Document:

Exhibit 10.03

                        SETTLEMENT AND RELEASE AGREEMENT

         This  Settlement  and  Release  Agreement  (Agreement)  is  made by and
between Schimatic Cash  Transactions  Network.com,  Inc., a Florida  corporation
with principal  offices at 740 East 3900 South,  Salt Lake City, Utah 84107, the
parent corporation and sole owner of IC One, Inc., a Delaware  Corporation,  and
INTERNATIONAL BUSINESS MACHINES CORPORATION ("IBM"), a New York Corporation.

         SCTN has entered into the following written agreements:

         IBM Customer Agreement Number VJ61633
         IBM Global Services Statement of Work Numbers CHWWA and CJFGA

         IBM claims that SCTN has failed to meet  certain  responsibilities  and
obligations in connection with the aforesaid  agreements,  including  failure to
pay $1.97 million which is due under the agreements.

         The parties now desire to settle any potential  liability that may have
been incurred as a result of the matter  mentioned  above.  Therefore,  with the
consideration and mutual promises listed below, the parties agree as follows:

         1.  SCTN will pay  $1,200,000  to IBM in  eleven  installment  payments
according to the following payment schedule:

                  DUE NO LATER THAN                           AMOUNT
                  -----------------                           ------
                  September 30, 2001                          $70,000.00
                  October 30, 2001                            $70,000.00
                  November 30, 2001                           $70,000.00
                  December 30, 2001                           $70,000.00
                  January 30, 2002                            $70,000.00
                  February 30, 2002                           $70,000.00
                  March 30, 2002                              $80,000.00
                  April 30, 2002                              $80,000.00
                  May 28, 2002                                $80,000.00
                  June 30, 2002                               $90,000.00
                  July 30, 2002                               $90,000.00
                  August 30, 2002                             $90,000.00
                  September 30, 2002                          $90,000.00
                  October 30, 2002                            $90,000.00
                  November 30, 2002                           $90,000.00
                  ------------------------------------------------------
                  TOTAL OF PAYMENTS                        $1,200,000.00

         2. IBM will charge no late fees as long as SCTN adheres to this payment
plan. IBM will charge, and SCTN is additionally  liable for a late fee charge of
2% per month for any payments that become past due under this Agreement.

         3. IBM will return to SCTN  shares of stock  which SCTN had  previously
issued to IBM, and hereby  authorizes  cancellation of all shares in IBM's name,
including any shares held in escrow.

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         4. To induce  IBM to enter into this  Agreement,  SCTN shall and hereby
does release and discharge IBM and their respective officers, directors, agents,
employees,  representatives,  successors  and  assigns  of and from ail  claims,
demands,   debts,  damages,   duties,  causes  of  action,  actions,  and  suits
whatsoever,  in law or  equity,  which it now has or to  which it may  hereafter
become entitled, on account of any act, failure to act, or event occurring prior
to  the  date  of  this  Agreement,   including   claims  and  damages  not  yet
ascertainable,  if there  be any,  as well as those  known,  and it does  hereby
acknowledge satisfaction thereof.

         5. SCTN, in executing this Agreement, does not rely on any inducements,
promises,   or   representations   made  by  IBM,  with  the  exception  of  the
consideration cited herein.

         6. SCTN agrees not to publicize or disclose the terms and conditions of
this  Agreement or the  underlying  circumstances  except with the prior written
consent of IBM.

         7. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and with respect to each of its successors and assigns.

         8. SCTN acknowledges that it has read this Agreement carefully, has had
an  opportunity  to review it with its  counsel  of  choice,  and has freely and
voluntarily agreed to the releases and obligations set forth in this Agreement.

         9. The laws of the State of New York shall govern this Agreement.

         Executed by the authorized representatives of:

                  Schimatic Cash Transaction Network.com, Inc. (SCTN)

                  By: /s/ Jim Williams
                     -----------------------------------------
                  Name:  Jim Williams
                  Title: President and CEO

                  Date:  8/2/01

                  INTERNATIONAL BUSINESS MACHINES CORPORATION

                  By:    /s/ David S. Asay
                       ---------------------------------------
                  Name:  David Asay
                  Title: Principal, IBM Global Services

                  Date:  8-2-2001

                                       2Exhibit 10.06

                                  IC One, Inc.
                           1999 Equity Incentive Plan

                          Article 1 General Provisions

         1.1 PURPOSE OF THE PLAN. This 1999 Equity Incentive Plan is intended to
promote the  interests  of IC One,  Inc., a Delaware  corporation,  by providing
eligible  persons with the  opportunity  to acquire a proprietary  interest,  or
otherwise  increase  their  proprietary  interest,  in  the  Corporation  as  an
incentive to remain in the service of the Corporation.

         1.2  DEFIN1TIONS.  Capitalized  terms  herein  shall have the  meanings
assigned to such terms below.

                  (a) "Board" shall mean the Corporation's Board of Directors.

                  (b) "Code"  shall mean the Internal  Revenue Code of 1986,  as
         amended.

                  (c)  "Committee"  shall mean a  committee  of at least two (2)
         Board  members   appointed  by  the  Board  to  exercise  one  or  more
         administrative functions under the Plan.

                  (d) "Common Stock" shall mean the Corporation's  common stock,
         $0.001 par value.

                  (e)  "Change  in  Control"  shall  mean  any of the  following
         transactions:  (i) a merger,  consolidation or reorganization involving
         the   Corporation  in  which  the   stockholders   of  the  Corporation
         immediately  before such merger,  consolidation or reorganization  own,
         directly   or   indirectly,    immediately   following   such   merger,
         consolidation or  reorganization,  less than fifty percent (50%) of the
         combined  voting  power of the  outstanding  voting  securities  of the
         surviving corporation,  (ii) the sale, transfer or other disposition of
         all or  substantially  all of the  Corporation's  assets  other than in
         connection with the liquidation or dissolution of the  Corporation,  or
         (iii) a  transaction  in which  securities  possessing  more than fifty
         percent (50%) of the combined  voting power of the  outstanding  Voting
         Securities of the  Corporation  are  transferred to a person or persons
         different from the persons holding those securities  immediately  prior
         to such transaction.

