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                                  eSPEED, INC.

                          1999 LONG-TERM INCENTIVE PLAN

                 (INCLUDING AMENDMENTS THROUGH OCTOBER 3, 2001)




     1. Purpose. The purpose of this 1999 Long-Term Incentive Plan (the "Plan")
of eSpeed, Inc., a Delaware corporation (the "Company"), is to advance the
interests of the Company and its stockholders by providing a means to attract,
retain, motivate and reward directors, officers, employees and consultants of
and service providers to the Company and its affiliates and to enable such
persons to acquire or increase a proprietary interest in the Company, thereby
promoting a closer identity of interests between such persons and the Company's
stockholders.

     2. Definitions. The definitions of awards under the Plan, including
Options, SARs (including Limited SARs), Restricted Stock, Deferred Stock, Stock
granted as a bonus or in lieu of other awards, Dividend Equivalents and Other
Stock-Based Awards as are set forth in Section 6 of the Plan. Such awards,
together with any other right or interest granted to a Participant under the
Plan, are termed "Awards." For purposes of the Plan, the following additional
terms shall be defined as set forth below.

     (a) "Award Agreement" means any written agreement, contract, notice or
other instrument or document evidencing an Award.

     (b) "Beneficiary" shall mean the person, persons, trust or trusts which
have been designated by a Participant in his or her most recent written
beneficiary designation filed with the Committee to receive the benefits
specified under the Plan upon such Participant's death or, if there is no
designated Beneficiary or surviving designated Beneficiary, then the person,
persons, trust or trusts entitled by will or the laws of descent and
distribution to receive such benefits.

     (c) "Board" means the Board of Directors of the Company.

     (d) A "Change in Control" shall be deemed to have occurred if:

          (i) the date of the acquisition by any "person" (within the meaning of
     Section 13(d)(3) or 14(d)(2) of the Exchange Act), excluding the Company,
     its Parent or any Subsidiary or any employee benefit plan sponsored by any
     of the foregoing, of beneficial ownership (within the meaning of Rule 13d-3
     under the Exchange Act) of shares of common stock of the Company
     representing 30% of either (x) the total number of the then outstanding
     shares of common stock, or (y) the total voting power with respect to the
     election of directors; or

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          (ii) the date the individuals who constitute the Board upon the
     completion of the Initial Public Offering (the "Incumbent Board") cease for
     any reason to constitute at least a majority of the members of the Board,
     provided that any individual becoming a director subsequent to the
     effective date of this Agreement whose election, or nomination for election
     by the Company's stockholders, was approved by a vote of at least a
     majority of the directors then comprising the Incumbent Board (other than
     any individual whose nomination for election to Board membership was not
     endorsed by the Company's management prior to, or at the time of, such
     individual's initial nomination for election) shall be, for purposes of
     this Agreement, considered as though such person were a member of the
     Incumbent Board; or

          (iii) the consummation of a merger, consolidation, recapitalization,
     reorganization, sale or disposition of all or a substantial portion of the
     Company's assets, a reverse stock split of outstanding voting securities,
     the issuance of shares of stock of the Company in connection with the
     acquisition of the stock or assets of another entity, provided, however,
     that a Change in Control shall not occur under this clause (iii) if
     consummation of the transaction would result in at least 70% of the total
     voting power represented by the voting securities of the Company (or, if
     not the Company, the entity that succeeds to all or substantially all of
     the Company's business) outstanding immediately after such transaction
     being beneficially owned (within the meaning of Rule 13d-3 promulgated
     pursuant to the Exchange Act) by at least 75% of the holders of outstanding
     voting securities of the Company immediately prior to the transaction, with
     the voting power of each such continuing holder relative to other such
     continuing holders not substantially altered in the transaction.

     (e) "Code" means the Internal Revenue Code of 1986, as amended from time to
time. References to any provision of the Code shall be deemed to include
regulations thereunder and successor provisions and regulations thereto.

     (f) "Committee" means the committee appointed by the Board to administer
the Plan, or if no committee is appointed, the Board.

     (g) "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time. References to any provision of the Exchange Act shall be
deemed to include rules thereunder and successor provisions and rules thereto.

     (h) "Fair Market Value" means, with respect to Stock, Awards, or other
property, the fair market value of such Stock, Awards, or other property
determined by such methods or procedures as shall be established from time to
time by the Committee, provided, however, that (i) if the Stock is listed on a
national securities exchange or quoted in an interdealer quotation system, the
Fair Market Value of such Stock on a given date shall be based upon the last
sales price or, if unavailable, the average of the closing bid and asked prices
per share of the Stock at the end of regular trading on such date (or, if there
was no trading or quotation in the Stock on such date, on the next preceding
date on which there was trading or quotation) as provided by one of such
organizations, (ii) the "fair market value" of Stock on the date on which shares
of Stock are first issued and sold pursuant to a registration statement filed
with and declared effective by the Securities and Exchange Commission shall be
the Initial Public Offering price of the





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shares so issued and sold, as set forth in the first final prospectus used in
such offering and (iii) the "fair market value" of Stock prior to the date of
the Initial Public Offering shall be as determined by the Board.

