Document:

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                                                                    EXHIBIT 10.6

                                      LEASE

         THIS LEASE AGREEMENT is entered into effective February 1, 2002 at
Oceanside, California, by and between WHMF, A California Corporation hereinafter
referred to as "WHMF", and DICKIE WALKER, hereinafter referred to as "DICKIE
WALKER".

         WHEREAS, it is the desire of WHMF to lease to DICKIE WALKER that
portion of the premises commonly known as 1414 S. Tremont Street in the City of
Oceanside consisting of approximately 18,100 square feet and depicted in Exhibit
A, the "Premises" attached hereto; and

         WHEREAS, it is the desire of DICKIE WALKER to hire said space from WHMF
and operate a clothing storage facility.

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:

         1. Premises. WHMF hereby leases to DICKIE WALKER, and DICKIE WALKER
hereby hires from WHMF, for the term, at the rental and upon the conditions
hereinafter set forth, the Premises hereinbefore described.

         2. Term.

              2.1. The term of this Lease shall be for a period of fifteen (15)
months, commencing on February 1, 2002 and ending April 30, 2003, unless
extended or sooner terminated as provided in this Lease.

              2.2. Provided that DICKIE WALKER is not in default under any
provision of this Lease, DICKIE WALKER shall have the option to extend the term
on all the provisions contained in this lease for one additional three year
period ("extended term") following expiration of the initial term, by giving
notice of exercise of the option ("option notice") to WHMF at least six months
but not more than one year before the expiration of the term. Should DICKIE
WALKER be in default, or not give the option notice within the time parameters
set forth in this sub-paragraph, the option notice shall be totally ineffective,
further, should DICKIE WALKER be in default on the date the extended term is to
commence, the

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extended term shall not commence and this lease shall expire at the end of the
initial term as extended by any prior properly exercised options.

         3. Possession. WHMF hereby authorizes DICKIE WALKER to occupy the
premises and obtain possession thereof on the commencement date of this lease.
At all times that DICKIE WALKER is in possession of the premises, DICKIE WALKER
shall comply with all terms of this lease and shall, upon entering into
possession provide to WHMF proof of insurance of the type and with the limits
hereinafter set forth. Failure to provide such proof of insurance shall
constitute a default under this lease.

         4. Rent.

              4.1. Upon execution of the lease DICKIE WALKER shall pay to WHMF
the sum of Six Thousand Two Hundred Seventy and no/100 Dollars ($6,270.00) which
shall apply to the rent due February 1, and March 1, 2002. During the remainder
of the initial term of this lease, DICKIE WALKER shall pay minimum monthly rent
in the amount of Three Thousand One Hundred Thirty Five and no/100 Dollars
($3,135.00), commencing April 1, 2002 and continuing thereafter on the first day
of each month thereafter during the term of this lease.

              4.2. DICKIE WALKER shall deposit with WHMF an additional sum of
Six Thousand Two Hundred Seventy and no/100 Dollars ($6,270.00) to secure DICKIE
WALKER's faithful performance of the terms of this lease. This deposit shall not
bear interest and WHMF is hereby authorized, but not obligated, to pay therefrom
any amounts necessary to cure any default by DICKIE WALKER. Should WHMF use
these funds to cure any default, DICKIE WALKER shall, within 3 days pay to WHMF
sufficient funds to maintain the deposit at Six Thousand Two Hundred Seventy and
no/100 Dollars ($6,270.00). Should DICKIE WALKER exercise its option to extend
this lease, it shall deposit an additional amount to bring the total deposit to
an amount equal to two month's rent, but in no event less than Eight Thousand
and no/100 Dollars.

              4.3. DICKIE WALKER shall pay said rent to WHMF, or to such other
person as WHMF may designate, at the address to which notices from WHMF are
given or to such other places as WHMF from time to time may designate in
writing.

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              4.4. The rent for the second and subsequent years of the option
period shall be the sum of Forty Eight Thousand and no/100 Dollars ($48,000.00)
increased by the percentage increase in the Consumer Price Index, Los
Angeles-Riverside-Orange Co. for September 2002 (1982-84=100) over the same
index for September 2001, which index is agreed to be 178.3. The rent shall be
increased annually thereafter using the same Index, September 2001, as the base
figure. In no event shall the rent for any month be less than Four Thousand and
no/100 Dollars ($4,000.00).

         5. Use of Premises. DICKIE WALKER shall use said Premises solely for
storage, embellishment and distribution of finished clothing products. No other
use of said Premises than that specified herein will be permitted without first
obtaining the express written consent of WHMF.

         6. Alterations. DICKIE WALKER shall make no alterations to the
Premises, or any part thereof, in excess of $5,000.00 without first obtaining
the written consent of WHMF. All alterations, additions or improvements, whether
or not they require the consent of the WHMF shall be made pursuant to permit and
comply with all codes and regulations and shall be surrendered with the Premises
upon the termination of this Lease unless, prior to such termination, WHMF gives
DICKIE WALKER written notice to remove some or all thereof, in which case DICKIE
WALKER shall cause the items so designated to be removed and the Premises to be
restored to their condition prior to such alteration, addition or improvement,
reasonable use and wear excepted, at the sole expense of the DICKIE WALKER.

