the Excel
     Technology 2006 Stock Option /Stock Issuance Plan(the "Plan").  This
     Registration Statement also covers such additional shares of Common
     Stock as may be issuable in accordance with the terms of the Plan by
     reason of any stock dividend, stock split, recapitalization, or
     other similar transaction without receipt of consideration which
     results in an increase in the number of shares of the outstanding
     Common Stock.

(2)  Pursuant to Rule 457(h), the proposed maximum offering price per
     share and the proposed maximum aggregate offering price have been
     calculated with respect to 750,000 shares, on the basis of
     $25.61, the average of the high and low prices of the Common
     Stock as quoted on Nasdaq National Market System on January 11,
     2007.

                                 PART II

           INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3.  Incorporation of Documents by Reference
         .......................................

         The following documents previously filed by Excel Technology,
Inc. (the "Company") with the Securities and Exchange Commission (the
"Commission") pursuant to the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), are incorporated herein by reference:

         (a)  The Company's Annual Report on Form 10-K, as amended, for
              the year ended December 31, 2005;

         (b)  All other reports filed pursuant to Section 13(a) or 15(d)
              of the Exchange Act since December 31, 2005; and

         (c)  The description of the Common Stock contained in the
              Company's Registration Statement on Form 8-A, including any
              amendment or report filed with the Commission for the
              purpose of updating such description.

          In addition, all documents and reports subsequently filed by
the Company pursuant to Section 13(a), 13(c), 14 or 15 (d) of the
Exchange Act prior to the filing of a post-effective amendment to this
Registration Statement which indicates that all securities offered hereby
have been sold or which deregisters all such securities then remaining
unsold shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the date of filing of
such documents.  Any statement contained herein or in any document
incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Registration
Statement to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement.  Any such
statement so modified or superseded shall not be deemed to constitute a
part of this Registration Statement, except as modified or superseded.

Item 4.  Description of Securities
         .........................

         Not applicable.

Item 5.  Interests of Named Experts and Counsel
         ......................................

         The validity of the securities offered hereby will be passed
upon for the Company by Breslow & Walker, LLP, New York, New York.
Howard S. Breslow, a partner in Breslow and Walker, LLP, was a director
of the Company until December 6, 2006.  As of the date hereof, Mr.
Breslow owns 12,000 shares of the Company's common stock and options to
purchase 80,000 shares of the Company's common stock.

Item 6.  Indemnification of Directors and Officers
         .........................................

         Section 102(b)(7) of the Delaware General Corporation Law
permits a corporation to provide in its certificate of incorporation that
a director of the corporation shall not be personally liable to the
corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of
the director's duty of loyalty to the corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) for unlawful payments of
dividends or unlawful stock repurchases, redemptions or other
distributions, or (iv) for any transaction from which the director
derived an improper personal benefit.  Article SIXTH of the Company's
Certificate of Incorporation provides for such limitation of liability.

         In addition, Section 145 of the Delaware General Corporation Law
empowers a corporation to indemnify any officer or director against
expenses incurred by him in connection with any action in which he is
made a party by reason of his being or having been a director, officer,
employee or agent of such corporation, provided that it is determined
that he acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful.  The Delaware General Corporation Law
provides that Section 145 is not exclusive of other rights to which those
seeking indemnification may be entitled under any bylaw, agreement, vote
of stockholders or disinterested directors or otherwise. Section 145 also
empowers a corporation  to advance to an officer or director the expenses
of defending claims upon receipt of his undertaking to repay any amount
to which it is later determined he is not entitled.

          The above discussion of the Delaware General Corporation Law
and of the Company's Certificate of Incorporation is not intended to be
exhaustive and is qualified in its entirety by such statute and the
Company's Certificate of Incorporation.

          The officers and directors of the Company are covered by
officers' and directors' liability insurance.

Item 7.  Exemption from Registration Claimed
         ...................................

          Not applicable.

Item 8.  Exhibits
         ........

                                                            Sequentially
                                                            Numbered Page
Exhibit                        Description                  Where Located
........                        ...........                  .............

 5           Opinion of Breslow & Walker, LLP as to the
             legality of the securities being registered           10

 23(a)       Consent of KPMG LLP                                   11

 23(b)       Consent of Breslow & Walker, LLP (included in
             Exhibit 5)                                             -
 24          Powers of Attorney - included in signature page
             hereof                                                 7

 99          Excel Technology, Inc. 2006 Stock Option/Stock
             Issuance Plan                                         12

Item 9.  Undertakings
         ............

A.       The undersigned Company hereby undertakes that it will:

         (1)  File, during any period in which it offers or sells
         securities, a post-effective amendment to the registration
         statement to:

              (i)  Include any prospectus required by Section 10(a)(3) of
         the Securities Act of 1933;

              (ii) Reflect in the prospectus any facts or events arising
         after the effective date of the registration statement (or the
         most recent post-effective amendment thereof) which,
         individually or in the aggregate, represent a fundamental change
         in the information set forth in the registration statement.
         Notwithstanding the foregoing, any increase or decrease in
         volume of securities offered (if the total dollar value of
         securities offered would not exceed that which was registered)
         and any deviation from the low or high end of the estimated
         maximum offering range may be reflected in the form of
         prospectus filed with the Commission pursuant to Rule 424(b) if,
         in the aggregate, the changes in volume and price represent no
         more than a 20 percent change in the maximum aggregate offering
         price set forth in the "Calculation of Registration Fee" table
         in the effective registration statement; and

              (iii)  Include any material information with respect to the
         plan of distribution not previously disclosed in the
         registration statement or any material change to such
         information in the registration statement;

         (2)  For the purpose of determining any liability under the
         Securities Act of 1933, treat each such post-effective amendment
         as a new registration statement for the securities offered in
         the registration statement, and the offering of the securities
         at that time as the initial bona fide offering of those
         securities; and

         (3)  File a post-effective amendment to remove from registration
         any of the securities that remain unsold at the end of the
         offering;

provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the Company
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in this registration statement.

