Document:

<PAGE>   1
                                                                    Exhibit 10.1

                                   HPSC, INC.

                            2000 STOCK INCENTIVE PLAN

                                DECEMBER 13, 1999

<PAGE>   2

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
<S>                                                                                                              <C>
1. PURPOSE; RESTRICTIONS..........................................................................................1
2. EFFECTIVE DATE.................................................................................................1
3. STOCK COVERED BY THE PLAN......................................................................................1
4. ADMINISTRATION.................................................................................................2
5. ELIGIBLE RECIPIENTS; AUTOMATIC GRANTS TO NON-EMPLOYEE DIRECTORS................................................2
   (a) KEY EMPLOYEES, CONSULTANTS AND OTHER INDIVIDUAL CONTRIBUTORS...............................................2
   (b) NON-EMPLOYEE DIRECTORS.....................................................................................2
      (i) PRICE...................................................................................................3
      (ii) EXERCISE...............................................................................................3
      (iii) EXPIRATION............................................................................................3
      (iv) OTHER TERMS............................................................................................3
6. DURATION OF THE PLAN...........................................................................................3
7. TERMS AND CONDITIONS OF OPTIONS AND RESTRICTED STOCK AWARDS....................................................3
   (a) PRICE......................................................................................................3
   (b) NUMBER OF SHARES...........................................................................................4
   (c) VESTING AND OTHER TERMS OF RESTRICTED STOCK AWARDS.........................................................4
      (I) VESTING.................................................................................................4
      (II) FORFEITURE OF UNVESTED SHARES..........................................................................5
      (III) ESCROW OF UNVESTED SHARES.............................................................................5
      (IV) STOCKHOLDER RIGHTS.....................................................................................6
      (V) OTHER TERMS.............................................................................................6
   (d) EXERCISE OF OPTIONS........................................................................................6
   (e) PAYMENT....................................................................................................6
   (f) WITHHOLDING TAXES; DELIVERY OF SHARES......................................................................7
   (g) TRANSFERABILITY............................................................................................7
   (h) TERMINATION OF RESTRICTED STOCK AWARDS AND OPTIONS.........................................................8
   (i) RIGHTS AS STOCKHOLDER......................................................................................8
   (j) FORFEITURE.................................................................................................9
   (k) 10% STOCKHOLDER............................................................................................9
   (l) CONFIDENTIALITY AGREEMENTS.................................................................................9
   (m) AGGREGATE LIMITATION.......................................................................................9
   (n) RIGHT TO TERMINATE.........................................................................................9
   (o) DEFERRAL..................................................................................................10
8. RESTRICTIONS ON INCENTIVE OPTIONS.............................................................................11
9. SUSPENSION OF RIGHTS PRIOR TO A DISSOLUTION, REORGANIZATION, ETC..............................................11
10. ADJUSTMENT IN SHARES.........................................................................................11
11. INVESTMENT REPRESENTATIONS; TRANSFER RESTRICTIONS............................................................12
12. DEFINITIONS..................................................................................................12
   (a) "BOARD"...................................................................................................12
   (b) "CHANGE IN CONTROL".......................................................................................12
</TABLE>

<PAGE>   3

<TABLE>
<CAPTION>
<S>                                                                                                             <C>
   (c) "CODE"....................................................................................................12
   (d) "COMMITTEE"...............................................................................................12
   (e) "COMMON STOCK"............................................................................................12
   (f) "COMPANY" AND "COMPANY GROUP".............................................................................12
   (g) "DEFERRED COMPENSATION ACCOUNT"...........................................................................12
   (h) "DIRECTOR OPTION".........................................................................................12
   (i) "DISABILITY"..............................................................................................12
   (j) "EFFECTIVE DATE"..........................................................................................12
   (k) "EMPLOYEE"................................................................................................13
   (l) "EVENT"...................................................................................................13
   (m) "EXCHANGE ACT"............................................................................................13
   (n) "INCENTIVE OPTION"........................................................................................13
   (o) "MARKET PRICE"............................................................................................13
   (p) "1995 PLAN"...............................................................................................13
   (q) "NON-EMPLOYEE DIRECTOR"...................................................................................13
   (r) "NONQUALIFIED OPTION".....................................................................................13
   (s) "OPTION"..................................................................................................13
   (t) "PARTICIPANT".............................................................................................13
   (u) "PERFORMANCE CONDITIONS"..................................................................................13
   (v) "PERFORMANCE PERIOD"......................................................................................13
   (w) "PHANTOM STOCK"...........................................................................................13
   (x) "PLAN"....................................................................................................13
   (y) "RESTRICTED STOCK AWARD"..................................................................................14
   (z) "SERVICE".................................................................................................14
   (aa) "SERVICE REQUIREMENT"....................................................................................14
   (bb) "SHARES".................................................................................................14
   (cc) "SUBSIDIARY".............................................................................................14
13. TERMINATION OR AMENDMENT OF PLAN.............................................................................14
14. CHANGE IN CONTROL............................................................................................14
</TABLE>

                                      -3-
<PAGE>   4

                                   HPSC, INC.
                            2000 STOCK INCENTIVE PLAN

     1.   PURPOSE; RESTRICTIONS. The purpose of this HPSC, Inc. 2000 Stock
Incentive Plan (the "Plan") is to advance the interests of HPSC, Inc., a
Delaware corporation (the "Company"), and of its shareholders by strengthening
the ability of the Company to attract, retain and motivate key employees,
directors, consultants and other individual contributors of or to the Company or
any present or future Subsidiary(1) of the Company (the Company and all such
Subsidiaries shall be collectively referred to as the "Company Group") by
providing such employees, directors, consultants and other individual
contributors with an opportunity to purchase or receive as bonuses stock of the
Company, thereby permitting such persons to share in the Company's success while
aligning their interests with those of the Company's shareholders. It is
intended that this purpose will be effected by granting (i) incentive stock
options ("Incentive Options"), which are intended to qualify under the
provisions of Section 422 of the Code, and non-statutory stock options
("Nonqualified Options"), which are not intended to meet the requirements of
Section 422 of the Code and which are intended to be taxed upon exercise under
Section 83 of the Code (both Incentive Options and Nonqualified Options shall be
collectively referred to as "Options") and (ii) restricted stock awards that are
subject to performance-vesting requirements ("Restricted Stock Awards").

     Notwithstanding the foregoing, no Incentive Options shall be granted under
this Plan unless this Plan shall have been approved by the stockholders of the
Company within twelve (12) months after the Effective Date.