         7. Assignment and Subletting. DICKIE WALKER shall not assign or sublet
this Lease, or any interest therein, nor sublet the leased Premises or any part
thereof, or any right or privilege appurtenant thereto, without first obtaining
the written consent of WHMF, which consent shall not be unreasonably withheld.
Either (1) the appointment of a receiver to take possession of all or
substantially all of the assets of DICKIE WALKER upon the Premises, or (2) a
general assignment by DICKIE WALKER for the benefit of creditors, or (3) any
action taken or suffered by DICKIE WALKER under any insolvency or bankruptcy
proceedings may be treated as a breach of the lease by the DICKIE WALKER at the
WHMF's election.

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         8. Waste. DICKIE WALKER shall not commit or permit to be committed any
waste to said Premises by DICKIE WALKER or anyone else during the term hereof.

         9. Taxes. DICKIE WALKER shall pay, before delinquency, any and all
taxes, assessments, charges, and demands levied upon or against the business of
the DICKIE WALKER conducted upon the Premises, together with the taxes upon all
personal property of the DICKIE WALKER used in or upon the leased Premises.

         10. Utilities. DICKIE WALKER shall pay, before delinquency, all charges
for heat, gas, electricity, telephone, water and any and all other utilities
used upon the Premises through the term of this Lease, including any connection
fees. DICKIE WALKER shall provide to WHMF proof of payment of utilities upon
request by WHMF. Failure to pay utilities or to provide proof of payment shall
constitute a default under this lease.

         11. Default. Should DICKIE WALKER fail to perform or default in any of
the covenants or conditions contained herein on the part of DICKIE WALKER to be
kept and performed, WHMF shall have the remedies herein below specified. These
remedies are not exclusive; they are cumulative in addition to any remedies now
or hereafter allowed by law.

              11.1. WHMF may terminate DICKIE WALKER's right to possession of
the Premises at any time. No act by WHMF, other than giving notice to DICKIE
WALKER, shall terminate this Lease. Acts of maintenance, efforts to relet the
Premises, or the appointment of a receiver on WHMF's initiative to protect
WHMF's interest under this Lease shall not constitute a termination of DICKIE
WALKER's right to possession. On termination, WHMF has the right to recover from
DICKIE WALKER:

                  a. The worth, at the time of the award, of the unpaid rent
that has been earned at the time of termination of this Lease;

                  b. The worth, at the time of the award of the amount by which
the unpaid rent that would have been earned after the date of termination of
this Lease until the time of award exceeds the amount of the loss of rent that
DICKIE

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WALKER proves could have been reasonable avoided;

                  c. The worth, at the time of the award, of the amount by which
the unpaid rent for the balance of the term after the time of award exceeds the
amount of the loss of rent that DICKIE WALKER proves could have been reasonably
avoided; and

                  d. Any other amount, and court costs, necessary to compensate
WHMF for all detriment proximately caused by DICKIE WALKER's default.

         "The worth at the time of the award", as used in subparagraphs a. and
b. of this paragraph, is to be computed by allowing interest at the maximum rate
allowed by law and "the worth, at the time of the award", as referred to in
subparagraph c. of this paragraph, is to be computed by discounting the amount
at the discount rate of the Federal Reserve Bank of San Francisco on the
twenty-fifth (25th) day of the month immediately preceding the default.

         12. Attorney's Fees. In the event that either party hereto shall
commence any legal action or proceedings, including any action for declaratory
relief, against the other by reason of the other to perform or keep any term,
covenant or condition of this Lease by it to be performed or kept, the party
prevailing in said action or proceeding shall be entitled to recover, in
addition to its court costs, reasonable attorney's fees to be fixed by the
court, and such recovery shall include court costs and attorney's fees on
appeal, if any. As used herein, "the prevailing party" means the party in whose
favor final judgment is rendered.

         It is further agreed that DICKIE WALKER shall pay to WHMF, as
additional rent, reasonable attorney's fees and other expenses incurred by WHMF,
if necessary, to enforce WHMF's rights hereunder or to collect said rent, even
though such action does not result in the commencement of a legal action or
proceeding.

         13. Destruction of Building. Should the building in which the Premises
are situated be damaged or destroyed by fire, earthquake, or other catastrophe,
without the fault of DICKIE WALKER, or DICKIE WALKER's agents or employees, then
this lease shall terminate.

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         14. Maintenance of Premises. DICKIE WALKER shall, at its sole cost and
expense, and at all times during the term of this Lease, keep and maintain said
Premises, exterior and every part thereof, including all plumbing facilities,
air conditioning, heating, and similar mechanical devices, and plate glass
windows or any glazing, except exterior walls not made of glass, and roofs, in
good order and repair, and in a safe, clean, sanitary, orderly and attractive
condition, and shall, upon expiration or earlier termination of this Lease,
restore and surrender the Premises to WHMF in the same condition as when
received, except for use and wear and except as otherwise provided in Paragraph
6 above.

         15. Other Tenants. DICKIE WALKER shall not commit, or suffer to be
committed, nuisance upon the Premises, or any other act of thing which may
disturb the quiet enjoyment or reasonable use of any other tenant in the
building in which the Premises are located. WHMF shall have the right, at all
reasonable working hours, to inspect the Premises.

         16. Acceptance of Premises in Present Condition. DICKIE WALKER accepts
the Premises "AS IS" in its present condition and without any representation or
warranty by WHMF as to the condition of the Premises or as to the use or
occupancy which may be made thereof.

