Document:

EXHIBIT
10.33

LOAN
MODIFICATION AGREEMENT

 

This Loan Modification Agreement is entered into as of June 26, 2002 by
and between PHARSIGHT CORPORATION (the “Borrower”) and Silicon Valley Bank
(“Bank”).

 

1.             DESCRIPTION OF
EXISTING OBLIGATIONS: Among other Obligations which may be owing by
Borrower to Bank, Borrower is indebted to Bank pursuant to, among other
documents, a Loan and Security Agreement, dated June 13, 2001, as may be
amended from time to time, (the “Domestic Loan Agreement”).  The Domestic Loan Agreement provides for,
among other things, a Committed Revolving Line in the original principal amount
of Two Million Five Hundred Thousand Dollars ($2,500,000) and a Committed Term
Loan in the original principal amount of Three Million Five Hundred Thousand
Dollars ($3,500,000). Furthermore, Borrower is indebted to Bank pursuant to,
among other documents, an Export-Import Bank Loan and Security Agreement, dated
June 13, 2001, as may be amended from time to time (the “EXIM Loan Agreement”).  The EXIM Loan Agreement provided for, among
other things, an EXIM Committed Line in the original principal amount of One
Million Five Hundred Thousand Dollars ($1,500,000).  The Domestic Loan Agreement and the EXIM Loan Agreement are
collectively defined as the Loan Agreements. Defined terms used but not
otherwise defined herein shall have the same meanings as set forth in the Loan
Agreements.

 

Hereinafter, all indebtedness owing by Borrower to Bank shall be
referred to as the “Obligations.”

 

2.             DESCRIPTION OF
COLLATERAL. Repayment of the Obligations is secured by the Collateral as
described in the Loan Agreements.  
Additionally, repayment of the EXIM Committed Line is guaranteed by the
Export-Import Bank of the United States “EXIM Bank” pursuant to a Master
Guarantee Agreement between EXIM Bank and Bank.

 

Hereinafter, the above-described security documents and guaranties,
together with all other documents securing repayment of the Obligations shall
be referred to as the “Security Documents”. 
Hereinafter, the Security Documents, together with all other documents
evidencing or securing the Obligations shall be referred to as the “Existing
Loan Documents”.

 

3.             DESCRIPTION OF CHANGE IN TERMS.

 

A.           Modification(s) to Domestic Loan
Agreement.

 

	
  1.

  	
   

  	
  Section 7.6 entitled
  “Distributions, Investments” is hereby amended in part to allow Borrower to
  pay any dividends (provided that cash dividends shall not exceed $600,000 per
  year) and payments in connection with redemptions as permitted or required
  pursuant to the terms of the Series A Preferred Stock and/or the Series B
  Preferred Stock.

  
	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Section
  7.4 entitled “Indebtedness” is hereby amended in part to allow Borrower to
  create a Series A and Series B Preferred Stock as described in its
  Certificate of Designation for such series and as contemplated by the
  Preferred Stock and Warrant Purchase Agreement, dated as of June 25, 2002, by
  and among Borrower and the purchasers named therein (the “Purchase
  Agreement”).

  
	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Section
  7.7 entitled “Transactions with Affiliates” is hereby amended in part to
  allow Borrower to issue Series A and Series B Preferred Stock to certain of
  its affiliates in accordance with the terms and conditions of the Purchase
  Agreement.

  

 

 

4.             CONSISTENT
CHANGES.  The Existing Loan
Documents are hereby amended wherever necessary to reflect the changes
described above.

 

5.             NO DEFENSES OF BORROWER.  Borrower agrees that, as of the date hereof,
it has no defenses against paying any of the Obligations.

 

6.             CONTINUING
VALIDITY.  Borrower understands and
agrees that in modifying the existing Obligations, Bank is relying upon
Borrower’s representations, warranties, and agreements, as set forth in the
Existing Loan Documents.  Except as
expressly modified pursuant to this Loan Modification Agreement, the terms of
the Existing Loan Documents remain unchanged and in full force and effect.  Bank’s agreement to modifications to the
existing Obligations pursuant to this Loan Modification Agreement in no way
shall obligate Bank to make any future modifications to the Obligations.  Nothing in this Loan Modification Agreement
shall constitute a satisfaction of the Obligations.  It is the intention of Bank and Borrower to retain as liable
parties all makers and endorsers of Existing Loan Documents, unless the party
is expressly released by Bank in writing. 
Unless expressly released herein, no maker, endorser, or guarantor will
be released by virtue of this Loan Modification Agreement.  The terms of this paragraph apply not only
to this Loan Modification Agreement, but also to all subsequent loan
modification agreements.

 

                This Loan
Modification Agreement is executed as of the date first written above.

 

	
  BORROWER:

  	
   

  	
  BANK:

  
	
   

  	
   

  	
   

  
	
  PHARSIGHT CORPORATION

  	
   

  	
  SILICON VALLEY BANK

  

 

 

 

	
  By:

  	
  /s/
  CHARLIE FAAS

  	
   

  	
  By:

  	
  /s/
  M.F. FORDE

  
	
  Name:

  	
  Charlie
  Faas

  	
   

  	
  Name:

  	
  Mercy
  F. Forde

  
	
  Title:

  	
  Vice
  President, Finance

  	
   

  	
  Title:

  	
  Vice
  President

  

 

SILICON VALLEY BANK

 

 

PRO FORMA
INVOICE FOR LOAN CHARGES

 

 

	
  BORROWER:

  	
  PHARSIGHT CORPORATION

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  LOAN OFFICER:

  	
  Ron Kundich

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DATE:

  	
  June 26, 2002

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Documentation Fee

  	
   

  	
  $250.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  TOTAL FEE DUE

  	
   

  	
  $250.00

  	
   

  
						

 

 

Please indicate
the method of payment:

 

                o  
A check for the total amount is attached.

 

                o  
Debit DDA # __________________ for the total amount.

 

                o  
Loan proceeds

 

 

 

	
   

  	
   

  	
   

  	
   

  
	
  Borrower

  	
   

  	
  (Date)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Silicon Valley Bank

  	
   

  	
  (Date)

  	
   

  
	
  Account Officer’s Signature<PAGE>

                                 EXHIBIT (10)(b)

                         OPINION AND CONSENT OF ACTUARY

<PAGE>

                [Transamerica Life Insurance Company Letterhead]

July 1, 2002

Transamerica Life Insurance Company
4333 Edgewood Road NE
Cedar Rapids, Iowa  52499-0001

Re:  Retirement Income Builder III
     Separate Account VA K
     Registration on Form N-4

Dear Sir/Madam:

With regard to the above registration statement, I have examined such documents
and made such inquiries as I have deemed necessary and appropriate, and on the
basis of such examination, have the following opinions:

Fees and charges deducted under the Retirement Income Builder III policies are
those deemed necessary to appropriately reflect:

(1)  the expenses incurred in the acquisition and distribution of the policies,

(2)  the expenses associated with the development and servicing of the policies,

(3)  the assumption of certain risks arising from the operation and management
     of the policies and/or riders to the policy and that provides for a
     reasonable margin of profit.

Fees and charges assessed against the policy values in the variable account
include:

(i)  Service Charge and Administrative Charge

(ii) Mortality and Expense Risk Fee (M&E)

(iii) Taxes (including premium and other taxes if applicable)

(iv) Surrender Charges

(v)  Any applicable rider fees or charges

<PAGE>

Transamerica Life Insurance Company
July 1, 2002
Page 2

The magnitude of each of the individual charges listed above in (i) through (v)
is established in the pricing of the Retirement Income Builder III, to achieve a
reasonable Return on Investment (ROI), which is within the range of industry
practice with respect to comparable variable annuity products.

Except by coincidence, it is not expected that actual charges assessed in a
given year would exactly offset actual expenses incurred. Acquisition expenses
(as well as major product and/or systems development expenses) are incurred "up
front" and recovered, with a reasonable profit margin, through future years'
charges. In addition, the company cannot increase certain charges under the
policies in the pricing process.

Therefore, in my opinion, the fees and charges deducted under the policies, in
the aggregate, are reasonable in relation to the services rendered, the expenses
expected to be incurred, and the risks assumed by the company.

I hereby consent to the use of this opinion, which is included as an Exhibit to
the registration statement.

        /s/ R. Gene Hauser
---------------------------------------
R. Gene Hauser
Associate Actuary
Transamerica Life Insurance Company<PAGE>

                                                                  EXHIBIT 10.27

                                STEELCASE INC.

                          Incentive Compensation Plan

                             Amended and Restated

                                 March 1, 2002

<PAGE>

                  STEELCASE INC. INCENTIVE COMPENSATION PLAN

                               Table of Contents

<TABLE>
<CAPTION>
                                                                           Page
                                                                           ----
 <S>                                                                       <C>
 Article 1.   Establishment, Objectives, and Duration.....................   1
 Article 2.   Definitions.................................................   1
 Article 3.   Administration..............................................   5
 Article 4.   Shares Subject to the Plan and Maximum Awards...............   6
 Article 5.   Eligibility and Participation...............................   7
 Article 6.   Stock Options...............................................   7
 Article 7.   Stock Appreciation Rights...................................   8
 Article 8.   Restricted Stock............................................   9
 Article 9.   Performance Units, Performance Shares, and Cash-Based Awards  10
 Article 10.  Phantom Shares..............................................  11
 Article 11.  Other Share-Based Awards....................................  12
 Article 12.  Performance Measures........................................  12
 Article 13.  Beneficiary Designation.....................................  13
 Article 14.  Deferrals...................................................  13
 Article 15.  Rights of Employees/Directors...............................  13
 Article 16.  Change in Control...........................................  14
 Article 17.  Change in Capitalization....................................  15
 Article 18.  Amendment, Modification and Termination.....................  15
 Article 19.  Withholding.................................................  16
 Article 20.  Indemnification.............................................  16
 Article 21.  Successors..................................................  16
 Article 22.  Legal Construction..........................................  16
 Article 23.  Execution...................................................  17
</TABLE>

                                       i

<PAGE>

Steelcase Inc. Incentive Compensation Plan

Article 1.  Establishment, Objectives, and Duration

   1.1.  Establishment of the Plan. Steelcase Inc., a Michigan corporation
(hereinafter referred to as the "Company"), hereby establishes an incentive
compensation plan to be known as the "Steelcase Inc. Incentive Compensation
Plan" (hereinafter referred to as the "Plan"), as set forth in this document.
The Plan permits the grant of Nonqualified Stock Options, Incentive Stock
Options, Stock Appreciation Rights, Restricted Stock, Performance Shares,
Performance Units, Cash-Based Awards, Phantom Shares and Share-Based Awards.