                  (f)  "Corporate  Transaction"  shall mean any of the following
         transactions: (i) a merger, consolidation,  or reorganization involving
         the Corporation that results in any change in the outstanding shares or
         exchange of the  outstanding  shares for a different  number or kind of
         shares or other  securities of the Corporation or another  corporation,
         or  (ii)  a  sale  of all or  substantially  all of the  assets  of the
         Corporation,   or  (iii)  the   liquidation   or   dissolution  of  the
         Corporation.

                  (g)  "Corporation"   shall  mean  IC  One,  Inc.,  a  Delaware
         corporation.

                  (h)  "Disability"  shall mean the inability of the Optionee or
         the Participant to engage in any substantial gainful activity by reason
         of any medically  determinable  physical or mental impairment and shall
         be  determined by the Plan  Administrator  on the basis of such medical

<PAGE>

         evidence  as  the  Plan   Administrator   deems   warranted  under  the
         circumstances.  Disability  shall be  deemed  to  constitute  Permanent
         Disability  in the event that such  Disability is expected to result in
         death or has lasted or can be expected to last for a continuous  period
         of twelve (12) months or more.

                  (i) "Domestic Relations Order" shall mean any judgment, decree
         or order (including approval of a property settlement  agreement) which
         provides or otherwise  conveys,  pursuant to applicable  State domestic
         relations laws (including  community  property laws),  marital property
         rights to any spouse or former spouse of the Optionee.

                  (j)  "Employee"  shall mean an individual who is in the employ
         of the  Corporation  (or any  Parent  or  Subsidiary),  subject  to the
         control and direction of the employer  entity as to both the work to be
         performed and the manner and method of performance.

                  (k)  "Exercise   Date"  shall  mean  the  date  on  which  the
         Corporation shall have received written notice of the option exercise.

                  (1) "Fair Market Value" per share of Common Stock shall be:

                           (i) If the Common Stock is listed on any  established
                  stock exchange or a national market system,  including without
                  limitation   the  National   Market  System  of  the  National
                  Association of Securities  Dealers,  Inc. Automated  Quotation
                  ("NASDAQ")  System, its Fair Market Value shall be the closing
                  sales price for such Common  Stock ( or the closing bid, if no
                  sales were  reported) as quoted on such system or exchange for
                  the last market trading day prior to the time of determination
                  as reported in The Wall Street Journal or such other source as
                  the Committee deems reliable;

                           (ii) If the  Common  Stock is  quoted  on the  NASDAQ
                  System  (but not on the  National  Market  System  thereof) or
                  regularly quoted by a recognized securities dealer but selling
                  prices are not  reported,  its Fair Market  Value shall be the
                  mean  between  the high and low asked  prices  for the  Common
                  Stock; or

                           (iii) In the absence of an established  market of the
                  Common   Stock,   the  Fair  Market  Value  thereof  shall  be
                  determined  in good faith by the Plan  Administrator,  and, in
                  the case of an Incentive  Stock  Option,  in  accordance  with
                  Section 422 of the Code.

                  (m)  "Highly-Compensated  Person"  shall mean an  Optionee  or
         Participant  (i)  whose   compensation   per  calendar  year  from  the
         Corporation  (or any  Parent or  Subsidiary)  equals or  exceeds  Sixty
         Thousand Dollars ($60,000) in the aggregate and (ii) who has previously
         received one or more option grants or stock issuances under the Plan.

                  (n) "Incentive option" shall mean an option that satisfies the
         requirements of Code Section 422.

                  (o) "1934 Act" shall mean the Securities Exchange Act of 1934,
         as amended.

                  (p)  "Non-Statutory  Option" shall mean an option not intended
         to satisfy the requirements of Code Section 422.

                  (q)  "Option  Grant  Program  " shall  mean the  option  grant
         program in effect under the Plan.

                                       2
<PAGE>

                  (r)  "Optioned  Stock"  means the Common  Stock  subject to an
         Option or a Stock Issuance Agreement.

                  (s)  "Optionee"  shall  mean any  person  to whom an option is
         granted under the Option Grant Program.

                  (t)  "Parent"  shall  mean  any  corporation  (other  than the
         Corporation)  in an  unbroken  chain of  corporations  ending  with the
         Corporation,  provided each  corporation  in the unbroken  chain (other
         than the  Corporation)  owns, at the time of the  determination,  stock
         possessing  fifty  percent (50%) or more of the total  combined  voting
         power of all classes of stock in one of the other  corporations in such
         chain.

                  (u)  "Participant"  shall mean any person who is issued shares
         of Common Stock under the Stock Issuance Program

                  (v) "Plan" shall mean the Corporation's  1999 Equity Incentive
         Plan, as set forth in this document.

                  (w) "Plan  Administrator"  shall mean  either the Board or the
         Committee,  to the extent the Committee is at the time  responsible for
         the administration of the Plan.

                  (x) "Qualified Domestic Relations Order" shall mean a Domestic
         Relations Order, which substantially  complies with the requirements of
         Code  Section  414(P).  The  Plan  Administrator  shall  have  the sole
         discretion  to  determine  whether  a  Domestic  Relations  Order  is a
         Qualified Domestic Relations Order.

                  (y) "Restricted  Stock" shall mean a grant of shares of Common
         Stock pursuant to the terms of the Stock Issuance Program.

                  (z)  "Service"  shall mean the  provision  of  services to the
         Corporation  (or any Parent or  Subsidiary) by a person in the capacity
         of an Employee,  a  non-employee  member of the board of directors or a
         consultant, except to the extent otherwise specifically provided in the
         documents evidencing the option grant or stock issuance.

                           (aa) "Stock Award Agreement" shall mean the agreement
                  entered into by the 3 Corporation  and the  Participant at the
                  time of the  grant of  shares  of  Restricted  under the Stock
                  Issuance Program.

                           (bb) "Stock  Issuance  Program"  shall mean the stock
                  issuance program in effect under the Plan.

                           (cc) "Subsidiary"  shall mean any corporation  (other
                  than the  Corporation)  in an unbroken  chain of  corporations
                  beginning  with the  Corporation,  provided  each  corporation
                  (other than the last  corporation) in the unbroken chain owns,
                  at the  time  of the  determination,  stock  possessing  fifty
                  percent  (50%) or more of the total  combined  voting power of
                  all classes of stock in one of the other  corporations in such
                  chain.

