Document:

EXHIBIT 10.7

                   LADENBURG THALMANN FINANCIAL SERVICES INC.
                               590 Madison Avenue
                            New York, New York 10022

Gentlemen:

         This letter shall serve to amend ("Amendment No. 1") the Investor
Rights Agreement ("Agreement"), dated as of February 8, 2001, among Ladenburg
Thalmann Financial Services Inc. (f/k/a GBI Capital Management Corp.)
("Corporation"), New Valley Corporation, New Valley Capital Corporation (f/k/a
Ladenburg, Thalmann Group Inc.), Berliner Effektengesellschaft AG, Frost-Nevada,
Limited Partnership and The Principals (capitalized terms used herein that are
defined in the Agreement shall have the same meanings herein as in the
Agreement).

         1.       The term "Warrants" shall have the following meaning in the
Agreement, as amended hereby:

                  "Warrants" means, collectively, the Warrants issued by the
         Corporation to New Valley and Lender in connection with the separate
         loans made by each party to the Corporation as of August 31, 2001."

         2.       The definition of "Registrable Securities" is hereby amended
to read as follows:

                  "Registrable Securities" means only (i) the shares of Common
         Stock issued or issuable to the Sellers under the Stock Purchase
         Agreement, (ii) shares of Common Stock issuable upon conversion of the
         Notes, (iii) shares of Common Stock issuable upon exercise of the
         Warrants and (iv) any additional shares of Common Stock by way of a
         dividend, stock split or other distribution in respect of such shares,
         and shall not include any other securities of the Corporation acquired
         by or issued to the parties hereto. As to any particular Registrable
         Securities, once issued such securities shall cease to be Registrable
         Securities when (i) a registration statement with respect to the sale
         of such securities shall have become effective under the 1933 Act and
         such securities shall have been disposed of in accordance with such
         registration statement, (ii) they shall have been distributed to the
         public pursuant to Rule 144 or (iii) they shall have ceased to be
         outstanding."

         3.       The first sentence of Section 3(a)(i) of the Agreement is
hereby amended to read as follows:

                  "(i) Grant of Right. As soon as practicable after August 31,
         2001, the Corporation shall file, and use commercially reasonable
         efforts to cause to be declared effective by the Commission, a
         registration statement (the "Required Registration Statement") to
         register the Registrable Securities owned by the Sellers and the Lender
         (the "Holders") for resale pursuant to the 1933 Act."

         4.       The parties hereby agree that, for purposes of Section 3(a)(i)
of the Agreement, the Corporation has used commercially reasonable efforts to
file, and cause to be declared effective, the Required Registration Statement as
it was required to prior to this Amendment No. 1. Accordingly, the parties agree
that no claim shall be made against the Corporation arguing any failure on the
Corporation's part to satisfy its obligations under Section 3 of the Agreement
prior to this Amendment No. 1.

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         5.       The parties agree that, because David Thalheim has held the
shares owned by him that are covered by the Agreement for more than two years,
and at the present time, and for the past 90 days, has not been an affiliate of
the Corporation, Mr. Thalheim may sell his shares in the open market pursuant to
Rule 144(k). Accordingly, the parties agree that, as soon as practicable
hereafter, an opinion from Graubard Miller shall be issued to American Stock
Transfer & Trust Company, transfer agent for the Corporation's common stock,
authorizing the removal of all legends from Mr. Thalheim's stock certificate.

Dated as of August 31, 2001

                                  LADENBURG THALMANN FINANCIAL SERVICES INC.

                                       /s/ Victor M. Rivas
                                  By:________________________________
                                      Name:  Victor M. Rivas
                                      Title: CEO

AGREED:

NEW VALLEY CORPORATION

      /s/ Richard J. Lampen
By: ________________________________
      Name:  Richard J. Lampen
      Title: Executive Vice President

NEW VALLEY CAPITAL CORPORATION (f/k/a Ladenburg, Thalmann Group Inc.)

      /s/ Richard J. Lampen
By: ________________________________
      Name:  Richard J. Lampen
      Title: Executive Vice President

BERLINER EFFEKTENGESELLSCHAFT AG

      /s/ Holger Timm
By: ________________________________
      Name:  Holger Timm
      Title: CEO

FROST-NEVADA, LIMITED PARTNERSHIP

      /s/ David Moskowitz
By: ________________________________
      Name:  David Moskowitz
      Title: President of Frost-Nevada Corporation, General Partner

<Page>

PRINCIPALS:

/s/ Richard J. Rosenstock
-----------------------------------
Richard J. Rosenstock

/s/ Mark Zeitchick
-----------------------------------
Mark Zeitchick

/s/ Vincent A. Mangone
-----------------------------------
Vincent A. Mangone

/s/ David Thalheim
-----------------------------------
David Thalheim<PAGE>   1
                                                                   EXHIBIT 10.30

                                MICROHELIX, INC.

