Document:

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                                                                   EXHIBIT 10.4

                                LIMITED GUARANTY
                                ----------------
                                  (MULTISTATE)

         This Limited Guaranty ("GUARANTY") is entered into as of 22nd day of
March, 2000, by the undersigned person(s) (the "GUARANTOR" whether one or
more), for the benefit of ____________________________________________________
__________________________________________________________________, and/or any
subsequent holder of the Note (the "LENDER").

                                    RECITALS

         A.       ____________________________________________________________
(the "BORROWER") has requested that Lender make a loan to Borrower in the
amount of $________________________________(the "LOAN"). The Loan will be
evidenced by a Multifamily Note from Borrower to Lender dated as of the date of
this Guaranty (the "NOTE"). The Note will be secured by a Multifamily Mortgage,
Deed of Trust, or Deed to Secure Debt dated the same date as the Note (the
"SECURITY INSTRUMENT"), encumbering the real property described in the Security
Instrument (the "PROPERTY").

         B.       As a condition to making the Loan to Borrower, Lender
requires that the Guarantor execute this Guaranty.

         NOW, THEREFORE, in order to induce Lender to make the Loan to
Borrower, and in consideration thereof, Guarantor agrees as follows:

         1.       "Indebtedness" and other capitalized terms used but not
defined in this Guaranty shall have the meanings assigned to them in the
Security Instrument.

         2.       Guarantor hereby absolutely, unconditionally and irrevocably
guarantees to Lender the full and prompt payment when due, whether at maturity
or earlier, by reason of acceleration or otherwise, and at all times
thereafter, and the full and prompt performance when due, of all of the
following:

         (a)      A portion of the Indebtedness equal to _________ percent
                  (______%) of the _________________ principal balance of the
                  Note (the "BASE GUARANTY").

         (b)      In addition to the Base Guaranty, all other amounts for which
                  Borrower is personally liable under Paragraphs 9(c) through
                  9(f) of the Note.

         (c)      The payment and performance of all of Borrower's obligations
                  under Section 18 of the Security Instrument.

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LIMITED GUARANTY (FREDDIE MAC) - MULTISTATE                              PAGE 1

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         (d)      The entire Indebtedness, in the event that (i) Borrower
                  voluntarily files for bankruptcy protection under the United
                  States Bankruptcy Code or voluntarily becomes subject to any
                  reorganization, receivership, insolvency proceeding or other
                  similar proceeding pursuant to any other federal or state law
                  affecting debtor and creditor rights, or (ii) an order for
                  relief is entered against Borrower in any involuntary
                  bankruptcy filing by any creditor of Borrower (other than
                  Lender) pursuant to the United States Bankruptcy Code or
                  other federal or state law affecting debtor and creditor
                  rights.

         (e)      All costs and expenses, including reasonable fees and out of
                  pocket expenses of attorneys and expert witnesses, incurred
                  by Lender in enforcing its rights under this Guaranty.

For purposes of determining Guarantor's liability under this Guaranty, all
payments made by Borrower with respect to the Indebtedness and all amounts
received by Lender from the enforcement of its rights under the Security
Instrument shall be applied first to the portion of the Indebtedness for which
neither Borrower nor Guarantor has personal liability.

         3.       The obligations of Guarantor under this Guaranty shall
survive any foreclosure proceeding, any foreclosure sale, any delivery of any
deed in lieu of foreclosure, and any release of record of the Security
Instrument, and, in addition, the obligations of Guarantor relating to
Borrower's obligations under Section 18 of the Security Instrument shall
survive any repayment or discharge of the Indebtedness.

         4.       Guarantor's obligations under this Guaranty constitute an
unconditional guaranty of payment and not merely a guaranty of collection.

