Document:

RESTATED CERTIFICATE OF INCORPORATION

                               OF

                       DMI FURNITURE, INC.

      Pursuant to Section 245 of the General Corporation  Law  of

the   State   of  Delaware,  DMI  Furniture,  Inc.,  a   Delaware

corporation, (the "Corporation") hereby certifies as follows:

     1.   The Corporation's present name is "DMI Furniture, Inc."

The  Corporation was originally incorporated under the name  "Dolmad

Corporation."   The  Corporation's original  certificate  of

incorporation was filed with the Secretary of State of the  State

of Delaware on January 29, 1969 and was most recently amended and

restated on March 23, 1995.

     2.   Pursuant to Section 243 of the General Corporation Law,

the Corporation retired all of the 2,020,000 authorized shares of

its Series C Preferred Stock, par value $2.00 per share, upon the

filing of a Certificate of Retirement with the Secretary of State

of Delaware on May 25, 2000.

      3.    The  Corporation's Certificate  of  Incorporation  is

hereby  restated to eliminate all references to the Corporation's

retired  Series C Preferred Stock and shall read in its  entirety

as so restated as follows:

      FIRST:  The name of the Corporation is DMI Furniture, Inc.

      SECOND:  The address of its registered office in the  State
of  Delaware  is  1209 Orange Street, in the City of  Wilmington,
County  of New Castle.  The name of its registered agent at  such
address is The Corporation Trust Company.

      THIRD:  The purpose of the Corporation is to engage in  any
lawful  act  or activity for which corporations may be  organized
under the General Corporation Law of Delaware.

     FOURTH:

          (a)  The total number of shares of all classes of stock
which the Corporation shall have authority to issue is 11,600,000
shares,  consisting  of  2,000,000 shares of Series  D  Preferred
Stock,  par  value  $10 per share (herein called  the  "Series  D
Preferred  Stock");  and 9,600,000 shares of  Common  Stock,  par
value $0.10 per share (herein called the "Common Stock").  Except
as  otherwise provided in this Article FOURTH, including, without
limitation,  part I hereof, all shares of Preferred  Stock  shall
rank  senior  with  respect  to the  Common  Stock.   All  cross-
references  in  each part of this Article FOURTH refer  to  other
paragraphs in such part unless otherwise indicated.

           (b)   The following is a statement of the designations
and  the  powers, preferences and rights, and the qualifications,
limitations or restrictions thereof, in respect of each class  of
stock of the Corporation:

                                I

                    SERIES D PREFERRED STOCK

     1.   The Series D Preferred Stock may be issued from time to
time  in  one or more subseries, the shares of each subseries  to
have  such voting powers, full or limited, and such designations,
preferences  and  relative,  participating,  optional  or   other
special  rights  and qualifications, limitations or  restrictions
thereof  as  are stated and expressed herein or in the resolution
or  resolutions providing for the issue of such subseries adopted
by the Board of Directors as hereinafter provided.

      2.    Authority is hereby granted to the Board of Directors
of  the  Corporation, subject to the provisions of  this  Article
FOURTH and to the limitations prescribed by law, to authorize the
issue  of  one or more subseries of Series D Preferred Stock  and
with  respect  to each subseries to fix by resolution  or  resolu
tions  providing for the issue of such subseries the  voting  pow
ers, full or limited, if any, of the shares of such subseries and
the designations, preferences and relative, participating, option
al or other special rights and the qualifications, limitations or
restrictions  thereof.  The authority of the Board  of  Directors
with  respect to each subseries shall include, but not be limited
to, the determination or fixing of the following:

         (i)   The designation of such subseries.

         (ii)    The  dividend rate of such subseries, the  condi
tions  and dates upon which such dividends shall be payable,  the
relation which such dividends shall bear to the dividends payable
on  any  other class or classes of stock, and whether  such  divi
dends shall be cumulative or noncumulative.

        (iii)   Whether the shares of such subseries shall be sub
ject  to  redemption by the Corporation and, if made  subject  to
such redemption, the times, prices and other terms and conditions
of such redemption.

         (iv)   The terms and amount of any sinking fund provided
for the purchase or redemption of the shares of such subseries.