     (i) "Initial Public Offering" shall mean an initial public offering of
shares of Stock in a firm commitment underwriting registered with the Securities
and Exchange Commission in compliance with the provisions of the 1933 Act.

     (j) "ISO" means any Option intended to be and designated as an incentive
stock option within the meaning of Section 422 of the Code.

     (k) "Parent" means any "person" (within the meaning of Section 13(d)(3) or
14(d)(2) of the Exchange Act) that controls the Company, either directly or
indirectly through one or more intermediaries.

     (l) "Participant" means a person who, at a time when eligible under Section
5 hereof, has been granted an Award under the Plan.

     (m) "Rule 16b-3" means Rule 16b-3, as from time to time in effect and
applicable to the Plan and Participants, promulgated by the Securities and
Exchange Commission under Section 16 of the Exchange Act.

     (n) "Stock" means the Company's Class A Common Stock, and such other
securities as may be substituted for Stock pursuant to Section 4.

     (o) "Subsidiary" means each entity that is controlled by the Company or a
Parent, either directly or indirectly through one or more intermediaries

     3.   Administration.

     (a) Authority of the Committee. Except as otherwise provided below, the
Plan shall be administered by the Committee. The Committee shall have full and
final authority to take the following actions, in each case subject to and
consistent with the provisions of the Plan:

          (i) to select persons to whom Awards may be granted;

          (ii) to determine the type or types of Awards to be granted to each
     such person;

          (iii) to determine the number of Awards to be granted, the number of
     shares of Stock to which an Award will relate, the terms and conditions of
     any Award granted under the Plan (including, but not limited to, any
     exercise price, grant price or purchase price, any restriction or
     condition, any schedule for lapse of restrictions or conditions relating to
     transferability or forfeiture, exercisability or settlement of an Award,
     and waivers or accelerations thereof, performance conditions relating to an
     Award (including performance conditions relating to Awards not intended to
     be governed by Section 7(f) and waivers and modifications thereof),



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     based in each case on such considerations as the Committee shall
     determine), and all other matters to be determined in connection with an
     Award;

          (iv) to determine whether, to what extent and under what circumstances
     an Award may be settled, or the exercise price of an Award may be paid, in
     cash, Stock, other Awards, or other property, or an Award may be canceled,
     forfeited, or surrendered;

          (v) to determine whether, to what extent and under what circumstances
     cash, Stock, other Awards or other property payable with respect to an
     Award will be deferred either automatically, at the election of the
     Committee or at the election of the Participant;

          (vi) to determine the restrictions, if any, to which Stock received
     upon exercise or settlement of an Award shall be subject (including
     lock-ups and other transfer restrictions), may condition the delivery of
     such Stock upon the execution by the Participant of any agreement providing
     for such restrictions;

          (vii) to prescribe the form of each Award Agreement, which need not be
     identical for each Participant;

          (viii) to adopt, amend, suspend, waive and rescind such rules and
     regulations and appoint such agents as the Committee may deem necessary or
     advisable to administer the Plan;

          (ix) to correct any defect or supply any omission or reconcile any
     inconsistency in the Plan and to construe and interpret the Plan and any
     Award, rules and regulations, Award Agreement or other instrument
     hereunder; and

          (x) to make all other decisions and determinations as may be required
     under the terms of the Plan or as the Committee may deem necessary or
     advisable for the administration of the Plan.

Other provisions of the Plan notwithstanding, the Board shall perform the
functions of the Committee for purposes of granting awards to directors who
serve on the Committee, and the Board may perform any function of the Committee
under the Plan for any other purpose, including without limitation for the
purpose of ensuring that transactions under the Plan by Participants who are
then subject to Section 16 of the Exchange Act in respect of the Company are
exempt under Rule 16b-3. In any case in which the Board is performing a function
of the Committee under the Plan, each reference to the Committee herein shall be
deemed to refer to the Board, except where the context otherwise requires.

     (b) Manner of Exercise of Committee Authority. Any action of the Committee
with respect to the Plan shall be final, conclusive and binding on all persons,
including the Company, its Parent and Subsidiaries, Participants, any person
claiming any rights under the Plan from or through any Participant and
stockholders, except to the extent the Committee may subsequently modify, or
take further action not consistent with, its prior action. If not specified in
the Plan, the time at which the Committee must or may make any determination
shall be determined by the Committee, and any such determination may




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thereafter be modified by the Committee (subject to Section 8(e)). The
express grant of any specific power to the Committee, and the taking of any
action by the Committee, shall not be construed as limiting any power or
authority of the Committee. Except as provided under Section 7(f), the Committee
may delegate to officers or managers of the Company, its Parent or Subsidiaries
the authority, subject to such terms as the Committee shall determine, to
perform such functions as the Committee may determine, to the extent permitted
under applicable law.