     2.   EFFECTIVE DATE. This Plan was adopted on December 13, 1999, which is
also the Effective Date of the Plan.

     3.   STOCK COVERED BY THE PLAN. Subject to adjustment as provided in
Sections 9 and 10 below, the shares that may be made subject to Options or
Restricted Stock Awards under this Plan ("Shares") shall not exceed in the
aggregate 450,000 shares of the common stock, $.01 par value, of the Company
("Common Stock"). Notwithstanding the foregoing, additional shares of Common
Stock may be issued and sold pursuant to Restricted Stock Awards and
Nonqualified Options in amounts up to the number of shares of Common Stock (i)
underlying any restricted stock award or option granted under the 1995 Plan or
the 1998 Plan (collectively, the "Prior Plans") which shall terminate or expire
without being fully exercised, but only to the extent such shares remained
available for purchase or award at the time of such termination or expiration,
or (ii) withheld or reacquired by the Company pursuant to withholding, payment,
forfeiture or repurchase rights under the Prior Plans. Any Shares subject to an
Option or Restricted Stock Award which for any reason expires or is terminated
unexercised as to such Shares and any Shares withheld or reacquired by the
Company pursuant to withholding, payment, forfeiture or a repurchase right
hereunder may again be the subject of an Option or Restricted Stock Award

--------
(1) Capitalized terms not otherwise defined herein are defined in Section 12
    below.

<PAGE>   5

under the Plan. The Shares purchased or issued under the Plan may, in whole or
in part, be either authorized but unissued Shares or issued Shares reacquired by
the Company.

     4.   ADMINISTRATION. This Plan shall be administered by the Compensation
Committee of the Board (the "Committee"); provided that each of the members of
the Committee shall be a person who in the opinion of counsel to the Company is
(i) a "Non-Employee Director" as such term is used in Rule 16b-3 promulgated
under the Exchange Act and (ii) an "outside director" as such term is used in
regulation Section 1.162.27(e)(3) under Section 162(m) of the Code. The
Committee shall have authority, subject to the express provisions of the Plan,
to construe the Plan and the respective Options, Restricted Stock Awards, and
related agreements, to prescribe, amend and rescind rules and regulations
relating to the Plan, to determine, within the limits of the Plan, the amounts,
times, forms, terms, conditions and status (as Incentive or Nonqualified
Options) of the respective Options, Restricted Stock Awards, and related
agreements, and to make all other determinations in the judgment of the
Committee necessary or desirable for the administration of the Plan. The
Committee may correct any defect or supply any omission or reconcile any
inconsistency in the Plan or in any Option, Restricted Stock Award, or related
agreement in the manner and to the extent it shall deem expedient to carry the
Plan into effect, and it shall be the sole and final judge of such expediency.

     The Committee shall have authority to establish guidelines for the grant of
Options and Restricted Stock Awards to key employees of the Company Group who
are not executive officers of the Company and to authorize the Company's chief
executive officer to recommend the award of Options and Restricted Stock Awards,
within such guidelines, to such eligible non-executive key employees; PROVIDED,
HOWEVER, that such recommendation must be submitted to the Committee for final
approval.

     No member of the Committee and no delegate of the Committee shall be liable
for any action or determination under the Plan taken or made in good faith.

     5.   ELIGIBLE RECIPIENTS; AUTOMATIC GRANTS TO NON-EMPLOYEE DIRECTORS.

     (a)  KEY EMPLOYEES, CONSULTANTS AND OTHER INDIVIDUAL CONTRIBUTORS. Subject
to the restrictions of this Plan, Options and Restricted Stock Awards may be
granted to such key employees, consultants or other individual contributors of
or to the Company Group, including, without limitation, directors of the Company
(whether or not any such director is also an Employee), as are selected by the
Committee or (except as to employees who are Company executive officers) by the
Company's Chief Executive Officer pursuant to Section 4 above (a "Participant");
provided, however, that only Employees shall be eligible for grant of an
Incentive Option.

     (b)  NON-EMPLOYEE DIRECTORS. Subject to the restrictions of this Plan,
Nonqualified Options will be granted annually pursuant to this Section 5(b) to
each director of the Company who is a director on the date of grant and who is
not an Employee ("Non-Employee Directors"). Each Non-Employee Director who is
such at the conclusion of any regular annual meeting of the

                                      -5-
<PAGE>   6

Company's stockholders while this Plan is in effect and who will continue to
serve on the Board thereafter (a "Director Participant" or, unless the context
otherwise requires, a "Participant") shall receive on such date a Nonqualified
Option to purchase 1,000 Shares (a "Director Option"). Further, each
Non-Employee Director who was not such at the conclusion of the last regular
annual meeting of the Company's stockholders will, on the date that such
Non-Employee Director is elected a director of the Company, automatically be
granted a Director Option to purchase the same number of Shares covered by the
last Director Option granted by the Board. All Director Options granted pursuant
to this Section are subject to adjustment as provided in Section 10 below. Each
Director Option shall be subject to the following terms and conditions:

          (i)  PRICE. The purchase price per Share payable upon the exercise of
a Director Option shall be one hundred percent (100%) of the Market Price per
Share on the date of grant of the Director Option.

          (ii) EXERCISE. Each Director Option shall be exercisable for the full
amount or for any part thereof immediately on the date of grant. Any unexercised
portion of a Director Option may be subsequently exercised for the full amount
or for any part thereof at any time and from time to time (until exhausted)
prior to the expiration or other termination of the Option.

          (iii) EXPIRATION. Each Director Option shall terminate and may no
longer be exercised upon the earliest of (1) ten years after the date of grant,
(2) six months after termination of the Participant's Service due to death or
Disability, (3) three months after termination of the Participant's Service for
any other reason except termination for cause, and (4) immediately upon
termination of the Participant's Service for cause. The Board's good faith
determination of whether the termination of a Director Participant's Service was
for cause shall be binding for purposes of the Plan.

          (iv) OTHER TERMS. Each Director Option shall be subject to all other
terms of the Plan (including without limitation the terms of Sections 7, 9, 10
and 11) except to the extent that such terms are inconsistent with the express
provisions of this Section 5(b).

     6.   DURATION OF THE PLAN. This Plan shall terminate ten years from the
Effective Date hereof, unless terminated earlier pursuant to Section 13 below,
and no Options or Restricted Stock Awards may be granted or made thereafter.