B.       The Company hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the
Company's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.

C.       Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Company pursuant to the foregoing provisions,
or otherwise, the Company has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed in
the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than
payment by the Company of expenses incurred or paid by a director,
officer or controlling person of the Company in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered,
the Company will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act of 1933 and will be
governed by final adjudication of such issue.

                               SIGNATURES
                               ..........

         Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused
this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of East Setauket,
State of New York, as of this 17th day of January, 2007.

                                 EXCEL TECHNOLOGY, INC.

                            By:  /s/ Antoine Dominic
                                 ........................................
                                 Antoine Dominic, Chief Executive Officer

         Each person whose signature appears below constitutes and
appoints Antoine Dominic and J. Donald Hill, and each of them, with full
power of substitution,  his true and lawful attorney-in-fact and agents
to do any and all acts and things in his name and on his behalf in his
capacities indicated below which they or either of them may deem
necessary or advisable to enable Excel Technology, Inc. to comply with
the Securities Act of 1933, as amended, and any rules, regulations and
requirements of the Securities and Exchange Commission in connection with
this Registration Statement including specifically, but not limited to,
power and authority to sign for him in his name in the capacities stated
below, any and all amendments (including post-effective amendments) to do
and perform each and every act and thing requisite and necessary to be
done in such connection, as fully to all intents and purposes as we might
or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, or his substitute or substitutes, may
lawfully do or cause to be done by virtue thereof.

         Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

Signature                           Title                      Date
.....................  .................................. ................
/s/ J. Donald Hill    Chairman of the Board and Director January 17, 2007
.....................
J. Donald Hill

/s/ Antoine Dominic   Chief Executive Officer,           January 17, 2007
.....................  President,and Chief Operating
Antoine Dominic       Officer (Principal Executive
                      Officer) and Director

/s/ Alice Varisano    Chief Financial Officer            January 17, 2007
.....................  (Principal Financial and
Alice Varisano        Accounting Officer)

/s/ Steven Georgiev   Director                           January 17, 2007
.....................
Steven Georgiev

/s/ Donald E. Weeden  Director                           January 17, 2007
.....................
Donald E. Weeden

/s/ Ira J. Lamel      Director                           January 17, 2007
.....................
Ira J. Lamel

                             EXHIBIT INDEX
                             .............

                                                             Sequentially
                                                            Numbered Page
Exhibit                        Description                  Where Located
........                        ...........                  .............

 5           Opinion of Breslow & Walker, LLP as to the
             legality of the securities being registered           10

 23(a)       Consent of KPMG LLP                                   11

 23(b)       Consent of Breslow & Walker, LLP (included in
             Exhibit 5)                                             -
 24          Powers of Attorney - included in signature page
             hereof                                                 7

 99          Excel Technology, Inc. 2006 Stock Option/Stock
             Issuance Plan                                         12

                                                               Exhibit 5

January 17, 2007

Board of Directors
Excel Technology, Inc.
41 Research Way
East Setauket, NY 11733

Gentlemen:

     We have acted as counsel to Excel Technology, Inc. (the "Company")
in connection with the preparation and filing of a Registration Statement
on Form S-8 (the "Registration Statement") with the Securities and
Exchange Commission (the "Commission") covering the offering of up to
750,000 shares (the "Shares") of the Company's common stock, par value
$0.001 per share, pursuant to the exercise of options granted or which
may be granted under its 2006 Stock Option/Stock Issuance Plan (the
"Plan").  The Company has requested that we furnish this opinion for
inclusion as an exhibit to the Registration Statement.

     In connection with this opinion, we have examined the Registration
Statement and the Company's Certificate of Incorporation and Bylaws, each
as amended, and such other documents, records, certificates, memoranda
and other instruments as we deem necessary as a basis for this opinion.
We have assumed the genuineness and authenticity of all documents
submitted to us as originals, the conformity to originals of all
documents submitted to us as copies thereof, and the due execution and
delivery of all documents where due execution and delivery are a
prerequisite to the effectiveness thereof.  We also have assumed that on
the dates the options are exercised and/or shares are issued (i) the
Shares will continue to be validly authorized, and (ii) the options will
constitute valid, legal and binding obligations of the Company.

     On the basis of the foregoing, and in reliance thereon, we are of
the opinion that the Shares, when issued and sold in accordance with the
Plan, the options, the Registration Statement and the related prospectus,
will be validly issued, fully paid and nonassessable.

     We consent to the filing of this opinion as an exhibit to the
Registration Statement.  In giving such consent, we do not consider that
we are "experts" within the meaning of such term as used in the
Securities Act of 1933, as amended, or the rules and regulations of the
Commission promulgated thereunder, with respect to any part of the
Registration Statement, including this opinion.

                                             Sincerely,

                                             /s/ Breslow & Walker, LLP

                                             Breslow & Walker, LLP

                                                               EXHIBIT 23

        CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders
Excel Technology, Inc.:

     We consent to the incorporation by reference in this registration
statement on Form S-8 of Excel Technology, Inc. of our reports dated
February 15, 2006, with respect to the consolidated balance sheets of
Excel Technology, Inc. and subsidiaries as of December 31, 2005 and 2004,
and the related consolidated statements of income, stockholders' equity
and comprehensive income and cash flows  for each of the years in the
three-year period ended December 31, 2005, and the related financial
statement schedule, management's assessment of the effectiveness of
internal control over financial reporting as of December 31, 2005, and
the effectiveness of internal control over financial reporting as of
December 31, 2005, which reports appear in the December 31, 2005 Annual
Report on Form 10-K of Excel Technology, Inc.

                                                           /s/ KPMG LLP

Melville, New York
January 17, 2007

                                                               EXHIBIT 99

                         EXCEL TECHNOLOGY, INC.
                        (a Delaware Corporation)

                  2006 STOCK OPTION/STOCK ISSUANCE PLAN

                              ARTICLE ONE
                           GENERAL PROVISIONS
                           ..................

