Document:

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                                                                    EXHIBIT 10.5

KEY                                                      1370-1140 w. Pender St.
Accelerating Energy Technologies                         Vancouver, B.C.

                             AGREEMENT IN PRINCIPLE

This Agreement in Principle (AIP) is to define broadly the main areas of
agreement between Key Capital Group Inc. of Suite 1370 - 1140 West Pender
Street, Vancouver, BC. Canada ("Key Capital") and Power Technology Inc. of
Nevada, 1000 West Bonanza Road, Las Vegas, US ("Power Technology")
(collectively, the "Parties") in the matter of granting Key Capital a license
for the rights to develop, commercialize and market the Advanced Lead Acid
Battery technology ("Battery") for the Traction Market only. This technology is
owned by Power Technology.

Principles:

1. The term of this AIP is as long as it takes for the regulatory approval to be
given on the terms of the "Definitive Agreement" or it's equivalent;

2. Both parties agree they will not enter into any discussions or agreements
with any other parties regarding a similar type of agreement;

3. Power Technology will grant a license (refer to paragraph a) for a minimum of
20 years with automatic renewal of said license where the patents extend beyond
this time frame to their Advanced Lead Acid Battery technology to Key Capital
for the following considerations:

         a.  Exclusivity:

                  i.     Key Capital will have exclusive rights to develop,
                         commercialize and market the "Energy Packet" (or
                         whatever designation to be decided by Key Capital);

                  ii     Key Capital will have the exclusive rights to develop
                         and commercialize the Battery Technology for the OEM
                         Traction market (E-Vehicles);

                  iii.   Power Technology will have the Marketing rights to the
                         Battery Technology to the OEM market and will pay to
                         Key Capital 25% of the total royalty received by Power
                         Technology;

                  iv.    Power Technology will have an exclusive agreement to
                         market the "Energy Packet" Products to China (see
                         paragraph 6).

         b.   5,800,000 common shares of Key Capital - (Escrow subject to the
              rules of the TSX Venture Exchange - formerly the Canadian Venture
              Exchnage - Kay Capital will honor the minimum requirement of the
              Exchange).

         c.   $500,000 CDN to be paid in the following manner:

                  i.      $50,000 (non-refundable) upon the signing of the
                          Agreement in Principle;

                  ii.     $50,000 (non-refundable) upon 60 days after the
                          signing of the Agreement in Principle;

                  iii.    $400,000 upon Key Capital completing a major financing
                          (in excess of $1,000,000 CDN) Within 90 days from the
                          signing of the AIP or best efforts but not exceeding
                          150 days;

                  iv.     Kay Capital will negotiate a 2 year contract with
                          David McLeod to run the operations of the battery and
                          the energy packet before the closing of the major
                          financing.

4. Although the ownership of the current Battery patents will reside with Power
Technology, protection in the event of insolvency, change of ownership or
bankruptcy to Key Capital will be assured.

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5. In the event that Key is unable to finance the development and
commercialization of the Battery or Key becomes insolvent or bankrupt then all
rights will terminate.

6. A separate Marketing agreement will be negotiated between Key Capital and
Power Technology allowing Power Technology an exclusive agreement to sell the
"Energy Packet" in China.

7. Funding for the development of the Battery for the Traction Market will be
the responsibility of Kay Capital.

8. Funding for the development of the "Energy Packet" will be the responsibility
of Key Capital.

9. Intellectual Property, and/or patents, and/or know how generated during the
development of the Battery for the "Energy Packet" will be jointly owned by the
Parties.

10. Intellectual Property, and/or patents, and/or know how generated during the
development of the "Energy Packet" will be owned by by the Parties.

11. Key Capital shall cause one representative of Power Technology to be
appointed to the Board of Directors of Key Capital.

It is the intention of both parties to complete the above deal in principle even
though the following may occur:

         a.   Both parties may have missed some points of agreement which legal
              counsel may provide But that in the opinion of both parties does
              not substantively change the Principles of this Agreement;

         b.   The Stock Exchanges and Regulatory Commissions may impose certain
              restrictions or regulations on the principles of this agreement;

         c.   Board of Directors of both companies must approve in some specific
              points, shareholder approval must occur.

We the undersigned agree to the Principles set forth above:

Power Technology Inc.                            Key Capital Group Inc.

 /s/ Wolf Meyerfeld                               /s/ D. David McLeod
----------------------------------------         -------------------------------
Mr. Wolf Meyerfeld                               Mr. David McLeod
Director                                             President
On behalf of Power Technology Inc.

Date: June 5-2002                                Date:   June 04, 2002
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                                                                    Exhibit 10.1

                      CHARLES RIVER ASSOCIATES INCORPORATED

                1998 INCENTIVE AND NONQUALIFIED STOCK OPTION PLAN

SECTION 1. PURPOSE

     This 1998 Incentive and Nonqualified Stock Option Plan (the "Plan") of
Charles River Associates Incorporated (the "Company"), is designed to provide
additional incentive to executives and other key employees of the Company, and
any parent or subsidiary of the Company, and to certain other individuals
providing services to or acting as directors of the Company or any such parent
or subsidiary. The Company intends that this purpose will be effected by the
granting of incentive stock options ("Incentive Stock Options") as defined in
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), and
nonqualified stock options ("Nonqualified Options") under the Plan which afford
such executives, key employees or other individuals an opportunity to acquire or
increase their proprietary interest in the Company through the acquisition of
shares of its Common Stock. The Company intends that Incentive Stock Options
issued under the Plan will qualify as "incentive stock options" as defined in
Section 422 of the Code and the terms of the Plan shall be interpreted in
accordance with this intention. As used in the Plan the terms "parent" and
"subsidiary" shall have the respective meanings set forth in Section 424 of the
Code.

SECTION 2. ADMINISTRATION

     2.1 THE PLAN ADMINISTRATOR. The Plan shall be administered by the Plan
Administrator (the "Plan Administrator"), which shall consist of the Board of
Directors of the Company (the "Board") or, if appointed by the Board, a
committee consisting of at least two "Disinterested Directors." As used herein,
the term Disinterested Director means any director of the Company who (i) is not
a current employee of the Company or a member of an "affiliated group," as such
term is defined in Section 1504(a) of the Code, which includes the Company (an
"Affiliate"), (ii) is not a former employee of the Company or any Affiliate who
receives compensation for prior services (other than benefits under a
tax-qualified retirement plan) during the Company's or any Affiliate's taxable
year (iii) has not been an officer of the Company or any Affiliate; and (iv)
does not receive remuneration from the Company or any Affiliate, either directly
or indirectly, in any capacity other than as a director. If the Plan is not
administered by the Board, none of the members of the Plan Administrator shall
be an officer or other employee of the Company. It is the intention of the
Company that the Plan, if not administered by the Board, shall be administered
by a committee having two or more "Non-Employee Directors" within the meaning of
Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the "1934
Act"), but the authority and validity of any act taken or not taken by the Plan
Administrator shall not be affected if any person administering the Plan is not
a Non-Employee Director. Except as specifically reserved to the Board under the
terms of the Plan, the Plan Administrator shall have full and final authority to
operate, manage and administer the Plan on behalf of the Company. Action by the
Plan Administrator shall require the affirmative vote of a majority of all
members thereof.

