Document:

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       FORM OF CERTIFICATE FOR THE GLOBAL FLOATING RATE NOTE - EXHIBIT 4.2

                     INTERNATIONAL LEASE FINANCE CORPORATION
                           MEDIUM-TERM NOTE, SERIES M
                                 (FLOATING RATE)

REGISTERED                                                            REGISTERED

NO. FLR-
CUSIP-

If this Security is registered in the name of The Depository Trust Company (the
"Depositary") (55 Water Street, New York, New York) or its nominee, this
Security may not be transferred except as a whole by the Depositary to a nominee
of the Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary unless and until
this Security is exchanged in whole or in part for Debt Securities in definitive
form. Unless this certificate is presented by an authorized representative of
the Depositary to the Company or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name of
Cede & Co. or such other name as requested by an authorized representative of
the Depositary and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since
the registered owner hereof, Cede & Co., has an interest herein.

REQUIRED TERMS

DESIGNATION:

PRINCIPAL AMOUNT:

ISSUE PRICE:

ORIGINAL ISSUE DATE:

STATED MATURITY:

INTEREST RATE BASIS OR BASES:

INITIAL INTEREST RATE:

INTEREST PAYMENT DATES:

INTEREST RATE RESET PERIOD:

INDEX MATURITY:

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PRESET TERMS

INTEREST RESET DATES:

INTEREST DETERMINATION DATES:

CALCULATION DATES:

REGULAR RECORD DATES:

OPTIONAL TERMS

SPREAD:

SPREAD MULTIPLIER: %

MAXIMUM INTEREST RATE:

MINIMUM INTEREST RATE:

OVERDUE RATE:

REDEEMABLE ON OR AFTER:

OPTIONAL REPAYMENT DATE:

FIXED INTEREST RATE:

FIXED RATE COMMENCEMENT DATE:

REPURCHASE PRICE (for Discount Securities):

OPTIONAL RESET DATES:

EXTENSION PERIODS:

FINAL MATURITY:

OTHER PROVISIONS:

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                INTERNATIONAL LEASE FINANCE CORPORATION, a California
corporation (hereinafter called the "Company," which term includes any successor
corporation under the Indenture, as hereinafter defined), for value received,
hereby promises to pay to Cede & Co., or registered assigns, the principal sum
set forth above at Stated Maturity shown above and to pay interest thereon from
the Original Issue Date shown above or from the most recent Interest Payment
Date (as hereinafter defined) to which interest has been paid or duly provided
for, in arrears on the Interest Payment Dates set forth above ("Interest Payment
Dates"), until the principal hereof is paid or made available for payment, and
on Stated Maturity, commencing with the Interest Payment Date next succeeding
the Original Issue Date, at the rate per annum determined in accordance with the
provisions below, depending on the Interest Rate Basis or Bases specified above.
Interest will be payable on each Interest Payment Date and at Stated Maturity or
upon redemption or optional repayment. Interest will be payable to the Holder at
the close of business on the Regular Record Date which, unless otherwise
specified above, shall be the fifteenth calendar day (whether or not a Business
Day (as defined below)) immediately preceding the related Interest Payment Date;
provided, however, that interest payable at Stated Maturity or upon redemption
or optional repayment will be payable to the person to whom principal is payable
and (to the extent that the payment of such interest shall be legally
enforceable) at the Overdue Rate, if any, per annum set forth above on any
overdue principal and premium and on any overdue installment of interest. If the
Original Issue Date is between a Regular Record Date and the next succeeding
Interest Payment Date, the first payment of interest hereon will be made on the
Interest Payment Date following the next succeeding Regular Record Date to the
Holder on such next Regular Record Date.

                Payment of the principal, and premium, if any, and interest
payable at Stated Maturity or upon redemption or optional repayment of this
Security will be made in immediately available funds at the corporate trust
office or agency of the Trustee in New York, New York, provided that this
Security is presented to the Trustee in time for the Trustee to make such
payments in such funds in accordance with its normal procedures. Interest (other
than interest payable at Stated Maturity or upon redemption or optional
repayment) will be paid by check mailed to the address of the person entitled
thereto as it appears in the Security Register on the applicable Regular Record
Date or, at the option of the Company, by wire transfer to an account maintained
by such person with a bank located in the United States. Notwithstanding the
foregoing, (1) the Depositary or its nominee, if it is the registered Holder of
this Security, will be entitled to receive payments of interest (other than at
Stated Maturity or upon redemption or optional repayment) by wire transfer to an
account maintained by such Holder with a bank located in the United States, and
(2) a Holder of $10,000,000 or more in aggregate principal amount of Securities
having the same Interest Payment Date will, upon receipt on or prior to the
Regular Record Date preceding an applicable Interest Payment Date by the Trustee
of written instructions from such Holder, be entitled to receive payments of
interest (other than at Stated Maturity or upon redemption or optional
repayment) by wire transfer to an account maintained by such Holder with a bank
located in the United States. Such instructions shall remain in effect with
respect to payments of interest made to such Holder on subsequent Interest
Payment Dates unless revoked or changed by written instructions received by the
Trustee from such Holder, provided that any such written revocation or change
which is received by the Trustee after a Regular Record Date and before the
related Interest Payment Date shall not be effective with respect to the
interest payable on such Interest Payment Date.

                This Security is one of a duly authorized issue of Medium-Term
Notes, Series M of the Company (herein called the "Securities"), issued and to
be issued under an Indenture dated as of November 1, 2000 (herein called the
"Indenture") between the Company and The Bank of New York, as trustee (herein
called the "Trustee," which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights, limitation of rights,
duties and immunities thereunder of the Company, the Trustee and the Holders of
the Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof. The Securities of this series may be issued from time to time
at varying maturities, interest rates and other terms as may be designated with
respect to a Security.

                After the completion of the issuance for which this Security is
a part, the Company may, from time to time, reopen such issuance and issue
additional Securities with the same terms (including maturity and interest
payment terms) as this Security. After such additional Securities are issued,
they will be fungible with this Security.

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                The interest rate borne by this Security shall be determined as
follows:

        -       Unless this Security is designated as a "Floating Rate/Fixed
                Rate Note," an "Inverse Floating Rate Note" or as having an
                Addendum attached, this Security shall be designated as a
                "Regular Floating Rate Note" and, except as described below or
                as specified on the face hereof, bear interest at the rate
                determined by reference to the Interest Rate Basis or Bases
                specified on the face hereof (a) plus or minus the Spread, if
                any, specified on the face hereof and/or (b) multiplied by the
                Spread Multiplier, if any, specified on the face hereof.
                Commencing on the first Interest Reset Date (as defined below),
                the rate at which interest on this Security shall be payable
                shall be reset as of each Interest Reset Date; provided,
                however, that the interest rate in effect for the period from
                the Original Issue Date to the first Interest Reset Date shall
                be the Initial Interest Rate specified on the face hereof.

        -       If this Security is designated as a "Floating Rate/Fixed Rate
                Note," then, except as described below or as specified on the
                face hereof, this Security shall bear interest at the rate
                determined by reference to the Interest Rate Basis or Bases
                specified on the face hereof (a) plus or minus the Spread, if
                any, specified on the face hereof and/or (b) multiplied by the
                Spread Multiplier, if any, specified on the face hereof.
                Commencing on the first Interest Reset Date, the rate at which
                interest on this Security shall be payable shall be reset as of
                each Interest Reset Date; provided, however, that the interest
                rate in effect for the period from the Original Issue Date to
                the first Interest Reset Date shall be the Initial Interest Rate
                specified on the face hereof and the interest rate in effect
                commencing on the Fixed Rate Commencement Date specified on the
                face hereof to Stated Maturity shall be the Fixed Interest Rate,
                if such rate is specified on the face hereof or, if no such
                Fixed Interest Rate is so specified, the interest rate in effect
                hereon on the day immediately preceding the Fixed Rate
                Commencement Date.

        -       If this Security is designated as an "Inverse Floating Rate
                Note," then, except as described below or as specified on the
                face hereof, this Security shall bear interest equal to the
                Fixed Interest Rate specified on the face hereof minus the rate
                determined by reference to the Interest Rate Basis or Bases
                specified on the face hereof (a) plus or minus the Spread, if
                any, specified on the face hereof and/or (b) multiplied by the
                Spread Multiplier, if any, specified on the face hereof;
                provided, however, that, unless otherwise specified on the face
                hereof, the interest rate hereon shall not be less than zero
                during any Interest Rate Reset Period (as defined below).
                Commencing on the first Interest Reset Date, the rate at which
                interest on this Security is payable shall be reset as of each
                Interest Reset Date; provided, however, that the interest rate
                in effect for the period from the Original Issue Date to the
                first Interest Reset Date shall be the Initial Interest Rate
                specified on the face hereof.

                Notwithstanding the foregoing, if this Security is designated as
having an Addendum attached as specified on the face hereof, this Security shall
bear interest in accordance with the terms described in such Addendum and as
specified on the face hereof.

                Except as set forth above or as specified on the face hereof,
the interest rate in effect on each day shall be (1) if such day is an Interest
Reset Date, the interest rate determined as of the Interest Determination Date
(as defined below) immediately preceding such Interest Reset Date or (2) if such
day is not an Interest Reset Date, the interest rate determined as of the
Interest Determination Date immediately preceding the most recent Interest Reset
Date.

