Document:

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                                                                   Exhibit 10.39

                               September 26, 2001

Sabino Rodriguez, III, Esq.
Day, Berry & Howard, LLP
CityPlace I
Hartford, Connecticut 06103-3499

                  Re:  Richard J. Quagliaroli Severance Agreement

Dear Mr. Rodriguez:

                  This is to confirm the terms of the Severance Agreement
reached between The MIIX Group, Inc. and its subsidiaries ("MIIX") and Richard
J. Quagliaroli ("Quagliaroli") (collectively, the "parties"), as follows:

                  1. The parties mutually agree to the termination of
Quagliaroli's employment by MIIX as Chief Executive Officer and President
effective September 21, 2001 (the "termination date"). Quagliaroli hereby
resigns from all positions with MIIX as of the termination date. MIIX will pay
Quagliaroli base pay through the termination date.

                  2. MIIX will pay to Quagliaroli the sum of $425,000, less
applicable withholding, as severance compensation by wire transfer to Day, Berry
& Howard, LLP no later than 12:00 noon on September 28, 2001. If the wire is not
initiated and a federal confirmation number issued by the indicated time, the
amounts due will accrue interest at the maximum per diem rate permitted by law
and MIIX will reimburse Quagliaroli for the costs of collection and attorneys
fees with respect thereto.

                  3. MIIX will pay to Quagliaroli the sum of $101,300 to
purchase the 10,000 shares of restricted MIIX stock he currently holds by wire
transfer to Day, Berry &

<PAGE>

Sabino Rodriguez, Esq.
November 9, 2001
Page 2

Howard, LLP no later than 12:00 noon on September 28, 2001. Quagliaroli shall
hold no ownership interest in such stock after payment. If the wire is not
initiated and a federal confirmation number issued by the indicated time, the
amounts due will accrue interest at the maximum per diem rate permitted by law
and MIIX will reimburse Quagliaroli for the costs of collection and attorneys
fees with respect thereto.

                  4. The Stock Purchase and Loan Agreement between MIIX and
Quagliaroli shall be deemed canceled in exchange for the return of the purchased
stock. Quagliaroli shall have no ownership interest in the purchased stock and
shall have no indebtedness to MIIX under the Stock Purchase and Loan Agreement.

                  5. MIIX shall assume responsibility for and hold Quagliaroli
harmless from any payments due under the Residential Lease for 69 Woodmont
Drive, Lawrenceville, New Jersey 08648 and the related insurance. MIIX will
reimburse Quagliaroli for funds previously advanced by him for security deposit
and rent under the lease and the cost of a washer/dryer purchased by him.
Quagliaroli will vacate the premises no later than October 31, 2001, after which
MIIX shall have sole use and occupancy of the premises. MIIX will reimburse
Quagliaroli for the costs of collection and attorneys fees with respect thereto
in respect of any amounts expended by Quagliaroli in defense of any action
related to such lease and shall reimburse Quagliaroli for amounts advanced in
respect thereof by him with interest at the maximum rate permitted by law. MIIX
will pay Quagliaroli's reasonable expenses of relocation back to Connecticut.
The costs of relocation are anticipated to be around $3,000 and the cost of the
washer/dryer around $1,000. If Quagliaroli provides MIIX with the amounts due to
him under this paragraph 5 by noon on Thursday, September 27th, the amounts will
be included with the wire transfers specified above.

                  6. Quagliaroli will be permitted a one-time prearranged and
escorted access to his office at MIIX before or after business hours in order to
delete personal e-mail from the office computer and for final review for his
personal property in the office.

                  7. The parties agree to the issuance of the Press Release
attached hereto. The parties mutually agree not to disparage or criticize each
other in any way to any third party.

                  8. Quagliaroli waives all rights, stock option rights,
payments or benefits due or claimed to be due to him from MIIX under any
agreement with MIIX or otherwise.

<PAGE>

Sabino Rodriguez, Esq.
November 9, 2001
Page 3

                  9. MIIX will defend, indemnify and hold harmless Quagliaroli
for any action brought against him as a result of his employment by MIIX,
including any action by any current or former employee of MIIX. MIIX will
continue to maintain its directors and officers insurance policy providing
coverage to Quagliaroli for acts occurring during the period of his employment
with MIIX.

                  10. Except for those obligations expressly set forth in this
letter agreement, MIIX and Quagliaroli mutually release and discharge each other
from any and all claims, duties or obligations between them, whether arising
under any agreement between them or otherwise.

                  I am authorized to execute this letter agreement on behalf of
MIIX and my signature to this letter shall be deemed binding on it. Please have
Mr. Quagliaroli sign this letter indicating his agreement and acceptance of the
terms set forth by telecopier and mail the original to me.

                                        Very truly yours,

                                        DAVID J. D'ALOIA

DJD/pk

cc: MIIX Group Executive Committee

AGREED AND ACCEPTED:

_______________________________
RICHARD J. QUAGLIAROLI<PAGE>
                                                                     Exhibit 4.1

                           SAFEGUARD SCIENTIFICS, INC.
                    2001 ASSOCIATES EQUITY COMPENSATION PLAN

                  The purpose of the Safeguard Scientifics, Inc. 2001 Associates
Equity Compensation Plan (the "Plan") is to provide (i) designated employees of
Safeguard Scientifics, Inc. (the "Company") and its subsidiaries, (ii)
individuals to whom an offer of employment has been extended, and (iii) certain
advisors who perform services for the Company or its subsidiaries, with the
opportunity to receive grants of nonqualified stock options, stock appreciation
rights, restricted stock, performance units and other stock-based awards. No
person who is an officer (within the meaning of the rules of the New York Stock
Exchange) or a director of the Company shall be entitled to receive any awards
hereunder. The Company believes that the Plan will encourage the participants to
contribute materially to the growth of the Company, thereby benefiting the
Company's shareholders, and will align the economic interests of the
participants with those of the shareholders.

