Document:

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                                                                    EXHIBIT 10.5

                                                              As Amended through
                                                               November 18, 1999

                                   TIME WARNER
                                PUBLISHING GROUP
                              STOCK INCENTIVE PLAN

1.       PURPOSE OF THE PLAN

         The purpose of the Time Warner Publishing Group Stock Incentive Plan
(hereinafter the "Plan") is to provide for the granting of stock options, stock
appreciation rights and restricted shares to certain employees of The Time Inc.
Magazine Company, The Time Inc. Book Company, Warner Publishing, Inc. and their
respective Subsidiaries in recognition of the valuable services provided, and
contemplated to be provided, by such employees. The general purpose of the Plan
is to promote the interests of Time Warner and its stockholders and to reward
dedicated employees of these companies by providing such employees additional
incentives to continue and increase their efforts with respect to, and to remain
in the employ of, Time Warner or its Subsidiaries. This plan is being adopted in
connection with the development of an overall long-term compensation program for
these companies and it is expected that certain Options granted hereunder will
become exercisable only if certain performance criteria are met.

2.       CERTAIN DEFINITIONS

         The following terms (whether used in the singular or plural) have the
meanings indicated when used in the Plan:

                  (a)      "Agreement" means the stock option agreement, stock
         appreciation rights agreement and the restricted shares agreement
         specified in Section 12, both individually and collectively, as the
         context so requires.

                  (b)      "Approved Transaction" means any transaction in which
         the Board (or, if approval of the Board is not required as a matter of
         law, the stockholders of Time Warner) shall approve (i) any
         consolidation or merger of

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         Time Warner in which Time Warner is not the continuing or surviving
         corporation or pursuant to which shares of Common Stock would be
         converted into cash, securities or other property, other than a merger
         of Time Warner (x) as contemplated in the Amended and Restated
         Agreement and Plan of Merger dated as of September 22, 1995 among Time
         Warner Inc., TW Inc., Time Warner Acquisition Corp., TW Acquisition
         Corp. and Turner Broadcasting System, Inc., as the same may be amended
         from time to time, or (y) in which the holders of Common Stock
         immediately prior to the merger have the same proportionate ownership
         of common stock of the surviving corporation immediately after the
         merger, or (ii) any sale, lease, exchange, or other transfer (in one
         transaction or a series of related transactions) of all, or
         substantially all, of the assets of Time Warner, or (iii) the adoption
         of any plan or proposal for the liquidation or dissolution of Time
         Warner.

                  (c)      "Award" means grants of Options, SARs and/or
         Restricted Shares under this Plan.

                  (d)      "Board" means the Board of Directors of Time Warner.

                  (e)      "Board Change" means, during any period of two
         consecutive years, individuals who at the beginning of such period
         constituted the entire Board ceased for any reason to constitute a
         majority thereof unless the election, or the nomination for election by
         Time Warner's stockholders, of each new director was approved by a vote
         of at least two-thirds of the directors then still in office who were
         directors at the beginning of the period.

                  (f)      "Cash Award" means the amount of cash, if any, to be
         paid to an employee pursuant to Section 7.5.

                  (g)      "Code" means the Internal Revenue Code of 1986, as
         amended from time to time, or any successor statute or statutes
         thereto. Reference to any specific Code section shall include any
         successor section.

                  (h)      "Committee" means the Committee comprised of

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         members of the Board appointed pursuant to Section 4.

                  (i)      "Common Stock" means the common stock, par value $.01
         per share, of Time Warner.

                  (j)      "Composite Tape" means the New York Stock Exchange
         Composite Tape.

                  (k)      "Control Purchase" means any transaction in which any
         person (as such term is defined in Sections 13(d)(3) and 14(d)(2) of
         the Exchange Act), corporation or other entity (other than Time Warner
         or any employee benefit plan sponsored by Time Warner or any if its
         Subsidiaries) (i) shall purchase any Common Stock (or securities
         convertible into Common Stock) for cash, securities or any other
         consideration pursuant to a tender offer or exchange offer, without the
         prior consent of the Board, or (ii) shall become the "beneficial owner"
         (as such term is defined in Rule 13d-3 under the Exchange Act),
         directly or indirectly, of securities of Time Warner representing 20%
         or more of the combined voting power of the then outstanding securities
         of Time Warner ordinarily (and apart from the rights accruing under
         special circumstances) having the right to vote in the election of
         directors (calculated as provided in Rule 13d-3(d) in the case of
         rights to acquire Time Warner's securities).

                  (l)      "Dividend Equivalents" means, with respect to
         Restricted Shares to be issued at the end of the Restriction Period, to
         the extent specified by the Board only, an amount equal to the regular
         cash dividends and all other distributions (or the economic equivalent
         thereof) which are payable to stockholders of record during the
         Restriction Period on a like number of shares of Common Stock.

                  (m)      "Effective Date" means the date the Plan becomes
         effective pursuant to Section 16.

                  (n)      "Exchange Act" means the Securities Exchange Act of
         1934, as amended from time to time, or any successor statute or
         statutes thereto. Reference to any specific

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         Exchange Act section shall include any successor section.

                  (o)      "Fair Market Value" of a share of Common Stock means
         the average of the high and low sales prices of a share of Common Stock
         on the Composite Tape on the date in question, except as otherwise
         provided in Section 6.5.

                  (p)      "General SARs" means stock appreciation rights
         subject to the terms of Section 6.5(b).

                  (q)      "Holder" means an employee of Time Warner or any of
         its Subsidiaries who has received an Award under this Plan.

                  (r)      "ISO" means an incentive stock option within the
         meaning of section 422A(b) of the Code.

                  (s)      "Limited SARs" means stock appreciation rights
         subject to the terms of Section 6.5(c).

                  (t)      "Minimum Price Per Share" means the highest gross
         price (before brokerage commissions, soliciting dealers' fees and
         similar charges) paid or to be paid for any share of Common Stock
         (whether by way of exchange, conversion, distribution, liquidation or
         otherwise) in, or in connection with, any Approved Transaction or
         Control Purchase which occurs at any time during the period beginning
         on the sixtieth day prior to the date on which Limited SARs are
         exercised and ending on the date on which Limited SARs are exercised.
         If the consideration paid or to be paid in any such Approved
         Transaction or Control Purchase shall consist, in whole or in part, of
         consideration other than cash, the Board shall take such action, as in
         its judgment it deems appropriate, to establish the cash value of such
         consideration, but such valuation shall not be less than the value, if
         any, attributed to such consideration by any other party to such
         Approved Transaction or Control Purchase.

                  (u)      "Nonqualified Stock Option" means a stock option that
         is designated as a nonqualified stock option.

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                  (v)      "Option" means any ISO or Nonqualified Stock Option.

                  (w)      "Plan" has the meaning ascribed thereto in Section 1.

                  (x)      "Restricted Shares" means shares of Common Stock or
         the right to receive shares of Common Stock, as the case may be,
         awarded pursuant to Section 7.

                  (y)      "Restriction Period" means a period of time beginning
         on the date of each award of Restricted Shares and ending on the
         Valuation Date with respect to such award.

                  (z)      "Retained Distributions" has the meaning ascribed
         thereto in Section 7.3.

                  (aa)     "SARs" means General SARs and Limited SARs.

                  (bb)     "SEC" means the Securities and Exchange Commission.

                  (cc)     "Subsidiary" of a person means any present or future
         subsidiary of such person as such term is defined in section 425 of the
         Code and any present or future trade or business, whether or not
         incorporated, controlled by or under common control with such person.
         An entity shall be deemed a Subsidiary of a person only for such
         periods as the requisite ownership or control relationship is
         maintained.

                  (dd)     "Time Warner" means Time Warner Inc., a Delaware
         corporation, and any successor thereto.

                  (ee)     "Total Disability" means a permanent and total
         disability as defined in section 22(e)(3) of the Code.

                  (ff)     "Valuation Date" with respect to any Restricted
         Shares awarded hereunder means the date designated as such in the
         Agreement with respect to such award of Restricted Shares pursuant to
         Section 7.

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3.       STOCK SUBJECT TO THE PLAN

         3.1.     Number of Shares. Subject to the provisions of Section 13 and
this Section 3, the maximum number of shares of Common Stock in respect of which
Awards may be granted is 650,000. If and to the extent that an Option shall
expire, terminate or be canceled for any reason without having been exercised
(or without having been considered to have been exercised as provided in Section
6.5(a)), the shares of Common Stock subject to such expired, terminated or
canceled portion of the Option shall again become available for purposes of the
Plan. In addition, any Restricted Shares which are forfeited under the terms of
the Plan or any Agreement shall again become available for purposes of the Plan.

         3.2.     Character of Shares. Shares of Common Stock deliverable under
the terms of the Plan may be, in whole or in part, authorized and unissued
shares of Common Stock or issued shares of Common Stock held in Time Warner's
treasury, or both.

         3.3.     Reservation of Shares. Time Warner shall at all times reserve
a number of shares of Common Stock (authorized and unissued Common Stock, issued
Common Stock held in Time Warner's treasury, or both) equal to the maximum
number of shares that may be subject to outstanding Awards and future Awards
under the Plan.

4.       ADMINISTRATION

         4.1.     Powers. The Plan shall be administered by the Board. Subject
to the express provisions of the Plan, the Board shall have plenary authority,
in its discretion, to grant Awards under the Plan and to determine the terms and
conditions (which need not be identical) of all Awards so granted, including
without limitation, (a) the purchase price, if any, of each Restricted Share,
(b) the individuals to whom, and the time or times at which, Awards shall be
granted or awarded, (c) the number of shares to be subject to each Award, (d)
whether an Option shall be an ISO or a Nonqualified Stock Option, (e) when an
Option or SAR can be exercised and whether in whole or

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in installments, (f) the time or times and the conditions subject to which
Restricted Shares shall become vested and any Cash Awards shall become payable,
and (g) the form, terms and provisions of any Agreement (which terms may be
amended, subject to Section 15).

         4.2.     Factors to Consider. In making determinations hereunder, the
Board may take into account the nature of the services rendered by the
respective employees, their dedication and past contributions to Time Warner and
its Subsidiaries, their present and potential contributions to the success of
Time Warner and its Subsidiaries and such other factors as the Board in its
discretion shall deem relevant.

         4.3.     Interpretation. Subject to the express provisions of the Plan,
the Board shall have plenary authority to interpret the Plan, to prescribe,
amend and rescind the rules and regulations relating to it and to make all other
determinations deemed necessary or advisable for the administration of the Plan.
The determinations of the Board on the matters referred to in this Section 4
shall be conclusive.

         4.4.     Delegation to Committee. Notwithstanding anything to the
contrary contained herein, the Board may at any time, or from time to time,
appoint a Committee and delegate to such Committee the authority of the Board to
administer the Plan, including to the extent provided by the Board, the power to
further delegate such authority. Upon such appointment and delegation, any such
Committee shall have all the powers, privileges and duties of the Board in the
administration of the Plan to the extent provided in such delegation, except for
the power to appoint members of the Committee and to terminate, modify or amend
the Plan. The Board may from time to time appoint members of any such Committee
in substitution for or in addition to members previously appointed, may fill
vacancies in such Committee and may discharge such Committee.

