Document:

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                                                                    EXHIBIT 10.9

                                 LEASE PURCHASE

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LESSEE:  MCDERMOTT RESTAURANTS, INC.    LESSOR:  BANK OF AMERICA, N.A.
         7373 E. DOUBLETREE RANCH RD.            C/O AZ BUSINESS LOAN PROCESSING
         SUITE 130                               201 EAST WASHINGTON STREET
         SCOTTSDALE, AZ 85058-2141               PHOENIX, AZ 85004
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         DESCRIPTION OF COLLATERAL: PURCHASE MONEY SECURITY INTEREST IN ALL
INVENTORY, CHATTEL PAPER, ACCOUNTS, EQUIPMENT AND GENERAL INTANGIBLES; WHETHER
ANY OF THE FOREGOING IS OWNED NOW OR ACQUIRED LATER; ALL ACCESSIONS, ADDITIONS,
REPLACEMENTS, AND SUBSTITUTIONS RELATING TO ANY OF THE FOREGOING; ALL RECORDS OF
ANY KIND RELATING TO ANY OF THE FOREGOING; ALL PROCEEDS RELATING TO ANY OF THE
FOREGOING (INCLUDING INSURANCE, GENERAL INTANGIBLES AND OTHER ACCOUNTS PROCEEDS)

<TABLE>
<S>                                      <C>
         TOTAL AMOUNT FINANCED:          $850,000.00

         TERMS OF RENTAL PAYMENTS:       NUMBER OF PAYMENTS:  60
                                         MONTHLY PAYMENT: $16,890,54
</TABLE>

         FIRST MONTHLY PAYMENT IS PAYABLE ON NOVEMBER 27, 2001 AND THEREAFTER ON
THE SAME DAY OF EACH CONSECUTIVE MONTH.

THIS LEASE PURCHASE (the "Lease") is entered into between MCDERMOTT RESTAURANTS,
INC., (the "Lessee") and Bank of America, N.A. (the "Lessor") dated as of the
date set forth below.

Lessee wishes to purchase certain equipment and has requested that Lessor
provide the financing for such equipment pursuant to the terms of this Lease. In
consideration of the foregoing and other valuable consideration, Lessor and
Lessee agree as follows:

LEASE. Lessor and Lessee agree that Lessor will finance pursuant to the
provisions of this Lease the equipment described herein (the items of equipment
subject hereto, together with all attachments, accessions, accessories, parts,
and additions to and all replacements of and substitutions for such equipment,
whether now owned or hereafter acquired, whether now existing or hereafter
arising, individually and collectively called the "Equipment").

TERM. Subject to the conditions stated herein, the term of this Lease (the
"Term") for the Equipment financed pursuant to this Lease shall commence on the
later of (a) the date of this Lease, or (b) the date of delivery of the
Equipment, but in no event later than the date set forth above for first monthly
payment.

PAYMENTS. Lessee agrees to pay the total amount of payments (the "Payments") for
the financing of the Equipment in the amounts and at the times which are
indicated herein, plus such additional amounts as may be provided herein.
Payments shall be made as indicated herein, at the address of Lessor stated
above or as otherwise provided to Lessee in writing. Lessee agrees
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that Lessor shall have the right to satisfy any Payments due under this Lease by
directly charging any account of Lessee with Lessor or with any affiliate bank
of Lessor.

NO ABATEMENT OF PAYMENTS. There will be no abatement or reduction of Payments by
Lessee for any reason, including but not limited to, any defense, recoupment,
setoff, counterclaim, or any claim arising out of or related to any defects,
damages, malfunctions, breakdowns, infirmities, losses or thefts of the
Equipment. Lessee assumes and shall bear the entire risk of loss and damage to
the Equipment from any cause whatsoever, it being the intention of the parties
that the Payments and any other sums required to be paid to Lessor hereunder
shall be paid ,in all events unless the obligation of Lessee to make Payments is
terminated as otherwise provided herein.

PREPAYMENT. Lessee may pay without penalty all or a portion of the amount owed
earlier than it is due. Early Payments will not, unless agreed to by Lessor in
writing, relieve Lessee of Lessee's obligation to continue to make Payments
under the payment schedule. Rather, they will reduce the principal balance due
and may result in Lessee making fewer Payments.