                  1.       Administration

                           (a) Committee. The Plan shall be administered and
interpreted by a committee (the "Committee") appointed by the Board of Directors
of the Company. The Committee shall consist of two or more persons appointed by
the Board, all of whom may be "outside directors" as defined under section
162(m) of the Internal Revenue Code of 1986, as amended (the "Code") and related
Treasury regulations and may be "non-employee directors" as defined under Rule
16b-3 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). Except to the extent prohibited by applicable law or the applicable rules
of a stock exchange, the Committee may allocate all or any portion of its
responsibilities and powers to any one or more of its members or may delegate
all or any part of its responsibilities and powers to any person or persons
selected by it. Any such allocation or delegation may be revoked by the
Committee at any time. If the Committee does not exist, or for any other reason
determined by the Board, the Board may take any action under the Plan that would
otherwise be the responsibility of the Committee.

                           (b) Committee Authority. The Committee shall have the
sole authority to (i) determine the individuals to whom grants shall be made
under the Plan, (ii) determine the type, size and terms of the grants to be made
to each such individual, (iii) determine the time when the grants will be made
and the duration of any applicable exercise or restriction period, including the
criteria for exercisability and the acceleration of exercisability, and (iv)
deal with any other matters arising under the Plan.

                           (c) Committee Determinations. The Committee shall
have full power and authority to administer and interpret the Plan, to make
factual determinations and to adopt or amend such rules, regulations, agreements
and instruments for implementing the Plan and for the conduct of its business as
it deems necessary or advisable, in its sole discretion. The Committee's
interpretations of the Plan and all determinations made by the Committee
pursuant to the powers vested in it hereunder shall be conclusive and binding on
all persons having any interest in the
<PAGE>
Plan or in any awards granted hereunder. All powers of the Committee shall be
executed in its sole discretion, in the best interest of the Company, not as a
fiduciary, and in keeping with the objectives of the Plan and need not be
uniform as to similarly situated individuals.

                  2.       Grants

                           (a) Generally. Awards under the Plan may consist of
grants of nonqualified stock options as described in Section 5 ("Options"),
restricted stock as described in Section 6 ("Restricted Stock"), stock
appreciation rights as described in Section 7 ("SARs"), performance units as
described in Section 8 ("Performance Units"), and other stock-based awards as
described in Section 9 ("Other Stock-Based Grants") (hereinafter collectively
referred to as "Grants"). All Grants shall be subject to the terms and
conditions set forth herein and to such other terms and conditions consistent
with this Plan as the Committee deems appropriate and as are specified in
writing by the Committee to the individual in a grant instrument (the "Grant
Instrument") or an amendment to the Grant Instrument. The Committee shall
approve the basic form and provisions of each Grant Instrument. Grants under a
particular Section of the Plan need not be uniform as among the grantees.

                           (b) Stand-Alone, Additional, Tandem, and Substitute
Grants. Grants made under the Plan may, in the discretion of the Committee, be
made either alone or in addition to, in tandem with, or in substitution or
exchange for, any other Grants or any grant made under another plan of the
Company, any subsidiary or affiliate, or any business entity to be acquired by
the Company or a subsidiary or affiliate, or any other right of a Grantee to
receive payment from the Company or any subsidiary or affiliate ("Non-Plan
Grants"). Grants made in addition to or in tandem with other Grants or Non-Plan
Grants may be granted either as of the same time as or a different time from the
grant of such other Grants or Non-Plan Grants. Except as otherwise required by
law, the Committee may determine that, in making a new Grant, the value of any
surrendered Grant or Non-Plan Grant (as determined by the Committee in its sole
discretion) may be applied to reduce the exercise price of any Option, grant
price of any SAR, or purchase price of any other Grant.

                           (c) Form and Timing of Payment under Grants;
Deferrals. Subject to the terms of the Plan and any applicable Grant document,
payments to be made by the Company or a subsidiary or affiliate upon the
exercise of an Option or other Grant or settlement of a Grant may be made in
such forms as the Committee shall determine, including, without limitation,
cash, Company Stock (hereinafter defined), other Grants or other property, and
may be made in a single payment or transfer, in installments, or on a deferred
basis. The settlement of any Grant may be accelerated, and cash paid in lieu of
Company Stock in connection with such settlement, in the discretion of the
Committee or upon occurrence of one or more specified events. Installment or
deferred payments may be required by the Committee or permitted at the election
of the Grantee on terms and conditions established by the Committee. Payments
may include, without limitation, provisions for the payment or crediting of
reasonable interest on installment or deferred payments or the grant or
crediting of dividend equivalents, other rights or other amounts in respect of
installment or deferred payments denominated in Company Stock.
<PAGE>
                  3.       Shares Subject to the Plan

                           (a) Shares Authorized. Subject to the adjustment
specified below, the aggregate number of shares of common stock of the Company
("Company Stock") that may be issued or transferred under the Plan is 4,200,000
shares. The maximum aggregate number of shares of Company Stock that shall be
subject to Grants made under the Plan to any individual during any calendar year
shall be 1,000,000 shares. The shares may be authorized but unissued shares of
Company Stock or reacquired shares of Company Stock, including shares purchased
by the Company on the open market for purposes of the Plan. If and to the extent
Options or SARs granted under the Plan terminate, expire, or are canceled,
forfeited, exchanged or surrendered without having been exercised, or if any
shares of Restricted Stock, Performance Units or Other Stock-Based Grants are
forfeited, the shares subject to such Grants shall again be available for
purposes of the Plan.