   The Plan as hereby amended and restated is effective as of March 1, 2002
(the "Effective Date"); provided, however, that the continuation of this Plan
after the annual meeting for the stockholders of the Company held in 2002 (the
"2002 Meeting"), as well as any Award granted pursuant to Article 9 which is
designed to qualify for the Performance-Based Exception with respect to any
Performance Period ending after the 2002 Meeting, shall be subject to the
approval by stockholders of the Plan at such 2002 Meeting.

   1.2.  Objectives of the Plan. The objectives of the Plan are to optimize the
profitability and growth of the Company through annual and long-term incentives
which are consistent with the Company's goals and which link the personal
interests of Participants to those of the Company's stockholders; to provide
Participants with an incentive for excellence in individual performance; and to
promote teamwork among Participants.

   The Plan is further intended to provide flexibility to the Company in its
ability to motivate, attract, and retain the services of Participants who make
significant contributions to the Company's success and to allow Participants to
share in the success of the Company.

   1.3.  Duration of the Plan. The Plan shall commence on the Effective Date,
as described in Section 1.1 hereof, and shall remain in effect, subject to the
right of the Board of Directors to amend or terminate the Plan at any time
pursuant to Article 18 hereof, until all Shares subject to it shall have been
purchased or acquired according to the Plan's provisions under Awards
denominated in Shares, and with respect to all Awards, in no event may an Award
be granted under the Plan on or after the tenth anniversary of the Effective
Date.

Article 2.  Definitions

   Whenever used in the Plan, the following terms shall have the meanings set
forth below, and when the meaning is intended, the initial letter of the word
shall be capitalized:

   2.1.  "Affiliate" shall have the meaning ascribed to such term in Rule 12b-2
of the General Rules and Regulations of the Exchange Act.

   2.2.  "Award" means, individually or collectively, a grant under this Plan
of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation
Rights, Restricted Stock, Performance Shares, Performance Units, Cash-Based
Awards, Phantom Shares or Other Share-Based Awards.

                                        1

<PAGE>

   2.3.  "Award Agreement" means an agreement entered into by the Company and
each Participant setting forth the terms and provisions applicable to Awards
granted under this Plan.

   2.4.  "Beneficial Owner" or "Beneficial Ownership" shall have the meaning
ascribed to such term in Rule 13d-3 of the General Rules and Regulations under
the Exchange Act.

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

   2.6.  "Cash-Based Award" means an Award granted to a Participant, as
described in Article 9 herein.

   2.7.  "Change in Control" of the Company shall be deemed to have occurred if
the event set forth in any one of the following paragraphs shall have occurred:

   (a) any Person (other than those Persons owning stock of the Company as of
       the day before the IPO Date, or other than a trustee or other fiduciary
       holding securities under an employee benefit plan of the Company, or a
       corporation owned directly or indirectly by the stockholders of the
       Company in substantially the same proportions as their ownerships of
       stock of the Company) (i) is or becomes the Beneficial Owner, directly
       or indirectly, of securities of the Company representing thirty percent
       (30%) or more of the combined voting power of the Company's then
       outstanding securities, excluding any Person who becomes such a
       Beneficial Owner in connection with a transaction described in clause
       (i) of paragraph (c) below, and (ii) such Person's ownership exceeds the
       combined voting power beneficially owned by the stockholders of the
       Company on the day before the IPO Date; or

   (b) the following individuals cease for any reason to constitute a majority
       of the number of directors then serving: individuals who, on the
       Effective Date, constitute the Board and any new director (other than a
       director whose initial assumption of office is in connection with an
       actual or threatened election contest, including but not limited to a
       consent solicitation, relating to the election of directors of the
       Company) whose appointment or election by the Board or nomination for
       election by the Company's shareholders was approved or recommended by a
       vote of at least two-thirds (2/3) of the directors then still in office
       who either were directors on the Effective Date or whose appointment,
       election or nomination for election was previously so approved or
       recommended; or

   (c) there is consummated a merger or consolidation of the Company or any
       direct or indirect subsidiary of the Company with or involving any other
       corporation, other than (i) 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 or any
       parent thereto), at least sixty-five percent ( 65%) of the combined
       voting power of the securities of the Company or such surviving entity
       or any parent thereof outstanding immediately after such merger or
       consolidation, or (ii) a merger or consolidation effected to implement a
       recapitalization of the Company (or similar transaction) in which no
       Person (other than those Persons owning stock of the Company as of the
       day before the IPO Date, or other than a trustee or other fiduciary
       holding securities under an employee benefit plan of the Company, or a
       corporation

                                        2

<PAGE>

       owned directly or indirectly by the stockholders of the Company in
       substantially the same proportions as their ownerships of stock of the
       Company) is or becomes the Beneficial Owner, directly or indirectly, of
       securities of the Company (not including in the securities Beneficially
       Owned by such Person any securities acquired directly from the Company
       or its Affiliates) representing thirty percent (30%) or more of the
       combined voting power of the Company's then outstanding securities; or

   (d) the shareholders of the Company approve a plan of complete liquidation
       or dissolution of the Company or there is consummated an agreement for
       the sale or disposition by the Company of all or substantially all of
       the Company's assets, other than a sale or disposition by the Company of
       all or substantially all of the Company's assets to an entity, at least
       sixty-five percent (65%) of the combined voting power of the voting
       securities of which are owned by shareholders of the Company in
       substantially the same proportions as their ownership of the Company
       immediately prior to such sale.

       However, in no event shall a Change in Control be deemed to have
       occurred, with respect to a Participant, if the Participant is part of a
       purchasing group which consummates the Change in Control transaction. A
       Participant shall be deemed "part of a purchasing group" for purposes of
       the preceding sentence if the Participant is an equity participant in
       the purchasing company or group (except for: (i) passive ownership of
       less than three percent (3%) of the stock of the purchasing company; or
       (ii) ownership of equity participant in the purchasing company or group
       which is otherwise not significant, as determined prior to the Change in
       Control by a majority of the nonemployee continuing Directors).

   2.8.  "Code" means the Internal Revenue Code of 1986, as amended from time
to time.

   2.9.  "Committee" means the Compensation Committee of the Board.

   2.10.  "Company" means Steelcase Inc., a Michigan corporation, including any
and all Subsidiaries and Affiliates, and any successor thereto as provided in
Article 21 herein.

   2.11.  "Competition" means directly or indirectly engaging in competition
with the Company or any subdivision, Subsidiary, or Affiliate of the Company
(collectively, the "Company") at any time during employment with the Company or
during the three (3) year period following termination of employment with the
Company, without prior approval of the Administrative Committee. A Plan
Participant engages in competition if that person participates directly or
indirectly in the manufacture, design or distribution of any products of the
same type as those of the Company, including, but not limited to, office
furniture, office systems or architectural products, or the providing of any
related services, for or on behalf of any person or entity other than the
Company and its authorized dealers, at any location within or without the
United States of America. It is intended that this definition shall be enforced
to the fullest extent permitted by law. If any part of this definition shall be
construed to be invalid or unenforceable, in whole or in part, then such
definition shall be construed in a manner so as to permit its enforceability to
the fullest extent permitted by law.

   2.12.  "Director" means any individual who is a member of the Board of
Directors of the Company or any Subsidiary or Affiliate; provided, however,
that any Director who is employed

                                        3

<PAGE>

by the Company or any Subsidiary or Affiliate shall be considered an Employee
under the Plan and shall not be considered a Director.

   2.13.  "Effective Date" shall have the meaning ascribed to such term in
Section 1.1 hereof.

   2.14.  "Employee" means any employee of the Company or its Subsidiaries or
Affiliates. Directors who are employed by the Company shall be considered
Employees under this Plan.

   2.15.  "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor act thereto.

   2.16.  "Fair Market Value" shall be determined on the basis of the opening
sale price on the principal securities exchange on which the Shares are traded
or, if there is no such sale on the relevant date, then on the last previous
day on which a sale was reported; if the security is not listed for trading on
a national securities exchange, the fair market value of a security as
determined in good faith by the Board.

   2.17.  "Freestanding SAR" means an SAR that is granted independently of any
Options, as described in Article 7 herein.

   2.18.  "Incentive Stock Option" or "ISO" means an option to purchase Shares
granted under Article 6 herein and which is designated as an Incentive Stock
Option and which is intended to meet the requirements of Code Section 422.

   2.19.  "Insider" shall mean an individual who is, on the relevant date, an
officer, Director or more than ten percent (10%) Beneficial Owner of any class
of the Company's equity securities that is registered pursuant to Section 12 of
the Exchange Act, all as defined under Section 16 of the Exchange Act.

