Document:

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                                                                EXHIBIT 4(a)(ii)

                                                                [CONFORMED COPY]

                           J. C. PENNEY COMPANY, INC.

                                       AND

                              THE BANK OF NEW YORK,

                                            Trustee

                           --------------------------

                      5% Convertible Subordinated Notes Due

                                October 15, 2008

                          FIRST SUPPLEMENTAL INDENTURE

                          Dated as of January 27, 2002

                                       TO

                                    INDENTURE

                          Dated as of October 15, 2001

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                          FIRST SUPPLEMENTAL INDENTURE
                          ----------------------------

     First Supplemental Indenture dated as of January 27, 2002, among J. C.
Penney Company, Inc., a Delaware corporation (hereinafter called "Co-Obligor"),
J. C. Penney Corporation, Inc., a wholly-owned subsidiary of the Co-Obligor
(formerly known as J. C. Penney Company, Inc. and hereinafter called the
"Company") and The Bank of New York, a banking corporation organized and
existing under the laws of the State of New York, Trustee (hereinafter called
the "Trustee").

                             RECITALS OF THE COMPANY

     The Company and the Trustee have heretofore executed an Indenture dated as
of October 15, 2001 (hereinafter called the "Original Indenture"), providing for
the issuance of Securities of the Company in accordance with its terms.

     JCP Merger Sub, Inc., a wholly-owned subsidiary of the Co-Obligor has been
merged with and into the Company (the "Merger") and, as a result of the Merger,
the Company has become a wholly-owned subsidiary of Co-Obligor.

     Co-Obligor has agreed to become a co-obligor with respect to the Securities
issued under the Original Indenture.

     Section 11.01 of the Original Indenture provides, among other things, that
the Company and the Trustee may enter into indentures supplemental to the
Original Indenture for, among other things, making any provisions with respect
to matters arising under the Original Indenture which shall not be inconsistent
with the provisions of the Original Indenture, provided that such action shall
not adversely affect the interest of any of the Holders of the Securities.

     This First Supplemental Indenture does not make any change that adversely
affects the rights under Article 5 of the Original Indenture of any holder of an
issue of Senior Indebtedness. Further, this First Supplemental Indenture does
not adversely affect the interest under the Original Indenture of any of the
Holders of the Securities.

     All things necessary to make this Supplemental Indenture a valid agreement
of the Company, in accordance with the terms of the Original Indenture, have
been done.

          NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:

     That in order to make provision for the Co-Obligor to become a co-obligor
with the Company on the Securities issued under the Original Indenture,
Co-Obligor and the Company, in consideration of the Trustee entering into this
First Supplemental Indenture, covenant and agree with the Trustee as follows:

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     Section 1.  Co-Obligor Status.
     ---------   -----------------

     Co-Obligor hereby expressly agrees to become a co-obligor of the Securities
liable for the due and punctual payment of the principal of (and premium, if
any) and interest, if any (including Additional Interest, if any), on all the
Securities.

     Section 2.  Joint and Several Liability.
     ---------   ---------------------------

     Co-Obligor and the Company, as co-obligors, shall be jointly and severally
liable for the due and punctual payment of the principal of (and premium, if
any) and interest, if any, on all Securities.

     Section 3.  Subordination; New Article and Definition.
     ---------   -----------------------------------------

     The Original Indenture is hereby further amended by adding thereto a new
Article Five -A, entitled "SUBORDINATION OF CO-OBLIGOR OBLIGATIONS" which shall
be the same as Article Five of the Original Indenture in every respect except
that every reference in Article Five to "the Company," shall be changed in
Article Five-A to "the Co-Obligor," and every reference in Article Five to
"Senior Indebtedness" and Officers' Certificate" shall mean in Article Five-A,
respectively, "Co-Obligor Senior Indebtedness," as defined below, and an
Officers' Certificate of officers of the Co-Obligor. In connection with the
addition of Article Five-A, there is hereby added a new definition to Section
1.01 of the Original Indenture entitled "Co-Obligor Senior Indebtedness," which
definition shall be the same as the definition of "Senior Indebtedness" in
Section 1.01 except that the words "the Company" in the definition of "Senior
Indebtedness" shall be changed to the words "the Co-Obligor" in the definition
of "Co-Obligor Senior Indebtedness." Article Five of the Original Indenture
shall not be changed hereby in any respect.

     Section 4.  Amendment of Conversion Privilege; SEC Reports.
     ---------   ----------------------------------------------

     Pursuant to Section 4.12 of the Original Indenture, Article Four and the
definition of "Common Stock" in Section 1.01 of the Original Indenture are
hereby amended to provide that from and after the date of this Supplemental
Indenture, on the terms and subject to the conditions set forth in the Original
Indenture, as hereby amended, a Holder of a Security shall have the right to
convert a Security pursuant to Article Four of the Original Indenture only into
the common stock, par value 50(cent) per share, of the Co-Obligor, and all
references in Article Four of the Original Indenture to "the Company," the
"Board of Directors" and the "Officers' Certificate" shall mean, respectively,
the Co-Obligor, the board of directors of the Co-Obligor and an officers'
certificate of officers of the Co-Obligor. All the other provisions of Article
Four shall remain in effect without change. In connection with the amendment to
Article Four in this Section 4, Section 6.08 of the Original Indenture relating
to the delivery of SEC reports, other information and documents is hereby
amended by substituting the words "the Co-Obligor" for the word "it" wherever
used in the first paragraph of Section 6.08.

                                       2

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     Section 5.  No Release of Company.
     ---------   ---------------------

     Notwithstanding the agreement of the Co-Obligor to become liable for the
due and punctual payment of the principal of (and premium, if any) and interest,
if any (including Additional Interest, if any), on all the Securities issued
under and subject to the Indenture, the Company remains fully liable for all of
its obligations under the Indenture and has not been released from any
liabilities or obligations thereunder except for the issuance of its common
stock upon conversion of the Securities pursuant to Article Four of the
Indenture.

     Section 6.  General.
     ---------   -------

     This Supplemental Indenture is executed and shall be construed as an
indenture supplemental to the Original Indenture, and, as provided in the
Original Indenture, this Supplemental Indenture forms a part thereof.

     All terms used in this Supplemental Indenture which are defined in the
Original Indenture shall have the meanings assigned to them in the Original
Indenture except as otherwise provided in this Supplemental Indenture.