                           (dd) "10% Shareholder"  shall mean the owner of stock
                  (as  determined  under Code  Section  424(d))  possessing  ten
                  percent  (10%) or more of the total  combined  voting power of
                  all  classes  of stock of the  Corporation  (or any  Parent or
                  Subsidiary).

                                       3
<PAGE>

         1.3  STRUCTURE  OF THE PLAN.  The Plan  shall be  divided  into two (2)
separate  equity  programs:  (i) the Option Grant Program  under which  eligible
persons may, at the discretion of the Plan Administrator,  be granted options to
purchase shares of Common Stock, and (ii) the Stock Issuance Program under which
eligible  persons may, at the  discretion of the Plan  Administrator,  be issued
shares of Restricted  Stock directly,  either through the immediate  purchase of
such shares or as a bonus for services  rendered the  Corporation (or any Parent
or  Subsidiary).  The  provisions of Articles 1 and 4 shall apply to both of the
equity programs under the Plan and shall accordingly govern the interests of all
persons under the Plan.

         1.4 ADMINISTRATION OF THE PLAN.

                  (a) The Board shall administer the Plan.  However,  any or all
         administrative  functions  otherwise  exercisable  by the  Board may be
         delegated to the  Committee.  Members of the Committee  shall serve for
         such period of time as the Board may  determine and shall be subject to
         removal  by the  Board  at any  time.  The  Board  may also at any time
         terminate  the  functions of the  Committee and reassume all powers and
         authority previously delegated to the Committee.

                  (b) The Plan Administrator shall have full power and authority
         (subject to the  provisions  of the Plan) to  establish  such rules and
         regulations as it may deem appropriate for proper administration of the
         Plan  and  to  make  such   determinations   under,   and  issue   such
         interpretations  of,  the Plan  and any  outstanding  options  or stock
         issuances  thereunder as it may deem necessary or advisable.  Decisions
         of the Plan Administrator shall be final and binding on all parties who
         have  an  interest  in  the  Plan  or  any  option  or  stock  issuance
         thereunder.

         1.5 ELIGIBILITY.

                  (a) The  persons  eligible to  participate  in the Plan are as
         follows:  (i) Employees,  (ii) non-employee members of the Board or the
         non-employee  members  of the  board  of  directors  of  any  Parent or
         Subsidiary,   and  (iii)   consultants  who  provide  services  to  the
         Corporation (or any Parent or Subsidiary).

                  (b) Subject to the terms and conditions of this Plan, the Plan
         Administrator shall have full authority to determine,  (i) with respect
         to the option  grants under the Option Grant  Program,  which  eligible
         persons  are to  receive  option  grants,  the time or times  when such
         option  grants  are to be made,  the  number of shares to be covered by
         each  such  grant,  the  status  of the  granted  option  as  either an
         Incentive Option or a Non-Statutory Option,  the time or times at which
         each option is to become  exercisable,  the vesting  schedule  (if any)
         applicable  to the  option  shares and the  maximum  term for which the
         option  is to  remain  outstanding,  and  (ii)  with  respect  to stock
         issuances under the Stock Issuance Program,  which eligible persons are
         to receive stock  issuances,  the time or times when such issuances are
         to be made, the number of shares to be issued to each Participant,  the
         repurchase  schedules (if any)  applicable to the issued shares and the
         consideration to be paid by the Participant for such shares.

                  (c) The Plan Administrator  shall have the absolute discretion
         either to grant options in accordance  with the Option Grant Program or
         to  effect  stock  issuances  in  accordance  with the  Stock  Issuance
         Program.

         1.6 STOCK SUBJECT TO THE PLAN.

                  (a) The  stock  issuable  under  the Plan  shall be  shares of
         authorized but unissued or reacquired  Common Stock. The maximum number
         of shares that may be issued over the term of the Plan shall not exceed

                                       4
<PAGE>

         5,000,000 shares. The maximum number of shares for which options may be
         granted in any single calendar year shall not exceed 1,500,000 shares.

                  (b) Shares subject to  outstanding  options shall be available
         for  subsequent  issuance  under the Plan to the extent (i) the options
         expire or  terminate  for any reason  prior to exercise in full or (ii)
         the options are canceled in accordance  with the  cancellation-re-grant
         provisions of Article 2. All shares  issued under the Plan,  whether or
         not  those  shares  are  subsequently  repurchased  by the  Corporation
         pursuant to its  repurchase  rights  under the Plan,  shall reduce on a
         share-for-share  basis the number of shares  available  for  subsequent
         issuance under the Plan.

                  (c) Should any change be made to the Common Stock by reason of
         any stock  split,  stock  dividend,  recapitalization,  combination  of
         shares,  exchange of shares or other change  affecting the  outstanding
         Common  Stock  as  a  class  without  the   Corporation's   receipt  of
         consideration, appropriate adjustments shall be made to (i) the maximum
         number  and/or  class of  shares  issuable  under the Plan and (ii) the
         number  and/or  class of  shares  and the  exercise  price per share in
         effect under each  outstanding  option in order to prevent the dilution
         or enlargement of benefits  thereunder.  The adjustments  determined by
         the Plan Administrator  shall be final,  binding and conclusive.  In no
         event  shall  any  such  adjustments  be made in  connection  with  the
         conversion  of one or  more  outstanding  shares  of the  Corporation's
         preferred stock into shares of Common Stock.

                                    Article 2
                              Option Grant Program

         2.1  OPTION  TERMS.  Each  option  shall  be  evidenced  by one or more
documents in the form  approved by the Plan  Administrator;  provided,  however,
that each such  document  shall  comply  with the terms  specified  below.  Each
document  evidencing an Incentive  Option shall, in addition,  be subject to the
provisions of the Plan applicable to such options.

                  (a) Exercise Price. The Plan Administrator shall determine, in
         its sole  discretion,  the  exercise  price of all  Options;  provided,
         however,  that the  exercise  price shall not be less than  eighty-five
         percent  (85%) of the Fair Market Value of the Common Stock on the date
         of grant.