                           (b) Adjustments. If there is any change in the number
or kind of shares of Company Stock outstanding (i) by reason of a stock
dividend, spinoff, recapitalization, stock split or combination or exchange of
shares, (ii) by reason of a merger, reorganization or consolidation in which the
Company is the surviving corporation, (iii) by reason of a reclassification or
change in par value, or (iv) by reason of any other extraordinary or unusual
event affecting the outstanding Company Stock as a class without the Company's
receipt of consideration, or if the value of outstanding shares of Company Stock
is substantially reduced as a result of a spinoff or the Company's payment of an
extraordinary dividend or distribution (as may be determined from time to time
by the Committee), the maximum number of shares of Company Stock available for
Grants, the maximum number of shares of Company Stock that any individual
participating in the Plan may be granted in any year, the number of shares
covered by outstanding Grants, the kind of shares issued under the Plan, and the
price per share or the applicable market value of such Grants shall be
appropriately adjusted by the Committee to reflect any increase or decrease in
the number of, or change in the kind or value of, issued shares of Company Stock
to preclude, to the extent practicable, the enlargement or dilution of rights
and benefits under such Grants; provided, however, that any fractional shares
resulting from such adjustment shall be eliminated by rounding any portion of a
share equal to .5 or greater up, and any portion of a share equal to less than
 .5 down, in each case to the nearest whole number. Any adjustments determined by
the Committee shall be conclusive and binding on all persons having any interest
in the Plan or in any awards granted hereunder.

                  4.       Eligibility for Participation

                           (a) Eligible Persons. All employees of the Company
and its subsidiaries ("Employees") and individuals to whom an offer of
employment has been extended ("New Hire") shall be eligible to participate in
the Plan; provided however that (i) Employees shall not be deemed to include any
person who, at the time of the award under this Plan, is an officer of the
Company within the meaning of the rules of the New York Stock Exchange, and (ii)
no awards shall be made under this plan to any person who, at the time of the
award under this Plan, is a director of the Company. Advisors who perform
services at the Company's request ("Key Advisors") shall be eligible to
participate in the Plan if the Key Advisors render bona fide
<PAGE>
services to the Company and its subsidiaries or business ventures in which the
Company has a significant interest, such services are not in connection with the
offer or sale of securities in a capital-raising transaction, and the Key
Advisors do not directly or indirectly promote or maintain a market for the
Company's securities.

                           (b) Selection of Grantees. The Committee shall select
the Employees, New Hires, and Key Advisors to receive Grants and shall determine
the number of shares of Company Stock subject to a particular Grant in such
manner as the Committee determines. Employees, New Hires, and Key Advisors who
receive Grants under this Plan shall hereinafter be referred to as "Grantees."

                  5.       Granting of Options

                           (a) Number of Shares. The Committee shall determine
the number of shares of Company Stock that will be subject to each Grant of
Options to Employees, New Hires, and Key Advisors.

                           (b) Type of Option and Price.

                                    (i) The Committee may grant Nonqualified
Stock Options that are not intended to qualify as "incentive stock options"
within the meaning of section 422 of the Code, all in accordance with the terms
and conditions set forth herein. Nonqualified Stock Options may be granted to
Employees, New Hires, and Key Advisors.

                                    (ii) The purchase price (the "Exercise
Price") of Company Stock subject to an Option shall be determined by the
Committee and may be equal to, greater than, or less than the Fair Market Value
(as defined below) of a share of Company Stock on the date the Option is
granted.

                                    (iii) If the Company Stock is publicly
traded, then, except as otherwise determined by the Committee, the following
rules regarding the determination of Fair Market Value per share apply:

         (x) if the principal trading market for the Company Stock is a national
securities exchange or the Nasdaq National Market, the mean between the highest
and lowest quoted selling prices on the relevant date or (if there were no
trades on that date) the latest preceding date upon which a sale was reported,
or

         (y) if the Company Stock is not principally traded on such exchange or
market, the mean between the last reported "bid" and "asked" prices of Company
Stock on the relevant date, as reported on Nasdaq or, if not so reported, as
reported by the National Daily Quotation Bureau, Inc. or as reported in a
customary financial reporting service, as applicable and as the Committee
determines. If the Company Stock is not publicly traded or, if publicly traded,
is not subject to reported transactions or "bid" or "asked" quotations as set
forth above, the Fair Market Value per share shall be as determined by the
Committee.
<PAGE>
                           (c) Option Term. The Committee shall determine the
term of each Option. The term of any Option shall not exceed ten years from the
date of grant.

                           (d) Exercisability of Options.

                                    (i) Options shall become exercisable in
accordance with such terms and conditions, consistent with the Plan, as may be
determined by the Committee and specified in the Grant Instrument or an
amendment to the Grant Instrument. The Committee may accelerate the
exercisability of any or all outstanding Options at any time for any reason.

                                    (ii) Notwithstanding the foregoing, the
Option may, but need not, include a provision whereby the Grantee may elect at
any time while an Employee or Key Advisor to exercise the Option as to any part
or all of the shares subject to the Option prior to the full vesting of the
Option. Any unvested shares so purchased shall be subject to a repurchase right
in favor of the Company (which the Company shall have the right, but not the
obligation, to exercise), with the repurchase price to be equal to the original
purchase price, and any other restrictions the Committee determines to be
appropriate.

                           (e) Termination of Employment, Disability or Death.

                                    (i) Except as provided below, an Option may
only be exercised while the Grantee is employed by, or providing service to, the
Company as an Employee or Key Advisor. In the event that a Grantee ceases to be
employed by, or providing service to the Company for any reason other than
Disability, death or termination for Cause, any Option which is otherwise
exercisable by the Grantee shall terminate unless exercised within 90 days after
the date on which the Grantee ceases to be employed by, or providing service to,
the Company (or within such other period of time as may be specified by the
Committee), but in any event no later than the date of expiration of the Option
term. Except as otherwise provided by the Committee, any of the Grantee's
Options that are not otherwise exercisable as of the date on which the Grantee
ceases to be employed by, or providing service to, the Company shall terminate
as of such date.