     The recitals contained herein shall be taken as the statements of the
Company, and the Trustee assumes no responsibility for their correctness. The
Trustee makes no representations as to the validity or sufficiency of this
Supplemental Indenture.

     All covenants and agreements in this Supplemental Indenture by Co-Obligor
shall bind its successors and assigns, whether so expressed or not.

     This Supplemental Indenture shall be construed in accordance with and
governed by the internal laws (and not the law of conflicts) of the State of New
York applicable to agreements made or instruments entered into and, in each
case, performed in said State.

     This Supplemental Indenture may be executed in any number of counterparts,
each of which shall be an original; but such counterparts shall together
constitute but one and the same instrument.

                                       3

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     IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.

                                       J. C. Penney Company, Inc.,
                                       as Co-Obligor

                                       By:  /s/ Robert B. Cavanaugh
                                          --------------------------------------

Attest:  /s/  C. R. Lotter
       --------------------------
         Secretary

                                       J. C. Penney Corporation, Inc.,
                                       as the Company

                                       By:  /s/  Robert B. Cavanaugh
                                          --------------------------------------
Attest:  /s/  Jeffrey J. Vawrinek
       --------------------------
         Assistant Secretary

                                       The Bank of New York,
                                       Trustee

                                       By:  /s/ Beata Hryniewicka
                                          --------------------------------------
                                            Assistant Treasurer

                                       4<PAGE>
                                                                    EXHIBIT 10.2

                              AMENDED AND RESTATED

                             NOVATEL WIRELESS, INC.
                            2000 STOCK INCENTIVE PLAN
                        EFFECTIVE AS OF JANUARY 30, 2002

SECTION 1. INTRODUCTION.

        The Company's Board of Directors adopted the Novatel Wireless, Inc. 2000
        Stock Incentive Plan on July 24, 2000 (the "Adoption Date"), and the
        Company's stockholders approved the Plan on September 13, 2000. The Plan
        is effective on the date of our initial public offering.

        The purpose of the Plan is to promote the long-term success of the
        Company and the creation of shareholder value by offering Key Employees
        an opportunity to acquire a proprietary interest in the success of the
        Company, or to increase such interest, and to encourage such selected
        persons to continue to provide services to the Company and to attract
        new individuals with outstanding qualifications.

        The Plan seeks to achieve this purpose by providing for Awards in the
        form of Restricted Stock, Stock Units, Stock Appreciation Rights and
        Options (which may be Incentive Stock Options or Nonstatutory Stock
        Options).

        The Plan shall be governed by, and construed in accordance with, the
        laws of the State of Delaware (except its choice-of-law provisions).
        Capitalized terms shall have the meaning provided in Section 2 unless
        otherwise provided in this Plan or the applicable Stock Option
        Agreement, SAR Agreement, Stock Unit Agreement or Restricted Stock
        Agreement.

SECTION 2. DEFINITIONS.

        (a) "AFFILIATE" means any entity other than a Subsidiary, if the Company
        and/or one or more Subsidiaries own not less than 50% of such entity.
        For purposes of determining an individual's "Service," this definition
        shall include any entity other than a Subsidiary, if the Company, a
        Parent and/or one or more Subsidiaries own not less than 50% of such
        entity.

        (b) "AWARD" means any award of an Option, SAR, Stock Unit or Restricted
        Stock under the Plan.

        (c) "BOARD" means the Board of Directors of the Company, as constituted
        from time to time.

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        (d) "CHANGE IN CONTROL" except as may otherwise be provided in a Stock
        Option Agreement, SAR Agreement, Stock Unit Agreement or Restricted
        Stock Agreement, means the occurrence of any of the following:

                      (i) The consummation of a merger or consolidation of the
               Company with or into another entity or any other corporate
               reorganization, if more than 50% of the combined voting power of
               the continuing or surviving entity's securities outstanding
               immediately after such merger, consolidation or other
               reorganization is owned by persons who were not stockholders of
               the Company immediately prior to such merger, consolidation or
               other reorganization;

                      (ii) The sale, transfer or other disposition of all or
               substantially all of the Company's assets;

                      (iii) A change in the composition of the Board, as a
               result of which fewer that one-half of the incumbent directors
               are directors who either (i) had been directors of the Company on
               the date 24 months prior to the date of the event that may
               constitute a Change in Control (the "original directors") or (ii)
               were elected, or nominated for election, to the Board with the
               affirmative votes of at least a majority of the aggregate of the
               original directors who were still in office at the time of the
               election or nomination and the directors whose election or
               nomination was previously so approved;

                      (iv) Any transaction as a result of which any person
               becomes the "beneficial owner" (as defined in Rule 13d-3 under
               the Exchange Act), directly or indirectly, of securities of the
               Company representing at least 20% of the total voting power
               represented by the Company's then outstanding voting securities.
               For purposes of this Paragraph (iii), the term "person" shall
               have the same meaning as when used in sections 13(d) and 14(d) of
               the Exchange Act but shall exclude:

                             (A) A trustee or other fiduciary holding securities
                      under an employee benefit plan of the Company or a
                      subsidiary of the Company;

                             (B) A corporation owned directly or indirectly by
                      the stockholders of the Company in substantially the same
                      proportions as their ownership of the common stock of the
                      Company; and

                             (C) The Company; or

                      (v) A complete liquidation or dissolution of the Company.

        (e) "CODE" means the Internal Revenue Code of 1986, as amended.

        (f) "COMMITTEE" means a committee consisting of one or more members of
        the Board that is appointed by the Board (as described in Section 3) to
        administer the Plan.

        (g)  "COMMON STOCK" means the Company's common stock.

                                        2
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        (h) "COMPANY" means Novatel Wireless, Inc., a Delaware corporation.

        (i) "CONSULTANT" means an individual who performs bona fide services to
        the Company, a Parent, a Subsidiary or an Affiliate other than as an
        Employee or Director or Non-Employee Director.

        (j)  "DIRECTOR" means a member of the Board who is also an Employee.

        (k) "DISABILITY" means that the Key Employee is unable to engage in any
        substantial gainful activity by reason of any medically determinable
        physical or mental impairment which can be expected to result in death
        or which has lasted or can be expected to last for a continuous period
        of not less than 12 months.