                  (b) Payment of Exercise Price. The exercise price shall become
         immediately  due upon exercise of the option and shall,  subject to the
         provisions of this Plan and the  documents  evidencing  the option,  be
         payable in cash or check made  payable to the  Corporation.  Should the
         Common Stock be  registered  under Section 12(g) of the 1934 Act at the
         time the option is exercised,  then the exercise price may also be paid
         as follows: (i) in shares of Common Stock held for the requisite period
         necessary to avoid a charge to the Corporation's earnings for financial
         reporting  purposes  and valued at Fair  Market  Value on the  Exercise
         Date, or (ii) to the extent the option is exercised for vested  shares,
         through a special sale and remittance  procedure  pursuant to which the
         Optionee shall concurrently  provide irrevocable  written  instructions
         (a) to a Corporation  designated brokerage firm to effect the immediate
         sale of the purchased shares and remit to the  Corporation,  out of the
         sale proceeds  available on the settlement  date,  sufficient  funds to
         cover the aggregate  exercise  price  payable for the purchased  shares
         plus all  applicable  Federal,  state and local  income and  employment
         taxes  required  to be withheld  by the  Corporation  by reason of such
         exercise and (b ) to the  Corporation to deliver the  certificates  for
         the  purchased  shares  directly  to such  brokerage  firm in  order to
         complete  the sale  transaction.  Except  to the  extent  such sale and
         remittance procedure is utilized, payment of the exercise price for the
         purchased shares must be made on the Exercise Date.

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<PAGE>

                  (c)  Exercise  and  Term of  Options.  Each  option  shall  be
         exercisable  at such time or times,  during  such  period  and for such
         number of shares as shall be determined by the Plan  Administrator  and
         set forth in the documents  evidencing the option.  However,  no option
         shall have a term in excess of ten (10) years  measured from the option
         grant date. In addition,  the Plan  Administrator may also restrict the
         ability of the Optionees to exercise any option prior to the occurrence
         of a  Corporate  Transaction  or an  initial  public  offering  of  the
         Corporation's Common Stock.

                  (d) Effect of  Termination  of  Service.  Except as  otherwise
         expressly   provided  by  the  Plan   Administrator  in  the  documents
         evidencing  the option,  or an  amendment  thereto,  and subject to the
         provisions of subparagraph  (vi) below and the other  provisions of the
         Plan, the following provisions shall govern the exercise of any options
         held by the Optionee at the time of cessation of Service or death:

                           (i)  Should the  Optionee  cease to remain in Service
                  for any  reason  other  than  Disability  or  death,  then the
                  Optionee shall have a period of three (3) months following the
                  date of such  cessation  of Service  during  which to exercise
                  each outstanding option held by such Optionee.

                           (ii)  Should  such  Service  terminate  by  reason of
                  Disability,  then the Optionee  shall have a period of six (6)
                  months  following the date of such cessation of Service during
                  which  to  exercise  each  outstanding  option  held  by  such
                  Optionee.   However,  should  such  Disability  be  deemed  to
                  constitute Permanent Disability, then  the period during which
                  each  outstanding  option  held by the  Optionee  is to remain
                  exercisable  shall be extended by an additional six (6) months
                  so that the  exercise  period  shall be the twelve  (12)-month
                  period  following  the  date of the  Optionee's  cessation  of
                  Service by reason of such Permanent Disability.

                           (iii) Should the  Optionee  die while  holding one or
                  more outstanding options, then the personal  representative of
                  the  Optionee's  estate or the  person or  persons to whom the
                  option is transferred  pursuant to the  Optionee's  will or in
                  accordance  with the laws of descent  and  distribution  shall
                  have a period of twelve (12) months  following the date of the
                  Optionee's death during which to exercise each such option.

                           (iv) Under no circumstances,  however, shall any such
                  option be  exercisable  after the specified  expiration of the
                  option term.

                           (v)  During  the  applicable   post-Service  exercise
                  period,  the option may not be exercised in the  aggregate for
                  more than the number of vested  shares for which the option is
                  exercisable  on  the  date  of  the  Optionee's  cessation  of
                  Service. Upon the expiration of the applicable exercise period
                  or (if earlier) upon the  expiration  of the option term,  the
                  option shall  terminate  and cease to be  outstanding  for any
                  vested  shares for which the  option  has not been  exercised.
                  However,  the option shall,  immediately  upon the  Optionee's
                  cessation of Service, terminate and cease to be outstanding to
                  the extent it is not exercisable for vested shares on the date
                  of such cessation of Service.

                           (vi)  The  Plan   Administrator   may,  in  its  sole
                  discretion,  include  in the  terms  of any  option  or  stock
                  issuance award provisions providing for (i) the termination of
                  an option or award,  (ii) forfeiture of the gain on any option
                  exercises or realized  pursuant to any award,  (iii) the right
                  of the Corporation to repurchase any shares acquired  pursuant
                  to an option or award,  or (iv) forfeiture of shares of Common
                  Stock acquired pursuant to an award (and any proceeds realized

                                       6
<PAGE>

                  on the sale of the  shares  is  subject  to  repayment  to the
                  Corporation),  if an  Optionee or  Participant  engages in any
                  activity during the Optionee's or Participant's employment and
                  such  period  thereafter  as may  be  determined  by the  Plan
                  Administrator,   in  competition  with  any  activity  of  the
                  Corporation, or inimical, contrary or harmful to the interests
                  of the  Company,  including,  without  limitation  (i) conduct
                  related to the  Optionee's  or  Participant's  employment  for
                  which either criminal or civil  penalties may be sought,  (ii)
                  the   commission   of  an  act   of   fraud   or   intentional
                  misrepresentation,  (iii) embezzlement or  misappropriation or
                  conversion of assets or opportunities of the Corporation, (iv)
                  accepting employment with or serving as a consultant,  adviser
                  or in any other  capacity to, or having an ownership  interest
                  in, a person or entity that is in  competition  with or acting
                  against the interest of the  Corporation,  (v)  disclosing  or
                  misusing any  confidential  or proprietary  information of the
                  Corporation, or (vi) a material violation of the Corporation's
                  policies.  The  Committee  may  condition  any  grant  on  the
                  potential Optionee's or Participant's  agreement to such terms
                  and   conditions.   The  Plan   Administrator,   in  its  sole
                  discretion, may waive at any time in writing such a forfeiture
                  provision  and  release  the  Optionee  or  Participant   from
                  liability hereunder.