     I.   PURPOSE OF THE PLAN
          This 2006 Stock Option/Stock Issuance Plan is intended to
promote the interests of Excel Technology Inc, a Delaware corporation, by
providing eligible persons with the opportunity to acquire a proprietary
interest, or otherwise increase their proprietary interest, in the
Corporation as an incentive for them to remain in the service of the
Corporation.

          Capitalized terms herein shall have the meanings assigned to
such terms in the attached Appendix.

     II.  STRUCTURE OF THE PLAN
          A.    The Plan shall be divided into two (2) separate equity
programs:
          (i)   the Option Grant Program under which eligible persons
may, at the discretion of the Committee, be granted options to purchase
shares of Common Stock, and

          (ii)  the Stock Issuance Program under which eligible persons
may, at the discretion of the Committee, be issued shares of Common Stock
directly.

          B.    The provisions of Articles One and Four shall apply to
both equity programs under the Plan and shall accordingly govern the
interests of all persons under the Plan.

     III. ADMINISTRATION OF THE PLAN

          A.    The Plan shall be administered by the Committee.  Members
of the Committee shall serve for such period of time as the Board may
determine and shall be subject to removal by the Board at any time.

          B.    The Committee shall have full power and authority
(subject to the provisions of the Plan) to establish such rules and
regulations as it may deem appropriate for proper administration of the
Plan and to make such determinations under, and issue such
interpretations of, the Plan and any outstanding options and awards of
shares of Common Stock thereunder as it may deem necessary or advisable.
Decisions of the Committee shall be final and binding on all parties who
have an interest in the Plan or any option or issuance of shares of
Common Stock thereunder.

          c.    The Committee may delegate to one or more officers of the
Corporation the authority to grant options under the Option Grant Program
and/or shares of Common Stock under the Stock Issuance Program to
eligible persons who are not subject to the requirements of Section 16 of
the Exchange Act or Section 162(m) of the Code and the rules and
regulations thereunder, provided that the Committee shall have fixed the
total number of shares of Common Stock subject to such grants.  Any such
delegation shall be subject to the limitations of Section 157(c) of the
Delaware General Corporation Law.  The Committee may revoke any such
allocation or delegation at any time for any reason with or without prior
notice.

          D.    No member of the Board or the Committee, nor any officer
or employee of the Corporation acting on behalf of the Board or the
Committee, shall be personally liable for any action, determination or
interpretation taken or made with respect to the Plan, and all members of
the Board or the Committee and all officers or employees of the
Corporation acting on their behalf shall, to the extent permitted by law,
be fully indemnified and protected by the Corporation in respect of any
such action, determination or interpretation.

          E.    The Committee may employ attorneys, consultants,
accountants or other persons, and the Committee and the Corporation and
its officers and directors shall be entitled to rely upon the advice,
opinions or valuations of any such persons.

     IV.  ELIGIBILITY

          A.    The persons eligible to participate in the Plan are as
follows:
          (i)   Employees,

          (ii)  non-employee members of the Board or the non-employee
members of the board of directors of any Parent or Subsidiary, and

          (iii) consultants and other independent advisors who provide
services to the Corporation (or any Parent or Subsidiary).

          B.    The Committee shall have full authority to determine (i)
with respect to the grants under the Option Grant Program, which eligible
persons are to receive the option grants, the time or times when those
grants are to be made, the number of shares to be covered by each such
grant, the status of the granted option as either an Incentive Option or
a Non-Statutory Option, the time or times when each option is to become
exercisable, the vesting schedule (if any) applicable to the option
shares and the maximum term for which the option is to remain
outstanding, and (ii) with respect to stock issuances under the Stock
Issuance Program, which eligible persons are to receive such stock
issuances, the time or times when such issuances are to be made, the
number of shares to be issued to each Participant, the vesting schedule
(if any) applicable to the issued shares, the consideration (if any) to
be paid by the Participant for such shares, whether such award shall be a
Performance Award, and if it is a Performance Award, the terms of such
Performance Award consistent with Section I.C. of Article Three.

          C.    The Committee shall have the absolute discretion either
to grant options in accordance with the Option Grant Program or to effect
stock issuances in accordance with the Stock Issuance Program.

          D.    Subject to Section V.C. of this Article One relating to
changes made to Common Stock by reason of certain events, no Employee
shall be eligible to be granted options covering more than two hundred
thousand  (200,000) shares of Common Stock during any one calendar year.

          E.    Subject to Section V.C. of this Article One relating to
changes made to Common Stock by reason of certain events, the maximum
number of shares of Common Stock that may be issued to any Employee in
connection with Performance Awards under the Stock Issuance Program
during any calendar year shall be two hundred thousand (200,000) shares.

     V.   STOCK SUBJECT TO THE PLAN

          A.    The stock issuable under the Plan shall be shares of
authorized but unissued or reacquired Common Stock.  The maximum number
of shares of Common Stock which may be issued over the term of the Plan
shall not exceed seven hundred and fifty thousand (750,000) shares.

          B.    Shares of Common Stock subject to outstanding options
shall be available for subsequent issuance under the Plan to the extent
(i) the options expire or terminate for any reason prior to exercise in
full or (ii) the options are canceled in accordance with the
cancellation-regrant provisions of Article Two.  Unvested shares issued
under the Plan and subsequently repurchased by the Corporation, at the
option exercise price or direct issue price paid per share, pursuant to
the Corporation's repurchase rights under the Plan shall be added back to
the number of shares of Common Stock reserved for issuance under the Plan
and shall accordingly be available for reissuance through one or more
subsequent option grants or direct stock issuances under the Plan.

          C.    Should any change be made to the Common Stock by reason
of any stock split, stock dividend, recapitalization, combination of
shares, exchange of shares or other change affecting the outstanding
Common Stock as a class without the Corporation's receipt of
consideration, appropriate adjustments shall be made by the Committee to
(i) the maximum number and/or class of securities issuable under the Plan
and (ii) the number and/or class of securities and the exercise price per
share in effect under each outstanding option in order to prevent the
dilution or enlargement of benefits thereunder.  The adjustments
determined by the Committee shall be final, binding and conclusive.