        (l) "EMPLOYEE" means any individual who is a common-law employee of the
        Company, a Parent, a Subsidiary or an Affiliate.

        (m) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
        amended.

        (n) "EXERCISE PRICE" means, in the case of an Option, the amount for
        which a Share may be purchased upon exercise of such Option, as
        specified in the applicable Stock Option Agreement. "Exercise Price," in
        the case of a SAR, means an amount, as specified in the applicable SAR
        Agreement, which is subtracted from the Fair Market Value of a Share in
        determining the amount payable upon exercise of such SAR.

        (o) "FAIR MARKET VALUE" means the market price of Shares, determined by
        the Committee as follows:

               (i) If the Shares were traded on a stock exchange on the date in
        question, then the Fair Market Value shall be equal to the last trading
        price reported by the applicable composite transactions report for such
        date;

               (ii) If the Shares were traded over-the-counter on the date in
        question and were classified as a national market issue, then the Fair
        Market Value shall be equal to the last trading price quoted by the
        NASDAQ system for such date;

               (iii) If the Shares were traded over-the-counter on the date in
        question but were not classified as a national market issue, then the
        Fair Market Value shall be equal to the mean between the last reported
        representative bid and asked prices quoted by the NASDAQ system for such
        date; and

               (iv) If none of the foregoing provisions is applicable, then the
        Fair Market Value shall be determined by the Committee in good faith on
        such basis as it deems appropriate.

        Whenever possible, the determination of Fair Market Value by the
        Committee shall be based on the prices reported in the Wall Street
        Journal. Such determination shall be conclusive and binding on all
        persons.

                                       3
<PAGE>

        (p) "GRANT" means any grant of an Award under the Plan.

        (q) "INCENTIVE STOCK OPTION" or "ISO" means an incentive stock option
        described in Code section 422(b).

        (r) "KEY EMPLOYEE" means an Employee, Director, Non-Employee Director or
        Consultant who has been selected by the Committee to receive an Award
        under the Plan.

        (s) "NON-EMPLOYEE DIRECTOR" means a member of the Board who is not an
        Employee.

        (t) "NONSTATUTORY STOCK OPTION" or "NSO" means a stock option that is
        not an ISO.

        (u) "OPTION" means an ISO or NSO granted under the Plan entitling the
        Optionee to purchase Shares.

        (v) "OPTIONEE" means an individual, estate or other entity that holds an
        Option.

        (w) "PARENT" means any corporation (other than the Company) in an
        unbroken chain of corporations ending with the Company, if each of the
        corporations other than the Company owns stock possessing fifty percent
        (50%) or more of the total combined voting power of all classes of stock
        in one of the other corporations in such chain. A corporation that
        attains the status of a Parent on a date after the adoption of the Plan
        shall be considered a Parent commencing as of such date.

        (x) "PARTICIPANT" means an individual or estate or other entity that
        holds an Award.

        (y) "PLAN" means this Novatel Wireless, Inc. 2000 Stock Incentive Plan
        as it may be amended from time to time.

        (z) "RESTRICTED STOCK" means a Share awarded under the Plan.

        (aa) "RESTRICTED STOCK AGREEMENT" means the agreement described in
        Section 8 evidencing each Award of Restricted Stock.

        (bb) "SAR AGREEMENT" means the agreement described in Section 9
        evidencing each Award of a Stock Appreciation Right.

        (cc) "SECURITIES ACT" means the Securities Act of 1933, as amended.

        (dd) "SERVICE" means service as an Employee, Director, Non-Employee
        Director or Consultant.

        (ee) "SHARE" means one share of Common Stock.

        (ff) "STOCK APPRECIATION RIGHT" OR "SAR" means a stock appreciation
        right awarded under the Plan.

        (gg) "STOCK OPTION AGREEMENT" means the agreement described in Section 6
        evidencing each Grant of an Option.

                                       4
<PAGE>

        (hh) "STOCK UNIT" means a bookkeeping entry representing the equivalent
        of a Share, as awarded under the Plan.

        (ii) "STOCK UNIT AGREEMENT" means the agreement described in Section 8
        evidencing each Award of Stock Units.

        (jj) "SUBSIDIARY" means any corporation (other than the Company) in an
        unbroken chain of corporations beginning with the Company, if each of
        the corporations other than the last corporation in the unbroken chain
        owns stock possessing fifty percent (50%) or more of the total combined
        voting power of all classes of stock in one of the other corporations in
        such chain. A corporation that attains the status of a Subsidiary on a
        date after the adoption of the Plan shall be considered a Subsidiary
        commencing as of such date.

        (kk) "10-PERCENT SHAREHOLDER" means an individual who owns more than ten
        percent (10%) of the total combined voting power of all classes of
        outstanding stock of the Company, its Parent or any of its subsidiaries.
        In determining stock ownership, the attribution rules of section 424(d)
        of the Code shall be applied.

SECTION 3. ADMINISTRATION.

        (a) COMMITTEE COMPOSITION. A Committee appointed by the Board shall
        administer the Plan. The Board shall designate one of the members of the
        Committee as chairperson. If no Committee has been approved, the entire
        Board shall constitute the Committee. Members of the Committee shall
        serve for such period of time as the Board may determine and shall be
        subject to removal by the Board at any time. The Board may also at any
        time terminate the functions of the Committee and reassume all powers
        and authority previously delegated to the Committee.

        With respect to officers or directors subject to Section 16 of the
        Exchange Act, the Committee shall consist of those individuals who shall
        satisfy the requirements of Rule 16b-3 (or its successor) under the
        Exchange Act with respect to Awards granted to persons who are officers
        or directors of the Company under Section 16 of the Exchange Act.
        Notwithstanding the previous sentence, failure of the Committee to
        satisfy the requirements of Rule 16b-3 shall not invalidate any Awards
        granted by such Committee.

        The Board may also appoint one or more separate committees of the Board,
        each composed of one or more directors of the Company who need not
        qualify under Rule 16b-3, who may administer the Plan with respect to
        Key Employees who are not considered officers or directors of the
        Company under Section 16 of the Exchange Act, may grant Awards under the
        Plan to such Key Employees and may determine all terms of such Awards.

        Notwithstanding the foregoing, the Board shall constitute the Committee
        and shall administer the Plan with respect to all Awards granted to
        Non-Employee Directors.