   2.20.  "IPO Date" means the first day on which Shares are publicly traded on
the New York Stock Exchange.

   2.21.  "Nonqualified Stock Option" or "NQSO" means an option to purchase
Shares granted under Article 6 herein and which is not intended to meet the
requirements of Code Section 422.

   2.22.  "Option" means an Incentive Stock Option or a Nonqualified Stock
Option, as described in Article 6 herein.

   2.23.  "Option Price" means the price at which a Share may be purchased by a
Participant pursuant to an Option.

   2.24.  "Participant" means an Employee, Director, or other individual
designated by the Board who has been selected to receive an Award or who has an
outstanding Award granted under the Plan.

   2.25.  "Performance-Based Exception" means the performance-based exception
from the tax deductibility limitations of Code Section 162(m).

                                        4

<PAGE>

   2.26.  "Performance Share" means an Award granted to a Participant, as
described in Article 9 herein.

   2.27.  "Performance Unit" means an Award granted to a Participant, as
described in Article 9 herein.

   2.28.  "Period of Restriction" means the period during which the transfer of
Shares of Restricted Stock is limited in some way (based on the passage of
time, the achievement of performance goals, or upon the occurrence of other
events as determined by the Board, at its discretion), and the Shares are
subject to a substantial risk of forfeiture, as provided in Article 8 herein.

   2.29.  "Person" shall have the meaning ascribed to such term in Section
3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof,
including a "group" as defined in Section 13(d) thereof.

   2.30.  "Phantom Shares" means an Award granted to a Participant pursuant to
Article 10 herein.

   2.31.  "Restricted Stock" means an Award granted to a Participant pursuant
to Article 8 herein.

   2.32.  "Share-Based Award" means an Award granted to a Participant pursuant
to Article 11 herein.

   2.33.  "Shares" means the shares of Class A Common Stock of the Company.

   2.34.  "Stock Appreciation Right" or "SAR" means an Award, granted alone or
in connection with a related Option, designated as an SAR, pursuant to the
terms of Article 7 herein.

   2.35.  "Sub-Committee" means any committee appointed by the Board to
administer Awards to Employees (including the Committee), as specified in
Article 3 herein. Any such committee shall be comprised entirely of Directors
who are considered "outside directors" under Section 162(m) of the Code.

   2.36.  "Subsidiary" means any corporation, partnership, joint venture, or
other entity in which the Company has a fifty percent (50%) or greater voting
interest.

   2.37.  "Tandem SAR" means an SAR that is granted in connection with a
related Option pursuant to Article 7 herein, the exercise of which shall
require forfeiture of the right to purchase a Share under the related Option
(and when a Share is purchased under the Option, the Tandem SAR shall similarly
be canceled).

   2.38.  "Transaction" shall have the meaning ascribed to it in Section 17.1.

Article 3.  Administration

   3.1.  General. The Plan shall be administered by the Board, or (subject to
the following) by any committee appointed by the Board. The members of the
Committee and the Sub-Committee shall be appointed from time to time by, and
shall serve at the discretion of, the

                                        5

<PAGE>

Board of Directors. The Board may delegate to the Committee and the
Sub-Committee any or all of the administration of the Plan; provided, however,
that the administration of the Plan with respect to Awards granted to Directors
may not be so delegated. To the extent that the Board has delegated to the
Committee and or the Sub-Committee any authority and responsibility under the
Plan, all applicable references to the Board in the Plan shall be to the
Committee or the Sub-Committee, respectively. The Committee and the
Sub-Committee shall each have the authority to delegate administrative duties
to Employees, officers or Directors of the Company.

   3.2.  Authority of the Board. Except as limited by law or by the Certificate
of Incorporation or Bylaws of the Company, and subject to the provisions
herein, the Board shall have full power to select Employees and Directors and
other individuals who shall participate in the Plan; determine the sizes and
types of Awards; determine the terms and conditions of Awards in a manner
consistent with the Plan; construe and interpret the Plan and any agreement or
instrument entered into under the Plan; establish, amend, or waive rules and
regulations for the Plan's administration; and (subject to the provisions of
Article 18 herein) amend the terms and conditions of any outstanding Award as
provided in the Plan. Further, the Board shall make all other determinations
which may be necessary or advisable for the administration of the Plan. As
permitted by law (and subject to Section 3.1 herein), the Board may delegate
its authority as identified herein.

   3.3.  Decisions Binding. All determinations and decisions made by the Board
pursuant to the provisions of the Plan and all related orders and resolutions
of the Board shall be final, conclusive and binding on all persons, including
the Company, its stockholders, Directors, Employees, Participants, and their
estates and beneficiaries.

Article 4.  Shares Subject to the Plan and Maximum Awards

   4.1.  Number of Shares Available for Grants. Subject to adjustment as
provided in Article 17 herein, the number of Shares hereby reserved for
issuance to Participants under the Plan shall be 14,284,727 Shares; no more
than 2,000,000 of which may be granted in the form of Restricted Shares. Shares
available under the Plan shall be now or hereafter issued or authorized but
unissued. In addition, subject to obtaining the stockholder approval of the
Plan at the 2002 Meeting, an additional 6,715,273 of Shares shall be reserved
for issuance under the Plan; no more than 1,000,000 of which may be granted in
the form of Restricted Shares. The Board shall determine the appropriate
methodology for calculating the number of shares issued in pursuance of the
Plan. Unless and until the Board determines that an Award shall not qualify for
the Performance-Based Exception, the following rules shall apply to grants of
such Awards under the Plan:

   (a) Stock Options: The maximum aggregate number of Shares that may be
       granted in the form of Stock Options, pursuant to any Award granted in
       any one fiscal year to any one single Participant shall be five hundred
       thousand (500,000).

   (b) SARs: The maximum aggregate number of Shares that may be granted in the
       form of Stock Appreciation Rights, pursuant to any Award granted in any
       one fiscal year to any one single Participant shall be five hundred
       thousand (500,000).

                                        6

<PAGE>

   (c) Restricted Stock: The maximum aggregate grant with respect to Awards of
       Restricted Stock granted in any one fiscal year to any one Participant
       shall be two hundred thousand (200,000).

   (d) Performance Shares/Performance Units and Cash-Based Awards: The maximum
       aggregate payout (determined as of the end of the applicable performance
       period) with respect to Cash-Based Awards or Awards of Performance
       Shares or Performance Units granted in any one fiscal year to any one
       Participant shall be equal to the value of two hundred fifty thousand
       (250,000) Shares.

   (e) Phantom Shares: The maximum aggregate payout (determine at the end of
       the applicable Performance Period) with respect to Phantom Shares
       granted in any one fiscal year to any one Participant shall be equal to
       the value of two hundred fifty thousand (250,000) Shares.

   (f) Other Share-Based Awards: The maximum aggregate number of Shares that
       may be granted in the form of Other Share-Based Awards, pursuant to any
       Award granted in any one fiscal year to an one single Participant shall
       be two hundred thousand (200,000).

Article 5.  Eligibility and Participation

   5.1.  Eligibility. Persons eligible to participate in this Plan include all
Employees, Directors, and other individuals designated by the Board.

   5.2.  Actual Participation. Subject to the provisions of the Plan, the Board
may, from time to time, select from all eligible Employees, Directors, and
other individuals designated by the Board, those to whom Awards shall be
granted and shall determine the nature and amount of each Award.

Article 6.  Stock Options

   6.1.  Grant of Options. Subject to the terms and provisions of the Plan,
Options may be granted to Participants in such number, and upon such terms, and
at any time and from time to time as shall be determined by the Board,
provided, however, (i) that no Director shall be granted any ISO and (ii) that
any Option designed to qualify for the Performance-Based Exception shall be
granted only by the Sub-Committee.

   6.2.  Award Agreement. Each Option grant shall be evidenced by an Award
Agreement that shall specify the Option Price, the duration of the Option, the
number of Shares to which the Option pertains, termination and transferability
rights, and such other provisions as the Board shall determine. The Award
Agreement also shall specify whether the Option is intended to be an ISO within
the meaning of Code Section 422, or an NQSO whose grant is intended not to fall
under the provisions of Code Section 422.

   6.3.  Option Price. The Option Price for each grant of an Option under this
Plan shall be at least equal to one hundred percent (100%) of the Fair Market
Value of a Share on the date the Option is granted.

   6.4.  Duration of Options. Each Option granted to a Participant shall expire
at such time as the Board shall determine at the time of grant; provided,
however, that no Option shall be exercisable later than the tenth (10th)
anniversary date of its grant.

                                        7

<PAGE>

   6.5.  Exercise of Options. Options granted under this Article 6 shall be
exercisable at such times and be subject to such restric-tions and conditions
as the Board shall in each instance approve, which need not be the same for
each grant or for each Participant.

   6.6.  Payment. Options granted under this Article 6 shall be exercised by
the delivery of a written notice of exercise to the Company, setting forth the
number of Shares with respect to which the Option is to be exercised,
accompanied by full payment for the Shares.

   The Option Price upon exercise of any Option shall be payable to the Company
in full either: (a) in cash or its equivalent, or (b) by tendering previously
acquired Shares having an aggregate Fair Market Value at the time of exercise
equal to the total Option Price (provided that the Shares which are tendered
must have been held by the Participant for at least six (6) months prior to
their tender to satisfy the Option Price), or (c) by a combination of (a)
and (b).

   The Board also may allow cashless exercise as permitted under Federal
Reserve Board's Regulation T, subject to applicable securities law
restrictions, or by any other means which the Board determines to be consistent
with the Plan's purpose and applicable law.