EARLY TERMINATION. Lessor reserves the right, if requested by Lessee to remove
an item of Equipment from this Lease, to require that all Payments due under the
Lease be paid in full (less such amount as is attributable to the unearned
interest component of such Payments based upon a simple interest accrual method,
and the rate implicit in the Payments, as determined by Lessor in its
discretion) whereupon the Lessor will release its interest in all of the
Equipment subject to this Lease. Should Lessor consent to Lessee's request to
remove an item of Equipment from this Lease and not require payment in full, and
provided that no Event of Default has occurred, Lessee may do so upon payment of
the remaining Payments for such item of Equipment less such amount as is
attributable to the unearned interest component of such Payments based upon a
simple interest accrual method, and the rate implicit in the Payments, as
determined by Lessor in its discretion. Upon such payment, Lessor will release
its interest in the respective item of Equipment and the item of Equipment shall
no longer be subject to this Lease.

LATE CHARGES. Should Lessee fail to pay any part of the Payments or any other
sum required to be paid to Lessor hereunder, within 15 DAYS AFTER THE DUE DATE
THEREOF, LESSEE SHALL PAY A LATE PAYMENT CHARGE EQUAL TO 4.00% OF THE DELINQUENT
PAYMENT.

SECURITY INTEREST.  Notwithstanding that this instrument is referred to as a
"Lease", Lessee will at all times hold title to the Equipment during the Term.
Lessor and Lessee acknowledge this instrument is a lease intended as security
and is not intended to constitute a lease for tax or accounting purposes. Use
of the term "Lease" in the title of this instrument is solely for the
convenience of the parties hereto. Lessee hereby grants to Lessor a security
interest in the Equipment, whether now or hereafter covered by this Lease,
together with all of the following, whether now owned or hereafter acquired,
whether now existing or hereafter arising, and wherever located:

          (a)  The Equipment.

          (b)  All documents covering the Equipment and all accounts, contract
rights, general intangibles, instruments, rents, monies, payments, and all
other rights, arising out of a sale, lease, or other disposition of the
Equipment.

          (c)  All proceeds (including insurance proceeds) from the sale,
destruction, loss, or other disposition of the Equipment.

          (d)  All records and data relating to the Equipment, whether in the
form of a writing, photograph, microfilm, microfiche, or electronic media,
together with all of Lessee's right, title, and interest in and to all computer
software required to utilize, create, maintain, and process any such records or
data on electronic media.

The security interest granted herein shall secure all indebtedness and
obligations of Lessee to Lessor under this Lease, whether for Payments in
respect of the same Equipment, Payments in respect of other Equipment, costs or
expenses, or otherwise.

OBLIGATIONS OF LESSEE.  Lessee warrants and covenants to Lessor as follows:

          ORGANIZATION.  Lessee is a corporation which is duly organized,
          validly existing, and in good standing under the laws of the state of
          Lessee's organization. Lessee has its chief executive office at the
          address specified at the beginning of this Lease. Lessee will notify
          Lessor of any change in the location of Lessee's chief executive
          office.

          PERFECTION OF SECURITY INTEREST.  Lessee agrees to execute such
          financing statements, notices of lien, and powers of attorney, and to
          take whatever other actions are requested by Lessor to perfect and
          continue Lessor's security interest in the Equipment, including the
          delivery to Lessor of all certificates of title (showing Lessor as
          legal owner or lienholder if required by law to perfect Lessor's
          security interest in the item of Equipment) or manufacturer's
          certificates of origin. Lessee hereby irrevocably appoints Lessor as
          its attorney-in-fact for the purpose of executing any documents
          necessary to perfect or to continue the security interest granted in
          this Lease or pursuant hereto, or to more specifically identify the
          Equipment so as to ensure the validity and perfection of such
          security interest. Lessor may at any time, and without further
          authorization from Lessee, file a carbon, photographic or other
          reproduction of any financing statement or of this Lease for use as a
          financing statement.
          Lessee will reimburse Lessor for all expenses for the perfection and
          the continuation of the perfection of Lessor's security interest in
          the Equipment. Lessee promptly will notify Lessor of any change in
          Lessee's name including any change to the assumed or fictitious
          business names of Lessee.

          REMOVAL OF EQUIPMENT.  Lessee shall keep the Equipment at Lessee's
          address shown above, or at such other locations as are acceptable to
          Lessor. Lessee shall not remove the Equipment from its existing
          locations without the prior written consent of Lessor. To the extent
          that the Equipment consists of vehicles, or other titled property,
          Lessee shall not take or permit any action which would require
          application for certificates of title for any vehicle outside the
          State of Nevada, without the prior written consent of Lessor.