     2.2 POWERS OF THE PLAN ADMINISTRATOR. Subject to the terms and conditions
of the Plan, the Plan Administrator shall have the power:

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     (a)  To determine from time to time the persons eligible to receive options
     and the options to be granted to such persons under the Plan and to
     prescribe the terms, conditions, restrictions, if any, and provisions
     (which need not be identical) of each option granted under the Plan to such
     persons;

     (b)  To construe and interpret the Plan and options granted thereunder and
     to establish, amend, and revoke rules and regulations for administration of
     the Plan. In this connection, the Plan Administrator may correct any defect
     or supply any omission, or reconcile any inconsistency in the Plan, or in
     any option agreement, in the manner and to the extent it shall deem
     necessary or expedient to make the Plan fully effective. All decisions and
     determinations by the Plan Administrator in the exercise of this power
     shall be final and binding upon the Company and optionees;

     (c)  To make, in its sole discretion, changes to any outstanding option
     granted under the Plan, including: (i) to reduce the exercise price, (ii)
     to accelerate the vesting schedule or (iii) to extend the expiration date;
     and

     (d)  Generally, to exercise such powers and to perform such acts as are
     deemed necessary or expedient to promote the best interests of the Company
     with respect to the Plan.

SECTION 3. STOCK

     3.1 STOCK TO BE ISSUED. The stock subject to the options granted under the
Plan shall be shares of the Company's authorized but unissued common stock,
without par value (the "Common Stock"), or shares of the Company's Common Stock
held in treasury. The total number of shares that may be issued pursuant to
options granted under the Plan shall not exceed an aggregate of 2,470,000 shares
of Common Stock, which number shall increase on the first day of each fiscal
year commencing before the expiration of the Plan by an amount equal to the
lesser of (i) 400,000 shares of Common Stock or (ii) four percent (4%) of the
number of shares of Common Stock outstanding on the last day of the fiscal year
immediately preceding the increase; provided, however, that the class and
aggregate number of shares which may be subject to options granted under the
Plan shall be subject to adjustment as provided in Section 8 hereof.

     3.2 EXPIRATION, CANCELLATION OR TERMINATION OF OPTION. Whenever any
outstanding option under the Plan expires, is cancelled or is otherwise
terminated (other than by exercise), the shares of Common Stock allocable to the
unexercised portion of such option may again be the subject of options under the
Plan.

     3.3 LIMITATION ON GRANTS. In no event may any Plan participant be granted
options with respect to more than 150,000 shares of Common Stock in any calendar
year. The number of shares of Common Stock issuable pursuant to an option
granted to a Plan participant in a calendar year that is subsequently forfeited,
cancelled or otherwise terminated shall continue to count toward the foregoing
limitation in such calendar year. In addition, if the exercise price of an
option is subsequently reduced, the transaction shall be deemed a cancellation
of the original option and the grant of a new one so that both transactions
shall count toward the maximum shares issuable in the calendar year of each
respective transaction.

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SECTION 4. ELIGIBILITY

     4.1 PERSONS ELIGIBLE. Incentive Stock Options under the Plan may be granted
only to officers and other employees of the Company or any parent or subsidiary
of the Company. Nonqualified Options may be granted to officers or other
employees of the Company or any parent or subsidiary of the Company, and to
members of the Board and consultants or other persons who render services to the
Company or any such parent or subsidiary (regardless of whether they are also
employees), provided, however, that options may be granted to members of the
Board who are neither employees of the Company or any such parent or subsidiary
nor consultants who provide economic consulting services to or in conjunction
with the Company or any such parent or subsidiary ("Outside Directors") only as
provided in Section 4.4.

     4.2 GREATER-THAN-TEN-PERCENT STOCKHOLDERS. Except as may otherwise be
permitted by the Code or other applicable law or regulation, no Incentive Stock
Option shall be granted to an individual who, at the time the option is granted,
owns (including ownership attributed pursuant to Section 424(d) of the Code)
more than ten percent of the total combined voting power of all classes of stock
of the Company or any parent or subsidiary (a "greater-than-ten-percent
stockholder"), unless such Incentive Stock Option provides that (i) the purchase
price per share shall not be less than one hundred ten percent of the fair
market value of the Common Stock at the time such option is granted, and (ii)
that such option shall not be exercisable to any extent after the expiration of
five years from the date it is granted.

     4.3 MAXIMUM AGGREGATE FAIR MARKET VALUE. The aggregate fair market value
(determined at the time the option is granted) of the Common Stock with respect
to which Incentive Stock Options are exercisable for the first time by any
optionee during any calendar year (under the Plan and any other plans of the
Company or any parent or subsidiary for the issuance of incentive stock options)
shall not exceed $100,000 (or such greater amount as may from time to time be
permitted with respect to incentive stock options by the Code or any other
applicable law or regulation). Any option granted in excess of the foregoing
limitation shall be specifically designated as being a Nonqualified Option.

     4.4 OPTION GRANTS TO OUTSIDE DIRECTORS.

     (a)  GRANT OF OPTIONS UPON ELECTION TO BOARD. Each Outside Director joining
     the Board at or subsequent to the meeting of the Company's stockholders at
     which the Plan is approved (the "Approval Meeting") shall automatically be
     granted, upon such Outside Director so joining the Board, an initial
     Nonqualified Option to purchase 10,000 shares of Common Stock. Such
     Nonqualified Option shall vest and become exercisable in three equal annual
     installments cumulatively beginning on the first anniversary of the date of
     grant.

     (b)  GRANT OF OPTIONS UPON RE-ELECTION TO BOARD OR CONTINUATION ON THE
     BOARD. Each Outside Director who shall be re-elected by the stockholders of
     the Company to the Board at or subsequent to the Approval Meeting shall
     automatically be granted, immediately following the meeting of stockholders
     at which such Outside Director shall be re-elected, a Nonqualified Option
     to purchase 5,000 shares of Common Stock. In addition, each Outside
     Director whose term of office shall not expire at any annual meeting of
     stockholders or special meeting in lieu thereof subsequent to the Approval
     Meeting and who shall remain an Outside Director after such meeting shall
     automatically be granted, immediately following such meeting, a
     Nonqualified Option to purchase 5,000 shares of Common Stock. Each
     Nonqualified Option

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     described in this Section 4.4(b) shall vest and become exercisable in full
     on the first anniversary of the date of grant.

     (c)  PURCHASE PRICE. The purchase price per share of Common Stock under
     each Nonqualified Option granted pursuant to this Section 4.4 shall be
     equal to the fair market value of the Common Stock on the date the
     Nonqualified Option is granted, such fair market value to be determined in
     accordance with the provisions of Section 6.3.

     (d)  EXPIRATION. Each Nonqualified Option granted to an Outside Director
     under this Section 4.4 shall expire on the fifth anniversary of the date of
     grant with respect to all Nonqualified Options so granted prior to the date
     of the approval of this Plan by the Company's stockholders in 1999 and the
     tenth anniversary of the date of grant with respect to all other
     Nonqualified Options so granted.