   Subject to any governing rules or regulations, as soon as practicable after
receipt of a written notification of exercise and full payment, the Company
shall deliver to the Participant, in the Participant's name, Share certificates
in an appropriate amount based upon the number of Shares purchased under the
Option(s).

   6.7.  Restrictions on Share Transferability. The Board may impose such
restrictions on any Shares acquired pursuant to the exercise of an Option
granted under this Article 6 as it may deem advisable, including, without
limitation, restrictions under applicable federal securities laws, under the
requirements of any stock exchange or market upon which such Shares are then
listed and/or traded, and under any blue sky or state securities laws
applicable to such Shares.

Article 7.  Stock Appreciation Rights

   7.1.  Grant of SARs. Subject to the terms and conditions of the Plan, SARs
may be granted to Participants at any time and from time to time as shall be
determined by the Board. The Board may grant Freestanding SARs, Tandem SARs, or
any combination of these forms of SAR.

   The Board shall have complete discretion in determining the number of SARs
granted to each Participant (subject to Article 4 herein) and, consistent with
the provisions of the Plan, in determining the terms and conditions pertaining
to such SARs.

   The grant price of a Freestanding SAR shall equal the Fair Market Value of a
Share on the date of grant of the SAR. The grant price of Tandem SARs shall
equal the Option Price of the related Option.

   7.2.  Exercise of Tandem SARs. Tandem SARs may be exercised for all or part
of the Shares subject to the related Option upon the surrender of the right to
exercise the equivalent portion of the related Option. A Tandem SAR may be
exercised only with respect to the Shares for which its related Option is then
exercisable.

                                       8

<PAGE>

   Notwithstanding any other provision of this Plan to the contrary, with
respect to a Tandem SAR granted in connection with an ISO: (i) the Tandem SAR
will expire no later than the expiration of the underlying ISO; (ii) the value
of the payout with respect to the Tandem SAR may be for no more than one
hundred percent (100%) of the difference between the Option Price of the
underlying ISO and the Fair Market Value of the Shares subject to the
underlying ISO at the time the Tandem SAR is exercised; and (iii) the Tandem
SAR may be exercised only when the Fair Market Value of the Shares subject to
the ISO exceeds the Option Price of the ISO.

   7.3.  Exercise of Freestanding SARs. Freestanding SARs may be exercised upon
whatever terms and conditions the Board, in its sole discretion, imposes upon
them.

   7.4.  SAR Agreement. Each SAR grant shall be evidenced by an Award Agreement
that shall specify the grant price, the term of the SAR, and such other
provisions as the Board shall determine.

   7.5.  Term of SARs. The term of an SAR granted under the Plan shall be
determined by the Board, in its sole discretion; provided, however, that such
term shall not exceed ten (10) years.

   7.6.  Payment of SAR Amount. Upon exercise of an SAR, a Participant shall be
entitled to receive payment from the Company in an amount determined by
multiplying:

   (a) The difference between the Fair Market Value of a Share on the date of
       exercise over the grant price; by

   (b) The number of Shares with respect to which the SAR is exercised.

   At the discretion of the Board, the payment upon SAR exercise may be in
cash, in Shares of equivalent value, or in some combination thereof. The
Board's determination regarding the form of SAR payout shall be set forth in
the Award Agreement pertaining to the grant of the SAR.

Article 8. Restricted Stock

   8.1.  Grant of Restricted Stock. Subject to the terms and provisions of the
Plan, the Board, at any time and from time to time, may grant Shares of
Restricted Stock to Participants in such amounts as the Board shall determine.

   8.2.  Restricted Stock Agreement. Each Restricted Stock grant shall be
evidenced by a Restricted Stock Award Agreement that shall specify the
Period(s) of Restriction, the number of Shares of Restricted Stock granted, and
such other provisions as the Board shall determine.

   8.3.  Other Restrictions. Subject to Article 12 herein, the Board shall
impose such other conditions and/or restrictions on any Shares of Restricted
Stock granted pursuant to the Plan as it may deem advisable including, without
limitation, a requirement that Participants pay a stipulated purchase price for
each Share of Restricted Stock, restrictions based upon the achievement of
specific performance goals (Company-wide, divisional, and/or individual),
time-based restrictions on vesting following the attainment of the performance
goals, and/or restrictions under applicable federal or state securities laws.

                                       9

<PAGE>

   The Company may retain the certificates representing Shares of Restricted
Stock in the Company's possession until such time as all conditions and/or
restrictions applicable to such Shares have been satisfied.

   Except as otherwise provided in this Article 8, Shares of Restricted Stock
covered by each Restricted Stock grant made under the Plan shall become freely
transferable by the Participant after the last day of the applicable Period of
Restriction.

   8.4.  Voting Rights. Participants holding Shares of Restricted Stock granted
hereunder may be granted the right to exercise full voting rights with respect
to those Shares during the Period of Restriction.

   8.5.  Dividends and Other Distributions. During the Period of Restriction,
Participants holding Shares of Restricted Stock granted hereunder may be
credited with regular cash dividends paid with respect to the Shares while they
are so held. The Board may apply any restrictions to the dividends that the
Board deems appropriate. Without limiting the generality of the preceding
sentence, if the grant or vesting of Restricted Shares is intended to comply
with the requirements of the Performance-Based Exception, the Board may apply
any restrictions it deems appropriate to the payment of dividends declared with
respect to such Restricted Shares, including, without limitation, that the
dividends and/or the Restricted Shares maintain eligibility for the
Performance-Based Exception.

Article 9.  Performance Units, Performance Shares, and Cash-Based Awards

   9.1.  Grant of Performance Units/Shares and Cash-Based Awards. Subject to
the terms of the Plan, Performance Units, Performance Shares and/or Cash-Based
Awards may be granted at any time or from time to time, as shall be determined
by the Board, provided, however, that Performance Units, Performance Shares
and/or Cash-Based Awards designed to qualify for the Performance-Based
Exception shall be granted only by the Sub-Committee.

   9.2.  Value of Performance Units/Shares and Cash-Based Awards. Each
Performance Unit shall have an initial value that is established by the Board
at the time of grant. Each Performance Share shall have an initial value equal
to the Fair Market Value of a Share on the date of grant. Each Cash-Based Award
shall have a value as may be determined by the Board. The Board shall set
performance goals in its discretion which, depending on the extent to which
they are met, will determine the number and/or value of Performance
Units/Shares and Cash-Based Award that will be paid out to the Participant. For
purposes of this Article 9, the time period during which the performance goals
must be met shall be called a "Performance Period." The performance goals with
respect to Awards designed to qualify for the Performance-Based Exception shall
be established in writing by the Sub-Committee prior to the earlier of (i)
ninety (90) days after the commencement of the Performance Period or (ii) the
date on which twenty-five percent (25%) of the Performance Period will elapse,
provided that, in either case, achievement of the performance goals is
substantially uncertain on such date.

   9.3.  Earning of Performance Units/Shares and Cash-Based Awards. Subject to
the terms of this Plan, after the applicable Performance Period has ended, the
holder of Performance Units/Shares and Cash-Based Awards shall be entitled to
receive payout on the number and value of Performance Units/Shares and of
Cash-Based Awards earned by the Participant over the Performance Period, to be
determined as a function of the extent to which the corresponding performance
goals have been achieved.

                                       10

<PAGE>

   9.4.  Form and Timing of Payment of Performance Units/Shares and Cash-Based
Awards. Payment of earned Performance Units/Shares and Cash-Based Awards shall
be made in lump-sum payments at such time or times designated by the Board
following the close of the applicable Performance Period. Subject to the terms
of this Plan, the Board, in its sole discretion, may pay earned Performance
Units/Shares and Cash-Based Awards in the form of cash or in Shares (or in a
combination thereof) which have an aggregate Fair Market Value equal to the
value of the earned Performance Units/Shares and Cash-Based Awards at the close
of the applicable Performance Period plus or minus any investment return from
the close of the Performance Period to the date of payment as determined by the
Board in its discretion provided, however, that payment shall not be made with
respect to Awards designed to qualify for the Performance-Based Exception prior
to the Sub-Committee's certification, in writing, that the performance goals
relating to such Awards have been satisfied. Such Shares may be granted subject
to any restrictions deemed appropriate by the Board. The determination of the
Board with respect to the form and timing of payout of such Awards shall be set
forth in the Award Agreement pertaining to the grant of the Award.

   At the discretion of the Board, Participants may be entitled to receive any
dividends declared with respect to Shares which have been earned in connection
with grants of Performance Units and/or Performance Shares which have been
earned, but not yet distributed to Participants (such dividends shall be
subject to the same accrual, forfeiture, and payout restrictions as apply to
dividends earned with respect to Shares of Restricted Stock, as set forth in
Section 8.5 herein). In addition, Participants may, at the discretion of the
Board, be entitled to exercise their voting rights with respect to such Shares.

Article 10.  Phantom Shares

   10.1.  Grant of Phantom Shares. Subject to the terms of the Plan, Phantom
Shares may be granted to Participants in such amounts and upon such terms, and
at any time and from time to time, as shall be determined by the Board.

   10.2.  Value of Phantom Shares. Each Phantom Share shall have an initial
value equal to the Fair Market Value of a Share on the date of grant. The Board
shall establish the terms and conditions of such Award, including any vesting
provisions.

   10.3.  Earning of Phantom Shares. Subject to the terms of this Plan, the
holder of any vested Phantom Shares shall be entitled to receive payout on the
number and value of Phantom Shares earned by the Participant over the
Performance Period, to be determined by the extent to which the corresponding
performance goals have been achieved.