          TRANSACTIONS INVOLVING EQUIPMENT.  Lessee shall not sell, lease, or
          otherwise transfer or dispose of the Equipment. Lessee shall not
          pledge, assign, sublease, mortgage, encumber or otherwise permit the
          Equipment to be subject to any lien, security interest, encumbrance,
          or charge, other than the security interest provided for in this
          Lease, without the prior written consent of Lessor. This includes
          security interests even if junior in right to the security interests
          granted under this Lease. Unless waived by Lessor, all proceeds from
          any disposition of the Equipment (for whatever reason) shall be held
          in trust for Lessor and shall not be commingled with any other funds;
          provided however, this requirement shall not constitute consent by
          Lessor to any sale or other disposition. Upon receipt, Lessee shall
          immediately deliver any such proceeds to Lessor.

          TITLE.  Lessee represents and warrants to Lessor that it holds good
          and marketable title to the Equipment, free and clear of all liens
          and encumbrances except for the lien of this Lease. No financing
          statement covering any of the Equipment is on file in any public
          office other than those which reflect the security interest created
          by this Lease. Lessee agrees to protect and defend Lessor's rights in
          the Equipment against the claims and demands of all other persons.

          MAINTENANCE AND INSPECTION OF EQUIPMENT.  Lessee shall maintain all
          Equipment in good condition and repair. Lessee will not commit or
          permit damage to or destruction of the Equipment or any part of the
          Equipment. Lessor and its designated representatives and agents shall
          have the right at all times to examine, inspect, and audit the
          Equipment wherever located. Lessee shall immediately notify Lessor of
          all cases involving the repossession, loss or damage of or to any
          Equipment; of any dispute arising with respect to the Equipment; and
          generally of all events affecting the Equipment or the value thereof.

          PERSONAL PROPERTY.  The Equipment is, and shall at all times be and
          remain, personal property notwithstanding that the Equipment or any
          part thereof may now be, or hereafter become, in any manner affixed or
          attached to real property or any building thereon. Upon request of
          Lessor, Lessee shall obtain, as to any place where the Equipment is
          located, a waiver from the landlord and mortgagee thereof with respect
          to any rights they may have in and to the Equipment or the rights of
          levy or seizure thereon.

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         TAXES, ASSESSMENTS AND LIENS. Lessee will pay when due all taxes,
         assessments and liens upon the Equipment, its use or operation, or upon
         this Lease. Lessee may withhold any such payment or may elect to
         contest any lien if Lessee is in good faith conducting an appropriate
         proceeding to contest the obligation to pay and so long as Lessor's
         interest in the Equipment is not, in Lessor's sole opinion, thereby
         jeopardized. If the Equipment is subjected to a lien which is not
         discharged within fifteen (15) days, Lessee shall deposit with Lessor
         cash, a sufficient corporate surety bond or other security satisfactory
         to Lessor in an amount adequate to provide for the discharge of the
         lien plus any interest, costs or other charges that could accrue as a
         result of foreclosure or sale of the Equipment. In any contest Lessee
         shall defend itself and Lessor and shall satisfy any final adverse
         judgment before enforcement against the Equipment. Lessee shall name
         Lessor as an additional obligee under any surety bond furnished in the
         contest proceedings.

         COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS. Lessee shall comply promptly
         with all laws, ordinances and regulations of all governmental
         authorities applicable to the Equipment. Lessee may contest in good
         faith any such law, ordinance or regulation and withhold compliance
         during any proceeding, including appropriate appeals, so long as
         Lessor's interest in the Equipment, in Lessor's opinion, is not
         jeopardized.

         MAINTENANCE OF CASUALTY INSURANCE. Lessee shall procure and maintain
         all risks insurance, including without limitation fire, theft and
         liability coverage together with such other insurance as Lessor may
         require with respect to the Equipment, in form, amounts, coverages and
         basis reasonably acceptable to Lessor and issued by a company or
         companies reasonably acceptable to Lessor. Lessee, upon request of
         Lessor, will deliver to Lessor from time to time the policies or
         certificates of insurance in form satisfactory to Lessor, including
         stipulations that coverages will not be cancelled or diminished without
         at least thirty (30) days prior written notice to Lessor and not
         including any disclaimer of the insurer's liability for failure to give
         such a notice. In connection with all policies covering Equipment
         Lessee will provide Lessor with such loss payable or other endorsements
         as Lessor may require. If Lessee at any time fails to obtain or
         maintain any insurance as required under this Lease, Lessor may (but
         shall not be obligated to) obtain such insurance as Lessor deems
         appropriate, including if it so chooses "single interest insurance,"
         which will cover only Lessor's interest in the Equipment.