     (c) Limitation of Liability; Indemnification. Each member of the Committee
shall be entitled to, in good faith, rely or act upon any report or other
information furnished to him by any officer or other employee of the Company,
its Parent or Subsidiaries, the Company's independent certified public
accountants or any executive compensation consultant, legal counsel or other
professional retained by the Company to assist in the administration of the
Plan. No member of the Committee, or any officer or employee of the Company
acting on behalf of the Committee, shall be personally liable for any action,
determination or interpretation taken or made in good faith with respect to the
Plan, and all members of the Committee and any officer or employee of the
Company acting on its behalf shall, to the extent permitted by law, be fully
indemnified and protected by the Company with respect to any such action,
determination or interpretation.

     4. Stock Subject to Plan.

     (a) Amount of Stock Reserved. The total number of shares of Stock that may
be subject to outstanding Awards, determined immediately after the grant of any
Award, shall not exceed the greater of 16 million shares, or such number that
equals 30% of the total number of shares of all classes of the Company's common
stock outstanding at the effective time of such grant. In no event shall the
number of shares of Stock delivered upon the exercise of ISOs exceed 16 million;
provided, however, that shares subject to ISOs shall not be deemed delivered if
such ISOs are forfeited, expire or otherwise terminate without delivery of
shares to the Participant. If an Award valued by reference to Stock may only be
settled in cash, the number of shares to which such Award relates shall be
deemed to be Stock subject to such Award for purposes of this Section 4(a). Any
shares of Stock delivered pursuant to an Award may consist, in whole or in part,
of authorized and unissued shares, treasury shares or shares acquired in the
market on a Participant's behalf.

     (b) Annual Per-Participant Limitations. During any calendar year, no
Participant may be granted Awards that may be settled by delivery of more than 5
million shares of Stock, subject to adjustment as provided in Section 4(c). In
addition, with respect to Awards that may be settled in cash (in whole or in
part), no Participant may be paid during any calendar year cash amounts relating
to such Awards that exceed the greater of the fair market value of the number of
shares of Stock set forth in the preceding sentence at the date of grant or the
date of settlement of Award. This provision sets forth two separate limitations,
so that Awards that may be settled solely by delivery of Stock will not operate
to reduce the amount of cash-only Awards, and vice versa; nevertheless, Awards
that may be settled in Stock or cash must not exceed either limitation.

     (c) Adjustments. In the event that the Committee shall determine that any
recapitalization, forward or reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase or exchange of Stock or other
securities, Stock dividend or other special, large and non-recurring dividend or
distribution (whether in the form of cash, securities or other property),
liquidation, dissolution, or other similar corporate transaction or event,
affects the Stock such that an adjustment is appropriate in order to prevent
dilution or enlargement of the rights of Participants under the Plan, then the
Committee shall, in




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<PAGE>



such manner as it may deem equitable, adjust any or all of (i) the number and
kind of shares of Stock reserved and available for Awards under Section 4(a),
including shares reserved for ISOs, (ii) the number and kind of shares of Stock
specified in the Annual Per-Participant Limitations under Section 4(b), (iii)
the number and kind of shares of outstanding Restricted Stock or other
outstanding Awards in connection with which shares have been issued, (iv) the
number and kind of shares that may be issued in respect of other outstanding
Awards and (v) the exercise price, grant price or purchase price relating to any
Award (or, if deemed appropriate, the Committee may make provision for a cash
payment with respect to any outstanding Award). In addition, the Committee is
authorized to make adjustments in the terms and conditions of, and the criteria
included in, Awards (including, without limitation, cancellation of unexercised
or outstanding Awards, or substitution of Awards using stock of a successor or
other entity) in recognition of unusual or nonrecurring events (including,
without limitation, events described in the preceding sentence and events
constituting a Change in Control) affecting the Company, its Parent or any
Subsidiary or the financial statements of the Company, its Parent or any
Subsidiary, or in response to changes in applicable laws, regulations, or
accounting principles.

     5. Eligibility. Directors, officers and employees of the Company or its
Parent or any Subsidiary, and persons who provide consulting or other services
to the Company, its Parent or any Subsidiary deemed by the Committee to be of
substantial value to the Company or its Parent and Subsidiaries, are eligible to
be granted Awards under the Plan. In addition, persons who have been offered
employment by, or agreed to become a director of, the Company, its Parent or any
Subsidiary, and persons employed by an entity that the Committee reasonably
expects to become a Subsidiary of the Company, are eligible to be granted an
Award under the Plan.