          (v)   Whether or not the shares of such subseries shall
be convertible into or exchangeable for shares of any other class
or  classes  or  of any other series of any class or  classes  of
stock  of  the Corporation, and, if provision be made for  conver
sion  or  exchange,  the times, prices, rates,  adjustments,  and
other terms and conditions of such conversion or exchange.

         (vi)   The extent, if any, to which the holders of  the
shares  of such subseries shall be entitled to vote with  respect
to the election of directors or otherwise.

        (vii)   The restrictions, if any, on the issue or reissue
of  any additional Series D Preferred Stock, and subseries  there
of.

       (viii)   The rights of the holders of the shares of  such
series and subseries thereof upon the dissolution of, or upon the
distribution of assets of, the Corporation.

     3.   Except as otherwise required by law and except for such
voting powers with respect to the election of directors or  other
matters as may be stated in the resolution or resolutions of  the
Board  of  Directors providing for the issue of any subseries  of
Series D Preferred Stock, the holders of any such subseries shall
have no voting power whatsoever.

     4.   The Corporation may from time to time issue and dispose
of  any  of  the authorized and unissued shares of Series  D  Pre
ferred Stock for such consideration, not less than its par value,
as  may  be  fixed from time to time by the Board  of  Directors,
without  action by the Stockholders.  The Board of Directors  may
provide for payment thereof to be received by the Corporation  in
cash,  property  or  services.  Any and all such  shares  of  the
Series D Preferred Stock of the Corporation the issuance of which
has  been so authorized, and for which consideration so fixed  by
the Board of Directors has been paid or delivered, shall be fully
paid and non-assessable.

                               II

                          COMMON STOCK

      1.   Dividends.  Subject to all prior rights of holders  of
the Corporation's Preferred Stock of any class or series, holders
of shares of Common Stock shall be entitled to dividends when, as
and  if  declared by the Corporation's Board of Directors out  of
funds legally available therefor.

     2.   Liquidation.  Upon any liquidation, dissolution or wind
ing  up of the Corporation, after any other payments required  by
the  provisions of this Article FOURTH to be made to  holders  of
securities of the Corporation ranking senior to the Common Stock,
shall  have  been  made,  the holders of Common  Stock  shall  be
entitled  equally on a share-for-share basis to receive  any  and
all assets remaining to be paid or distributed to stockholders of
the  Corporation, and holders of Preferred Stock of any class  or
series shall not be entitled to shares therein.

      3.    Voting.  Except as otherwise provided by  law  or  by
express  provision  of  this Certificate of  Incorporation,  each
share of Common Stock shall be entitled to one vote on any matter
submitted for the vote or written consent of stockholders of  the
Corporation, including the election of directors.

      4.   Fully Paid and Non-Assessable.  Shares of Common Stock
shall be fully paid and non-assessable.

      FIFTH:  The number of directors which shall constitute  the
whole  board of directors shall be no less than five (5)  and  no
more  than nine (9), all of whom shall be elected by the  holders
of the voting stock of the Corporation.

      SIXTH:  The Corporation shall make, not less than once annu
ally  in  advance of its annual meeting of stockholders, periodic
reports  to  its stockholders which shall include balance  sheets
and  profit  and loss statements of the Corporation  prepared  in
accordance with sound business and accounting practice.  Any such
annual  reports shall be certified by a firm of certified  public
accountants of good standing.

     SEVENTH:  In furtherance and not in limitation of the powers
conferred by statute, the board of directors is expressly  author
ized to adopt, amend or repeal the by-laws of the Corporation.

      EIGHTH:   Election of directors need not be by written  bal
lot.

      NINTH:   A director of the Corporation shall not be  person
ally  liable to the Corporation or its stockholders for  monetary
damages  for breach of fiduciary duty as a director,  except  for
liability (i) for any breach of the director's duty of loyalty to
the  Corporation or its stockholders, (ii) for acts or  omissions
not  in good faith or which involve intentional misconduct  or  a
knowing violation of law, (iii) under Section 174 of the Delaware
General  Corporation Law, or (iv) for any transaction from  which
the director derived an improper personal benefit.  Any repeal or
modification of this paragraph by the stockholders of the Corpora
tion  shall  be prospective only, and shall not adversely  affect
any limitation on the personal liability of a director of the Cor
poration existing at the time of such repeal or modification.