   10.4.  Form and Timing of Payment of Phantom Shares. Payment of earned
Phantom Shares shall be made in a single lump sum at such time as designated by
the Board. Subject to the terms of this Plan, the Board, in its sole
discretion, may pay earned Phantom Shares in the form of cash or in Shares (or
in a combination thereof) which have an aggregate Fair Market Value equal to
the value of the earned Phantom Shares at such time as designated by the Board.
Such Shares may be granted subject to any restrictions deemed appropriate by
the Board. The determination of the Board with respect to the form of payout of
such Awards shall be set forth in the Award Agreement pertaining to the grant
of the Award.

                                       11

<PAGE>

   At the discretion of the Board, Participants may be entitled to receive any
dividends declared with respect to Shares which have been earned in connection
with grants of Phantom Shares which have been earned, but not yet distributed
to Participants (such dividends shall be subject to the same accrual,
forfeiture, and payout restrictions as apply to dividends earned with respect
to Shares of Restricted Stock, as set forth in Section 8.5 herein).

Article 11.  Other Share-Based Awards

   Subject to the terms of the Plan, the Board may grant other Share-Based
Awards under this Plan, including without limitation, those Awards pursuant to
which Shares are acquired or may in the future be acquired. The Board, in its
sole discretion, shall determine the terms and conditions of such other
Share-Based Awards.

Article 12.  Performance Measures

   Unless and until the Board proposes for shareholder vote and shareholders
approve a change in the general performance measures set forth in this Article
12, the attainment of which may determine the degree of payout and/or vesting
with respect to Awards which are designed to qualify for the Performance-Based
Exception, the performance measure(s) to be used for purposes of such grants
shall be chosen from among:

   (a) Earnings per share;

   (b) Net income (before or after taxes);

   (c) Return measures (including, but not limited to, return on assets,
       equity, or sales);

   (d) Cash flow return on investments which equals net cash flows divided by
       owners equity;

   (e) Earnings before or after taxes;

   (f) Gross revenues;

   (g) Share price (including, but no limited to, growth measures and total
       shareholder return); and

   (h) Economic value added.

   The Board (or the Sub-Committee with respect to Awards designed to qualify
for the Performance-Based Exception) shall have the discretion to adjust the
determinations of the degree of attainment of the preestablished performance
goals; provided, however, that Awards which are designed to qualify for the
Performance-Based Exception, may not be adjusted upward (the Sub-Committee
shall retain the discretion to adjust such Awards downward). Nevertheless, the
Board (or the Sub-Committee with respect to Awards designed to qualify for the
Performance-Based Exception) shall have the authority to make appropriate
adjustments in the performance goals under an Award to reflect the impact of
the following extraordinary items not reflected in such goals: (1) any profit
or loss attributable to acquisitions or dispositions of stock or assets, (2)
any changes in accounting standards that may be required or permitted by the
Financial Accounting Standards Board or adopted by the Company after the goal
is established, (3) all items of gain, loss or expense for the year related to
restructuring charges for the Company, (4) all items of gain, loss or expense
for the

                                       12

<PAGE>

year determined to be extraordinary or unusual in nature or infrequent in
occurrence or related to the disposal of a segment of a business, (5) all items
of gain, loss or expense for the year related to discontinued operations that
do not qualify as a segment of a business as defined in APB Opinion No. 30, and
(6) such other items as may be prescribed by Section 162(m) of the Code and the
Treasury Regulations thereunder as may be in effect from time to time, and any
amendments, revisions or successor provisions and any changes thereto. The
Board (or the Sub-Committee with respect to Awards designed to qualify for the
Performance-Based Exception) shall have full authority and discretion to, from
time to time, as the Board deems necessary or appropriate, modify the
accounting principles and components applied in the determination of the degree
of attainment of the preestablished performance goals with respect to all
Awards.

   In the event that applicable tax and/or securities laws change to permit
Board discretion to alter the governing performance measures without obtaining
shareholder approval of such changes, the Board shall have sole discretion to
make such changes without obtaining shareholder approval. In addition, in the
event that the Board determines that it is advisable to grant Awards which
shall not qualify for the Performance-Based Exception, the Board may make such
grants without satisfying the requirements of Code Section 162(m).

Article 13.  Beneficiary Designation

   Each Participant under the Plan may, from time to time, name any beneficiary
or beneficiaries (who may be named contingently or successively) to whom any
benefit under the Plan is to be paid in case of his or her death before he or
she receives any or all of such benefit. Each such designation shall revoke all
prior designations by the same Participant, shall be in a form prescribed by
the Company, and will be effective only when filed by the Participant in
writing with the Company during the Participant's lifetime. In the absence of
any such designation, benefits remaining unpaid at the Participant's death
shall be paid to the Participant's estate.

Article 14.  Deferrals

   The Board may permit or require a Participant to defer such Participant's
receipt of the payment of cash or the delivery of Shares that would otherwise
be due to such Participant by virtue of the exercise of an Option or SAR, the
lapse or waiver of restrictions with respect to Restricted Stock, or the
satisfaction of any requirements or goals with respect to Performance
Units/Shares. If any such deferral election is required or permitted, the Board
shall, in its sole discretion, establish rules and procedures for such payment
deferrals.

Article 15.  Rights of Employees/Directors

   15.1.  Employment. Nothing in the Plan shall interfere with or limit in any
way the right of the Company to terminate any Participant's employment at any
time, nor confer upon any Participant any right to continue in the employ of
the Company.

   15.2.  Participation. No Employee or Director shall have the right to be
selected to receive an Award under this Plan, or, having been so selected, to
be selected to receive a future Award.

   15.3.  Termination of Employment/Directorship/Relationship. Each
Participant's Award Agreement shall set forth the extent to which the
Participant shall have the right to exercise

                                       13

<PAGE>

and/or receive payment for any Award following termination of the Participant's
employment or directorship with the Company, or termination of relationship
with the Company. Such provisions shall be determined in the sole discretion of
the Board, shall be included in the Award Agreement entered into with each
Participant, need not be uniform among Awards and may reflect distinctions
based on the reasons for termination.

   15.4.  Competition. In the event the Participant engages in any Competition
with the Company, the Participant immediately and permanently forfeits the
right to exercise and/or receive payment for any Award, whether or not vested.
The Participant must return to the Company the Participant's gain resulting
from options exercised at any time within the twelve-month period preceding the
date the Participant became engaged in competition with the Company.

   15.5.  Nontransferability. Except as otherwise provided in a Participant's
Award Agreement, Awards may not be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, other than by will or by the laws of
descent and distribution. Further, except as otherwise provided in a
Participant's Award Agreement, a Participant's rights under the Plan shall be
exercisable during the Participant's lifetime only by the Participant or the
Participant's legal representative.

Article 16.  Change in Control

   16.1.  Treatment of Outstanding Awards. Upon the occurrence of a Change in
Control, unless otherwise specifically prohibited under applicable laws, or by
the rules and regulations of any governing governmental agencies or national
securities exchanges:

   (a) Any and all Options and SARs granted hereunder shall become immediately
       exercisable, and shall remain exercisable throughout their entire term;

   (b) Any restriction periods and restrictions imposed on Restricted Shares
       which are not performance-based shall lapse;

   (c) The target payout opportunities attainable under all outstanding Awards
       of performance-based Restricted Stock, Performance Units, Performance
       Shares, and Cash-Based Awards and Share-Based Awards shall be deemed to
       have been fully earned for the entire Performance Period(s) as of the
       effective date of the Change in Control. The vesting of all Awards
       denominated in Shares shall be accelerated as of the effective date of
       the Change in Control, and there shall be paid out to Participants
       within thirty (30) days following the effective date of the Change in
       Control a pro rata number of shares based upon an assumed achievement of
       all relevant targeted performance goals and upon the length of time
       within the Performance Period which has elapsed prior to the Change in
       Control. Awards denominated in cash shall be paid pro rata to
       participants in cash within thirty (30) days following the effective
       date of the Change in Control, with the proration determined as a
       function of the length of time within the Performance Period which has
       elapsed prior to the Change in Control, and based on an assumed
       achievement of all relevant targeted performance goals.

   16.2.  Termination, Amendment, and Modifications of Change in Control
Provisions. Notwithstanding any other provision of this Plan (but subject to
the limitations of Section 18.3 hereof) or any Award Agreement provision, the
provisions of this Article 16 may

                                       14

<PAGE>

not be terminated, amended, or modified on or after the date of a Change in
Control to affect adversely any Award theretofore granted under the Plan
without the prior written consent of the Participant with respect to said
Participant's outstanding Awards; provided, however, the Board may terminate,
amend, or modify this Article 16 at any time and from time to time prior to the
date of a Change in Control.

Article 17.  Change in Capitalization

   17.1.  Adjustments in Authorized Shares. In the event of any change in
corporate capitalization, such as a stock split, or a corporate transaction,
such as any merger, consolidation, separation, including a spin off, or other
distribution of stock or property of the Company, any reorganization (whether
or not such reorganization comes within the definition of such term in Code
Section 368) or any partial or complete liquidation of the Company, such
adjustment shall be made in the number and class of Shares which may be
delivered under Section 4.1, in the number and class of and/or price of Shares
subject to outstanding Awards granted under the Plan, and in the Award limits
set forth in Section 4.1 as may be determined to be appropriate and equitable
by the Board, in its sole discretion, to prevent dilution or enlargement of
rights; provided, however, that the number of Shares subject to any Award shall
always be a whole number.

Article 18.  Amendment, Modification, and Termination

   18.1.  Amendment, Modification, and Termination. Subject to Section 18.3 and
18.4, the Board may at any time and from time to time, alter, amend, suspend or
terminate the Plan in whole or in part, provided that no amendment shall be
made without shareholder approval if such approval is necessary to comply with
any applicable tax or regulatory requirements. Prior to such approval, Awards
may be made under the Plan expressly subject to such approval.