         5.       The obligations of Guarantor under this Guaranty shall be
performed without demand by Lender and shall be unconditional irrespective of
the genuineness, validity, regularity or enforceability of the Note, the
Security Instrument, or any other Loan Document, and without regard to any
other circumstance which might otherwise constitute a legal or equitable
discharge of a surety or a guarantor. Guarantor hereby waives the benefit of
all principles or provisions of law, statutory or otherwise, which are or might
be in conflict with the terms of this Guaranty and agrees that Guarantor's
obligations shall not be affected by any circumstances, whether or not referred
to in this Guaranty, which might otherwise constitute a legal or equitable
discharge of a surety or a guarantor. Guarantor hereby waives the benefits of
any right of discharge under any and all statutes or other laws relating to
guarantors or sureties and any other rights of sureties and guarantors
thereunder. Without limiting the generality of the foregoing, Guarantor hereby
waives, to the fullest extent permitted by law, diligence in collecting the
Indebtedness, presentment, demand for payment, protest, all notices with
respect to the Note and this Guaranty which may be required by statute, rule of
law or otherwise to preserve Lender's rights against Guarantor under this
Guaranty, including, but not limited to, notice of acceptance, notice of any
amendment of the Loan Documents, notice of the occurrence of any default or
Event of Default, notice of intent to accelerate, notice of acceleration,
notice of dishonor, notice of foreclosure, notice of protest, and notice of the
incurring by Borrower

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LIMITED GUARANTY (FREDDIE MAC) - MULTISTATE                              PAGE 2

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of any obligation or indebtedness. Guarantor also waives, to the fullest extent
permitted by law, all rights to require Lender to (a) proceed against Borrower
or any other guarantor of Borrower's payment or performance with respect to the
Indebtedness (an "OTHER GUARANTOR") (b) if Borrower or any Other Guarantor is a
partnership, proceed against any general partner of Borrower or the Other
Guarantor, (c) proceed against or exhaust any collateral held by Lender to
secure the repayment of the Indebtedness, or (d) pursue any other remedy it may
now or hereafter have against Borrower, or, if Borrower is a partnership, any
general partner of Borrower.

         6.       At any time or from time to time and any number of times,
without notice to Guarantor and without affecting the liability of Guarantor,
(a) the time for payment of the principal of or interest on the Indebtedness
may be extended or the Indebtedness may be renewed in whole or in part; (b) the
time for Borrower's performance of or compliance with any covenant or agreement
contained in the Note, the Security Instrument or any other Loan Document,
whether presently existing or hereinafter entered into, may be extended or such
performance or compliance may be waived; (c) the maturity of the Indebtedness
may be accelerated as provided in the Note, the Security Instrument, or any
other Loan Document; (d) the Note, the Security Instrument, or any other Loan
Document may be modified or amended by Lender and Borrower in any respect,
including, but not limited to, an increase in the principal amount; and (e) any
security for the Indebtedness may be modified, exchanged, surrendered or
otherwise dealt with or additional security may be pledged or mortgaged for the
Indebtedness.

         7.       If more than one person executes this Guaranty, the
obligations of those persons under this Guaranty shall be joint and several.
Lender, in its sole and absolute discretion, may (a) bring suit against
Guarantor, or any one or more of the persons constituting Guarantor, and any
Other Guarantor, jointly and severally, or against any one or more of them; (b)
compromise or settle with any one or more of the persons constituting Guarantor
for such consideration as Lender may deem proper; (c) release one or more of
the persons constituting Guarantor, or any Other Guarantor, from liability; and
(d) otherwise deal with Guarantor and any Other Guarantor, or any one or more
of them, in any manner, and no such action shall impair the rights of Lender to
collect from Guarantor any amount guaranteed by Guarantor under this Guaranty.
Nothing contained in this paragraph shall in any way affect or impair the
rights or obligations of Guarantor with respect to any Other Guarantor.

         8.       Any indebtedness of Borrower held by Guarantor now or in the
future is and shall be subordinated to the Indebtedness and any such
indebtedness of Borrower shall be collected, enforced and received by
Guarantor, as trustee for Lender, but without reducing or affecting in any
manner the liability of Guarantor under the other provisions of this Guaranty.