SECTION 5. TERMINATION OF EMPLOYMENT OR DEATH OF OPTIONEE

     5.1  TERMINATION OF EMPLOYMENT. Except as may be otherwise expressly
provided herein, options shall terminate on the earlier of:

     (a)  the date of expiration thereof; or

     (b)  immediately upon the termination of the optionee's employment with or
     performance of services for the Company (or any parent or subsidiary of the
     Company) by the Company (or any such parent or subsidiary) for cause (as
     determined by the Company or such parent or subsidiary), without cause or
     voluntarily by the optionee;

PROVIDED, HOWEVER, that Nonqualified Options granted to persons who are not
employees of the Company (or any parent or subsidiary of the Company) need not,
unless the Plan Administrator determines otherwise, be subject to the provisions
set forth in clause (b) above.

     An employment relationship between the Company (or any parent or subsidiary
of the Company) and the optionee shall be deemed to exist during any period in
which the optionee is employed by the Company (or any such parent or
subsidiary). Whether authorized leave of absence, or absence on military or
government service, shall constitute termination of the employment relationship
between the Company (or any parent or subsidiary of the Company) and the
optionee shall be determined by the Plan Administrator at the time thereof.

     As used herein, "cause" shall mean (x) any material breach by the optionee
of any agreement to which the optionee and the Company (or any parent or
subsidiary of the Company) are both parties, (y) any act or omission to act by
the optionee which may have a material and adverse effect on the business of the
Company (or any such parent or subsidiary) or on the optionee's ability to
perform services for the Company (or any such parent or subsidiary), including,
without limitation, the commission of any crime (other than ordinary traffic
violations), or (z) any material misconduct or material neglect of duties by the
optionee in connection with the business or affairs of the Company (or any such
parent or subsidiary) or any affiliate of the Company (or any such parent or
subsidiary).

     5.2  DEATH OR RETIREMENT OF OPTIONEE. In the event of the death of the
holder of an option that is subject to clause (b) of Section 5.1 above prior to
termination of the optionee's employment with or performance of services for the
Company (or any parent or subsidiary of

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the Company) and before the date of expiration of such option, such option shall
terminate on the earlier of such date of expiration or one year following the
date of such death. After the death of the optionee, his executors,
administrators or any person or persons to whom his option may be transferred by
will or by the laws of descent and distribution shall have the right, at any
time prior to such termination, to exercise the option to the extent the
optionee was entitled to exercise such option at the time of his death.

     If, before the date of the expiration of an option that is subject to
clause (b) of Section 5.1 above, the optionee shall be retired in good standing
from the Company for reasons of age or disability under the then established
rules of the Company, the option shall terminate on the earlier of such date of
expiration or ninety (90) days after the date of such retirement. In the event
of such retirement, the optionee shall have the right prior to the termination
of such option to exercise the option to the extent to which he was entitled to
exercise such option immediately prior to such retirement.

SECTION 6. TERMS OF THE OPTION AGREEMENTS

     Each option agreement shall be in writing and shall contain such terms,
conditions, restrictions, if any, and provisions as the Plan Administrator shall
from time to time deem appropriate. Such provisions or conditions may include,
without limitation, restrictions on transfer, repurchase rights, or such other
provisions as shall be determined by the Plan Administrator; PROVIDED, HOWEVER,
THAT such additional provisions shall not be inconsistent with any other term or
condition of the Plan and such additional provisions shall not cause any
Incentive Stock Option granted under the Plan to fail to qualify as an incentive
stock option within the meaning of Section 422 of the Code.

     Option agreements need not be identical, but each option agreement by
appropriate language shall include the substance of all of the following
provisions:

     6.1  EXPIRATION OF OPTION. Notwithstanding any other provision of the Plan
or of any option agreement, each option shall expire on the date specified in
the option agreement, which date shall not, in the case of an Incentive Stock
Option, be later than the tenth anniversary (fifth anniversary in the case of a
greater-than-ten-percent stockholder) of the date on which the option was
granted or as specified in Section 5 of this Plan.

     6.2  EXERCISE. Each option may be exercised, so long as it is valid and
outstanding, from time to time in part or as a whole, subject to any limitations
with respect to the number of shares for which the option may be exercised at a
particular time and to such other conditions as the Plan Administrator in its
discretion may specify upon granting the option.

     6.3  PURCHASE PRICE. The purchase price per share under each option shall
be determined by the Plan Administrator at the time the option is granted;
provided, however, that the option price of any Incentive Stock Option shall
not, unless otherwise permitted by the Code or other applicable law or
regulation, be less than the fair market value of the Common Stock on the date
the option is granted (110% of the fair market value in the case of a
greater-than-ten-percent stockholder) and the option price of any Nonqualified
Option shall not be less than 85% of the fair market value of the Common Stock
on the date the option is granted. For the purpose of the Plan the fair market
value of the Common Stock shall be the

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closing price per share on the date of grant of the option as reported by a
nationally recognized stock exchange, or, if the Common Stock is not listed on
such an exchange, as reported by the National Association of Securities Dealers
Automated Quotation System ("Nasdaq") National Market System or, if the Common
Stock is not listed on the Nasdaq National Market System, the mean of the bid
and asked prices per share on the date of grant of the option or, if the Common
Stock is not traded over-the-counter, the fair market value as determined by the
Plan Administrator.

     6.4  TRANSFERABILITY OF OPTIONS. Options shall not be transferable by the
optionee otherwise than by will or under the laws of descent and distribution,
and shall be exercisable, during his lifetime, only by the optionee.
Notwithstanding the foregoing, the Plan Administrator may, in its sole
discretion, permit the transfer or assignment of a Nonqualified Option by the
original optionee for no consideration to: (i) any member of the optionee's
Immediate Family; (ii) any trust solely for the benefit of members of the
optionee's Immediate Family; (iii) any partnership whose only partners are
members of the optionee's Immediate Family; or (iv) any limited liability
company or corporate entity whose only members or other equity owners are
members of the optionee's Immediate Family. For purposes of this Section 6.4,
"Immediate Family" means an optionee's parents, spouse, children and
grandchildren. Nothing contained in this Section 6.4 shall be construed to
require the Plan Administrator to give its approval to any transfer or
assignment of any Nonqualified Option or portion thereof, and approval to
transfer or assign any Nonqualified Option or portion thereof does not mean that
such approval will be given with respect to any other Nonqualified Option or
portion thereof. The transferee or assignee of any Nonqualified Option shall be
subject to all of the terms and conditions applicable to such Nonqualified
Option immediately prior to the transfer or assignment and shall be subject to
any conditions prescribed by the Plan Administrator with respect to such
Nonqualified Option. In particular, and without limiting the generality of the
foregoing, the termination of employment, retirement or death of the original
optionee shall continue to determine the term and time for exercise of such
Nonqualified Option for purposes of Sections 5.1 and 5.2 above.

     6.5  RIGHTS OF OPTIONEES. No optionee shall be deemed for any purpose to be
the owner of any shares of Common Stock subject to any option unless and until
the option shall have been exercised pursuant to the terms thereof, and the
Company shall have issued and delivered certificates representing such shares to
the optionee.