                            2001 STOCK INCENTIVE PLAN

        1.      PURPOSE. The purpose of this 2001 Stock Incentive Plan (the
"Plan") is to enable microHelix, Inc. (the "Company"), to attract and retain the
services of (i) selected employees, officers and directors of the Company or any
parent or subsidiary of the Company and (ii) selected nonemployee agents,
consultants, advisers and independent contractors of the Company or any parent
or subsidiary of the Company. For purposes of this Plan, a person is considered
to be employed by or in the service of the Company if the person is employed by
or in the service of any entity (the "Employer") that is either the Company or a
parent or subsidiary of the Company.

        2.      SHARES SUBJECT TO THE PLAN. Subject to adjustment as provided
below and in Section 10, the shares to be offered under the Plan shall consist
of Common Stock of the Company, and the total number of shares of Common Stock
that may be issued under the Plan shall be 600,000 shares. If an option or
Performance-Based Award granted under the Plan expires, terminates or is
canceled, the unissued shares subject to that option or Performance-Based Award
shall again be available under the Plan. If shares awarded as a bonus pursuant
to Section 7 or sold pursuant to Section 8 under the Plan are forfeited to or
repurchased by the Company, the number of shares forfeited or repurchased shall
again be available under the Plan.

        3.      EFFECTIVE DATE AND DURATION OF PLAN.

                3.1     EFFECTIVE DATE. The Plan shall become effective as of
July 23, 2001. No Incentive Stock Option (as defined in Section 5 below) granted
under the Plan shall become exercisable and no payments shall be made under a
Performance-Based Award, however, until the Plan is approved by the affirmative
vote of the holders of a majority of the shares of Common Stock represented at a
shareholders meeting at which a quorum is present or by means of unanimous
consent resolutions, and the exercise of any Incentive Stock Options granted
under the Plan before approval shall be conditioned on and subject to that
approval. Subject to this limitation, options and Performance-Based Awards may
be granted and shares may be awarded as bonuses or sold under the Plan at any
time after the effective date and before termination of the Plan.

                3.2     DURATION. The Plan shall continue in effect until all
shares available for issuance under the Plan have been issued and all
restrictions on the shares have lapsed. The Board of Directors may suspend or
terminate the Plan at any time except with respect to options, Performance-Based
Awards and shares subject to restrictions then outstanding under the Plan.
Termination shall not affect any outstanding options, any outstanding
Performance-

<PAGE>   2
Based Awards or any right of the Company to repurchase shares or the
forfeitability of shares issued under the Plan.

        4.      ADMINISTRATION.

                4.1     BOARD OF DIRECTORS. The Plan shall be administered by
the Board of Directors of the Company, which shall determine and designate the
individuals to whom awards shall be made, the amount of the awards and the other
terms and conditions of the awards. Subject to the provisions of the Plan, the
Board of Directors may adopt and amend rules and regulations relating to
administration of the Plan, advance the lapse of any waiting period, accelerate
any exercise date, waive or modify any restriction applicable to shares (except
those restrictions imposed by law) and make all other determinations in the
judgment of the Board of Directors necessary or desirable for the administration
of the Plan. The interpretation and construction of the provisions of the Plan
and related agreements by the Board of Directors shall be final and conclusive.
The Board of Directors may correct any defect or supply any omission or
reconcile any inconsistency in the Plan or in any related agreement in the
manner and to the extent it deems expedient to carry the Plan into effect, and
the Board of Directors shall be the sole and final judge of such expediency.

                4.2     COMMITTEE. The Board of Directors may delegate to any
committee of the Board of Directors (the "Committee") any or all authority for
administration of the Plan. If authority is delegated to the Committee, all
references to the Board of Directors in the Plan shall mean and relate to the
Committee, except (i) as otherwise provided by the Board of Directors and (ii)
that only the Board of Directors may amend or terminate the Plan as provided in
Sections 3 and 11.

                4.3     OFFICERS. The Board of Directors may delegate to any
officer or officers of the Company authority to grant awards under the Plan,
subject to any restrictions imposed by the Board of Directors.