     7.   TERMS AND CONDITIONS OF OPTIONS AND RESTRICTED STOCK AWARDS. Options
and Restricted Stock Awards granted or made under this Plan shall be evidenced
by grant forms or agreements in such form and containing such terms and
conditions as the Committee or (except as to grants and awards to employees who
are Company executive officers) the Committee's delegate shall determine;
provided, however, that such grant forms and agreements shall evidence among
their terms and conditions the following:

          (a)  PRICE. The purchase price per Share payable upon the exercise of
each Option (other than a Director Option) or the consideration (if any) in
addition to services of the Participant required pursuant to each Restricted
Stock Award granted or made hereunder shall be

                                      -6-
<PAGE>   7

determined by the Committee at the time the Option or Restricted Stock Award is
granted or made subject to the following restrictions. Subject to Section
7(k)(i), if applicable, the purchase price per Share payable upon the exercise
of each Incentive Option granted hereunder shall not be less than one hundred
percent (100%) of the Market Price per Share on the day the Incentive Option is
granted. The purchase price per Share payable upon the exercise of each
Nonqualified Option granted hereunder shall be not less than eighty-five percent
(85%) of the Market Price per Share on the date of the grant. Restricted Stock
Awards may be issued in consideration of services to be rendered, which shall be
valued for such purposes by the Committee. No Share shall be issued for less
than its par value, if any, paid in cash, property or services.

          (b)  NUMBER OF SHARES. Each grant or award form or agreement shall
specify the number of Shares to which it pertains.

          (c)  VESTING AND OTHER TERMS OF RESTRICTED STOCK AWARDS. All Shares
covered by a Restricted Stock Award will be issued promptly after the date of
grant of the award, subject to the following terms and conditions:

               (i)  VESTING. Such Shares shall remain unvested and subject to
the restrictions of this Section 7(c) until such time (if at all) as (I) one or
both of the following performance conditions (the "Performance Conditions") are
met within the period of five years beginning on the date of grant of the
Restricted Stock Award (the "Performance Period") and (II) the Service
Requirement (as defined below) (the "Service Requirement") is also met with
respect to a Participant.

               The Partial Performance Condition is met when the closing price
of a share of the Common Stock as reported on the NASDAQ National Market System
for a consecutive ten-day period equals or exceeds 144.605% of the Market Price
of a share on the first day of the Performance Period. If the Partial
Performance Condition is met for a Restricted Stock Award, then fifty percent
(50%) of the Shares covered by the award shall vest in the Participant who holds
the award, and the restrictions of this Section 7(c) shall terminate with
respect to such vested Shares (but not with respect to the remaining unvested
Shares), at such time as the Participant meets the Service Requirement, subject
to payment by the Participant of any additional consideration required under the
Restricted Stock Award.

               The Service Requirement is met if the Participant has provided
continuous Service from the date of grant of a Restricted Stock Award through
the end of the Performance Period; provided that (i) if a Participant's Service
is terminated by the Company without cause or by reason of death or Disability
during the Performance Period but after one or both of the Performance
Conditions are met, the Participant shall be deemed to have met the Service
Requirement as of such date of termination with respect to the Performance
Condition(s) which have been met (or deemed to have been met, as set forth in
(ii) below) as of such termination date and (ii) if a Participant's Service is
terminated by the Company without cause or by reason of death or Disability
prior to the date that both Performance Conditions are met, the Participant
shall be deemed to meet the Service Requirement until the first day of the fifth
month following

                                      -7-
<PAGE>   8

such termination. The Committee's good faith determination of whether the
termination of a Participant's Service (other than a Director Participant's
Service) was without cause or for cause shall be binding for purposes of the
Plan.

               The Full Performance Condition is met when the closing price of a
share of the Common Stock as reported on the NASDAQ National Market System for a
consecutive ten-day period equals or exceeds 189.210% of the Market Price of a
share on the first day of the Performance Period. If the Full Performance
Condition is met for a Restricted Stock Award, then the remaining fifty percent
(50%) or, if the Partial Performance Condition was not previously met, one
hundred percent (100%) of the Shares covered by the award shall vest in the
Participant who holds the award, and the restrictions of this Section 7(c) shall
terminate with respect to such vested Shares, at such time as the Participant
meets the Service Requirement, subject to payment by the Participant of any
additional consideration required under the Restricted Stock Award.

               Notwithstanding any of the foregoing, if the Committee so
provides at the time of a Restricted Stock Award grant, if a Change in Control
of the Company occurs while any Shares covered by a Restricted Stock Award
remain unvested pursuant to the foregoing provisions of this Section 7(c), but
before the date of forfeiture pursuant to this Section 7(c) of such Shares, such
unvested but unforfeited Shares covered by the award shall thereupon vest in the
Participant and the restrictions of this Section 7(c) shall terminate, subject
to payment by the Participant of any additional consideration required (without
regard to the occurrence of a Change in Control) in the Restricted Stock Award.
In the case of Restricted Stock Awards that by their terms do not automatically
vest upon a Change in Control, the Committee is authorized, in its discretion,
to provide for the accelerated vesting of unvested, but unforfeited Shares upon
a Change in Control.

               (ii) FORFEITURE OF UNVESTED SHARES. If the Performance Condition
applicable to Shares covered by a Restricted Stock Award to a Participant has
not been met by the end of the Performance Period or if any such Shares remain
unvested at a time when the Participant fails to meet the Service Requirement,
the Shares as to which the Performance Condition has not been met or the Shares
which remain unvested when the Participant fails to meet the Service Requirement
(as the case may be) shall thereupon be forfeited to the Company without any
further action by the Company or the Participant and for no consideration other
than the amount (if any) of cash or other property paid by the Participant for
such Shares. A Participant shall be deemed to fail to meet the Service
Requirement on the first day of the fifth month following termination of his or
her Service without cause or by reason of death or Disability and on the date of
termination of his or her Service for any other reason (including without
limitation, termination for cause and any voluntary termination by the
Participant).

               (iii) ESCROW OF UNVESTED SHARES. While Shares covered by a
Restricted Stock Award remain unvested, they shall be held in escrow by the
Company in certificate or book-entry form and they may not be sold,
hypothecated, or otherwise disposed of by the Participant or anyone claiming
through him or her.

                                      -8-
<PAGE>   9

               (iv) STOCKHOLDER RIGHTS. Subject to the restrictions of this
Section 7(c), each Participant shall enjoy all the benefits of ownership with
respect to all Shares covered by a Restricted Stock Award (including the rights
to vote such Shares and to receive dividends thereon), regardless of whether
such Shares are vested or unvested; provided that all such rights shall
immediately cease with respect to any unvested Shares upon the forfeiture of
such Shares.

               (v)  OTHER TERMS. Each Restricted Stock Award shall be subject to
all other terms of the Plan (including without limitation the other terms of
this Section 7 and of Sections 9, 10 and 11) and of any form or agreement
embodying the award, except to the extent that such terms are inconsistent with
the express provisions of this Section 7(c).