     6.6  CERTAIN RIGHTS OF THE COMPANY. The Plan Administrator may in its
discretion provide upon the grant of any option hereunder that the Company shall
have an option to repurchase upon such terms and conditions as determined by the
Plan Administrator all or any number of shares purchased upon exercise of such
option or a right of first refusal in connection with subsequent transfer of any
or all of such shares. The repurchase price per share payable by the Company
shall be such amount or be determined by such formula as is fixed by the Plan
Administrator at the time the option for the shares subject to repurchase is
granted. In the event the Plan Administrator shall grant options subject to the
Company's repurchase option or right of first refusal, the certificates
representing the shares purchased pursuant to such option shall carry a legend
satisfactory to counsel for the Company referring to the Company's repurchase
option or right of first refusal.

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     6.7  "LOCKUP" AGREEMENT. The Plan Administrator may in its discretion
specify upon granting an option that upon request of the Company or the
underwriters managing any underwritten offering of the Company's securities, the
optionee shall agree in writing that for a period of time (not to exceed 180
days) from the effective date of any registration of securities of the Company,
the optionee will not sell, make any short sale of, loan, grant any option for
the purchase of, or otherwise dispose of any shares issued pursuant to the
exercise of such option, without the prior written consent of the Company or
such underwriters, as the case may be.

SECTION 7. METHOD OF EXERCISE; PAYMENT OF PURCHASE PRICE

     7.1  METHOD OF EXERCISE. Any option granted under the Plan may be exercised
by the optionee by delivering to the Company on any business day a written
notice specifying the number of shares of Common Stock the optionee then desires
to purchase and specifying the address to which the certificates for such shares
are to be mailed (the "Notice"), accompanied by payment for such shares.

     7.2  PAYMENT OF PURCHASE PRICE. Payment for the shares of Common Stock
purchased pursuant to the exercise of an option shall be made either by (i) cash
or check equal to the option price for the number of shares specified in the
Notice, or (ii) with the consent of the Plan Administrator, other shares of
Common Stock which (a) either have been owned by the optionee for more than six
(6) months on the date of surrender or were not acquired, directly or
indirectly, from the Company, and (b) have a fair market value on the date of
surrender not greater than the aggregate option price of the shares as to which
such option shall be exercised, (iii) with the consent of the Plan
Administrator, delivery of such documentation as the Plan Administrator and the
broker, if applicable, shall require to effect an exercise of the option and
delivery to the Company of the sale or loan proceeds required to pay the option
price, (iv) with the consent of the Plan Administrator, such other consideration
which is acceptable to the Plan Administrator and which has a fair market value
equal to the option price of such shares, or (v) with the consent of the Plan
Administrator, a combination of (i), (ii), (iii) or (iv). For the purpose of the
preceding sentence, the fair market value per share of Common Stock so delivered
to the Company shall be determined in the manner specified in Section 6.3. As
promptly as practicable after receipt of the Notice and accompanying payment,
the Company shall deliver to the optionee certificates for the number of shares
with respect to which such option has been so exercised, issued in the
optionee's name; provided, however, that such delivery shall be deemed effected
for all purposes when the Company or a stock transfer agent of the Company shall
have deposited such certificates in the United States mail, addressed to the
optionee, at the address specified in the Notice.

SECTION 8. CHANGES IN COMPANY'S CAPITAL STRUCTURE

     8.1  RIGHTS OF COMPANY. The existence of outstanding options shall not
affect in any way the right or power of the Company or its stockholders to make
or authorize, without limitation, any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or any issue of Common
Stock, or any issue of bonds, debentures, preferred or prior

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preference stock or other capital stock ahead of or affecting the Common Stock
or the rights thereof, or the dissolution or liquidation of the Company, or any
sale or transfer of all or any part of its assets or business, or any other
corporate act or proceeding, whether of a similar character or otherwise.

     8.2  RECAPITALIZATIONS, STOCK SPLITS AND DIVIDENDS. If the Company shall
effect a subdivision or consolidation of shares or other capital readjustment,
the payment of a stock dividend, or other increase or reduction of the number of
shares of the Common Stock outstanding, in any such case without receiving
compensation therefor in money, services or property, then (i) the number,
class, and price per share of shares of stock subject to outstanding options
hereunder shall be appropriately adjusted in such a manner as to entitle an
optionee to receive upon exercise of an option, for the same aggregate cash
consideration, the same total number and class of shares as he would have
received as a result of the event requiring the adjustment had he exercised his
option in full immediately prior to such event; and (ii) the number and class of
shares set forth in each of Sections 3.1, 3.3 and 4.4 shall be adjusted by
substituting therefor that number and class of shares of stock that the owner of
an equal number of outstanding shares of Common Stock immediately prior to the
event requiring adjustment would own as the result of such event."

     8.3  MERGER WITHOUT CHANGE OF CONTROL. After a merger of one or more
corporations with or into the Company or after a consolidation of the Company
and one or more corporations in which the stockholders of the Company
immediately prior to such merger or consolidation own after such merger or
consolidation shares representing at least fifty percent (50%) of the voting
power of the Company or the surviving or resulting corporation, as the case may
be, each holder of an outstanding option shall, at no additional cost, be
entitled upon exercise of such option to receive in lieu of the shares of Common
Stock as to which such option was exercisable immediately prior to such event,
the number and class of shares of stock or other securities, cash or property
(including, without limitation, shares of stock or other securities of another
corporation or Common Stock) to which such holder would have been entitled
pursuant to the terms of the agreement of merger or consolidation if,
immediately prior to such merger or consolidation, such holder had been the
holder of record of a number of shares of Common Stock equal to the number of
shares for which such option shall be so exercised.

     8.4  CHANGE OF CONTROL. If the Company is merged with or into or
consolidated with another corporation, other than a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than fifty percent (50%) of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation; or if the Company is liquidated, or sells or
otherwise disposes of substantially all of its assets to another corporation
while unexercised options remain outstanding under the Plan, then in such event
either:

     (a)  subject to the provisions of clause (c) below, after the effective
date of such merger, consolidation, liquidation, sale or disposition, as the
case may be, each holder of an outstanding option shall be entitled, upon
exercise of such option, to receive, in lieu of the shares of Common Stock as to
which such option was exercisable immediately prior to such

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event, the number and class of shares of stock or other securities, cash or
property (including, without limitation, shares of stock or other securities of
another corporation or common stock) to which such holder would have been
entitled pursuant to the terms of the merger, consolidation, liquidation, sale
or disposition if, immediately prior to such event, such holder had been the
holder of a number of shares of Common Stock equal to the number of shares as to
which such option shall be so exercised;

     (b)  the Plan Administrator may accelerate the time for exercise of some or
all unexercised and unexpired options so that from and after a date prior to the
effective date of such merger, consolidation, liquidation, sale or disposition,
as the case may be, specified by the Plan Administrator such accelerated options
shall be exercisable in full; or

     (c)  all outstanding options may be canceled by the Plan Administrator as
of the effective date of any such merger, consolidation, liquidation, sale or
disposition provided that (x) notice of such cancellation shall be given to each
holder of an option and (y) each holder of an option shall have the right to
exercise such option to the extent that the same is then exercisable or, if the
Plan Administrator shall have accelerated the time for exercise of all
unexercised and unexpired options, in full during the 10-day period preceding
the effective date of such merger, consolidation, liquidation, sale or
disposition.