                Unless otherwise specified on the face hereof:

                (1) The "Interest Reset Date" shall be, if the Interest Rate
                Reset Period specified on the face hereof is (i) daily, each
                Business Day; (ii) weekly, the Wednesday of each week (except
                with respect to the Treasury Rate which shall reset on the
                Tuesday of each week, except as described below); (iii) monthly,
                the third Wednesday of each month (except with respect to the
                Eleventh

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                District Cost of Funds Rate which shall reset on the first
                calendar day of the month); (iv) quarterly, the third Wednesday
                of March, June, September and December of each year, (v)
                semiannually, the third Wednesday of the two months specified on
                the face hereof; and (vi) annually, the third Wednesday of the
                month specified on the face hereof. If any Interest Reset Date
                would otherwise be a day that is not a Business Day, such
                Interest Reset Date shall be postponed to the next succeeding
                day that is a Business Day, unless LIBOR is an applicable
                Interest Rate Basis, in which case, if such Business Day falls
                in the next succeeding calendar month, such Interest Reset Date
                shall be the immediately preceding Business Day.

                (2) The "Interest Determination Date" with respect this Security
                shall be: (i) if the applicable Interest Rate Basis is the CD
                Rate or the CMT Rate, the second Business Day immediately
                preceding the applicable Interest Reset Date; (ii) if the
                applicable Interest Rate Basis is the Commercial Paper Rate, the
                Federal Funds Rate or the Prime Rate, the Business Day
                immediately preceding the applicable Interest Reset Date; (iii)
                if the applicable Interest Rate Basis is the Eleventh District
                Cost of Funds Rate, the last working day of the month
                immediately preceding the applicable Interest Reset Date on
                which the Federal Home Loan Bank of San Francisco publishes the
                Index (as defined below); (iv) if the applicable Interest Rate
                Basis is LIBOR, the second London Business Day (as defined
                below) immediately preceding the applicable Interest Reset Date
                and (v) if the applicable Interest Rate Basis is the Treasury
                Rate, the day in the week in which the applicable Interest Reset
                Date falls on which day Treasury Bills (as defined below) are
                normally auctioned; provided, however, that if an auction is
                held on the Friday of the week preceding the applicable Interest
                Reset Date, the Interest Determination Date will be such
                preceding Friday; and provided, further, that if an auction
                falls on the applicable Interest Reset Date, then the Interest
                Reset Date will instead be the first Business Day following such
                auction. If the interest rate on this Security is determined by
                reference to two or more Interest Rate Bases, the Interest
                Determination Date shall be the second Business Day prior to the
                applicable Interest Reset Date for this Security on which each
                Interest Rate Basis is determinable. Each Interest Rate Basis
                will be determined on such date, and the applicable interest
                rate will take effect on the applicable Interest Reset Date.

                (3) The "Calculation Date," if applicable, pertaining to any
                Interest Determination Date will be the earlier of (1) the tenth
                calendar day after such Interest Determination Date, or, if such
                day is not a Business Day, the next succeeding Business Day or
                (2) the Business Day immediately preceding the applicable
                Interest Payment Date or Stated Maturity, as the case may be.

                Unless otherwise specified on the face hereof, the interest rate
with respect to each Interest Rate Basis shall be determined in accordance with
the following provisions:

Determination of CD Rate

                If the Interest Rate Basis with respect to this Security is the
CD Rate, such rate shall be determined by the Calculation Agent appointed as
agent by the Company to calculate the rates of interest applicable to securities
including this Security (the "Calculation Agent") in accordance with the
following provisions:

                "CD Rate" means the rate on the date for negotiable certificates
of deposit having the Index Maturity specified on the face hereof as published
by the Board of Governors of the Federal Reserve System in "H.15(519)" (as
defined below), under the heading "CDs (Secondary Market)."

                The Interest Determination Date relating to a CD Rate Note or
any Floating Rate Note for which the interest rate is determined with reference
to the CD Rate is referred to herein as a "CD Rate Interest Determination Date."

                The following procedures will be followed if the CD Rate cannot
be determined as described above:

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        -       If the rate is not published by 3:00 P.M., New York City time,
                on the related Calculation Date, the rate on the CD Rate
                Interest Determination Date for negotiable certificates of
                deposit of the Index Maturity specified on the face hereof as
                published in H.15 Daily Update (as later defined) or the other
                recognized electronic source used for the purpose of displaying
                the rate under the caption "CDs (secondary market)" will apply.

        -       If the rate is not yet published in either H.15(519), H.15 Daily
                Update or other recognized electronic source on the related
                Calculation Date, the CD Rate for the CD Rate Interest
                Determination Date will be calculated by the Calculation Agent
                and will be the arithmetic mean of the secondary market offered
                rates as of 10:00 A.M., New York City time on the date, of three
                leading nonbank dealers in negotiable United States dollar
                certificates of deposit in the City of New York. The secondary
                market offered rates will be selected by the Calculation Agent
                for negotiable certificates of deposit of major United States
                money center banks for negotiable certificates of deposit with a
                remaining maturity closest to the Index Maturity designated on
                the face hereof and be in an amount that is representative for a
                single transaction in that market at that time.

        -       If the dealers so selected by the Calculation Agent are not
                quoting as set forth above, the CD Rate for the CD Rate Interest
                Determination Date will be that CD Rate in effect on the CD Rate
                Interest Determination Date.

                "Index Maturity" means the period to maturity of the instrument
or obligation with respect to which the related Interest Rate Basis or Bases
will be calculated.

                "H.15(519)" means the designated weekly statistical release, or
any successor publication, published by the Board of Governors of the Federal
Reserve System.

                "H.15 Daily Update" means the daily update of H.15(519),
available through the world-wide-web site of the Board of Governors of the
Federal Reserve System at http://www.federalreserve.gov/releases/h15/update, or
any successor site or publication.

Determination of CMT Rate

                If the Interest Rate Basis with respect to this Security is the
CMT Rate, such rate will be determined by the Calculation Agent in accordance
with the following provisions:

                The Interest Determination Date relating to a CMT Rate Note or
any Floating Rate Note for which the interest rate is determined with reference
to the CMT Rate will be referred to herein as the "CMT Rate Interest
Determination Date."

                "CMT Rate" means:

                (1) if CMT Telerate Page 7051 is specified on the face hereof:

                        (a) the percentage equal to the yield for United States
                Treasury securities at "constant maturity" having the Index
                Maturity specified on the face hereof as published in H.15(519)
                under the caption "Treasury Constant Maturities", as the yield
                is displayed on Bridge Telerate, Inc. (or any successor service)
                on page 7051 (or any other page as may replace the specified
                page on that service) ("Telerate Page 7051"), for the CMT Rate
                Interest Determination Date, or

                        (b) if the rate referred to in clause (a) does not so
                appear on Telerate Page 7051, the percentage equal to the yield
                for United States Treasury securities at "constant maturity"
                having

<PAGE>   7

                the Index Maturity specified on the face hereof and for the CMT
                Rate Interest Determination Date as published in H.15(519) under
                the caption "Treasury Constant Maturities", or

                        (c) if the rate referred to in clause (b) does not so
                appear in H.15(519), the rate on the CMT Rate Interest
                Determination Date for the period of the Index Maturity
                specified on the face hereof as may then be published by either
                the Federal Reserve System Board of Governors or the United
                States Department of the Treasury that the Calculation Agent
                determines to be comparable to the rate which would otherwise
                have been published in H.15(519), or

                        (d) if the rate referred to in clause (c) is not so
                published, the rate on the CMT Rate Interest Determination Date
                calculated by the Calculation Agent as a yield to maturity based
                on the arithmetic mean of the secondary market bid prices at
                approximately 3:30 P.M., New York City time, on that CMT Rate
                Interest Determination Date of three leading primary United
                States government securities dealers in The City of New York
                (which may include the agents or their affiliates) (each, a
                "Reference Dealer"), selected by the Calculation Agent from five
                Reference Dealers selected by the Calculation Agent and
                eliminating the highest quotation, or, in the event of equality,
                one of the highest, and the lowest quotation or, in the event of
                equality, one of the lowest, for United States Treasury
                securities with an original maturity equal to the Index Maturity
                specified on the face hereof, a remaining term to maturity no
                more than 1 year shorter than that Index Maturity and in a
                principal amount that is representative for a single transaction
                in the securities in that market at that time, or

                        (e) if fewer than five but more than two of the prices
                referred to in clause (d) are provided as requested, the rate on
                the CMT Rate Interest Determination Date calculated by the
                Calculation Agent based on the arithmetic mean of the bid prices
                obtained and neither the highest nor the lowest of the
                quotations shall be eliminated, or

                        (f) if fewer than three prices referred to in clause (d)
                are provided as requested, the rate on the CMT Rate Interest
                Determination Date calculated by the Calculation Agent as a
                yield to maturity based on the arithmetic mean of the secondary
                market bid prices as of approximately 3:30 P.M., New York City
                time, on that CMT Rate Interest Determination Date of three
                Reference Dealers selected by the Calculation Agent from five
                Reference Dealers selected by the Calculation Agent and
                eliminating the highest quotation or, in the event of equality,
                one of the highest and the lowest quotation or, in the event of
                equality, one of the lowest, for United States Treasury
                securities with an original maturity greater than the Index
                Maturity specified on the face hereof, a remaining term to
                maturity closest to that Index Maturity and in a principal
                amount that is representative for a single transaction in the
                securities in that market at that time, or

                        (g) if fewer than five but more than two prices referred
                to in clause (f) are provided as requested, the rate on the CMT
                Rate Interest Determination Date calculated by the Calculation
                Agent based on the arithmetic mean of the bid prices obtained
                and neither the highest nor the lowest of the quotations will be
                eliminated, or

                        (h) if fewer than three prices referred to in clause (f)
                are provided as requested, the CMT Rate in effect on the CMT
                Rate Interest Determination Date.