         APPLICATION OF INSURANCE PROCEEDS. Lessee shall promptly notify Lessor
         of any loss or damage to the Equipment. Lessor may present proof of
         loss to Lessee's insurer if Lessee fails to do so within fifteen (15)
         days of the casualty. All proceeds of any insurance on the Equipment,
         including accrued interest thereon, shall be held by Lessor as part of
         the security for the indebtedness. If Lessor consents to repair or
         replacement of the damaged or destroyed Equipment, Lessor shall, upon
         satisfactory proof of expenditure, pay or reimburse Lessee from the
         proceeds for the reasonable cost of repair or restoration. If Lessor
         does not consent to repair or replacement of the Equipment, Lessor
         shall retain a sufficient amount of the proceeds to pay the remaining
         Payments due under this Lease less such amount as is attributable to
         the unearned interest component of such Payments based upon a simple
         interest accrual method, and the rate implicit in the Payments, as
         determined by Lessor in its discretion, and shall pay the balance, if
         any, to Lessee. Any

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         proceeds which have been disbursed within six (6) months after their
         receipt and which Lessee has not committed to the repair or restoration
         of the Equipment shall be used to pay the indebtedness.

         INSURANCE REPORTS. Lessee, upon request of Lessor, shall furnish to
         Lessor reports on each existing policy of insurance showing such
         information as Lessor may reasonably request including the following:
         (a) the name of the insurer; (b) the risks insured; (c) the amount of
         the policy; (d) the property insured; (e) the then current value on the
         basis of which insurance has been obtained and the manner of
         determining that value; and (f) the expiration date of the policy. In
         addition, Lessee shall at Lessee's cost and upon request by Lessor
         (however not more often than annually) have an independent appraiser
         satisfactory to Lessor determine, as applicable, the cash value or
         replacement cost of the Equipment.

         BUSINESS PURPOSES. The Equipment will be used solely for business or
         commercial purposes.

         SALE OF ASSETS. Lessee shall not convey, lease, sell, transfer or
         assign all or substantially all of its assets, and shall not liquidate
         or discontinue its normal operations with intent to liquidate, without
         the prior written consent of Lessor.

LESSEE'S RIGHT TO POSSESSION. Until an Event of Default, Lessee may have
possession and beneficial use of all the Equipment and may use it in any lawful
manner not inconsistent with this Lease. If Lessor at any time has possession of
any Equipment, whether before or after an Event of Default, Lessor shall be
deemed to have exercised reasonable care in the custody and preservation of the
Equipment if Lessor takes such action for that purpose as Lessee shall request
or as Lessor, in Lessor's sole discretion, shall deem appropriate under the
circumstances, but failure to honor any request by Lessee shall not of itself be
deemed to be a failure to exercise reasonable care. Lessor shall not be required
to take any steps necessary to preserve any rights in the Equipment against
prior parties, nor to protect, preserve or maintain any security interest given
to secure the Equipment.

EXPENDITURES BY LESSOR. If not discharged or paid when due, Lessor may (but
shall not be obligated to) discharge or pay any amounts required to be
discharged or paid by Lessee under this Lease, including without limitation all
taxes, liens, security interests, encumbrances, and other claims, at any time
levied or placed on the Equipment. Lessor also may (but shall not be obligated
to) pay all costs for insuring, maintaining and preserving the Equipment. All
such expenditures incurred or paid by Lessor for such purposes will then bear
interest from the date incurred or paid by Lessor to the date of repayment by
Lessee at a rate equal to 1.5% per month, or the highest rate permitted by
applicable law, if less.

All such expenses shall become a part of the indebtedness hereunder and, at
Lessor's option, will (a) be payable on demand, (b) be apportioned among and be
payable with any Payments to become due during either (i) the term of any
applicable insurance policy or (ii) the remaining Term of the Payments or (c) be
treated as a balloon payment which will be due and payable with the respective
final Payments. The security interests granted pursuant to this Lease also will

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secure payment of these amounts. Such right shall be in addition to all other
rights and remedies to which Lessor may be entitled upon the occurrence of an
Event of Default.

RIGHT OF SETOFF. Lessee grants to Lessor a contractual possessory security
interest in, and hereby assigns, conveys; delivers, pledges, and transfers to
Lessor all Lessee's right, title and interest in and to, Lessee's accounts with
Lessor (whether checking, savings, or some other account), including without
limitation all accounts held jointly with someone else and all accounts Lessee
may open in the future, excluding however all IRA, Keogh, and trust accounts.
Lessee authorizes Lessor, to the extent permitted by applicable law, to charge
or setoff all sums owing on the indebtedness against any and all such accounts.

EVENTS OF DEFAULT. Each of the following shall constitute an event of default
(an "Event of Default") under this Lease:

         DEFAULT ON INDEBTEDNESS. Failure of Lessee to make any Payment when
         due.