      5.    This  Restated  Certificate of Incorporation  of  the

Corporation  was  duly adopted by the Board of Directors  without

the  vote  of  stockholders in accordance with the provisions  of

Section  245  of  the General Corporation Law  and  restates  and

integrates  but  does  not further amend the  provisions  of  the

Corporation's Certificate of Incorporation.

      6.    This  Restated Certificate of Incorporation shall  be

known  as the "2000 Restated Certificate of Incorporation of  DMI

Furniture, Inc."

      IN  WITNESS  WHEREOF, DMI Furniture, Inc., has  caused  its
Chairman  and its Secretary to sign and attest this  Amended  and
Restated Certificate of Incorporation on December 15, 2000.

                                   DMI FURNITURE, INC.

                                   By  /s/ Donald D. Dreher
                                     Donald D. Dreher
                                     Chairman of the Board,
                                     President and Chief
                                     Executive Officer

ATTEST:

/s/ Joseph G. Hill
Joseph G. Hill, Secretary<PAGE>

                                                                  Exhibit 4.1

                             PEREGRINE SYSTEMS, INC.

                       1999 NONSTATUTORY STOCK OPTION PLAN

     1.  PURPOSES OF THE PLAN. The purposes of this Nonstatutory Stock Option
Plan are:

         -        to attract and retain the best available personnel for
                  positions of substantial responsibility,

         -        to provide additional incentive to Employees, Directors and
                  Consultants, and

         -        to promote the success of the Company's business.

         Options granted under the Plan will be Nonstatutory Stock Options.

     2.  DEFINITIONS. As used herein, the following definitions shall apply:

         (a) "ADMINISTRATOR" means the Board or any of its Committees as shall
be administering the Plan, in accordance with Section 4 of the Plan.

         (b) "APPLICABLE LAWS" means the requirements relating to the
administration of stock option plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options are, or will be, granted under
the Plan.

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

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

         (e) "COMMITTEE" means a committee of Directors appointed by the Board
in accordance with Section 4 of the Plan.

         (f) "COMMON STOCK" means the Common Stock of the Company.

         (g) "COMPANY" means Peregrine Systems, Inc., a Delaware corporation.

         (h) "CONSULTANT" means any person, including an advisor, engaged by the
Company or a Parent or Subsidiary to render services to such entity.

         (i) "DIRECTOR" means a member of the Board.

         (j) "DISABILITY" means total and permanent disability as defined in
Section 22(e)(3) of the Code.

<PAGE>

         (k) "EMPLOYEE" means any person, including Officers, employed by the
Company or any Parent or Subsidiary of the Company. A Service Provider shall not
cease to be an Employee in the case of (i) any leave of absence approved by the
Company or (ii) transfers between locations of the Company or between the
Company, its Parent, any Subsidiary, or any successor. Neither service as a
Director nor payment of a director's fee by the Company shall be sufficient to
constitute "employment" by the Company.

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

         (m) "FAIR MARKET VALUE" means, as of any date, the value of Common
Stock determined as follows:

                  (i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of determination, as reported in
THE WALL STREET JOURNAL or such other source as the Administrator deems
reliable;

                  (ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value of
a Share of Common Stock shall be the mean between the high bid and low asked
prices for the Common Stock on the last market trading day prior to the day of
determination, as reported in THE WALL STREET JOURNAL or such other source as
the Administrator deems reliable;

                  (iii) In the absence of an established market for the Common
Stock, the Fair Market Value shall be determined in good faith by the
Administrator.

         (n) "NOTICE OF GRANT" means a written or electronic notice evidencing
certain terms and conditions of an individual Option grant. The Notice of Grant
is part of the Option Agreement.

         (o) "OFFICER" means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

         (p) "OPTION" means a nonstatutory stock option granted pursuant to the
Plan, that is not intended to qualify as an incentive stock option within the
meaning of Section 422 of the Code and the regulations promulgated thereunder.