         9.       Guarantor shall have no right of, and hereby waives any claim
for, subrogation or reimbursement against Borrower or any general partner of
Borrower by reason of any payment by Guarantor under this Guaranty, whether
such right or claim arises at law or in equity or under any contract or
statute, until the Indebtedness has been paid in full and there has expired the
maximum

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LIMITED GUARANTY (FREDDIE MAC) - MULTISTATE                              PAGE 3

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possible period thereafter during which any payment made by Borrower to Lender
with respect to the Indebtedness could be deemed a preference under the United
States Bankruptcy Code.

         10.      If any payment by Borrower is held to constitute a preference
under any applicable bankruptcy, insolvency, or similar laws, or if for any
other reason Lender is required to refund any sums to Borrower, such refund
shall not constitute a release of any liability of Guarantor under this
Guaranty. It is the intention of Lender and Guarantor that Guarantor's
obligations under this Guaranty shall not be discharged except by Guarantor's
performance of such obligations and then only to the extent of such
performance.

         11.      Guarantor shall from time to time, upon request by Lender,
deliver to Lender such financial statements as Lender may reasonably require.

         12.      Lender may assign its rights under this Guaranty in whole or
in part and upon any such assignment, all the terms and provisions of this
Guaranty shall inure to the benefit of such assignee to the extent so assigned.
The terms used to designate any of the parties herein shall be deemed to
include the heirs, legal representatives, successors and assigns of such
parties; and the term "LENDER" shall include, in addition to Lender, any lawful
owner, holder or pledgee of the Note.

         13.      This Guaranty and the other Loan Documents represent the
final agreement between the parties and may not be contradicted by evidence of
prior, contemporaneous or subsequent oral agreements. There are no unwritten
oral agreements between the parties. All prior or contemporaneous agreements,
understandings, representations, and statements, oral or written, are merged
into this Guaranty and the other Loan Documents. Guarantor acknowledges that it
has received copies of the Note and all other Loan Documents. Neither this
Guaranty nor any of its provisions may be waived, modified, amended,
discharged, or terminated except by an agreement in writing signed by the party
against which the enforcement of the waiver, modification, amendment,
discharge, or termination is sought, and then only to the extent set forth in
that agreement.

         14.      Guarantor agrees that any controversy arising under or in
relation to this Guaranty shall be litigated exclusively in the jurisdiction
where the Land is located (the "PROPERTY JURISDICTION"). The state and federal
courts and authorities with jurisdiction in the Property Jurisdiction shall
have exclusive jurisdiction over all controversies which shall arise under or
in relation to this Guaranty, the Note, the Security Instrument or any other
Loan Document. Guarantor irrevocably consents to service, jurisdiction, and
venue of such courts for any such litigation and waives any other venue to
which it might be entitled by virtue of domicile, habitual residence or
otherwise.

         15.      GUARANTOR AND LENDER EACH (A) AGREES NOT TO ELECT A TRIAL BY
JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS GUARANTY OR THE RELATIONSHIP
BETWEEN THE PARTIES AS GUARANTOR AND LENDER THAT IS TRIABLE OF RIGHT BY A JURY
AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE
EXTENT THAT ANY SUCH

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LIMITED GUARANTY (FREDDIE MAC) - MULTISTATE                              PAGE 4

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RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS
SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF
COMPETENT LEGAL COUNSEL.

         ATTACHED EXHIBIT.  The following Exhibit is attached to this Guaranty:

                  |__|     Exhibit A        Modifications to Guaranty

         IN WITNESS WHEREOF, Guarantor has signed and delivered this Guaranty
or has caused this Guaranty to be signed and delivered by its duly authorized
representative.