   18.2.  Adjustment of Awards. The Board (or its delegate) may make
adjustments in the terms and conditions of, and the criteria included in, any
Award in any situation it deems appropriate, as long as the adjustment of such
Award does not adversely affect the holder; provided that no such adjustment
shall be authorized to the extent that such authority would be inconsistent
with the Plan's meeting the requirements of Section 162(m) of the Code.

   18.3.  Awards Previously Granted. Notwithstanding any other provision of the
Plan to the contrary (but subject to Article 17 and 16.2 hereof), no
termination, amendment, or modification of the Plan shall adversely affect in
any material way any Award previously granted under the Plan, without the
written consent of the Participant holding such Award.

   18.4.  Compliance with Code Section 162(m). At all times when Code Section
162(m) is applicable, all Awards granted under this Plan shall comply with the
requirements of Code Section 162(m); provided, however, that in the event the
Board determines that such compliance is not desired with respect to any Award
or Awards available for grant under the Plan, then compliance with Code Section
162(m) will not be required. In addition, in the event that changes are made to
Code Section 162(m) to permit greater flexibility with respect to any Award or
Awards available under the Plan, the Board may, subject to this Article 18,
make any adjustments it deems appropriate.

                                       15

<PAGE>

Article 19.  Withholding

   19.1.  Tax Withholding. The Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy Federal, state, and local taxes, domestic or foreign,
required by law or regulation to be withheld with respect to any taxable event
arising as a result of this Plan.

   19.2.  Share Withholding. With respect to withholding required upon the
exercise of Options or SARs, upon the lapse of restrictions on Restricted
Stock, or upon any other taxable event arising as a result of Awards granted
hereunder, Participants may elect, subject to the approval of the Board, to
satisfy the withholding requirement, in whole or in part, by having the Company
withhold Shares having a Fair Market Value on the date the tax is to be
determined equal to the minimum statutory total tax which could be imposed on
the transaction. All such elections shall be irrevocable, made in writing,
signed by the Participant, and shall be subject to any restrictions or
limitations that the Board, in its sole discretion, deems appropriate.

Article 20.  Indemnification

   Each person who is or shall have been a member of the Committee, or of the
Board, shall be indemnified and held harmless by the Company against and from
any loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by him or her in connection with or resulting from any claim, action,
suit, or proceeding to which he or she may be a party or in which he or she may
be involved by reason of any action taken or failure to act under the Plan and
against and from any and all amounts paid by him or her in settlement thereof,
with the Company's approval, or paid by him or her in satisfaction of any
judgment in any such action, suit, or proceeding against him or her, provided
he or she shall give the Company an opportunity, at its own expense, to handle
and defend the same before he or she undertakes to handle and defend it on his
or her own behalf. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such persons may be
entitled under the Company's Articles of Incorporation or Bylaws, as a matter
of law, or otherwise, or any power that the Company may have to indemnify them
or hold them harmless.

Article 21.  Successors

   All obligations of the Company under the Plan with respect to Awards granted
hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the
business and/or assets of the Company.

Article 22.  Legal Construction

   22.1.  Gender and Number. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine; the plural
shall include the singular and the singular shall include the plural.

   22.2.  Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.

                                       16

<PAGE>

   22.3.  Requirements of Law. The granting of Awards and the issuance of
Shares under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.

   22.4.  Securities Law Compliance. With respect to Insiders, transactions
under this Plan are intended to comply with all applicable conditions or Rule
16b-3 or its successors under the 1934 Act. To the extent any provision of the
plan or action by the Board fails to so comply, it shall be deemed null and
void, to the extent permitted by law and deemed advisable by the Board.

   22.5.  Governing Law. To the extent not preempted by federal law, the Plan,
and all agreements hereunder, shall be construed in accordance with and
governed by the laws of the State of Michigan.

Article 23.  Execution

   IN WITNESS WHEREOF, Steelcase Inc. has caused this Plan, captioned
"Steelcase Inc. Incentive Compensation Plan," as amended and restated effective
as of March 1, 2002, to be executed by its duly authorized officer this 10/th/
day of March, 2002.

               STEELCASE INC.

               By:  /s/  Nancy W. Hickey
               --------------------------------------------
               Its:  Sr. Vice President, Global Strategic Resources
                     and Chief Administrative Officer

                                       17

<PAGE>

                        RULES OF THE UK SUB-PLAN OF THE
                  STEELCASE INC. INCENTIVE COMPENSATION PLAN

                  AMENDED UK SUB-PLAN SUBJECT TO APPROVAL BY
                             THE UK INLAND REVENUE
                PREVIOUS APPROVAL: 17 August 2001 REF:21921/PJP
                   UK SUB-PLAN TERMINATES ON 2 DECEMBER 2007

1.  Adoption of the UK Sub-Plan

   1.1.  Steelcase Inc., a Michigan Corporation, ("the Company"), has
established this UK Sub-Plan ("the UK Sub-Plan") of the Steelcase Inc.
Incentive Compensation Plan ("the Plan") for the purpose of granting rights to
acquire Shares of the Company to employees of it and its Subsidiaries.

   1.2.  The UK Sub-Plan is intended to qualify as an approved share option
plan under Schedule 9 to the Income and Corporation Taxes Act 1988 ("the Taxes
Act"). References to Schedule 9 are to Schedule 9 to the Taxes Act.

   1.3.  The Plan attached as Appendix A to these Rules shall apply to the UK
Sub-Plan subject to the additional restrictions and amendments specified below.

   1.4.  References in these Rules to Articles are to Articles of the Plan.

2.  Article 1. Duration of the Plan

   2.1.  For the purposes of the UK Sub-Plan, Article 1.3 shall be amended by
the addition at the end of that Article 1.3 of the following words:

    "provided that no Options shall be granted under the UK Sub-Plan until it
    has received formal approval of the UK Inland Revenue."

3.  Article 2. Definitions

   3.1.  The following definitions set out in Article 2 of the Plan shall be
varied as follows for the purposes of the UK Sub-Plan:

    3.1.1.  "Award" means the grant of an Option pursuant to an Award Agreement.

    3.1.2.  "Award Agreement" means a written agreement entered into by the
    Company and each Participant setting forth the terms and conditions
    applicable to Awards granted pursuant to the UK Sub-Plan, the initial form
    of which has been approved by the Inland Revenue.

    3.1.3.  "Company" means Steelcase Inc., a Michigan corporation, including
    any and all Subsidiaries and any successor thereto as provided in Article
    21 herein.

    3.1.4.  "Employee" means any full-time Director of the Company (being a
    director required to work at least 25 hours or more per week; excluding
    meal breaks) or any employee of the Company.

                                       18

<PAGE>

    3.1.5.  "Fair Market Value" means, as at any date, the value of a Share of
    common stock, determined as follows:

        (i) the opening sale price of the Shares as traded on the New York
        Stock Exchange, or if there is no trading for that date, the opening
        sale price of the Shares on the previous date on which the Shares were
        traded on the New York Stock Exchange; or

        (ii) if the Shares are not listed as in (i) above the fair market value
        shall be determined in accordance with the provisions of Part VIII of
        the Taxation of Chargeable Gains Act 1992 and agreed in advance for the
        purposes of the UK Sub-Plan with the Inland Revenue's Share Valuation
        Division.

    3.1.6.  "Option" means a Non Qualified Stock Option, as described in
    Article 6.

    3.1.7.  "Participant" means an Employee designated by the Board who has
    been selected to receive an Award or who has an outstanding Award granted
    under the UK Sub-Plan.

    3.1.8.  "Shares" means the shares of Class A Common Stock of the Company
    which satisfy the conditions specified in paragraphs 10-14 of Schedule 9.

   3.2.  The following definitions shall be deleted from Article 2 of the Plan
and all references thereto throughout the Plan in respect of Options granted
under the UK Sub-Plan:

    3.2.1.  "Cash-Based Award"

    3.2.2.  "Covered Employee"

    3.2.3.  "Freestanding SAR"

    3.2.4.  "Incentive Stock Option" or "ISO"

    3.2.5.  "Performance-Based-Exception"

    3.2.6.  "Performance Share"

    3.2.7.  "Performance Unit"

    3.2.8.  "Period of Restriction"

    3.2.9.  "Phantom Shares"

    3.2.10.  "Restricted Stock"

    3.2.11.  "Share Based Award"

    3.2.12.  "Stock Appreciation Right" or "SAR"

    3.2.13.  "Tandem SAR"

4.  Article 3. Administration

   4.1.  For the purposes of the UK Sub-Plan Article 3.2 shall be amended by:

    (a)  deleting the following words from the third line "and Directors and
    other individuals";

    (b)  the addition of the following paragraphs at the end of that Article:

        "Notwithstanding the discretion of the Committee any determination of
        the Committee involving the imposition of performance conditions in
        relation to Options shall be subject to the requirement that such
        performance conditions:

         (i) must be objective and set at the date of grant of Options; and

                                       19

<PAGE>

        (ii) cannot be waived or amended unless events occur which cause the
             Committee to consider that the performance conditions will not
             achieve their original purpose (in which case the Committee may
             make such alterations or additions to those performance conditions
             as it considers fair and reasonable provided that the amended
             performance conditions are no more difficult to meet than those
             originally imposed).