                (2) if CMT Telerate Page 7052 is specified on the face hereof:

                        (a) the percentage equal to the one-week or one-month,
                as specified on the face hereof, average yield for United States
                Treasury securities at "constant maturity" having the Index
                Maturity specified on the face hereof as published in H.15(519)
                opposite the caption "Treasury Constant Maturities", as the
                yield is displayed on Bridge Telerate, Inc. (or any successor
                service) (on page 7052 or any other page as may replace the
                specified page on that service) ("Telerate Page

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                7052"), for the week or month, as applicable, ended immediately
                preceding the week or month, as applicable, in which the CMT
                Rate Interest Determination Date falls, or

                        (b) if the rate referred to in clause (a) does not so
                appear on Telerate Page 7052, the percentage equal to the
                one-week or one-month, as specified on the face hereof, average
                yield for United States Treasury securities at "constant
                maturity" having the Index Maturity specified on the face hereof
                and for the week or month, as applicable, preceding the CMT Rate
                Interest Determination Date as published in H.15(519) opposite
                the caption "Treasury Constant Maturities," or

                        (c) if the rate referred to in clause (b) does not so
                appear in H.15(519), the one-week or one-month, as specified on
                the face hereof, average yield for United States Treasury
                securities at "constant maturity" having the Index Maturity
                specified on the face hereof as otherwise announced by the
                Federal Reserve Bank of New York for the week or month, as
                applicable, ended immediately preceding the week or month, as
                applicable, in which the CMT Rate Interest Determination Date
                falls, or

                        (d) if the rate referred to in clause (c) is not so
                published, the rate on the CMT Rate Interest Determination Date
                calculated by the Calculation Agent as a yield to maturity based
                on the arithmetic mean of the secondary market bid prices at
                approximately 3:30 P.M., New York City time, on that CMT Rate
                Interest Determination Date of three Reference Dealers selected
                by the Calculation Agent from five Reference Dealers selected by
                the Calculation Agent and eliminating the highest quotation, or,
                in the event of equality, one of the highest, and the lowest
                quotation or, in the event of equality, one of the lowest, for
                United States Treasury securities with an original maturity
                equal to the Index Maturity specified on the face hereof, a
                remaining term to maturity no more than 1 year shorter than that
                Index Maturity and in a principal amount that is representative
                for a single transaction in the securities in that market at
                that time, or

                        (e) if fewer than five but more than two of the prices
                referred to in clause (d) are provided as requested, the rate on
                the CMT Rate Interest Determination Date calculated by the
                Calculation Agent based on the arithmetic mean of the bid prices
                obtained and neither the highest nor the lowest of the
                quotations shall be eliminated, or

                        (f) if fewer than three prices referred to in clause (d)
                are provided as requested, the rate on the CMT Rate Interest
                Determination Date calculated by the Calculation Agent as a
                yield to maturity based on the arithmetic mean of the secondary
                market bid prices as of approximately 3:30 P.M., New York City
                time, on that CMT Rate Interest Determination Date of three
                Reference Dealers selected by the Calculation Agent from five
                Reference Dealers selected by the Calculation Agent and
                eliminating the highest quotation or, in the event of equality,
                one of the highest and the lowest quotation or, in the event of
                equality, one of the lowest, for United States Treasury
                securities with an original maturity greater than the particular
                Index Maturity, a remaining term to maturity closest to that
                Index Maturity and in a principal amount that is representative
                for a single transaction in the securities in that market at the
                time, or

                        (g) if fewer than five but more than two prices referred
                to in clause (f) are provided as requested, the rate on the CMT
                Rate Interest Determination Date calculated by the Calculation
                Agent based on the arithmetic mean of the bid prices obtained
                and neither the highest or the lowest of the quotations will be
                eliminated, or

                        (h) if fewer than three prices referred to in clause (f)
                are provided as requested, the CMT Rate in effect on that CMT
                Rate Interest Determination Date.

                If two United States Treasury securities with an original
maturity greater than the Index Maturity specified on the face hereof have
remaining terms to maturity equally close to the that Index Maturity, the quotes
for

<PAGE>   9

the United States Treasury security with the shorter original remaining term to
maturity will be used.

Determination of Commercial Paper Rate

                If the Interest Rate Basis with respect to this Security is the
Commercial Paper Rate, such rate shall be determined by the Calculation Agent in
accordance with the following provisions:

                "Commercial Paper Rate" means the Money Market Yield (as defined
below) on the date of the rate for commercial paper having the Index Maturity
specified on the face hereof as published in H.15(519) under the caption
"Commercial Paper -- Non-Financial."

                The Interest Determination Date relating to a Commercial Paper
Rate Note or any Floating Rate Note for which the interest rate is determined
with reference to the Commercial Paper Rate will be referred to herein as the
"Commercial Paper Rate Interest Determination Date."

                The following procedures will be followed if the Commercial
Paper Rate cannot be determined as described above:

        -       In the event the rate is not published by 3:00 P.M., New York
                City time, on the related Calculation Date then the Commercial
                Paper Rate will be the Money Market Yield (as defined below) on
                the Commercial Paper Rate Interest Determination Date of the
                rate for commercial paper having the Index Maturity specified on
                the face hereof, as published in H.15 Daily Update, or the other
                recognized electronic source used for the purpose of displaying
                the rate under the caption "Commercial Paper Non-Financial." An
                Index Maturity of one month will be deemed equivalent to an
                Index Maturity of 30 days and an Index Maturity of three months
                will be deemed to be equivalent to an Index Maturity of 90 days.

        -       If by 3:00 P.M., New York City time, on the related Calculation
                Date, the rate is not yet published in H.15(519), H15 Daily
                Update or another other recognized electronic source, then the
                Commercial Paper Rate on the Interest Determination Date will be
                calculated by the Calculation Agent and will be the Money Market
                Yield of the arithmetic mean of the offered rates at
                approximately 11:00 A.M., New York City time, on the Commercial
                Paper Rate Interest Determination Date of three leading dealers
                United States dollar commercial paper in The City of New York.
                The quotations will be selected by the Calculation Agent for
                commercial paper having the Index Maturity designated on the
                face hereof placed for an industrial issuer whose bond rating is
                "AA," or the equivalent, from a nationally recognized rating
                agency.

        -       If the dealers selected by the Calculation Agent are not quoting
                as provided above, the Commercial Paper Rate will be that
                Commercial Paper Rate in effect on the Commercial Paper Rate
                Interest Determination Date.

                "Money Market Yield" means a yield (expressed as a percentage
rounded to the nearest one-hundredth of a percent, with five one-thousandths of
a percent rounded upwards) calculated by the following formula:

                          Money Market Yield   =    D x 360      x   100
                                                  ----------
                                                 360 - (D x M)

                where "D" is the applicable per annum rate for commercial paper
                quoted on a bank discount basis and expressed as a decimal, and
                "M" refers to the actual number of days in the applicable
                Interest Reset Period.

<PAGE>   10

Determination of Eleventh District Cost of Funds Rate

                If the Interest Rate Basis with respect to this Security is the
Eleventh District Cost of Funds Rate, such rate shall be determined by the
Calculation Agent in accordance with the following provisions:

                "Eleventh District Cost of Funds Rate" means the rate equal to
the monthly weighted average cost of funds for the calendar month immediately
preceding the month in which the Eleventh District Cost of Funds Rate Interest
Determination Date falls, as set forth under the caption "11th District" on
Bridge Telerate, Inc. (or any successor service) on page 7058 ("Telerate Page
7058") as of 11:00 A.M. San Francisco time, on the date.

                An Interest Determination Date relating to an Eleventh District
Cost of Funds Rate Note or any Floating Rate Note for which the interest rate is
determined with reference to the Eleventh District Cost of Funds Rate will be
referred to herein as an "Eleventh District Cost of Funds Rate Interest
Determination Date."

                The following procedures will be followed if the Eleventh
District Cost of Funds Rate cannot be determined as described above:

        -       If the rate does not appear on Telerate Page 7058 on any related
                Eleventh District Cost of Funds Rate Interest Determination
                Date, the Eleventh District Cost of Funds Rate for the Eleventh
                District Cost of Funds Rate Interest Determination Date will be
                the monthly weighted average costs of funds paid by member
                institutions of the Eleventh Federal Home Loan Bank District
                that was most recently announced (the "Index") by the Federal
                Home Loan Bank of San Francisco as the cost of funds for the
                calendar month immediately preceding the date of the
                announcement.

        -       If the Federal Home Loan Bank of San Francisco fails to announce
                the rate for the calendar month immediately preceding the
                Eleventh District Cost of Funds Rate Interest Determination
                Date, then the Eleventh District Cost of Funds Rate determined
                as of the Eleventh District Cost of Funds Rate Interest
                Determination Date will be the Eleventh District Cost of Funds
                Rate in effect on the Eleventh District Cost of Funds Rate
                Interest Determination Date.

Determination of Federal Funds Rate

                If the Interest Rate Basis with respect to this Security is the
Federal Funds Rate, such rate shall be determined by the Calculation Agent in
accordance with the following provisions:

                "Federal Funds Rate" means the rate on the date for federal
funds as published in H.15(519) under the heading "Federal Funds (Effective)",
as the rate is displayed on Bridge Telerate, Inc. (or any successor service) on
page 120 (or any other page as may replace the page on the service) ("Telerate
120").

                An Interest Determination Date relating to a Federal Funds Rate
Note or any Floating Rate Note for which the interest rate is determined with
reference to the Federal Funds Rate will be referred to herein as a "Federal
Funds Rate Interest Determination Date."

                The following procedures will be followed if the Federal Funds
Rate cannot be determined as described above:

        -       If the rate does not appear on Telerate Page 120 or is not so
                published by 3:00 P.M. New York City time, on the related
                Calculation Date, the rate on the Federal Funds Rate Interest
                Determination Date as published in H.15 Daily Update, or the
                other recognized electronic source used for the purpose of
                displaying the rate, under the caption "Federal Funds
                (Effective)" will be used.