                        [SIGNATURES AND ACKNOWLEDGMENTS]

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LIMITED GUARANTY (FREDDIE MAC) - MULTISTATE                              PAGE 5

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                                   EXHIBIT A

                           MODIFICATIONS TO GUARANTY

The following modifications are made to the text of the Guaranty that precedes
this Exhibit:

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LIMITED GUARANTY (FREDDIE MAC) - MULTISTATE                            PAGE A-1<PAGE>   1
                                                                    EXHIBIT 10.5
                          SUNRISE ASSISTED LIVING, INC.

                         SENIOR EXECUTIVE SEVERANCE PLAN
                            (CHIEF EXECUTIVE OFFICER)

       Sunrise Assisted Living, Inc., a Delaware corporation (the "Company"),
sets forth herein the terms of its SENIOR EXECUTIVE SEVERANCE PLAN (the "Plan")
as follows:

       SECTION 1. PURPOSE. The Board of Directors of the Company (the "Board")
believes that it is in the best interests of the Company to encourage the
continued employment with and dedication to the Company of certain of the
Company's key executive officers in the face of potentially distracting
circumstances arising from the possibility of a change in control of the
Company, and the Board has established the Plan for this purpose.

       SECTION 2. DEFINITIONS.

       (a)    "ACCRUED OBLIGATIONS" means, with respect to an Executive, the sum
of (1) the Executive's Annual Base Salary through the Date of Termination to the
extent not theretofore paid, (2) the product of (x) the Executive's Annual Bonus
and (y) a fraction, the numerator of which is the number of days in the current
fiscal year through the Date of Termination, and the denominator of which is
365, and (3) any compensation previously deferred by the Executive (together
with any accrued interest or earnings thereon) and any accrued vacation pay, in
each case, to the extent not theretofore paid.

       (b)    "ANNUAL BASE SALARY" means, with respect to an Executive, the
greater of (a) the annual base salary payable to the Executive by the Company
and its affiliates as of the Date of Termination or (b) the amount equal to
twelve times the highest monthly base salary paid or payable, including any base
salary which has been earned but deferred, to the Executive by the Company and
its affiliate in respect of the twelve-month period immediately preceding the
month in which the Date of Termination occurs.

       (c)    "ANNUAL BONUS" means, with respect to an Executive, the highest
amount paid to the Executive as bonus payments in a single year during the last
three full fiscal years prior to the Date of Termination (annualized in the
event that the Executive was not employed by the Company for the whole of such
fiscal year).

       (d)    "BOARD" means the Board of Directors of the Company.

       (e)    "CAUSE" for termination of an Executive's employment by the
Company shall be deemed to exist if: (a) the Executive is found guilty by a
court of having committed fraud or theft against the Company and such conviction
is affirmed on appeal or the time for appeal has expired; (b) the Executive is
found guilty by a court of having committed a crime involving moral turpitude
and such conviction is affirmed on appeal or the time for appeal has expired;
(c) in the reasonable judgment of the Board, the Executive has compromised trade
secrets or other similarly valuable proprietary information of the Company; or
(d) in the reasonable judgment of the Board, the Executive has engaged in

<PAGE>   2

gross or willful misconduct that causes substantial and material harm to the
business and operations of the Company or any of its affiliates, the
continuation of which will continue to substantially and materially harm the
business and operations of the Company or any of its affiliates in the future.

       (f)    "CHANGE IN CONTROL" means:

       (1)    The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than 50%
of either (i) the then outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (ii) the combined voting power of the
then outstanding voting securities of the Company entitled to vote generally in
the election of directors (the "Outstanding Company Voting Securities");
provided, however, that for purposes of this subsection (a), the following
acquisitions shall not constitute a Change in Control: (i) any acquisition by
the Company; (ii) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation controlled by
the Company; and (iii) any acquisition by any entity pursuant to a transaction
which complies with clauses (i), (ii) and (iii) of subsection (3) of this
Section 2(f); or

       (2)    Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to
the date hereof whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or