5.  Article 4.1. Number of Shares Available for Grants

   5.1.  For the purposes of the UK Sub-Plan, the first paragraph of Article
4.1 of the Plan as amended shall be deleted and replaced by:

    "4.1.  Number of shares available for grants. Subject to adjustment as
    provided in Article 4.2 herein, the number of the Shares hereby reserved
    for issuance to Participants under the Plan shall be fourteen million, two
    hundred eighty-four thousand, seven hundred twenty-seven (14,284,727)
    Shares. In addition, subject to obtaining the stockholder approval of the
    Plan at the 2002 Meeting, an additional 6,715,273 of Shares shall be
    reserved for issuance under the Plan. Shares available under the Plan shall
    be now or hereafter issued or authorised but unissued. The Board shall
    determine the appropriate methodology for calculating the number of Shares
    issued in pursuance of the Plan. The maximum aggregate number of Shares
    that may be granted pursuant to an Award to any one single Participant is
    contained in Rule 7.1."

6.  Article 5. Eligibility and Participation

   6.1.  For the purposes of the UK Sub-Plan, the words "Directors, and other
individuals designated by the Board," in Articles 5.1 and 5.2 shall be deleted.

   6.2.  The following shall be added to Article 5.1 for the purposes of the UK
Sub-Plan:

    "In no event shall an Option under the UK Sub-Plan be granted or exercised
    by any person who is precluded by paragraph 8 of Schedule 9 from
    participating in a UK Inland Revenue approved share option plan."

   6.3.  For the purposes of the UK Sub-Plan, the following shall be added to
Article 5.2:

    "provided that for the purposes of the UK Sub-Plan no Award shall be made
    otherwise than to eligible Employees."

7.  Article 6. Stock Options

   7.1.  For the purposes of the UK Sub-Plan, Article 6.1 shall be deleted and
replaced by:

    "6.1  Grant of Options. Subject to the terms and provisions of the Plan,
    Options may be granted to Participants in such manner, and upon such terms,
    and at any time and from time to time as shall be determined by the Board.
    Options granted under the UK Sub-Plan shall be limited and take effect so
    that following any grant, no Employee will hold Options granted under the
    UK Sub-Plan or any other UK Inland Revenue approved share option plan (not
    being a UK Inland Revenue approved savings related share option plan)
    operated by the Company or any associated company (as defined in Section
    416 of

                                       20

<PAGE>

    the Taxes Act) over Shares with an aggregate Fair Market Value in excess of
    (Pounds)30,000, or such other limit as may apply from time to time under
    paragraph 28 of Schedule 9, determined on the basis of the Fair Market
    Value of Shares as at the date(s) of grant of the relevant Options and the
    market value at the date(s) of grant of options granted under the rules of
    any other UK Inland Revenue discretionary approved share option plans,
    converted from US Dollars into Pounds Sterling at the rate of exchange
    determined by the Committee in accordance with the exchange rates published
    in the Wall Street Journal applicable as at the date(s) of grant."

   7.2.  The final sentence in Article 6.2 shall be deleted for the purposes of
the UK Sub-Plan.

   7.3.  For the purposes of the UK Sub-Plan, the following language shall be
added to the end of Article 6.5:

    "Any such restrictions or conditions shall be determined at the date of
    grant and will be subject to the provisions contained in Rule 4.1."

   7.4.  For the purposes of the UK Sub-Plan, the Option Price may only be paid
in cash; the second paragraph of Article 6.6. shall be deleted and replaced
with the following paragraph:

    "The Option Price upon exercise of any Option shall be payable to the
    Company in full in cash or its equivalent."

   7.5.  For the purposes of the UK Sub-Plan, the following words shall be
added to the third paragraph of Article 6.6:

    "For the purposes of the UK Sub-Plan the cashless exercise programme shall
    be subject to the Board of the Inland Revenue's guidelines."

   7.6.  Under the UK Sub-Plan Shares must be transferred to Participants
within 30 days after the date of exercise, the following paragraph shall be
added at the end of Article 6.6:

    "Subject to any governing rules or regulations, the Company shall issue or
    procure the transfer to the Participants the number of Shares in respect
    for which the Option has been validly exercised, within 30 days after the
    date of exercise. Save for any rights determined by reference to a date on
    or before the date of issuance, any Shares which are issued shall rank pari
    passu and as one class with the other issued shares of the same class."

   7.7.  Article 6.7 shall be amended for the purposes of the UK Sub-Plan by
deleting the following words from the third line of that Article, "advisable,
including, without limitation," and replacing them with the words "necessary to
comply with".

8.  Articles: 7, 8, 9, 10, 11, 12 and 14

    Article 7. Stock Appreciation Rights
    Article 8. Restricted Stock
    Article 9. Performance Units, Performance Shares, and Cash-Based Awards
    Article 10. Phantom Shares
    Article 11. Other Share-Based Awards
    Article 12. Performance Measures
    Article 14. Deferrals

    shall not apply for the purposes of the UK Sub-Plan.

                                       21

<PAGE>

9.  Article 15. Rights of Employees/Directors

   9.1.  For the purposes of the UK Sub-Plan, the following words shall be
added to the end of Article 15.2:

    "Notwithstanding any provision of any other Rules, the rights and
    obligations of any individual under the terms of his office or employment
    with the Company or Subsidiary shall not be affected by his participation
    in the UK Sub-Plan or any right which he may have to participate therein.
    An individual who is granted any Options pursuant to this UK Sub-Plan shall
    have no rights to compensation or damages in consequence of the termination
    of his office or employment with the Company or Subsidiary for any reason
    whatsoever, whether or not in breach of contract, insofar as those rights
    arise or may arise from his ceasing to have rights under or be entitled to
    exercise any Options under this UK Sub-Plan as a result of such termination
    or from the loss or diminution in value of such rights or entitlements. If
    an individual did acquire any such rights, he would be deemed to have
    waived them irrevocably."

   9.2.  For the purposes of the UK Sub-Plan, the new Article 15.4 (inserted
pursuant to an amendment effective from October 1, 2000) the first sentence
shall be amended by the addition of the following words after the first
sentence:

    "All outstanding Awards shall immediately lapse."

   9.3.  For the purposes of the UK Sub-Plan, Article 15.5 (which use to be
Article 15.4 prior to the amendment effective from October 1, 2000) the first
sentence shall be amended by the deletion of the words "Except as otherwise
provided in a Particpant's Award Agreement" and the words "other than by will
or by the laws of decent and distribution".

10.  Article 16. Change of Control

   10.1.  For the purposes of the UK Sub-Plan, Article 16.1(b) and (c) shall be
deleted and replaced by:

    (b)  In the event of any company ("the Successor Entity") obtaining Control
    (Control for these purposes shall be defined in accordance with Section 840
    of the Taxes Act) of the Company as a result of making a general offer:

     (i) to acquire the whole of the issued ordinary 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) to acquire all the shares in the Company which are of the same class
         as the Shares subject to subsisting Options granted under the UK
         Sub-Plan ("the Old Option");

    the holder of Options under the UK Sub-Plan (or the Company on behalf of
    such holder) may seek the agreement of the Successor Entity and, if such
    agreement is obtained, the holder may release the Old Option in
    consideration of the grant of a new option ("the New Option") which
    satisfies the following conditions:

     (1) it is over shares in the Successor Entity or in a company which has
         Control over the Successor Entity which satisfies the conditions
         specified in paragraphs 10 to 14 (inclusive) of Schedule 9;

     (2) it is a right to acquire such number of shares as has on acquisition
         of the New Option an aggregate market value equal to the aggregate
         Fair Market Value of the shares subject to the Old Option on its
         disposal;

                                       22

<PAGE>

     (3) it has a purchase price per share such that the aggregate price
         payable on complete exercise equals the aggregate price which would
         have been payable on complete exercise of the Old Option; and

     (4) it is otherwise identical in terms to the Old Option.

    The New Option shall, for all other purposes of the UK Sub-Plan, be treated
    as having been acquired at the same time as the Old Option, which is
    released in consideration for the grant of the New Option.

    Where any New Option is granted pursuant to this Article 16.1 (b), the
    provisions of the UK Sub-Plan shall, in relation to the New Option, be
    construed as if references to the Company and the Shares were references to
    the Successor Entity or, as the case may be, to the other company to whose
    shares the New Option relates and to the shares in the Successor Entity or
    that other company.

    The release of the Old Option and the grant of a New Option under Article
    16.1 (b) must take place within the period of six months ("the Appropriate
    Period") beginning with the time when Control of the Company has been
    obtained and any conditions in connection with the Change of Control are
    satisfied.

11.  Article 17. Change in Capitalization

   11.1.  Article 17.1 shall be deleted and replaced by the following language:

    "Any adjustments to be made pursuant to Article 17.1 in relation to Options
    granted under the UK Sub-Plan must arise from a change in the Shares which
    falls within the meaning of paragraph 29 of Schedule 9 and no adjustments
    shall take effect until approved by the Board of the Inland Revenue."

12.  Article 18. Amendment, Modification, and Termination

   12.1.  For the purposes of the UK Sub-Plan, the following words shall be
added to the end of Article 18.1:

    "Any amendments or alteration to the UK Sub-Plan, or to the Plan insofar as
    they affect the UK Sub-Plan which are made pursuant to Articles 3.2, 16.2,
    and 18.1, shall not take effect in relation to the UK Sub-Plan until they
    have been approved by the Board of the Inland Revenue."

   12.2. For the purposes of the UK Sub-Plan, Article 18.2 shall be deleted in
its entirety.

13.  Article 19.2. Share Withholding

   13.1.  For the purposes of the UK Sub-Plan, the words "As a condition of
exercise" shall be added to the beginning of Article 19.1 and the words "the
Particpant's liability to" shall be added to line 2 of Article 19.1 between the
words "amount sufficent to satisfy" and the words "Federal, state, and local
taxes".