     8.5  ADJUSTMENTS TO COMMON STOCK SUBJECT TO OPTIONS. Except as hereinbefore
expressly provided, the issue by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, for cash or property,
or for labor or services, either upon direct sale or upon the exercise of rights
or warrants to subscribe therefor, or upon conversion of shares or obligations
of the Company convertible into such shares or other securities, shall not
affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of shares of Common Stock then subject to outstanding options.

     8.6  MISCELLANEOUS. Adjustments under this Section 8 shall be determined by
the Plan Administrator, and such determinations shall be conclusive. No
fractional shares of Common Stock shall be issued under the Plan on account of
any adjustment specified above.

SECTION 9. GENERAL RESTRICTIONS

     9.1  INVESTMENT REPRESENTATIONS. The Company may require any person to whom
an option is granted, as a condition of exercising such option, to give written
assurances in substance and form satisfactory to the Company to the effect that
such person is acquiring the Common Stock subject to the option for his own
account for investment and not with any present intention of selling or
otherwise distributing the same, and to such other effects as the Company deems
necessary or appropriate in order to comply with federal and applicable state
securities laws.

     9.2  COMPLIANCE WITH SECURITIES LAWS. The Company shall not be required to
sell or issue any shares under any option if the issuance of such shares shall
constitute a violation by the optionee or by the Company of any provision of any
law or regulation of any governmental authority. In addition, in connection with
the Securities Act of 1933, as now in effect or hereafter amended (the "Act"),
upon exercise of any option, the Company shall not be required to issue such
shares unless the Plan Administrator has received evidence

                                       9
<PAGE>

satisfactory to it to the effect that the holder of such option will not
transfer such shares except pursuant to a registration statement in effect under
such Act or unless an opinion of counsel satisfactory to the Company has been
received by the Company to the effect that such registration is not required.
Any determination in this connection by the Plan Administrator shall be final,
binding and conclusive. In the event the shares issuable on exercise of an
option are not registered under the Act, the Company may imprint upon any
certificate representing shares so issued the following legend or any other
legend which counsel for the Company considers necessary or advisable to comply
with the Act and with applicable state securities laws:

     The shares of stock represented by this certificate have not been
     registered under the Securities Act of 1933 or under the securities laws of
     any State and may not be pledged, hypothecated, sold or otherwise
     transferred except upon such registration or upon receipt by the
     Corporation of an opinion of counsel satisfactory to the Corporation, in
     form and substance satisfactory to the Corporation, that registration is
     not required for such sale or transfer.

     The Company may, but shall in no event be obligated to, register any
securities covered hereby pursuant to the Act; and in the event any shares are
so registered the Company may remove any legend on certificates representing
such shares. The Company shall not be obligated to take any other affirmative
action in order to cause the exercise of an option or the issuance of shares
pursuant thereto to comply with any law or regulation of any governmental
authority.

     9.3  EMPLOYMENT OBLIGATION. The granting of any option shall not impose
upon the Company (or any parent or subsidiary of the Company) any obligation to
employ or continue to employ any optionee; and the right of the Company (or any
such parent or subsidiary) to terminate the employment of any officer or other
employee shall not be diminished or affected by reason of the fact that an
option has been granted to him/her.

     9.4  WITHHOLDING TAX. Whenever under the Plan shares of Common Stock are to
be delivered upon exercise of an option, the Company shall be entitled to
require as a condition of delivery that the optionee remit an amount sufficient
to satisfy all federal, state and other governmental withholding tax
requirements related thereto.

SECTION 10. AMENDMENT OR TERMINATION OF THE PLAN

     The Board of Directors may modify, revise or terminate this Plan at any
time and from time to time, except that (i) the class of persons eligible to
receive options and the aggregate number of shares issuable pursuant to this
Plan shall not be changed or increased, other than by operation of Section 8
hereof, without the consent of the stockholders of the Company and (ii) the
provisions of Section 4.4 shall not be amended more than once every six (6)
months, other than to comport with changes in the Code, the Employee Retirement
Income Security Act of 1974, or the rules thereunder.

SECTION 11. NONEXCLUSIVITY OF THE PLAN

     Neither the adoption of the Plan by the Board of Directors nor the
submission of the Plan to the stockholders of the Company for approval shall be
construed as creating any

                                       10
<PAGE>

limitations on the power of the Board of Directors to adopt such other incentive
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.

SECTION 12. EFFECTIVE DATE AND DURATION OF PLAN

     The Plan shall become effective upon its adoption by the Board of
Directors. No option may be granted under the Plan after the tenth anniversary
of the effective date. The Plan shall terminate (i) when the total amount of
Common Stock with respect to which options may be granted shall have been issued
upon the exercise of options or (ii) by action of the Board of Directors
pursuant to Section 10 hereof, whichever shall first occur.

                                 * * * * * * * *

                                       11
<PAGE>

                                   APPENDIX 1

This Appendix constitutes the UK Approved Part of the Charles River Associates
Incorporated 1998 Incentive and Nonqualified Stock Option Plan. The terms of the
UK Approved Part are as follows:

1.   INTERPRETATION

(1)  The following words and expressions have the following meanings except
     where the context otherwise requires:

     "ACQUISITION PRICE" the price, as determined by the Plan Administrator, at
     which each Share subject to an Option may be acquired on the exercise of
     that Option, which must not be less than the Market Value of a Share at the
     Date of Grant or if the Option relates to unissued Shares, its nominal
     value, if greater.

     The Acquisition Price may be varied under Rule 11 and, if Rule 13 has been
     applied, the "ACQUISITION PRICE" shall be the price for the acquisition of
     a share in the company whose shares are scheme shares determined under Rule
     13;

     "APPROVAL" approval of the UK Approved Part as a share option scheme under
     Schedule 9 of the ICTA;

     "CONTROL" has the same meaning as in Section 840 of the ICTA;

     "DATE OF GRANT" the date on which an Option is granted under Rule 3;

     "ELIGIBLE EMPLOYEE" any person holding Employment who is not precluded from
     participating in the Scheme by paragraph 8 of Schedule 9 of the ICTA;

     "EMPLOYMENT" employment as

          (a) an employee the Company or any Affiliate who is resident in the
          United Kingdom or

          (b) a director of the Company or any Affiliate who is resident in the
          United Kingdom and who is required to devote substantially the whole
          of his working time, being not less than 25 hours per week excluding
          meal breaks, to the performance of his duties;

     "GRANT PERIOD" the period of 42 days commencing on the day after any of the
     following:

     (a)  the date on which the Company releases its interim results or its
          final results for any financial period; or

     (b)  the date on which listing particulars or a document containing
          equivalent information relating to Shares is issued; or

     (c)  the date on which Approval is given;

     provided that no Option may be granted until Approval has been obtained.