                  (e) Unvested  Shares.  The Plan  Administrator  shall have the
         discretion to grant options that are exercisable for unvested shares of
         Common  Stock.  Should the Optionee  cease  Service  while holding such
         unvested shares, the Corporation shall have the right to repurchase, at
         the exercise  price paid per share,  all or (at the  discretion  of the
         Corporation and with the consent of the Optionee) any of those unvested
         shares. The terms upon which such repurchase right shall be exercisable
         (including  the period and procedure  for exercise and the  appropriate
         vesting schedule for the purchased  shares) shall be established by the
         Plan  Administrator  and set  forth  in the  document  evidencing  such
         repurchase  right.  Except as may be allowed  pursuant  to Section  2.1
         (d)(vi),  the Plan Administrator may not impose a vesting schedule upon
         any option  grant or any shares of Common  Stock  subject to the option
         which is more  restrictive  than twenty percent (20%) per year vesting,
         beginning  one (1) year  after the option  grant  date.  However,  this
         minimum vesting requirement shall not be applicable with respect to any
         option granted to a Highly-Compensated Person.

                  (f) First Refusal Rights.  Until such time as the Common Stock
         is  first   registered  under  Section  12(g)  of  the  1934  Act,  the
         Corporation  shall have the right of first  refusal with respect to any
         proposed disposition by the Optionee ( or any successor in interest) of
         any shares of Common Stock issued under the Option Grant Program.  Such
         right of first refusal  shall be  exercisable  in  accordance  with the
         terms  established  by the  Plan  Administrator  and set  forth  in the
         document evidencing such right.

                  (g) Limited Transferability of Options. During the lifetime of
         the Optionee,  the option shall be exercisable only by the Optionee and
         shall not be  assignable or  transferable  other than by will or by the
         laws of  descent  and  distribution  following  the  Optionee's  death.
         However, a Non-Statutory  Option may be assigned in accordance with the
         terms of a Qualified  Domestic Relations Order. The assigned option may
         only be  exercised  by the person or persons who acquire a  proprietary
         interest in the option  pursuant to such Qualified  Domestic  Relations
         Order. The terms applicable to the assigned option (or portion thereof)
         shall be the same as those in effect for the option  immediately  prior
         to such  assignment and shall be set forth in such documents  issued to
         the assignee as the Plan Administrator may deem appropriate.

         2.2 INCENTIVE OPTIONS. The terms specified below shall be applicable to
all Incentive Options. Except as modified by the provisions of this Section 2.2,

                                       7
<PAGE>

all the  provisions  of Articles 1,2 and 4, and shall be applicable to Incentive
Options.  Options,  which are specifically  designated as Non-Statutory Options,
shall not be subject to the terms of this Section 2.2.

                  (a)  Eligibility.  Incentive  Options  may only be  granted to
         Employees.

                  (b) Exercise Price.  The exercise price per share shall not be
         less than one hundred percent (100%) of the Fair Market Value per share
         of Common  Stock on the option  grant  date.  If the person to whom the
         option is granted is a 10%  Shareholder,  then the  exercise  price per
         share shall not be less than one hundred ten percent (110%) of the Fair
         Market Value per share of Common Stock on the option grant date.

                  (c) Dollar Limitation.  The aggregate Fair Market Value of the
         shares of Common Stock  (determined as of the respective  date or dates
         of grant) for which one or more options  granted to any Employee  under
         the Plan (or any other option plan of the  Corporation or any Parent or
         Subsidiary)  may for the first time  become  exercisable  as  Incentive
         Options during anyone (1) calendar year shall not exceed the sum of One
         Hundred Thousand Dollars  ($100,000).  To the extent the Employee holds
         two (2) or more such  options  which become  exercisable  for the first
         time  in the  same  calendar  year,  the  foregoing  limitation  on the
         exercisability of such options as Incentive Options shall be applied on
         the basis of the order in which such options are granted.

                  (d) 10%  Shareholder.  If any  Employee  to whom an  Incentive
         Option is granted is a 10% Shareholder,  then the option term shall not
         exceed five (5) years measured from the option grant date.

         2.3 CORPORATE TRANSACTION; CHANGE IN CONTROL.

                  (a)  In  the  event  of  any   Corporate   Transaction,   each
         outstanding option shall be handled in accordance with the terms of the
         agreement  of merger,  consolidation,  reorganization,  liquidation  or
         dissolution  which may  provide  for  either (i) the full  vesting  and
         deemed  exercise  or  cashout  of such  options  at  closing,  (ii) the
         assumption of such options with such adjustments as may be necessary to
         entitle  the  Optionee  to  receive  in respect of each share of Common
         Stock subject to any  outstanding  Options upon exercise of any Option,
         the same number and kind of stock, securities,  cash, property or other
         consideration  that each holder of a share of Common Stock was entitled
         to receive in the Corporate Transaction in respect of a share of Common
         Stock;  provided  that such Option shall  remain  subject to all of the
         terms  and  conditions  of the  foregoing,  including  any  vesting  or
         termination  provisions,  (iii)  the grant of an  equivalent  option or
         right  substituted  by  the  successor   corporation  or  a  Parent  or
         Subsidiary  of  the  successor  corporation,  (iv)  in the  event  of a
         liquidation or dissolution not arising from the sale of the business of
         the  Corporation  on a going concern  basis,  the right to exercise the
         vested portion of any  outstanding  options and the  termination of any
         unvested   options  and  any  unexercised   vested  options  upon  such
         liquidation or dissolution of the Company,  (v) any  combination of the
         foregoing.

                  (b) The grant of options under the Plan shall in no way affect
         the right of  the  Corporation  to adjust,  reclassify,  reorganize  or
         otherwise  change  its  capital  or  business  structure  or to  merge,
         consolidate, dissolve, liquidate or sell or transfer all or any part of
         its business or assets.

                  (c) In the event of a Change in Control, then unless expressly
         otherwise  provided in an Option  Agreement,  any  restrictions  on the
         exercise of  outstanding  Options  until the  occurrence of a Corporate
         Transaction  shall  terminate,  and the  Optionee  shall be entitled to
         exercise any vested options that have become  exercisable in accordance
         with the vesting schedule set forth in the relevant Option Agreement;

                                       8
<PAGE>

         any Options that have not vested shall remain unexerciseable until they
         vest in accordance with the terms of the Option Agreement.

         2.4 CANCELLATION AND REGRANT OF OPTIONS.  The Plan Administrator  shall
have the  authority  to  effect,  at any time  and from  time to time,  with the
consent  of  the  affected  option  holders,  the  cancellation  of  any  or all
outstanding  options under the Option Grant Program and to grant in substitution
therefor new options  covering the same or different  number of shares of Common
Stock but with an exercise  price per share  based on the Fair Market  Value per
share of Con1ffiOn Stock on the new option grant date.