                                    (ii) In the event the Grantee ceases to be
employed by, or providing service to, the Company on account of a termination
for Cause by the Company, any Option held by the Grantee shall terminate as of
the date the Grantee ceases to be employed by, or providing service to, the
Company. In addition, notwithstanding any other provisions of this Section 5, if
the Committee determines that the Grantee has engaged in conduct that
constitutes Cause at any time while the Grantee is employed by, or providing
service to, the Company or after the Grantee's termination of employment or
service, any Option held by the Grantee shall immediately terminate, and the
Grantee shall automatically forfeit all shares underlying any exercised portion
of an Option for which the Company has not yet delivered the share certificates,
upon refund by the Company of the Exercise Price paid by the Grantee for such
shares. Upon any exercise of an Option, the Company may withhold delivery of
share certificates pending resolution of an inquiry that could lead to a finding
resulting in a forfeiture.
<PAGE>
                                    (iii) In the event the Grantee ceases to be
employed by, or providing service to, the Company because the Grantee incurs a
Disability, any Option which is otherwise exercisable by the Grantee shall
terminate unless exercised within one year after the date on which the Grantee
ceases to be employed by, or provide service to, the Company (or within such
other period of time as may be specified by the Committee), but in any event no
later than the date of expiration of the Option term. Except as otherwise
provided by the Committee, any of the Grantee's Options which are not otherwise
exercisable as of the date on which the Grantee ceases to be employed by, or
providing service to, the Company shall terminate as of such date.

                                    (iv) If the Grantee dies while employed by,
or providing service to, the Company or within 90 days after the date on which
the Grantee ceases to be employed or providing service on account of a
termination specified in Section 5(e)(i) above (or within such other period of
time as may be specified by the Committee), any Option that is otherwise
exercisable by the Grantee shall terminate unless exercised within one year
after the date on which the Grantee ceases to be employed by, or providing
service to, the Company (or within such other period of time as may be specified
by the Committee), but in any event no later than the date of expiration of the
Option term. Except as otherwise provided by the Committee, any of the Grantee's
Options that are not otherwise exercisable as of the date on which the Grantee
ceases to be employed by, or providing service to, the Company shall terminate
as of such date.

                                    (v) For purposes of Sections 5(e), 6, 7, 8
and 9:

         (A) "Company," when used in the phrase "employed by the Company," shall
mean the Company and its parent, subsidiary corporations, and any business
venture in which the Company has a significant interest or other entities, as
determined by the Committee.

         (B) "Employed by, or providing service to, the Company" shall mean
employment or service as an Employee of Safeguard or any subsidiary or business
venture in which the Company has a significant interest, or Key Advisor (so
that, for purposes of exercising Options and SARs and satisfying conditions with
respect to Restricted Stock, Performance Units and Other Stock-Based Grants, a
Grantee shall not be considered to have terminated employment or service until
the Grantee ceases to be an Employee of Safeguard or any subsidiary or business
venture in which the Company has a significant interest, or Key Advisor), unless
the Committee determines otherwise. The Committee's determination as to a
participant's employment or other provision of services, termination of
employment or cessation of the provision of services, leave of absence, or
reemployment shall be conclusive on all persons unless determined to be
incorrect.

         (C) "Disability" shall mean a Grantee's becoming disabled within the
meaning of section 22(e)(3) of the Code.

         (D) "Cause" shall mean the determination of the Committee that any one
or more of the following events has occurred:
<PAGE>
         (1) the Grantee's conviction of any act which constitutes a felony
under applicable federal or state law, either in connection with the performance
of the Grantee's obligations on behalf of the Company or which affects the
Grantee's ability to perform his or her obligations as an employee, board member
or advisor of the Company or under any employment agreement, non-competition
agreement, confidentiality agreement or like agreement or covenant between the
Grantee and the Company (any such agreement or covenant being herein referred to
as an "Employment Agreement");

         (2) the Grantee's willful misconduct in connection with the performance
of his or her duties and responsibilities as an employee, board member or
advisor of the Company or under any Employment Agreement, which willful
misconduct is not cured by the Grantee within 10 days of his or her receipt of
written notice thereof from the Committee;

         (3) the Grantee's commission of an act of embezzlement, fraud or
dishonesty which results in a loss, damage or injury to the Company;

         (4) the Grantee's substantial and continuing neglect, gross negligence
or inattention in the performance of his or her duties as an employee, board
member or advisor of the Company or under any Employment Agreement which is not
cured by the Grantee within 10 days of his or her receipt of written notice
thereof from the Committee;

         (5) the Grantee's unauthorized use or disclosure or any trade secret or
confidential information of the Company which adversely affects the business of
the Company, provided that any disclosure of any trade secret or confidential
information of the Company to a third party in the ordinary course of business
who signs a confidentiality agreement shall not be deemed a breach of this
subparagraph;

         (6) the Grantee's material breach of any of the provisions of any
Employment Agreement, which material breach is not cured by the Grantee within
10 days of his or her receipt of a written notice from the Company specifying
such material breach; or

         (7) the Grantee has voluntarily terminated his or her employment or
service with the Company and breaches his or her noncompetition agreement with
the Company.

                           (f) Exercise of Options. A Grantee may exercise an
Option that has become exercisable, in whole or in part, by delivering a notice
of exercise to the Company with payment of the Exercise Price. The Grantee shall
pay the Exercise Price for an Option as specified by the Committee:

                                    (i) in cash,

                                    (ii) by delivering shares of Company Stock
owned by the Grantee for the period necessary to avoid a charge to the Company's
earnings for financial reporting purposes (including Company Stock acquired in
connection with the exercise of an
<PAGE>
Option, subject to such restrictions as the Committee deems appropriate) and
having a Fair Market Value on the date of exercise equal to the Exercise Price,

                                    (iii) by payment through a broker in
accordance with procedures permitted by Regulation T of the Federal Reserve
Board, or

                                    (iv) by such other method of payment as the
Committee may approve.

                                    Shares of Company Stock used to exercise an
Option shall have been held by the Grantee for the requisite period of time to
avoid adverse accounting consequences to the Company with respect to the Option.
The Grantee shall pay the Exercise Price and the amount of any withholding tax
due (pursuant to Section 11) at the time of exercise.

                           (g) Reload Options. In the event that shares of
Company Stock are used to exercise an Option, the terms of such Option may
provide for a Grant of additional Options, or the Committee may grant additional
Options, to purchase a number of shares of Company Stock equal to the number of
whole shares used to exercise the Option and the number of whole shares, if any,
withheld in payment of any taxes. Such Options shall be granted with an Exercise
Price equal to the Fair Market Value of the Company Stock at the date of grant
of such additional Options, or at such other Exercise Price as the Committee may
establish, for a term not longer than the unexpired term of the exercised option
and on such other terms as the Committee shall determine.