         Any such Committee shall select one of its members as its chairman and
shall hold its meeting at such times and places as it shall deem advisable. A
majority of members shall constitute a quorum and all determinations shall be
made by a majority of such quorum. Any determination reduced to writing and
signed by all of the members shall be fully as effective as

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if it had been made by a majority vote at a meeting duly called and held.

5.       ELIGIBILITY

         5.1.     General. Awards may be made only to (a) employees of Time
Warner or any of its Subsidiaries (including officers and directors of any of
Time Warner's Subsidiaries), other than officers or directors of Time Warner who
are subject to Section 16 of the Exchange Act, and (b) prospective employees of
Time Warner or any of its Subsidiaries. The exercise of Options and SARs and the
vesting of Restricted Shares granted to a prospective employee shall be
conditioned upon such person becoming an employee of Time Warner or any of its
Subsidiaries. For purposes of the Plan, the term "prospective employee" shall
mean any person who holds an outstanding offer of employment on specific terms
from Time Warner or any of its Subsidiaries. Awards may be made to employees who
hold or have held Awards under this Plan or any similar or other awards under
any other plan of Time Warner or its Subsidiaries.

         5.2.     Special ISO Rule. No ISO shall be granted to an employee who,
at the time the ISO is granted, owns (or is considered as owning within the
meaning of section 425(d) of the Code) stock possessing more than 10% of the
total combined voting power of all classes of stock of Time Warner or any of its
Subsidiaries, unless at the time the ISO is granted the option price is at least
110% of the Fair Market Value of the Common Stock subject to the ISO and the ISO
by its terms is not exercisable after the expiration of five years from the date
it is granted.

6.       OPTIONS AND SARS

         6.1.     Option Prices. Subject to Section 5.2, the purchase price of
the Common Stock under each Option shall be determined by the Board and set
forth in the applicable Agreement, but shall not be less than 100% of the Fair
Market Value of the Common Stock on the date of grant.

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         6.2.     Term of Options. The term of each Option shall be for such
period as the Board shall determine, as set forth in the applicable Agreement,
but not more than 10 years from the date of grant in the case of an ISO (except
as provided in Section 5.2).

         6.3.     Exercise of Options. An Option granted under the Plan shall
become (and remain) exercisable during the term of the Option to the extent
provided in the applicable Agreement and this Plan and, unless the Agreement
otherwise provides, may be exercised to the extent exercisable, in whole or in
part, at any time and from time to time during such term; provided, however,
that subsequent to the grant of an Option, the Board, at any time before
complete termination of such Option, may accelerate the time or times at which
such Option may be exercised in whole or in part (without reducing the term of
such Option). The Agreement may contain conditions precedent to the
exercisability of Options, including without limitation, the achievement of
minimum performance criteria.

         6.4.     Manner of Exercise. Payment of the Option purchase price shall
be made in cash or in whole shares of Common Stock already owned by the person
exercising an Option or, partly in cash and partly in such Common Stock;
provided, however, that such payment may be made in whole or in part in shares
of Common Stock only if and to the extent permitted by the applicable Agreement.
An Option shall be exercised by written notice to Time Warner upon such terms
and conditions as provided in the Agreement. Time Warner shall effect the
transfer of the shares of Common Stock purchased under the Option as soon as
practicable, and within a reasonable time thereafter such transfer shall be
evidenced on the books of Time Warner. No Holder or other person exercising an
Option shall have any of the rights of a stockholder of Time Warner with respect
to shares of Common Stock subject to an Option granted under the Plan until due
exercise and full payment has been made. No adjustment shall be made for cash
dividends or other rights for which the record date is prior to the date of such
due exercise and full payment.

         6.5.     SARS. (a) General Conditions. The Board may (but

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shall not be obligated to) grant General SARs and/or Limited SARs pursuant to
the provisions of this Section 6.5 to a Holder of any Option (hereinafter called
a "related Option"), with respect to all or a portion of the shares of Common
Stock subject to the related Option.

         A SAR may be granted either concurrently with the grant of the related
Option or at any time thereafter prior to the complete exercise, termination,
expiration or cancellation of such related Option. Subject to the terms and
provisions of this Section 6.5, each SAR shall be exercisable to the extent the
related Option is then exercisable (and may be subject to such additional
limitations on exercisability as the Agreement may provide), and in no event
after the complete termination or full exercise of the related Option. SARs
shall be exercisable in whole or in part upon notice to Time Warner upon such
terms and conditions as provided in the Agreement.

         Upon the exercise of SARs, the related Option shall be considered to
have been exercised to the extent of the number of shares of Common Stock with
respect to which such SARs are exercised and shall be considered to have been
exercised to that extent for purposes of determining the number of shares of
Common Stock in respect of which other Awards may be granted. Upon the exercise
or termination of the related Option, the SARs with respect thereto shall be
considered to have been exercised or terminated to the extent of the number of
shares of Common Stock with respect to which the related Option was so exercised
or terminated.

         The provisions of Sections 4, 6 and 8 through 22 (to the extent that
such provisions are applicable to Options) shall also be applicable to SARs
unless the context otherwise requires.

         (b)      General SARs. General SARs shall be exercisable only at the
time the related Option is exercisable and subject to the terms and provisions
of this Section 6.5, upon the exercise of General SARs, the person exercising
the General SAR shall be entitled to receive consideration (in the form
hereinafter provided) equal in value to the excess of the Fair Market Value on
the date of exercise of the shares of Common Stock with

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respect to which such General SARs have been exercised over the aggregate
related Option purchase price for such shares; provided, however, that the Board
may, in any Agreement granting General SARs provide that the appreciation
realizable upon exercise thereof shall be measured from a base higher than the
related Option purchase price.

         Upon the exercise of a General SAR, the person exercising the General
SAR may specify the form of consideration to be received by such person
exercising the General SAR, which shall be in shares of Common Stock (valued at
Fair Market Value on the date of exercise of such General SAR), or in cash, or
partly in cash and partly in shares of Common Stock. Any election by the person
exercising the General SAR to receive cash in full or partial settlement of such
General SAR shall comply with all applicable laws. Unless otherwise specified in
the applicable Agreement, the number of General SARs which may be exercised for
cash, or partly for cash and partly for shares of Common Stock, during any
calendar quarter, may not exceed 20% of the aggregate number of shares of Common
Stock originally subject to the related Option (as such original number, without
giving effect to the exercise of any portion of the related Option, shall have
been retroactively adjusted in accordance with Section 13 or any corresponding
provisions of an applicable Agreement).

         For purposes of this Section 6.5, the date of exercise of a General SAR
shall mean the date on which Time Warner shall have received notice from the
person exercising the General SAR of the exercise of such General SAR.

         (c)      Limited SARs. Limited SARs may be exercised only during the
period (a) beginning on the first day following either (i) the date of an
Approved Transaction, (ii) the date of a Control Purchase, or (iii) the date of
a Board Change, and (b) ending on the ninetieth day (or such other date
specified in the Agreement) following such date. The effective date of exercise
of a Limited SAR shall be deemed to be the date on which Time Warner shall have
received notice from the person exercising the Limited SAR of the exercise
thereof.

         Upon the exercise of Limited SARs granted in connection with an ISO,
except as otherwise provided in the Agreement, the

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person exercising the Limited SAR shall receive in cash an amount equal to the
excess of the Fair Market Value on the date of exercise of such Limited SARs of
the shares of Common Stock with respect to which such Limited SARs shall have
been exercised over the aggregate related Option purchase price for such shares.

         Upon the exercise of Limited SARs granted in connection with a
Nonqualified Stock Option, except as otherwise provided in the Agreement, the
person exercising the Limited SAR shall receive in cash an amount equal to the
product computed by multiplying (a) the excess of (i) the higher of (A) the
Minimum Price Per Share, or (B) the highest reported closing sales price of a
share of Common Stock as reported on the Composite Tape at any time during the
period beginning on the sixtieth day prior to the date on which such Limited
SARs are exercised and ending on the date on which such Limited SARs are
exercised over (ii) the per share Option price of the related Nonqualified Stock
Option, by (b) the number of shares of Common Stock with respect to which such
Limited SARs are being exercised.

         6.6.     Limited Transferability of Options and SARs. Except as set
forth in this Section 6.6 and Section 23, Options and SARs shall not be
transferable other than by will or the laws of descent and distribution, and
Options and SARs may be exercised during the lifetime of the Holder thereof only
by such Holder (or his or her court appointed legal representative). The
Agreement may provide that Options and SARs are transferable by gift to such
persons or entities and upon such terms and conditions specified in the
Agreement.

7.       RESTRICTED SHARES

         7.1.     Valuation Date, Issuance and Price. The Board shall determine
whether shares of Common Stock covered by awards of Restricted Shares will be
issued at the beginning or the end of the Restriction Period, whether Dividend
Equivalents will be paid during the Restriction Period in the event shares of
the Common Stock are to be issued at the end of the Restriction Period and shall
designate a Valuation Date with respect to

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each award of Restricted Shares and may prescribe other restrictions, terms and
conditions applicable to the vesting of such Restricted Shares in addition to
those provided in the Plan. The Board shall determine the price, if any, to be
paid by the Holder for the Restricted Shares; provided, however, that the
issuance of Restricted Shares shall be made for at least the minimum
consideration necessary to permit such Restricted Shares to be deemed fully paid
and nonassessable. All determinations made by the Board pursuant to this Section
7.1 shall be specified in the Agreement.

         7.2.     Issuance of Restricted Shares at Beginning of the Restriction
Period. If shares of Common Stock are issued at the beginning of the Restriction
Period, the stock certificate or certificates representing such Restricted
Shares shall be registered in the name of the Holder to whom such Restricted
Shares shall have been awarded. During the Restriction Period, certificates
representing the Restricted Shares and any securities constituting Retained
Distributions shall bear a restrictive legend to the effect that ownership of
the Restricted Shares (and such Retained Distributions), and the enjoyment of
all rights appurtenant thereto, are subject to the restrictions, terms and
conditions provided in the Plan and the applicable Agreement. Such certificates
shall remain in the custody of Time Warner and the Holder shall deposit with
Time Warner stock powers or other instruments of assignment, each endorsed in
blank, so as to permit retransfer to Time Warner of all or any portion of the
Restricted Shares and any securities constituting Retained Distributions that
shall be forfeited or otherwise not become vested in accordance with the Plan
and the applicable Agreement.

         7.3.     Restrictions. Restricted Shares issued at the beginning of the
Restriction Period shall constitute issued and outstanding shares of Common
Stock for all corporate purposes. The Holder will have the right to vote such
Restricted Shares, to receive and retain all regular cash dividends and such
other distributions, as the Board may in its sole discretion designate, paid or
distributed on such Restricted Shares and to exercise all other rights, powers
and privileges of a Holder of Common Stock with respect to such Restricted
Shares; except, that, (a) the Holder will not be entitled to delivery of the
stock certificate or certificates representing such Restricted

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Shares until the Restriction Period shall have expired and unless all other
vesting requirements with respect thereto shall have been fulfilled or waived;
(b) Time Warner will retain custody of the stock certificate or certificates
representing the Restricted Shares during the Restriction Period as provided in
Section 7.2; (c) other than regular cash dividends and such other distributions
as the Board may in its sole discretion designate, Time Warner will retain
custody of all distributions ("Retained Distributions") made or declared with
respect to the Restricted Shares (and such Retained Distributions will be
subject to the same restrictions, terms and vesting and other conditions as are
applicable to the Restricted Shares) until such time, if ever, as the Restricted
Shares with respect to which such Retained Distributions shall have been made,
paid or declared shall have become vested, and such Retained Distributions shall
not bear interest or be segregated in a separate account; (d) the Holder may not
sell, assign, transfer, pledge, exchange, encumber or dispose of the Restricted
Shares or any Retained Distributions or his interest in any of them during the
Restriction Period; and (e) a breach of any restrictions, terms or conditions
provided in the Plan or established by the Board with respect to any Restricted
Shares or Retained Distributions will cause a forfeiture of such Restricted
Shares and any Retained Distributions with respect thereto.