     "GROUP" the Company and its Subsidiaries which are under the Control of the
     Company;

<PAGE>

     "ICTA" Income and Corporation Taxes Act 1988;

     "ISSUE OR REORGANISATION" any variation in the capital of the Company (or
     any other company whose shares are scheme shares following an exchange of
     options pursuant to Rule 13 arising from or in connection with a
     capitalisation issue, an offer to the holders of Shares by way of rights, a
     subdivision, consolidation, reduction or other variation of share capital;

     "MARKET VALUE" means an amount equal to the market value of a Share
     determined in accordance with Part VIII of the Taxation of Chargeable Gains
     Act 1992 agreed in advance for the purposes of the Scheme with the Shares
     Valuation Division of the Inland Revenue;

     "OPTION" means a right to acquire Shares under the UK Approved Part;

     "OTHER EXECUTIVE OPTION SCHEME" any Other Option Scheme the grant of any
     option under which is in practice substantially limited to persons of
     executive status;

     "OTHER OPTION SCHEME" any employee share option scheme adopted by the
     Company in the United Kingdom, other than the Plan, providing for the issue
     of Shares;

     "PARTICIPATING COMPANY" any company within the Group to which the Plan
     Administrator from time to time extends the Scheme;

     "REMUNERATION" at any particular time, an Eligible Employee's relevant
     emoluments for the current or preceding year of assessment (whichever of
     those years gives the greater amount) or, if there were no relevant
     emoluments for the preceding year of assessment, his relevant emoluments
     for the period of twelve months beginning with the first day during the
     current year of assessment in respect of which there are relevant
     emoluments and "relevant emoluments" has the meaning ascribed to it in
     paragraph 28(4) of Schedule 9 of the ICTA;

     "SHARE" a share of common stock of the Company or, if Rule 13 has been
     applied, the company whose shares are scheme shares which satisfies the
     conditions of paragraphs 10 to 14 of Schedule 9 of the ICTA;

     "SUBSIDIARY" a company which is a subsidiary of the Company within the
     meaning of Section 736 of the Companies Act 1985;

(2)  Other words or expressions, so far as not inconsistent with the context,
     shall have the same meanings as in Schedule 9 of the ICTA or the rules of
     the Plan.

(3)  Words importing the singular shall include the plural and vice versa and
     words importing the masculine shall include the feminine.

(4)  Any reference, express or implied, to an enactment includes references to:

     (a)  that enactment as amended, extended or applied by or under any other
          enactment; and

     (b)  any enactment which that enactment re-enacts (with or without
          modification).

     "UK APPROVED PART" the UK Approved Section of the Plan, in its present
     form, as from time to time amended in accordance with the rules.

                                      A-2
<PAGE>

2.   ELIGIBILITY

     No person is entitled as of right to participate in the UK Approved Part.
     The Plan Administrator may decide from time to time which Eligible Employee
     or Eligible Employees may participate and the extent of the participation.

3.   GRANT OF OPTIONS

(1)  The Plan Administrator may adopt any procedure for granting Options.
     Options may be granted by the Plan Administrator. The form for the time
     being of any Option certificate or other document shall be determined by
     the Plan Administrator subject to the approval of the Inland Revenue.

(2)  Options shall be granted by deed. A single deed of grant may be executed in
     favour of any number of persons.

(3)  The Date of Grant of an Option shall be the day on which the deed granting
     the Option is executed, or such later date as may be approved in the deed.

(4)  A Participant who is granted an Option by deed may, with the consent of the
     Plan Administrator, renounce the Option, in whole or in part, within 30
     days of the Date of Grant and, to the extent renounced, shall be treated as
     if it had never been granted.

(5)  If Shares are listed or dealt in on the Unlisted Securities Market of the
     London Stock Exchange the Date of Grant must be chosen so that each dealing
     day used to determine the Acquisition Price lies within a Grant Period.
     However, Options may be granted at any other time when the Plan
     Administrator considers that there are exceptional circumstances justifying
     the grant of Options.

(6)  An Option certificate or deed of grant shall be sent to the Optionee as
     soon as practicable after an Option has been granted. The Option
     certificate or deed of grant sent to the Optionee shall state the Date of
     Grant, the number of shares subject to the Option, the Acquisition Price
     and any further terms and conditions imposed in accordance with Rule 4.

(7)  An Option shall constitute a contract between the Company and the Optionee
     incorporating the provisions of the UK Approved Part and the Plan so far as
     relevant.

(8)  An Option shall not be granted to an Eligible Employee if he is bound to
     retire in accordance with the terms of his contract of employment within
     two years of the Date of Grant.

4.   PERFORMANCE REQUIREMENTS

(1)  The Plan Administrator may grant an Option to an Eligible Employee subject
     to such objective additional terms and conditions as they consider
     appropriate.

(2)  On the occurrence of an event which causes the Plan Administrator to
     determine that all or any of the additional terms and conditions imposed
     under sub-rule (1) are no longer appropriate, the Plan Administrator may
     alter or waive any such additional terms and conditions provided that any
     alteration to a term or condition relating to performance must be such that
     the altered term or condition reflects a fairer measure of the performance
     required and is no more difficult to satisfy than the term or condition at
     the Date of Grant.

                                      A-3
<PAGE>

(3)  The circumstances in which the Plan Administrator may alter or waive the
     additional terms and conditions imposed shall be specified in the letter of
     invitation (if the invitation procedure is used) or in the letter enclosing
     the option certificate or in the deed of grant.

(4)  The Plan Administrator must act fairly and reasonably in imposing, altering
     or waiving any terms and conditions.

(5)  Any additional terms and conditions to which an Option is subject under
     sub-rule 4(1) shall be deemed to be waived in any of the circumstances
     specified in Rules 8(1)(b), other than retirement at or after any age at
     which he is bound to retire in accordance with the terms of his contract of
     employment, 8(1)(c), 13 and 14.

5.   PROHIBITION ON ASSIGNMENT

(1)  No Option granted under the Scheme may be transferred, assigned, charged or
     otherwise alienated (without prejudice to any right of a person's legal
     personal representatives to exercise the Option following death).

(2)  If an Optionee enters into a composition with his creditors in satisfaction
     of his debts or a bankruptcy order is made against him his Option will
     lapse.

6.   LIMITS ON SHARES

(1)  The total number of Shares which may be issued under the Plan, including
     the UK Approved Part, shall not exceed the number set forth in the Plan. In
     the event of an Issue or Reorganisation this number of Shares may be
     adjusted in such manner as the Plan Administrator decides.

(2)  No person shall be granted an Option under the UK Approved Part which would
     cause the aggregate Market Value (at the time the Option is granted) of the
     Shares which he may acquire in pursuance of rights obtained under the UK
     Approved Part or under any other share option scheme, not being a savings
     related share scheme, approved under Schedule 9 to the ICTA and established
     by the Company (and not exercised) to exceed (pound)30,000.