                  6.       Restricted Stock Grants

                  The Committee may issue or transfer shares of Company Stock to
a Grantee under a Grant of Restricted Stock upon such terms as the Committee
deems appropriate. The following provisions are applicable to Restricted Stock:

                           (a) General Requirements. Shares of Company Stock
issued or transferred pursuant to Restricted Stock Grants may be issued or
transferred for consideration or for no consideration, as determined by the
Committee. The Committee may establish conditions under which restrictions on
shares of Restricted Stock shall lapse over a period of time or according to
such other criteria as the Committee deems appropriate. The period of time
during which the Restricted Stock will remain subject to restrictions will be
designated in the Grant Instrument as the "Restriction Period."

                           (b) Number of Shares. The Committee shall determine
the number of shares of Company Stock to be issued or transferred pursuant to a
Restricted Stock Grant and the restrictions applicable to such shares.

                           (c) Requirement of Employment or Service. If the
Grantee ceases to be employed by, or providing services to, the Company (as
defined in Section 5(e)) during a period designated in the Grant Instrument as
the Restriction Period, or if other specified
<PAGE>
conditions are not met, the Restricted Stock Grant shall terminate as to all
shares covered by the Grant as to which the restrictions have not lapsed, and
those shares of Company Stock must be immediately returned to the Company. The
Committee may, however, provide for complete or partial exceptions to this
requirement as it deems appropriate.

                           (d) Restrictions on Transfer and Legend on Stock
Certificate. During the Restriction Period, a Grantee may not sell, assign,
transfer, pledge or otherwise dispose of the shares of Restricted Stock except
to a Successor Grantee under Section 13(a). Each certificate for a share of
Restricted Stock shall contain a legend giving appropriate notice of the
restrictions in the Grant. The Grantee shall be entitled to have the legend
removed from the stock certificate covering the shares subject to restrictions
when all restrictions on such shares have lapsed. The Committee may determine
that the Company will not issue certificates for shares of Restricted Stock
until all restrictions on such shares have lapsed, or that the Company will
retain possession of certificates for shares of Restricted Stock until all
restrictions on such shares have lapsed.

                           (e) Right to Vote and to Receive Dividends. Unless
the Committee determines otherwise, during the Restriction Period, the Grantee
shall have the right to vote shares of Restricted Stock and to receive any
dividends or other distributions paid on such shares, subject to any
restrictions deemed appropriate by the Committee, including, without limitation,
the achievement of specific performance goals.

                           (f) Lapse of Restrictions. All restrictions imposed
on Restricted Stock shall lapse upon the expiration of the applicable
Restriction Period and the satisfaction of all conditions imposed by the
Committee. The Committee may determine, as to any or all Restricted Stock
Grants, that the restrictions shall lapse without regard to any Restriction
Period.

                  7.       Stock Appreciation Rights

                           (a) General Requirements. The Committee may grant
stock appreciation rights ("SARs") to a Grantee separately or in tandem with any
Option (for all or a portion of the applicable Option). Tandem SARs may be
granted either at the time the Option is granted or at any time thereafter while
the Option remains outstanding. The Committee shall establish the base amount of
the SAR at the time the SAR is granted. Unless the Committee determines
otherwise, the base amount of each SAR shall be equal to the per share Exercise
Price of the related Option or, if there is no related Option, the Fair Market
Value of a share of Company Stock as of the date of Grant of the SAR.

                           (b) Tandem SARs. In the case of tandem SARs, the
number of SARs granted to a Grantee that shall be exercisable during a specified
period shall not exceed the number of shares of Company Stock that the Grantee
may purchase upon the exercise of the related Option during such period. Upon
the exercise of an Option, the SARs relating to the Company Stock purchased
pursuant to such Option shall terminate. Upon the exercise of SARs, the related
Option shall terminate to the extent of an equal number of shares of Company
Stock.
<PAGE>
                           (c) Exercisability. A SAR shall be exercisable during
the period specified by the Committee in the Grant Instrument and shall be
subject to such vesting and other restrictions as may be specified in the Grant
Instrument. The Committee may accelerate the exercisability of any or all
outstanding SARs at any time for any reason. SARs may only be exercised while
the Grantee is employed by, or providing service to, the Company or during the
applicable period after termination of employment as described in Section 5(e).
A tandem SAR shall be exercisable only during the period when the Option to
which it is related is also exercisable. No SAR may be exercised for cash by an
officer or director of the Company or any of its subsidiaries who is subject to
Section 16 of the Exchange Act, except in accordance with Rule 16b-3 under the
Exchange Act.

                           (d) Value of SARs. When a Grantee exercises SARs, the
Grantee shall receive in settlement of such SARs an amount equal to the value of
the stock appreciation for the number of SARs exercised, payable in cash,
Company Stock or a combination thereof, as determined by the Committee. The
stock appreciation for a SAR is the amount by which the Fair Market Value of the
underlying Company Stock on the date of exercise of the SAR exceeds the base
amount of the SAR as described in Subsection (a).

                           (e) Form of Payment. The Committee shall determine
whether the appreciation in a SAR shall be paid in the form of cash, shares of
Company Stock, or a combination of the two, in such proportion as the Committee
deems appropriate. For purposes of calculating the number of shares of Company
Stock to be received, shares of Company Stock shall be valued at their Fair
Market Value on the date of exercise of the SAR. If shares of Company Stock are
to be received upon exercise of an SAR, cash shall be delivered in lieu of any
fractional share.

                  8.       Performance Units

                           (a) General Requirements. The Committee may grant
performance units ("Performance Units") to a Grantee. Each Performance Unit
shall represent the right of the Grantee to receive an amount based on the value
of the Performance Unit, if performance goals established by the Committee are
met. A Performance Unit shall be based on the Fair Market Value of a share of
Company Stock or on such other measurement base as the Committee deems
appropriate. The Committee shall determine the number of Performance Units to be
granted and the requirements applicable to such Units.