                                       5
<PAGE>
        (b) AUTHORITY OF THE COMMITTEE. Subject to the provisions of the Plan,
        the Committee shall have full authority and discretion to take any
        actions it deems necessary or advisable for the administration of the
        Plan. Such actions shall include:

                (i) selecting Key Employees who are to receive Awards under the
                Plan;

                (ii) determining the type, number, vesting requirements and
                other features and conditions of such Awards;

                (iii) interpreting the Plan; and

                (iv) making all other decisions relating to the operation of the
                Plan.

        The Committee may adopt such rules or guidelines, as it deems
        appropriate to implement the Plan. The Committee's determinations under
        the Plan shall be final and binding on all persons.

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

SECTION 4. ELIGIBILITY.

        (a) GENERAL RULES. Only Employees, Directors, Non-Employee Directors and
        Consultants shall be eligible for designation as Key Employees by the
        Committee.

        (b) INCENTIVE STOCK OPTIONS. Only Key Employees who are common-law
        employees of the Company, a Parent or a Subsidiary shall be eligible for
        the grant of ISOs. In addition, a Key Employee who is a 10-Percent
        Shareholder shall not be eligible for the grant of an ISO unless the
        requirements set forth in section 422(c)(5) of the Code are satisfied.

        (c) NON-EMPLOYEE DIRECTOR OPTIONS. Non-Employee Directors shall also be
        eligible to receive Options as described in this Section 4(c) from and
        after the date the Board has determined to implement this provision.

                                       6
<PAGE>
               (i) Each eligible Non-Employee Director shall be granted an NSO
        to purchase 100,000 Shares (subject to adjustment under Section 9) as a
        result of his or her election or appointment as a Non-Employee Director.
        No additional option grants shall be issued to Non-Employee Directors
        following the initial grant of options to purchase 100,000 Shares. All
        NSOs granted pursuant to this Section 4 shall vest and become
        exercisable provided the individual is serving as a director of the
        Company as of the vesting date as follows: 25% one year from the date of
        grant, then in 36 equal monthly installments commencing on the date one
        month and one year after the date of grant.

               (ii) All NSOs granted to Non-Employee Directors under this
        Section 4(c) shall become exercisable in full in the event of Change in
        Control with respect to the Company.

               (iii) The Exercise Price under all NSOs granted to a Non-Employee
        Director under this Section 4(c) shall be equal to one hundred percent
        (100%) of the Fair Market Value of a Share of Common Stock on the date
        of grant, payable in one of the forms described in Section 7.

               (iv) All NSOs granted to a Non-Employee Director under this
        Section 4(c) shall terminate on the earlier of:

                      (1) The 10th anniversary of the date of grant; or

                      (2) The date ninety (90) days after the termination of
               such Non-Employee Director's service for any reason.

SECTION 5. SHARES SUBJECT TO PLAN.

        (a) BASIC LIMITATION. The stock issuable under the Plan shall be
        authorized but unissued Shares or treasury Shares. The aggregate number
        of Shares reserved for Awards under the Plan shall not exceed
        16,500,000.

        (b) ANNUAL ADDITION. Beginning with the first fiscal year of the Company
        beginning after the Effective Date, on the first day of each fiscal
        year, Shares will be added to the Plan equal to the lesser of (i)
        1,500,000 Shares, (ii) three percent (3%) of the outstanding shares in
        the last day of the prior fiscal year, or (iii) such lesser number of
        Shares as may be determined by the Board in its sole discretion.

        (c) ADDITIONAL SHARES. If Awards are forfeited or terminate for any
        other reason before being exercised, then the Shares underlying such
        Awards shall again become available for Awards under the Plan. If SARs
        are exercised, then only the number of Shares (if any) actually issued
        in settlement of such SARs shall reduce the number available under
        Section 5(a) and the balance shall again become available for Awards
        under the Plan.

                                       7
<PAGE>
        (d) DIVIDEND EQUIVALENTS. Any dividend equivalents distributed under the
        Plan shall not be applied against the number of Shares available for
        Awards whether or not such dividend equivalents are converted into Stock
        Units.

        (e) LIMITS ON OPTIONS AND SARS. No Key Employee shall receive Options to
        purchase Shares and/or SARs during any fiscal year covering in excess of
        1,000,000 Shares, or 2,000,000 Shares in the first fiscal year of a Key
        Employee's employment with Company.

        (f) LIMITS ON RESTRICTED STOCK AND STOCK UNITS. No Key Employee shall
        receive Award(s) of Restricted Stock and/or Stock Units during any
        fiscal year covering in excess of 500,000 Shares, or 1,000,000 Shares in
        the first fiscal year of a Key Employee's employment with Company.

SECTION 6. TERMS AND CONDITIONS OF OPTIONS.

        (a) STOCK OPTION AGREEMENT. Each Grant under the Plan shall be evidenced
        by a Stock Option Agreement between the Optionee and the Company. Such
        Option shall be subject to all applicable terms and conditions of the
        Plan and may be subject to any other terms and conditions that are not
        inconsistent with the Plan and that the Committee deems appropriate for
        inclusion in a Stock Option Agreement. The provisions of the various
        Stock Option Agreements entered into under the Plan need not be
        identical. A Stock Option Agreement may provide that new Options will be
        granted automatically to the Optionee when he or she exercises the prior
        Options. The Stock Option Agreement shall also specify whether the
        Option is an ISO or an NSO.

        (b) NUMBER OF SHARES. Each Stock Option Agreement shall specify the
        number of Shares that are subject to the Option and shall provide for
        the adjustment of such number in accordance with Section 9.

        (c) EXERCISE PRICE. An Option's Exercise Price shall be established by
        the Committee and set forth in a Stock Option Agreement. To the extent
        required by applicable law the Exercise Price of an ISO shall not be
        less than 100% of the Fair Market Value (110% for 10-Percent
        Shareholders) of a Share on the date of Grant. In the case of an NSO, a
        Stock Option Agreement may specify an Exercise Price that varies in
        accordance with a predetermined formula while the NSO is outstanding.