        -       If by 3:00 P.M., New York City time, on the related Calculation
                Date the rate does not appear on Telerate Page 120 or is not yet
                published in H.15(519), H.15 Daily Update or other recognized

<PAGE>   11

                electronic source, then the Federal Funds Rate on the Federal
                Funds Rate Interest Determination Date will be calculated by the
                Calculation Agent and will be the arithmetic mean of the rates
                for the last transaction in overnight United States dollar
                federal funds arranged by three leading brokers of United States
                dollar federal funds transactions in The City of New York (which
                may include one or more of the Agents or their affiliates)
                selected by the Calculation Agent prior to 9:00 A.M., New York
                City time, on that Federal Funds Rate Interest Determination
                Date.

        -       If the brokers selected by the Calculation Agent are not quoting
                as provided above, the Federal Funds Rate determined as of the
                Federal Funds Rate Interest Determination Date will be the
                Federal Funds Rate in effect on that Federal Funds Rate Interest
                Determination Date.

Determination of LIBOR

                If the Interest Rate Basis with respect to this Security is
LIBOR, such rate shall be determined by the Calculation Agent in accordance with
the following provisions:

                An Interest Determination Date relating to a LIBOR Note or any
Floating Rate Note for which the interest rate is determined with reference to
LIBOR will be referred to herein as a "LIBOR Interest Determination Date".

       (a) Upon a LIBOR Interest Determination Date, the LIBOR rate will be
    either:

                if "LIBOR Telerate" is specified on the face hereof or if
        neither "LIBOR Reuters" nor "LIBOR Telerate" is specified on the face
        hereof as the method for calculating LIBOR, the rate for deposits in the
        Designated LIBOR Currency having the Index Maturity specified on the
        face hereof, commencing on the Interest Reset Date, that appears on the
        Designated LIBOR Page as of 11:00 A.M., London time, on the LIBOR
        Interest Determination Date; or

                if "LIBOR Reuters" is specified on the face hereof, the
        arithmetic mean of the offered rates (unless the Designated LIBOR Page
        by its terms provides only for a single rate, in which case that single
        rate shall be used) for deposits in the Designated LIBOR Currency having
        the Index Maturity specified on the face hereof, commencing on the
        applicable Interest Reset Date, that appear (or, if only a single rate
        is required as aforesaid, appears) on the Designated LIBOR Page as of
        11:00 A.M., London time, on the LIBOR Interest Determination Date. If
        fewer than two offered rates so appear, or if no rate so appears, as
        applicable, LIBOR on the LIBOR Interest Determination Date will be
        determined in accordance with the provisions described in paragraph (b)
        set forth below.

       (b) With respect to a LIBOR Interest Determination Date on which fewer
    than two offered rates appear, or no rate appears, as the case may be, on
    the Designated LIBOR Page as specified in (a) above, LIBOR will be
    determined according to the procedures described below:

        -       The Calculation Agent will request the principal London offices
                of each of four major reference banks in the London interbank
                market, as selected by the Calculation Agent, to provide the
                Calculation Agent with its offered quotation for deposits in the
                Designated LIBOR Currency for the period of the Index Maturity
                specified on the face hereof, commencing on the applicable
                Interest Reset Date, to prime banks in the London interbank
                market at approximately 11:00 A.M., London time, on the LIBOR
                Interest Determination Date and in a principal amount that is
                representative for a single transaction in the Designated LIBOR
                Currency in the market at the time.

        -       If at least two quotations are so provided, then LIBOR on the
                LIBOR Interest Determination Date will be the arithmetic mean of
                the quotations.

<PAGE>   12

        -       If fewer than two quotations are so provided, then LIBOR on the
                LIBOR Interest Determination Date will be the arithmetic mean of
                the rates quoted at approximately 11:00 A.M., in the applicable
                principal financial center, on the LIBOR Interest Determination
                Date by three major banks in the principal financial center
                selected by the Calculation Agent for loans in the Designated
                LIBOR Currency to leading European banks, having the Index
                Maturity specified on the face hereof and in a principal amount
                that is representative for a single transaction in the
                Designated LIBOR Currency in the market at the time.

        -       If the banks so selected by the Calculation Agent are not
                quoting as provided above, LIBOR determined as of the LIBOR
                Interest Determination Date will be LIBOR in effect on that
                LIBOR Interest Determination Date.

                "Designated LIBOR Currency" means the currency specified on the
face hereof as to which LIBOR shall be calculated or, if no currency is
specified on the face hereof, United States dollars.

                "Designated LIBOR Page" means (a) if "LIBOR Reuters" is
specified on the face hereof, the display on the Reuter Monitor Money Rates
Service (or any successor service) on the page specified on the face hereof (or
any other page as may replace the page on the service) for the purpose of
displaying the London interbank rates of major banks for the Designated LIBOR
Currency, or (b) if "LIBOR Telerate" is specified on the face hereof or neither
"LIBOR Reuters" nor "LIBOR Telerate" is specified on the face hereof as the
method for calculating LIBOR, the display on Bridge Telerate, Inc. (or any
successor service) on the page specified on the face hereof (or any other page
as may replace the page on the service) for the purpose of displaying the London
interbank rates of major banks for the Designated LIBOR Currency.

Determination of Prime Rate

                If the Interest Rate Basis with respect to this Security is the
Prime Rate, such rate shall be determined by the Calculation Agent in accordance
with the following provisions:

                "Prime Rate" means the rate on the date as published in
H.15(519) under the heading "Bank Prime Loan."

                An Interest Determination Date relating to a Prime Rate Note or
any Floating Rate Note for which the interest rate is determined with reference
to the Prime Rate will be referred to herein as a "Prime Rate Interest
Determination Date."

                The following procedures will be followed if the Prime Rate
cannot be determined as described above:

        -       If the rate is not published in H.15(519) prior to 3:00 P.M.,
                New York City time, on the related Calculation Date, the rate on
                the Prime Rate Interest Determination Date as published in H.15
                Daily Update, or other recognized electronic source used for the
                purpose of displaying the rate, under the caption "Bank Prime
                Loan" will be used.

        -       If the rate is not published prior to 3:00 P.M., New York City
                time, on the related Calculation Date, in H.15(519), or H.15
                Daily Update or another recognized electronic source, then the
                Prime Rate will be the arithmetic mean of the rates of interest
                publicly announced by each bank that appears on the Reuters
                Screen US PRIME 1 (as defined below) as the bank's prime rate or
                base lending rate as in effect for that Prime Rate Interest
                Determination Date, as determined by the Calculation Agent.

        -       If fewer than four rates appear on the Reuters Screen US PRIME 1
                for the Prime Rate Interest Determination Date, the Prime Rate
                will be calculated by the Calculation Agent and will be the
                arithmetic mean of the prime rates or base lending rates quoted
                on the basis of the actual number

<PAGE>   13

                of days in the year divided by a 360-day year as of the close of
                business on the Prime Rate Interest Determination Date by three
                major banks in The City of New York (which may include
                affiliates of the Agents) selected by the Calculation Agent.

        -       If the banks or trust companies selected are not quoting as
                provided above, the Prime Rate determined for the Prime Rate
                Interest Determination Date will be that Prime Rate in effect on
                the Prime Rate Interest Determination Date.

                "Reuters Screen US PRIME 1" means the display designated as page
"US PRIME 1" on the Reuters Monitor Money Rates Service (or the other page as
may replace the US PRIME 1 page on that service for the purpose of displaying
prime rates or base lending rates of major United States banks).

Determination of Treasury Rate

                If the Interest Rate Basis with respect to this Security is the
Treasury Rate, such rate shall be determined by the Calculation Agent in
accordance with the following provisions:

                An Interest Determination Date relating to a Treasury Rate Note
or any Floating Rate Note for which the interest rate is determined by reference
in the Treasury Rate shall be referred to herein as a "Treasury Rate Interest
Determination Date."

                "Treasury Rate" means:

                (1) the rate from the auction held on the Treasury Rate Interest
                Determination Date (the "Auction") of direct obligations of the
                United States ("Treasury Bills") having the Index Maturity
                specified on the face hereof under the caption "INVESTMENT RATE"
                on the display on Bridge Telerate, Inc. (or any successor
                service) on page 56 (or any other page as may replace that page
                on that service) ("Telerate Page 56") or page 57 (or any other
                page as may replace that page on that service) ("Telerate Page
                57"), or

                (2) if the rate referred to in clause (1) is not so published by
                3:00 P.M., New York City time, on the related Calculation Date,
                the Bond Equivalent Yield (as defined below) of the rate for the
                applicable Treasury Bills as published in H.15 Daily Update, or
                another recognized electronic source used for the purpose of
                displaying the applicable rate, under the caption "U.S.
                Government Securities/Treasury Bills/Auction High", or

                (3) if the rate referred to in clause (2) is not so published by
                3:00 P.M., New York City time, on the related Calculation Date,
                the Bond Equivalent Yield of the auction rate of the applicable
                Treasury Bills as announced by the United States Department of
                the Treasury, or

                (4) if the rate referred to in clause (3) is not so announced by
                the United States Department of the Treasury, or if the Auction
                is not held, the Bond Equivalent Yield of the rate on the
                Treasury Rate Interest Determination Date of the applicable
                Treasury Bills as published in H.15(519) under the caption "U.S.
                Government Securities/Treasury Bills/Secondary Market", or

                (5) if the rate referred to in clause (4) not so published by
                3:00 P.M., New York City time, on the related Calculation Date,
                the rate on the Treasury Rate Interest Determination Date of the
                applicable Treasury Bills as published in H.15 Daily Update, or
                another recognized electronic source used for the purpose of
                displaying the applicable rate, under the caption "U.S.
                Government Securities/Treasury Bills/Secondary Market", or

                (6) if the rate referred to in clause (5) is not so published by
                3:00 P.M., New York City time, on the related Calculation Date,
                the rate on the Treasury Rate Interest Determination Date
                calculated by the Calculation Agent as the Bond Equivalent Yield
                of the arithmetic mean of the

<PAGE>   14

                secondary market bid rates, as of approximately 3:30 P.M., New
                York City time, on that Treasury Rate Interest Determination
                Date, of three primary United States government securities
                dealers (which may include the agents or their affiliates)
                selected by the Calculation Agent, for the issue of Treasury
                Bills with a remaining maturity closest to the Index Maturity
                specified on the face hereof, or

                (7) if the dealers so selected by the Calculation Agent are not
                quoting as mentioned in clause (6), the Treasury Rate in effect
                on the Treasury Rate Interest Determination Date.