                           (b) Performance Period and Performance Goals. When
Performance Units are granted, the Committee shall establish the performance
period during which performance shall be measured (the "Performance Period"),
performance goals applicable to the Units ("Performance Goals") and such other
conditions of the Grant as the Committee deems appropriate. Performance Goals
may relate to the financial performance of the Company or its operating units,
the performance of Company Stock, individual performance, or such other criteria
as the Committee deems appropriate.
<PAGE>
                           (c) Payment with respect to Performance Units. At the
end of each Performance Period, the Committee shall determine to what extent the
Performance Goals and other conditions of the Performance Units are met and the
amount, if any, to be paid with respect to the Performance Units. Payments with
respect to Performance Units shall be made in cash, in Company Stock, or in a
combination of the two, as determined by the Committee.

                           (d) Requirement of Employment or Service. If the
Grantee ceases to be employed by, or providing service to, the Company (as
defined in Section 5(e)) during a Performance Period, or if other conditions
established by the Committee are not met, the Grantee's Performance Units shall
be forfeited. The Committee may, however, provide for complete or partial
exceptions to this requirement as it deems appropriate.

                  9.       Other Stock-Based Grants

                           (a) General Requirements. The Committee may, subject
to limitations under applicable law, grant to a Grantee such other Grants that
may be denominated or payable in, valued in whole or in part by reference to, or
otherwise based on or related to, Company Stock or factors that may influence
the value of Company Stock, including, without limitation, convertible or
exchangeable debt securities, other rights convertible or exchangeable into
Company Stock, purchase rights for Company Stock, Grants with value and payment
contingent upon performance of the Company or business units thereof or any
other factors designated by the Committee, and Grants valued by reference to the
book value of Company Stock or the value of securities of or the performance of
specified subsidiaries or affiliates or other business units. The Committee
shall determine the terms and conditions of such Grants. Company Stock delivered
pursuant to a Grant in the nature of a purchase right granted under this Section
9 shall be purchased for such consideration and paid for at such times, by such
methods and in such forms, including, without limitation, cash, Company Stock,
other Grants, notes, or other property, as the Committee shall determine. Cash
grants, as an element of or supplement to any other Grant under the Plan, may
also be made pursuant to this Section 9.

                           (b) Requirement of Employment. If with respect to any
Other Stock-Based Grant, the Grantee ceases to be employed by the Company (as
defined in Section 5(e)) before all conditions of vesting or exercise have been
met, or if other conditions established by the Committee are not met, the
Grantee's Other Stock-Based Grant shall be forfeited. The Committee may,
however, provide for complete or partial exceptions to this requirement as it
deems appropriate.

         10.      Qualified Performance-Based Compensation.

                           (a) Designation as Qualified Performance-Based
Compensation. The Committee may determine that Performance Units, Restricted
Stock or Other Stock-Based Grants granted to an Employee shall be considered
"qualified performance-based compensation" under section 162(m) of the Code. The
provisions of this Section 10 shall apply to Grants of Performance Units,
Restricted Stock and Other Stock-Based Grants that are to be considered
"qualified performance-based compensation" under section 162(m) of the Code.
<PAGE>
                           (b) Performance Goals. When Performance Units,
Restricted Stock or Other Stock-Based Grants that are to be considered
"qualified performance-based compensation" are granted, the Committee shall
establish in writing (i) the objective performance goals that must be met in
order for restrictions on the Restricted Stock to lapse or amounts to be paid
under the Performance Units, (ii) the Performance Period during which the
performance goals must be met, (iii) the threshold, target and maximum amounts
that may be paid if the performance goals are met, and (iv) any other
conditions, including without limitation provisions relating to death,
disability, other termination of employment or Reorganization or Change of
Control, that the Committee deems appropriate and consistent with the Plan and
section 162(m) of the Code. The performance goals may relate to the Employee's
business unit or the performance of the Company and its subsidiaries as a whole,
or any combination of the foregoing. The Committee shall use objectively
determinable performance goals based on one or more of the following criteria:
stock price, earnings per share, net earnings, operating earnings, return on
assets, shareholder return, return on equity, growth in assets, unit volume,
sales, market share, or strategic business criteria consisting of one or more
objectives based on meeting specific revenue goals, market penetration goals,
geographic business expansion goals, cost targets or goals relating to
acquisitions or divestitures or capital raising activities (including without
limitation rights offerings and share subscription programs) for the Company (as
defined in Section 5(e)(v)(A) hereof).

                           (c) Establishment of Goals. The Committee shall
establish the performance goals in writing either before the beginning of the
Performance Period or during a period ending no later than the earlier of (i) 90
days after the beginning of the Performance Period or (ii) the date on which 25%
of the Performance Period has been completed, or such other date as may be
required or permitted under applicable regulations under section 162(m) of the
Code. The performance goals shall satisfy the requirements for "qualified
performance-based compensation," including the requirement that the achievement
of the goals be substantially uncertain at the time they are established and
that the goals be established in such a way that a third party with knowledge of
the relevant facts could determine whether and to what extent the performance
goals have been met. The Committee shall not have discretion to increase the
amount of compensation that is payable upon achievement of the designated
performance goals; however, subject to any restrictions in section 162(m) of the
Code, the Committee may reduce the amount of compensation that is payable upon
achievement of the designated performance goals.

                           (d) Maximum Payment. If Restricted Stock, or
Performance Units or Other Stock-Based Grants measured with respect to the fair
market value of the Company Stock, are granted, not more than 1,000,000 shares
may be granted to any Grantee for any Performance Period. If Performance Units
are measured with respect to other criteria, the maximum amount that may be paid
to a Grantee with respect to a Performance Period is $1,000,000.

                           (e) Announcement of Grants. The Committee shall
certify and announce the results for each Performance Period to all Grantees
immediately following the announcement of the Company's financial results for
the Performance Period. If and to the extent
<PAGE>
that the Committee does not certify that the performance goals have been met,
the grants of Restricted Stock, Performance Units or Other Stock-Based Grants
for the Performance Period shall be forfeited.