                               ARTICLE TWO
                          OPTION GRANT PROGRAM
                          ....................

     I.   OPTION TERMS

          Each option shall be evidenced by one or more documents in the
form approved by the Committee; provided, however, that each such
document shall comply with the terms specified below.  Each document
evidencing an Incentive Option shall, in addition, be subject to the
provisions of the Plan applicable to such options.

          A.    Exercise Price.

          1.    The exercise price per share shall be fixed by the
Committee, and shall in no event be less than the Fair Market Value per
share of Common Stock on the option grant date.

          2.    The exercise price shall become immediately due upon
exercise of the option and shall, subject to the provisions of Section I
of Article Four and the documents evidencing the option, be payable in
cash or check made payable to the Corporation.  Should the Common Stock
be registered under Section 12(g) of the 1934 Act at the time the option
is exercised, then the exercise price may also be paid as follows:

          (i)   in shares of Common Stock (including shares that are
subject to risk of forfeiture or restrictions on transfer ("Restricted
Shares")) held for the requisite period necessary to avoid a charge to
the Corporation's earnings for financial reporting purposes and valued at
Fair Market Value on the Exercise Date, provided that, unless otherwise
determined by the Committee, if Restricted Shares are surrendered, shares
received by the Optionee upon exercise of the Options, equal in number to
the Restricted Shares surrendered, shall be subject to the same risks of
forfeiture or restrictions on transfer as those that applied to the
Restricted Shares surrendered by the Optionee, or

          (ii)  to the extent the option is exercised for vested shares,
through a special sale and remittance procedure pursuant to which the
Optionee shall concurrently provide irrevocable instructions (A) to a
Corporation-designated brokerage firm to effect the immediate sale of the
purchased shares and remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
exercise price payable for the purchased shares plus all applicable
Federal, state and local income and employment taxes required to be
withheld by the Corporation by reason of such exercise and (B) to the
Corporation to deliver the certificates for the purchased shares directly
to such brokerage firm in order to complete the sale.

Except to the extent such sale and remittance procedure is utilized,
payment of the exercise price for the purchased shares must be made on
the Exercise Date.

          B.    Exercise and Term of Options.  Each option shall be
exercisable at such time or times, during such period and for such number
of shares as shall be determined by the Committee and set forth in the
documents evidencing the option grant.  However, no option shall have a
term in excess of ten (10) years measured from the option grant date.

          C.    Effect of Termination of Service.

          1.    The following provisions shall govern the exercise of any
options held by the Optionee at the time of cessation of Service or
death:

           (i)  Should the Optionee cease to remain in Service for any
reason other than death, Disability or Misconduct, then, subject to
Section I. C. 2.  (i) and (ii) of this Article Two, the Optionee shall
have a period of three (3) months following the date of such cessation of
Service during which to exercise each outstanding option held by such
Optionee; provided, however, that if such Optionee is an executive
officer, then such Optionee may exercise such Options at any time within
twelve (12) months from the date of termination of such Service.

          (ii)  Should Optionee's Service terminate by reason of
Disability, then the Optionee shall have a period of twelve (12) months
following the date of such cessation of Service during which to exercise
each outstanding option held by such Optionee.

          (iii) If the Optionee dies while holding an outstanding option,
then the personal representative of his or her estate or the person or
persons to whom the option is transferred pursuant to the Optionee's will
or the laws of inheritance shall have a twelve (12)-month period
following the date of the Optionee's death to exercise such option.

          (iv)  Under no circumstances, however, shall any such option be
exercisable after the specified expiration of the option term.

          (v)   Subject to Section I.C.2.(i) and (ii) of this Article
Two, during the applicable post-Service exercise period, the option may
not be exercised in the aggregate for more than the number of vested
shares for which the option is exercisable on the date of the Optionee's
cessation of Service.  Upon the expiration of the applicable exercise
period or (if earlier) upon the expiration of the option term, the option
shall terminate and cease to be outstanding for any vested shares for
which the option has not been exercised.  However, the option shall,
immediately upon the Optionee's cessation of Service, terminate and cease
to be outstanding with respect to any and all option shares for which the
option is not otherwise at the time exercisable or in which the Optionee
is not otherwise at that time vested.

          (vi)  Should Optionee's Service be terminated for Misconduct,
then all outstanding options held by the Optionee shall terminate
immediately and cease to remain outstanding.

          2.    The Committee shall have the discretion, exercisable
either at the time an option is granted or at any time while the option
remains outstanding, to:

          (i)   extend the period of time for which the option is to
remain exercisable following Optionee's cessation of Service or death
from the limited period otherwise in effect for that option to such
greater period of time as the Committee shall deem appropriate, but in no
event beyond the expiration of the option term, and/or

          (ii)  permit the option to be exercised, during the applicable
post-Service exercise period, not only with respect to the number of
vested shares of Common Stock for which such option is exercisable at the
time of the Optionee's cessation of Service but also with respect to one
or more additional installments in which the Optionee would have vested
under the option had the Optionee continued in Service.

          D.    Stockholder Rights.  The holder of an option shall have
no stockholder rights with respect to the shares subject to the option
until such person shall have exercised the option, paid the exercise
price and become a holder of record of the purchased shares.

          E.    Unvested Shares.  The Committee shall have the discretion
to grant options which are exercisable for unvested shares of Common
Stock.  Should the Optionee cease Service while holding such unvested
shares, the Corporation shall have the right to repurchase, at the
exercise price paid per share, any or all of those unvested shares.  The
terms upon which such repurchase right shall be exercisable (including
the period and procedure for exercise and the appropriate vesting
schedule for the purchased shares) shall be established by the Committee
and set forth in the document evidencing such repurchase right.  The
Committee may not impose a vesting schedule upon any option grant or the
shares of Common Stock subject to that option which is more restrictive
than twenty percent (20%) per year vesting, with the initial vesting to
occur not later than one (1) year after the option grant date.  However,
such limitation shall not be applicable to any option grants made to
individuals who are officers of the Corporation, non-employee Board
members or independent consultants.