         OTHER INDEBTEDNESS. Failure of Lessee to make any payment when due of
         any other indebtedness of Lessee to Lessor or to any affiliate of
         Lessor.

         OTHER DEFAULTS. Failure of Lessee to comply with or to perform any
         other term, obligation, covenant or condition contained in this Lease
         or in any other agreement between Lessor, or any affiliate of Lessor,
         and Lessee, or Lessee dies or becomes incompetent.

         FALSE STATEMENTS. Any warranty, representation, statement or report
         made or furnished to Lessor by or on behalf of Lessee under this Lease
         is false or misleading in any material respect, either now or at the
         time made or furnished.

         DEFECTIVE LEASE. This Lease ceases to be in full force and effect
         (including failure to create a valid, first perfected security interest
         or lien) at any time and for any reason.

         INSOLVENCY. The dissolution or termination of Lessee's existence as a
         going business, the insolvency of Lessee, the appointment of a receiver
         for any part of Lessee's property, any assignment for the benefit of
         creditors, or the commencement of any proceeding under any bankruptcy
         or insolvency laws by or against Lessee.

         CREDITOR PROCEEDINGS. Commencement of foreclosure proceedings, whether
         by judicial proceeding, self-help, repossession or any other method, by
         any creditor of Lessee or by any governmental agency against the
         Equipment or any other collateral securing the indebtedness. This
         includes a garnishment of any of Lessee's deposit accounts with Lessor.

         EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with
         respect to any guarantor of any of the Payments or other indebtedness
         hereunder or such guarantor dies or becomes incompetent.

RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this Lease,
to the extent permitted by law, interest shall accrue on amounts owed hereunder
at such interest

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rate as Lessor shall determine in its sole discretion, up to the maximum
interest rate allowed by law, or if none, 18% per annum. Also, if an Event of
Default occurs, at any time thereafter, Lessor shall have all the rights of a
secured party under the State of Uniform Commercial Code. In addition and
without limitation, Lessor may exercise any one or more of the following rights
and remedies:

         ACCELERATE INDEBTEDNESS. Lessor may declare all Payments (less such
         amount as is attributable to the unearned interest component of such
         Payments based upon a simple interest accrual method, and the rate
         implicit in the Payments, as determined by Lessor in its discretion),
         and other indebtedness hereunder immediately due and payable, without
         notice.

         ASSEMBLE EQUIPMENT. Lessor may require Lessee to deliver to Lessor all
         or any portion of the Equipment and any and all certificates of title
         and other documents relating to the Equipment. Lessor may require
         Lessee to assemble the Equipment and make it available to Lessor at a
         place to be designated by Lessor. Lessor also shall have full power to
         enter upon the property of Lessee to take possession of and remove the
         Equipment. If the Equipment contains other goods not covered by this
         Lease at the time of repossession, Lessee agrees Lessor may take such
         other goods, provided that Lessor makes reasonable efforts to return
         them to Lessee after repossession.

         SELL THE EQUIPMENT. Lessor shall have the full power to sell, lease,
         transfer, or otherwise deal with the Equipment or proceeds thereof in
         its own name or that of Lessee. Lessor may sell the Equipment at public
         auction or private sale. Unless the Equipment threatens to decline
         speedily in value or is of a type customarily sold on a recognized
         market, Lessor will give Lessee reasonable notice of the time after
         which any private sale or any other intended disposition of the
         Equipment is to be made. The requirements of reasonable notice shall be
         met if such notice is given at least ten (10) days before the time of
         the sale or disposition. All expenses relating to the disposition of
         the Equipment, including without limitation the expenses of retaking,
         holding, insuring, preparing for sale and selling the Equipment, shall
         become a part of the indebtedness secured by this security interest
         granted pursuant to this Lease and shall be payable on demand, with
         such interest rate as Lessor shall determine in its sole discretion, up
         to the maximum amount allowed by law, or if none, 18% per annum.

         APPOINT RECEIVER. To the extent permitted by applicable law, Lessor
         shall have the following rights and remedies regarding the appointment
         of a receiver: (a) Lessor may have a receiver appointed as a matter of
         right, (b) the receiver may be an employee of Lessor and may serve
         without bond, and (c) all fees of the receiver shall become part of the
         indebtedness secured by the security interest granted pursuant to the
         Lease and shall be payable on demand, with such interest rate as Lessor
         shall determine in its sole discretion, up to the maximum amount
         allowed by law, or if none, 18% per annum.