         7.4.     Issuance of Stock at End of the Restriction Period. Restricted
Shares issued at the end of the Restriction Period shall not constitute issued
and outstanding shares of Common Stock and the Holder shall not have any of the
rights of a stockholder with respect to the shares of Common Stock covered by
such an award of Restricted Shares, in each case, until such shares shall have
been transferred to the Holder at the end of the Restriction Period. If and to
the extent that shares of Common Stock are to be issued at the end of the
Restriction Period, the Holder shall be entitled to receive Dividend Equivalents
with respect to the shares of Common Stock covered thereby either (a) during the
Restriction Period or (b) in accordance with the rules applicable to Retained
Distributions, as the Board may specify in the Agreement.

         7.5.     Cash Awards. In connection with any award of Restricted
Shares, an Agreement may provide for the payment of

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a cash amount to the Holder of such Restricted Shares at any time after such
Restricted Shares shall have become vested. Such Cash Awards shall be payable in
accordance with such additional restrictions, terms and conditions as shall be
prescribed by the Board in the Agreement and shall be in addition to any other
salary, incentive, bonus or other compensation payments which such Holder shall
be otherwise entitled or eligible to receive from Time Warner or any of its
Subsidiaries.

         7.6.     Completion of Restriction Period. On the Valuation Date with
respect to each award of Restricted Shares, and the satisfaction of any other
applicable restrictions, terms and conditions (a) all or part of such Restricted
Shares shall become vested, (b) any Retained Distributions and any unpaid
Dividend Equivalents with respect to such Restricted Shares shall become vested
to the extent that the Restricted Shares related thereto shall have become
vested and (c) any Cash Award to be received by the Holder with respect to such
Restricted Shares shall become payable, all in accordance with the terms of the
applicable Agreement. Any such Restricted Shares, Retained Distributions and any
unpaid Dividend Equivalents that shall not become vested shall be forfeited to
Time Warner and the Holder shall not thereafter have any rights (including
dividend and voting rights) with respect to such Restricted Shares, Retained
Distributions and any unpaid Dividend Equivalents that shall have been so
forfeited.

8.       ACCELERATION OF OPTIONS, SARS AND RESTRICTED SHARES

         If a Holder's employment shall terminate by reason of death or Total
Disability, notwithstanding any contrary waiting period or installment period or
Restriction Period in any Agreement or in the Plan or in the event of any
Approved Transaction, Board Change or Control Purchase, unless the applicable
Agreement provides otherwise: (a) in the case of an Option or SAR, each such
outstanding Option or SAR granted under the Plan shall immediately become
exercisable in full in respect of the aggregate number of shares covered
thereby; and (b) in the case of Restricted Shares, the Restriction Period
applicable to each such award of Restricted Shares shall be

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deemed to have expired and all such Restricted Shares, any related Retained
Distributions and any unpaid Dividend Equivalents shall become vested and any
Cash Award payable pursuant to the applicable Agreement shall be adjusted in
such manner as provided in the Agreement.

9.       TERMINATION OF EMPLOYMENT

         9.1.     General. If a Holder's employment shall terminate prior to the
complete exercise of an Option (or deemed exercise thereof, as provided in
Section 6.5(a)), then such Option shall thereafter be exercisable solely to the
extent provided in the applicable Agreement; provided, however, that (a) no
Option may be exercised after the scheduled expiration date of such Option; (b)
if the Holder's employment terminates by reason of death or Total Disability,
the Option shall remain exercisable for a period of at least one year following
such termination (but not later than the scheduled expiration of such Option);
and (c) any termination by the employing company for cause will be treated in
accordance with the provisions of Section 9.2.

         9.2.     Termination for Cause. If a Holder's employment with Time
Warner or any of its Subsidiaries shall be terminated by Time Warner or such
Subsidiary during the Restriction Period with respect to any Restricted Shares
or prior to the exercise of any Option for cause (for these purposes, cause
shall have the meaning ascribed thereto in any employment agreement to which
such Holder is a party or, in the absence thereof, shall include but not be
limited to, insubordination, dishonesty, incompetence, moral turpitude, other
misconduct of any kind and the refusal to perform his duties and
responsibilities for any reason other than illness or incapacity; provided,
however, that if such termination occurs within 12 months after an Approved
Transaction, Control Purchase or Board Change, termination for cause shall mean
only a felony conviction for fraud, misappropriation or embezzlement), then (a)
all Options held by such Holder and any permitted transferee pursuant to Section
6.6 shall immediately terminate and (b) such Holder's rights to all Restricted
Shares, Retained Distributions, any unpaid Dividend Equivalents and any Cash
Awards shall be forfeited immediately.

                                      -16-
<PAGE>

         9.3.     Special Rule. Notwithstanding any other provision of the Plan,
the Board may provide in the applicable Agreement that the Award shall become
and/or remain exercisable at rates and times at variance with the rules
otherwise herein set forth; provided, however, that any such Agreement
provisions at variance with the exercisability rules otherwise set forth herein
shall be effective only if reflected in the terms of an employment agreement
approved or ratified by the Board.

         9.4.     Miscellaneous. The Board may determine whether any given leave
of absence constitutes a termination of employment. Awards made under the Plan
shall not be affected by any change of employment so long as the Holder
continues to be an employee of Time Warner or any of its Subsidiaries.

10.      RIGHT OF COMPANY TO TERMINATE EMPLOYMENT

         Nothing contained in the Plan or in any Award shall confer on any
Holder any right to continue in the employ of Time Warner or any of its
Subsidiaries or interfere in any way with the right of Time Warner or a
Subsidiary to terminate the employment of the Holder at any time, with or
without cause; subject, however, to the provisions of any employment agreement
between the Holder and Time Warner or any of its Subsidiaries.

11.      NONALIENATION OF BENEFITS

         Except as provided in Section 6.6, no right or benefit under the Plan
shall be subject to anticipation, alienation, sale, assignment, hypothecation,
pledge, exchange, transfer, encumbrance or charge, and any attempt to
anticipate, alienate, sell, assign, hypothecate, pledge, exchange, transfer,
encumber or charge the same shall be void. No right or benefit hereunder shall
in any manner be liable for or subject to the debts, contracts, liabilities or
torts of the person entitled to such benefits.

12.      WRITTEN AGREEMENT

                                      -17-
<PAGE>

         Each award of Restricted Shares and any right to a Cash Award hereunder
shall be evidenced by a restricted shares agreement; each grant of an Option
shall be evidenced by a stock option agreement which shall designate the Options
granted thereunder as ISOs or Nonqualified Stock Options; and each SAR shall be
evidenced by a stock appreciation rights agreement, each in such form and
containing such terms and provisions not inconsistent with the provisions of the
Plan as the Board from time to time shall approve; provided, however, that such
Awards may be evidenced by a single agreement. The effective date of the
granting of an Award shall be the date on which the Board approves such grant.
Each grantee of an Option, SAR or Restricted Shares shall be notified promptly
of such grant and a written Agreement shall be promptly executed and delivered
by Time Warner and the grantee, provided that such grant of Options, SARs or
Restricted Shares shall terminate if such written Agreement is not signed by
such grantee (or his attorney) and delivered to Time Warner within 60 days after
the date the Board approved such grant or if the effectiveness of such grant is
conditioned upon the grantee becoming an employee of Time Warner or one of its
Subsidiaries, the execution by the grantee of an employment agreement with Time
Warner or one of its subsidiaries or any other similar condition, within 60 days
after the occurrence of such condition, if later. Any such written Agreement may
contain (but shall not be required to contain) such provisions as the Board
deems appropriate to ensure that the penalty provisions of section 4999 of the
Code will not apply to any stock or cash received by the Holder or such Holder's
permitted transferee pursuant to Section 6.6 from Time Warner or any of its
Subsidiaries.

13.      ADJUSTMENT UPON CHANGES IN CAPITALIZATION, ETC.

         In the event of any stock split, dividend, distribution, combination,
reclassification or recapitalization that changes the character or amount of the
Common Stock while any portion of any Award theretofore granted under the Plan
is outstanding but unexercised or unvested, the Board shall make such
adjustments in the character and number of shares subject to such Award, in the
option price, in the relevant appreciation

                                      -18-
<PAGE>

base and in the Cash Awards, as shall be applicable, equitable and appropriate
in order to make such Award, immediately after any such change, as nearly as may
be practicable, equivalent to such Award, immediately prior to any such change.
If any merger, consolidation or similar transaction affects the Common Stock
subject to any unexercised or unvested Award theretofore granted under the Plan,
the Board or any surviving or acquiring corporation shall take such action as is
equitable and appropriate to substitute a new award for such Award or to assume
such Award in order to make such new or assumed Award, as nearly as may be
practicable, equivalent to the old Award. If any such change or transaction
shall occur, the number and kind of shares for which Awards may thereafter be
granted under the Plan shall be adjusted to give effect thereto.

14.      RIGHT OF FIRST REFUSAL

         The Agreements may contain such provisions as the Board shall determine
to the effect that if a Holder, or other person exercising an Option, elects to
sell all or any shares of Common Stock that such Holder or other person acquired
upon the exercise of an Option or upon the vesting of Restricted Shares awarded
under the Plan, then such Holder or other person shall not sell such shares
unless such Holder or other person shall have first offered in writing to sell
such shares to Time Warner at Fair Market Value on a date specified in such
offer (which date shall be at least three business days and not more than 10
business days following the date of such offer). In any such event, certificates
representing shares issued upon exercise of Options and the vesting of
Restricted Shares shall bear a restrictive legend to the effect that
transferability of such shares are subject to the restrictions contained in the
Plan and the applicable Agreement and Time Warner may cause the registrar of its
Common Stock to place a stop transfer order with respect to such shares.

15.      TERMINATION AND AMENDMENT

         15.1.    General. Unless the Plan shall theretofore have

                                      -19-
<PAGE>

been terminated as hereinafter provided, no Awards may be made under the Plan on
or after the tenth anniversary of the Effective Date. The Board may at any time
prior to the tenth anniversary of the Effective Date terminate the Plan, and the
Board may at any time modify or amend the Plan in such respects as it shall deem
advisable; provided, however, that any such modification or amendment shall
comply with all applicable laws and stock exchange listing requirements.

         15.2.    Modification. No termination, modification or amendment of the
Plan may, without the consent of the person (or a transferee of such person if
the Award, or any part thereof, has been transferred pursuant to Section 6.6) to
whom any Award shall theretofore have been granted, adversely affect the rights
of such person with respect to such Award. No modification, extension, renewal
or other change in any Award granted under the Plan shall be made after the
grant of such Award, unless the same is consistent with the provisions of the
Plan. With the consent of the Holder (or a transferee of such Holder if the
Award, or any part thereof, has been transferred pursuant to Section 6.6) and
subject to the terms and conditions of the Plan (including Section 15.1), the
Board may amend outstanding Agreements with any Holder (or any such transferee),
including, without limitation, any amendment which would (a) accelerate the time
or times at which the Award may be exercised and/or (b) extend the scheduled
expiration date of the Award. Without limiting the generality of the foregoing,
the Board may but solely with the Holder's consent, agree to cancel any Award
under the Plan held by such Holder and issue a new Award in substitution
therefor, provided that the Award so substituted shall satisfy all of the
requirements of the Plan as of the date such new Award is made.