         17. Taking by Eminent Domain. In case the whole of the leased Premises
are taken by right of eminent domain or other authority of law during the period
of this Lease, or any extension thereof, this Lease shall terminate.

         18. Covenant to Save Harmless. DICKIE WALKER covenants and agrees, at
all times during the term of this Lease or extension thereof, to save free and
harmless of or from each and every claim or demand at any time made or asserted
or claimed, by or on behalf of any person or persons against WHMF, arising out
of or resulting from the use and occupancy of the leased Premises by DICKIE
WALKER, DICKIE WALKER'S agents or servants.

         Throughout the term, at DICKIE WALKER's sole cost and expense, DICKIE
WALKER shall keep or cause to be kept in force, for the mutual benefit of WHMF
and DICKIE WALKER, comprehensive broad form general public liability insurance
against claims and liability for personal injury, death or property damage
arising from the use, occupancy or disuse of

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the Premises, improvements or adjoining areas or ways, providing protection of
at least One Million Dollars ($1,000,000.00) for bodily injury or death to any
one person, and at least One Million Dollars ($1,000,000.00) for property
damage.

         All insurance required by express provisions of this Lease shall be
carried only in responsible insurance companies licensed to do business in the
State of California. All such policies shall be nonassessable and shall contain
language, to the extent obtainable, to the effect that (1) any loss shall be
payable notwithstanding any act or negligence of WHMF that might otherwise
result in a forfeiture of the insurance, (2) the insurer waives the right of
subrogation against WHMF and against WHMF's agents and representatives, (3) the
policies are primary and noncontributing with any insurance that may be carried
by WHMF, and (4) they cannot be canceled or materially changed expect after
thirty (30) days' notice by the insurer to WHMF or WHMF's designated
representative. DICKIE WALKER shall furnish WHMF with copies of all such
policies promptly on receipt of them, or with certificates evidencing the
insurance. Before commencement of the Lease, DICKIE WALKER shall furnish WHMF
with binders representing all insurance required by this Lease. At the
expiration of the term, WHMF shall reimburse DICKIE WALKER, and DICKIE WALKER
shall assign all DICKIE WALKER's right, title and interest in that insurance to
WHMF. DICKIE WALKER may effect, for its own account, any insurance not required
under this Lease. DICKIE WALKER may provide, by blanket insurance covering the
Premises and any other location or locations, any insurance required or
permitted under this Lease, provided it is acceptable to all mortgagees.

         DICKIE WALKER shall deliver to WHMF, in the manner required for
notices, copies of certificates of all insurance policies required by this
Lease, together with evidence satisfactory to WHMF of payment required for
procurement and maintenance of the policy.

         If DICKIE WALKER fails or refuses to procure or to maintain insurance
as required by this Lease or fails or refuses to furnish WHMF with required
proof that the insurance has been procured and is in force and paid for, WHMF
shall have the right, at WHMF's election and on fifteen (15) days' notice, to
procure and maintain such insurance. The premiums paid by WHMF shall be treated
as additional rent due from

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DICKIE WALKER with interest at the maximum rate allowed by law, to be paid on
the first (1st) day of the month following the date on which the premiums were
paid. WHMF shall give prompt notice of the payment of such premiums, stating the
amounts paid and the names of the insurer or insurers, and interest shall run
from the date of the notice.

         19. Insurance on the Premises. DICKIE WALKER, at DICKIE WALKER's sole
expense, shall cause to be issued, and shall keep in full force and effect,
insurance policies insuring the Premises against all perils, specifically
including damage to the windows, walls and doors made of plate glass, glass or
similar glazing material. WHMF shall be named as a coinsured, and DICKIE WALKER
shall provide WHMF evidence of such insurance upon execution of this lease and
on or before March 1 of each year thereafter.

              The parties release each other and their respective authorized
representatives from any claims for damage to any person or to the Premises and
the building and other improvements in which the Premises are located, and to
the fixtures, personal property, tenant's improvements and alterations of either
WHMF or DICKIE WALKER in or on the Premises and the building and other
improvements in which the premises are located, that are caused by or result
form risks insured against under any insurance policies carried by the parties
and in force at the time of any such damage.

              Each party shall cause each insurance policy obtained by it to
provide that the insurance company waives all right of recovery by way of
subrogation against either party in connection with any damage covered by any
policy. Neither party shall be liable to the other for any damage caused by fire
or any of the risks insured against under any insurance policy required by this
Lease. If any insurance policy cannot be obtained with a waiver of subrogation,
or is obtainable only by the payment of an additional premium charge above that
charged by insurance companies issuing policies without waiver of subrogation,
the party undertaking to obtain the insurance shall notify the other party of
this fact. The other party shall have a period of ten (10) day after receiving
the notice either to place the insurance with a company that is reasonably
satisfactory to the other party and that will carry the insurance with a waiver
of subrogation, or to agree to pay the additional premium if such policy is
obtainable at additional cost. If the insurance cannot be obtained, or the party
in whose favor a waiver of subrogation is desired refuses to pay the additional
premium charged, the

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other party is relieved of the obligation to obtain a waiver of subrogation
rights with respect to the particular insurance involved.