   13.2.  For the purposes of the UK Sub-Plan, the following words shall be
deleted from the second line of Article 19.2:

    "or SAR's, upon the lapse of restrictions on Restricted Stock,"

                                       23

<PAGE>

                                STEELCASE INC.
                   STOCK OPTION PLAN FOR EMPLOYEES IN FRANCE

   1.  Introduction. The Board of Directors of Steelcase Inc. (the "Company")
has established the Stock Option Plan (the "U.S. Plan") for the benefit of
certain employees of the Company, its parent and subsidiary companies,
including its French subsidiary/ies, (the "Subsidiary") of which the Company
holds directly or indirectly at least 50% of the share capital. Section 3.2 of
the U.S. Plan specifically authorizes the Board (or Committee) (the " Board")
to adopt procedures and forms relating to the U.S. Plan as it deems advisable
with respect to foreign participants. The Board, therefore, intends to
establish a sub-plan for France of the U.S. Plan for the purpose of granting
Options which qualify for the favorable tax and social security treatment in
France applicable to Options granted under Sections L 225-177 to L 225-186 of
the French Commercial Code as amended to qualifying employees who are resident
in France for French tax purposes (the "Optionees"). The terms of the U.S.
Plan, as subsequently amended and as set out in Appendix 1 hereto, shall,
subject to the modifications in the following rules, constitute the Stock
Option Plan for Employees in France (the "French Plan").

   Under the French Plan, the Optionees will be granted only Options as defined
under Section 2 hereunder. In no case will grants under the French Plan include
any other substitute awards, e.g. stock appreciation rights, restricted stocks,
performance shares or/and other awards.

   2.  Definitions. Capitalized terms used but not defined in the French Plan
shall have the same meanings as set forth in the U.S. Plan.

   In addition, the term "Option" shall have the following meaning:

     A.  Purchase Options, that are rights to acquire Common Stock repurchased
         by the Company prior to the vesting of said Options; or

     B.  Subscription Options, that are rights to subscribe newly issued Common
         Stock.

   Notwithstanding any provisions in the U.S. Plan, the term "Grant Date" shall
be the date on which the board both (a) designates the Optionee and (b)
specifies the terms and conditions of the Option including the number of shares
and the Option Price.

   The term "Vesting Date" shall mean the date on which an Optionee's right to
all or a portion of an option granted under the French Plan becomes
non-forfeitable. The Vesting Date or Vesting Schedule shall be noted on the
Stock Option Agreement entered into with each optionee.

   The term "Exercise Date" shall mean the date on which a portion of
Optionee's Option becomes exercisable. The Exercise Date shall be the fourth
anniversary of the Grant Date, unless determined by the Compensation Committee
or the Committee entitled to modify the terms of the grant.

   3.  Entitlement to Participate.  Any individual who at the date of grant of
the Option under the French Plan is either bound to the Subsidiary by a
contract of employment ("contrat de

                                       24

<PAGE>

travail") or who is a corporate officers of the Subsidiary, shall be eligible
to receive Options under the French Plan provided that he or she also satisfies
the eligibility conditions of section 5 of the U.S. Plan. Options may not be
issued under the French Plan to employees or officers owning more than ten
percent (10%) of the Company's share capital or to individuals other than
employees and corporate officers of the Subsidiary. Options may not be issued
to directors of the Subsidiary, other than managing directors (President du
Conseil d'Administration, Directeur General, Directeur General Delegue, Membre
du Directoire, Gerant de societes par actions), unless they are bound to the
Subsidiary by a contract of employment.

   4.  Conditions and Exercise of the Option. Notwithstanding any provision in
the U.S. Plan to the contrary, the conditions of the U.S. Plan, of the French
Plan and of any Options granted thereunder (and as determined in the respective
Stock Option Agreement) shall not be modified after the grant date, unless
authorized by French law and subject to the prior written consent of the
Optionee, and except in the cases enumerated under Article 7 below.

   As such and subject to the above provision, an Administrative Committee duly
authorized by the Board or the Compensation Committee may alter certain
conditions of the options.

   Notwithstanding any provision in the U.S. plan to the contrary and following
the following the date of admission of the Common Stock of the Company to
trading on a regulated securities market, no option may be granted to optionees
in France during specific closed periods as set forth by section L. 225-177 of
the French commercial code as amended.

    4.1.  Vesting and Exercisability. The Options will vest and be exercisable
    pursuant to the terms and conditions set forth in the U.S. Plan, the French
    Plan and under the respective Stock Option Agreement entered into with each
    Optionee.

    The Vesting and exercisability of Options may be accelerated in accordance
    with the provisions of Section 16 of the U.S. Plan. In this case, the
    shares acquired upon exercise of a Stock Option, can not be sold before the
    expiration of a period of 3 years as from the date of exercise if necessary
    to comply with the four year holding period.

    Specific provisions apply in the event of termination of employment/service
    and death as provided in Articles 6 and 8 below and as provided in the
    Stock Option Agreement entered into with each Optionee.

    The exercise of the Options may be accelerated in order to combine the
    specific regime applicable to French Plan d'Epargne d'Entreprise (French
    "employee saving plan") and the favorable tax and social security regime
    applicable to stock options, for French tax resident Optionees, provided in
    any case that the relevant holding period set forth by section 163 bis C of
    the French tax code is met.

    4.2.  Option Price. The Option price payable pursuant to Options issued
    hereunder shall be fixed by the Board on the date the Option is granted,
    but in no event shall the Option price per share be less than the greater
    of:

       A.  with respect to Purchase Options over Common Stock, the higher of
           either 80% of the average opening price of such Common Stock during
           the 20 days of quotation immediately preceding the Grant Date or 80%
           of the average purchase price paid for such Common Stock by the
           Company;

                                       25

<PAGE>

       B.  with respect to Subscription Options over the Common Stock, 80% of
           the average opening price of such Common Stock during the 20 days of
           quotation immediately preceding the Grant Date; and

       C.  the minimum Option price permitted under the U.S. Plan.

    4.3.  Payment of the Option Price. Notwithstanding any provisions in the
    U.S. Plan to the contrary, upon exercise of an Option, the full Option
    Price will be paid either in cash, by check or by credit transfer,
    exclusive of any other method of payment. Under a cashless exercise
    program, the Optionee may give irrevocable instructions to a stockbroker to
    properly deliver the Option price to the Company. Notwithstanding any
    provisions in the U.S. Plan to the contrary, no delivery of prior owned
    shares having a fair market value on the date of delivery equal to the
    aggregate exercise price of the shares may be used as consideration for
    exercising the Options.

    Furthermore, notwithstanding any provisions in the U.S. Plan to the
    contrary, shares owed to the Optionee upon exercise may not be withheld in
    order to meet the tax and/or social security contributions which might be
    due at the time of exercise or sale of the underlying Shares. However, upon
    sale of the underlying shares, the Company and/or the Subsidiary shall have
    the right to withhold, or request any third party to withhold, from the
    proceeds to be paid to the Optionee the sums corresponding to any social
    security contributions due at exercise or sale by the Optionee. If such
    amounts are due and are not withheld, the Optionee agrees to submit the
    amount due to the Subsidiary by means of check, cash or credit transfer.

    The Shares acquired upon exercise of an Option will be recorded in an
    account in the name of the shareholder with a broker or in such other
    manner as the Company may otherwise determine in order to ensure compliance
    with applicable law.

   5.  Non-transferability of Options. Notwithstanding any provision in the
U.S. Plan to the contrary and except in the case of death, Options cannot be
transferred to any third party. In addition, the Options are only exercisable
by the Optionee during the lifetime of the Optionee.

   6.  Termination of Employment/Service. If a termination of eligibility
status is due to death, the Options shall be exercisable as set forth by
Article 8 below.

   In case of termination of eligibility status for other reasons than death,
specific provisions regarding the exercise of the options by the Optionee are
provided for in the Stock Option Agreement entered into with each Optionee.

   7.  Changes In Capitalization. Notwithstanding any provisions of the U.S.
Plan to the contrary, adjustments to the Option Price and/or the number of
Shares subject to an Option issued hereunder shall be made to preclude the
dilution or enlargement of benefits under the Option only in the event of one
or more of the transactions listed below by the Company. Furthermore, even upon
occurrence of one or more of the transactions listed below, no adjustment to
the kind of shares to be granted shall be made (i.e., only shares of Common
Stock shall be granted to Optionees). The transactions are as follows:

    A. an issuance of new shares for cash consideration reserved to the
       Company's existing shareholders;

                                       26

<PAGE>

    B. an issuance of convertible or exchangeable bonds reserved to the
       Company's existing shareholders;

    C. a capitalization of retained earnings, profits, or issuance premiums;

    D. a distribution of reserves by payment in cash or shares;

    E. a cancellation of shares in order to absorb losses; and

    F. the repurchase of its own shares by a listed company at a price higher
       than the stock quotation price in the open market.

   8.  Death. In the event of the death of an Optionee, the Options shall
become immediately vested and exercisable. The Optionee's heirs may exercise
the Option within six months following the death, even if the Option that was
held by the deceased Optionee expires during this 6 month- period, but any
Option which remains unexercised shall expire six months following the date of
the Optionee's death.

   9.  Interpretation. In the event of any conflict between the provisions of
the present French Plan and the U.S. Plan, the provisions of the French Plan
shall control for any grants made thereunder to Optionees.

   10.  Employment Rights. The adoption of this sub-plan shall not confer upon
the Optionees any employment rights and shall not be construed as a part of the
Optionee's employment contracts.

   11.  Adoption. The French Plan is effective as of June 25, 2001.

                                       27

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