     6. Specific Terms of Awards.

     (a) General. Awards may be granted on the terms and conditions set forth in
this Section 6. In addition, the Committee may impose on any Award or the
exercise thereof such additional terms and conditions, not inconsistent with the
provisions of the Plan, as the Committee shall determine, including terms
requiring forfeiture of Awards in the event of termination of employment or
service of the Participant. Except as expressly provided by the Committee
(including for purposes of complying with the requirements of the Delaware
General Corporation Law relating to lawful consideration for the issuance of
shares), no consideration other than services will be required as consideration
for the grant (but not the exercise) of any Award.

     (b) Options. The Committee is authorized to grant options to purchase Stock
(including "reload" options automatically granted to offset specified exercises
of Options) on the following terms and conditions ("Options"):

          (i) Exercise Price. The exercise price per share of Stock purchasable
     under an Option shall be determined by the Committee.

          (ii) Time and Method of Exercise. The Committee shall determine the
     time or times at which an Option may be exercised in whole or in part, the
     methods by which such exercise price may be paid or deemed to be paid, the
     form of such payment, including, without limitation, cash, Stock, other
     Awards or awards granted under other Company plans or other property



                                        6



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     (including notes or other contractual obligations of Participants to make
     payment on a deferred basis, such as through "cashless exercise"
     arrangements, to the extent permitted by applicable law), and the methods
     by which Stock will be delivered or deemed to be delivered to Participants.

          (iii) Termination of Employment. The Committee shall determine the
     period, if any, during which Options shall be exercisable following a
     Participant's termination of his employment relationship with the Company,
     its Parent or any Subsidiary. For this purpose, any sale of a Subsidiary of
     the Company pursuant to which it ceases to be a Subsidiary of the Company
     shall be deemed to be a termination of employment by any Participant
     employed by such Subsidiary. Unless otherwise determined by the Committee,
     (i) during any period that an Option is exercisable following termination
     of employment, it shall be exercisable only to the extent it was
     exercisable upon such termination of employment, and (ii) if such
     termination of employment is for cause, as determined in the discretion of
     the Committee, all Options held by the Participant shall immediately
     terminate.

          (iv) Sale of the Company. Upon the consummation of any transaction
     whereby the Company (or any successor to the Company or substantially all
     of its business) becomes a wholly-owned Subsidiary of any corporation, all
     Options outstanding under the Plan shall terminate (after taking into
     account any accelerated vesting pursuant to Section 7(g)), unless such
     other corporation shall continue or assume the Plan as it relates to
     Options then outstanding (in which case such other corporation shall be
     treated as the Company for all purposes hereunder, and, pursuant to Section
     4(c), the Committee of such other corporation shall make appropriate
     adjustment in the number and kind of shares of Stock subject thereto and
     the exercise price per share thereof to reflect consummation of such
     transaction). If the Plan is not to be so assumed, the Company shall notify
     the Participant of consummation of such transaction at least ten days in
     advance thereof.

          (v) Options Providing Favorable Tax Treatment. The Committee may grant
     Options that may afford a Participant with favorable treatment under the
     tax laws applicable to such Participant, including, but not limited to
     ISOs. If Stock acquired by exercise of an ISO is sold or otherwise disposed
     of within two years after the date of grant of the ISO or within one year
     after the transfer of such Stock to the Participant, the holder of the
     Stock immediately prior to the disposition shall promptly notify the
     Company in writing of the date and terms of the disposition and shall
     provide such other information regarding the disposition as the Company may
     reasonably require in order to secure any deduction then available against
     the Company's or any other corporation's taxable income. The Company may
     impose such procedures as it determines may be necessary to ensure that
     such notification is made. Each Option granted as an ISO shall be
     designated as such in the Award Agreement relating to such Option.

     (c) Stock Appreciation Rights. The Committee is authorized to grant stock
appreciation rights on the following terms and conditions ("SARs"):

          (i) Right to Payment. An SAR shall confer on the Participant to whom
     it is granted a right to receive, upon exercise thereof, the excess of (A)
     the Fair Market Value of one share of Stock on the date of exercise (or, if
     the Committee shall so determine in the case of any such right




                                        7

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     other than one related to an ISO, the Fair Market Value of one share
     at any time during a specified period before or after the date of
     exercise), over (B) the grant price of the SAR as determined by the
     Committee as of the date of grant of the SAR, which, except as provided in
     Section 7(a), shall be not less than the Fair Market Value of one share of
     Stock on the date of grant.