        (d) EXERCISABILITY AND TERM. Each Stock Option Agreement shall specify
        the date when all or any installment of the Option is to become
        exercisable. The Stock Option Agreement shall also specify the term of
        the Option; provided that the term of an ISO shall in no event exceed
        ten (10) years from the date of Grant. An ISO that is granted to a
        10-Percent Shareholder shall have a maximum term of five (5) years. No
        Option can be exercised after the expiration date provided in the
        applicable Stock Option Agreement. A Stock Option Agreement may provide
        for accelerated exercisability in the event of the Optionee's death,
        disability or retirement or other events and may provide for expiration
        prior to the end of its term in the event of the termination of the
        Optionee's service. A Stock Option Agreement may permit an Optionee to
        exercise an Option before it is

                                       8
<PAGE>
        vested, subject to the Company's right of repurchase over any Shares
        acquired under the unvested portion of the Option (an "early exercise"),
        which right of repurchase shall lapse at the same rate the Option would
        have vested had there been no early exercise. In no event shall the
        Company be required to issue fractional Shares upon the exercise of an
        Option.

        (e) MODIFICATIONS OR ASSUMPTION OF OPTIONS. Within the limitations of
        the Plan, the Committee may modify, extend or assume outstanding options
        or may accept the cancellation of outstanding options (whether granted
        by the Company or by another issuer) in return for the grant of new
        Options for the same or a different number of Shares and at the same or
        a different Exercise Price. The foregoing notwithstanding, no
        modification of an Option shall, without the consent of the Optionee,
        alter or impair his or her rights or obligations under such Option.

        (f) TRANSFERABILITY OF OPTIONS. Except as otherwise provided in the
        applicable Stock Option Agreement and then only to the extent permitted
        by applicable law, no Option shall be transferable by the Optionee other
        than by will or by the laws of descent and distribution. Except as
        otherwise provided in the applicable Stock Option Agreement, an Option
        may be exercised during the lifetime of the Optionee only or by the
        guardian or legal representative of the Optionee. No Option or interest
        therein may be assigned, pledged or hypothecated by the Optionee during
        his lifetime, whether by operation of law or otherwise, or be made
        subject to execution, attachment or similar process.

        (g) NO RIGHTS AS STOCKHOLDER. An Optionee, or a transferee of an
        Optionee, shall have no rights as a stockholder with respect to any
        Common Stock covered by an Option until such person becomes entitled to
        receive such Common Stock by filing a notice of exercise and paying the
        Exercise Price pursuant to the terms of such Option.

        (h) RESTRICTIONS ON TRANSFER. Any Shares issued upon exercise of an
        Option shall be subject to such rights of repurchase, rights of first
        refusal and other transfer restrictions as the Committee may determine.
        Such restrictions shall apply in addition to any restrictions that may
        apply to holders of Shares generally and shall also comply to the extent
        necessary with applicable law.

SECTION 7. PAYMENT FOR OPTION SHARES.

        (a) GENERAL RULE. The entire Exercise Price of Shares issued upon
        exercise of Options shall be payable in cash at the time when such
        Shares are purchased, except as follows:

                (i) In the case of an ISO granted under the Plan, payment shall
        be made only pursuant to the express provisions of the applicable Stock
        Option Agreement. The Stock Option Agreement may specify that payment
        may be made in any form(s) described in this Section 7.

                (ii) In the case of an NSO granted under the Plan, the Committee
        may in its discretion, at any time accept payment in any form(s)
        described in this Section 7.

                                       9
<PAGE>
        (b) SURRENDER OF STOCK. To the extent that this Section 7(b) is
        applicable, payment for all or any part of the Exercise Price may be
        made with Shares which have already been owned by the Optionee for such
        duration as shall be specified by the Committee. Such Shares shall be
        valued at their Fair Market Value on the date when the new Shares are
        purchased under the Plan.

        (c) PROMISSORY NOTE. To the extent that this Section 7(c) is applicable,
        payment for all or any part of the Exercise Price may be made with a
        full-recourse promissory note.

        (d) OTHER FORMS OF PAYMENT. To the extent that this Section 7(d) is
        applicable, payment may be made in any other form that is consistent
        with applicable laws, regulations and rules.

SECTION 8. TERMS AND CONDITIONS FOR AWARDS OF RESTRICTED STOCK AND STOCK UNITS.

        (a) TIME, AMOUNT AND FORM OF AWARDS. Awards under this Section 8 may be
        granted in the form of Restricted Stock in the form of Stock Units, or
        in any combination of both. Restricted Stock or Stock Units may also be
        awarded in combination with NSOs or SARs, and such an Award may provide
        that the Restricted Stock or Stock Units will be forfeited in the event
        that the related NSOs or SARs are exercised.

        (b) AGREEMENTS. Each Award of Restricted Stock or Stock Units under the
        Plan shall be evidenced by a Restricted Stock Agreement or Stock Unit
        Agreement between the Participant and the Company. Such Awards shall be
        subject to all applicable terms and conditions of the Plan and may be
        subject to any other terms and conditions that are not inconsistent with
        the Plan and that the Committee deems appropriate for inclusion in the
        applicable Agreement. The provisions of the various Agreements entered
        into under the Plan need not be identical.

        (c) PAYMENT FOR RESTRICTED STOCK OR STOCK UNIT AWARDS. Restricted Stock
        or Stock Units may be issued with or without cash consideration under
        the Plan.

        (d) FORM AND TIME OF SETTLEMENT OF STOCK UNITS. Settlement of vested
        Stock Units may be made in the form of (i) cash, (ii) Shares or (iii)
        any combination of both. The actual number of Stock Units eligible for
        settlement may be larger or smaller than the number included in the
        original Award, based on predetermined performance factors. Methods of
        converting Stock Units into cash may include (without limitation) a
        method based on the average Fair Market Value of Shares over a series of
        trading days. Vested Stock Units may be settled in a lump sum or in
        installments. The distribution may occur or commence when all vesting
        conditions applicable to the Stock Units have been satisfied or have
        lapsed, or it may be deferred to any later date. The amount of a
        deferred distribution may be increased by an interest factor or by
        dividend equivalents. Until an Award of Stock Units is settled, the
        number of such Stock Units shall be subject to adjustment pursuant to
        Section 10.

                                       10
<PAGE>
        (e) VESTING CONDITIONS. Each Award of Restricted Stock or Stock Units
        shall become vested, in full or in installments, upon satisfaction of
        the conditions specified in the applicable Agreement. An Agreement may
        provide for accelerated vesting in the event of the Participant's death,
        Disability or retirement or other events.