         2.5  ADDITIONAL  AUTHORITY.  The  Plan  Administrator  shall  have  the
discretion,  exercisable  either at the time an option is granted or at any time
while the option remains outstanding, to:

                  (a)  extend  the  period of time for  which  the  option is to
         remain  exercisable  following the  Optionee's  cessation of Service or
         death from the limited  period  otherwise  in effect for that option to
         such  greater  period  of time as the  Plan  Administrator  shall  deem
         appropriate,  but in no event beyond the expiration of the option term,
         and/or

                  (b) permit the option to be exercised,  during the  applicable
         post-Service  exercise  period,  not only with respect to the number of
         vested shares of Common Stock for which such option is  exercisable  at
         the time of the Optionee's  cessation of Service or death but also with
         respect to one or more  additional  installments  in which the Optionee
         would  have  vested  under the  option had the  Optionee  continued  in
         Service.

                                    Article 3
                             Stock Issuance Program

         3.1 GRANT. The Plan  Administrator  may grant awards to Participants of
Restricted Stock, which shall be evidenced by a Stock Issuance Agreement between
the Corporation and the Participant. Each Stock Issuance Agreement shall contain
such  restrictions,   repurchase  rights,  terms  and  conditions  as  the  Plan
Administrator  may, in its  discretion,  determine  and  (without  limiting  the
generality of the foregoing) such Stock Issuance  Agreements may require that an
appropriate  legend be placed on certificates.  Awards of Restricted Stock shall
be subject to the terms and provisions set forth below in this Article 3.

         3.2 RIGHTS OF GRANTEE.  Shares of Restricted  Stock granted pursuant to
an award  hereunder  shall be issued in the name of the  Participant  as soon as
reasonably  practicable after the award is granted provided that the Participant
has executed a Stock Award Agreement evidencing the award, the appropriate blank
stock  powers  and,  in the  discretion  of the Plan  Administrator,  an  escrow
agreement and any other documents which the Plan  Administrator may require as a
condition to the issuance of such shares. If a Participant shall fail to execute
the Stock A ward Agreement evidencing a Restricted Stock A ward, the appropriate
blank stock powers and, in the discretion of the Plan  Administrator,  an escrow
agreement  and any other  documents  which the Plan  Administrator  may  require
within the time  period  prescribed  by the Plan  Administrator  at the time the
award is granted,  the award shall be null and void.  At the  discretion  of the
Plan  Administrator,  shares issued in connection with a Restricted  Stock award
shall be  deposited  together  with the stock powers with an escrow agent (which
may be the  Company)  designated  by the  Plan  Administrator.  Unless  the Plan
Administrator  determines  otherwise  and  as  set  forth  in  the  Stock  Award
Agreement,  upon  delivery of the Shares to the escrow  agent,  the  Participant
shall  have all of the rights of a  stockholder  with  respect  to such  shares,
including  the right to vote the shares and to receive  all  dividends  or other
distributions paid or made with respect to the shares.

         3.3  NON-TRANSFERABILITY.  Until all  restrictions  upon the  shares of
Restricted  Stock awarded to a  Participant  shall have lapsed in the manner set
forth in Section 3.4,  such shares shall not be sold,  transferred  or otherwise
disposed of and shall not be pledged or otherwise  hypothecated,  nor shall they
be delivered to the Participant  except as otherwise provided in the Stock Award
Agreement.

                                        9
<PAGE>

         3.4 LAPSE OF RESTRICTIONS.

                  (a)  Restrictions  upon  shares of  Restricted  Stock  awarded
         hereunder  shall  lapse at such  time or times  and on such  terms  and
         conditions as the Plan  Administrator  may determine.  The Stock A ward
         Agreement evidencing the award shall set forth any such restrictions.

                  (b) The  Agreement  evidencing  the Award  shall set forth any
         such provisions regarding the effect of a Change in Control, if any, on
         the award of the Restricted Stock and the restrictions upon such shares
         of Restricted Stock.

         3.5 MODIFICATION OR SUBSTITUTION. Subject to the terms of the Plan, the
Committee  may  modify  outstanding  awards of  Restricted  Stock or accept  the
surrender  of  outstanding  shares  of  Restricted  Stock  (to  the  extent  the
restrictions  on such  Shares  have not yet  lapsed)  and  grant  new  awards in
substitution  for them.  Notwithstanding  the foregoing,  no  modification of an
award shall adversely alter or impair any rights or obligations  under the Stock
Award Agreement without the Participant's consent.

         3.6  TREATMENT  OF  DIVIDENDS.  At the  time  an  award  of  shares  of
Restricted  Stock is granted,  the Plan  Administrator  may, in its  discretion,
determine  that the  payment to the  Participant  of  dividends,  or a specified
portion  thereof,  declared or paid on such  shares by the Company  shall be (i)
deferred until the lapsing of the restrictions imposed upon such shares and (ii)
held by the Company for the account of the  Participant  until such time. In the
event that dividends are to be deferred,  the Committee shall determine  whether
such  dividends  are to be reinvested in shares of stock (which shall be held as
additional  shares of Restricted  Stock) or held in cash. If deferred  dividends
are to be held in  cash,  there  may be  credited  at the end of each  year  (or
portion  thereof)  interest on the amount of the account at the beginning of the
year at a rate per  annum  as the Plan  Administrator,  in its  discretion,  may
determine.  Payment of  deferred  dividends  in respect of shares of  Restricted
Stock  (whether  held in cash or as  additional  shares  of  Restricted  Stock),
together with interest accrued  thereon,  if any, shall be made upon the lapsing
of restrictions imposed on the Shares in respect of which the deferred dividends
were paid,  and any  dividends  deferred  (together  with any  interest  accrued
thereon) in respect of any shares of  Restricted  Stock shall be forfeited  upon
the forfeiture of such shares.

         3.7 DELIVERY OF SHARES. Upon the lapse of the restrictions on shares of
Restricted  Stock  or at  such  other  time  as set  forth  in the  Stock A ward
Agreement,  the  Plan  Administrator  shall  cause  a  stock  certificate  to be
delivered to the Participant with respect to such Shares.