         20. Advertising Signs. No outdoor advertising signs shall be erected
upon or painted on the premises other than those approved by the WHMF in
writing.

         21. General Provisions.

              21.1. All governmental laws and regulations shall be complied with
by the DICKIE WALKER. No use shall be made or allowed to be made by DICKIE
WALKER, nor acts done, which will increase the existing rate of insurance upon
the building in which said Premises are located, or cause a cancellation of any
insurance policy covering said building or any part thereof.

              21.2. In the event DICKIE WALKER shall, for any reason, remain in
possession of the leased Premises or any part thereof, after the expiration of
the term of this Lease with the consent of the WHMF, expressed or implied, such
holding over shall constitute a tenancy from month-to-month only, upon the same
terms and conditions as herein set forth.

              21.3. The failure of the WHMF to insist, in any one or more
instances, upon a strict performance of any of the covenants or agreements of
this Lease, shall not be considered as a waiver or relinquishment for the future
of said covenants or agreements, but the same shall continue and remain in full
force and effect. The receipt by the WHMF of any rent, with the knowledge of the
breach of any condition or covenant hereof, shall not be deemed a waiver of any
such breach and no waiver by the WHMF of any of the provisions hereof shall be
deemed to have been made unless expressed in writing and signed by the WHMF.

              21.4. Any notice or demand which the DICKIE WALKER may desire or
is required to serve upon WHMF may be given by delivering it to WHMF personally
or, unless otherwise designated in writing, by mailing such notice to WHMF, by
first class mail, postage prepaid, addressed as follows:

              WHMF
              c/o Willard Wedeking
              1040 Sun Park Lane
              Lincoln, CA 95684

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              Any notice or demand which the WHMF may desire or is required to
serve upon DICKIE WALKER may be given by delivering it to DICKIE WALKER
personally or, unless otherwise designated in writing, by mailing such notice to
DICKIE WALKER, by first class mail, postage prepaid, addressed as follows:

              Dickie Walker
              c/o Jerry Montiel
              470 Nautilus, Suite 312
              La Jolla, CA 92037

              21.5. All of the terms, conditions and provisions of this Lease
shall, subject to the limitations set forth in this Lease, extend to and bind
and inure to the benefit of WHMF and DICKIE WALKER, and their respective heirs,
executors, administrators, successors and assigns, as fully as though they were
in each instance specifically mentioned herein.

              Time is expressly declared to be the essence of this Lease and of
each, every and all of the terms, conditions and provisions herein contained.

              21.6. Should any provision contained herein be found to be
invalid, the remainder of this agreement shall remain in full force and effect.

         22. Entire Agreement. This agreement contains the entire agreement
between the parties and cannot be changed other than in writing signed by the
party to be charged.

                                         WHMF
                                         A California Corporation

Dated December 28, 2001
                                         By: /s/ WILLARD WEDEKING
                                             -----------------------------------

                                         Dickie Walker
                                         A California Corporation

Dated December 17, 2001
                                         By: /s/ GERALD W. MONTIEL
                                             -----------------------------------
                                             CEO

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                                                                     EXHIBIT "A"

                                  [FLOORPLAN]<PAGE>
                                                                    EXHIBIT 10.7

                           DICKIE WALKER MARINE, INC.

                              EQUITY INCENTIVE PLAN

                            ADOPTED JANUARY 24, 2002

         1. PURPOSE. Dickie Walker Marine, Inc. (the "Company") hereby
establishes its Equity Incentive Plan (the "Plan"). The purpose of the Plan is
to help the Company and its subsidiaries to attract and retain competent
employees, officers, directors, advisors and independent contractors by
providing them with an opportunity to participate in the increased value of the
Company which their effort, initiative, and skill have helped produce.

         2. GENERAL PROVISIONS.

                  (a) The Plan will be administered by the Compensation
Committee of the Board of Directors of the Company (the "Committee"). The
Committee shall be comprised of two or more directors designated by the Board of
Directors (the "Board"). If and to the extent that Securities Exchange Act Rule
16b-3 or Internal Revenue Code Section 162 are applicable to the Plan, Committee
members shall qualify as "Non-Employee Directors" within the meaning of
Securities Exchange Act Rule 16b-3 and as "outside directors" within the meaning
of Treasury Regulation Section 1.162-27(e)(3). (In the event Rule 16b-3 or
Treasury Regulation Section 1.162-27(e)(3) is amended, modified or repealed, the
requirements for being a member of the Committee shall reflect the then current
requirements of the successor rule or regulation, if any.) Options granted under
the Plan are intended to qualify for the "qualified performance based
compensation" exception to Internal Revenue Code Section 162(m). Notwithstanding
the foregoing, if it would be consistent with all applicable laws, including
without limitation Rule 16b-3 and Treasury Regulation Section 1.162-27(e)(3),
then the Plan may be administered by the Board of Directors, and if so
administered all subsequent references to the Committee shall be read as
referring to the Board of Directors.

                  (b) The Committee shall have full power to construe and
interpret the Plan and to establish and amend rules and regulations for its
administration. The Committee shall determine, in its sole discretion, which
participants under the Plan shall be granted restricted stock, stock options or
stock appreciation rights, the time or times at which stock, options and rights
are granted, as well as the number of shares and the duration of the options or
rights which are granted to participants. The Committee shall also determine any
other terms and conditions relating to restricted stock, options and rights
granted under the Plan as the Committee may prescribe, in its sole discretion.
The Committee shall make all other determinations and take all other actions
which it deems necessary or advisable for the administration of the Plan. All
decisions, determinations and interpretations made by the Committee shall be
binding and conclusive on all participants in the Plan and on their legal
representatives, heirs and beneficiaries.