         OBTAIN DEFICIENCY. If Lessor chooses to sell any or all of the
         Equipment, Lessor may obtain a judgment against Lessee and/or any
         guarantor for any deficiency remaining on the indebtedness due to
         Lessor after application of all amounts received from the exercise of
         the rights provided in this Lease.

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         OTHER RIGHTS AND REMEDIES. Lessor shall have all the rights and
         remedies of a secured creditor under the provisions of the Uniform
         Commercial Code, as amended from time to time. In addition, Lessor
         shall have and may exercise any or all other rights and remedies it may
         have available at law, in equity, or otherwise.

         CUMULATIVE REMEDIES. All of Lessor's rights and remedies, whether
         evidenced by this Lease or by any other writing, shall be cumulative
         and may be exercised singularly or concurrently. Election by Lessor to
         pursue any remedy shall not exclude pursuit of any other remedy, and an
         election to make expenditures or to take action to perform an
         obligation of Lessee, after Lessee's failure to perform, shall not
         affect Lessor's right to declare an Event of Default and to exercise
         its remedies.

INDEMNIFICATION. Lessee hereby agrees to indemnify, protect and save Lessor or
its assigns harmless from any and all liabilities, liens, obligations, losses,
claims, damages, actions, suits, proceedings, costs and expenses, including
attorneys' fees, imposed or incurred by or asserted against Lessor or its
assigns, arising out of, connected with, or resulting directly or indirectly
from the Equipment, including without limitation, the manufacture, purchase,
lease, possession, Operation, condition (including all defects whether or not
discoverable by either party hereto), delivery, selection, use, or return of the
Equipment, including but not limited to any of the foregoing giving rise to or
causing personal injury, environmental liability, property damage, or death, or
by operation of law. Lessee shall give Lessor or its assigns prompt written
notice of any matter hereby indemnified against and agrees that upon notice by
Lessor or its assigns of the assertion of such a claim, action, damage,
obligation, liability or lien, Lessee shall assume full responsibility for the
defense thereof. All of Lessor's rights and privileges arising from the
indemnities contained in this Lease shall survive the expiration or earlier
termination of this Lease, and such indemnities are expressly made for the
benefit of, and shall be enforceable by Lessor, its successors and assigns.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Lease.

         AMENDMENTS. This Lease, together with any related documents,
         constitutes the entire understanding and agreement of the parties as to
         the matters set forth in this Lease. No alteration of or amendment to
         this Lease shall be effective unless given in writing and signed by the
         party or parties sought to be charged or bound by the alteration or
         amendment.

         APPLICABLE LAW. This Lease has been delivered to Lessor and accepted by
         Lessor in the State of Nevada. This Lease shall be governed by and
         construed in accordance with the laws of the State of Nevada.

         CAPTION HEADINGS. Caption headings in this Lease are for convenience
         purposes only and are not to be used to interpret or define the
         provisions of this Lease.

         COSTS AND EXPENSES. Lessee agrees to pay upon demand all of Lessor's
         out-of-pocket expenses, including reasonable attorneys' fees, incurred
         in connection with the preparation, execution, enforcement and
         collection of this Lease or in connection with the

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         financing pursuant to this Lease. Lessor may pay someone else to help
         collect the indebtedness and to enforce this Lease, and Lessee will pay
         that amount. This includes, subject to any limits under applicable law,
         Lessor's reasonable attorneys' fees and Lessor's legal expenses,
         whether or not there is a lawsuit or an arbitration proceeding,
         including reasonable attorneys' fees for bankruptcy proceedings
         (including efforts to modify or vacate any automatic stay or
         injunction), appeals, and any anticipated post-judgment collection
         services. Lessee also will pay any court costs, in addition to all
         other sums provided by law.

         NOTICES. All notices required to be given under this Lease shall be
         given in writing, may be sent by telefacsimile (unless otherwise
         required by law) and shall be effective when actually delivered or when
         deposited with a nationally recognized overnight courier or deposited
         in the United States mail, first class, postage prepaid, addressed to
         the party to whom the notice is to be given at the address shown above.
         Any party may change its address for notices under this Lease by giving
         formal written notice to the other parties, specifying that the purpose
         of the notice is to change the party's address. To the extent permitted
         by applicable law, if there is more than one Lessee, notice to any
         Lessee will constitute notice to all Lessees. For notice purposes,
         Lessee agrees to keep Lessor informed at all times of Lessee's current
         address(es).