        5.      TYPES OF AWARDS, ELIGIBILITY, LIMITATIONS. The Board of
Directors may, from time to time, take the following actions, separately or in
combination, under the Plan: (i) grant Incentive Stock Options, as defined in
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), as
provided in Sections 6.1 and 6.2; (ii) grant options other than Incentive Stock
Options ("Non-Statutory Stock Options") as provided in Sections 6.1 and 6.3;
(iii) award stock bonuses as provided in Section 7; (iv) sell shares subject to
restrictions as provided in Section 8; and (v) award Performance-Based Awards as
provided in Section 9. Awards may be made to employees, including employees who
are officers or directors, and to other individuals described in Section 1
selected by the Board of Directors; provided, however, that only employees of
the Company or any parent or subsidiary of the Company (as defined in
subsections 424(e) and 424(f) of the Code) are eligible to receive Incentive
Stock Options under the Plan. The Board of Directors shall select the
individuals to whom awards shall be

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<PAGE>   3
made and shall specify the action taken with respect to each individual to whom
an award is made. At the discretion of the Board of Directors, an individual may
be given an election to surrender an award in exchange for the grant of a new
award. No employee may be granted options for more than an aggregate of 125,000
shares of Common Stock in any calendar year.

        6.      OPTION GRANTS.

                6.1     GENERAL RULES RELATING TO OPTIONS.

                        6.1-1   TERMS OF GRANT. The Board of Directors may grant
options under the Plan. With respect to each option grant, the Board of
Directors shall determine the number of shares subject to the option, the
exercise price, the period of the option, the time or times at which the option
may be exercised and whether the option is an Incentive Stock Option or a
Non-Statutory Stock Option. At the time of the grant of an option or at any time
thereafter, the Board of Directors may provide that an optionee who exercised an
option with Common Stock of the Company shall automatically receive a new option
to purchase additional shares equal to the number of shares surrendered and may
specify the terms and conditions of such new options.

                        6.1-2   EXERCISE OF OPTIONS. Except as provided in
Section 6.1-4 or as determined by the Board of Directors, no option granted
under the Plan may be exercised unless at the time of exercise the optionee is
employed by or in the service of the Company and shall have been so employed or
provided such service continuously since the date the option was granted. Except
as provided in Sections 6.1-4 and 10, options granted under the Plan may be
exercised from time to time over the period stated in each option in amounts and
at times prescribed by the Board of Directors, provided that options may not be
exercised for fractional shares. Unless otherwise determined by the Board of
Directors, if an optionee does not exercise an option in any one year for the
full number of shares to which the optionee is entitled in that year, the
optionee's rights shall be cumulative and the optionee may purchase those shares
in any subsequent year during the term of the option.

                        6.1-3   NONTRANSFERABILITY. Each Incentive Stock Option
and, unless otherwise determined by the Board of Directors, each other option
granted under the Plan by its terms (i) shall be nonassignable and
nontransferable by the optionee, either voluntarily or by operation of law,
except by will or by the laws of descent and distribution of the state or
country of the optionee's domicile at the time of death, and (ii) during the
optionee's lifetime, shall be exercisable only by the optionee.

                        6.1-4   TERMINATION OF EMPLOYMENT OR SERVICE.

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<PAGE>   4
                                6.1-4(a) GENERAL RULE. Unless otherwise
determined by the Board of Directors, if an optionee's employment or service
with the Company terminates for any reason other than because of total
disability or death as provided in Sections 6.1-4(b) and (c), his or her option
may be exercised at any time before the expiration date of the option or the
expiration of 30 days after the date of termination, whichever is the shorter
period, but only if and to the extent the optionee was entitled to exercise the
option at the date of termination.

                                6.1-4(b) TERMINATION BECAUSE OF TOTAL
DISABILITY. Unless otherwise determined by the Board of Directors, if an
optionee's employment or service with the Company terminates because of total
disability, his or her option may be exercised at any time before the expiration
date of the option or before the date 12 months after the date of termination,
whichever is the shorter period, but only if and to the extent the optionee was
entitled to exercise the option at the date of termination. The term "total
disability" means a medically determinable mental or physical impairment that is
expected to result in death or has lasted or is expected to last for a
continuous period of 12 months or more and that, in the opinion of the Company
and two independent physicians, causes the optionee to be unable to perform his
or her duties as an employee, director, officer or consultant of the Employer
and unable to be engaged in any substantial gainful activity. Total disability
shall be deemed to have occurred on the first day after the two independent
physicians have furnished their written opinion of total disability to the
Company and the Company has reached an opinion of total disability.