          (d)  EXERCISE OF OPTIONS. Each Option (other than a Director Option)
shall be exercisable for the full amount or for any part thereof at such time or
at such intervals and in such installments as the Committee (or its delegate, if
applicable) may determine at the time it grants such Option; provided, however,
that no Option shall be exercisable with respect to any Shares later than ten
years after the date of the grant of such Option (or five years in the case of
Incentive Options to which Section 7(k)(ii) applies). Notwithstanding the
foregoing, if the Committee so provides at the time of an Option grant, an
outstanding Option shall become immediately exercisable for the full amount or
any part thereof upon the occurrence of a Change in Control of the Company. In
the case of Options that by their terms do not become immediately exercisable
upon a Change in Control, the Committee is authorized, in its discretion, to
provide for the accelerated vesting of such options upon a Change in Control.

          An Option shall be exercisable only by delivery of a written notice to
the Company's Treasurer, or any other officer of the Company designated by the
Committee to accept such notices on its behalf, specifying the number of Shares
for which the Option is exercised and accompanied by either (i) payment or (ii)
if permitted by the Committee, irrevocable instructions to a broker to promptly
deliver to the Company full payment in accordance with Section 7(e)(ii) below of
the amount necessary to pay the aggregate exercise price. With respect to an
Incentive Option, the permission of the Committee referred to in clause (ii) of
the preceding sentence must be granted at the time the Incentive Option is
granted.

          (e)  PAYMENT. Payment shall be made in full (i) at the time the Option
is exercised, (ii) promptly after the Participant forwards the irrevocable
instructions referred to in Section 7(d)(ii) above to the appropriate broker, if
exercise of an Option is made pursuant to Section 7(d)(ii) above, or (iii) at
the time specified in the Restricted Stock Award if any payment is required
pursuant to the Award. Payment shall be made either (I) in cash, (II) by check,
(III) if permitted by the Committee (with respect to an Incentive Option, such
permission to have been granted at the time of the Incentive Option grant), by
delivery or deemed delivery and assignment to the Company of shares of Company
stock which (1) have a fair market value (as determined by the Committee) equal
to the exercise or purchase price and (2) except to the extent otherwise
permitted by the Committee in any instance, have been owned by the Participant
(or other person(s) exercising the Participant's rights under this Plan) for at
least six months prior to

                                      -9-
<PAGE>   10

the date of delivery or deemed delivery of such shares, (IV) by a combination of
one or more of the foregoing methods. For purposes of this Section, a deemed
delivery of shares shall mean the offset by the Company of a number of shares
subject to the Option or Restricted Stock Award against an equal number of
shares of the Company's stock owned by the Participant. If shares of Company
stock are to be used to pay the exercise price of an Incentive Option, the
Company prior to such payment must be furnished with evidence satisfactory to it
that the acquisition of such shares and their transfer in payment of the
exercise price satisfy the requirements of Section 422 of the Code and other
applicable laws.

     Notwithstanding any other provision of this Plan, if an Option would have a
before-tax net value of at least $10,000 to the holder upon exercise, then the
holder of the Option shall be deemed to have exercised the Option in full (to
the extent not previously exercised) on the last day that such Option is
exercisable. Such deemed exercise shall be subject to payment in full of the
exercise price (and all applicable withholding taxes) by any of the methods
permitted pursuant to this Section 7(e) and Section 7(f), but subject to the
discretion of the Committee to require payment in cash if it determines that
payment by other methods is not in the best interests of the Company.

          (f)  WITHHOLDING TAXES; DELIVERY OF SHARES. The Company's obligation
to deliver Shares upon exercise of an Option or pursuant to a Restricted Stock
Award shall be subject to the Participant's satisfaction of all applicable
federal, state and local income and employment tax withholding obligations.
Without limiting the generality of the foregoing, the Company shall have the
right to deduct from payments of any kind otherwise due to the Participant any
federal, state or local taxes of any kind required by law to be withheld with
respect to any Shares issued upon exercise of Options or pursuant to Restricted
Stock Awards. Furthermore, to the extent possible, all federal, state and local
tax withholding required by law shall be satisfied by withholding of vested and
unrestricted Shares or by delivery to the Company of already owned unrestricted
Shares, having a value equal to the amount required to be withheld, as
determined by the Committee. To the extent satisfaction of all required tax
withholding is not possible in the manner specified in the preceding sentence
and to the extent that additional tax withholding is elected by the Participant,
payment of withholding taxes may be made by any of the methods permitted in
Section 7(e) for payment of the exercise or purchase price of an Option or
Restricted Stock Award, subject to the discretion of the Committee to require
payment in cash if it determines that payment by other methods is not in the
best interests of the Company.

          (g)  TRANSFERABILITY. No Option or Restricted Stock Award shall be
transferable by the Participant otherwise than by will or the laws of descent or
distribution, and each Option shall be exercisable during the Participant's
lifetime only by the Participant. Notwithstanding the foregoing, the Board or
the Committee, as the case may be, may grant Nonqualified Options and Restricted
Stock Awards under this Plan that are transferable (subject to any terms and
conditions imposed by the Committee) by the Participant, either directly or in
trust, to one or more members of the Participant's family or to a trust, a
family partnership or other entity for the exclusive benefit of one or more
members of the Participant's family. Following any transfer permitted pursuant
to this paragraph, of which the Participant has notified

                                      -10-
<PAGE>   11

the Committee in writing, such Option or Restricted Stock Award may be exercised
or shall be held by the transferee(s), subject to all terms and conditions of
the Option or the Restricted Stock Award, as the case may be. For these
purposes, the members of the Participant's family are only the Participant's:
(i) spouse and the lineal descendants of such spouse; (ii) lineal descendants
and the spouses of such lineal descendants; (iii) lineal ancestors and the
spouses of such lineal ancestors; and (iv) siblings and the spouses and the
children of such siblings.

          (h)  TERMINATION OF RESTRICTED STOCK AWARDS AND OPTIONS. Each
Restricted Stock Award shall be subject to the termination and forfeiture
provisions of Section 7(c) above. Except to the extent the Committee provides
specifically in a grant form or Option agreement for a lesser period (or a
greater period, in the case of Nonqualified Options only), each Option (other
than a Director Option) shall terminate and may no longer be exercised if the
Participant ceases for any reason to render continuous Service, in accordance
with the following provisions:

               (i)  if the Participant ceases to render Service for any reason
          other than death, Disability or termination for cause, the Participant
          may, at any time within a period of three months after the date of
          such cessation of Service, exercise the Option to the extent that the
          Option was exercisable on the date of such cessation;

               (ii) if the Participant ceases to render Service because of
          termination for cause, the Option shall terminate immediately and may
          no longer be exercised on and after the date of such termination for
          cause;

               (iii) if the Participant ceases to render Service because of
          Disability, the Participant may, at any time within a period of six
          months after the date of such cessation of Service, exercise the
          Option to the extent that the Option was exercisable on the date of
          such cessation; and

               (iv) if the Participant ceases to render Service because of
          death, the Option, to the extent that the Participant was entitled to
          exercise it on the date of death, may be exercised within a period of
          six months after the Participant's death by the person or persons to
          whom the Participant's rights under the Option pass by will or by the
          laws of descent or distribution;

provided, however, that no Option may be exercised to any extent by anyone after
the date of its expiration; and provided, further, that Options may be exercised
at any time only as to Shares which at such time are available for acquisition
pursuant to the terms of the applicable grant form or agreement.