                "Bond Equivalent Yield" means a yield (expressed as a
percentage) calculated in accordance with the following formula:

                        Bond Equivalent Yield =    D x N      x   100
                                                ----------
                                               360 - (D x M)

where "D" refers to the applicable per annum rate for Treasury Bills quoted on a
bank discount basis and expressed as a decimal, "N" refers to 365 or 366, as the
case may be, and "M" refers to the actual number of days in the applicable
Interest Reset Period.

                Notwithstanding the foregoing, the interest rate hereon shall
not be greater than the Maximum Interest Rate, if any, or less than the Minimum
Interest Rate, if any, shown on the face hereof. The Calculation Agent shall
calculate the interest rate on this Security in accordance with the foregoing on
each Interest Determination Date.

                The interest rate on this Security will in no event be higher
than the maximum rate permitted by New York or California law as the same may be
modified by the United States law of general applicability.

                The Calculation Agent will, upon the request of the Holder of
this Security, provide to such Holder the interest rate hereon then in effect
and, if different, the interest rate which will become effective as of the next
applicable Interest Reset Date.

                If any Interest Payment Date specified on the face hereof would
otherwise be a day that is not a Business Day, the Interest Payment Date shall
be postponed to the next day that is a Business Day, except that if (1) the rate
of interest on this Security shall be determined in accordance with the
provisions of the heading "Determination of LIBOR" above, and (2) such Business
Day is in the next succeeding calendar month, such Interest Payment Date shall
be the immediately preceding Business Day. "Business Day" means any day that is
not a Saturday or Sunday and that, in The City of New York (and, if the rate of
interest on this Security shall be determined in accordance with the provisions
of the heading "Determination of LIBOR" above, the City of London), is not a day
on which banking institutions are generally authorized or obligated by law to
close.

                Interest payments for this Security will include interest
accrued from and including the date of issue or from and including the last date
in respect of which interest has been paid, as the case may be, to, but
excluding, the Interest Payment Date or Stated Maturity, as the case may be.
Accrued interest hereon from the Original Issue Date or from the last date to
which interest hereon has been paid, as the case may be, shall be an amount
calculated by multiplying the face amount hereof by an accrued interest factor.
Such accrued interest factor shall be computed by adding the interest factor
calculated for each day from the Original Issue Date or from the last date to
which interest shall have been paid, as the case may be, to the date for which
accrued interest is being calculated. The interest factor for each such day
shall be computed by dividing the interest rate (expressed as a decimal)
applicable to such day by 360, in case the Interest Rate Basis of this Security
is the Commercial Paper Rate or LIBOR, or by the actual number of days in the
year in the case the Interest Rate Basis of this Security is the Treasury Rate.

                On each Optional Reset Date, if any, specified on the face
hereof, the Company has the option to reset the Spread and the Spread
Multiplier. If no date or dates for such reset are set forth on the face hereof,
this

<PAGE>   15

Security will not be subject to such reset. The Company may exercise such option
by notifying the Trustee of such exercise at least 45 but not more than 60 days
prior to an Optional Reset Date. Not later than 40 days prior to such Optional
Reset Date, the Trustee will mail to the Holder hereof a notice (the "Reset
Notice"), first class, postage prepaid. The Reset Notice will indicate whether
the Company has elected to reset the Spread or Spread Multiplier and if so, (1)
such new Spread or Spread Multiplier, as the case may be; and (2) the
provisions, if any, for redemption during the period from such Optional Reset
Date to the next Optional Reset Date or, if there is no such next Optional Reset
Date, to Stated Maturity (each such period a "Subsequent Interest Period"),
including the date or dates on which or the period or periods during which and
the price or prices at which such redemption may occur during such Subsequent
Interest Period.

                Notwithstanding the foregoing, the Company may, at its option,
revoke the Spread or Spread Multiplier as provided for in the Reset Notice, and
establish a Spread or Spread Multiplier that is higher (or lower if this
Security is designated an Inverse Floating Rate Note) than the Spread or Spread
Multiplier provided for in the relevant Reset Notice for the Subsequent Interest
Period commencing on such Optional Reset Date, by causing the Trustee to mail,
not later than 20 days prior to an Optional Reset Date (or, if the day is not a
Business Day, on the immediately succeeding Business Day), a notice of such new
Spread or Spread Multiplier to the Holder hereof. Such notice will be
irrevocable. The Company must notify the Trustee of its intentions to revoke
such Reset Notice at least 25 days prior to such Optional Reset Date. If the
Spread or Spread Multiplier hereof is reset on an Optional Reset Date and the
Holder hereof has not tendered this Security for repayment (or has validly
revoked any such tender) pursuant to the next succeeding paragraph, such Holder
will bear such new Spread or Spread Multiplier for the Subsequent Interest
Period.

                If the Company elects to reset the Spread or Spread Multiplier
as described above, the Holder hereof will have the option to elect repayment
hereof by the Company on any Optional Reset Date at a price equal to the
aggregate principal amount hereof outstanding on, plus any interest accrued to,
such Optional Reset Date. In order to exercise such option, the Holder hereof
must follow the procedures set forth below for optional repayment, except that
(1) the period for delivery of this Security or notification to the Trustee will
be at least 25 but not more than 35 days prior to such Optional Reset Date and
(2) a Holder who has tendered for repayment pursuant to a Reset Notice may, by
written notice to the Trustee, revoke any such tender until the close of
business on the tenth day prior to such Optional Reset Date.

                The Company may extend the Stated Maturity of this Security for
the number of periods of whole years from one to five, if any, specified on the
face hereof under Extension Periods up to but not beyond the Final Maturity Date
specified on the face hereof. If no period or periods for such extension are set
forth on the face hereof, this Security will not be subject to such extension
and will finally mature on the Stated Maturity specified on the face hereof. The
Company may exercise such option by notifying the Trustee of such exercise at
least 45 but not more than 60 days prior to the old Stated Maturity. Not later
than 40 days prior to the old Stated Maturity, the Trustee will mail to the
Holder hereof a notice (the "Extension Notice"), first class, postage prepaid.
The Extension Notice will set forth (2) the election of the Company to extend
the Stated Maturity; (2) the new Stated Maturity; (3) the Spread or Spread
Multiplier applicable to the Extension Period; and (4) the provisions, if any,
for redemption during the Extension Period, including the date or dates on which
or the period or periods during which and the price or prices at which such
redemption may occur during the Extension Period. Upon the mailing by such
Trustee of an Extension Notice to the Holder hereof, the Stated Maturity shall
be extended automatically, and, except as modified by the Extension Notice and
as described in the next paragraph, this Security will have the same terms as
prior to the mailing of such Extension Notice.

                Notwithstanding the foregoing, not later than 20 days prior to
the old Stated Maturity, the Company may, at its option, revoke the Spread or
Spread Multiplier provided for in the Extension Notice and establish a higher
(or lower if this Security is designated an Inverse Floating Rate Note) Spread
or Spread Multiplier for the Extension Period, by causing the Trustee to mail
notice of such new Spread or Spread Multiplier, as the case may be, first class,
postage prepaid, to the Holder hereof. Such notice will be irrevocable. In such
case, this Security will bear such new Spread or Spread Multiplier for the
Extension Period, whether or not tendered for repayment.

<PAGE>   16

                If the Company extends the Stated Maturity, the Holder hereof
will have the option to elect repayment hereof by the Company on the old Stated
Maturity at a price equal to the principal amount hereof, plus any interest
accrued and unpaid to such date. In order to exercise such option, the Holder
hereof must follow the procedures set forth for optional repayment, except that
(1) the period for delivery of this Security or notification to the Trustee will
be at least 25 but not more than 35 days prior to the old Stated Maturity and
(2) a Holder who has tendered for repayment pursuant to an Extension Notice may,
by written notice to the Trustee, revoke any such tender for repayment until the
close of business on the tenth day before the old Stated Maturity.

                Unless otherwise indicated on the face of this Security, this
Security may not be redeemed prior to Stated Maturity. If so indicated on the
face of this Security, this Security may be redeemed, at the option of the
Company, on any date on or after the date set forth on the face hereof, either
in whole or from time to time in part at a redemption price equal to 100% of the
principal amount redeemed, together with interest accrued and unpaid thereon to
the date of redemption. Notice of redemption shall be mailed to the Holders of
the Securities designated for redemption at their addresses as the same shall
appear in the Security Register not less than 30 and not more than 60 days prior
to the date of redemption, subject to all the conditions and provisions of the
Indenture. In the event of any redemption, the Company will not be required to
(1) issue, register the transfer of, or exchange any Security during a period
beginning at the opening of business 15 days before any selection of Securities
to be redeemed and ending at the close of business on the date of mailing of the
relevant notice of redemption or (2) register the transfer or exchange of any
Security, or any portion thereof, called for redemption, except the unredeemed
portion of any Security being redeemed in part. Only a new Security or
Securities for the amount of the unredeemed portion hereof shall be issued in
the name of the Holder upon the cancellation hereof.