         (q) "OPTION AGREEMENT" means an agreement between the Company and an
Optionee evidencing the terms and conditions of an individual Option grant. The
Option Agreement is subject to the terms and conditions of the Plan.

         (r) "OPTION EXCHANGE PROGRAM" means a program whereby outstanding
options are surrendered in exchange for options with a lower exercise price.

                                      -2-
<PAGE>

         (s) "OPTIONED STOCK" means the Common Stock subject to an Option.

         (t) "OPTIONEE" means the holder of an outstanding Option granted under
the Plan.

         (u) "PARENT" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.

         (v) "PLAN" means this 1999 Nonstatutory Stock Option Plan.

         (w) "SERVICE PROVIDER" means an Employee including an Officer,
Consultant or Director.

         (x) "SHARE" means a share of the Common Stock, as adjusted in
accordance with Section 12 of the Plan.

         (y) "SUBSIDIARY" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.

     3.  STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section 12 of
the Plan, the maximum aggregate number of Shares, which may be optioned and sold
under the Plan, is 3,000,000 Shares. The Shares may be authorized, but unissued,
or reacquired Common Stock.

         If an Option expires or becomes unexercisable without having been
exercised in full, or is surrendered pursuant to an Option Exchange Program, the
unpurchased Shares which were subject thereto shall become available for future
grant or sale under the Plan (unless the Plan has terminated).

     4.  ADMINISTRATION OF THE PLAN.

         (a) ADMINISTRATION. The Plan shall be administered by (i) the Board or
(ii) a Committee, which committee shall be constituted to satisfy Applicable
Laws.

         (b) POWERS OF THE ADMINISTRATOR. Subject to the provisions of the Plan,
and in the case of a Committee, subject to the specific duties delegated by the
Board to such Committee, the Administrator shall have the authority, in its
discretion:

                  (i) to determine the Fair Market Value of the Common Stock;

                  (ii) to select the Service Providers to whom Options may be
granted hereunder;

                  (iii) to determine whether and to what extent Options are
granted hereunder;

                  (iv) to determine the number of shares of Common Stock to be
covered by each Option granted hereunder;

                                      -3-
<PAGE>

                  (v) to approve forms of agreement for use under the Plan;

                  (vi) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any award granted hereunder. Such terms and
conditions include, but are not limited to, the exercise price, the time or
times when Options may be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture restrictions, and
any restriction or limitation regarding any Option or the shares of Common Stock
relating thereto, based in each case on such factors as the Administrator, in
its sole discretion, shall determine;

                  (vii) to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Common Stock covered
by such Option shall have declined since the date the Option was granted;

                  (viii) to institute an Option Exchange Program;

                  (ix) to construe and interpret the terms of the Plan and
awards granted pursuant to the Plan;

                  (x) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under
foreign tax laws;

                  (xi) to modify or amend each Option (subject to Section 14(b)
of the Plan), including the discretionary authority to extend the
post-termination exercisability period of Options longer than is otherwise
provided for in the Plan;

                  (xii) to authorize any person to execute on behalf of the
Company any instrument required to effect the grant of an Option previously
granted by the Administrator;

                  (xiii) to determine the terms and restrictions applicable to
Options;

                  (xiv) to allow Optionees to satisfy withholding tax
obligations by electing to have the Company withhold from the Shares to be
issued upon exercise of an Option that number of Shares having a Fair Market
Value equal to the amount required to be withheld. The Fair Market Value of the
Shares to be withheld shall be determined on the date that the amount of tax to
be withheld is to be determined. All elections by an Optionee to have Shares
withheld for this purpose shall be made in such form and under such conditions
as the Administrator may deem necessary or advisable; and

                  (xv) to make all other determinations deemed necessary or
advisable for administering the Plan.

         (c) EFFECT OF ADMINISTRATOR'S DECISION. The Administrator's decisions,
determinations and interpretations shall be final and binding on all Optionees
and any other holders of Options.

                                      -4-
<PAGE>

     5.  ELIGIBILITY. Options may be granted to Service Providers; provided,
however, that notwithstanding anything to the contrary contained in the Plan,
Options may not be granted to Officers and Directors, except in connection with
an Officer's initial service to the Company.