                                6.1-4(c) TERMINATION BECAUSE OF DEATH. Unless
otherwise determined by the Board of Directors, if an optionee dies while
employed by or providing service to the Company, his or her option may be
exercised at any time before the expiration date of the option or before the
date 12 months after the date of death, whichever is the shorter period, but
only if and to the extent the optionee was entitled to exercise the option at
the date of death and only by the person or persons to whom the optionee's
rights under the option shall pass by the optionee's will or by the laws of
descent and distribution of the state or country of domicile at the time of
death.

                                6.1-4(d) AMENDMENT OF EXERCISE PERIOD APPLICABLE
TO TERMINATION. The Board of Directors may at any time extend the 30-day and
12-month exercise periods any length of time not longer than the original
expiration date of the option. The Board of Directors may at any time increase
the portion of an option that is exercisable, subject to terms and conditions
determined by the Board of Directors.

                                6.1-4(e) FAILURE TO EXERCISE OPTION. To the
extent that the option of any deceased optionee or any optionee whose employment
or service terminates is

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<PAGE>   5
not exercised within the applicable period, all further rights to purchase
shares pursuant to the option shall cease and terminate.

                                6.1-4(f) LEAVE OF ABSENCE. Absence on leave
approved by the Employer or on account of illness or disability shall not be
deemed a termination or interruption of employment or service. Unless otherwise
determined by the Board of Directors, vesting of options shall continue during a
medical, family or military leave of absence, whether paid or unpaid, and
vesting of options shall be suspended during any other unpaid leave of absence.

                        6.1-5   PURCHASE OF SHARES.

                                6.1-5(a) NOTICE OF EXERCISE. Unless the Board of
Directors determines otherwise, shares may be acquired pursuant to an option
granted under the Plan only upon the Company's receipt of written notice from
the optionee of the optionee's binding commitment to purchase shares, specifying
the number of shares the optionee desires to purchase under the option and the
date on which the optionee agrees to complete the transaction, and, if required
to comply with the Securities Act of 1933, containing a representation that it
is the optionee's intention to acquire the shares for investment and not with a
view to distribution.

                                6.1-5(b) PAYMENT. Unless the Board of Directors
determines otherwise, on or before the date specified for completion of the
purchase of shares pursuant to an option exercise, the optionee must pay the
Company the full purchase price of those shares in cash or by check or, with the
consent of the Board of Directors, in whole or in part, in Common Stock of the
Company valued at fair market value, restricted stock or other contingent awards
denominated in either stock or cash, promissory notes and other forms of
consideration. Unless otherwise determined by the Board of Directors, any Common
Stock provided in payment of the purchase price must have been previously
acquired and held by the optionee for at least six months. The fair market value
of Common Stock provided in payment of the purchase price shall be the closing
price of the Common Stock last reported before the time payment in Common Stock
is made or, if earlier, committed to be made, if the Common Stock is publicly
traded, or another value of the Common Stock as specified by the Board of
Directors. No shares shall be issued until full payment for the shares has been
made, including all amounts owed for tax withholding. With the consent of the
Board of Directors, an optionee may request the Company to apply automatically
the shares to be received upon the exercise of a portion of a stock option (even
though stock certificates have not yet been issued) to satisfy the purchase
price for additional portions of the option.

                                6.1-5(c) TAX WITHHOLDING. Each optionee who has
exercised an option shall, immediately upon notification of the amount due, if
any, pay to the Company

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<PAGE>   6
in cash or by check amounts necessary to satisfy any applicable federal, state
and local tax withholding requirements. If additional withholding is or becomes
required (as a result of exercise of an option or as a result of disposition of
shares acquired pursuant to exercise of an option) beyond any amount deposited
before delivery of the certificates, the optionee shall pay such amount, in cash
or by check, to the Company on demand. If the optionee fails to pay the amount
demanded, the Company or the Employer may withhold that amount from other
amounts payable to the optionee, including salary, subject to applicable law.
With the consent of the Board of Directors, an optionee may satisfy this
obligation, in whole or in part, by instructing the Company to withhold from the
shares to be issued upon exercise or by delivering to the Company other shares
of Common Stock; provided, however, that the number of shares so withheld or
delivered shall not exceed the minimum amount necessary to satisfy the required
withholding obligation.