          (ii) Other Terms. The Committee shall determine the time or times at
     which an SAR may be exercised in whole or in part, the method of exercise,
     method of settlement, form of consideration payable in settlement, method
     by which Stock will be delivered or deemed to be delivered to Participants,
     whether or not an SAR shall be in tandem with any other Award, and any
     other terms and conditions of any SAR. Limited SARs that may only be
     exercised upon the occurrence of a Change in Control may be granted on such
     terms, not inconsistent with this Section 6(c), as the Committee may
     determine. Limited SARs may be either freestanding or in tandem with other
     Awards.

    (d) Restricted Stock.  The Committee is authorized to grant Stock that is
subject to restrictions based on continued employment on the following terms
and conditions ("Restricted Stock"):

          (i) Grant and Restrictions. Restricted Stock shall be subject to such
     restrictions on transferability and other restrictions, if any, as the
     Committee may impose, which restrictions may lapse separately or in
     combination at such times, under such circumstances, in such installments,
     or otherwise, as the Committee may determine. Except to the extent
     restricted under the terms of the Plan and any Award Agreement relating to
     the Restricted Stock, a Participant granted Restricted Stock shall have all
     of the rights of a stockholder including, without limitation, the right to
     vote Restricted Stock or the right to receive dividends thereon.

          (ii) Forfeiture. Except as otherwise determined by the Committee, upon
     termination of employment or service (as determined under criteria
     established by the Committee) during the applicable restriction period,
     Restricted Stock that is at that time subject to restrictions shall be
     forfeited and reacquired by the Company; provided, however, that the
     Committee may provide, by rule or regulation or in any Award Agreement, or
     may determine in any individual case, that restrictions or forfeiture
     conditions relating to Restricted Stock will be waived in whole or in part
     in the event of termination resulting from specified causes.

          (iii) Certificates for Stock. Restricted Stock granted under the Plan
     may be evidenced in such manner as the Committee shall determine. If
     certificates representing Restricted Stock are registered in the name of
     the Participant, such certificates may bear an appropriate legend referring
     to the terms, conditions, and restrictions applicable to such Restricted
     Stock, the Company may retain physical possession of the certificate, in
     which case the Participant shall be required to have delivered a stock
     power to the Company, endorsed in blank, relating to the Restricted Stock.

          (iv) Dividends. Dividends paid on Restricted Stock shall be either
     paid at the dividend payment date in cash or in shares of unrestricted
     Stock having a Fair Market Value equal to the amount of such dividends, or
     the payment of such dividends shall be deferred and/or


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     the amount or value thereof automatically reinvested in additional
     Restricted Stock, other Awards, or other investment vehicles, as the
     Committee shall determine or permit the Participant to elect. Stock
     distributed in connection with a Stock split or Stock dividend, and other
     property distributed as a dividend, shall be subject to restrictions and a
     risk of forfeiture to the same extent as the Restricted Stock with respect
     to which such Stock or other property has been distributed, unless
     otherwise determined by the Committee.

     (e) Deferred Stock. The Committee is authorized to grant units representing
the right to receive Stock at a future date subject to the following terms and
conditions ("Deferred Stock"):

          (i) Award and Restrictions. Delivery of Stock will occur upon
     expiration of the deferral period specified for an Award of Deferred Stock
     by the Committee (or, if permitted by the Committee, as elected by the
     Participant). In addition, Deferred Stock shall be subject to such
     restrictions as the Committee may impose, if any, which restrictions may
     lapse at the expiration of the deferral period or at earlier specified
     times, separately or in combination, in installments or otherwise, as the
     Committee may determine.

          (ii) Forfeiture. Except as otherwise determined by the Committee, upon
     termination of employment or service (as determined under criteria
     established by the Committee) during the applicable deferral period or
     portion thereof to which forfeiture conditions apply (as provided in the
     Award Agreement evidencing the Deferred Stock), all Deferred Stock that is
     at that time subject to such forfeiture conditions shall be forfeited;
     provided, however, that the Committee may provide, by rule or regulation or
     in any Award Agreement, or may determine in any individual case, that
     restrictions or forfeiture conditions relating to Deferred Stock will be
     waived in whole or in part in the event of termination resulting from
     specified causes.

     (f) Bonus Stock and Awards in Lieu of Cash Obligations. The Committee is
authorized to grant Stock as a bonus, or to grant Stock or other Awards in lieu
of Company obligations to pay cash under other plans or compensatory
arrangements.

     (g) Dividend Equivalents. The Committee is authorized to grant awards
entitling the Participant to receive cash, Stock, other Awards or other property
equal in value to dividends paid with respect to a specified number of shares of
Stock ("Dividend Equivalents"). Dividend Equivalents may be awarded on a
free-standing basis or in connection with another Award. The Committee may
provide that Dividend Equivalents shall be paid or distributed when accrued or
shall be deemed to have been reinvested in additional Stock, Awards or other
investment vehicles, and subject to such restrictions on transferability and
risks of forfeiture, as the Committee may specify.