        (f) ASSIGNMENT OR TRANSFER OF RESTRICTED STOCK OR STOCK UNITS. Except as
        provided in Section 13, or in a Restricted Stock Agreement or Stock Unit
        Agreement, or as required by applicable law, a Restricted Stock or Stock
        Unit Award granted under the Plan shall not be anticipated, assigned,
        attached, garnished, optioned, transferred or made subject to any
        creditor's process, whether voluntarily, involuntarily or by operation
        of law. Any act in violation of this Section 8(f) shall be void.
        However, this Section 8(f) shall not preclude a Participant from
        designating a beneficiary who will receive any outstanding Restricted
        Stock or Stock Unit Awards in the event of the Participant's death, nor
        shall it preclude a transfer of Restricted Stock or Stock Unit Awards by
        will or by the laws of descent and distribution.

        (g) DEATH OF STOCK UNITS RECIPIENT. Any Stock Unit Award that becomes
        payable after the Award recipient's death shall be distributed to the
        recipient's beneficiary or beneficiaries. Each recipient of a Stock Unit
        Award under the Plan shall designate one or more beneficiaries for this
        purpose by filing the prescribed form with the Company. A beneficiary
        designation may be changed by filing the prescribed form with the
        Company at any time before the recipient's death. If no beneficiary was
        designated or if no designated beneficiary survives the recipient, then
        any Stock Unit Award that becomes payable after the recipient's death
        shall be distributed to the recipient's estate.

        (h) TRUSTS. Neither this Section 8 nor any other provision of the Plan
        shall preclude a Participant from transferring or assigning Restricted
        Stock to (a) the trustee of a trust that is revocable by such
        Participant alone, both at the time of the transfer or assignment and at
        all times thereafter prior to such Participant's death, or (b) the
        trustee of any other trust to the extent approved in advance by the
        Committee in writing. A transfer or assignment of Restricted Stock from
        such trustee to any person other than such Participant shall be
        permitted only to the extent approved in advance by the Committee in
        writing, and Restricted Stock held by such trustee shall be subject to
        all of the conditions and restrictions set forth in the Plan and in the
        applicable Restricted Stock Agreement, as if such trustee were a party
        to such Agreement.

        (i) VOTING AND DIVIDEND RIGHTS. The holders of Restricted Stock awarded
        under the Plan shall have the same voting, dividend and other rights as
        the Company's other stockholders. A Restricted Stock Agreement, however,
        may require that the holders of Restricted Stock invest any cash
        dividends received in additional Restricted Stock. Such additional
        Restricted Stock shall be subject to the same conditions and
        restrictions as the Award with respect to which the dividends were paid.
        Such additional Restricted Stock shall not reduce the number of Shares
        available under Section 5.

        (j) STOCK UNIT VOTING AND DIVIDEND RIGHTS. The holders of Stock Units
        shall have no voting rights. Prior to settlement or forfeiture, any
        Stock Unit awarded under the Plan may, at the Committee's discretion,
        carry with it a right to dividend equivalents. Such

                                       11
<PAGE>
        right entitles the holder to be credited with an amount equal to all
        cash dividends paid on one Share while the Stock Unit is outstanding.
        Dividend equivalents may be converted into additional Stock Units.
        Settlement of dividend equivalents may be made in the form of cash, in
        the form of Shares, or in a combination of both. Prior to distribution,
        any dividend equivalents which are not paid shall be subject to the same
        conditions and restrictions as the Stock Units to which they attach.

        (k) CREDITORS' RIGHTS. A holder of Stock Units shall have no rights
        other than those of a general creditor of the Company. Stock Units
        represent an unfunded and unsecured obligation of the Company, subject
        to the terms and conditions of the applicable Stock Unit Agreement.

SECTION 9. TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS.

        (a) SAR AGREEMENT. Each Award of a SAR under the Plan shall be evidenced
        by a SAR Agreement between the Optionee and the Company. Such SAR shall
        be subject to all applicable terms of the Plan and may be subject to any
        other terms that are not inconsistent with the Plan. The provisions of
        the various SAR Agreements entered into under the Plan need not be
        identical. SARs may be granted in consideration of a reduction in the
        Optionee's other compensation.

        (b) NUMBER OF SHARES. Each SAR Agreement shall specify the number of
        Shares to which the SAR pertains and shall provide for the adjustment of
        such number in accordance with Section 10.

        (c) EXERCISE PRICE. Each SAR Agreement shall specify the Exercise Price.
        A SAR Agreement may specify an Exercise Price that varies in accordance
        with a predetermined formula while the SAR is outstanding.

        (d) EXERCISABILITY AND TERM. Each SAR Agreement shall specify the date
        when all or any installment of the SAR is to become exercisable. The SAR
        Agreement shall also specify the term of the SAR. A SAR Agreement may
        provide for accelerated exercisability in the event of the Optionee's
        death, Disability or retirement or other events and may provide for
        expiration prior to the end of its term in the event of the termination
        of the Optionee's Service. SARs may also be awarded in combination with
        Options, Restricted Stock or Stock Units, and such an Award may provide
        that the SARs will not be exercisable unless the related Options,
        Restricted Stock or Stock Units are forfeited. A SAR may be included in
        an ISO only at the time of Grant but may be included in an NSO at the
        time of Grant or at any subsequent time, but not later than six months
        before the expiration of such NSO. A SAR granted under the Plan may
        provide that it will be exercisable only in the event of a Change in
        Control.

        (e) EXERCISE OF SARS. If, on the date when a SAR expires, the Exercise
        Price under such SAR is less than the Fair Market Value on such date but
        any portion of such SAR has not been exercised or surrendered, then such
        SAR shall automatically be deemed to be exercised as of such date with
        respect to such portion. Upon exercise of a SAR, the Optionee (or any
        person having the right to exercise the SAR after his or her death)
        shall

                                       12
<PAGE>
        receive from the Company (i) Shares, (ii) cash or (iii) a combination of
        Shares and cash, as the Committee shall determine. The amount of cash
        and/or the Fair Market Value of Shares received upon exercise of SARs
        shall, in the aggregate, be equal to the amount by which the Fair Market
        Value (on the date of surrender) of the Shares subject to the SARs
        exceeds the Exercise Price.