<PAGE>

                  (c) Any action of the Committee with respect to the Plan shall
be taken by majority vote or by the unanimous written consent of the Committee
members. The Committee may, in its discretion, delegate its administrative
duties with respect to the Plan to an officer or employees, or to a committee
composed of officers or employees, of the Company.

                  (d) The Board (with members of the Committee abstaining) shall
have the authority to make grants under the Plan to members of the Committee and
may also establish a formula by which grants will automatically be made to
members of the Committee. The Committee shall have the authority to make grants
hereunder to members of the Board other than Committee members and may also
establish a formula by which grants will automatically be made to Board members.

         3. ELIGIBILITY. Employees, officers, directors, advisors and
independent contractors of the Company and its subsidiaries shall be eligible to
participate in the Plan and to receive restricted stock, options and rights
hereunder, except where the Committee determines that a particular subsidiary
will not participate in the Plan. However, Incentive Stock Options may only be
granted to officers and directors who are employees of the Company or its
subsidiaries at all times during the period beginning on the date of grant of
the option and ending on the day three months before the date of exercise.

         4. SHARES SUBJECT TO PLAN. The aggregate number of shares of the
Company's Common Stock which may be issued to participants shall be 500,000
shares, subject to adjustment as provided in Section 9. These shares may consist
of shares of the Company's authorized but unissued Common Stock or shares of the
Company's authorized and issued Common Stock reacquired by the Company and held
in its treasury or any combination thereof. To the extent that a participant
pays for the exercise of an option with shares of the Company's stock rather
than cash, the tendered shares shall be deemed to be added back to the Plan,
increasing the total number of shares subject to and reserved for the Plan by
that amount. If an option granted under the Plan is surrendered, or for any
other reason ceases to be exercisable in whole or in part, the shares as to
which the option ceases to be exercisable shall be available to be granted to
the same or other participants under the Plan, except to the extent that an
option is deemed surrendered by the exercise of a tandem stock appreciation
right and that right is paid by the Company in stock, in which event the shares
issued in satisfaction of the right shall not be available for new options or
rights under the Plan. Shares of restricted stock that are forfeited under the
Plan shall be deemed to be added back to the Plan, increasing the total number
of shares subject to and reserved for the Plan by that amount.

         5. STOCK OPTIONS.

                  (a) Type of Options. Options granted may be either
Nonqualified Stock Options or Incentive Stock Options as determined by the
Committee in its sole discretion and as reflected in the Notice of Grant issued
by the Committee. "Incentive Stock Option" means an option intended to qualify
as an incentive stock option within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"). "Nonqualified Stock Option"

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means an option not intended to qualify as an Incentive Stock Option or an
Incentive Stock Option which is converted to a Nonqualified Stock Option, either
under Section 8(b) hereof or by operation of law.

                  (b) Option Price. The price at which options may be granted
under the Plan shall be determined by the Committee at the time of grant as
follows:

                           (i) For Incentive Stock Options the option price
shall be equal to 100% of the Fair Market Value of the stock (as defined below);
provided, however, that for Incentive Stock Options granted to any person who,
at the time such option is granted, owns (as defined in Section 422 of the Code)
shares possessing more than 10% of the total combined voting power of all
classes of shares of the Company or its parent or subsidiary corporation, the
Option Price shall be 110% of the Fair Market Value.

                           (ii) For Nonqualified Stock Options the option price
may be less than the Fair Market Value of the stock, but in no event shall the
option price be less than fifty percent (50%) of the Fair Market Value. However,
any grant of a Nonqualified Stock Option at a price less than Fair Market Value
will not qualify for the "qualified performance based compensation" exception to
Internal Revenue Code Section 162(m).

                           (iii) "Fair Market Value" shall mean, if there is an
established market for the Company's Common Stock on a stock exchange, in an
over-the-counter market or otherwise, the mean of the highest and lowest quoted
selling prices on the valuation date. Unless otherwise specified by the
Committee at the time of grant (or in the formula applicable to such grant), the
valuation date for purposes of determining the option price shall be the date of
grant. The Committee (or the Board of Directors with respect to grants to
Committee members) may specify that, instead of the date of grant, the valuation
date shall be a valuation period of up to ninety (90) days prior to the date of
grant, and Fair Market Value for purposes of such grant shall be the average
over the valuation period of the mean of the highest and lowest quoted selling
prices on each date on which sales were made in the valuation period. If the
Committee fails to specify a valuation period and there were no sales on the
date of grant then Fair Market Value shall be determined as if the Committee had
specified a thirty (30) day valuation period. If there is no established market
for the Company's Common Stock, or if there were no sales during the applicable
valuation period, the determination of Fair Market Value shall be established by
the Committee in its sole discretion, considering the criteria set forth in
Treas. Reg. Section 20.2031-2 or successor regulations.