     (h) Other Stock-Based Awards. The Committee is authorized, subject to
limitations under applicable law, to grant such other Awards that may be
denominated or payable in, valued in whole or in part by reference to, or
otherwise based on, or related to, Stock and factors that may influence the
value of Stock, as deemed by the Committee to be consistent with the purposes of
the Plan, including, without limitation, convertible or exchangeable debt
securities, other rights convertible or exchangeable into Stock, purchase rights
for Stock, Awards with value and payment contingent upon performance of the
Company or any other factors designated by the Committee and Awards valued by
reference to the book




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<PAGE>


value of Stock or the value of securities of or the performance of specified
Subsidiaries ("Other Stock Based Awards"). The Committee shall determine the
terms and conditions of such Awards. Stock issued pursuant to an Award in the
nature of a purchase right granted under this Section 6(h) shall be purchased
for such consideration, paid for at such times, by such methods, and in such
forms, including, without limitation, cash, Stock, other Awards, or other
property, as the Committee shall determine. Cash awards, as an element of or
supplement to any other Award under the Plan, may be granted pursuant to this
Section 6(h).

     7. Certain Provisions Applicable to Awards.

     (a) Stand-Alone, Additional, Tandem, and Substitute Awards. Awards granted
under the Plan may, in the discretion of the Committee, be granted either alone
or in addition to, in tandem with or in substitution for any other Award granted
under the Plan or any award granted under any other plan of the Company, its
Parent or Subsidiaries or any business entity to be acquired by the Company or a
Subsidiary, or any other right of a Participant to receive payment from the
Company its Parent or Subsidiaries. Awards granted in addition to or in tandem
with other Awards or awards may be granted either as of the same time as or a
different time from the grant of such other Awards or awards.

     (b) Term of Awards. The term of each Award shall be for such period as may
be determined by the Committee; provided, however, that (i) in no event shall
the term of any ISO or an SAR granted in tandem therewith exceed a period of ten
years from the date of its grant (or such shorter period as may be applicable
under Section 422 of the Code), and (ii) the term of any Option granted to a
resident of the United Kingdom shall not exceed a period of ten years from the
date of its grant.

     (c) Form of Payment Under Awards. Subject to the terms of the Plan and any
applicable Award Agreement, payments to be made by the Company, its Parent or
Subsidiaries upon the grant, exercise or settlement of an Award may be made in
such forms as the Committee shall determine, including, without limitation,
cash, Stock, other Awards or other property, and may be made in a single payment
or transfer, in installments or on a deferred basis. Such payments may include,
without limitation, provisions for the payment or crediting of reasonable
interest on installment or deferred payments or the grant or crediting of
Dividend Equivalents in respect of installment or deferred payments denominated
in Stock.

     (d) Rule 16b-3 Compliance.

          (i) Six-Month Holding Period. Unless a Participant could otherwise
     dispose of equity securities, including derivative securities, acquired
     under the Plan without incurring liability under Section 16(b) of the
     Exchange Act, equity securities acquired under the Plan must be held for a
     period of six months following the date of such acquisition, provided that
     this condition shall be satisfied with respect to a derivative security if
     at least six months elapse from the date of acquisition of the derivative
     security to the date of disposition of the derivative security (other than
     upon exercise or conversion) or its underlying equity security.


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<PAGE>

          (ii) Other Compliance Provisions. With respect to a Participant who is
     then subject to Section 16 of the Exchange Act in respect of the Company,
     the Committee shall implement transactions under the Plan and administer
     the Plan in a manner that will ensure that each transaction by such a
     Participant is exempt from liability under Rule 16b-3, except that such a
     Participant may be permitted to engage in a non-exempt transaction under
     the Plan if written notice has been given to the Participant regarding the
     non-exempt nature of such transaction. The Committee may authorize the
     Company to repurchase any Award or shares of Stock resulting from any Award
     in order to prevent a Participant who is subject to Section 16 of the
     Exchange Act from incurring liability under Section 16(b). Unless otherwise
     specified by the Participant, equity securities, including derivative
     securities, acquired under the Plan which are disposed of by a Participant
     shall be deemed to be disposed of in the order acquired by the Participant.

     (e) Loan Provisions. With the consent of the Committee, and subject at all
times to, and only to the extent, if any, permitted under and in accordance
with, laws and regulations and other binding obligations or provisions
applicable to the Company, the Company may make, guarantee or arrange for a loan
or loans to a Participant with respect to the exercise of any Option or other
payment in connection with any Award, including the payment by a Participant of
any or all federal, state or local income or other taxes due in connection with
any Award. Subject to such limitations, the Committee shall have full authority
to decide whether to make a loan or loans hereunder and to determine the amount,
terms and provisions of any such loan or loans, including the interest rate to
be charged in respect of any such loan or loans, whether the loan or loans are
to be with or without recourse against the borrower, the terms on which the loan
is to be repaid and conditions, if any, under which the loan or loans may be
forgiven.