                                6.1-5(d) REDUCTION OF RESERVED SHARES. Upon the
exercise of an option, the number of shares reserved for issuance under the Plan
shall be reduced by the number of shares issued upon exercise of the option
(less the number of any shares surrendered in payment for the exercise price or
withheld to satisfy withholding requirements).

                        6.1-6   LIMITATIONS ON GRANTS TO NON-EXEMPT EMPLOYEES.
Unless otherwise determined by the Board of Directors, if an employee of the
Company or any parent or subsidiary of the Company is a non-exempt employee
subject to the overtime compensation provisions of Section 7 of the Fair Labor
Standards Act (the "FLSA"), any option granted to that employee shall be subject
to the following restrictions: (i) the option price shall be at least 85 percent
of the fair market value, as described in Section 6.2-4, of the Common Stock
subject to the option on the date it is granted; and (ii) the option shall not
be exercisable until at least six months after the date it is granted; provided,
however, that this six-month restriction on exercisability will cease to apply
if the employee dies, becomes disabled or retires, there is a change in
ownership of the Company, or in other circumstances permitted by regulation, all
as prescribed in Section 7(e)(8)(B) of the FLSA.

                6.2     INCENTIVE STOCK OPTIONS. Incentive Stock Options shall
be subject to the following additional terms and conditions:

                        6.2-1   LIMITATION ON AMOUNT OF GRANTS. If the aggregate
fair market value of stock (determined as of the date the option is granted) for
which Incentive Stock Options granted under this Plan (and any other stock
incentive plan of the Company or its parent or subsidiary corporations, as
defined in subsections 424(e) and 424(f) of the Code) are exercisable for the
first time by an employee during any calendar year exceeds $100,000, the portion
of the option or options not exceeding $100,000, to the extent of whole shares,
will be treated as an Incentive Stock Option and the remaining portion of the
option or options will be treated as a Non-Statutory Stock Option. The preceding
sentence will be applied by taking options into account in the order in which
they were granted. If, under the $100,000

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limitation, a portion of an option is treated as an Incentive Stock Option and
the remaining portion of the option is treated as a Non-Statutory Stock Option,
unless the optionee designates otherwise at the time of exercise, the optionee's
exercise of all or a portion of the option will be treated as the exercise of
the Incentive Stock Option portion of the option to the full extent permitted
under the $100,000 limitation. If an optionee exercises an option that is
treated as in part an Incentive Stock Option and in part a Non-Statutory Stock
Option, the Company will designate the portion of the stock acquired pursuant to
the exercise of the Incentive Stock Option portion as Incentive Stock Option
stock by issuing a separate certificate for that portion of the stock and
identifying the certificate as Incentive Stock Option stock in its stock
records.

                        6.2-2   LIMITATIONS ON GRANTS TO 10 PERCENT
SHAREHOLDERS. An Incentive Stock Option may be granted under the Plan to an
employee possessing more than 10 percent of the total combined voting power of
all classes of stock of the Company or any parent or subsidiary (as defined in
subsections 424(e) and 424(f) of the Code) only if the option price is at least
110 percent of the fair market value, as described in Section 6.2-4, of the
Common Stock subject to the option on the date it is granted and the option by
its terms is not exercisable after the expiration of five years from the date it
is granted.

                        6.2-3   DURATION OF OPTIONS. Subject to Sections 6.1-2,
6.1-4 and 6.2-2, Incentive Stock Options granted under the Plan shall continue
in effect for the period fixed by the Board of Directors, except that by its
terms no Incentive Stock Option shall be exercisable after the expiration of 10
years from the date it is granted.

                        6.2-4   OPTION PRICE. The option price per share shall
be determined by the Board of Directors at the time of grant. Except as provided
in Section 6.2-2, the option price shall not be less than 100 percent of the
fair market value of the Common Stock covered by the Incentive Stock Option at
the date the option is granted. The fair market value shall be the closing price
of the Common Stock last reported before the time the option is granted, if the
stock is publicly traded, or another value of the Common Stock as specified by
the Board of Directors.

                        6.2-5   LIMITATION ON TIME OF GRANT. No Incentive Stock
Option shall be granted on or after the tenth anniversary of the last action by
the Board of Directors adopting the Plan or approving an increase in the number
of shares available for issuance under the Plan, which action was subsequently
approved within 12 months by the shareholders.