         POWER OF ATTORNEY. Lessee hereby appoints Lessor as its true and lawful
         attorney-in-fact, irrevocably, with full power of substitution to do
         the following: (a) to demand, collect, receive, receipt for, sue and
         recover all sums of money or other property which may now or hereafter
         become due, owing or payable from the Equipment or its proceeds; (b) to
         execute, sign and endorse any and all claims, instruments, receipts,
         checks, drafts or warrants issued in respect of the Equipment or its
         proceeds; (c) to settle or compromise any and all claims arising under
         the Equipment, and, in the place and stead of Lessee, to execute and
         deliver its release and settlement for the claim; and (d) to file any
         claim or claims or to take any action or institute or take part in any
         proceedings, either in its own name or in the name of Lessee, or
         otherwise, which in the discretion of Lessor may seem to be necessary
         or advisable. This power is given as security for the indebtedness, and
         the authority hereby conferred is and shall be irrevocable and shall
         remain in full force and effect until renounced by Lessor.

         NO USURY. Notwithstanding anything to the contrary contained herein, in
         no event shall Lessee be required to pay an amount that violates any
         applicable usury or other law, and if any such limit is exceeded the
         amount due shall be reduced to the maximum amount permitted by law.

         SEVERABILITY. If a court of competent jurisdiction finds any provision
         of this Lease to be invalid or unenforceable as to any person or
         circumstance, such finding shall not render that provision invalid or
         unenforceable as to any other persons or circumstances. If feasible,
         any such offending provision shall be deemed to be modified, or it
         shall be stricken and all other provisions of this Lease in all other
         respects shall remain valid and enforceable.

                                       8
<PAGE>
         SUCCESSOR INTERESTS. Subject to the limitations set forth above On
         transfer of the Equipment, this Lease shall be binding upon and inure
         to the benefit of the parties, their successors and assigns. Lessee
         shall not, however, have the right to assign its rights or duties under
         this Lease, or any other interest herein, without the prior written
         consent of Lessor. Lessor may assign its rights under this Lease
         without notice to or consent by Lessee.

         TIME IS OF THE ESSENCE. Time is of the essence in the performance of
         this Lease.

         WAIVER. Lessor shall not be deemed to have waived any rights under this
         Lease unless such waiver is given in writing and signed by Lessor. No
         delay or omission on the part of Lessor in exercising any right shall
         operate as a waiver of such right or any other right. A waiver by
         Lessor of a provision of this Lease shall not prejudice or constitute a
         waiver of Lessor's right otherwise to demand strict compliance with
         that provision or any other provision of this Lease. No prior waiver by
         Lessor, nor any course of dealing between Lessor and Lessee, shall
         constitute a waiver of any of Lessor's rights or of any of Lessee's
         obligations as to any future transactions.

         DISCLAIMER OF WARRANTIES. Lessee acknowledges and agrees that it has
         selected each item, type, quality, quantity and supplier of the
         Equipment based upon its own judgment and disclaims any reliance upon
         any statements or representations made by Lessor, and agrees that the
         Equipment is of a design, size, quality, and capacity required by
         Lessee and is suitable for its purpose. Lessee acknowledges that Lessor
         is neither the manufacturer, distributor, seller, or owner of the
         Equipment, and that Lessor has no knowledge or familiarity with it.
         Lessee agrees to settle all claims, defenses, setoffs, and
         counterclaims it may have with any manufacturer, distributor, seller,
         or owner of the Equipment, and will not assert any thereof against
         Lessor. LESSOR MAKES NO WARRANTIES OR REPRESENTATIONS, EXPRESS OR
         IMPLIED, AS TO THE VALUE, DESIGN, CONDITION, MERCHANTABILITY OR FITNESS
         FOR A PARTICULAR PURPOSE OF THE EQUIPMENT OR ANY OTHER REPRESENTATION
         OR WARRANTY WITH RESPECT TO THE EQUIPMENT, AND, AS TO LESSOR, LESSEE
         LEASES THE EQUIPMENT AS IS.

         NO FINANCE LEASE. Lessor and Lessee agree that this Lease is not a
         "finance lease" under the Article of the Uniform Commercial Code that
         governs personal property leases. Lessee waives any right (a) to cancel
         or repudiate this Lease, (b) to reject or revoke acceptance of any item
         of Equipment, and (c) to recover from Lessor any general or
         consequential damages, for any reason whatsoever.

         DISCLAIMER OF TAX TREATMENT. LESSEE ACKNOWLEDGES AND AGREES THAT THE
         SOLE RESPONSIBILITY FOR DETERMINING THE PROPER TREATMENT OF THIS LEASE
         FOR FEDERAL, STATE AND LOCAL INCOME TAX PURPOSES RESTS WITH THE LESSEE.
         LESSOR MAKES NO REPRESENTATION AS TO THE PROPER TREATMENT OF THIS LEASE
         FOR SUCH PURPOSES. LESSEE IS ADVISED TO CONSULT WITH ITS TAX ADVISOR
         REGARDING SUCH TREATMENT.