                If so provided on the face of this Security, the Security will
be subject to repayment at the option of the Holder on the date or dates so
indicated on the face hereof. If no date or dates for such repayment are set
forth on the face hereof, this Security will not be repayable at the option of
the Holder prior to Stated Maturity. On an optional repayment date, if any, this
Security will be repayable in whole or in part in increments of $1,000 at the
option of the Holder at a price equal to 100% of the principal amount to be
repaid, together with interest thereon payable to the date of repayment, if not
more than 60 nor less than 30 days prior to the date or dates of repayment set
forth on the face hereof, the Company receives either (a) the Security with the
form entitled "Option to Elect Repayment" on the reverse of the Security duly
completed or (b) a telegram, telex, facsimile transmission or letter from a
member of a national securities exchange or the National Association of
Securities Dealers, Inc. or a commercial bank or a trust company in the United
States of America stating the name of the Holder of the Security, the principal
amount of the Security, the amount of the Security to be repaid, a statement
that the option to elect repayment is being exercised, and a guarantee that the
Security to be repaid with the form entitled "Option to Elect Repayment" on the
reverse of the Security duly completed will be received by the Company within
five Business Days after the date of the telegram, telex, facsimile transmission
or letter, and the security and form duly completed are so received by the
Company. Any notice of this effect received by the Company will be irrevocable.
The final and binding determination of all questions as to the validity,
eligibility (including time of receipt) and acceptance of this Security for
repayment will be made by the Company. In the event of repayment of this
Security in part only, a new Security for the unrepaid portion hereof shall be
issued in the name of the Holder hereof upon the surrender hereof.

                If an Event of Default with respect to Securities of this series
shall occur and be continuing, the principal of the Securities of the series may
be declared due and payable in the manner and with the effect provided in the
Indenture.

                Unless otherwise specified on the face hereof, if (1) this
Security is issued with original issue discount (as defined in the Internal
Revenue Code of 1986, as amended)( the "Code"), and (2) the principal hereof is
declared to be due and payable immediately, the amount of principal due and
payable with respect hereto shall be limited to the Principal Amount hereof
multiplied by the sum of the Issue Price hereof (expressed as a percentage of
the Principal Amount hereof); plus the aggregate portions of the original issue
discount (consisting of the excess of the amounts considered as part of the
"stated redemption price at maturity" of the Security within the meaning of
Section 1273(a)(2) of the Code, whether denominated as principal or interest,
over the Issue Price), which have accrued pursuant to Section 1272 of the Code
(without regard to Section 1272(a)(7) of the Code) from the date of

<PAGE>   17

issuance of the Security to the date of determination; and minus any amount paid
from the date of issuance up to the date of determination which is considered
part of the "stated redemption price at maturity" of the Security.

                The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of not less than a majority in
principal amount of the Securities at the time outstanding of each series to be
affected. The Indenture also contains provisions permitting the Holders of not
less than a majority in principal amount of the outstanding Securities of any
series to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Security shall be conclusive
and binding upon such Holder and upon all future Holders of this Security and of
any Security issued upon the registration of transfer hereof or in exchange
hereof or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Security.

                No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of, premium,
if any, and interest on this Security at the times, places and rate, and in the
coin or currency, herein prescribed. However, the Indenture limits Holder's
rights to enforce the Indenture and this Security.

                This Security is exchangeable only if (1) the Depositary
notifies the Company that it is unwilling or unable to continue as Depositary
for this Global Security or if at any time the Depositary ceases to be a
clearing agency registered under the Securities Exchange Act of 1934, as
amended, and a successor Depositary is not appointed within the time specified
in the Indenture, or (2) the Company in its sole discretion determines that all
Global Securities of the same series as this Security shall be exchangeable for
definitive Securities of differing denominations aggregating a like amount in
registered form. If this Security is exchangeable pursuant to the preceding
sentence, it shall be exchangeable for definitive Securities of differing
denominations aggregating a like amount in registered form in denominations of
$1,000 and integral multiples of $1,000 in excess thereof, bearing interest at
the same rate or pursuant to the same formula, having the same date of issuance,
redemption provisions, if any, Stated Maturity and other terms.

                The Depositary will not sell, assign, transfer or otherwise
convey any beneficial interest in this Security unless such beneficial interest
is in an amount equal to $1,000 or an integral multiple of $1,000 in excess
thereof. The Depositary, by accepting this Security, agrees to be bound by such
provision.

                No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.

                Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue and none of the
Company, the Trustee or any such agent shall be affected by notice to the
contrary.

                All percentages resulting from any calculation on this Security
will be rounded to the nearest one hundred-thousandth of a percentage point,
with five one-millionths of a percentage point rounded upwards (e.g., 9.876545%
(or .09876545) would be rounded to 9.87655% (or .0987655)), and all dollar
amounts used in or resulting from such calculation on this Security will be
rounded to the nearest cent (with one-half cent being rounded upwards).

                THE INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

                All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.

<PAGE>   18

                IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal as of the Dated Date set forth on the
face hereof.

                                       INTERNATIONAL LEASE FINANCE CORPORATION

[Seal]

                                       By:
                                           -------------------------------------
                                           Chairman of the Board

                                           -------------------------------------
                                           President

Attest:

----------------------------------
          Secretary

                Unless the certificate of authentication hereon has been
executed by The Bank of New York, the Trustee under the Indenture, or its
successor thereunder, by the manual signature of one of its authorized
signatories or authorized Authenticating Agents, this Note shall not be entitled
to any benefits under the Indenture, or be valid or obligatory for any purpose.

                          CERTIFICATE OF AUTHENTICATION

                This is one of the Securities of the series designated herein
referred to in the within-mentioned Indenture.

Date of Registration:

                                       THE BANK OF NEW YORK,
                                       as Trustee

                                       By:
                                           -------------------------------------
                                           Authorized Signatory

<PAGE>   19

[FORM OF ASSIGNMENT]

                                  ABBREVIATIONS

                The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations.

       TEN COM -- as tenants in common
       TEN ENT -- as tenants by the entireties
       JT TEN  -- as joint tenants with right of survivorship and not as tenants
                  in common

UNIF GIFT MIN ACT -- __________________ Custodian ___________________
                            (Cust)                     (Minor)

under Uniform Gifts to Minors Act _____________________________
                                            (State)

                Additional abbreviations may also be used though not in the
above list.

                         ______________________________

                FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto

Please insert Social Security or Other
Identifying Number of Assignee           _________________________________

PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE

_____________________________________________________

_____________________________________________________

the within Note and all rights thereunder, hereby irrevocably constituting and
appointing

_____________________________________________________ Attorney to transfer said
Note on the books of the Company, with full power of substitution in the
premises.

Dated: ________________________________

                                    ____________________________________________

                                    ____________________________________________
                                    Notice: The signature to this assignment
                                            must correspond with the name as
                                            written on the face of the within
                                            instrument in every particular,
                                            without alteration or enlargement,
                                            or any change whatever.

<PAGE>   20

                            OPTION TO ELECT REPAYMENT

                The undersigned hereby irrevocably requests and instructs the
Company to repay the within Security (or portion thereof specified below)
pursuant to its terms at a price equal to the principal amount thereof, together
with interest to the repayment date, to the undersigned.

                The undersigned acknowledges that for the within Security to be
repaid, the Company must receive at the offices or agencies of the Trustee in
The City of New York, during the period specified in this Security (1) the
Security with this "Option to Elect Repayment" form duly completed, or (2) a
telegram, telex, facsimile or letter from a member of a national securities
exchange or the National Association of Securities Dealers, Inc. or a commercial
bank or a trust company in the United States of America setting forth the name
of the Holder of the Security, the principal amount of the Security, the amount
of the Security to be repaid, a statement that the option to elect repayment is
being exercised thereby and a guarantee that the Security to be repaid with the
"Option to Elect Repayment" form duly completed will be received by the Company
not later than five Business Days after the date of such telegram, telex,
facsimile transmission or letter and such Security and form duly completed are
received by the Company by such fifth Business Day. Any such notice received by
the Company during the period specified in this Security shall be irrevocable.

                If less than the entire principal amount of the within Security
is to be repaid, specify the portion thereof (which shall be $1,000 or an
integral multiple thereof) which the Holder elects to have repaid:
$______________; and specify the denomination or denominations (which shall be
$1,000 or an integral multiple thereof) of the Security or Securities to be
issued to the Holder for the portion of the within Security not being repaid (in
the absence of any such specification, one such Security will be issued for the
portion not being repaid): $______________.

Dated:

                                    ____________________________________________
                                    Note: The signature to this Option to Elect
                                    Repayment must correspond with the name as
                                    it appears upon the face of the within
                                    Security in every particular without
                                    alteration or enlargement or any change
                                    whatever.<PAGE>   1

                                                                    Exhibit 10.1

                                    EXHIBIT A
                         NATIONAL SCIENTIFIC CORPORATION
                              AMENDED AND RESTATED
                             2000 STOCK OPTION PLAN

      SECTION 1. PURPOSE OF PLAN. The purpose of the National Scientific
Corporation 2000 Stock Option Plan (the "Plan") shall be to provide for the
grant to employees, officers, directors, and consultants of the Company options
to acquire Stock of the Company.

      SECTION 2. DEFINITIONS. Unless the context clearly indicates otherwise,
the following terms, when used in the Plan, shall have the meanings set forth in
this section.

      (a) "Board" shall mean the Board of Directors of the Company.

      (b) "Cause" shall mean (i) Grantee's willful, material and irreparable
breach of any agreement that governs the terms and conditions of his or her
employment; (ii) Grantee's gross negligence or gross incompetence in the
performance or intentional nonperformance (continuing for ten days after receipt
of written notice of such negligence) of any of Grantee's material duties and
responsibilities; (iii) Grantee's dishonesty, fraud or misconduct with respect
to the business or affairs of the Company or any Subsidiary; (iv) Grantee's
conviction of a felony; or (v) chronic alcohol abuse or illegal drug abuse by
Grantee.