          F.    Limited Transferability of Options.  During the lifetime
of the Optionee, the option shall be exercisable only by the Optionee and
shall not be assignable or transferable other than by will or by the laws
of descent and distribution following the Optionee's death.

          G.    Withholding.  The Corporation's obligation to deliver
shares of Common Stock upon the exercise of any options granted under the
Plan shall be subject to the satisfaction of all applicable Federal,
state and local income and employment tax withholding requirements.

     II.  INCENTIVE OPTIONS

          The terms specified below shall be applicable to all Incentive
Options.  Except as modified by the provisions of this Section II, all
the provisions of the Plan shall be applicable to Incentive Options.
Options which are specifically designated as Non-Statutory Options shall
not be subject to the terms of this Section II.

          A.    Eligibility.  Incentive Options may only be granted to
Employees.

          B.    Dollar Limitation.  The aggregate Fair Market Value of
the shares of Common Stock (determined as of the respective date or dates
of grant) for which one or more options granted to any Employee under the
Plan (or any other option plan of the Corporation or any Parent or
Subsidiary) may for the first time become exercisable as Incentive
Options during any one (1) calendar year shall not exceed the sum of One
Hundred Thousand Dollars ($100,000).  To the extent the Employee holds
two (2) or more such options which become exercisable for the first time
in the same calendar year, the foregoing limitation on the exercisability
of such options as Incentive Options shall be applied on the basis of the
order in which such options are granted.

          C.    10% Stockholder.  If any Employee to whom an Incentive
Option is granted is a 10% Stockholder, then (i) the option term shall
not exceed five (5) years measured from the option grant date and (ii)
the exercise price per share shall not be less than one hundred ten
percent (110%) of the Fair Market Value per share of Common Stock on the
option grant date.

     III. CORPORATE TRANSACTION

          A.    The shares subject to each option outstanding under the
Plan at the time of a Corporate Transaction shall automatically vest in
full so that each such option shall, immediately prior to the effective
date of the Corporate Transaction, become fully exercisable for all of
the shares of Common Stock at the time subject to that option and may be
exercised for any or all of those shares as fully-vested shares of Common
Stock.

          B.    All outstanding repurchase rights shall also terminate
automatically, and the shares of Common Stock subject to those terminated
rights shall immediately vest in full, in the event of any Corporate
Transaction.

          C.    Immediately following the consummation of the Corporate
Transaction, all outstanding options shall terminate and cease to be
outstanding, except to the extent assumed by the successor corporation
(or parent thereof).

          D.    Each option which is assumed in connection with a
Corporate Transaction shall be appropriately adjusted by the Committee,
immediately after such Corporate Transaction, to apply to the number and
class of securities which would have been issuable to the Optionee in
consummation of such Corporate Transaction, had the option been exercised
immediately prior to such Corporate Transaction.  Appropriate adjustments
shall also be made by the Committee to (i) the number and class of
securities available for issuance under the Plan following the
consummation of such Corporate Transaction and (ii) the exercise price
payable per share under each outstanding option, provided the aggregate
exercise price payable for such securities shall remain the same.

          E.    The Committee shall have the discretion, exercisable
either at the time the option is granted or at any time while the option
remains outstanding, to provide for the automatic acceleration (in whole
or in part) of one or more outstanding options (and the immediate
termination of the Corporation's repurchase rights with respect to the
shares).

                             ARTICLE THREE
                         STOCK ISSUANCE PROGRAM
                         ......................

     I.   STOCK ISSUANCE TERMS

          Shares of Common Stock may be issued by the Committee under the
Stock Issuance Program through direct and immediate issuances without any
intervening option grants.  Each such stock issuance shall be evidenced
by a Stock Issuance Agreement which complies with the terms specified
below.

          A.    Payment for Shares.

          The Committee may, but need not, require a Participant to pay
an amount per share determined by the Committee as a condition for
receiving an issuance of shares of Common Stock under the Stock Issuance
Program.

          B.    Vesting Provisions.

          1.    Shares of Common Stock issued under the Stock Issuance
Program may, in the discretion of the Committee, be fully and immediately
vested upon issuance or may vest in one or more installments over the
Participant's period of Service or upon attainment of specified
performance objectives.  However, the Committee may not impose a vesting
schedule upon any stock issuance effected under the Stock Issuance
Program (other than in connection with a Performance Award) which is more
restrictive than twenty percent (20%) per year vesting, with initial
vesting to occur not later than one (1) year after the issuance date.
Such limitation shall not apply to any Common Stock issuances made to the
officers of the Corporation, non-employee Board members or independent
consultants.

          2.    Any new, substituted or additional securities or other
property (including money paid other than as a regular cash dividend)
which the Participant may have the right to receive with respect to the
Participant's unvested shares of Common Stock by reason of any stock
dividend, stock split, recapitalization, combination of shares, exchange
of shares or other change affecting the outstanding Common Stock as a
class without the Corporation's receipt of consideration shall be issued
subject to (i) the same vesting requirements applicable to the
Participant's unvested shares of Common Stock and (ii) such escrow
arrangements as the Committee shall deem appropriate.

          3.    The Participant shall have full stockholder rights with
respect to any shares of Common Stock issued to the Participant under the
Stock Issuance Program, whether or not the Participant's interest in
those shares is vested.  Accordingly, the Participant shall have the
right to vote such shares and to receive any regular cash dividends paid
on such shares.

          4.    Should the Participant cease to remain in Service while
holding one or more unvested shares of Common Stock issued under the
Stock Issuance Program or should the performance objectives not be
attained with respect to one or more such unvested shares of Common
Stock, then, subject to Section I. B. 5. of this Article Three, those
shares shall be immediately surrendered to the Corporation for
cancellation, and the Participant shall have no further stockholder
rights with respect to those shares.  To the extent the surrendered
shares were previously issued to the Participant for consideration paid
in cash or cash equivalent (including the Participant's purchase-money
indebtedness), the Corporation shall repay to the Participant the cash
consideration paid for the surrendered shares and shall cancel the unpaid
principal balance of any outstanding purchase-money note of the
Participant attributable to such surrendered shares.