7.   EXERCISE OF OPTIONS

(1)  Save as provided in Rules 8, 9, 10, 13 and 14, an Option shall be capable
     of being exercised in full at any time following the earliest of:

     (a)  the third anniversary of the Date of Grant;

     (b)  the Optionee's death or ceasing to be in Employment by reason of
          retirement at any age at which the Optionee is bound to retire in
          accordance with the terms of his contract of employment, redundancy,
          injury or disability;

     (c)  the Optionee ceasing to be in Employment by reason of the
          Participating Company by which he is employed ceasing to be under the
          Control of the Company or by reason of the transfer or sale of the
          undertaking or part of the undertaking in which he is employed to a
          person who is not under the Control of the Company;

     (d)  the occurrence of the circumstances permitting the exercise of Options
          specified in Rule 13 or 14.

                                      A-4
<PAGE>

(2)  If an Option is subject to additional terms and conditions under Rule 4(2)
     it may only be exercised in accordance with those terms and conditions.

(3)  An Optionee shall not be treated for the purposes of Rule 7, 8 or 9 as
     ceasing to be in Employment until such time as he is no longer a director
     or employee of any company within the Group and a female Optionee who
     ceases Employment by reason of pregnancy or confinement and who is entitled
     to exercise and subsequently exercises her statutory right (or any
     corresponding contractual right) to return to work before exercising an
     Option shall be treated for those purposes as not ceasing to be in
     Employment.

(4)  An Option may not be exercised by an Optionee at any time when he is
     ineligible to participate in the UK Approved Part by virtue of paragraph 8
     of Schedule 9 of the ICTA.

8.   LAPSE OF OPTION

(1)  Unless provided otherwise elsewhere in the Rules, an Option shall lapse to
     the extent that it has not been exercised (whether or not it became
     exercisable) by the earliest of:

     (a)  the tenth anniversary of the Date of Grant;

     (b)  the expiry of 90 days from the date on which the Optionee ceases to be
          in Employment by reason of retirement at any age at which the Optionee
          is bound to retire in accordance with the terms of his contract of
          employment, redundancy, injury or disability, or the date on which the
          Optionee ceases to be in Employment by reason of the Participating
          Company by which he is employed ceasing to be under the Control of the
          Company or the transfer or sale of the undertaking or part of the
          undertaking in which he is employed to a person who is not under the
          Control of the Company;

     (c)  the expiry of the period referred to in Rule 13;

     (d)  the expiry of the period referred to in Rule 14;

     (e)  the date on which:

          (i)  the Optionee gives or is given notice to leave Employment if he
               subsequently ceases to be in Employment (and for the avoidance of
               doubt any purported exercise of the Option during the period of
               notice shall be of no effect); or

          (ii) the Optionee ceases to be in Employment without any notice having
               been given

          in any circumstances other than death and those referred to in
          sub-paragraphs (b) and (c) of this paragraph unless (being female) she
          is entitled to exercise and subsequently does exercise the statutory
          right (or any corresponding contractual right) to resume Employment
          after an absence due to pregnancy or confinement.

(2)  If an Optionee dies at any time when his Option is outstanding whether or
     not it is then capable of being exercised, the Option shall be and remain
     capable of exercise until the expiry of 90 days from the date of his death
     but shall lapse earlier in the circumstances specified in Rule 13 or Rule
     14.

                                      A-5
<PAGE>

(3)  An Option shall not lapse by virtue of this Rule if the occasion for lapse
     falls in a period when the Option is capable of being exercised under Rule
     13 but the Option shall lapse on the expiry of that period or, if earlier,
     one year after the date of the Optionee's death.

9.   CESSATION OF EMPLOYMENT - SPECIAL CIRCUMSTANCES

(1)  If an Optionee ceases to be in Employment, whether or not within the period
     specified in sub-rule 7(1)(a), in circumstances in which his Option is not
     exercisable under Rule 7 or would lapse immediately under Rule 8 the Plan
     Administrator, acting fairly and reasonably, may in its discretion permit
     his Option to be exercisable in whole or in part during such period (but
     not later than one year after his death) and on such other terms as they
     may decide.

(2)  If an Option would lapse at the end of any period specified in Rule 8
     following the cessation of the Optionee's Employment the Plan Administrator
     may defer the lapse of his Option until the end of such longer period as it
     may determine, acting fairly and reasonably, but not later than one year
     after his death and not exceeding a period which expires three years and
     six months after the Date of Grant or, if longer, three years and six
     months after the last occasion on which the Optionee exercised an option in
     circumstances qualifying for relief from income tax under Section 185 of
     the ICTA.

(3)  If an Optionee ceases to be in Employment but continues to provide services
     to the Group on a part-time basis as an employee or a director or on a
     self-employed basis the Plan Administrator may determine acting fairly and
     reasonably that his Option shall neither become exercisable nor lapse by
     virtue of such cessation and that Rules 8 to 10 shall apply when he
     subsequently ceases to provide services to the Group, or in such other
     circumstances as the Plan Administrator may determine, acting fairly and
     reasonably, with such modifications as are necessary, provided that no
     further Options can be granted to an Optionee who has ceased to be in
     Employment.

10.  MANNER OF EXERCISE AND ISSUE OR TRANSFER OF SHARES

(1)  An Option may be exercised by the Optionee giving notice of exercise in a
     form approved by the Plan Administrator accompanied by the relevant option
     certificate or deed of grant and payment of the total Acquisition Price of
     the Shares in respect of which the Option is exercised.

(2)  The Company shall allot or procure the transfer of the Shares in respect of
     which the Option has been exercised within 30 days of the date of exercise.

(3)  Shares issued under the UK Approved Part will rank pari passu in all
     respects with issued Shares of the same class. However, they will not be
     entitled to any rights attaching to Shares by reference to a record date
     prior to the date of exercise of the Option.

(4)  An Option may be exercised in whole or in part and, in the event of an
     Option being exercised in part the Plan Administrator may call in or cancel
     any outstanding option certificate or deed of grant and furnish the
     Optionee with details of the date on which the Option was last exercised
     and the number of Shares outstanding under the Option. The Directors may
     determine, acting fairly and reasonably, that the Option may only be
     exercised in respect of a reasonable minimum number of Shares and/or in
     respect of a multiple of any round number of Shares, or in respect of the
     balance of Shares outstanding in the Option.

                                      A-6
<PAGE>

(5)  The allotment or transfer of Shares under the Plan is subject to obtaining
     any approval or consent required under any applicable regulations or
     enactment.

11.  ISSUE OR REORGANISATION

(1)  In the event of any Issue or Reorganisation:

     (a)  the number of Shares comprised in an Option; and/or

     (b)  the Acquisition Price under an Option

     may be adjusted in such manner as the Plan Administrator decides subject to
     the prior approval of the Inland Revenue and the written concurrence of the
     Auditors that in their opinion the adjustment is fair and reasonable.

(2)  Following an adjustment under paragraph (1) above, Shares must continue to
     comply with paragraphs 10 to 14 of Schedule 9 of the ICTA.