         3.8 FORFEITURE PROVISIONS. The provisions of Section 2. 1 (d)(vi) shall
apply to the Stock  Issuance  Program  and  shares of  Restricted  Stock  issued
thereunder.

                                    Article 4
                                 Miscellaneous

         4.1  FINANCING.  The Plan  Administrator  may  permit any  Optionee  or
Participant  to pay  the option  exercise price or the purchase price for shares
issued to such person under the Plan by delivering a promissory  note payable in
one or more  installments.  The terms of any such promissory note (including the
interest  rate and the  terms of  repayment)  shall be  established  by the Plan
Administrator in its sole discretion. Promissory notes may be authorized with or
without  security or collateral.  However,  any promissory  notes delivered by a
consultant must be secured by property other than the purchased shares of Common
Stock.  In  all  events,  the  maximum  credit  available  to  the  Optionee  or
Participant may not exceed the sum of (i) the aggregate option exercise price or
purchase price payable for the purchased shares plus (ii) any Federal, state and
local  income and  employment  tax  liability  incurred  by the  Optionee or the
Participant in connection with the option exercise or share purchase.

                                       10
<PAGE>

         4.2 EFFECTIVE DATE AND TERM OF THE PLAN.

                  (a) The Plan shall become effective when adopted by the Board,
         but no option  granted under the Plan may be  exercised,  and no shares
         shall be  issued  under the Plan,  until  the Plan is  approved  by the
         Corporation's  shareholders.   If  such  shareholder  approval  is  not
         obtained  within  twelve  (12)  months  after  the date of the  Board's
         adoption of the Plan,  then all options  previously  granted  under the
         Plan  shall  terminate  and  cease to be  outstanding,  and no  further
         options  shall be granted and no shares shall be issued under the Plan.
         Subject to such limitation,  the Plan  Administrator  may grant options
         and issue shares under the Plan at any time after the effective date of
         the Plan and before the date fixed herein for termination of the Plan.

                  (b) The Plan  shall  terminate  upon the  earliest  of (i) the
         expiration of the  ten(10)-year  period measured from the date the Plan
         is adopted by the  Board,  (ii) the date on which all shares  available
         for  issuance  under the Plan shall have been  issued  pursuant  to the
         exercise of options or the  issuance of shares  under the Plan or (iii)
         the  termination  of  all  outstanding  options  in  connection  with a
         Corporate  Transaction.  Upon such Plan  termination,  all  options and
         Stock Purchase Rights then outstanding under the Plan shall continue to
         have full force and effect in  accordance  with the  provisions  of the
         documents evidencing such options or issuances.

         4.3 AMENDMENT OF THE PLAN.

                  (a) The Board  shall have  complete  and  exclusive  power and
         authority to amend or modify the Plan in any or all respects.  However,
         no such amendment or modification shall adversely affect the rights and
         obligations  with  respect to options or Stock  Purchase  Rights at the
         time outstanding under the Plan, unless the Optionee or the Participant
         consents to such  amendment or  modification.  In  addition,  the Board
         shall not,  without  the  approval of the  Corporation's  shareholders,
         increase the maximum number of shares  issuable under the Plan,  except
         for  permissible  adjustments  in the event of  certain  changes in the
         Corporation's capitalization.

                  (b) Options to purchase  shares of Common Stock may be granted
         under the Plan and shares of Common  Stock may be issued under the Plan
         that are in each  instance  in  excess of the  number  of  shares  then
         available  for  issuance  under the Plan,  provided  any excess  shares
         actually  issued  under  the  Plan are held in  escrow  until  there is
         obtained shareholder approval of an amendment  sufficiently  increasing
         the number of shares of Common Stock  available for issuance  under the
         Plan. If such  shareholder  approval is not obtained within twelve (12)
         months after the date the first such excess  issuances  are made,  then
         (i) any unexercised  options granted on the basis of such excess shares
         shall  terminate and cease to be outstanding  and (ii) the  Corporation
         shall  promptly  refund  to the  Optionees  and  the  Participants  the
         exercise or purchase  price paid for any excess shares issued under the
         Plan and held in escrow,  together  with  interest  (at the  applicable
         Short-Term Federal Rate) for the period the shares were held in escrow,
         and such shares shall thereupon be automatically  canceled and cease to
         be outstanding.

         4.4  DISSOLUTION  OR   LIQUIDATION.   In  the  event  of  the  proposed
dissolution or  liquidation of the  Corporation,  the Plan  Administrator  shall
notify each Optionee as soon as practicable  prior to the effective date of such
proposed  transaction.  The  Administrator  in its discretion may provide for an
Optionee or Participant to have the right to exercise his or her Option or Stock
Purchase  Right until fifteen (15) days prior to such  transaction  as to all of
the Optioned  Stock  covered  thereby,  including  shares as to which the Option
would not otherwise be exercisable.  In addition,  the Administrator may provide
that any Company  repurchase  option  applicable  to any shares  purchased  upon
exercise of an Option or Stock Purchase Right shall lapse as to all such shares,

                                       11
<PAGE>

provided the proposed  dissolution or liquidation takes place at the time and in
the manner contemplated.  To the extent it has not been previously exercised, an
Option  or  Stock  Purchase  Right  will  terminate  immediately  prior  to  the
consummation of such proposed action.

         4.5 WITHHOLDING.

                  (a) At such times as an  Optionee  or  Participant  recognizes
         taxable  income in connection  with the receipt of shares  hereunder (a
         "Taxable  Event"),  the  Optionee  or  Participant  shall  pay  to  the
         Corporation  an amount  equal to the  federal,  state and local  income
         taxes and other amounts as may be required by law to be withheld by the
         Corporation  in  connection  with the Taxable  Event (the  "Withholding
         Taxes") prior to the issuance,  or release from escrow, of such shares.
         The Corporation shall have the right to deduct from any payment of cash
         to an Optionee or Participant an amount equal to the Withholding  Taxes
         in  satisfaction  of  the  obligation  to  pay  Withholding  Taxes.  In
         satisfaction  of  the  obligation  to  pay  Withholding  Taxes  to  the
         Corporation,  the Optionee or Participant  may make a written  election
         (the  "Tax  Election"),  which  may  be  accepted  or  rejected  in the
         discretion of the Plan Administrator, to have withheld a portion of the
         shares  then  issuable  to him or her having an  aggregate  Fair Market
         Value equal to the Withholding Taxes-

                  (b) If an Optionee makes a disposition,  within the meaning of
         Section 424(c) of the  Code and regulations promulgated thereunder,  of
         any share or shares issued to such Optionee pursuant to the exercise of
         an Incentive  Option within the two-year  period  commencing on the day
         after the date of the grant or within the one-year period commencing on
         the day  after  the date of  transfer  of such  share or  shares to the
         Optionee pursuant to such exercise, the Optionee shall, within ten (10)
         days of such disposition,  notify the Corporation  thereof, by delivery
         of written notice to the Corporation at its principal executive office.