     (f) Performance-Based Awards. The Committee may, in its discretion,
designate any Award the exercisability or settlement of which is subject to the
achievement of performance conditions as a performance-based Award subject to
this Section 7(f), in order to qualify such Award as "qualified
performance-based compensation" within the meaning of Code Section 162(m) and
regulations thereunder. The performance objectives for an Award subject to this
Section 7(f) shall consist of one or more business criteria and a targeted level
or levels of performance with respect to such criteria, as specified by the
Committee but subject to this Section 7(f). Performance objectives shall be
objective and shall otherwise meet the requirements of Section 162(m)(4)(C) of
the Code. Business criteria used by the Committee in establishing performance
objectives for Awards subject to this Section 7(f) shall be selected from among
the following:

          (i) Annual return on capital;

          (ii) Annual earnings or earnings per share;

          (iii) Annual cash flow provided by operations;

          (iv) Increase in stock price;

          (v) Changes in annual revenues; and/or

          (vi) Strategic business criteria, consisting of one or more objectives
     based on meeting specified revenue, market penetration, geographic business
     expansion goals, cost targets, and goals relating to acquisitions or
     divestitures.

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<PAGE>

The levels of performance required with respect to such business criteria may be
expressed in absolute or relative levels. Performance objectives may differ for
such Awards to different Participants. The Committee shall specify the weighting
to be given to each performance objective for purposes of determining the final
amount payable with respect to any such Award. The Committee may, in its
discretion, reduce the amount of a payout otherwise to be made in connection
with an Award subject to this Section 7(f), but may not exercise discretion to
increase such amount, and the Committee may consider other performance criteria
in exercising such discretion. All determinations by the Committee as to the
achievement of performance objectives shall be in writing. The Committee may not
delegate any responsibility with respect to an Award subject to this Section
7(f).

     (g) Acceleration upon a Change of Control. Notwithstanding anything
contained herein to the contrary, except as set forth in an Award Agreement, all
conditions and/or restrictions relating to the continued performance of services
and/or the achievement of performance objectives with respect to the
exercisability or full enjoyment of an Award shall lapse immediately prior to a
Change in Control.

     8. General Provisions.

     (a) Compliance With Laws and Obligations. The Company shall not be
obligated to issue or deliver Stock in connection with any Award or take any
other action under the Plan in a transaction subject to the requirements of any
applicable securities law, any requirement under any listing agreement between
the Company and any national securities exchange or automated quotation system
or any other law, regulation or contractual obligation of the Company until the
Company is satisfied that such laws, regulations, and other obligations of the
Company have been complied with in full. Certificates representing shares of
Stock issued under the Plan will be subject to such stop-transfer orders and
other restrictions as may be applicable under such laws, regulations and other
obligations of the Company, including any requirement that a legend or legends
be placed thereon.

     (b) Limitations on Transferability. Awards and other rights under the Plan
will not be transferable by a Participant except by will or the laws of descent
and distribution or to a Beneficiary in the event of the Participant's death,
shall not be pledged, mortgaged, hypothecated or otherwise encumbered, or
otherwise subject to the claims of creditors, and, in the case of ISOs and SARs
in tandem therewith, shall be exercisable during the lifetime of a Participant
only by such Participant or his guardian or legal representative; provided,
however, that such Awards and other rights (other than ISOs and SARs in tandem
therewith) may be transferred to one or more transferees during the lifetime of
the Participant to the extent and on such terms as then may be permitted by the
Committee.

     (c) No Right to Continued Employment or Service. Neither the Plan nor any
action taken hereunder shall be construed as giving any employee, director or
other person the right to be retained in the employ or service of the Company,
its Parent or any Subsidiary, nor shall it interfere in any way with the right
of the Company, its Parent or any Subsidiary to terminate any employee's
employment or other person's service at any time or with the right of the Board
or stockholders to remove any director.

     (d) Taxes. The Company, its Parent and Subsidiaries are authorized to
withhold from any Award granted or to be settled, any delivery of Stock in
connection with an Award, any other payment relating to an Award or any payroll
or other payment to a Participant amounts of withholding and other




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<PAGE>

taxes due or potentially payable in connection with any transaction involving
an Award, and to take such other action as the Committee may deem advisable to
enable the Company, its Parent and Subsidiaries and Participants to
satisfy obligations for the payment of withholding taxes and other tax
obligations relating to any Award. This authority shall include authority to
withhold or receive Stock or other property and to make cash payments in respect
thereof in satisfaction of a Participant's tax obligations.