                  (c) Exercise of Option. The right to purchase shares covered
by any option or options under the Plan shall be exercisable only in accordance
with the terms and conditions of the grant to the participant. Such terms and
conditions may include a time period or schedule over which the options become
exercisable, or "vested", and may provide that certain conditions, such as
continuous service or specified performance criteria or goals, must be satisfied
for such vesting. The determination as to whether to impose any such vesting
schedule or performance criteria, and the terms of such schedule or criteria,
shall be within the

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sole discretion of the Committee. These terms and conditions may be different
for different participants.

                  The Committee may provide that an option will be exercisable
prior to vesting, and that upon exercise the participant will receive restricted
stock (as described in Section 7), subject to restrictions reflecting any
vesting period or conditions of the option that are unfulfilled at the time of
exercise.

                  Options shall be exercised when written notice of exercise by
the participant, and full payment for the shares with respect to which the
option is exercised, has been received by the Company at its principal office.
The exercise of options shall be paid for in cash or in shares of the Company's
Common Stock, or any combination thereof. Shares tendered as payment for option
exercises shall be valued at the Fair Market Value of the shares on the date of
exercise. The Committee may, in its discretion, agree to a loan by the Company
to one or more participants of a portion of the exercise price (not to exceed
the exercise price minus the par value of the shares to be acquired, if any) for
up to three (3) years with interest payable at the prime rate quoted in the Wall
Street Journal on the date of exercise. The Board may approve such loans to
members of the Committee.

                  The Committee may also permit a participant to effect a net
exercise of an option without tendering any shares of the Company's stock as
payment for the option. In such an event, the participant will be deemed to have
paid for the exercise of the option with shares of the Company's stock and shall
receive from the Company a number of shares equal to the difference between (i)
the shares that would have been tendered to pay the option price and withholding
taxes, if any, and (ii) the number of options exercised.

                  The Committee may also cause the Company to enter into
arrangements with one or more licensed stock brokerage firms whereby
participants may exercise options without payment therefor but with irrevocable
orders to such brokerage firm to immediately sell the number of shares necessary
to pay the option price and withholding taxes, if any, and then to transmit the
proceeds from such sales directly to the Company in satisfaction of such
obligations.

                  A participant shall have no rights as a shareholder with
respect to any shares of common stock subject to an option prior to the date of
exercise of the option.

                  (d) Duration of Options. Unless otherwise prescribed by the
Committee or the Plan, options granted hereunder shall expire ten (10) years
from the date of grant, subject to early termination as provided in Section 8.

                  (e) Incentive Stock Option Limitations. In no event shall an
Incentive Stock Option be granted to any person who, at the time such option is
granted, owns (as defined in Section 422 of the Code) shares possessing more
than 10% of the total combined voting power of all classes of shares of the
Company or of its parent or subsidiary corporation, unless the option price is
at least 110% of the Fair Market Value of the stock subject to the option, and
such option is by its terms not exercisable after the expiration of five (5)
years from the date of

                                       4
<PAGE>

grant. The aggregate Fair Market Value (determined as of the time that option is
granted) of the shares with respect to which Incentive Stock Options are
exercisable for the first time by any individual employee during any single
calendar year under the Plan shall not exceed $100,000. In addition, employees
are advised that in order to receive the tax benefits of an Incentive Stock
Option, they must not resell or otherwise dispose of the stock acquired upon
exercise of the Incentive Stock Option until two (2) years after the date the
option was granted and one (1) year after it was exercised.

         6. STOCK APPRECIATION RIGHTS.

                  (a) Grant. Stock appreciation rights may be granted by the
Committee under the Plan upon such terms and conditions as it may prescribe. A
stock appreciation right may be granted in connection with an option (the
"Related Option") previously granted or to be granted under the Plan (a "Tandem
Right"), or may be granted separately (a "Separate Right"). Upon grant of a
Separate Right, the Committee shall specify an exercise price for the right.
Upon exercise of a stock appreciation right, the participant is entitled to
receive the excess of Fair Market Value, on the date of exercise, of the
Company's Common Stock over the option price of the Related Option (in the case
of a Tandem Right), or over the exercise price of the right (in the case of a
Separate Right). Such excess is hereafter called "the differential."

                  (b) Exercise of Stock Appreciation Rights. Stock appreciation
rights shall be exercisable and payable in the following manner:

                           (i) A Separate Right shall be exercisable at the time
or times prescribed by the Committee. A Tandem Right shall be exercisable at the
same time or times that the Related Option could be exercised. Stock
appreciation rights shall be exercised when written notice of exercise by the
participant has been received by the Company at its principal office. Upon
receipt of such notice, the Company shall determine, in its sole discretion,
whether the participant's stock appreciation rights shall be paid in cash or in
shares of the Company's Common Stock or any combination of cash and shares and
thereupon shall, without deducting any transfer or issue tax, deliver to the
person exercising such right an amount of cash or shares of the Company's Common
Stock or a combination thereof with a value equal to the differential minus
withholding taxes, if any. No fractional share of Common Stock shall be issued;
rather, the Committee shall determine whether cash shall be given in lieu of
such fractional share or whether such fractional share shall be disregarded.

                           (ii) The exercise of a Tandem Right shall
automatically result in the surrender of the Related Option by the participant
on a share for share basis. Likewise, the exercise of a stock option shall
automatically result in the surrender of the related Tandem Right.