                  11.      Withholding of Taxes

                           (a) Required Withholding. All Grants under the Plan
shall be subject to applicable federal (including FICA), state and local tax
withholding requirements. The Company shall have the right to deduct from all
Grants paid in cash, or from other wages paid to the Grantee, any federal, state
or local taxes required by law to be withheld with respect to such Grants. In
the case of Options and other Grants paid in Company Stock, the Company may
require the Grantee or other person receiving such shares to pay to the Company
the amount of any such taxes that the Company is required to withhold with
respect to such Grants, or the Company may deduct from other wages paid by the
Company the amount of any withholding taxes due with respect to such Grants.

                           (b) Election to Withhold Shares. If the Committee so
permits, a Grantee may elect to satisfy the Company's income tax withholding
obligation with respect to an Option, SAR, Restricted Stock, Performance Units
or Other Stock-Based Grant paid in Company Stock by having shares withheld up to
an amount that does not exceed the Grantee's minimum applicable withholding tax
rate for federal (including FICA), state and local tax liabilities. The election
must be in a form and manner prescribed by the Committee and shall be subject to
the prior approval of the Committee.

                  12.      Loan Provisions.

                  With the consent of the Committee, and subject to any
limitations imposed by applicable law and other obligations binding upon the
Company, the Company may make, guarantee or arrange for a loan or loans to a
Grantee with respect to the exercise of any Option or other payment in
connection with any Grant, including the payment by a Grantee of any or all
federal, state or local taxes due in connection with any Grant. Subject to such
limitations, the Committee shall have full authority to decide whether to make a
loan or loans hereunder and to determine the amount, terms and provisions of any
such loan or loans.

                  13.      Transferability of Grants

                           (a) Nontransferability of Grants. Except as provided
below or as provided by the terms of an Other Stock-Based Grant, only the
Grantee may exercise rights under a Grant during the Grantee's lifetime. A
Grantee may not transfer those rights except by will or by the laws of descent
and distribution or if permitted in any specific case by the Committee, pursuant
to a domestic relations order (as defined under the Code or Title I of the
Employee Retirement Income Security Act of 1974, as amended, or the regulations
thereunder). When a Grantee dies, the personal representative or other person
entitled to succeed to the rights of the Grantee ("Successor Grantee") may
exercise such rights. A Successor Grantee must furnish proof
<PAGE>
satisfactory to the Company of his or her right to receive the Grant under the
Grantee's will or under the applicable laws of descent and distribution.

                           (b) Transfer of Nonqualified Stock Options.
Notwithstanding the foregoing, the Committee may provide, in a Grant Instrument
or other written agreement, that a Grantee may transfer Grants to family members
or other persons or entities, consistent with applicable securities laws,
according to such terms as the Committee may determine; provided that the
Grantee receives no consideration for the transfer of such Grants and the
transferred Grant shall continue to be subject to the same terms and conditions
as were applicable to the Grant immediately before the transfer.

                  14.      Reorganization or Change of Control of the Company.

                           (a) Reorganization. As used herein, a
"Reorganization" shall be deemed to have occurred if the shareholders of the
Company approve (or, if shareholder approval is not required, the Board
approves) an agreement providing for (i) the merger or consolidation of the
Company with another corporation where the shareholders of the Company,
immediately prior to the merger or consolidation, will not beneficially own,
immediately after the merger or consolidation, shares entitling such
shareholders to more than 50% of all votes to which all shareholders of the
surviving corporation would be entitled in the election of directors (without
consideration of the rights of any class of stock to elect directors by a
separate class vote), (ii) the sale or other disposition of all or substantially
all of the assets of the Company, or (iii) a liquidation or dissolution of the
Company.

                           (b) As used herein, a "Change of Control" shall be
deemed to have occurred if

                                    (i) Any "person" (as such term is used in
sections 13(d) and 14(d) of the Exchange Act) becomes a "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing a majority of the voting power of the
then outstanding securities of the Company except where the acquisition is
approved by the Board; or

                                    (ii) Any person has commenced a tender offer
or exchange offer for a majority of the voting power of the then outstanding
shares of the Company.

                           (c) Assumption of Grants. Upon a Reorganization or
Change of Control where the Company is not the surviving corporation (or
survives only as a subsidiary of another corporation), unless the Committee
determines otherwise, all outstanding Options and SARs that are not exercised
shall be assumed by, or replaced with comparable options or rights by, the
surviving corporation (or a parent of the surviving corporation), and other
outstanding Grants shall be converted to similar grants of the surviving
corporation or a parent of the surviving corporation).
<PAGE>
                           (d) Other Alternatives. Notwithstanding the
foregoing, in the event of a Reorganization or Change of Control, the Committee
may take one or both of the following actions: the Committee may (i) require
that Grantees surrender their outstanding Options and SARs in exchange for a
payment by the Company, in cash or Company Stock as determined by the Committee,
in an amount equal to the amount by which the then Fair Market Value of the
shares of Company Stock subject to the Grantee's unexercised Options and SARs
exceeds the Exercise Price of the Options or the base amount of the SARs, as
applicable, or (ii) after giving Grantees an opportunity to exercise their
outstanding Options and SARs or otherwise realize the value of all of their
other Grants, terminate any or all unexercised Options, SARs and Grants at such
time as the Committee deems appropriate. Such surrender or termination shall
take place as of the date of the Reorganization or Change of Control or such
other date as the Committee may specify. The Committee shall have no obligation
to take any of the foregoing actions and, in the absence of any such actions,
outstanding Grants shall continue in effect according to their terms (subject to
any assumption pursuant to Subsection (b)).