       (3)    Consummation of a reorganization, merger or consolidation or sale
or other disposition of all or substantially all of the assets of the Company (a
"Business Combination"), in each case unless, following such Business
Combination, (i) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 50% of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the entity
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as the case may be, and (ii) no
Person (excluding any corporation resulting from such Business Combination or
any employee benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly,

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35% or more of, respectively, the then outstanding shares of common
stock of the corporation resulting from such Business Combination or the
combined voting power of the then outstanding voting securities of such
corporation except to the extent that such ownership existed prior to the
Business Combination and (iii) at least a majority of the members of the board
of directors of the corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination; or

       (4)    Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.

       (g)    "CHANGE IN CONTROL EVENT" means the earlier to occur of (i) a
Change in Control or (ii) the execution and delivery by the Company of an
agreement providing for a Change in Control.

       (h)    "CHANGE IN CONTROL PERIOD" means the period commencing upon a
Change in Control Event and ending two years after such Change in Control Event.

       (i)    "COMPANY" means Sunrise Assisted Living, Inc., a Delaware
corporation.

       (j)    "DATE OF TERMINATION" means, with respect to an Executive, the
effective date of termination of the Executive's employment with the Company.

       (k)    "EXECUTIVE" means an executive officer of the Company designated
by the Board to participate in the Plan.

       (l)    "GOOD REASON" means, with respect to an Executive: (1) any
reduction in the Executive's base salary, fringe benefits or bonus eligibility,
except, in the case of fringe benefits or bonus eligibility, in connection with
a reduction in such compensation generally applicable to peer employees of the
Company; (2) that the Executive has his responsibilities or areas of supervision
with the Company substantially reduced ; or (3) that the Executive is required
to move his office outside the metropolitan area in which the office of the
Executive was previously located.

       (m)    "OTHER BENEFITS" means, with respect to an Executive, any other
amounts or benefits required to be paid or provided or which the Executive is
eligible to receive under any plan, program, policy or practice or contract or
agreement of the Company and its affiliates.

       SECTION 3. TERM. This Plan shall be for a period commencing on February
25, 2000 and ending on February 25, 2005; provided, however, that, in the event
of a Change in Control Event during the term of this Plan, the term of this Plan
shall be automatically extended, if necessary, so that this Plan remains in full
force and effect for the Change in Control Period relating to such Change in
Control Event and until all payments required to be made hereunder have been
made. The Board may supend, amend or terminate this Plan in accordance with
Section 10. References herein to the term of this Plan shall include the initial
term and any additional period for which this Plan is extended or renewed.

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<PAGE>   4

       SECTION 4. SEVERANCE BENEFITS FOLLOWING A CHANGE IN CONTROL.

       (a)    GOOD REASON; OTHER THAN FOR CAUSE. If a Change in Control Event
occurs during the term of this Plan and the Company terminates an Executive's
employment other than for Cause or the Executive terminates employment for Good
Reason during the Change in Control Period:

              (i)    The Company shall pay to the Executive the following
                     amounts:

                     A.     the Accrued Obligations in a lump sum in cash within
       30 days of the Date of Termination;

                     B.     the amount equal to 0.5% of the total enterprise
       value of the Company based upon the value realized in the Change in
       Control transaction.

                     C.     the amount equal to the product of (1) three (3)
       and (2) the sum of (x) the Executive's Annual Base Salary and (y) the
       Annual Bonus;

       Company shall pay the amounts provided in subparagraphs (B) and (C) in a
       lump sum in cash within 30 days of the Date of Termination; provided,
       however, that if the Executive is requested by the acquiror in the Change
       in Control transaction to provide transition services, payment of up to
       one half of amounts due under this Agreement may be deferred until the
       completion of a transition period ending up to 120 days following the
       consummation of such transaction.