16.      EFFECTIVENESS OF THE PLAN

         The Plan shall become effective upon approval by the Board of Directors
of Time Warner.

17.      GOVERNMENT AND OTHER REGULATIONS

                                      -20-
<PAGE>

         The obligation of Time Warner with respect to Awards shall be subject
to all applicable laws, rules and regulations and such approvals by any
governmental agencies as may be required, including, without limitation, the
effectiveness of any registration statement required under the Securities Act of
1933, and the rules and regulations of any securities exchange on which the
Common Stock may be listed. For so long as the Common Stock is registered under
the Exchange Act, Time Warner shall use its reasonable efforts to comply with
any legal requirements (a) to maintain a registration statement in effect under
the Securities Act of 1933 with respect to all shares of Common Stock that may
be issued to Holders under the Plan, and (b) to file in a timely manner all
reports required to be filed by it under the Exchange Act.

18.      WITHHOLDING

         Time Warner's obligation to deliver shares of Common Stock or pay cash
in respect of any Award or Cash Award under the Plan shall be subject to
applicable federal, state and local tax withholding requirements. Federal, state
and local withholding taxes paid upon the exercise of any Option and upon the
vesting of Restricted Shares may be paid in shares of Common Stock upon such
terms and conditions as the Board shall determine; provided, however, that the
Board in its sole discretion may disapprove such payment and require that such
taxes be paid in cash.

19.      SEPARABILITY

         If any of the terms or provisions of this Plan conflict with the
requirements of section 422A of the Code, then such terms or provisions shall be
deemed inoperative to the extent they so conflict with the requirements of
section 422A of the Code. If this Plan does not contain any provision required
to be included herein under section 422A of the Code, such provision shall be
deemed to be incorporated herein with the same force and effect as if such
provision had been set out at length herein; provided, however, that to the
extent any Option which is intended to qualify as an ISO cannot so qualify, such

                                      -21-
<PAGE>

Option, to that extent, shall be deemed to be a Nonqualified Stock Option for
all purposes of the Plan.

20.      NON-EXCLUSIVITY OF THE PLAN

         The adoption of the Plan by the Board shall not be construed as
creating any limitations on the power of the Board to adopt such other incentive
arrangements as it may deem desirable, including, without limitation, the
granting of stock options and the awarding of stock and cash otherwise than
under the Plan, and such arrangements may be either generally applicable or
applicable only in specific cases.

21.      EXCLUSION FROM PENSION AND PROFIT-SHARING COMPUTATION

         By acceptance of an Award or Cash Award, as applicable, each Holder
shall be deemed to have agreed that such Award or Cash Award, as applicable, is
special incentive compensation that will not be taken into account, in any
manner, as salary, compensation or bonus in determining the amount of any
payment under any pension, retirement or other employee benefit plan of Time
Warner or any of its Subsidiaries. In addition, each beneficiary of a deceased
Holder shall be deemed to have agreed that such Award or Cash Award, as
applicable, will not affect the amount of any life insurance coverage, if any,
provided by Time Warner or any of its Subsidiaries on the life of the Holder
which is payable to such beneficiary under any life insurance plan covering
employees of Time Warner or any of its Subsidiaries.

22.      GOVERNING LAW

         The Plan shall be governed by, and construed in accordance with, the
laws of the State of New York.

23.      BENEFICIARIES

         Each Holder may designate any person(s) or legal

                                      -22-
<PAGE>

entity(ies), including his or her estate, as his or her beneficiary under the
Plan. Such designation shall be made in writing on a form filed with the
Secretary of Time Warner or his or her designee and may be revoked or changed by
such Holder at any time by filing written notice of such revocation or change
with the Secretary of Time Warner or his or her designee. If no person shall be
designated by a Holder as his or her beneficiary or if no person designated as a
beneficiary survives such Holder, the Holder's beneficiary shall be his or her
estate.

24.      DEFERRAL OF OPTION GAINS.

         The Agreement may contain terms, conditions and procedures permitting
Holders to elect to defer the receipt of shares of Common Stock upon the
exercise of Options for a specific period or until a specified event.

                                      -23-<PAGE>
                                                                    EXHIBIT 10.8

                                                              AS AMENDED THROUGH
                                                                JANUARY 16, 2003

                              AOL TIME WARNER INC.

                                 1999 STOCK PLAN

1.       PURPOSES OF THE PLAN.

         The Plan is intended to encourage ownership of Shares by Key Employees
and directors of and certain consultants to the Company or its Affiliates in
order to attract and retain such people, to motivate them to work for the
benefit of the Company or an Affiliate, and to provide an additional incentive
for them to promote the success of the Company or of an Affiliate. The Plan
provides for the granting of ISOs and Non-Qualified Options and awards of Stock
Purchase Rights.

2.       DEFINITIONS.

         Unless otherwise specified or unless the context otherwise requires,
         the following terms, as used in this AOL Time Warner Inc. 1999 Stock
         Plan, have the following meanings:

                  Administrator means the Board of Directors, unless it has
                  delegated power to act on its behalf to the Committee, in
                  which case the Administrator means the Committee.

                  Affiliate, with respect to ISOs, means a corporation which,
                  for purposes of Section 424 of the Code, is a parent or
                  subsidiary of the Company, direct or indirect, and, with
                  respect to Non-Qualified Options, means any corporation,
                  company or other entity whose financial results are
                  consolidated with those of the Company in accordance with U.S.
                  generally accepted accounting principles, all as determined by
                  the Administrator.

                  Board of Directors means the Board of Directors of the
                  Company.

                  Change in Control means either a Corporate Change in Control
                  or a Transactional Change in Control.

                  Code means the United States Internal Revenue Code of 1986, as
                  amended.

                  Committee means the Compensation Committee of the Board of
                  Directors, or its successor, or such other committee of the
                  Board of Directors to which the Board

<PAGE>

                  of Directors has delegated power to act under or pursuant to
                  the provisions of the Plan or a subcommittee of the
                  Compensation Committee established by the Compensation
                  Committee.

                  Common Stock means shares of the Company's common stock, $.01
                  par value per share.

                  Company means (i) with respect to the periods prior to January
                  11, 2001, America Online, Inc., a Delaware corporation and
                  (ii) with respect to periods on and after January 11, 2001,
                  AOL Time Warner Inc., a Delaware corporation.

                  Corporate Change in Control means the happening of any of the
                  following events:

                  (1)      the acquisition by any individual, entity or group
                  (an "Entity"), including any "person" within the meaning of
                  Section 13(d)(3) or 14(d)(2) of the Exchange Act, of
                  beneficial ownership (within the meaning of Rule 13d-3
                  promulgated under the Exchange Act) of 30% or more 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 securities of the Company
                  entitled to vote generally in the election of directors (the
                  "Outstanding Company Voting Securities"); excluding, however,
                  the following: (A) any acquisition directly from the Company
                  (excluding any acquisition by virtue of the exercise of an
                  exercise, conversion or exchange privilege unless the security
                  being so exercised, converted or exchanged was itself acquired
                  directly from the Company), (B) any acquisition by the
                  Company, or (C) any acquisition by an employee benefit plan
                  (or related trust) sponsored or maintained by the Company or
                  by any corporation controlled by the Company; or

                  (2)      a change in the composition of the Board of Directors
                  since October 28, 1999, such that the individuals who, as of
                  such date, constituted the Board of Directors (the "Incumbent
                  Board") cease for any reason to constitute at least a majority
                  of such Board; provided that any individual who becomes a
                  director of the Company subsequent to October 28, 1999 whose
                  election, or nomination for election by the Company's
                  stockholders, was approved by the vote of at least a majority
                  of the directors then comprising the Incumbent Board shall be
                  deemed a member of the Incumbent Board; and provided further,
                  that any individual who was initially elected as a director of
                  the Company as a result of an actual or threatened election
                  contest, as such terms are used in Rule 14a-11 of Regulation
                  14A promulgated under the Exchange Act, or any other actual or
                  threatened solicitation of proxies or consents by or on behalf
                  of any person or Entity other than the Board shall not be
                  deemed a member of the Incumbent Board.

                  Disability or Disabled means permanent and total disability as
                  defined in Section 22(e)(3) of the Code.

                                        2
<PAGE>

                  Fair Market Value of a Share of Common Stock means:

                  (1)      If the Common Stock is listed on a national
                  securities exchange or traded in the over-the-counter market
                  and sales prices are regularly reported for the Common Stock,
                  the average of the high and low sales prices of a share of the
                  Common Stock on the New York Stock Exchange or other
                  comparable reporting system for the applicable date, or if the
                  applicable date is not a trading day, the trading day
                  immediately preceding the applicable date;

                  (2)      If the Common Stock is not traded on a national
                  securities exchange but is traded on the over-the-counter
                  market, if sales prices are not regularly reported for the
                  Common Stock for the trading day referred to in clause (1),
                  and if bid and asked prices for the Common Stock are regularly
                  reported, the mean between the bid and the asked price for the
                  Common Stock at the close of trading in the over-the-counter
                  market on the applicable date, or if the applicable date is
                  not a trading day, on the trading day immediately preceding
                  the applicable date; and

                  (3)      If the Common Stock is neither listed on a national
                  securities exchange nor traded in the over-the-counter market,
                  such value as the Administrator, in good faith, shall
                  determine.

                  Involuntary Employment Action shall mean any change in the
                  terms and conditions of the Participant's employment with the
                  Company or any successor, without cause (as defined herein),
                  to such extent that:

                  (1)      the Participant shall fail to be vested with power,
                  authority and resources analogous to the Participant's title
                  and/or office prior to the Change in Control, or

                  (2)      the Participant shall lose any significant duties or
                  responsibilities attending such office, or

                  (3)      there shall occur a reduction in the Participant's
                  base compensation, or

                  (4)      the Participant's employment with the Company, or its
                  successor, is terminated without cause (as defined herein).

                  ISO means an option meant to qualify as an incentive stock
                  option under Section 422 of the Code.

                  Key Employee means an employee of the Company or of an
                  Affiliate (including, without limitation, an employee who is
                  also serving as an officer or director of the Company or of an
                  Affiliate), designated by the Administrator to be eligible to
                  be granted one or more Options or Stock Purchase Rights under
                  the Plan; provided however, that Key Employee shall not
                  include any person who: (i) is not on the payroll of the
                  Company or an Affiliate as a full-time or part-time employee
                  or (ii)

                                        3
<PAGE>

                  directly or indirectly provides services to the Company or an
                  Affiliate pursuant to a contractual or other arrangement,
                  written or otherwise between the Company or an Affiliate and
                  either that person or a third party, which does not designate
                  such person as an employee (regardless of whether a government
                  agency, court or other entity subsequently determines that
                  such person is an employee of the Company or an Affiliate for
                  purposes of employment taxes or for any other purpose).
                  Anything in the prior sentence to the contrary
                  notwithstanding, a person who is providing services pursuant
                  to a contractual or other arrangement may be eligible for
                  participation in the Plan as a consultant who is designated by
                  the Administrator in accordance with Paragraph 5 of the Plan.