                        6.2-6   EARLY DISPOSITIONS. If within two years after an
Incentive Stock Option is granted or within 12 months after an Incentive Stock
Option is exercised, the optionee sells or otherwise disposes of Common Stock
acquired on exercise of the Option, the optionee shall within 30 days of the
sale or disposition notify the Company in writing of (i) the

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date of the sale or disposition, (ii) the amount realized on the sale or
disposition and (iii) the nature of the disposition (e.g., sale, gift, etc.).

                6.3     NON-STATUTORY STOCK OPTIONS. Non-Statutory Stock Options
shall be subject to the following terms and conditions, in addition to those set
forth in Section 6.1 above:

                        6.3-1   OPTION PRICE. The option price for Non-Statutory
Stock Options shall be determined by the Board of Directors at the time of grant
and may be any amount determined by the Board of Directors.

                        6.3-2   DURATION OF OPTIONS. Non-Statutory Stock Options
granted under the Plan shall continue in effect for the period fixed by the
Board of Directors.

        7.      STOCK BONUSES. The Board of Directors may award shares under the
Plan as stock bonuses. Shares awarded as a bonus shall be subject to the terms,
conditions and restrictions determined by the Board of Directors. The
restrictions may include restrictions concerning transferability and forfeiture
of the shares awarded, together with any other restrictions determined by the
Board of Directors. The Board of Directors may require the recipient to sign an
agreement as a condition of the award, but may not require the recipient to pay
any monetary consideration other than amounts necessary to satisfy tax
withholding requirements. The agreement may contain any terms, conditions,
restrictions, representations and warranties required by the Board of Directors.
The certificates representing the shares awarded shall bear any legends required
by the Board of Directors. The Company may require any recipient of a stock
bonus to pay to the Company in cash or by check upon demand amounts necessary to
satisfy any applicable federal, state or local tax withholding requirements. If
the recipient fails to pay the amount demanded, the Company or the Employer may
withhold that amount from other amounts payable to the recipient, including
salary, subject to applicable law. With the consent of the Board of Directors, a
recipient may satisfy this obligation, in whole or in part, by instructing the
Company to withhold from any shares to be issued or by delivering to the Company
other shares of Common Stock; provided, however, that the number of shares so
withheld or delivered shall not exceed the minimum amount necessary to satisfy
the required withholding obligation. Upon the issuance of a stock bonus, the
number of shares reserved for issuance under the Plan shall be reduced by the
number of shares issued, less the number of shares withheld or delivered to
satisfy withholding obligations.

        8.      RESTRICTED STOCK. The Board of Directors may issue shares under
the Plan for any consideration (including promissory notes and services)
determined by the Board of Directors. Shares issued under the Plan shall be
subject to the terms, conditions and restrictions determined by the Board of
Directors. The restrictions may include restrictions

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<PAGE>   9
concerning transferability, repurchase by the Company and forfeiture of the
shares issued, together with any other restrictions determined by the Board of
Directors. All Common Stock issued pursuant to this Section 8 shall be subject
to a purchase agreement, which shall be executed by the Company and the
prospective purchaser of the shares before the delivery of certificates
representing the shares to the purchaser. The purchase agreement may contain any
terms, conditions, restrictions, representations and warranties required by the
Board of Directors. The certificates representing the shares shall bear any
legends required by the Board of Directors. The Company may require any
purchaser of restricted stock to pay to the Company in cash or by check upon
demand amounts necessary to satisfy any applicable federal, state or local tax
withholding requirements. If the purchaser fails to pay the amount demanded, the
Company or the Employer may withhold that amount from other amounts payable to
the purchaser, including salary, subject to applicable law. With the consent of
the Board of Directors, a purchaser may satisfy this obligation, in whole or in
part, by instructing the Company to withhold from any shares to be issued or by
delivering to the Company other shares of Common Stock; provided, however, that
the number of shares so withheld or delivered shall not exceed the minimum
amount necessary to satisfy the required withholding obligation. Upon the
issuance of restricted stock, the number of shares reserved for issuance under
the Plan shall be reduced by the number of shares issued, less the number of
shares withheld or delivered to satisfy withholding obligations.