         4.6 REGULATORY APPROVALS.  The implementation of the Plan, the granting
of any options under the Plan and the issuance of any shares of Common Stock (i)
upon the exercise of any option or (ii) under the Stock  Issuance  Program shall
be  subject  to the  Corporation's  procurement  of all  approvals  and  permits
required  by  regulatory  authorities  having  jurisdiction  over the Plan,  the
options granted under it and the shares of Common Stock issued pursuant to it.

         4.7 NO EMPLOYMENT OR SERVICE  RIGHTS.  Nothing in the Plan shall confer
upon the  Optionee or the  Participant  any right to continue in Service for any
period of specific  duration or interfere with or otherwise  restrict in any way
the  rights  of the  Corporation  (or any  Parent  or  Subsidiary  employing  or
retaining such person) or of the Optionee or the  Participant,  which rights are
hereby  expressly  reserved by each, to terminate  such person's  Service at any
time for any reason, with or without cause.

         4.8 POOLING  TRANSACTIONS.  Notwithstanding  anything  contained in the
Plan or any Agreement to the contrary,  in the event of a Corporate  Transaction
or  similar   transaction  which  is  also  intended  to  constitute  a  Pooling
Transaction,  the Plan  Administrator  shall take such  actions,  if any, as are
specifically  recommended  by an  independent  accounting  firm  retained by the
Corporation  to the  extent  reasonably  necessary  in order to assure  that the
Pooling  Transaction  will  qualify as such,  including  but not  limited to (i)
deferring the vesting, exercise,  payment, settlement or lapsing of restrictions
with  respect  to any  Option or  award,  (ii)  providing  that the  payment  or
settlement in respect of any Option or award be made in the form of cash, shares
or securities of a successor or acquiror of the Company, or a combination of the

                                       12
<PAGE>

foregoing,  and (iii)  providing  for the extension of the term of any Option or
award to the extent  necessary to accommodate the foregoing,  but not beyond the
maximum term permitted for any Option or award.

         4.9  EXCLUSITY.  The  adoption  of the Plan by the  Board  shall not be
construed as amending, modifying or rescinding any previously approved incentive
arrangement  or as creating any  limitations  on the power of the Board to adopt
such other incentive arrangements as it may deem desirable,  including,  without
limitation,  the granting of stock options  otherwise  than under the Plan,  and
such arrangements may be either applicable generally or only in specific cases.

         4.10  LIMITATION ON LIABILITY.  As  illustrative  of the limitations of
liability of the Corporation, but not intended to be exhaustive thereof, nothing
in the Plan shall be construed to:

                  (a) give any person any right to be granted an Option or award
         other than at the sole discretion of the Plan Administrator;

                  (b) give any  person  any rights  whatsoever  with  respect to
         shares except as specifically provided in the Plan;

                  (c) be evidence of any agreement or  understanding,  expressed
         or  implied,  that  the  Corporation  will  employ  any  person  at any
         particular rate of compensation or for any particular period of time.

         4.11 GOVERNING  LAW.  Except as to matters of federal law, the Plan and
the rights of all persons  claiming  hereunder shall be construed and determined
in accordance  with the laws of the State of Delaware  without  giving effect to
conflicts of laws principles thereof.

         4.12  APPLICABLE  LAWS.  The  obligation of the  Corporation to sell or
deliver  shares with respect to Options and awards  granted under the Plan shall
be  subject  to all  applicable  laws,  rules  and  regulations,  including  all
applicable  federal and state  securities  laws,  and the  obtaining of all such
approvals by governmental  agencies as may be deemed necessary or appropriate by
the Plan Administrator.

         4.13 RULES AND  REGULATIONS.  The Board may make such changes as may be
necessary  or  appropriate  to  comply  with the rules  and  regulations  of any
government  authority,  or to obtain for Employees granted Incentive Options the
tax  benefits  under  the  applicable  provisions  of the Code  and  regulations
promulgated thereunder.

         4.14  SECURITIES  REGULATIONS.  Each Option and award is subject to the
requirement  that,  if at any  time the Plan  Administrator  determines,  in its
discretion,  that the listing,  registration or qualification of shares issuable
pursuant to the Plan is required by any  securities  exchange or under any state
or federal law, or the consent or approval of any  governmental  regulatory body
is necessary or desirable as a condition of, or in connection with, the grant of
an Option or award or the  issuance  of shares,  no  Options or awards  shall be
granted or payment made or shares issued,  in whole or in part,  unless listing,
registration,  qualification,  consent or approval has been effected or obtained
free of any conditions as acceptable to the Plan Administrator.

         4.15 RESTRICTIONS ON SHARES.  Notwithstanding anything contained in the
Plan or any  Agreement  to the contrary,  in the event that the  disposition  of
shares  acquired  pursuant  to  the  Plan  is  not  covered  by a  then  current
registration  statement  under  the  Securities  Act of 1933,  as  amended  (the
"Securities  Act"),  and is not otherwise  exempt from such  registration,  such
shares  shall be  restricted  against  transfer  to the extent  required  by the
Securities  Act  and  Rule  144  or  other  regulations  thereunder.   The  Plan

                                       13
<PAGE>

Administrator may require any individual  receiving shares pursuant to an Option
or award  granted  under the Plan,  as a condition  precedent to receipt of such
Shares,  to  represent  and  warrant to the  Company in writing  that the Shares
acquired by such  individual  are  acquired  without a view to any  distribution
thereof and will not be sold or transferred  other than pursuant to an effective
registration thereof under said Act or pursuant to an exemption applicable under
the  Securities Act or the rules and  regulations  promulgated  thereunder.  The
certificates  evidencing  any of such shares shall be  appropriately  amended to
reflect their status as restricted securities as aforesaid.

                                       14

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