                  Non-Qualified Option means an option which is not intended to
                  qualify as an ISO.

                  Option means an ISO or Non-Qualified Option granted under the
                  Plan.

                  Option Agreement means an agreement between the Company and a
                  Participant delivered pursuant to the Plan, in such form as
                  the Administrator shall approve.

                  Participant means a Key Employee, director or consultant of
                  the Company or of an Affiliate to whom one or more Options are
                  granted under the Plan. As used herein, "Participant" shall
                  include "Participant's Survivors" where the context requires.

                  Plan means this AOL Time Warner Inc. 1999 Stock Plan.

                  Restricted Stock means shares of Common Stock acquired
                  pursuant to a grant of Stock Purchase Rights under Paragraph
                  14 below.

                  Restricted Stock Purchase Agreement means a written agreement
                  between the Company and a Participant evidencing the terms and
                  restrictions applying to stock purchased under a Stock
                  Purchase Right, in such form as the Administrator shall
                  approve.

                  Shares means shares of the Common Stock as to which Options or
                  Stock Purchase Rights have been or may be granted under the
                  Plan or any shares of capital stock into which the Shares are
                  changed or for which they are exchanged within the provisions
                  of Paragraph 3 of the Plan. The Shares issued upon exercise of
                  Options or Stock Purchase Rights granted under the Plan may be
                  authorized and unissued shares or shares held by the Company
                  in its treasury, or both.

                  Stock Purchase Right means the right to purchase Common Stock
                  pursuant to Paragraph 14 of the Plan, as evidenced by a
                  Restricted Stock Purchase Agreement.

                                        4
<PAGE>

                  Survivors means a deceased Participant's legal representatives
                  and/or any person or persons who acquired the Participant's
                  rights to an Option or Stock Purchase Right by will or by the
                  laws of descent and distribution.

                  Transactional Change in Control shall mean any of the
                  following transactions to which the Company is a party:

                  (1)      a reorganization, recapitalization, merger or
                  consolidation (a "Corporate Transaction") of the Company,
                  unless securities representing 60% or more of either the
                  outstanding shares of common stock or the combined voting
                  power of the then outstanding voting securities entitled to
                  vote generally in the election of directors of the Company or
                  the corporation resulting from such Corporate Transaction (or
                  the parent of such corporation) are held subsequent to such
                  transaction by the person or persons who were the beneficial
                  holders of the Outstanding Company Common Stock and
                  Outstanding Company Voting Securities immediately prior to
                  such Corporate Transaction, in substantially the same
                  proportions as their ownership immediately prior to such
                  Corporate Transaction; or

                  (2)      the sale, transfer or other disposition of all or
                  substantially all of the assets of the Company.

                  To Vest means that you have obtained a contingent right to
                  exercise or purchase a defined number of your stock options,
                  as defined by and subject to the terms and conditions set
                  forth in the pertinent Option Agreement and this Plan. Unless
                  and until your stock options Vest pursuant to the terms of the
                  pertinent Option Agreement and this Plan, as well as the
                  vesting schedule included in your notice of grant, you have
                  not obtained any such right to exercise or purchase any of
                  your unvested stock options (except as may be provided in
                  Paragraphs 12 and 13 of this Plan and in the pertinent Option
                  Agreement in the event of Participant's Disability or death,
                  respectively).

3.       SHARES SUBJECT TO THE PLAN.

         The number of Shares which may be issued from time to time pursuant to
this Plan shall be 100,000,000 or the equivalent of such number of Shares after
the effect of any stock split, stock dividend, combination, recapitalization or
similar transaction in accordance with Paragraph 17 of the Plan. No more than 5%
of such number of Shares may be issued in connection with grants of Stock
Purchase Rights.

         If an Option ceases to be "outstanding", in whole or in part, the
Shares which were subject to such Option shall be available for the granting of
other Options under the Plan. Any Option shall be treated as "outstanding" until
such Option is exercised in full, or terminates or expires under the provisions
of the Plan, or by agreement of the parties to the pertinent Option Agreement.
Shares that have actually been issued under the Plan upon exercise of a Stock

                                        5
<PAGE>

Purchase Right shall not be returned to the Plan and shall not become available
for the granting of other Options or Stock Purchase Rights under the Plan.

4.       ADMINISTRATION OF THE PLAN.

         Subject to the provisions of the Plan, the Administrator is authorized
         to:

         a.       Interpret the provisions of the Plan or of any Option, Option
                  Agreement, Stock Purchase Right, or Restricted Stock Purchase
                  Agreement and to make all rules and determinations which it
                  deems necessary or advisable for the administration of the
                  Plan;

         b.       Determine which employees of the Company or of an Affiliate
                  shall be designated as Key Employees and which of the Key
                  Employees, directors and consultants shall be granted Options
                  or Stock Purchase Rights;

         c.       Determine the number of Shares for which an Option, Options or
                  Stock Purchase Rights shall be granted, provided, however,
                  that in no event shall Options or Stock Purchase Rights to
                  purchase more than 4,000,000 Shares be granted to any
                  Participant in any fiscal year;

         d.       Specify the terms and conditions upon which an Option, Options
                  or Stock Purchase Rights may be granted; and

         e.       Award Options or Stock Purchase Rights to Participants who are
                  foreign nationals or employed or located outside the United
                  States, or both, on such terms and conditions, including
                  imposing conditions on the exercise or Vesting of Options or
                  Stock Purchase Rights, different from those applicable to
                  Options or Stock Purchase Rights granted to Participants
                  employed or located in the United States as may, in the
                  judgment of the Administrator, be necessary or desirable in
                  order to recognize differences in local law, tax policy or
                  customs;

provided, however, that all such interpretations, rules, determinations, terms
and conditions shall be made and prescribed in the context of preserving the tax
status under Section 422 of the Code of those Options which are designated as
ISOs. Subject to the foregoing, the interpretation and construction by the
Administrator of any provisions of the Plan or of any Option or Stock Purchase
Right granted under it shall be final, unless otherwise determined by the Board
of Directors, if the Administrator is the Committee. The Administrator's
determinations under the Plan need not be uniform and may be made by it
selectively among persons who receive, or are eligible to receive, Options or
Stock Purchase Rights under the Plan (whether or not such persons are similarly
situated). Without limiting the generality of the foregoing, the Administrator
shall be entitled, among other things, to make non-uniform and selective
determinations, and to enter into non-uniform and selective Option Agreements or
Restricted Stock Purchase Agreements as to (a) the persons to receive Options or
Stock Purchase Rights under the Plan, (b) the terms and

                                        6
<PAGE>

provisions of Options or Stock Purchase Rights under the Plan, and (c) whether a
termination of service with the Company and any Affiliate has occurred.

         No member of the Board of Directors or the Administrator shall be
liable for any action or determination made in good faith with respect to the
Plan or any Option.

5.       ELIGIBILITY FOR PARTICIPATION.

         The Administrator will, in its sole discretion, name the Participants
in the Plan, provided, however, that each Participant must be a Key Employee,
director or consultant of the Company or of an Affiliate at the time an Option
or Stock Purchase Right is granted. Members of the Company's Board of Directors
who are not employees of the Company or of an Affiliate may receive Options or
Stock Purchase Rights pursuant to Paragraph 6, Subparagraph A (f), but only
pursuant thereto. Notwithstanding any of the foregoing provisions, the
Administrator may authorize the grant of an Option or Stock Purchase Right to a
person not then a Key Employee, director or consultant of the Company or of an
Affiliate. The actual grant of such Option or Stock Purchase Right, however,
shall be conditioned upon such person becoming eligible to become a Participant
at or prior to the time of the execution of the Option Agreement or Restricted
Stock Purchase Agreement evidencing such Option or Stock Purchase Right, as
applicable. ISOs may be granted only to Key Employees. Non-Qualified Options may
be granted to any Key Employee, director or consultant of the Company or an
Affiliate. Stock Purchase Rights shall be granted only in connection with the
hiring or retention of a Key Employee. The granting of any Option or Stock
Purchase Right to any individual shall neither entitle that individual to, nor
disqualify him or her from, participation in any other grant of Options or Stock
Purchase Rights.

6.       TERMS AND CONDITIONS OF OPTIONS.

         Each Option shall be set forth in writing in an Option Agreement, duly
executed by the Company and, to the extent required by law or requested by the
Company, by the Participant. The Administrator may provide that Options be
granted subject to such terms and conditions as the Administrator may deem
appropriate including, without limitation, subsequent approval by the
stockholders of the Company of this Plan or any amendments thereto. The Option
Agreements shall be subject to at least the following terms and conditions:

         A.       Non-Qualified Options: Each Option intended to be a
                  Non-Qualified Option shall be subject to the terms and
                  conditions which the Administrator determines to be
                  appropriate and in the best interest of the Company, subject
                  to the following minimum standards for any such Non-Qualified
                  Option:

                  a.       Option Price: The option price (per share) of the
                           Shares covered by each Option shall be determined by
                           the Administrator but shall not be less than one
                           hundred percent (100%) of the Fair Market Value (per
                           share) of the Shares on the date of grant of the
                           Option.

                                        7
<PAGE>

                  b.       Each Option Agreement shall state the number of
                           Shares to which it pertains;

                  c.       Each Option Agreement shall state the date or dates
                           on which it first is exercisable and the date after
                           which it may no longer be exercised, and may provide
                           that the Option rights Vest or become exercisable in
                           installments over a period of months or years, or
                           upon the occurrence of certain conditions or the
                           attainment of stated goals or events; and

                  d.       Exercise of any Option may be conditioned upon the
                           Participant's execution of a stock purchase agreement
                           in form satisfactory to the Administrator providing
                           for certain protections for the Company and its other
                           stockholders, including requirements that:

                           i.       The Participant's or the Participant's
                                    Survivors' right to sell or transfer the
                                    Shares may be restricted; and

                           ii.      The Participant or the Participant's
                                    Survivors may be required to execute letters
                                    of investment intent and must also
                                    acknowledge that the Shares will bear
                                    legends noting any applicable restrictions.

                  e.       Limitation on Grant of Non-Qualified Options: No
                           Non-Qualified Option shall be granted after the date
                           provided in Paragraph 23 of this Plan.

                  f.       Directors' Options: Each director of the Company who
                           is not an employee of the Company or any Affiliate,
                           upon first being elected or appointed to the Board of
                           Directors, shall be granted a Non-Qualified Option to
                           purchase 8,000 Shares; provided, however, that the
                           Administrator shall be entitled to grant an Option
                           for such higher number of Shares as may be
                           appropriate (as determined by the Board of Directors)
                           for recruitment purposes. Each director of the
                           Company who is not an employee of the Company or any
                           Affiliate on January 18, 2001, shall be granted on
                           such date a Non-Qualified Option to purchase 52,000
                           Shares as an initial grant for joining the Board of
                           Directors. For the annual meeting of stockholders in
                           2002, on the date following the annual meeting of
                           stockholders of the Company, giving effect to the
                           election of any director or directors at such annual
                           meeting of stockholders, each director who is not an
                           employee of the Company or any Affiliate and who has
                           served at least six months as a director shall be
                           granted a Non-Qualified Option to purchase 40,000
                           Shares. Beginning with the annual meeting of
                           stockholders in 2003, on the date following the
                           annual meeting of stockholders of the Company each
                           year, giving effect to the election of any director
                           or directors at such annual meeting of stockholders,
                           each director who is not an employee of the Company
                           or any Affiliate and who has served at least six
                           months as a

                                        8
<PAGE>

                           director shall be granted a Non-Qualified Option to
                           purchase 8,000 Shares. Each Option granted pursuant
                           to this Paragraph 6(A)(f) shall (i) have an exercise
                           price equal to the Fair Market Value (per share) of
                           the Shares on the date of grant of the Option, (ii)
                           have a term of ten (10) years, and (iii) Vest in
                           installments of 25% annually over a four-year period
                           and on the date of a meeting of stockholders at which
                           directors are elected if the director does not stand
                           for re-election or is not re-elected at such meeting,
                           unless a different vesting schedule is established by
                           the Administrator in the applicable Option Agreement.
                           The Board of Directors may amend this Paragraph
                           6(A)(f) to increase, reduce, eliminate, or institute
                           option grants for Board, Committee or other
                           individual or collective service under this Plan.