                           (iii) The Committee may impose any other terms and
conditions it prescribes upon the exercise of a stock appreciation right, which
conditions may include a condition that the stock appreciation right may only be
exercised in accordance with rules and regulations adopted by the Committee from
time to time.

                                       5
<PAGE>

                  (c) Limitation on Payments. Notwithstanding any other
provision of the Plan, the Committee may from time to time determine, including
at the time of exercise, the maximum amount of cash or stock which may be given
upon exercise of any stock appreciation right in any year; provided, however,
that all such amounts shall be paid in full no later than the end of the year
immediately following the year in which the participant exercised such stock
appreciation rights. Any determination under this paragraph may be changed by
the Committee from time to time provided that no such change shall require the
participant to return to the Company any amount theretofore received or to
extend the period within which the Company is required to make full payment of
the amount due as the result of the exercise of the participant's stock
appreciation rights.

                  (d) Expiration of Stock Appreciation Rights. Unless earlier
terminated under Section 8, each Tandem Right shall expire on the date on which
the Related Option expires or terminates, and each Separate Right shall expire
on the date prescribed by the Committee.

         7. RESTRICTED STOCK.

                  (a) Grant. The Committee may grant shares of the Company's
Common Stock to persons eligible for grants under the Plan, subject to such
restrictions, if any, as may be determined by the Committee, including but not
limited to that person's continuous employment by or service to the Company for
a specified period of time or the attainment of specified performance goals or
objectives by that person, a group of persons or the Company as a whole. The
determination as to whether to impose any such vesting schedule or performance
criteria, and the terms of such schedule or criteria, shall be within the sole
discretion of the Committee. These terms and conditions may be different for
different participants.

                  (b) Voting Rights. A participant will have all voting,
dividend, liquidation and other rights with respect to the shares of restricted
stock in accordance with its terms upon becoming the holder of record of such
stock; provided, however, that the participant shall have the right to sell or
otherwise transfer such stock only to the extent that vesting and performance
criteria have been satisfied. Such limitations may be enforced, in the sole
discretion of the Committee, by placing a restrictive legend on the stock
certificates, or by making arrangements for custody of the stock certificates.

         8. EARLY TERMINATION.

                  (a) Death or Disability. If a participant's employment or
engagement by the Company terminates because of total disability (as defined
below) or because of retirement at 65 years of age or later, any options or
stock appreciation rights granted to such participant shall expire three (3)
months after such termination. If the participant dies while employed or engaged
by the Company, to the extent that the option was exercisable at the time of the
participant's death, such option may, within one year after the participant's
death, be exercised by the person or persons to whom the participant's rights
under the option pass by will or by

                                       6
<PAGE>

the applicable laws of descent and distribution; provided, however, that an
option or stock appreciation right may not be exercised after the expiration
date as originally granted. In the event of termination by reason of death or
total disability as described in this paragraph, all employment period and other
restrictions applicable to restricted stock then held by the participant shall
lapse, and such stock shall become fully nonforfeitable.

                  An employee who is absent from work with the Company because
of total disability, as defined below, shall not by virtue of such absence alone
be deemed to have terminated such participant's employment with the Company. All
rights which such participant would have had to exercise options or stock
appreciation rights granted hereunder will be suspended during the period of
such absence and may be exercised cumulatively by such participant upon return
to the Company so long as such rights are exercised prior to the expiration of
the option or stock appreciation right as originally granted. For purposes of
the Plan, "total disability" means disability, as a result of sickness or
injury, to the extent that the participant is prevented from engaging in any
substantial gainful activity and is eligible for and receives a disability
benefit under Title II of the Federal Social Security Act.

                  (b) Other Terminations. If a participant's employment or
engagement by the Company terminates for any other reason, whether terminated by
the participant or the Company, with or without cause, then (i) all options
granted to such participant under the Plan shall terminate and no longer be
exercisable as of the date of such termination, and (ii) any restricted stock as
to which the employment period or other restrictions have not been satisfied
shall be forfeited. The preceding sentence will not apply if the participant
becomes or remains a non-employee officer, director, advisor or independent
contractor. In that event, any Incentive Stock Option held by the participant
shall be converted to a Nonqualified Stock Option on the date the participant's
employment or engagement terminates.

                  (c) Waiver of Vesting Restrictions. In any circumstance
described in this section, the Committee shall have the discretion to waive any
vesting restrictions on the participant's restricted stock, options or rights,
or the early termination thereof.

         9. CAPITAL ADJUSTMENTS. If any changes are made to the shares of Common
Stock (whether by reason of reorganization, recapitalization, stock dividend,
stock split, combination of shares, exchange of shares, change in corporate
structure or otherwise), the Committee shall make the adjustments it deems
appropriate in: (i) the number of outstanding stock options and stock
appreciation rights, (ii) the option price thereof, and (iii) the aggregate
number of shares which may be made subject to stock options or which may be
granted to any one participant hereunder. If any such adjustment results in a
fractional share, the fraction shall be disregarded.