        (f) MODIFICATION OR ASSUMPTION OF SARS. Within the limitations of the
        Plan, the Committee may modify, extend or assume outstanding SARs or may
        accept the cancellation of outstanding SARs (whether granted by the
        Company or by another issuer) in return for the grant of new SARs for
        the same or a different number of Shares and at the same or a different
        Exercise Price. The foregoing notwithstanding, no modification of a SAR
        shall, without the consent of the Optionee, alter or impair his or her
        rights or obligations under such SAR.

SECTION 10. PROTECTION AGAINST DILUTION.

        (a) ADJUSTMENTS. In the event of a subdivision of the outstanding
        Shares, a declaration of a dividend payable in Shares, a declaration of
        a dividend payable in a form other than Shares in an amount that has a
        material effect on the price of Shares, a combination or consolidation
        of the outstanding Shares (by reclassification or otherwise) into a
        lesser number of Shares, a recapitalization, reorganization, merger,
        liquidation, spin-off or a similar occurrence, the Committee shall make
        such adjustments as it, in its reasonable discretion, deems appropriate
        in order to prevent the dilution or enlargement of rights hereunder in
        one or more of:

                (i) the number of Shares available for future Awards and the per
        person Share limits under Section 5;

                (ii) the number of Shares covered by each outstanding Award; or

                (iii) the Exercise Price under each outstanding SAR or Option.

        (b) PARTICIPANT RIGHTS. Except as provided in this Section 10, a
        Participant shall have no rights by reason of any issue by the Company
        of stock of any class or securities convertible into stock of any class,
        any subdivision or consolidation of shares of stock of any class, the
        payment of any stock dividend or any other increase or decrease in the
        number of shares of stock of any class.

SECTION 11. EFFECT OF A CHANGE IN CONTROL.

        (a) MERGER OR REORGANIZATION. In the event that the Company is a party
        to a merger or other reorganization, outstanding Awards shall be subject
        to the agreement of merger or reorganization. Such agreement may
        provide, without limitation, for the assumption of outstanding Awards by
        the surviving corporation or its parent, for their continuation by the
        Company (if the Company is a surviving corporation), for accelerated
        vesting or for their cancellation with or without consideration.

                                       13
<PAGE>
        (b) ACCELERATION. The Committee may determine, at the time of granting
        an Award or thereafter, that such Award shall become fully vested as to
        all Shares subject to such Award in the event that a Change in Control
        occurs with respect to the Company.

SECTION 12. LIMITATIONS ON RIGHTS.

        (a) RETENTION RIGHTS. Neither the Plan nor any Award granted under the
        Plan shall be deemed to give any individual a right to remain an
        employee, consultant or director of the Company, a Parent, a Subsidiary
        or an Affiliate. The Company and its Parents and Subsidiaries and
        Affiliates reserve the right to terminate the Service of any person at
        any time, and for any reason, subject to applicable laws, the Company's
        Certificate of Incorporation and Bylaws and a written employment
        agreement (if any).

        (b) STOCKHOLDERS' RIGHTS. A Participant shall have no dividend rights,
        voting rights or other rights as a stockholder with respect to any
        Shares covered by his or her Award prior to the issuance of a stock
        certificate for such Shares. No adjustment shall be made for cash
        dividends or other rights for which the record date is prior to the date
        when such certificate is issued, except as expressly provided in Section
        10.

        (c) REGULATORY REQUIREMENTS. Any other provision of the Plan
        notwithstanding, the obligation of the Company to issue Shares under the
        Plan shall be subject to all applicable laws, rules and regulations and
        such approval by any regulatory body as may be required. The Company
        reserves the right to restrict, in whole or in part, the delivery of
        Shares pursuant to any Award prior to the satisfaction of all legal
        requirements relating to the issuance of such Shares, to their
        registration, qualification or listing or to an exemption from
        registration, qualification or listing.

SECTION 13. WITHHOLDING TAXES.

        (a) GENERAL. A Participant shall make arrangements satisfactory to the
        Company for the satisfaction of any withholding tax obligations that
        arise in connection with his or her Award. The Company shall not be
        required to issue any Shares or make any cash payment under the Plan
        until such obligations are satisfied.

        (b) SHARE WITHHOLDING. If a public market for the Company's Shares
        exists, the Committee may permit a Participant to satisfy all or part of
        his or her withholding or income tax obligations by having the Company
        withhold all or a portion of any Shares that otherwise would be issued
        to him or her or by surrendering all or a portion of any Shares that he
        or she previously acquired. Such Shares shall be valued at their Fair
        Market Value on the date when taxes otherwise would be withheld in cash.
        Any payment of taxes by assigning Shares to the Company may be subject
        to restrictions, including, but not limited to, any restrictions
        required by rules of the Securities and Exchange Commission.

                                       14
<PAGE>
SECTION 14. DURATION AND AMENDMENTS.

        (a) TERM OF THE PLAN. The Plan, as set forth herein, shall become
        effective on the date of its adoption by the Board, subject to the
        approval of the Company's stockholders. No Options or SARs shall be
        exercisable until such stockholder approval is obtained. In the event
        that the stockholders fail to approve the Plan within twelve (12) months
        after its adoption by the Board, any Awards made shall be null and void
        and no additional Awards shall be made. To the extent required by
        applicable law, the Plan shall terminate on the date that is ten (10)
        years after its adoption by the Board and may be terminated on any
        earlier date pursuant to Section 14(b).

        (b) RIGHT TO AMEND OR TERMINATE THE PLAN. The Board may amend or
        terminate the Plan at any time and for any reason. The termination of
        the Plan, or any amendment thereof, shall not affect any Award
        previously granted under the Plan. No Awards shall be granted under the
        Plan after the Plan's termination. An amendment of the Plan shall be
        subject to the approval of the Company's stockholders only to the extent
        required by applicable laws, regulations or rules.

SECTION 15. EXECUTION.

        To record the adoption of the Plan by the Board, the Company has caused
        its duly authorized officer to execute this Plan on behalf of the
        Company.

                                       NOVATEL WIRELESS, INC.