         B.       ISOs: Each Option intended to be an ISO shall so state and
                  shall be issued only to a Key Employee and be subject to at
                  least the following terms and conditions, with such additional
                  restrictions or changes as the Administrator determines are
                  appropriate but not in conflict with Section 422 of the Code
                  and relevant regulations and rulings of the Internal Revenue
                  Service:

                  a.       Minimum standards: The ISO shall meet the minimum
                           standards required of Non-Qualified Options, as
                           described in Paragraph 6(A) above, except clauses (a)
                           and (f) thereunder.

                  b.       Option Price: Immediately before the Option is
                           granted, if the Participant owns, directly or by
                           reason of the applicable attribution rules in Section
                           424(d) of the Code:

                           i.       Ten percent (10%) or less of the total
                                    combined voting power of all classes of
                                    stock of the Company or an Affiliate, the
                                    Option price per share of the Shares covered
                                    by each Option shall not be less than one
                                    hundred percent (100%) of the Fair Market
                                    Value per share of the Shares on the date of
                                    the grant of the Option.

                           ii.      More than ten percent (10%) of the total
                                    combined voting power of all classes of
                                    stock of the Company or an Affiliate, the
                                    Option price per share of the Shares covered
                                    by each Option shall not be less than one
                                    hundred ten percent (110%) of the Fair
                                    Market Value on the date of grant.

                  c.       Term of Option: For Participants who own

                           i.       Ten percent (10%) or less of the total
                                    combined voting power of all classes of
                                    stock of the Company or an Affiliate, each
                                    Option shall terminate ten (10) years from
                                    the date of the grant or at such earlier
                                    time as the Option Agreement may provide.

                                        9
<PAGE>

                           ii.      More than ten percent (10%) of the total
                                    combined voting power of all classes of
                                    stock of the Company or an Affiliate, each
                                    Option shall terminate five (5) years from
                                    the date of the grant or at such earlier
                                    time as the Option Agreement may provide.

                  d.       Limitation on Yearly Exercise: The Option Agreements
                           shall restrict the amount of Options which may be
                           exercisable in any calendar year (under this or any
                           other ISO plan of the Company or an Affiliate) so
                           that the aggregate Fair Market Value (determined at
                           the time each ISO is granted) of the stock with
                           respect to which ISOs are exercisable for the first
                           time by the Participant in any calendar year does not
                           exceed one hundred thousand dollars ($100,000),
                           provided that this subparagraph (d) shall have no
                           force or effect if its inclusion in the Plan is not
                           necessary for Options issued as ISOs to qualify as
                           ISOs pursuant to Section 422(d) of the Code.

                  e.       Limitation on Grant of ISOs: No ISOs shall be granted
                           after the date provided in Paragraph 23 of this Plan.

                  f.       To the extent that an Option which is intended to be
                           an ISO fails to so qualify, it shall be treated as a
                           Non-Qualified Option.

7.       EXERCISE OF OPTIONS AND ISSUANCE OF SHARES.

         An Option (or any part or installment thereof) shall be exercised in
accordance with procedures established by the Company by giving written notice
to the Company at its principal executive office address, or such other address
as the Company shall determine, together with provision for payment of the full
purchase price in accordance with this Paragraph for the Shares as to which the
Option is being exercised, and upon compliance with any other condition(s) set
forth in the Option Agreement. Such written notice shall be signed by the person
exercising the Option, shall state the number of Shares with respect to which
the Option is being exercised and shall contain any representation required by
the Plan or the Option Agreement. Payment of the purchase price for the Shares
as to which such Option is being exercised shall be made (a) in United States
dollars in cash or by check, or (b) at the discretion of the Administrator,
through delivery of shares of Common Stock having a Fair Market Value equal as
of the date of the exercise to the cash exercise price of the Option, or (c) at
the discretion of the Administrator, by delivery of the grantee's personal
recourse note bearing interest payable not less than annually at no less than
100% of the applicable Federal rate, as defined in Section 1274(d) of the Code,
or (d) at the discretion of the Administrator, in accordance with a cashless
exercise program established with a securities brokerage firm, and approved by
the Administrator, or (e) at the discretion of the Administrator, through such
other method of payment approved by the Administrator, or (f) at the discretion
of the Administrator, by any combination of (a), (b), (c), (d) and (e) above.
Notwithstanding the foregoing, the Administrator shall accept only such payment
on exercise of an ISO as is permitted by Section 422 of the Code.

                                       10
<PAGE>

         The Company shall then reasonably promptly deliver the Shares as to
which such Option was exercised to the Participant (or to the Participant's
Survivors, as the case may be). In determining what constitutes "reasonably
promptly," it is expressly understood that the delivery of the Shares may be
delayed by the Company in order to comply with any law or regulation (including,
without limitation, state securities or "blue sky" laws) which requires the
Company to take any action with respect to the Shares prior to their issuance.
The Shares shall, upon delivery, be evidenced by an appropriate certificate or
certificates for fully paid, non-assessable Shares.

         The Administrator shall have the right to accelerate the date of
exercise of any installment of any Option; provided that the Administrator shall
not accelerate the exercise date of any installment of any Option granted to any
Key Employee as an ISO (and not previously converted into a Non-Qualified Option
pursuant to Paragraph 20) if such acceleration would violate the annual vesting
limitation contained in Section 422(d) of the Code, as described in Paragraph
6(B)(d).

         The Administrator may, in its discretion, amend any term or condition
of an outstanding Option provided (i) such term or condition as amended is
permitted by the Plan, (ii) if any amendment is materially adverse to the
Participant, any such amendment shall be made only with the consent of the
Participant to whom the Option was granted, or in the event of the death of the
Participant, the Participant's Survivors, and (iii) any such amendment of any
ISO shall be made only after the Administrator, after consulting with counsel
for the Company, determines whether such amendment would constitute a
"modification" of any Option which is an ISO (as that term is defined in Section
424(h) of the Code) or would cause any adverse tax consequences for the holder
of such ISO.

8.       RIGHTS AS A STOCKHOLDER.

         No Participant to whom an Option has been granted shall have rights as
a stockholder with respect to any Shares covered by such Option, except after
due exercise of the Option and tender of the full purchase price for the Shares
being purchased pursuant to such exercise (and satisfaction of such other
conditions for the transfer of Shares as may be required pursuant to the Option)
and registration of the Shares in the Company's share register in the name of
the Participant. No Participant to whom a Stock Purchase Right has been granted
shall have rights as a stockholder with respect to any Shares covered by such
Stock Purchase Right, except after tender of the full purchase price for the
Shares being purchased (and satisfaction of such other conditions for the
transfer of Shares as may be required pursuant to the Stock Purchase Right) and
registration of the Shares in the Company's share register in the name of the
purchaser. Once the Stock Purchase Right is exercised, the purchaser shall have
the rights equivalent to those of a stockholder, and shall be a stockholder when
his or her purchase is entered upon the records of the duly authorized transfer
agent of the Company. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the Stock Purchase Right is
exercised, except as provided in Paragraph 17 of this Plan.

                                       11
<PAGE>

9.       ASSIGNABILITY AND TRANSFERABILITY OF OPTIONS AND STOCK PURCHASE RIGHTS.

         By its terms, an Option or Stock Purchase Right granted to a
Participant shall not be transferable by the Participant other than (i) by will
or by the laws of descent and distribution, or (ii) as otherwise determined by
the Administrator and set forth in the applicable Option Agreement or Restricted
Stock Purchase Agreement. The designation of a beneficiary of an Option by a
Participant shall not be deemed a transfer prohibited by this Paragraph. Except
as provided above, an Option or Stock Purchase Right shall be exercisable,
during the Participant's lifetime, only by such Participant (or by his or her
legal representative) and shall not be assigned, pledged or hypothecated in any
way (whether by operation of law or otherwise) and shall not be subject to
execution, attachment or similar process. Any attempted transfer, assignment,
pledge, hypothecation or other disposition of any Option or Stock Purchase Right
or of any rights granted thereunder contrary to the provisions of this Plan, or
the levy of any attachment or similar process upon an Option or Stock Purchase
Right, shall be null and void.

10.      EFFECT OF TERMINATION OF SERVICE OTHER THAN "FOR CAUSE" OR DEATH OR
         DISABILITY.

         Except as otherwise provided in the pertinent Option Agreement, in the
event of a termination of service (whether as an employee, director or
consultant) with the Company or an Affiliate before the Participant has
exercised all Options, the following rules apply:

         a.       A Participant who ceases to be an employee, director or
                  consultant of the Company or of an Affiliate (for any reason
                  other than termination "for cause", Disability, or death for
                  which events there are special rules in Paragraphs 11, 12, and
                  13, respectively), may exercise any Option granted to him or
                  her to the extent that the Option is exercisable on the date
                  of such termination of service, but only within such term as
                  the Administrator has designated in the pertinent Option
                  Agreement. An Option that is not exercisable on the date of
                  termination of service is canceled on such date and may not be
                  exercised. An Option that is exercisable on the date of
                  termination of service, but not exercised within the term as
                  the Administrator has designated in the pertinent Option
                  Agreement is canceled and may not be exercised thereafter.

         b.       Except as provided in Paragraph 12, in no event may an Option
                  Agreement provide, if the Option is intended to be an ISO,
                  that the time for exercise be later than three (3) months
                  after the Participant's termination of employment.

         c.       The provisions of this Paragraph, and not the provisions of
                  Paragraph 12 or 13, shall apply to a Participant who
                  subsequently becomes Disabled or dies after the termination of
                  employment, director status or consultancy, provided, however,
                  in the case of a Participant's Disability or death within
                  three (3) months after the termination of employment, director
                  status or consultancy, the Participant or the

                                       12
<PAGE>

                  Participant's Survivors may exercise the Option within one (1)
                  year after the date of the Participant's termination of
                  employment, but in no event after the date of expiration of
                  the term of the Option.

         d.       Notwithstanding anything herein to the contrary, if subsequent
                  to a Participant's termination of employment, termination of
                  director status or termination of consultancy, but prior to
                  the exercise of an Option, the Board of Directors determines
                  that, either prior or subsequent to the Participant's
                  termination, the Participant engaged in conduct which would
                  constitute "cause" (as defined in Paragraph 11 below), then
                  such Participant shall forthwith cease to have any right to
                  exercise any Option, whether or not such Option was previously
                  exercisable.

         e.       A Participant to whom an Option has been granted under the
                  Plan who is absent from work with the Company or with an
                  Affiliate because of temporary disability (any disability
                  other than a permanent and total Disability as defined in
                  Paragraph 2 hereof), or who is on leave of absence for any
                  purpose, shall not, during the period of any such absence, be
                  deemed, by virtue of such absence alone, to have terminated
                  such Participant's employment, director status or consultancy
                  with the Company or with an Affiliate, except to the extent
                  that the Administrator so determines as Company policy or to
                  the extent that the Option Agreement may otherwise expressly
                  provide.

         f.       Except as required by law or as set forth in the pertinent
                  Option Agreement, Options granted under the Plan shall not be
                  affected by any change of a Participant's status within or
                  among the Company and any Affiliates, so long as the
                  Participant continues to be a Key Employee, director or
                  consultant of the Company or any Affiliate.