     (e) Changes to the Plan and Awards. The Board may amend, alter, suspend,
discontinue or terminate the Plan or the Committee's authority to grant Awards
under the Plan without the consent of stockholders or Participants, except that
any such action shall be subject to the approval of the Company's stockholders
at or before the next annual meeting of stockholders for which the record date
is after such Board action if such stockholder approval is required by any
federal or state law or regulation or the rules of any stock exchange or
automated quotation system on which the Stock may then be listed or quoted, and
the Board may otherwise, in its discretion, determine to submit other such
changes to the Plan to stockholders for approval; provided, however, that,
without the consent of an affected Participant, no such action may materially
impair the rights of such Participant under any Award theretofore granted to him
(as such rights are set forth in the Plan and the Award Agreement). The
Committee may waive any conditions or rights under, or amend, alter, suspend,
discontinue, or terminate, any Award theretofore granted and any Award Agreement
relating thereto; provided, however, that, without the consent of an affected
Participant, no such action may materially impair the rights of such Participant
under such Award (as such rights are set forth in the Plan and the Award
Agreement). Notwithstanding the foregoing, the Board or the Committee may take
any action (including actions affecting or terminating outstanding Awards): (i)
permitted by Section 4(c), (ii) to avoid limitations related to the availability
of a tax deduction in respect of Awards (e.g., pursuant to, sections Code 280G
or 162(m)), or (iii) to the extent necessary for a business combination in which
the Company is a party to be accounted for under the pooling-of-interests method
of accounting under Accounting Principles Board Opinion No. 16 (or any successor
thereto). The Board or the Committee shall also have the authority to establish
separate sub-plans under the Plan with respect to Participants resident in a
particular jurisdiction (the terms of which shall not be inconsistent with those
of the Plan) if necessary or desirable to comply with the applicable laws of
such jurisdiction.

     (f) No Rights to Awards; No Stockholder Rights. No person shall have any
claim to be granted any Award under the Plan, and there is no obligation for
uniformity of treatment of Participants and employees. No Award shall confer on
any Participant any of the rights of a stockholder of the Company unless and
until Stock is duly issued or transferred and delivered to the Participant in
accordance with the terms of the Award or, in the case of an Option, the Option
is duly exercised.

     (g) Unfunded Status of Awards; Creation of Trusts. The Plan is intended to
constitute an "unfunded" plan for incentive and deferred compensation. With
respect to any payments not yet made to a Participant pursuant to an Award,
nothing contained in the Plan or any Award shall give any such Participant any
rights that are greater than those of a general creditor of the Company;
provided, however, that the Committee may authorize the creation of trusts or
make other arrangements to meet the Company's obligations under the Plan to
deliver cash, Stock, other Awards, or other property pursuant to any Award,
which trusts or other arrangements shall be consistent with the "unfunded"
status of the Plan unless the Committee otherwise determines with the consent of
each affected Participant.

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<PAGE>

     (h) Nonexclusivity of the Plan. Neither the adoption of the Plan by the
Board nor any submission of the Plan or amendments thereto to the stockholders
of the Company for approval shall be construed as creating any limitations on
the power of the Board to adopt such other compensatory arrangements as it may
deem desirable, including, without limitation, the granting of stock options
otherwise than under the Plan, and such arrangements may be either applicable
generally or only in specific cases.

     (i) No Fractional Shares. No fractional shares of Stock shall be issued or
delivered pursuant to the Plan or any Award. The Committee shall determine
whether cash, other Awards, or other property shall be issued or paid in lieu of
such fractional shares or whether such fractional shares or any rights thereto
shall be forfeited or otherwise eliminated.

     (j) Compliance with Code Section 162(m). It is the intent of the Company
that employee Options, SARs and other Awards designated as Awards subject to
Section 7(f) shall constitute "qualified performance-based compensation" within
the meaning of Code Section 162(m). Accordingly, if any provision of the Plan or
any Award Agreement relating to such an Award does not comply or is inconsistent
with the requirements of Code Section 162(m), such provision shall be construed
or deemed amended to the extent necessary to conform to such requirements, and
no provision shall be deemed to confer upon the Committee or any other person
discretion to increase the amount of compensation otherwise payable in
connection with any such Award upon attainment of the performance objectives.

     (k) Governing Law. The validity, construction and effect of the Plan, any
rules and regulations relating to the Plan and any Award Agreement shall be
determined in accordance with the laws of the State of Delaware, without giving
effect to principles of conflicts of laws, and applicable federal law.

     (l) Effective Date; Plan Termination. The Plan shall become effective as of
the date of its adoption by the Board, and shall continue in effect until
terminated by the Board.





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