     6.  LIMITATION. Neither the Plan nor any Option shall confer upon an
Optionee any right with respect to continuing the Optionee's relationship as a
Service Provider with the Company, nor shall they interfere in any way with the
Optionee's right or the Company's right to terminate such relationship at any
time, with or without cause.

     7.  TERM OF PLAN. The Plan shall become effective upon its adoption by the
Board. It shall continue in effect for ten (10) years, unless sooner terminated
under Section 14 of the Plan.

     8.  TERM OF OPTION. The term of each Option shall be stated in the Option
Agreement.

     9.  OPTION EXERCISE PRICE AND CONSIDERATION.

         (a) EXERCISE PRICE. The per share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be determined by the
Administrator.

         (b) WAITING PERIOD AND EXERCISE DATES. At the time an Option is
granted, the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions which must be satisfied before the
Option may be exercised.

         (c) FORM OF CONSIDERATION. The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the method
of payment. Such consideration may consist entirely of:

                  (i) cash;

                  (ii) check;

                  (iii) promissory note;

                  (iv) other Shares which (A) in the case of Shares acquired
upon exercise of an option, have been owned by the Optionee for more than six
months on the date of surrender, and (B) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised;

                  (v) consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan;

                  (vi) a reduction in the amount of any Company liability to the
Optionee, including any liability attributable to the Optionee's participation
in any Company-sponsored deferred compensation program or arrangement;

                                      -5-
<PAGE>

                  (vii) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws; or

                  (viii) any combination of the foregoing methods of payment.

     10. EXERCISE OF OPTION.

         (a) PROCEDURE FOR EXERCISE; RIGHTS AS A SHAREHOLDER. Any Option granted
hereunder shall be exercisable according to the terms of the Plan and at such
times and under such conditions as determined by the Administrator and set forth
in the Option Agreement. An Option may not be exercised for a fraction of a
Share.

                  An Option shall be deemed exercised when the Company receives:
(i) written or electronic notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his or her spouse.
Until the Shares are issued (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company), no right
to vote or receive dividends or any other rights as a shareholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option.
The Company shall issue (or cause to be issued) such Shares promptly after the
Option is exercised. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the Shares are issued, except as
provided in Section 12 of the Plan.

                  Exercising an Option in any manner shall decrease the number
of Shares thereafter available, both for purposes of the Plan and for sale under
the Option, by the number of Shares as to which the Option is exercised.

         (b) TERMINATION OF RELATIONSHIP AS A SERVICE PROVIDER. If an Optionee
ceases to be a Service Provider, other than upon the Optionee's death or
Disability, the Optionee may exercise his or her Option, but only within such
period of time as is specified in the Option Agreement, and only to the extent
that the Option is vested on the date of termination (but in no event later than
the expiration of the term of such Option as set forth in the Option Agreement).
In the absence of a specified time in the Option Agreement, the Option shall
remain exercisable for ninety (90) days following the Optionee's termination.
If, on the date of termination, the Optionee is not vested as to his or her
entire Option, the Shares covered by the unvested portion of the Option shall
revert to the Plan. If, after termination, the Optionee does not exercise his or
her Option within the time specified by the Administrator, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.

         (c) DISABILITY OF OPTIONEE. If an Optionee ceases to be a Service
Provider as a result of the Optionee's Disability, the Optionee may exercise his
or her Option within such period of time as is specified in the Option
Agreement, to the extent the Option is vested on the date of

                                      -6-
<PAGE>

termination (but in no event later than the expiration of the term of such
Option as set forth in the Option Agreement). In the absence of a specified time
in the Option Agreement, the Option shall remain exercisable for six (6) months
following the Optionee's termination. If, on the date of termination, the
Optionee is not vested as to his or her entire Option, the Shares covered by the
unvested portion of the Option shall revert to the Plan. If, after termination,
the Optionee does not exercise his or her Option within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.