          5.    The Committee may in its discretion waive the surrender
and cancellation of one or more unvested shares of Common Stock (or other
assets attributable thereto) which would otherwise occur upon the non-
completion of the vesting schedule applicable to such shares (unless the
shares were issued in connection with a Performance Award and vesting was
contingent on meeting performance goals).  Such waiver shall result in
the immediate vesting of the Participant's interest in the shares of
Common Stock as to which the waiver applies.  Such waiver may be effected
at any time, whether before or after the Participant's cessation of
Service.

         C.    Performance Awards.

          1.    If the Committee determines that any shares of Common
Stock to be issued under the Stock Issuance Program to an eligible
Employee should qualify as "performance-based compensation" for purposes
of Section 162(m) of the Code, the grant or vesting of such award (each,
a "Performance Award") shall be contingent upon achievement of pre-
established performance goals and other terms set forth in this Section
I.C. of this Article III.

          (i)   The performance goals for such Performance Awards shall
consist of one or more business criteria and a targeted level or levels
of performance with respect to each of such criteria, as specified by the
Committee consistent with this Section I.C. of this Article III.  The
performance goals shall be objective and shall otherwise meet the
requirements of Section 162(m) of the Code and regulations thereunder
(including Treasury Regulation 1.162-27 and successor regulations
thereto), including the requirement that the level or levels of
performance targeted by the Committee result in the achievement of
performance goals being "substantially uncertain."  The Committee may
determine that such Performance Awards shall be granted or vested upon
achievement of any one performance goal or that two or more of the
performance goals must be achieved as a condition to grant or vesting.
Performance goals may differ for Performance Awards granted to any one
Participant or to different Participants.

          (ii)  One or more of the following business criteria for the
Corporation and/or for specified Subsidiaries or affiliates or divisions
or other business units or lines of business of the Corporation and/or of
its Subsidiaries or affiliates shall be used by the Committee in
establishing performance goals for such Performance Awards:  appreciation
in value of the Corporation's common stock; total shareholder return;
pretax earnings; return on capital, equity or assets; earnings
measures/ratios (on a gross, net, pretax or posttax basis), including
basic earnings per share, diluted earnings per share, total earnings,
operating earnings, earnings growth, earnings before interest and taxes,
and earnings before interest, taxes, depreciation and amortization;
operating income; net income; pro forma net income; economic value
created or economic profit; operating profit; sales; sales growth; gross
margin; direct margin; book value; revenues; expenses (including expense
ratio); loss ratio; new business production; capital markets and/or
acquisition transactions; investment programs initiated; per period or
cumulative cash flow (including but not limited to operating cash flow
and free cash flow); cash flow return on investment; operating margin;
net profit margin; inventory turns; financial return ratios; market
share; balance sheet measurements such as receivable turnover;
improvement in or attainment of expense levels; improvement in or
attainment of working capital levels; debt reduction; strategic
innovation; strategic plan development and implementation; customer or
employee satisfaction; improvements in productivity; and any combination
of the foregoing.  Performance goals may be expressed as absolute or
relative goals, goals compared to past performance, goals compared to the
performance of a published or special index or benchmark deemed
applicable by the Committee, goals compared to the performance of peer
companies, or otherwise as determined by the Committee.

          (iii)  Achievement of performance goals in respect of such
Performance Awards shall be measured over a performance period, as
specified by the Committee.  A performance goal shall be established not
later than the earlier of (A) 90 days after the beginning of any
performance period applicable to such Performance Award or (B) the date
on which 25% of such performance period has elapsed.

          (iv)  The Committee may, in its discretion, reduce the number
of shares of Common Stock otherwise issued or vesting in connection with
such Performance Awards, but may not exercise discretion to increase any
such amount payable to the Participant in respect of a Performance Award.

          (v)   In all cases, the maximum Performance Award of any
Participant shall be subject to the limitation set forth in Section IV.E.
of Article One.

          (vi)  The Committee is authorized to make adjustments in the
terms and conditions of, and the criteria included in, the authorization
of Performance Awards and performance goals in recognition of unusual,
nonrecurring or non-operational events, including without limitation
stock splits, stock dividends, mergers, consolidations, large, special
and non-recurring dividends, the effects of currency fluctuations,
litigation or claim judgments or settlements, accruals for reorganization
and restructuring programs, asset write-downs, acquisitions and
dispositions of businesses and assets, and any or all items that are
excluded from the calculation of non-GAAP earnings as reflected in any
Corporation press release and Form 8-K filing relating to an earnings
announcement, affecting the Corporation and its Subsidiaries or any
business unit thereof, or the financial statements of the Corporation or
any Subsidiary, or in response to changes in applicable laws,
regulations, accounting principles, tax rates and regulations or business
conditions or in view of the Committee's assessment of the business
strategy of the Corporation, any Subsidiary or affiliate or business unit
thereof, performance of comparable organizations, economic and business
conditions, and any other circumstances deemed relevant; provided,
however, that no such adjustment shall be authorized or made if and to
the extent that the existence or exercise of such authority would cause a
Performance Award to fail to qualify as "performance-based compensation"
under Section 162(m) of the Code.

          2.    Determinations by the Committee as to the establishment
of performance goals for Performance Awards, the amount potentially
payable in respect of Performance Awards, the level of actual achievement
of the specified performance goals relating to Performance Awards and the
amount of any final Performance Award shall be recorded in writing.
Specifically, the Committee shall certify in writing, in a manner
conforming to applicable regulations under Section 162(m) of the Code,
prior to issuance or vesting of each such Performance Award, that the
performance objective relating to the Performance Award and other
material terms of the Performance Award upon which issuance or vesting of
the Performance Award was conditioned have been satisfied.