          (i)  RIGHTS AS STOCKHOLDER. A Participant shall have no rights as a
stockholder with respect to any Shares covered by an Option until the date of
issuance of a stock certificate in the Participant's name for such Shares. A
Participant shall have such rights as a stockholder with respect to any Shares
covered by a Restricted Stock Award as are provided in Section 7(c) above.

                                      -11-
<PAGE>   12

          (j)  FORFEITURE. Any Options, any Shares acquired upon exercise of an
Option and any gain realized upon exercise of any Options (other than, in each
case, a Director Option) may in the discretion of the Committee be subject to
forfeiture to the Company if and to the extent and at the repurchase price, if
any, specifically set forth in the applicable Option grant form or agreement.
Certificates representing Shares subject to such repurchase or forfeiture may be
subject to such escrow and stock legending provisions as may be set forth in the
Option grant form or agreement pursuant to which the Shares were acquired. Any
Shares issued pursuant to a Restricted Stock Award shall be subject to such
forfeiture to the Company and to such escrow provisions as are specified in
Section 7(c) above and may be subject to such additional repurchase and
forfeiture rights and escrow and stock legending provisions as the Committee (in
its discretion) may set forth in any form or agreement embodying the award.

          (k)  10% STOCKHOLDER. If any Participant to whom an Incentive Option
is granted pursuant to the provisions of the Plan is on the date of grant the
owner of stock (as determined under Section 424(d) of the Code) possessing more
than ten percent (10%) of the total combined voting power or value of all
classes of stock of the Company, its parent, if any, or Subsidiaries, then the
following special provisions shall be applicable:

               (i)  The exercise price per Share subject to such Option shall
          not be less than one hundred and ten percent (110%) of the Market
          Price of each Share on the date of grant; and

               (ii) The Option shall not have a term in excess of five years
          from the date of grant.

          (l)  CONFIDENTIALITY AGREEMENTS. Each Participant shall execute, prior
to or contemporaneously with the grant of any Option or Restricted Stock Award
hereunder, the Company's then standard form of agreement, if any, relating to
nondisclosure of confidential information, assignment of inventions and related
matters.

          (m)  AGGREGATE LIMITATION. The maximum number of Shares with respect
to which any Options and Restricted Stock Awards may be granted under the Plan
to any individual during each successive twelve-month period commencing on the
Effective Date of the Plan shall not exceed 200,000 shares.

          (n)  RIGHT TO TERMINATE. Nothing contained in the Plan or in any
Option or Restricted Stock Award granted hereunder shall restrict the right of
any member of the Company Group to terminate the employment of any Participant
or other Service by the Participant at any time and for any reason, with or
without notice. Nothing contained in the Plan or in any Option granted hereunder
shall give any Non-Employee Director the right to continue in Service as a
director.

          (o)  DEFERRAL

                                      -12-
<PAGE>   13

               (i)  Notwithstanding anything herein to the contrary, a
Participant, may elect, at the discretion of, and in accordance with rules
(consistent with the terms of this Plan) which may be established by, the
Committee, to defer delivery of the Shares otherwise receivable upon exercise of
a Nonqualified Option using any of the payment methods permitted by Section 7(e)
(I) or (II) of this Plan (provided that any such election must apply to all
Shares otherwise receivable upon such exercise of the Option) or Section
7(e)(III) of this Plan, provided such election is irrevocable and is made at
least (i) six months prior to the date that such Option otherwise would expire
and (ii) two months prior to the exercise of such Option. Phantom shares of
Common Stock (the "Phantom Shares") equal in number to the Shares so deferred
shall be credited to an account in the name of the Participant on the books and
records of the Company (a "Deferred Compensation Account") at the date of
exercise. A separate Deferred Compensation Account shall be maintained with
respect to each Option subject to an effective deferral election.

               (ii) The Phantom Shares shall be entitled to dividends when, as
and if paid generally with respect to shares of Common Stock. At its election,
the Company may (i) pay such dividends to the Participant in cash when such
dividends are paid to the holders of Common Stock or (ii) credit the Deferred
Compensation Account with additional Phantom Shares equal to the aggregate
pre-tax amount of the dividends otherwise payable upon the number of Phantom
Shares then held in the Deferred Compensation Account, based on the Market Value
of the Common Stock on the date of payment of such dividends with any resulting
fractional Phantom Shares rounded up to the next whole Phantom Share.

               (iii) The value of a Participant's Deferred Compensation Account
shall be payable in shares of Common Stock in one single payment or in annual
installments over a period not to exceed 10 years or as otherwise determined by
the Committee. At the time Participant makes such deferral election, the
Participant shall elect the form of payment and date for lump sum payment or
commencement of annual payments of the Deferred Compensation Account, with such
date at least one year subsequent to the date of exercise of the Option, but not
later than the date of the Participant's termination of Service. Notwithstanding
any election by an optionee, in the event of Disability or death of the
optionee, the Participant's Deferred Compensation Account shall be paid within
90 days in the form of shares of Common Stock in a single lump sum.

               (iv) Notwithstanding the deferred payment date elected by the
Participant, the Committee may, in its discretion, allow for early payment of a
Participant's Deferred Compensation Account in the event of an "unforeseeable
emergency." For this purpose, an unforeseeable emergency shall be defined as an
unanticipated emergency that is caused by an event beyond the control of the
Participant and that would result in severe financial hardship to the
Participant if early withdrawal were not permitted. Any withdrawal on account of
an unforeseeable emergency must be limited to the amount necessary to meet the
emergency. The above provisions regarding a withdrawal upon an unforeseeable
emergency shall be interpreted in accordance with published revenue procedures,
regulations, releases or interpretations. In addition, solely for the
convenience or other benefit of the Company, Deferred

                                      -13-
<PAGE>   14

Compensation Accounts may be distributed on an accelerated basis in the
discretion of the Committee.

               (v)  Participants have the status of general unsecured creditors
of the Company with respect to their Deferred Compensation Accounts, and such
accounts constitute a mere promise by the Company to make payments with respect
thereto.