11.      EFFECT OF TERMINATION OF SERVICE "FOR CAUSE".

         Except as otherwise provided in the pertinent Option Agreement, the
following rules apply if the Participant's service (whether as an employee,
director or consultant) with the Company or an Affiliate is terminated for
"cause" prior to the time that all his or her outstanding Options have been
exercised:

         a.       All outstanding and unexercised Options as of the time the
                  Participant is notified his or her service is terminated for
                  "cause" will immediately be forfeited.

         b.       For purposes of this Plan, except as otherwise provided in the
                  pertinent Option Agreement or Restricted Stock Purchase
                  Agreement, "cause" shall include (and is not limited to)
                  dishonesty with respect to the Company or any Affiliate,
                  insubordination, substantial malfeasance or non-feasance of
                  duty, unauthorized disclosure of confidential information, and
                  conduct substantially prejudicial to the business of the
                  Company or any Affiliate. The determination of the
                  Administrator

                                       13
<PAGE>

                  as to the existence of "cause" will be conclusive on the
                  Participant and the Company.

         c.       "Cause" is not limited to events which have occurred prior to
                  a Participant's termination of service, nor is it necessary
                  that the Administrator's finding of "cause" occur prior to
                  termination. If the Administrator determines, subsequent to a
                  Participant's termination of service but prior to the exercise
                  of an Option, that either prior or subsequent to the
                  Participant's termination the Participant engaged in conduct
                  which would constitute "cause," then the right to exercise any
                  Option is forfeited.

         d.       Any definition in an agreement between the Participant and the
                  Company or an Affiliate, which contains a conflicting
                  definition of "cause" for termination and which is in effect
                  at the time of such termination, shall supersede the
                  definition in this Plan with respect to such Participant.

12.      EFFECT OF TERMINATION OF SERVICE FOR DISABILITY.

         Except as otherwise provided in the pertinent Option Agreement, a
Participant who terminates his or her employment, directorship or consultancy
with the Company or an Affiliate by reason of Disability may exercise any Option
granted to such Participant:

         a.       To the extent exercisable but not exercised on the date of
                  such cessation; and

         b.       In the event rights to exercise the Option Vest periodically,
                  to the extent of a pro rata portion of any additional rights
                  as would have Vested had the Participant not terminated his or
                  her employment, directorship or consultancy by reason of such
                  Disability, prior to the end of the Vesting period which next
                  ends following the date of such termination. The proration
                  shall be based upon the number of days of such Vesting period
                  prior to the date of such termination.

         Except as otherwise provided in the pertinent Option Agreement, a
Disabled Participant may exercise such rights only within the period ending one
(1) year after the date of the Participant's termination of employment,
directorship or consultancy, as the case may be, notwithstanding that the
Participant might have been able to exercise the Option as to some or all of the
Shares on a later date if the Participant had not become disabled and had
continued to be an employee, director or consultant or, if earlier, within the
originally prescribed term of the Option.

         The Company shall make the determination both of whether Disability has
occurred and the date of its occurrence (unless a procedure for such
determination is set forth in another agreement between the Company and such
Participant, in which case such procedure shall be used for such determination).
If requested, the Participant shall be examined by a physician

                                       14
<PAGE>

selected or approved by the Company, the cost of which examination shall be paid
for by the Company.

                                       15
<PAGE>

13.      EFFECT OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT.

         Except as otherwise provided in the pertinent Option Agreement, in the
event of the death of a Participant while the Participant is an employee,
director or consultant of the Company or of an Affiliate, such Option may be
exercised by the Participant's Survivors:

         a.       To the extent exercisable but not exercised on the date of
                  death; and

         b.       In the event rights to exercise the Option Vest periodically,
                  to the extent of a pro rata portion of any additional rights
                  which would have Vested had the Participant not died prior to
                  the end of the Vesting period which next ends following the
                  date of death. The proration shall be based upon the number of
                  days of such Vesting period prior to the Participant's death.

         Except as otherwise provided in the pertinent Option Agreement, if the
Participant's Survivors wish to exercise the Option, they must take all
necessary steps to exercise the Option within one (1) year after the date of
Participant's termination of employment, directorship or consultancy, as the
case may be, notwithstanding that the decedent might have been able to exercise
the Option as to some or all of the Shares on a later date if he or she had not
died and had continued to be an employee, director or consultant or, if earlier,
within the originally prescribed term of the Option.

14.      STOCK PURCHASE RIGHTS.

         a.       Rights to Purchase. Stock Purchase Rights may be issued either
alone, in addition to, or in tandem with other awards granted under the Plan.
After the Administrator determines that it will offer Stock Purchase Rights
under the Plan, it shall advise the offeree in writing, by means of an
Agreement, of the terms, conditions and restrictions related to the offer,
including the number of Shares that the offeree shall be entitled to purchase,
the price to be paid (which shall not be less than the par value of the Shares),
and the time within which the offeree must accept such offer, which shall in no
event exceed six (6) months from the date upon which the Administrator made the
determination to grant the Stock Purchase Right. The offer shall be accepted by
execution of a Restricted Stock Purchase Agreement in the form determined by the
Administrator.

         b.       Repurchase Option. Unless the Administrator determines
otherwise, the Restricted Stock Purchase Agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's employment with the Company for any reason (including death or
Disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock Purchase Agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company. The repurchase option shall lapse at a rate determined by the
Administrator.

                                       16
<PAGE>

         c.       Other Provisions. The Restricted Stock Purchase Agreement
shall contain such other terms, provisions and conditions not inconsistent with
the Plan as may be determined by the Administrator in its sole discretion. In
addition, the provisions of Restricted Stock Purchase Agreements need not be the
same with respect to each purchaser.

15.      PURCHASE FOR INVESTMENT.

         Unless the offering and sale of the Shares to be issued upon the
particular exercise of an Option or Stock Purchase Right shall have been
effectively registered under the Securities Act of 1933, as now in force or
hereafter amended (the "1933 Act"), the Company shall be under no obligation to
issue the Shares covered by such exercise unless and until the following
conditions have been fulfilled:

         a.       The person(s) who exercise(s) such Option or Stock Purchase
                  Right shall warrant to the Company, prior to the receipt of
                  such Shares, that such person(s) are acquiring such Shares for
                  their own respective accounts, for investment, and not with a
                  view to, or for sale in connection with, the distribution of
                  any such Shares, in which event the person(s) acquiring such
                  Shares shall be bound by the provisions of the following
                  legend which shall be endorsed upon the certificate(s)
                  evidencing their Shares issued pursuant to such exercise of
                  such grant:

                           "The shares represented by this certificate have been
                           taken for investment and they may not be sold or
                           otherwise transferred by any person, including a
                           pledgee, unless (1) either (a) a Registration
                           Statement with respect to such shares shall be
                           effective under the Securities Act of 1933, as
                           amended, or (b) the Company shall have received an
                           opinion of counsel satisfactory to it that an
                           exemption from registration under such Act is then
                           available, and (2) there shall have been compliance
                           with all applicable state securities laws."

         b.       At the discretion of the Administrator, the Company shall have
                  received an opinion of its counsel that the Shares may be
                  issued upon such particular exercise in compliance with the
                  1933 Act without registration thereunder.

         The Company may delay issuance of the Shares until completion of any
action or obtaining of any consent which the Company deems necessary under any
applicable law (including, without limitation, state securities or "blue sky"
laws.)

16.      DISSOLUTION OR LIQUIDATION OF THE COMPANY.

         Upon the dissolution or liquidation of the Company, all Options or
Stock Purchase Rights granted under this Plan which as of such date shall not
have been exercised will terminate and become null and void; provided, however,
that if the rights of a Participant or a Participant's Survivors have not
otherwise terminated and expired, (i) the Participant or the Participant's
Survivors will have the right immediately prior to such dissolution or
liquidation to exercise any

                                       17
<PAGE>

Option or Stock Purchase Right to the extent that the Option or Stock Purchase
Right is exercisable as of the date immediately prior to such dissolution or
liquidation; and (ii) if a Change in Control shall have occurred within the
twelve months immediately prior to the date of such dissolution or liquidation,
such Participant or such Participant's Survivors will have the right immediately
prior to such dissolution or liquidation to exercise any Option or Stock
Purchase Right then outstanding whether or not such Option or Stock Purchase
Right is exercisable as of such date.

17.      ADJUSTMENTS.

         Upon the occurrence of any of the following events, the adjustments as
hereinafter provided shall be made, unless otherwise specifically provided in a
pertinent Option Agreement or Restricted Stock Purchase Agreement:

         A.       Stock Dividends and Stock Splits. If (i) the shares of Common
Stock shall be subdivided or combined into a greater or smaller number of shares
or if the Company shall issue any shares of Common Stock as a stock dividend on
its outstanding Common Stock, or (ii) additional shares or new or different
shares or other securities of the Company or other non-cash assets are
distributed with respect to such shares of Common Stock, the number of shares of
Common Stock deliverable upon the exercise of an Option or Stock Purchase Right
may be appropriately increased or decreased proportionately, and appropriate
adjustments may be made in the purchase price per share to reflect such
subdivision, combination or stock dividend. The number of Shares subject to
options to be granted (i) pursuant to Paragraph 3 or to directors pursuant to
Paragraph 6(A)(f) shall also be proportionately adjusted upon the occurrence of
such events, except as the Administrator shall otherwise determine in its sole
discretion or (ii) pursuant to Paragraph 4(c) shall also be proportionately
adjusted upon the occurrence of such events.

         B.       Corporate Changes in Control. In the event of a Corporate
Change in Control,

         (i)      Each Option or Stock Purchase Right outstanding as of the date
such Corporate Change in Control is determined to have occurred, and which is
not then exercisable by reason of Vesting requirements, shall automatically
accelerate the Vesting so that the Option or Stock Purchase Right shall become
fully exercisable and Vested on the first to occur of (x) the date the Option or
Stock Purchase Right becomes Vested and exercisable under its original terms
(with respect only to such Options or Stock Purchase Rights as otherwise would
Vest during such one-year period under their terms), (y) the first anniversary
of the date such Corporate Change in Control is determined to have occurred, and
(z) the occurrence of an Involuntary Employment Action; and

         (ii)     The Options or Stock Purchase Rights so accelerated shall
remain so exercisable until the earlier of the original expiration date of the
Option or Stock Purchase Right and the earlier termination of the Option or
Stock Purchase Right in accordance with the Plan and the Agreement.

