EPLUS INC. AMENDED AND RESTATED 1998 LONG-TERM INCENTIVE PLAN

 

                      Non-Qualified STOCK OPTION AGREEMENT

                                    under the

                                   EPLUS INC.

               AMENDED AND RESTATED 1998 LONG-TERM INCENTIVE PLAN

 

 

                  Optionee: ______________________________________________

 

                  Number Shares Subject to Option:________________________

 

                  Exercise Price per Share:_______________________________

 

                  Date of Grant:__________________________________________

                                                                               

                                                                               

     1.  Grant of  Option.  ePlus  inc.  (the  "Company")  hereby  grants to the

Optionee named above (the "Optionee"), under the ePlus inc. Amended and Restated

1998 Long-Term  Incentive  Plan (the "Plan"),  a  Non-Qualified  Stock Option to

purchase,  on the terms and conditions set forth in this agreement (this "Option

Agreement"),  the number of shares  indicated  above of the Company's  $0.01 par

value common  stock (the  "Stock"),  at the  exercise  price per share set forth

above (the "Option").  Capitalized  terms used herein and not otherwise  defined

shall have the meanings assigned such terms in the Plan.                       

                                                                               

     2.  Vesting  of  Option.   Unless  the  exercisability  of  the  Option  is

accelerated  in  accordance  with Article 14 of the Plan,  the Option shall vest

(become  exercisable) 20% on the first  anniversary of the date of grant, 20% on

the second anniversary of the date of grant, and 20% on the third anniversary of

the  date  of  grant,  20% on  the  fourth  anniversary  and  20%  on the  fifth

anniversary of the date of grant.                                              

                                                                               

     3. Period of Option and Limitations on Right to Exercise.  The Option will,

to the  extent  not  previously  exercised,  lapse  under  the  earliest  of the

following circumstances; provided, however, that the Committee may, prior to the

lapse of the Option under the circumstances described in paragraphs (b), (c) and

(d) below, provide in writing that the Option will extend until a later date:  

                                                                               

          (a) The Option shall lapse as of 5:00 p.m., Eastern Time, on the fifth

     year and three  month  anniversary  of the date of grant  (the  "Expiration

     Date").                                                                   

 

          (b)  The  Option  shall  lapse  three  months  after  the   Optionee's

     termination  of employment  or service as a director or consultant  for any

     reason other than the Optionee's  death or Disability;  provided,  however,

     that if the  Optionee's  employment or service is terminated by the Company

     for Cause, the Option shall lapse immediately.

 

          (c)  If  the  Optionee's  employment  or  service  as  a  director  or

     consultant  terminates by reason of Disability,  the Option shall lapse one

     year after the date of the Optionee's termination of employment or service.

 

          (d) If the Optionee  dies while  employed or otherwise in service as a

     director or  consultant,  or during the  three-month  period  described  in

     subsection (b) above or during the one-year period  described in subsection

     (c) above and before the Option  otherwise  lapses,  the Option shall lapse

     one year after the date of the Optionee's death. Upon the Optionee's death,

     the Option may be exercised by the Optionee's beneficiary.

 

     If the Optionee or his beneficiary exercises an Option after termination of

employment  or service,  the Option may be  exercised  only with  respect to the

shares that were otherwise vested on the Optionee's termination of employment or

service  (including vesting by acceleration in accordance with Article 14 of the

Plan).

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     4.  Exercise of Option.  The Option shall be  exercised  by written  notice

directed to the Secretary of the Company at the principal  executive  offices of

the Company,  in  substantially  the form attached  hereto as Exhibit A, or such

other form as the Committee may approve.  If the person exercising the Option is

not the  Optionee,  such person  shall also  deliver with the notice of exercise

appropriate  proof of his or her  right  to  exercise  the  Option.  Unless  the

exercise is a  broker-assisted  "cashless  exercise"  as described  below,  such

written  notice shall be  accompanied  by full payment in cash,  shares of Stock

previously   acquired  by  the  Optionee  (which  shares  may  be  delivered  by

attestation or actual delivery of one or more certificates),  or any combination

thereof,  for the number of shares  specified in such written notice;  provided,

however, that if shares of Stock are used to pay the exercise price, such shares

must have been held by the  Optionee  for at least six  months.  The Fair Market

Value of the surrendered  Stock as of the last trading day immediately  prior to

the exercise date shall be used in valuing Stock used in payment of the exercise

price. To the extent  permitted under Regulation T of the Federal Reserve Board,

and subject to applicable securities laws, the Option may be exercised through a

broker in a so-called  "cashless  exercise"  whereby the broker sells the Option

shares  and  delivers  cash  sales  proceeds  to the  Company  in payment of the

exercise  price.  In such case,  the date of exercise  shall be deemed to be the

date on which  notice of exercise  is  received by the Company and the  exercise

price shall be delivered to the Company on the settlement date.                

                                                                               

     Subject to the terms of this Option Agreement,  the Option may be exercised

at any time and  without  regard to any other  option  held by the  Optionee  to

purchase  stock of the Company.  No  fractional  shares of Stock shall be issued

upon exercise of the Option.                                                   

                                                                                

     5.  Beneficiary  Designation.  The  Optionee,  by  written  notice  to  the

Commmittee, may designate one or more persons (and from time to time change such

designation)  including the Optionee's legal  representative,  who, by reason of

the  Optionee's  death,  shall acquire the right to exercise all or a portion of

the Option. If no beneficiary has been designated or survives the Optionee,  the

Option may be exercised by the personal representative of the Optionee's estate.

If the person  with  exercise  rights  desires to  exercise  any  portion of the

Option,  such person must do so in accordance  with the terms and  conditions of

this Agreement and the Plan.

 

     6.  Withholding.  The Company has the  authority and the right to deduct or

withhold,  or require the Optionee to remit to the Company, an amount sufficient

to satisfy  federal,  state,  and local taxes  (including  the  Optionee's  FICA

obligation)  required by law to be withheld  with  respect to any taxable  event

arising as a result of the exercise of the Option. Such withholding  requirement

may be  satisfied,  in whole or in part,  at the  election  of the  Company,  by

withholding  from the O