               (vi) A Participant's right to benefit payments under this Plan
with respect to the Deferred Compensation Accounts may not be anticipated,
alienated, sold, transferred, assigned, pledged, encumbered by the Participant
on the Participant's beneficiary, or attached or garnished by creditors of the
Participant or the Participant's beneficiary and any attempt to do so shall be
void.

     8.   RESTRICTIONS ON INCENTIVE OPTIONS. Incentive Options granted under
this Plan shall be specifically designated as such and shall be subject to the
additional restriction that the aggregate Market Price, determined as of the
date the Incentive Option is granted, of the Shares with respect to which
Incentive Options are exercisable for the first time by a Participant during any
calendar year shall not exceed $100,000. If an Incentive Option which exceeds
the $100,000 limitation of this Section 8 is granted, the portion of such Option
which is exercisable for Shares in excess of the $100,000 limitation shall be
treated as a Nonqualified Option pursuant to Section 422(d) of the Code. In the
event that such Participant is eligible to participate in any other stock
incentive plans of the Company, its parent, if any, or a Subsidiary which are
also intended to comply with the provisions of Section 422 of the Code, such
annual limitation shall apply to the aggregate number of shares for which
options may be granted under all such plans.

     9.   SUSPENSION OF RIGHTS PRIOR TO A DISSOLUTION, REORGANIZATION, ETC.
Prior to any dissolution, liquidation, merger, consolidation or reorganization
of the Company as to which the Company will not be the surviving corporation, or
the sale or exchange of substantially all of the Common Stock or the sale of
substantially all of the assets of the Company (the "Event"), unless such Event
would constitute a Change in Control of the Company, the Board or the Committee
may decide to terminate each outstanding Option and Restricted Stock Award. If
the Board or the Committee so decides, each Option (including Director Options)
and Restricted Stock Award shall terminate as of the effective date of the
Event, but the Board or the Committee shall suspend the exercise of all
outstanding Options a reasonable time prior to the Event, giving each person
affected thereby not less than fourteen days written notice of the date of
suspension, prior to which date such person may purchase in whole or in part the
Shares otherwise available to him or her as of the date of purchase. If the
Event is not consummated, the suspension shall be removed and all Options and
Restricted Stock Awards shall continue in full force and effect, subject to
their terms.

     10.  ADJUSTMENT IN SHARES. Appropriate adjustment shall be made by the
Committee in the maximum number of Shares subject to the Plan and in the number,
kind, and exercise or purchase price of Shares covered by outstanding Options
and Restricted Stock Awards granted hereunder and in the number and kind of
Shares in each Director Option subsequently granted pursuant to Section 5(b) to
give effect to any stock dividends, stock splits, stock combinations,

                                      -14-
<PAGE>   15

recapitalizations and other similar changes in the capital structure of the
Company after the Effective Date of the Plan. In the event of a change of the
Common Stock resulting from a merger or similar reorganization as to which the
Company is the surviving corporation, the number and kind of Shares which
thereafter may be purchased pursuant to an Option or issued pursuant to a
Restricted Stock Award under the Plan and the number and kind of Shares then
subject to Options or Restricted Stock Awards granted hereunder and the price
per Share thereof shall be appropriately adjusted in such manner as the
Committee may deem equitable to prevent dilution or enlargement of the rights
available or granted hereunder.

     11.  INVESTMENT REPRESENTATIONS; TRANSFER RESTRICTIONS. The Company may
require Participants, as a condition of purchasing Shares pursuant to the
exercise of an Option or of receiving Shares pursuant to a Restricted Stock
Award, to give written assurances in substance and form satisfactory to the
Company to the effect that such person is acquiring the Shares for the
Participant's own account for investment and not with any present intention of
selling or otherwise distributing the same, and to such other effects as the
Company deems necessary or appropriate (including without limitation
confirmation that the Participant is aware of any applicable restrictions on
transfer of the Shares, as specified in the by-laws of the Company or otherwise)
in order to comply with federal and applicable state securities laws.

     12.  DEFINITIONS.

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

          (b)  "CHANGE IN CONTROL" has the meaning defined in section 14 below.

          (c)  "CODE" means the Internal Revenue Code of 1986, as heretofore and
hereafter amended, and the regulations promulgated thereunder.

          (d)  "COMMITTEE" has the meaning defined in Section 4 above.

          (e)  "COMMON STOCK" has the meaning defined in Section 3 above.

          (f)  "COMPANY" AND "COMPANY GROUP" have the meanings defined in
Section 1 above.

          (g)  "DEFERRED COMPENSATION ACCOUNT" has the meaning defined in
Section 7(o) above.

          (h)  "DIRECTOR OPTION" has the meaning defined in Section 5(b) above.

          (i)  "DISABILITY" has the meaning defined in Section 22(e)(3) of the
Code.

          (j)  "EFFECTIVE DATE" has the meaning defined in Section 2 above.

                                      -15-
<PAGE>   16

          (k)  "EMPLOYEE" means any individual (including an officer of the
Company) who is a common law employee of any member of the Company Group. Any
individual who was an Employee at the start of a leave of absence shall continue
to be an Employee for purposes of this Plan to the extent provided in
regulations under applicable provisions of the Code or to the extent required by
the Uniformed Services Employment and Reemployment Rights Act or other
applicable law.

          (l)  "EVENT" has the meaning defined in Section 9 above.

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

          (n)  "INCENTIVE OPTION" has the meaning defined in Section 1 above.

          (o)  "MARKET PRICE" means the closing price of the Common Stock as
published in the Wall Street Journal on the relevant date (or if such date is
not a trading date or if no trades took place on such date, then the closing
price for the last previous trading date or the last previous date on which such
a trade occurred, as the case may be); provided that if the closing price of the
Common Stock is no longer reported in the Wall Street Journal then the Market
Price as of the relevant date shall be as determined by the Board.

          (p)  "1995 PLAN" means the HPSC, Inc. 1995 Stock Incentive Plan, as
adopted March 8, 1995, and amended and restated March 14, 1996.

          (q)  "1998 PLAN" means the HPSC, Inc. 1998 Stock Incentive Plan, as
adopted February 23, 1998, and amended and restated on April 26, 1999.

          (r)  "NON-EMPLOYEE DIRECTOR" has the meaning defined in Section 5(b)
above.

          (s)  "NONQUALIFIED OPTION" has the meaning defined in Section 1 above.

          (t)  "OPTION" has the meaning defined in Section 1 above.

          (u)  "PARTICIPANT" has the meaning defined in Section 5 above.

          (v)  "PERFORMANCE CONDITIONS" "PARTIAL PERFORMANCE CONDITION" AND
"FULL PERFORMANCE CONDITION" have the meanings defined in Section 7(c) above.