                           (e) Limitations. Notwithstanding anything in the Plan
to the contrary, in the event of a Reorganization or Change of Control, the
Committee shall not have the right to take any actions described in the Plan
(including without limitation actions described in Subsection (d) above) that
would make the Reorganization or Change of Control ineligible for pooling of
interests accounting treatment or that would make the Reorganization or Change
of Control ineligible for desired tax treatment if, in the absence of such
right, the Reorganization or Change of Control would qualify for such treatment
and the Company intends to use such treatment with respect to the Reorganization
or Change of Control. The Committee shall have the right, however, to provide in
any Grant Instrument or other written agreement with the Grantee that the terms
of the Grant, including without limitation, any vesting provision, may change
upon the occurrence of a Change of Control or Reorganization.

                  15.      Requirements for Issuance or Transfer of Shares

                           (a) Shareholder's Agreement. The Committee may
require that a Grantee execute a shareholder's agreement, with such terms as the
Committee deems appropriate, with respect to any Company Stock distributed
pursuant to this Plan.

                           (b) Limitations on Issuance or Transfer of Shares. No
Company Stock shall be issued or transferred in connection with any Grant
hereunder unless and until all legal requirements applicable to the issuance or
transfer of such Company Stock have been complied with to the satisfaction of
the Committee. The Committee shall have the right to condition any Grant made to
any Grantee hereunder on such Grantee's undertaking in writing to comply with
such restrictions on his or her subsequent disposition of such shares of Company
Stock as the Committee shall deem necessary or advisable as a result of any
applicable law, regulation or official interpretation thereof, and certificates
representing such shares may be legended to reflect any such restrictions.
Certificates representing shares of Company Stock issued or transferred under
the Plan will be subject to such stop-transfer orders and other restrictions as
may be
<PAGE>
required by applicable laws, regulations and interpretations, including any
requirement that a legend be placed thereon.

                  16.      Amendment and Termination of the Plan

                           (a) Amendment. The Board or the Committee may amend
or terminate the Plan at any time.

                           (b) Termination of Plan. The Plan shall terminate on
the day immediately preceding the tenth anniversary of its effective date,
unless the Plan is terminated earlier by the Board or is extended by the Board
with the approval of the shareholders.

                           (c) Termination and Amendment of Outstanding Grants.
A termination or amendment of the Plan that occurs after a Grant is made shall
not materially impair the rights of a Grantee unless the Grantee consents. The
termination of the Plan shall not impair the power and authority of the
Committee with respect to an outstanding Grant. Whether or not the Plan has
terminated, an outstanding Grant may be terminated or amended in accordance with
the Plan or may be amended by agreement of the Company and the Grantee
consistent with the Plan.

                           (d) Governing Document. The Plan shall be the
controlling document. No other statements, representations, explanatory
materials or examples, oral or written, may amend the Plan in any manner. The
Plan shall be binding upon and enforceable against the Company and its
successors and assigns.

                  17.      Funding of the Plan

                  This Plan shall be unfunded. The Company shall not be required
to establish any special or separate fund or to make any other segregation of
assets to assure the payment of any Grants under this Plan. In no event shall
interest be paid or accrued on any Grant, including unpaid installments of
Grants. Notwithstanding the foregoing, the Committee may authorize the creation
of trusts and deposit therein cash, Company Stock, other Grants or other
property, or make other arrangements to meet the Company's obligations under the
Plan. Such trusts or other arrangements shall be consistent with the "unfunded"
status of the Plan unless the Committee otherwise determines with the consent of
each affected Grantee.

                  18.      Rights of Grantees

                  Nothing in this Plan shall entitle any Grantee or other person
to any claim or right to be granted a Grant under this Plan. Neither this Plan
nor any action taken hereunder shall be construed as giving any individual any
rights to be retained by or in the employ of the Company or any other employment
rights.
<PAGE>
                  19.      No Fractional Shares

                  No fractional shares of Company Stock shall be issued or
delivered pursuant to the Plan or any Grant. The Committee shall determine
whether cash, other awards or other property shall be issued or paid in lieu of
such fractional shares or whether such fractional shares or any rights thereto
shall be forfeited or otherwise eliminated.

                  20.      Headings

         Section headings are for reference only. In the event of a conflict
between a title and the content of a Section, the content of the Section shall
control.

                  21.      Effective Date of the Plan

                  The Plan shall be effective on February 21, 2001.

                  22.      Miscellaneous

                           (a) Grants in Connection with Corporate Transactions
and Otherwise. Nothing contained in this Plan shall be construed to (i) limit
the right of the Committee to make Grants under this Plan in connection with the
acquisition, by purchase, lease, merger, consolidation or otherwise, of the
business or assets of any corporation, firm or association, including Grants to
employees thereof who become Employees of the Company, or for other proper
corporate purposes, or (ii) limit the right of the Company to grant stock
options or make other awards outside of this Plan. Without limiting the
foregoing, the Committee may make a Grant to an employee of another corporation
who becomes an Employee by reason of a corporate merger, consolidation,
acquisition of stock or property, reorganization or liquidation involving the
Company or any of its subsidiaries in substitution for a stock option or
restricted stock grant made by such corporation. The terms and conditions of the
substitute grants may vary from the terms and conditions required by the Plan
and from those of the substituted stock incentives. The Committee shall
prescribe the provisions of the substitute grants.

                           (b) Compliance with Law. The Plan, the exercise of
Options and SARs and the obligations of the Company to issue or transfer shares
of Company Stock under Grants shall be subject to all applicable laws and to
approvals by any governmental or regulatory agency as may be required. With
respect to persons subject to section 16 of the Exchange Act, it is the intent
of the Company that the Plan and all transactions under the Plan comply with all
applicable provisions of Rule 16b-3 or its successors under the Exchange Act.
The Committee may revoke any Grant if it is contrary to law or modify a Grant to
bring it into compliance with any valid and mandatory government regulation. The
Committee may also adopt rules regarding the withholding of taxes on payments to
Grantees. The Committee may, in its sole discretion, agree to limit its
authority under this Section.
<PAGE>
                           (c) Governing Law. The validity, construction,
interpretation and effect of the Plan and Grant Instruments issued under the
Plan shall exclusively be governed by and determined in accordance with the law
of the Commonwealth of Pennsylvania.

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