     II.  CORPORATE TRANSACTION

          Upon the occurrence of a Corporate Transaction, all outstanding
repurchase rights under the Stock Issuance Program shall terminate
automatically, and the shares of Common Stock subject to those terminated
rights shall immediately vest in full.

     III. SHARE ESCROW/LEGENDS

          Unvested shares may, in the Committee's discretion, be held by
a custodian designated by the Corporation until the Participant's
interest in such shares vests or may be issued directly to the
Participant with restrictive legends on the certificates evidencing those
unvested shares.

                             ARTICLE FOUR
                             MISCELLANEOUS
                             .............
     I.   FINANCING

          The Committee may permit any Optionee or Participant to pay the
option exercise price under the Option Grant Program or the purchase
price of shares issued under the Stock Issuance Program by delivering a
full-recourse, interest bearing promissory note payable in one or more
installments.  The terms of any such promissory note (including the
interest rate and the terms of repayment) shall be established by the
Committee in its sole discretion.  In no event may the maximum credit
available to the Optionee or Participant exceed the sum of (i) the
aggregate option exercise price or purchase price payable for the
purchased shares (less the par value of those shares) plus (ii) any
Federal, state and local income and employment tax liability incurred by
the Optionee or the Participant in connection with the option exercise or
share purchase.

     II.  EFFECTIVE DATE AND TERM OF PLAN

          A.    The Plan shall become effective when adopted by the
Board, but no option granted under the Plan may be exercised, and no
shares shall be issued under the Plan, until the Plan is approved by the
Corporation's stockholders.  If such stockholder approval is not obtained
within twelve (12) months after the date of the Board's adoption of the
Plan, then all options previously granted under the Plan shall terminate
and cease to be outstanding, and no further options shall be granted and
no shares shall be issued under the Plan.  Subject to such limitation,
the Committee may grant options and issue shares under the Plan at any
time after the effective date of the Plan and before the date fixed
herein for termination of the Plan.

          B.    The Plan shall terminate upon the earliest of (i) the
expiration of the ten (10)-year period measured from the date the Plan is
adopted by the Board, (ii) the date on which all shares available for
issuance under the Plan shall have been issued as vested shares or (iii)
the termination of all outstanding options in connection with a Corporate
Transaction.  All options and unvested stock issuances outstanding at
that time under the Plan shall continue to have full force and effect in
accordance with the provisions of the documents evidencing such options
or issuances.

          C.    The Corporation intends that the Plan will be submitted
for reapproval by the Corporation's stockholders no later than the first
meeting of stockholders that occurs in the fifth year following the year
in which the Corporation's stockholders previously approved the Plan.

     III. AMENDMENT OF THE PLAN

          A.    The Board shall have complete and exclusive power and
authority to amend or modify the Plan in any or all respects.  However,
no such amendment or modification shall adversely affect the rights and
obligations with respect to options or unvested stock issuances at the
time outstanding under the Plan unless the Optionee or the Participant
consents to such amendment or modification.  In addition, certain
amendments may require stockholder approval pursuant to Section 162(m) or
422 of the Code or pursuant to other applicable laws and regulations or
the rules of any stock exchange on which the shares of Common Stock may
be listed or quoted.

          B.    Options may be granted under the Option Grant Program and
shares may be issued under the Stock Issuance Program which are in each
instance in excess of the number of shares of Common Stock then available
for issuance under the Plan, provided any excess shares actually issued
under those programs shall be held by a custodian designated by the
Corporation until there is obtained stockholder approval of an amendment
sufficiently increasing the number of shares of Common Stock available
for issuance under the Plan.  If such stockholder approval is not
obtained within twelve (12) months after the date the first such excess
shares are made, then (i) any unexercised options granted on the basis of
such excess shares shall terminate and cease to be outstanding and (ii)
the Corporation shall promptly refund to the Optionees and the
Participants the exercise or purchase price paid for any excess shares
issued under the Plan and held by a custodian designated by the
Corporation, together with interest (at the applicable Short Term Federal
Rate) for the period the shares were held by the custodian, and such
shares shall thereupon be automatically canceled and cease to be
outstanding.

     IV.  USE OF PROCEEDS

          Any cash proceeds received by the Corporation from the sale of
shares of Common Stock under the Plan shall be used for general corporate
purposes.

     V.   WITHHOLDING

          The Corporation's obligation to deliver shares of Common Stock
upon the exercise of any options or upon the vesting of any shares issued
under the Plan shall be subject to the satisfaction of all applicable
Federal, state and local income and employment tax withholding
requirements.

      VI. REGULATORY APPROVALS

          The implementation of the Plan, the granting of any options
under the Plan and the issuance of any shares of Common Stock (i) upon
the exercise of any option or (ii) under the Stock Issuance Program shall
be subject to the Corporation's procurement of all approvals and permits
required by regulatory authorities having jurisdiction over the Plan, the
options granted under it and the shares of Common Stock issued pursuant
to it.

     VII. NO EMPLOYMENT OR SERVICE RIGHTS

          Nothing in the Plan shall confer upon the Optionee or the
Participant any right to continue in Service for any period of specific
duration or interfere with or otherwise restrict in any way the rights of
the Corporation (or any Parent or Subsidiary employing or retaining such
person) or of the Optionee or the Participant, which rights are hereby
expressly reserved by each, to terminate such person's Service at any
time for any reason, with or without cause.

     VIII. FINANCIAL REPORTS

           The Corporation shall deliver a balance sheet and an income
statement at least annually to each individual holding an outstanding
option under the Plan, unless such individual is a key Employee whose
duties in connection with the Corporation (or any Parent or Subsidiary)
assure such individual access to equivalent information.

     IX.   GOVERNING LAW

           The validity, construction, and effect of the Plan and any
rules and regulations or documents hereunder shall be determined in
accordance with the laws (including those governing contracts) of
Delaware, without giving effect to principles of conflicts of laws.

                               APPENDIX
                               ........