          (w)  "PERFORMANCE PERIOD" has the meaning defined in Section 7(c)
above.

          (x)  "PHANTOM STOCK" has the meaning defined in Section 7(o) above.

          (y)  "PLAN" has the meaning defined in Section 1 above.

                                      -16-
<PAGE>   17

          (z)  "RESTRICTED STOCK AWARD" has the meaning defined in Section 1
above.

          (aa) "SERVICE" means the performance of work for one or more members
of the Company Group as an Employee, consultant or other individual contributor,
or service as a Non-Employee Director of the Company.

          (bb) "SERVICE REQUIREMENT" has the meaning defined in Section 7(c)
above.

          (cc) "SHARES" has the meaning defined in Section 3 above.

          (dd) "SUBSIDIARY" has the meaning defined in Section 424(f) of the
Code.

     13.  TERMINATION OR AMENDMENT OF PLAN. The Board may by written action at
any time terminate the Plan or make such changes in or additions or deletions to
the Plan as it deems advisable without further action on the part of the
stockholders of the Company, provided:

          (a)  that no such termination or amendment shall adversely affect or
impair any then outstanding Option or Restricted Stock Award or related
agreement without the consent of the Participant holding such Option or
Restricted Stock Award or related agreement; and

          (b)  that no such amendment which (i) increases the maximum number of
Shares subject to this Plan (except to the extent provided in Sections 9 and
10), (ii) materially modifies the requirements as to eligibility for
participation in the Plan, or (iii) makes any other change which, pursuant to
the Code or regulations thereunder or Section 16(b) of the Exchange Act and the
rules and regulations thereunder, requires action by the stockholders may be
made without obtaining, or being conditioned upon, stockholder approval.

     With the consent of the Participant affected, the Committee may amend
outstanding Options or Restricted Stock Awards or related agreements in a manner
not inconsistent with the Plan. The Committee shall have the right to amend or
modify the terms and provisions of the Plan and of any outstanding Incentive
Options granted under the Plan to the extent necessary to qualify any or all
such Options for such favorable federal income tax treatment (including deferral
of taxation upon exercise) as may be afforded incentive stock options under
Section 422 of the Code.

     14.  CHANGE IN CONTROL. A change in control of the Company (a "Change in
Control") will occur upon:

     (a)  The acquisition by any individual, entity or group (within the meaning
of Sections 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 20 percent or more of either (i) the then outstanding shares of the Common
Stock or (ii) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of the
directors (the "Outstanding Company Voting Securities"); provided, however, that
the following

                                      -17-
<PAGE>   18

acquisitions shall not constitute a Change in Control: (A) any acquisition
directly from the Company (excluding an acquisition by virtue of the exercise of
a conversion privilege); (B) any acquisition by the Company or by any
corporation controlled by the Company; (C) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company; or (D) any acquisition by any corporation
pursuant to a consolidation or merger, if, following such consolidation or
merger, the conditions described in clauses (i), (ii), and (iii) of paragraph
(c) of this Section 14 are satisfied.

     Notwithstanding the foregoing, a Change in Control shall not be deemed to
occur solely because any Person (the "Subject Person") acquired beneficial
ownership of more than the permitted percentage of the then Outstanding Company
Voting Securities as a result of the acquisition of Voting Securities by the
Company which by reducing the number of Voting Securities then outstanding,
increases the percentage of shares beneficially owned by the Subject Person,
provided that if a Change in Control would occur (but for the operation of this
sentence) as a result of the acquisition of Voting Securities by the Company
and, after such share acquisition by the Company, the Subject Person becomes the
beneficial owner of any additional Voting Securities which increases the
percentage of the then Outstanding Company Voting Securities beneficially owned
by the Subject Person, then a Change in Control shall occur;

     (b)  Individuals who, as of the date of this Agreement, constitute the
Board (the "Incumbent Board") ceasing for any reason to constitute at least
two-thirds of the Board over any period of 24 consecutive months or less;
provided, however, that any individual becoming a director subsequent to the
date of this Agreement whose election, or nomination for election by the
Corporation's shareholders, was approved by a vote or resolution of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of either an actual or threatened election contest (as
such terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies or consents
by or on behalf of a Person other than the Board;

     (c)  Adoption by the Board of a resolution approving an agreement of
consolidation of the Company with or merger of the Company into another
corporation or business entity in each case, unless, following such
consolidation or merger, (i) more than 60 percent of, respectively, the then
outstanding shares of common stock of the corporation resulting from such
consolidation or merger and/or the combined voting power of the then outstanding
voting securities of such corporation or business entity entitled to vote
generally in the election of directors (or other persons having the general
power to direct the affairs of such entity) is then beneficially owned, directly
or indirectly, by all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Common Stock and Outstanding
Company Voting Securities immediately prior to such consolidation or merger in
substantially the same proportions as their ownership, immediately prior to such
consolidation or merger, of the Common Stock and/or Outstanding Company Voting
Securities, as the case may be, (ii) no Person (excluding the Company, any
employee benefit plan (or related trust) of the Company or such corporation or
other business entity resulting from such consolidation or merger and any

                                      -18-
<PAGE>   19

Person beneficially owning, immediately prior to such consolidation or merger,
directly or indirectly, 35 percent or more of the Common Stock and/or
Outstanding Company Voting Securities, as the case may be) beneficially owns,
directly or indirectly, 35 percent or more of, respectively, the then
outstanding shares of common stock of the corporation resulting from such
consolidation or merger or the combined voting power of the then outstanding
voting securities of such corporation or business entity entitled to vote
generally in the election of its directors (or other persons having the general
power to direct the affairs of such entity) and (iii) at least two-thirds of the
members of the board of directors (or other group of persons having the general
power to direct the affairs of the corporation or other business entity)
resulting from such consolidation or merger were members of the Incumbent Board
at the time of the execution of the initial agreement providing for such
consolidation or merger; provided that any right which shall vest by reason of
the action of the Board pursuant to this paragraph (c) shall be divested, with
respect to any such right not already exercised, upon (A) the rejection of such
agreement of consolidation or merger by the stockholders of the Company or (B)
its abandonment by either party thereto in accordance with its terms; or