(3)  If an Option relates to unissued Shares an adjustment under paragraph (1)
     above may reduce or further reduce the Acquisition Price below the nominal
     value of a Share if:

     (a)  a part of the reserves of the Company equal to the difference between
          the adjusted Acquisition Price and the nominal value of the Shares
          concerned ("Relevant Amount") may be capitalised if the Option is
          exercised so as to pay up the Relevant Amount; and

     (b)  the Company has sufficient reserves available.

(4)  The Plan Administrator may notify Optionees of any adjustments made under
     this Rule 11 and may call in, cancel, endorse, issue or reissue any option
     certificate or deed of grant following an adjustment.

12.  TAKEOVER AND RECONSTRUCTION

(1)  If:

          (a)  a general offer is made to acquire the whole of the issued
          ordinary share capital of the Company (or such part thereof as is not
          at the time owned by the offeror or any company controlled by the
          offeror and/or persons acting in concert with the offeror) and after
          the announcement of the general offer the offeror (and any such
          companies and/or persons) acquires Control of the Company, or

          (b)  a general offer is made to acquire the whole of the issued
          ordinary share capital of the Company (or such part thereof as
          aforesaid) by any person who (together with any company controlled by
          such person and/or persons acting in concert with him) has Control of
          the Company,

     a participant may, subject to the provisions of Rule 7, be entitled to
     exercise his Option at any time during the period of six months following,
     in the case of an offer within paragraph (a) above, the date of the
     acquisition of Control and, in the case of an offer within paragraph (b)
     above, the date on which the offer is made or, if the offer was
     conditional, the later date on which the offer becomes unconditional.

                                      A-7
<PAGE>

(2)  The Company shall use its best endeavours to procure that if a participant
     is allotted Shares pursuant to the exercise of Options in accordance with
     Rule 10(1) then if such Shares were not the subject of the said general
     offer the offeror shall make an offer to acquire from the participant his
     Shares upon the same terms as Shares of the same class were acquired under
     the general offer.

13.  EXCHANGE OF OPTIONS

     If any company (the "acquiring company") obtains Control of the Company as
     a result of making:

          (i)  a general offer to acquire the whole of the issued share capital
               of the Company which is made on a condition such that if it is
               satisfied the person making the offer will have Control of the
               Company, or

          (ii) a general offer to acquire all the shares in the Company which
               are of the same class as the scheme shares,

     any participant may at any time within the appropriate period, by agreement
     with the acquiring company, release his Option ("old rights") in
     consideration of the grant to him of rights ("new rights") which are
     equivalent to his Option but relate to shares in a different company
     (whether the acquiring company itself or some other company falling within
     paragraph 10(b) or (c) of Schedule 9 of the ICTA). "The appropriate period"
     and "equivalent" have the same meaning as in paragraph 15 of Schedule 9 of
     the ICTA and accordingly the new rights shall not be regarded for the
     purpose of the Scheme as equivalent to the old rights unless:

          (a)  the shares to which they relate satisfy the conditions specified,
               in relation to scheme shares, in paragraphs 10 to 14 of Schedule
               9 of the ICTA; and

          (b)  the new rights will be exercisable in the same manner as the old
               rights and subject to the provisions of the Scheme as it had
               effect immediately before the release of the old rights; and

          (c)  the total Market Value, immediately before the release, of the
               shares which were subject to the participant's old rights is
               equal to the total market value, immediately after the grant of
               the shares in respect of which the new rights are granted to the
               participant; and

          (d)  the total amount payable by the participant for the acquisition
               of shares in pursuance of the new rights is equal to the total
               amount that would have been payable for the acquisition of shares
               in pursuance of the old rights.

     The new rights shall for the purposes of the UK Approved Part be treated as
     having been granted at the time when the old rights were granted and
     references to Shares shall, in relation to the new rights, be taken as
     references to the shares of the company whose shares are scheme shares.
     References to the Company shall be taken to be references to the company
     whose shares are scheme shares in Rules 6, 7, 8, 9, 10, 11 and 12.

                                      A-8
<PAGE>

14.  VOLUNTARY WINDING UP

     If a resolution for a shareholders' voluntary winding up of the Company is
     passed an Optionee may exercise his Option, subject to Rule 8, within three
     months of the date of the resolution.

15.  AMENDMENT

(1)  Subject to paragraph (2) below the Plan Administrator may by resolution at
     any time amend the rules of the UK Approved Part in any respect except that
     any amendment made when the UK Approved Part is approved under Schedule 9
     of the ICTA shall not have effect without the prior approval of the Inland
     Revenue.

(2)  Subject to paragraph (4) below, no amendment to the UK Approved Part to the
     advantage of Optionees or Eligible Employees may be made:

     (a)  to the number of Shares specified in Rule 6 and the provisions for
          adjustment of that number (except as provided in Rule 6);

     (b)  to the definitions of "Acquisition Price", "Eligible Employee",
          "Employment", "Grant Period", "Group Remuneration" and "Issue or
          Reorganisation";

     (c)  which would alter to the advantage of Eligible Employees or Optionees,
          any of the provisions of Rules 4, 5, 6, 7, 8, 9, 11(4), 11(6), 12, 13,
          paragraph (2) of this Rule or to the Schedules

     without the prior approval of a majority of the stockholders of the Company
     present at a meeting of stockholders.

(3)  No amendment shall be made under paragraph (1) which would abrogate or
     materially affect adversely the subsisting rights of an Optionee unless it
     is made with his written consent or by a resolution passed as if the
     Options constituted a separate class of share capital and the provisions of
     the Articles of Organisation of the Company relating to class meetings
     applied to that class mutatis mutandis.

(4)  Paragraph (2) shall not apply to any amendment which:

     (a)  is confined to Options which do not involve the issue of new Shares
          (including the eligibility requirements and the terms of such Options
          insofar as they do not involve the issue of new Shares); or

     (b)  is not so confined and affects the limit in Rule 7(3) provided that
          the Plan Administrator is reasonably satisfied that the purpose or
          effect of the amendment is substantially to comply with any current
          published guidelines issued by institutional investors; or

     (c)  is not so confined and:

          (i)  is necessary or desirable in order to obtain or maintain Inland
               Revenue approval of the Approved Part under Schedule 9 of the
               ICTA or any other enactment, or to comply with or take account of
               the provisions of any proposed or existing legislation or of any
               Inland Revenue practice or concession, or to obtain or maintain
               favourable taxation treatment of the Company, any Subsidiary or
               any Optionee; and

                                      A-9
<PAGE>

          (ii) does not affect the basic principles of the Approved Part.

16.  DURATION AND TERMINATION

     No Options may be granted under the Approved Part more than ten years after
     the date of adoption of the Approved Part by the Company. The Plan
     Administrator may at any time terminate the Approved Part and no further
     Options will be granted after that date, but Options granted before that
     date will continue to be valid and exercisable in accordance with these
     Rules.

17.  DISAPPLICATION OF PLAN RULES

     The following sections of the Plan shall not apply to the UK Approved Part:

     (a)  Section 2.2(c);

     (b)  Section 6.6 and 6.7;

     (c)  Section 7.2 (ii) -(v);

     (d)  Section 9.4 as far as it pertains to US taxes; and

     (e)  any reference to "Incentive Stock Options".

                                      A-10

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