        9.      PERFORMANCE-BASED AWARDS. The Board of Directors may grant
awards intended to qualify as qualified performance-based compensation under
Section 162(m) of the Code and the regulations thereunder ("Performance-Based
Awards"). Performance-Based Awards shall be denominated at the time of grant
either in Common Stock ("Stock Performance Awards") or in dollar amounts
("Dollar Performance Awards"). Payment under a Stock Performance Award or a
Dollar Performance Award shall be made, at the discretion of the Board of
Directors, in Common Stock ("Performance Shares"), or in cash or in any
combination thereof. Performance-Based Awards shall be subject to the following
terms and conditions:

                9.1     AWARD PERIOD. The Board of Directors shall determine the
period of time for which a Performance-Based Award is made (the "Award Period").

                9.2     PERFORMANCE GOALS AND PAYMENT. The Board of Directors
shall establish in writing objectives ("Performance Goals") that must be met by
the Company or any subsidiary, division or other unit of the Company ("Business
Unit") during the Award Period as a condition to payment being made under the
Performance-Based Award. The Performance Goals for each award shall be one or
more targeted levels of performance with respect to one or more of the following
objective measures with respect to the Company or any Business Unit: earnings,
earnings per share, stock price increase, total shareholder return (stock price
increase plus dividends), return on equity, return on assets, return on capital,
economic value

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<PAGE>   10
added, revenues, operating income, inventories, inventory turns, cash flows or
any of the foregoing before the effect of acquisitions, divestitures, accounting
changes, and restructuring and special charges (determined according to criteria
established by the Board of Directors). The Board of Directors shall also
establish the number of Performance Shares or the amount of cash payment to be
made under a Performance-Based Award if the Performance Goals are met or
exceeded, including the fixing of a maximum payment (subject to Section 9.4).
The Board of Directors may establish other restrictions to payment under a
Performance-Based Award, such as a continued employment requirement, in addition
to satisfaction of the Performance Goals. Some or all of the Performance Shares
may be issued at the time of the award as restricted shares subject to
forfeiture in whole or in part if Performance Goals or, if applicable, other
restrictions are not satisfied.

                9.3     COMPUTATION OF PAYMENT. During or after an Award Period,
the performance of the Company or Business Unit, as applicable, during the
period shall be measured against the Performance Goals. If the Performance Goals
are not met, no payment shall be made under a Performance-Based Award. If the
Performance Goals are met or exceeded, the Board of Directors shall certify that
fact in writing and certify the number of Performance Shares earned or the
amount of cash payment to be made under the terms of the Performance-Based
Award.

                9.4     MAXIMUM AWARDS. No participant may receive in any fiscal
year Stock Performance Awards under which the aggregate amount payable under the
Awards exceeds the equivalent of 125,000 shares of Common Stock or Dollar
Performance Awards under which the aggregate amount payable under the Awards
exceeds the amount determined by multiplying such participant's Salary by a
factor of four. For purposes of this Section 9, "Salary" shall mean the sum of
the annual base salary of the participant for such year as determined by the
Board of Directors in its sole discretion. Notwithstanding the foregoing,
"Salary" determined hereunder shall not include any amounts that would cause the
Board of Directors to exercise discretion not otherwise permitted by Section
162(m) of the Code..

                9.5     TAX WITHHOLDING. Each participant who has received
Performance Shares shall, upon notification of the amount due, pay to the
Company in cash or by check amounts necessary to satisfy any applicable federal,
state and local tax withholding requirements. If the participant fails to pay
the amount demanded, the Company or the Employer may withhold that amount from
other amounts payable to the participant, including salary, subject to
applicable law. With the consent of the Board of Directors, a participant may
satisfy this obligation, in whole or in part, by instructing the Company to
withhold from any shares to be issued or by delivering to the Company other
shares of Common Stock; provided, however, that the number of shares so
delivered or withheld shall not exceed the minimum amount necessary to satisfy
the required withholding obligation.

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                9.6     EFFECT ON SHARES AVAILABLE. The payment of a
Performance-Based Award in cash shall not reduce the number of shares of Common
Stock reserved for issuance under the Plan. The number of shares of Common Stock
reserved for issuance under the Plan shall be reduced by the number of shares
issued upon payment of an award, less the number of shares delivered or withheld
to satisfy withholding obligations.