      (c) A "Change in Control" of the Company shall occur when: (i) any
"person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act)
is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing
30 percent or more of the combined voting power of the Company's then
outstanding securities; (ii) as a result of, or in connection with, any tender
offer or exchange offer, merger, or other business combination (a
"Transaction"), the persons who were Directors of the Company immediately before
the Transaction shall cease to constitute a majority of the Board or any
successor to the Company; (iii) the Company is merged or consolidated with
another corporation and as a result of the merger or consolidation less than 75
percent of the outstanding voting securities of the surviving or resulting
corporation shall then be owned in the aggregate by the former shareholders of
the Company; (iv) a tender offer or exchange offer is made and consummated for
the ownership of securities of the Company representing 50 percent or more of
the combined voting power of the Company's then outstanding voting securities;
or (v) the Company transfers substantially all of its assets to another
corporation which is not controlled by the Company.

      (d) "Code" shall mean the Internal Revenue Code of 1986 as it may be
amended from time to time.

      (e) "Committee" shall mean the Board or, in the discretion of the Board,
any Committee of two or more Directors that may be designated by the Board to
administer the Plan, all of which Committee's members shall be Nonemployee
Directors. Additionally, if any Options are intended to qualify as
performance-based compensation under Section 162(m)(4)(C) of the Code, all
members of the Committee granting such Options shall be "outside directors"
within the meaning of that Code section.

      (f) "Company" shall mean National Scientific Corporation, a Texas
corporation.

      (g) "Consultant" shall mean any person who is engaged to perform services
for the Company or its Subsidiaries, other than as an Employee or Director.
<PAGE>   2
      (h) "Control Person" shall mean any person who, as of the date of grant of
an Option, owns (within the meaning of Section 422(b)(6) of the Code) stock
possessing more than ten percent of the total combined voting power or value of
all classes of stock of the Company or of any Parent or Subsidiary.

      (i) "Director" shall mean any member of the Board.

      (j) "Employee" shall mean any full-time employee of the Company or any
Subsidiary (including Directors who are otherwise employed on a full-time basis
by the Company or any Subsidiary).

      (k) "Exchange Act" shall mean the Securities Exchange Act of 1934 as it
may be amended from time to time.

      (l) "Fair Market Value" of the Stock on a given date shall be based upon:
(i) if the Stock is listed on a national securities exchange or quoted in an
interdealer quotation system, the last sales price or, if such price is
unavailable, the average of the closing bid and asked prices per share of the
Stock on such date (or, if there was no trading or quotation in the Stock on
such date, on the next preceding date on which there was trading or quotation)
as provided by one of such organizations; or (ii) if the Stock is not listed on
a national securities exchange or quoted in an interdealer quotation system, the
value as determined by the Board in good faith in its sole discretion.

      (m) "Grantee" shall mean a person granted an Option under the Plan.

      (n) "ISO" shall mean an Option granted pursuant to the Plan to purchase
shares of the Stock and intended to qualify as an incentive stock option under
Section 422 of the Code, as now or hereafter constituted.

      (o) "1933 Act" shall mean the Securities Act of 1933, as it may be amended
from time to time.

      (p) "Nonemployee Director" shall mean a Director who is a "nonemployee
director" within the meaning of Rule 16b-3 under the Exchange Act and an
"outside director" within the meaning of Section 162(m) of the Code:

      (q) "NQSO" shall mean an Option granted pursuant to the Plan to purchase
shares of the Stock that is not an ISO.

      (r) "Option" or "Options" shall refer to one or more NQSOs and ISOs issued
under and subject to the Plan.

      (s) "Parent" shall mean any parent corporation as defined in Section 424
of the Code.

      (t) "Plan" shall mean the National Scientific Corporation 2000 Stock
Option Plan as set forth herein and as amended from time to time.

      (u) "SEC" means the United States Securities and Exchange Commission.

      (v) "Stock" shall mean shares of the common stock, par value $.01 per
share, of the Company.

                                        2
<PAGE>   3
      (w) "Subsidiary" shall mean any corporation with respect to which the
Company owns, directly or indirectly, 50 percent or more of the total combined
voting power of all classes of stock of such corporation.

      SECTION 3. SHARES OF STOCK SUBJECT TO THE PLAN. Subject to the provisions
of Section 11 hereof, the total amount of Stock with respect to which Options
may be granted under the Plan shall not exceed the greater of (i) 7,000,000
shares (subject to adjustment pursuant to Section 11 hereof) and (ii)15 percent
of the total number of shares of Stock outstanding from time to time at the time
of grant of any Option hereunder. Notwithstanding the foregoing, the total
amount of Stock with respect to which ISOs may be granted under the Plan shall
not exceed 3,500,000 shares. Moreover, the total amount of Stock with respect to
which Options may be granted under the Plan to any Grantee during the term of
the Plan shall not exceed 3,000,000 shares. Stock issuable under the Plan may be
authorized but unissued shares or reacquired shares of Stock. If, prior to
exercise, any Options are forfeited, lapse, or terminate for any reason, the
Stock covered thereby shall again be available for Option grants under the Plan.

      SECTION 4. ADMINISTRATION OF THE PLAN. The Plan shall be administered by
the Committee. Subject to the express provisions of the Plan, the Committee
shall have the authority to interpret the Plan, to prescribe, amend, and rescind
rules and regulations relating to the Plan, to determine the terms and
provisions of stock option agreements thereunder, and to make all other
determinations necessary or advisable for the administration of the Plan. Any
controversy or claim arising out of or related to the Plan or the Options
granted thereunder shall be determined unilaterally by, and at the sole
discretion of, the Committee. To the extent necessary to comply with Rule 16b-3
under the Exchange Act, determinations concerning Options granted to any person
who is a Director or officer or otherwise subject to Section 16 of the Exchange
Act shall be made by the Committee.

      SECTION 5. LIMITATION OF LIABILITY. Each member of the Committee shall be
entitled to, in good faith, rely or act upon any report or other information
furnished to him by any officer or other employee of the Company or any
subsidiary, the Company's independent certified public accountants or any
executive compensation consultant, legal counsel or other professional retained
by the Company to assist in the administration of the Plan. No member of the
Committee, nor any officer or employee of the Company acting on behalf of the
Committee, shall be personally liable for any action, determination or
interpretation taken or made in good faith with respect to the Plan, and all
members of the Committee and any officer or employee of the Company acting on
its behalf shall, to the extent permitted by law, be fully indemnified and
protected by the Company with respect to any such action, determination or
interpretation.

      SECTION 6. TYPES OF OPTIONS. Options granted under the Plan may be of two
types: ISOs or NQSOs. The Committee shall have the authority and discretion to
grant to an eligible Employee either ISOs, NQSOs, or both but shall clearly
designate the nature of each Option at the time of grant. Grantees who are not
Employees of the Company or a Subsidiary on the date an Option is granted shall
receive only NQSOs.

      SECTION 7. GRANTS OF OPTIONS TO NONEMPLOYEE DIRECTORS.

      (a) Nonemployee Directors of the Company shall be eligible to receive
Options under the Plan only pursuant to the provisions of this Section 7. Each
individual who agrees to become a Nonemployee Director shall receive, without
the exercise of the discretion of any person, an NQSO under the Plan relating to
the purchase of 5,000 shares of Stock on the date that the Nonemployee
Director's service as a director commences. In addition, on the date of each
annual meeting of the shareholders, each person who is a continuing Nonemployee
Director on any such date shall receive, without the exercise of discretion of
any person, an NQSO under the Plan relating to the purchase of 5,000 shares of

                                        3
<PAGE>   4
Stock. In the event that there are not sufficient shares available under the
Plan to allow for the grant to each Nonemployee Director of an NQSO for the
number of shares provided herein, each Nonemployee Director shall receive an
NQSO for his pro rata share of the total number of shares of Stock available
under the Plan.

      (b) The exercise price of each share of Stock subject to an Option granted
a Nonemployee Director shall equal the Fair Market Value of a share of Stock on
the date such Option is granted.

      (c) Each Option granted to a Nonemployee Director shall become exercisable
six (6) months from, and shall have a term of ten (10) years from, the date of
the Option grant. Notwithstanding the exercise period of any Option granted to a
Nonemployee Director, all such Options shall immediately become exercisable upon
(1) the death of a Nonemployee Director while serving as such or (2) a Change in
Control.

      SECTION 8. GRANTS OF OPTIONS TO EMPLOYEES AND CONSULTANTS.

      (a) Employees and Consultants of the Company and its Subsidiaries shall be
eligible to receive Options under the Plan. Consultants of the Company shall
receive only NQSOs.

      (b) The exercise price per share of Stock subject to an Option granted to
an Employee or Consultant shall be determined by the Committee; provided,
however, that the exercise price of each share subject to an ISO shall be not
less than 100 percent of the Fair Market Value of a share of the Stock on the
date such Option is granted, or, in the case of an ISO granted to a Control
Person, not less than 110 percent of such Fair Market Value, and the exercise
price of each share subject to an NQSO shall be not less than 25 percent of the
Fair Market Value of a share of the Stock on the date such Option is granted.

      (c) The term of each Option granted to an Employee or Consultant shall be
determined by the Committee, provided that no ISO shall be exercisable more than
ten years from the date of grant of the Option and further provided that no ISO
granted to a Control Person shall be exercisable more than five years from the
date of grant of the Option.

      (d) The Committee shall determine and designate from time to time
Employees or Consultants who are to be granted Options, the nature of each
Option granted and the number of shares of Stock subject to each such Option.