              (ii)   For two (2) years after the Date of Termination, or such
                     longer period as may be provided by the terms of the
                     appropriate plan, program, practice or policy, the Company
                     shall continue benefits to the Executive and/or the
                     Executive's family at least equal to those which would have
                     been provided to them in accordance with the welfare
                     benefit plans, practices, policies and programs provided by
                     the Company and its affiliates (including, without
                     limitation, medical, prescription, dental, disability,
                     employee life, group life, accidental death and travel
                     accident insurance plans and programs) to the extent
                     applicable generally to other peer employees of the Company
                     and its affiliates, as if the Executive's employment had
                     not been terminated; provided, however, that if the
                     Executive becomes reemployed with another employer and is
                     eligible to receive medical or other welfare benefits under
                     another employer provided plan, the medical and other
                     welfare benefits described herein shall be secondary to
                     those provided under such other plan during such applicable
                     period of eligibility,

              (iii)  To the extent not theretofore paid or provided, the Company
              shall timely pay or provide to the Executive all Other Benefits.

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<PAGE>   5

       (b)    CAUSE; OTHER THAN FOR GOOD REASON. If the Executive's employment
is terminated for Cause during the Change in Control Period, this Plan shall
terminate without further obligations to the Executive, other than the
obligation to pay to the Executive (x) his Annual Base Salary through the Date
of Termination, (y) the amount of any compensation previously deferred by the
Executive and (z) Other Benefits through the Date of Termination, in each case
to the extent theretofore unpaid. If the Executive voluntarily terminates
employment during the Change in Control Period, excluding a termination for Good
Reason, this Plan shall terminate without further obligations to the Executive,
other than for Accrued Obligations and the timely payment or provision of Other
Benefits through the Date of Termination. In such case, all Accrued Obligations
shall be paid to the Executive in a lump sum in cash within 30 days of the Date
of Termination.

       SECTION 5. EFFECT ON OPTION PLANS. Immediately prior to a Change in
Control, all stock option grants made to an Executive by the Company that are
outstanding at the time of such Change in Control shall be accelerated and vest.
Accordingly, all stock options shall be exercisable at such time in accordance
with their terms. This Plan is intended to amend all stock option grants
previously awarded to Executives to accelerate vesting as described above to the
extent vesting would not otherwise be accelerated under the terms of such stock
option grants.

       SECTION 6. PARACHUTE LIMITATIONS. Notwithstanding any other provision of
this Plan or of any other agreement, contract or understanding heretofore or
hereafter entered into by an Executive with the Company or any affiliate, except
an agreement, contract or understanding hereafter entered into that expressly
modifies or excludes application of this paragraph (an "Other Agreement"), and
notwithstanding any formal or informal plan or other arrangement for the direct
or indirect provision of compensation to the Executive (including groups or
classes of participants or beneficiaries of which the Executive is a member),
whether or not such compensation is deferred, is in cash, or is in the form of a
benefit to or for the Executive (a "Benefit Arrangement"), if the Executive is a
"disqualified individual" (as defined in Section 280G(c) of the Internal Revenue
Code of 1986, as amended (the "Code")), any right to receive any payment or
other benefit under this Plan shall not become vested (i) to the extent that
such right to payment or other benefit, taking into account all other rights,
payments, or benefits to or for the Executive under this Plan, all Other
Agreements and all Benefit Arrangements, would cause any payment or benefit to
the Executive under this Plan to be considered a "parachute payment" within the
meaning of Section 280G(b)(2) of the Code as then in effect (a "Parachute
Payment") and (ii) if, as a result of receiving a Parachute Payment, the
aggregate after-tax amounts received by the Executive from the Company under
this Plan, all Other Agreements and all Benefit Arrangements would be less than
the maximum after-tax amount that could be received by the Executive without
causing any such payment or benefit to be considered a Parachute Payment. In the
event that the receipt of any such right to payment or other benefit under this
Plan, in conjunction with all other rights, payments or benefits to or for the
Executive under any Other Agreement or any Benefit Arrangement would cause the
Executive to be considered to have received a Parachute Payment under this Plan
that would have the effect of decreasing the after-tax amount received by the
Executive as described in clause (ii) of the preceding sentence, then the
Executive shall have the right, in the Executive's sole discretion, to designate
those rights, payments or benefits under this Plan, any Other Agreements and any
Benefit Arrangements that should be reduced or eliminated so as to avoid

                                     - 5 -
<PAGE>   6

having the payment or benefit to the Executive under this Plan be deemed to be a
Parachute Payment.