        10.     CHANGES IN CAPITAL STRUCTURE.

                10.1    STOCK SPLITS, STOCK DIVIDENDS. If the outstanding Common
Stock of the Company is hereafter increased or decreased or changed into or
exchanged for a different number or kind of shares or other securities of the
Company by reason of any stock split, combination of shares, dividend payable in
shares, recapitalization or reclassification, appropriate adjustment shall be
made by the Board of Directors in the number and kind of shares available for
grants under the Plan and in all other share amounts set forth in the Plan. In
addition, the Board of Directors shall make appropriate adjustment in the number
and kind of shares as to which outstanding options, or portions thereof then
unexercised, shall be exercisable, so that the optionee's proportionate interest
before and after the occurrence of the event is maintained. Notwithstanding the
foregoing, the Board of Directors shall have no obligation to effect any
adjustment that would or might result in the issuance of fractional shares, and
any fractional shares resulting from any adjustment may be disregarded or
provided for in any manner determined by the Board of Directors. Any such
adjustments made by the Board of Directors shall be conclusive.

                10.2    MERGERS, REORGANIZATIONS, ETC. In the event of a merger,
consolidation, plan of exchange, acquisition of property or stock, split-up,
split-off, spin-off, reorganization or liquidation to which the Company is a
party or any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all, or substantially all, of the assets of
the Company (each, a "Transaction"), the Board of Directors shall, in its sole
discretion and to the extent possible under the structure of the Transaction,
select one of the following alternatives for treating outstanding options under
the Plan:

                        10.2-1  Outstanding options shall remain in effect in
accordance with their terms.

                        10.2-2  Outstanding options shall be converted into
options to purchase stock in one or more of the corporations, including the
Company, that are the surviving or acquiring corporations in the Transaction.
The amount, type of securities subject thereto and exercise price of the
converted options shall be determined by the Board of Directors of the Company,
taking into account the relative values of the companies involved in the
Transaction and the exchange rate, if any, used in determining shares of the
surviving corporation(s) to be held by holders of shares of the Company
following the Transaction. Unless otherwise

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determined by the Board of Directors, the converted options shall be vested only
to the extent that the vesting requirements relating to options granted
hereunder have been satisfied.

                        10.2-3  The Board of Directors shall provide a period of
30 days or less before the completion of the Transaction during which
outstanding options may be exercised to the extent then exercisable, and upon
the expiration of that period, all unexercised options shall immediately
terminate. The Board of Directors may, in its sole discretion, accelerate the
exercisability of options so that they are exercisable in full during that
period.

                10.3    DISSOLUTION OF THE COMPANY. In the event of the
dissolution of the Company, options shall be treated in accordance with Section
10.2-3.

                10.4    RIGHTS ISSUED BY ANOTHER CORPORATION. The Board of
Directors may also grant options and stock bonuses and Performance-Based Awards
and issue restricted stock under the Plan with terms, conditions and provisions
that vary from those specified in the Plan, provided that any such awards are
granted in substitution for, or in connection with the assumption of, existing
options, stock bonuses, Performance-Based Awards and restricted stock granted,
awarded or issued by another corporation and assumed or otherwise agreed to be
provided for by the Company pursuant to or by reason of a Transaction.

        11.     AMENDMENT OF THE PLAN. The Board of Directors may at any time
modify or amend the Plan in any respect. Except as provided in Section 10,
however, no change in an award already granted shall be made without the written
consent of the holder of the award if the change would adversely affect the
holder.

        12.     APPROVALS. The Company's obligations under the Plan are subject
to the approval of state and federal authorities or agencies with jurisdiction
in the matter. The Company will use its best efforts to take steps required by
state or federal law or applicable regulations, including rules and regulations
of the Securities and Exchange Commission and any stock exchange on which the
Company's shares may then be listed, in connection with the grants under the
Plan. The foregoing notwithstanding, the Company shall not be obligated to issue
or deliver Common Stock under the Plan if such issuance or delivery would
violate state or federal securities laws.

        13.     EMPLOYMENT AND SERVICE RIGHTS. Nothing in the Plan or any award
pursuant to the Plan shall (i) confer upon any employee any right to be
continued in the employment of an Employer or interfere in any way with the
Employer's right to terminate the employee's employment at will at any time, for
any reason, with or without cause, or to decrease the employee's compensation or
benefits, or (ii) confer upon any person engaged by an Employer any right to be
retained or employed by the Employer or to the continuation, extension,

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renewal or modification of any compensation, contract or arrangement with or by
the Employer.

        14.     RIGHTS AS A SHAREHOLDER. The recipient of any award under the
Plan shall have no rights as a shareholder with respect to any shares of Common
Stock until the date the recipient becomes the holder of record of those shares.
Except as otherwise expressly provided in the Plan, no adjustment shall be made
for dividends or other rights for which the record date occurs before the date
the recipient becomes the holder of record.

Adopted: July 23, 2001

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