                                       By /s/ Melvin L. Flowers
                                          --------------------------------------
                                          Melvin L. Flowers
                                          Senior Vice President, Finance,
                                          Chief Financial Officer and Secretary

                                       15
<PAGE>
                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                              Page
                                                                                              ----
<S>         <C>                                                                                <C>
SECTION 1.  INTRODUCTION...................................................................     1

SECTION 2.  DEFINITIONS....................................................................     1

               (a)    "Affiliate"..........................................................     1

               (b)    "Award"..............................................................     1

               (c)    "Board"..............................................................     1

               (d)    "Change In Control"..................................................     2

               (e)    "Code"...............................................................     2

               (f)    "Committee"..........................................................     2

               (g)    "Common Stock".......................................................     2

               (h)    "Company"............................................................     3

               (i)    "Consultant".........................................................     3

               (j)    "Director"...........................................................     3

               (k)    "Disability".........................................................     3

               (l)    "Employee"...........................................................     3

               (m)    "Exchange Act".......................................................     3

               (n)    "Exercise Price".....................................................     3

               (o)    "Fair Market Value"..................................................     3

               (p)    "Grant"..............................................................     4

               (q)    "Incentive Stock Option" or "ISO"....................................     4

               (r)    "Key Employee".......................................................     4

               (s)    "Non-Employee Director"..............................................     4

               (t)    "Nonstatutory Stock Option" or "NSO".................................     4

               (u)    "Option".............................................................     4

               (v)    "Optionee"...........................................................     4

               (w)    "Parent".............................................................     4

               (x)    "Participant"........................................................     4

               (y)    "Plan"...............................................................     4

               (z)    "Restricted Stock"...................................................     4

               (aa)   "Restricted Stock Agreement".........................................     4

               (bb)   "SAR Agreement"......................................................     4

               (cc)   "Securities Act".....................................................     4
</TABLE>

                                      -i-
<PAGE>

<TABLE>
<CAPTION>
                                                                                              Page
                                                                                              ----
<S>         <C>                                                                               <C>
               (dd)   "Service"............................................................     4

               (ee)   "Share"..............................................................     4

               (ff)   "Stock Appreciation Right" or "SAR"..................................     4

               (gg)   "Stock Option Agreement".............................................     4

               (hh)   "Stock Unit".........................................................     5

               (ii)   "Stock Unit Agreement"...............................................     5

               (jj)   "Subsidiary".........................................................     5

               (kk)   "10-Percent Shareholder".............................................     5

SECTION 3.  ADMINISTRATION.................................................................     5

               (a)    Committee Composition................................................     5

               (b)    Authority of the Committee...........................................     6

               (c)    Indemnification......................................................     6

SECTION 4.  ELIGIBILITY....................................................................     6

               (a)    General Rules........................................................     6

               (b)    Incentive Stock Options..............................................     6

               (c)    Non-Employee Director Options........................................     6

SECTION 5.  SHARES SUBJECT TO PLAN.........................................................     7

               (a)    Basic Limitation.....................................................     7

               (b)    Annual Addition......................................................     7

               (c)    Additional Shares....................................................     7

               (d)    Dividend Equivalents.................................................     8

               (e)    Limits on Options and SARs...........................................     8

               (f)    Limits on Restricted Stock and Stock Units...........................     8

SECTION 6.  TERMS AND CONDITIONS OF OPTIONS................................................     8

               (a)    Stock Option Agreement...............................................     8

               (b)    Number of Shares.....................................................     8

               (c)    Exercise Price.......................................................     8

               (d)    Exercisability and Term..............................................     8

               (e)    Modifications or Assumption of Options...............................     9

               (f)    Transferability of Options...........................................     9

               (g)    No Rights as Stockholder.............................................     9

               (h)    Restrictions on Transfer.............................................     9
</TABLE>

                                      -ii-
<PAGE>

<TABLE>
<CAPTION>
                                                                                              Page
                                                                                              ----
<S>         <C>                                                                              <C>
SECTION 7.  PAYMENT FOR OPTION SHARES......................................................     9

               (a)    General Rule.........................................................     9

               (b)    Surrender of Stock...................................................    10

               (c)    Promissory Note......................................................    10

               (d)    Other Forms of Payment...............................................    10

SECTION 8.  TERMS AND CONDITIONS FOR AWARDS OF RESTRICTED STOCK AND STOCK UNITS............    10

               (a)    Time, Amount and Form of Awards......................................    10

               (b)    Agreements...........................................................    10

               (c)    Payment for Restricted Stock or Stock Unit Awards....................    10

               (d)    Form and Time of Settlement of Stock Units...........................    10

               (e)    Vesting Conditions...................................................    11

               (f)    Assignment or Transfer of Restricted Stock or Stock Units............    11

               (g)    Death of Stock Units Recipient.......................................    11

               (h)    Trusts...............................................................    11

               (i)    Voting and Dividend Rights...........................................    11

               (j)    Stock Unit Voting and Dividend Rights................................    12

               (k)    Creditors' Rights....................................................    12

SECTION 9.    TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS............................    12

               (a)    SAR Agreement........................................................    12

               (b)    Number of Shares.....................................................    12

               (c)    Exercise Price.......................................................    12

               (d)    Exercisability and Term..............................................    12

               (e)    Exercise of SARs.....................................................    12

               (f)    Modification or Assumption of SARs...................................    13

SECTION 10. PROTECTION AGAINST DILUTION....................................................    13

               (a)    Adjustments..........................................................    13

               (b)    Participant Rights...................................................    13

SECTION 11. EFFECT OF A CHANGE IN CONTROL..................................................    13

               (a)    Merger or Reorganization.............................................    13

               (b)    Acceleration.........................................................    14
</TABLE>

                                     -iii-
<PAGE>

<TABLE>
<CAPTION>
                                                                                              Page
                                                                                              ----
<S>         <C>                                                                              <C>
SECTION 12. LIMITATIONS ON RIGHTS..........................................................    14

               (a)    Retention Rights.....................................................    14

               (b)    Stockholders' Rights.................................................    14

               (c)    Regulatory Requirements..............................................    14

SECTION 13. WITHHOLDING TAXES..............................................................    14

               (a)    General..............................................................    14

               (b)    Share Withholding....................................................    14

SECTION 14. DURATION AND AMENDMENTS........................................................    15

               (a)    Term of the Plan.....................................................    15

               (b)    Right to Amend or Terminate the Plan.................................    15

SECTION 15. EXECUTION......................................................................    15
</TABLE>

                                      -iv-

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