       SECTION 7 EXPENSES. The Company shall pay any and all reasonable legal
fees and expenses incurred by an Executive in seeking to obtain or enforce, by
bringing an action against the Company, any right or benefit provided in this
Plan if the Executive is successful in whole or in part in such action.

       SECTION 8. WITHHOLDING. Notwithstanding anything in this Plan to the
contrary , all payments required to be made by the Company hereunder to an
Executive or his estate or beneficiaries shall be subject to the withholding of
such amounts relating to taxes as the Company reasonably may determine it should
withhold pursuant to any applicable law or regulation. In lieu of withholding
such amounts, in whole or in part, the Company may, in its sole discretion,
accept other provisions for the payment of taxes and any withholdings as
required by law, provided that the Company is satisfied that all requirements of
law affecting its responsibilities to withhold compensation have been satisfied.

       SECTION 9. NO DUTY TO MITIGATE. An Executive's payments received
hereunder shall be considered severance pay in consideration of past service,
and pay in consideration of continued service from the date hereof and
entitlement thereto shall not be governed by any duty to mitigate damages by
seeking further employment.

       SECTION 10. AMENDMENT, SUSPENSION OR TERMINATION. This Plan may be
amended, suspended or terminated at any time by the Board; provided, however,
that, following the commencement of a Change in Control transaction or Change in
Control Event and during the Change in Control Period relating to such Change in
Control Event, the Board may not amend, suspend or terminate this Plan without
the consent of all Executives then subject to the Plan. The Board shall notify
the Executives subject to the Plan of any such suspensions, changes, or
terminations.

       SECTION 11. GOVERNING LAW. This Plan shall be governed by the laws of
United States to the extent applicable and otherwise by the laws of the State of
Delaware, excluding the choice of law rules thereof.

       SECTION 12. SEVERABILITY. If any part of any provision of this Plan shall
be invalid or unenforceable under applicable law, such part shall be ineffective
to the extent of such invalidity or unenforceability only, without in any way
affecting the remaining parts of such provision or the remaining provisions of
this Plan.

       SECTION 13. DISCLAIMER OF RIGHTS. No provision in this Plan shall be
construed to confer upon any individual the right to remain in the employ or
service of the Company or any affiliate, or to interfere in any way with any
contractual or other right or authority of the Company either to increase or
decrease the compensation or other payments to any individual at any time, or to
terminate any employment or other relationship between any individual and the
Company. The obligation of the Company to pay any benefits pursuant to this Plan
shall be interpreted as a contractual obligation to pay only those amounts
described herein, in the manner and under the conditions prescribed herein. The
Plan shall in no way be interpreted to require

                                     - 6 -
<PAGE>   7

the Company to transfer any amounts to a third party trustee or otherwise hold
any amounts in trust or escrow for payment to any participant or beneficiary
under the terms of the Plan.

       SECTION 14. CAPTIONS. The use of captions in this Plan is for the
convenience of reference only and shall not affect the meaning of any provision
of this Plan.

       SECTION 15. NUMBER AND GENDER. With respect to words used in this Plan,
the singular form shall include the plural form, the masculine gender shall
include the feminine gender, etc., as the context requires.

                                    * * * * *

                                     - 7 -
<PAGE>   8

       This Plan was duly adopted and approved by the Board as of the 25th day
of February, 2000.

                               s/ Thomas B. Newell
                               ----------------------------
                               Secretary of the Meeting

                                     - 8 -

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