     (d)  Adoption by the requisite majority of the whole Board, or by the
holders of such majority of stock of the Company as is required by law or by the
Certificate of Incorporation or By-Laws of the Company as then in effect, of a
resolution or consent authorizing (i) the dissolution of the Company or (ii) the
sale or other disposition of all or substantially all of the assets of the
Company, other than to a corporation or other business entity with respect to
which, following such sale or other disposition, (A) more than 60 percent of,
respectively, the then outstanding shares of common stock of such corporation
and/or the combined voting power of the outstanding voting securities of such
corporation or other business entity entitled to vote generally in the election
of directors (or other persons having the general power to direct the affairs of
such entity) is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Common Stock and Outstanding Company Voting
Securities immediately prior to such sale or other disposition in substantially
the same proportions as their ownership, immediately prior to such sale or other
disposition, of the Common Stock and/or Outstanding Company Voting securities,
as the case may be, (B) no Person (excluding the Company and any employee
benefit plan (or related trust) of the Company or such corporation or other
business entity and any Person beneficially owning, immediately prior to such
sale or other disposition, directly or indirectly, 35 percent or more of the
Common Stock and/or Outstanding Company Voting Securities, as the case may be)
beneficially owns, directly or indirectly, 35 percent or more of, respectively,
the then outstanding shares of common stock of such corporation and/or the
combined voting power of the then outstanding voting securities of such
corporation or other business entity entitled to vote generally in the election
of directors (or other persons having the general power to direct the affairs of
such entity) and (C) at least two-thirds of the members of the board of
directors (or other group of persons having the general power to direct the
affairs of such corporation or other entity) were members of the Incumbent Board
at the time of the execution of the initial agreement or action of the Board
providing for such sale or other disposition of assets of the Company; provided
that any right which shall vest by reason of the action of the Board or the
stockholders pursuant to this paragraph (d) shall be divested, with respect to
any such right not

                                      -19-
<PAGE>   20

already exercised, upon the abandonment by the Company of such dissolution, or
such sale or other disposition of assets, as the case may be.

     A Change in Control shall not occur upon the mere reincorporation of the
Company in another state.

                                      -20-<PAGE>   1
                                                                    Exhibit 10.2

                                   HPSC, Inc.

                             Audit Committee Charter

                  Adopted by the Board of Directors on 4/20/00

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

PURPOSE AND OBJECTIVES

The primary purpose of the Audit Committee (the "Committee") is to assist the
Board of Directors (the "Board") in fulfilling its responsibility to oversee
management's conduct of the financial reporting process. This will include, but
is not limited to, oversight of the Company's systems of internal accounting and
financial controls, the Company's process for monitoring compliance with
applicable law and ethics programs, and the annual independent audit of the
Company's financial statements.

In discharging its oversight role, the Committee is empowered to investigate any
matter brought to its attention, with full access to all books, records,
facilities and personnel of the Company and the power to retain outside counsel,
auditors or other experts for this purpose. The Board and the Committee
represent the Company's shareholders; accordingly, the outside auditor is
ultimately accountable to the Board and the Committee.

MEMBERSHIP

The Committee, which is appointed by the Board, shall comprise not fewer than
three members of the Board, and the Committee's composition will meet the
requirements of the Audit Policy Committee of the NASD.

Accordingly all members of the Committee will be directors -

-    who have no relationship to the Company that may interfere with their
     independence from management; and

-    who are financially literate or who become financially literate within a
     reasonable period of time after appointment to the Committee. In addition,
     at least one member of the Committee will have accounting or related
     financial management expertise and sophistication.

<PAGE>   2

DUTIES AND RESPONSIBILITIES

The Committee's job is one of oversight. The Company's management is responsible
for preparing the Company's financial statements, and the outside auditors are
responsible for auditing those financial statements. The Committee does not plan
or conduct audits or determine whether the Company's financial statements are
complete and accurate and in accordance with generally accepted accounting
principles. The Company's financial managers and the outside auditor, have more
time, knowledge and detailed information on the Company than do Committee
members. Consequently, in carrying out its oversight responsibilities, the
Committee is not providing any expert or special assurance as to the Company's
financial statements or any professional certification to the auditor's work. It
is also not the duty of the Committee to resolve disagreements, if any, between
management and the outside auditor.

     The Committee shall have the following duties and responsibilities:

     (1)  Review with management and the outside auditor the audited financial
          statements to be included in the Company's Annual Report on Form 10-K
          (or the Annual Report to Shareholders if distributed prior to the
          filing of Form 10-K) and review and consider with the outside auditor
          the matters required to be discussed by the Statement of Auditing
          Standards (`SAS') No. 61.

     (2)  As a whole, or through the Committee chair, review with the outside
          auditor the Company's interim financial results to be included in the
          Company's quarterly reports to be filed with the Securities and
          Exchange Commission and the matters required to be discussed by SAS
          No. 61. This review will occur prior to the Company's filing of Form
          10-Q.

     (3)  Review the analysis prepared by management and the outside auditor of
          significant financial reporting issues and judgements made in
          connection with the preparation of the Company's financial statements.

     (4)  Review the annual audit plan of the outside auditor. Ensure receipt
          from the outside auditor of a formal written statement delineating all
          relationships between the auditor and the Company, consistent with
          Independence Standards Board Standard 1; actively engage in a dialogue
          with the auditor with respect to any disclosed relationships or
          services that may impact the objectivity and independence of the
          auditor; and take, or recommend that the full Board take, appropriate
          action to ensure the independence of the outside auditor.

     (5)  Review and discuss with management and the outside auditor the
          Company's internal control procedures and practices for accomplishing
          proper financial management, safeguarding assets, authorizing and
          recording transactions and complying with Company policies and ethical
          practices and any comments of the outside auditor with respect to such
          policies and practices.

<PAGE>   3

     (6)  Review with management and the outside auditor any significant changes
          in the Company's accounting principles or financial reporting
          practices.

     (7)  Consider the outside auditor's ultimate accountability to the Board
          and the Committee, as representatives of the shareholders, when
          evaluating, and, where appropriate, replacing the outside auditor (and
          in nominating the outside auditor to be proposed for shareholder
          approval in any proxy statement).

     (8)  Review with the outside auditor any problems or difficulties the
          auditor may have encountered and any management letter provided by the
          auditor and the Company's response to that letter. Such review should
          cover any difficulties encountered in the course of the audit work,
          including any restrictions on the scope of activities or access to
          required information.

     (9)  Review compliance with applicable regulatory and financial reporting
          requirements.

     (10) Conduct such other reviews as are necessary or advisable to discharge
          the foregoing responsibilities.

     (11) Review and reassess the adequacy of this Charter annually and
          recommend any proposed changes to the Board for approval.

     (12) Prepare the report required by the rules of the Securities and
          Exchange Commission to be included in the Company's annual proxy
          statement.

     (13) Meet as a Committee four times per year, or more frequently as needed,
          to carry out the foregoing duties and responsibilities.

     (14) Report to the Board at its next meeting after each Committee meeting.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00013-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00013-of-00352.parquet"}]]