      (e) Notwithstanding any other provisions hereof, the aggregate Fair Market
Value (determined at the time the ISO is granted) of the Stock with respect to
which ISOs are exercisable for the first time by any Employee during any
calendar year under all plans of the Company and any Parent or Subsidiary
corporation shall not exceed $100,000. To the extent the limitation set forth in
the preceding sentence is exceeded, the Options with respect to such excess
shall be treated as NQSOs.

      (f) The Committee, in its sole discretion, shall determine whether any
Option granted to an Employee or Consultant shall become exercisable in one or
more installments and shall specify the installment dates. The Committee may
also make such other provisions, not inconsistent with the terms of the Plan, as
it may deem desirable, including such provisions as it may deem necessary to
qualify any ISO under the provisions of Section 422 of the Code. Without
limitation of the foregoing, the Committee may, in its discretion, provide that
Options shall immediately become exercisable upon (i) the death of an Employee
or Consultant while in the employ of the Company or any Subsidiary or (ii) a
Change in Control.

                                        4
<PAGE>   5
      (g) The Committee may, at any time, grant new or additional options to any
eligible Employee or Consultant who has previously received Options under the
Plan or options under other plans, whether such prior Options or other options
are still outstanding, have been exercised previously in whole or in part, or
have been canceled. The exercise price of such new or additional Options may be
established by the Committee, subject to Section 8(b) hereof, without regard to
such previously granted Options or other options.

      SECTION 9. EXERCISE OF OPTIONS.

      (a) A Grantee shall exercise an Option by delivery of written notice to
the Company setting forth the number of shares with respect to which the Option
is to be exercised, together with cash, certified check, bank draft, or postal
or express money order payable to the order of the Company for an amount equal
to the Option price of such shares and any income tax required to be withheld.
The Committee may, in its sole discretion, permit a Grantee to pay all or a
portion of the exercise price by a simultaneous sale of the shares of Stock to
be issued pursuant to such exercise pursuant to a brokerage or similar
arrangement.

      (b) Except as provided pursuant to Section 10(a) hereof, no Option granted
to an Employee or Consultant shall be exercised unless at the time of such
exercise the Grantee is then an Employee or Consultant of the Company or a
Subsidiary.

      (c) Except as provided in Section 10(a) hereof, no Option granted to a
Nonemployee Director shall be exercised unless at the time of such exercise the
Grantee is then a Nonemployee Director.

      (d) Before the Company issues Stock to a Grantee pursuant to the exercise
of an NQSO, the Company shall have the right to require that the Grantee make
such provision, or furnish the Company such authorization, necessary or
desirable so that the Company may satisfy its obligation under applicable income
tax laws to withhold income or other taxes due upon or incident to such
exercise.

      SECTION 10. EXERCISE OF OPTIONS UPON TERMINATION.

      (a) Subject to Section 10(c) hereof, upon the termination of a Grantee's
relationship with the Company and its Subsidiaries, the period during which such
Grantee may exercise any outstanding exercisable installments of his Options
that were exercisable at the date of termination of his relationship with the
Company shall not exceed (i) if such termination is due to death or permanent
and total disability (within the meaning of Section 22(e)(3) of the Code), one
year from the date of such termination, and (ii) in all other cases, three
months (six months for Nonemployee Directors) from the date of such termination,
provided, however, that in no event shall the period extend beyond the
expiration of the Option term. Notwithstanding the foregoing, all Options shall
immediately terminate upon a termination of a Grantee's employment if the
Committee determines, in its sole discretion, that such termination is for
Cause.

      (b) In no event shall any Option be exercisable for more than the maximum
number of shares that the Grantee was entitled to purchase at the date of
termination of the relationship with the Company and its Subsidiaries.

      (c) The Committee may, in its discretion, extend the period of
exercisability set forth in clauses (i) and (ii) in paragraph (a) above;
provided, however, that such period may not be extended for Options granted to
Nonemployee Directors or for ISOs.

                                        5
<PAGE>   6
      (d) Subject to Section 10(b) hereof, the sale of any Subsidiary shall be
treated as a termination of employment with respect to any Grantee employed by
such Subsidiary.

      (e) Subject to the foregoing, in the event of a Grantee's death, Options
may be exercised by the Grantee's legal representative.

      SECTION 11. ADJUSTMENT UPON CHANGES IN CAPITALIZATION. If the Company
shall effect a subdivision or consolidation of shares or other increase or
reduction of shares of Stock outstanding without receiving compensation therefor
in money, services or property, or any other change in corporate capital
structure shall occur, then (a) the number of shares subject to outstanding
Options shall be proportionately adjusted (without a change in the total price
applicable to any such Option, but with a corresponding adjustment in the price
per share), and (b) the number of shares available for issuance under Section 3
and Section 8(a) shall be proportionately adjusted.

      SECTION 12. RESTRICTIONS ON ISSUING SHARES. No Stock shall be issued or
transferred under the Plan unless and until all applicable legal requirements
have been complied with to the satisfaction of the Committee. The Committee
shall have the right to condition any Option on the Grantee's undertaking in
writing to comply with such restrictions on any subsequent disposition of the
shares of Stock issued or transferred thereunder as the Committee shall deem
necessary or advisable as a result of any applicable law, regulation, official
interpretation thereof, or underwriting agreement, and certificates representing
such shares may be legended to reflect any such restrictions.

      SECTION 13. OPTION AGREEMENTS; MISCELLANEOUS TERMS.

      (a) Each Option shall be evidenced by a written agreement containing such
terms and conditions, not inconsistent with the Plan, as the Committee shall
approve. The terms and provisions of such agreements may vary among Grantees and
among different Options granted to the same Grantee.

      (b) The grant of an Option in any year shall not give the Grantee any
right to similar grants in future years, any right to continue such Grantee's
employment relationship with the Company or its Subsidiaries, or, until such
Option is exercised and share certificates are issued, any rights as a
Stockholder of the Company. All Grantees shall remain subject to discharge to
the same extent as if the Plan were not in effect.

      (c) No Grantee, and no beneficiary or other persons claiming under or
through the Grantee, shall have any right, title, or interest by reason of any
Option to any particular assets of the Company or its Subsidiaries or any shares
of Stock allocated or reserved for the purposes of the Plan or subject to any
Option except as set forth herein. The Company shall not be required to
establish any fund or make any other segregation of assets to assure the payment
of any Option.

      (d) No Option may be transferred, assigned, pledged, encumbered, or
charged, except by will or the laws of descent and distribution, and an Option
shall be exercisable during the Grantee's lifetime only by the Grantee.

      (e) The issuance of shares of Stock to Grantees or to their legal
representatives shall be subject to any applicable taxes and other laws or
regulations of the United States or of any state having jurisdiction thereof.

      SECTION 14. AMENDMENT AND TERMINATION. The Board may, at any time, alter,
amend, suspend, discontinue, or terminate the Plan; provided, however, that no
such action shall adversely affect the rights of Grantees to Options previously
granted hereunder and provided further that any stockholder approval

                                        6
<PAGE>   7
necessary or desirable in order to comply with Rule 16b-3 under the Exchange Act
or with Section 422 of the Code (or other applicable law or regulation) shall be
obtained in the manner required therein.

      SECTION 15. COMPLIANCE WITH SECTION 16(b). In the case of recipients of
Options under the Plan who are or may be subject to Section 16 of the Exchange
Act, it is the intent of the Company that the Plan and any Option granted
hereunder satisfy and be interpreted in a manner that satisfies the applicable
requirements of Rule 16b-3 under the Exchange Act, so that such persons will be
entitled to the benefits of Rule 16b-3 under the Exchange Act or other exemptive
rules under Section 16 of the Exchange Act and will not be subject to liability
thereunder. If any provision of the Plan or any award of Options would otherwise
conflict with the intent expressed herein, that provision, to the extent
possible, shall be interpreted and deemed amended so as to avoid such conflict.
To the extent of any remaining irreconcilable conflict with such intent, such
provision shall be deemed void as applicable to recipients who are or may be
subject Section 16 of the Exchange Act.

      SECTION 16. COMPLIANCE WITH CODE SECTION 162(m). It is the intent of the
Company that the Options awarded pursuant to the Plan shall constitute
"qualified performance-based compensation" within the meaning of the Code
Section 162(m). Accordingly, if any provision of the Plan or any award agreement
relating to such Options does not comply or is inconsistent with the
requirements of Code Section 162(m), such provision shall be construed or deemed
amended to the extent necessary to conform to such requirements, and no
provision shall be deemed to confer upon the Committee or any other person
discretion to increase the amount of compensation otherwise payable in
connection with any such Award upon attainment of the performance objectives.

      SECTION 17. MARKET STANDOFF. In connection with any underwritten public
offering by the Company of its equity securities pursuant to an effective
registration statement filed under the 1933 Act, the Grantee may not sell, make
any short sale of, loan, hypothecate, pledge, grant any option for the purchase
of, or otherwise dispose or transfer for value or otherwise agree to exchange in
any of the foregoing transactions with respect to any shares of Stock acquired
upon exercise of an Option granted hereunder without the prior written consent
of the Company and its underwriters. Such restriction (the "Market Standoff")
shall be in effect for such period of time from and after the effective date of
the final prospectus for the offering as may be requested by the Company or its
underwriters. The Grantee shall be required to execute such agreements as the
Company or its underwriters request in connection with the Market Standoff.

      SECTION 18. EFFECTIVE DATE OF PLAN. The Plan shall be effective upon its
adoption by the Board. The Plan must be approved by the Company's shareholders
within twelve (12) months of its establishment. No ISO may be granted more than
ten years after the Plan is approved by the Board or the Company's shareholders,
whichever is earlier.

                                        7

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