                                       18
<PAGE>

         C.       Transactional Changes in Control. In the event of a
Transactional Change in Control,

         (i)      Each Option or Stock Purchase Right outstanding as of the date
such Transactional Change in Control is determined to have occurred shall be:
(a) assumed by the successor corporation (or its parent) or replaced with a
comparable option or stock purchase right to purchase shares of the capital
stock of the successor corporation (or its parent) on an equitable basis, (b)
terminated upon written notice to the Participants stating that all Options or
Stock Purchase Rights (for purposes of this Subparagraph all Options or Stock
Purchase Rights then outstanding shall be deemed to be exercisable) must be
exercised within a specified number of days (which shall not be less than 15
days) from the date such notice is given, at the end of which period the Options
or Stock Purchase Rights shall terminate, or (c) terminated in exchange for a
cash payment equal to the excess of the Fair Market Value of the shares subject
to such Options or Stock Purchase Rights (for purposes of this Subparagraph all
Options then outstanding shall be deemed to be exercisable) over the exercise
price thereof; provided, however, that if any of the treatments of Options or
Stock Purchase Rights pursuant to this Plan set forth in clauses (a), (b) or (c)
above would make a Transactional Change in Control transaction ineligible for
pooling-of-interest accounting under APB No. 16 such that but for the nature of
such treatment such transaction would otherwise be eligible for such accounting
treatment, the Committee (or the Administrator if no Committee has been
appointed) shall have the ability to substitute for any cash or other
consideration payable under such treatment shares of Common Stock with a Fair
Market Value or other consideration with value equal to the cash or other
consideration that would otherwise be payable pursuant to such treatment. The
determination of which of the treatments set forth in clauses (a), (b) and (c)
above to provide and of comparability under clause (a) above shall be made by
the Administrator and its determinations shall be final, binding and conclusive.

         (ii)     Each Option or Stock Purchase Right that is assumed or
replaced in connection with a Transactional Change in Control shall
automatically accelerate so that the Option or Stock Purchase Right shall become
fully exercisable and Vested on the first to occur of (x) the date the Option
becomes Vested and exercisable under its original terms (with respect only to
such Options or Stock Purchase Rights as otherwise would Vest during such
one-year period under their terms), (y) the first anniversary of the date such
Transactional Change in Control is determined to have occurred, and (z) the
occurrence of an Involuntary Employment Action. The Options or Stock Purchase
Rights so accelerated shall remain so exercisable until the earlier of the
original expiration date of the Option and the earlier termination of the Option
in accordance with the Plan and the Agreement.

         D.       Corporate Transaction. In the event of a Corporate Transaction
that does not constitute a Transactional Change in Control or in the event of a
similar event, pursuant to which securities of the Company or of another
corporation or entity are issued with respect to the outstanding shares of
Common Stock, a Participant upon exercising an Option or Stock Purchase Right
shall be entitled to receive for the purchase price paid upon such exercise the
securities which would have been received if such Option or Stock Purchase Right
had been exercised prior to such Corporate Transaction.

                                       19
<PAGE>

         E.       Modification of ISOs. Notwithstanding the foregoing, any
adjustments made pursuant to Subparagraph A, B, C, or D with respect to ISOs
shall be made only after the Administrator, after consulting with counsel for
the Company, determines whether such adjustments would constitute a
"modification" of such ISOs (as that term is defined in Section 424(h) of the
Code) or would cause any adverse tax consequences for the holders of such ISOs.
If the Administrator determines that such adjustments made with respect to ISOs
would constitute a "modification" of such ISOs, it may refrain from making such
adjustments, unless the holder of an ISO specifically requests in writing that
such adjustment be made and such writing indicates that the holder has full
knowledge of the consequences of such "modification" on his or her income tax
treatment with respect to the ISO.

18.      ISSUANCES OF SECURITIES.

         Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares subject to Options or Stock Purchase
Rights. Except as expressly provided herein, no adjustments shall be made for
dividends paid in cash or in property (including without limitation, securities)
of the Company. The Option Agreement may contain terms, conditions and
procedures permitting Participants to elect to defer the receipt of Shares upon
the exercise of Non-Qualified Options for a specific period or until a specified
event.

19.      FRACTIONAL SHARES.

         No fractional shares shall be issued under the Plan and the person
exercising such right shall receive from the Company cash in lieu of such
fractional shares equal to the Fair Market Value thereof.

20.      CONVERSION OF ISOs INTO NON-QUALIFIED OPTIONS; TERMINATION OF ISOs.

         The Administrator, at the written request of any Participant, may in
its discretion take such actions as may be necessary to convert such
Participant's ISOs (or any portions thereof) that have not been exercised on the
date of conversion into Non-Qualified Options at any time prior to the
expiration of such ISOs, regardless of whether the Participant is an employee of
the Company or an Affiliate at the time of such conversion. Such actions may
include, but not be limited to, extending the exercise period or reducing the
exercise price of the appropriate installments of such Options. At the time of
such conversion, the Administrator (with the consent of the Participant) may
impose such conditions on the exercise of the resulting Non-Qualified Options as
the Administrator in its discretion may determine, provided that such conditions
shall not be inconsistent with this Plan. Nothing in the Plan shall be deemed to
give any Participant the right to have such Participant's ISOs converted into
Non-Qualified Options,

                                       20
<PAGE>

and no such conversion shall occur until and unless the Administrator takes
appropriate action. The Administrator, with the consent of the Participant, may
also terminate any portion of any ISO that has not been exercised at the time of
such conversion.

21.      WITHHOLDING.

         In the event that any federal, state, or local income taxes, employment
taxes, Federal Insurance Contributions Act ("F.I.C.A.") withholdings or other
amounts are required by applicable law or regulation to be withheld from the
Participant's salary, wages or other remuneration in connection with the
exercise of an Option or a Disqualifying Disposition (as defined in Paragraph
22) or the Vesting of Shares issued pursuant to Stock Purchase Rights, the
Company may deduct from any amounts due to the Participant, such as compensation
or reimbursements, or may require that the Participant advance in cash to the
Company, or to any Affiliate of the Company which employs or employed the
Participant, the amount of such withholdings unless a different withholding
arrangement, including the use of shares of the Company's Common Stock or a
promissory note, is authorized by the Administrator (and permitted by law),
provided, however, that with respect to persons subject to Section 16 of the
1934 Act, any such withholding arrangement shall be in compliance with any
applicable provisions of Rule 16b-3 promulgated under Section 16 of the 1934
Act. For purposes hereof, the fair market value of the shares withheld for
purposes of payroll withholding shall be determined in the manner provided in
Paragraph 2 above, as of the most recent practicable date prior to the date of
exercise. If the fair market value of the shares withheld is less than the
amount of payroll withholdings required, the Participant may be required to
advance the difference in cash to the Company or the Affiliate employer. The
Administrator in its discretion may condition the exercise of an Option for less
than the then Fair Market Value on the Participant's payment of such additional
withholding.

22.      NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION.

         Each Key Employee who receives an ISO must agree to notify the Company
in writing immediately after the Key Employee makes a Disqualifying Disposition
of any shares acquired pursuant to the exercise of an ISO. A Disqualifying
Disposition is any disposition (including any sale) of such shares before the
later of (a) two years after the date the Key Employee was granted the ISO, or
(b) one year after the date the Key Employee acquired Shares by exercising the
ISO. If the Key Employee has died before such stock is sold, these holding
period requirements do not apply and no Disqualifying Disposition can occur
thereafter.

23.      TERMINATION OF THE PLAN.

         Unless sooner terminated by the Board of Directors, the Plan shall
terminate on October 28, 2009, and no Options or Stock Purchase Rights shall
thereafter be granted under the Plan. All Options or Stock Purchase Rights
granted under the Plan prior to that date shall remain in

                                       21
<PAGE>

effect until such Options or Stock Purchase Rights shall have been exercised or
terminated in accordance with the terms and provisions of the Plan and the
applicable Option Agreements or Restricted Stock Purchase Agreements. The Board
of Directors may terminate the Plan at any time; provided, however, that any
such termination will not materially impair any rights under any Option or Stock
Purchase Right theretofore made under the Plan without the consent of the
Participant.

24.      AMENDMENT OF THE PLAN AND AGREEMENTS.

         The Plan may be amended by the stockholders of the Company. The Plan
may also be amended by the Board of Directors or the Administrator, including,
without limitation, to the extent necessary to qualify any or all outstanding
Options granted under the Plan or Options to be granted under the Plan for
favorable federal income tax treatment (including deferral of taxation upon
exercise) as may be afforded incentive stock options under Section 422 of the
Code, for as long as the Company has a class of stock registered pursuant to
Section 12 of the 1934 Act and to the extent necessary to qualify the shares
issuable upon exercise of any outstanding Options granted, or Options to be
granted, under the Plan for listing on any national securities exchange or
quotation in any national automated quotation system of securities dealers. Any
amendment approved by the Administrator which the Administrator determines is of
a scope that requires stockholder approval shall be subject to obtaining such
stockholder approval. Any modification or amendment of the Plan shall not,
without the consent of a Participant, materially adversely affect his or her
rights under an Option or Stock Purchase Right previously granted to him or her.
With the consent of the Participant affected, the Administrator may amend
outstanding Option Agreements or Restricted Stock Purchase Agreements in a
manner which may be materially adverse to the Participant but which is not
inconsistent with the Plan. In the discretion of the Administrator, outstanding
Option Agreements or Restricted Stock Purchase Agreements may be amended by the
Administrator in a manner which is not materially adverse to the Participant.

25.      EMPLOYMENT OR OTHER RELATIONSHIP.

         Nothing in this Plan or any Option Agreement or Restricted Stock
Purchase Agreement shall be deemed to prevent the Company or an Affiliate from
terminating the employment, consultancy or director status of a Participant, nor
to prevent a Participant from terminating his or her own employment, consultancy
or director status or to give any Participant a right to be retained in
employment or other service by the Company or any Affiliate for any period of
time.

         All Options and Stock Purchase Rights shall constitute a special
incentive payment to the Participant and shall not be taken into account in
computing the amount of salary or compensation of the Participant for the
purpose of determining any benefits under any pension, retirement,
profit-sharing, bonus, life insurance or other benefit plan of the Company or
under any agreement between the Company and the Participant, unless such plan or
agreement specifically provides otherwise.

                                       22
<PAGE>

26.      GOVERNING LAW.

         With respect to Options and Stock Purchase Rights granted prior to
January 18, 2001, this Plan shall be governed by and construed in accordance
with the laws of the State of Delaware, the Company's state of incorporation
and, except as otherwise provided in the pertinent Option Agreement or
Restricted Stock Purchase Agreement, the United States District Court for the
Eastern District of Virginia shall have exclusive jurisdiction over any and all
disputes between a Participant and the Company related to or arising out of
Options or Restricted Stock Purchase Rights granted under this Plan. With
respect to Option and Stock Purchase Rights granted on or after January 18,
2001, this Plan shall be governed by and construed in accordance with the laws
of the State of New York and, except as otherwise provided in the pertinent
Option Agreement or Restricted Stock Purchase Agreement, any and all disputes
between a Participant and the Company related to or arising out of Options or
Stock Purchase rights granted under this Plan shall be brought only in a state
or federal court of competent jurisdiction sitting in Manhattan, New York.

                                       23

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