         (d) DEATH OF OPTIONEE. In the event of the death of an Optionee, the
Option shall vest and become exercisable as to all of the Shares subject thereto
and may be exercised within such period of time as is specified in the Option
Agreement (but in no event later than the expiration of the term of such Option
as set forth in the Notice of Grant), by the Optionee's estate or by a person
who acquires the right to exercise the Option by bequest or inheritance. In the
absence of a specified time in the Option Agreement, the Option shall remain
exercisable for twelve (12) months following the Optionee's termination. The
Option may be exercised by the executor or administrator of the Optionee's
estate or, if none, by the person(s) entitled to exercise the Option under the
Optionnee's will or the laws of descent or distribution. If the Option is not so
exercised with the specified time, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.

         (e) BUYOUT PROVISIONS. The Administrator may at any time offer to buy
out for a payment in cash or Shares, an Option previously granted based on such
terms and conditions as the Administrator shall establish and communicate to the
Optionee at the time that such offer is made.

     11.  NON-TRANSFERABILITY OF OPTIONS. Unless determined otherwise by the
Administrator, an Option may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee. If the Administrator makes an Option
transferable, such Option shall contain such additional terms and conditions as
the Administrator deems appropriate.

     12. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, MERGER OR
ASSET SALE.

         (a) CHANGES IN CAPITALIZATION. Subject to any required action by the
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option, and the number of shares of Common Stock which have
been authorized for issuance under the Plan but as to which no Options have yet
been granted or which have been returned to the Plan upon cancellation or
expiration of an Option, as well as the price per share of Common Stock covered
by each such outstanding Option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities

                                      -7-
<PAGE>

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
of Common Stock subject to an Option.

         (b) DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option until ten (15) days prior to such
transaction as to all of the Optioned Stock covered thereby, including Shares as
to which the Option would not otherwise be exercisable. In addition, the
Administrator may provide that any Company repurchase option applicable to any
Shares purchased upon exercise of an Option shall lapse as to all such Shares,
provided the proposed dissolution or liquidation takes place at the time and in
the manner contemplated. To the extent it has not been previously exercised, an
Option will terminate immediately prior to the consummation of such proposed
action.

         (c) MERGER, SALE OF ASSETS, OR STOCK TRANSFER. In the event of (i) a
merger or consolidation of the Company with or into another corporation
resulting in the outstanding voting securities of the Company immediately prior
thereto representing (either by remaining or by being converted into voting
securities of the surviving entity) less than fifty percent (50%) of the total
voting power represented by the voting securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation; or
(ii) the sale of all or substantially all of the assets of the Company; the
Optionee shall fully vest in and have the right to exercise the Option as to all
of the Optioned Stock, including Shares as to which it would not otherwise be
vested or exercisable. If an Option becomes fully vested and exercisable in the
event of a merger or consolidation or sale of assets, as provided above, the
Administrator shall notify the Optionee in writing or electronically that the
Option shall be fully vested and exercisable.

     13. DATE OF GRANT. The date of grant of an Option shall be, for all
purposes, the date on which the Administrator makes the determination granting
such Option, or such other later date as is determined by the Administrator.
Notice of the determination shall be provided to each Optionee within a
reasonable time after the date of such grant.

     14. AMENDMENT AND TERMINATION OF THE PLAN.

         (a) AMENDMENT AND TERMINATION. The Board may at any time amend, alter,
suspend or terminate the Plan.

         (b) EFFECT OF AMENDMENT OR TERMINATION. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator's ability to exercise
the powers granted to it hereunder with respect to options granted under the
Plan prior to the date of such termination.

     15. CONDITIONS UPON ISSUANCE OF SHARES.

                                      -8-
<PAGE>

         (a) LEGAL COMPLIANCE. Shares shall not be issued pursuant to the
exercise of an Option unless the exercise of such Option and the issuance and
delivery of such Shares shall comply with Applicable Laws and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.

         (b) INVESTMENT REPRESENTATIONS. As a condition to the exercise of an
Option the Company may require the person exercising such Option to represent
and warrant at the time of any such exercise that the Shares are being purchased
only for investment and without any present intention to sell or distribute such
Shares if, in the opinion of counsel for the Company, such a representation is
required.

     16. INABILITY TO OBTAIN AUTHORITY. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.

     17. RESERVATION OF SHARES. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

                                      -9-

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