         10. NONTRANSFERABILITY. During a participant's lifetime, a right or an
option may be exercised only by the participant. Options and rights granted
under the Plan, restricted stock as to which the vesting and performance
criteria have not been satisfied, and the rights and privileges conferred
thereby, shall not be subject to execution, attachment or similar process and
may not be transferred, assigned, pledged or hypothecated in any manner (whether
by

                                       7
<PAGE>

operation of law or otherwise) other than by will or by the applicable laws of
descent and distribution. Notwithstanding the foregoing, to the extent permitted
by applicable law (including Exchange Act Rule 16b-3), the Committee may, in its
sole discretion, (i) permit a recipient of a Nonqualified Stock Option to
designate in writing during the participant's lifetime a beneficiary to receive
and exercise the participant's Nonqualified Stock Options in the event of such
participant's death, (ii) grant Nonqualified Stock Options that are transferable
to the immediate family or a family trust of the participant, and (iii) modify
existing Nonqualified Stock Options to be transferable to the immediate family
or a family trust of the participant. Any other attempt to transfer, assign,
pledge, hypothecate or otherwise dispose of any option or right or unvested
restricted stock under the Plan, or of any right or privilege conferred thereby,
contrary to the provisions of the Plan shall be null and void.

         11. RESALE OF SHARES PURCHASED. Except as provided in Section 7 with
respect to restricted stock, all shares of stock acquired under the Plan may be
freely resold, subject to applicable state and federal securities laws
restricting their transfer. However, the Company may impose various conditions
to exercise of an option, including a requirement that the person exercising
such option represent and warrant that, at the time of such exercise, the shares
of Common Stock being purchased are being purchased for investment and not with
a view to resale or distribution thereof. In addition, the resale of shares
purchased upon the exercise of Incentive Stock Options may cause the employee to
lose certain tax benefits if the employee fails to comply with the holding
period requirements described in Section 5(e) hereof.

         12. ACCELERATION OF RIGHTS AND OPTIONS. If the Company or its
shareholders agree to dispose of all or substantially all of the assets or stock
of the Company (whether by sale, merger or other reorganization, liquidation, or
otherwise), any right or option granted pursuant to the Plan shall become
immediately and fully exercisable during the period from the date of the
agreement to the date the agreement is consummated (or, if earlier, the date the
right or option terminates in accordance with the Plan). However, no option or
right shall be accelerated under this section if the shareholders of the Company
immediately before the contemplated transaction will own 50% or more of the
total combined voting power of all classes of voting stock of the surviving
entity (whether the Company or some other entity) immediately after the
transaction. In the event the contemplated transaction terminates without being
consummated, the options and rights granted pursuant to the Plan shall
thereafter be treated as if that agreement had never been entered into.

         13. TAX WITHHOLDING. Each participant agrees that, if and to the extent
required by law, the Company shall withhold or require the payment by the
participant of any state, federal or local taxes resulting from the exercise of
an option or right or the grant or vesting of restricted stock; provided,
however, that to the extent permitted by law, the Committee may in its
discretion, permit some or all of such withholding obligation to be satisfied by
the delivery by the participant of, or the retention by the Company of, shares
of its Common Stock.

         14. COMPLIANCE WITH SECURITIES LAWS. Shares shall not be issued with
respect to any option or right granted under the Plan unless the exercise of
that option and the issuance

                                       8
<PAGE>

and delivery of the shares pursuant thereto shall comply with all relevant
provisions of state and federal law, including without limitation the Securities
Act of 1933, as amended, the rules and regulations promulgated thereunder and
the requirements of any stock exchange or automated quotation system upon which
shares of the Company's stock may then be listed or traded, and shall be further
subject to the approval of counsel for the Company with respect to such
compliance. Each participant must consent to the imposition of a legend on the
certificate representing the shares of Common Stock issued upon the exercise of
the option or right restricting their transferability as may be required by law,
the option or right, or the Plan.

         15. NO EMPLOYEE CONTRACT. The grant of restricted stock or an option or
right under the Plan shall not confer upon any participant any right with
respect to continuation of employment by, or the rendition of advisory or
consulting services to, the Company, nor shall it interfere in any way with the
Company's right to terminate the participant's employment or services at any
time.

         16. NONEXCLUSIVITY OF THE PLAN. Approval of the Plan does not create
any limitations on the authority of the Company to adopt other incentive or
compensation arrangements of any nature, nor does it modify any other
compensation practice of the Company.

         17. AMENDMENT, SUSPENSION, OR TERMINATION OF PLAN. The Committee may at
any time suspend or terminate the Plan and (except as described below) may amend
it from time to time in such respects as the Committee may deem advisable in
order that options and rights granted hereunder shall conform to any change in
the law, or in any other respect which the Committee may deem to be in the best
interests of the Company. However, no such amendment shall, without the
participant's consent, alter or impair any of the rights or obligations under
any option or stock appreciation rights theretofore granted to a participant
under the Plan. Further, no such amendment shall, without shareholder approval:
(a) increase the total number of shares available for grants of options or
rights under the Plan (except as provided by Section 9 hereof); or (b) effect
any change to the Plan which is required by law (including without limitation
the regulations promulgated under Section 422 of the Code) to be approved by the
shareholders.

         18. EFFECTIVE DATE. The effective date of the Plan shall be January 24,
2002.

         19. TERMINATION DATE. Unless the Plan shall have been previously
terminated by the Committee, the Plan shall terminate on January 24, 2012, and
no stock, option or right shall be granted after that date. Stock, options and
rights outstanding under the Plan at that date shall continue to be governed by
the provisions of the Plan.

                                       9

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