     The following definitions shall be in effect under the Plan:

     A.  Board shall mean the Corporation's Board of Directors.
         .....

     B.  Code shall mean the Internal Revenue Code of 1986, as amended.
         ....

     C.  Committee shall mean the Compensation Committee of the Board.
         .........
The Committee shall have at least two members, each of whom shall be a
"non-employee director" as defined in Rule 16b-3 under the Exchange Act
and an "outside director" as defined in Section 162(m) of the Code and
the regulations thereunder, and, if applicable, meet the independence
requirements of the applicable stock exchange, quotation system or other
self-regulatory organization on which the shares of Common Stock are
traded.  However, no act of the Committee shall be void or deemed to be
without authority due to the failure of a member to meet any
qualification requirement at the time the action is taken.

     D.  Common Stock shall mean the Corporation's common stock.
         ............

     E.  Corporate Transaction shall mean either of the following
         .....................
stockholder-approved transactions to which the Corporation is a party:

         (a) a merger or consolidation in which securities possessing
     more than fifty percent (50%) of the total combined voting power of
     the Corporation's outstanding securities are transferred to a
     person or persons different from the persons holding those
     securities immediately prior to such transaction, or

         (b) the sale, transfer or other disposition of all or
     substantially all of the Corporation's assets in complete
     liquidation or dissolution of the Corporation.

     F.  Corporation shall mean Excel Technology, Inc, a Delaware
         ...........
corporation.

     G.  Disability shall mean the inability of the Optionee or the
         ..........
Participant to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment and shall be
determined by the Committee on the basis of such medical evidence as the
Committee deems warranted under the circumstances.

     H.  Employee shall mean an individual who is in the employ of the
         ........
Corporation (or any Parent or Subsidiary), subject to the control and
direction of the employer entity as to both the work to be performed and
the manner and method of performance.

     I.  Exercise Date shall mean the date on which the Corporation shall
         .............
have received written notice of the option exercise.

     J.  Fair Market Value per share of Common Stock on any relevant date
         .................
shall be determined by the Committee in accordance with the following
provisions:

         (a) If the Common Stock is at the time traded on the Nasdaq
     National Market, then the Fair Market Value shall be the closing
     selling price per share of Common Stock on the date in question, as
     such price is reported by the National Association of Securities
     Dealers on the Nasdaq National Market.  If there is no closing
     selling price for the Common Stock on the date in question, then the
     Fair Market Value shall be the closing selling price on the last
     preceding date for which such quotation exists.

         (b) If the Common Stock is at the time listed on any Stock
     Exchange, then the Fair Market Value shall be the closing selling
     price per share of Common Stock on the date in question on the Stock
     Exchange determined by the Committee to be the primary market for
     the Common Stock, as such price is officially quoted in the
     composite tape of transactions on such exchange.  If there is no
     closing selling price for the Common Stock on the date in question,
     then the Fair Market Value shall be the closing selling price on the
     last preceding date for which such quotation exists.

         (c) If the Common Stock is at the time neither listed on any
     Stock Exchange nor traded on the Nasdaq National Market, then the
     Fair Market Value shall be determined by the Committee after taking
     into account such factors as the Committee shall deem appropriate.

     K.  Incentive Option shall mean an option which satisfies the
         ................
requirements of Code Section 422.

     L.  Misconduct shall mean the commission of any act of fraud,
         ..........
embezzlement or dishonesty by the Optionee or Participant, any
unauthorized use or disclosure by such person of confidential information
or trade secrets of the Corporation (or any Parent or Subsidiary), or any
other intentional misconduct by such person adversely affecting the
business or affairs of the Corporation (or any Parent or Subsidiary) in a
material manner.  The foregoing definition shall not be deemed to be
inclusive of all the acts or omissions which the Corporation (or any
Parent or Subsidiary) may consider as grounds for the dismissal or
discharge of any Optionee, Participant or other person in the Service of
the Corporation (or any Parent or Subsidiary).

     M.  1934 Act shall mean the Securities Exchange Act of 1934, as
         ........
amended.

     N.  Non-Statutory Option shall mean an option not intended to
         ....................
satisfy the requirements of Code Section 422.

     O.  Option Grant Program shall mean the option grant program in
         ....................
effect under the Plan.

     P.  Optionee shall mean any person to whom an option is granted
         ........
under the Plan.

     Q.  Parent shall mean any corporation (other than the Corporation)
         ......
in an unbroken chain of corporations ending with the Corporation,
provided each corporation in the unbroken chain (other than the
Corporation) owns, at the time of the determination, stock possessing
fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.

     R.  Participant shall mean any person who is issued shares of Common
         ...........
Stock under the Stock Issuance Program.

     S.  Performance Award shall mean a Performance Award as that term is
         .................
defined in Section I.C.1. of Article Three.

     T.  Plan shall mean the Corporation's 2006 Stock Option/Stock
         ....
Issuance Plan, as set forth in this document.

      U. Service shall mean the provision of services to the Corporation
         .......
(or any Parent or Subsidiary) by a person in the capacity of an Employee,
a non-employee member of the board of directors or a consultant or
independent advisor, except to the extent otherwise specifically provided
in the documents evidencing the option grant.

     V.  Stock Exchange shall mean either the American Stock Exchange or
         ..............
the New York Stock Exchange or the Nasdaq Stock Market LLC.

     W.  Stock Issuance Agreement shall mean the agreement entered into
         ........................
by the Corporation and the Participant at the time of issuance of shares
of Common Stock under the Stock Issuance Program.

     X.  Stock Issuance Program shall mean the stock issuance program in
         ......................
effect under the Plan.

     Y.  Subsidiary shall mean any corporation (other than the
         ..........
Corporation) in an unbroken chain of corporations beginning with the
Corporation, provided each corporation (other than the last corporation)
in the unbroken chain owns, at the time of the determination, stock
possessing fifty percent (50%) or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain.

     Z.  10% Stockholder shall mean the owner of stock (as determined
         ...............
under Code Section 424(d)) possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Corporation
(or any Parent or Subsidiary).