                                       9
<PAGE>
         JURISDICTION. Lessee and Lessor consent to jurisdiction and venue in
         the state or federal courts in any county where Lessor maintains an
         office.

         ADDITIONAL PROVISION:

PRESENTATION OF ANNUAL TAX RETURNS OF BORROWER WITHIN 120 DAYS OF YEAR END.

         ARBITRATION AND WAIVER OF JURY TRIAL. ANY CLAIM OR CONTROVERSY
         ("CLAIM") BETWEEN THE PARTIES, WHETHER ARISING IN CONTRACT OR TORT OR
         BY STATUTE INCLUDING, BUT NOT LIMITED TO, CLAIMS RESULTING FROM OR
         RELATING TO THIS LEASE SHALL, UPON THE REQUEST OF EITHER PARTY, BE
         RESOLVED BY ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION ACT
         (TITLE 9, US CODE). ARBITRATION PROCEEDINGS WILL BE CONDUCTED IN
         ACCORDANCE WITH THE RULES FOR ARBITRATION OF FINANCIAL SERVICES
         DISPUTES OF J.A.M.S./ENDISPUTE. THE ARBITRATION SHALL BE CONDUCTED IN
         ANY STATE WHERE REAL PROPERTY COLLATERAL FOR THIS LEASE OR THE BANK
         OFFICE ORIGINATING THE CREDIT IS LOCATED. THE ARBITRATION HEARING SHALL
         COMMENCE WITHIN 90 DAYS OF THE DEMAND FOR ARBITRATION AND CLOSE WITHIN
         90 DAYS OF COMMENCEMENT, AND ANY AWARD WHICH MAY INCLUDE LEGAL FEES
         SHALL BE ISSUED (WITH A BRIEF WRITTEN STATEMENT OF THE REASONS
         THEREFOR) WITHIN 30 DAYS OF THE CLOSE OF HEARING. ANY DISPUTE
         CONCERNING WHETHER A CLAIM IS ARBITRABLE OR BARRED BY THE STATUTE OF
         LIMITATIONS SHALL BE DETERMINED BY THE ARBITRATOR. THIS ARBITRATION
         PROVISION IS NOT INTENDED TO LIMIT THE RIGHT OF ANY PARTY TO EXERCISE
         SELF-HELP REMEDIES, TO SEEK AND OBTAIN INTERIM OR PROVISIONAL RELIEF OF
         ANY KIND OR TO INITIATE JUDICIAL OR NON-JUDICIAL FORECLOSURE AGAINST
         ANY REAL OR PERSONAL PROPERTY COLLATERAL. IF FOR ANY REASON A CLAIM IS
         NOT ARBITRATED, THE PARTIES IRREVOCABLY AND VOLUNTARILY AGREE TO WAIVE
         ANY RIGHT TO A TRIAL BY JURY IN RESPECT OF SUCH CLAIM.

                                       10
<PAGE>
LESSEE ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS LEASE, AND LESSEE
AGREES TO ITS TERMS. THIS LEASE IS DATED DECEMBER 26, 2001.

LESSEE:

MCDERMOTT RESTAURANTS, INC.

BY: /S/ MICHAEL J. MCDERMOTT
    ----------------------------------
      NAME:  MICHAEL J. MCDERMOTT
      TITLE:  PRESIDENT/CEO

LESSOR:

BANK OF AMERICA, N.A.

BY: /S/ JAN HAVILL
    ----------------------------------
      JAN HAVILL

                                    GUARANTY

         GUARANTY. Each of the undersigned individuals (each, a "Guarantor"),
for good and valuable consideration, jointly and severally and unconditionally
and irrevocably guarantees to the above Lessor, and its successors and assigns,
the payment and performance, when due, of all of the above Lessee's obligations
(collectively, the "Obligations") under the above Lease. Each Guarantor further
agrees to pay, jointly and severally, all fees and costs (including, without
limitation, attorneys' fees) that Lessor, or its assigns, may incur in
collecting the amounts due. Each Guarantor agrees that from time to time Lessor
may, without notice to Guarantors and without affecting their liability: (i)
release any person liable for the Obligations; (ii) extend, renew, or modify the
terms of or accelerate the Obligations, in whole or in part; (iii) modify the
Lease; or (iv) waive or fail to enforce any of its rights under the Lease.

         GENERAL WAIVERS. Except as prohibited by applicable law, each Guarantor
waives any right to require Lessor: (i) to continue providing services to
Lessee; (ii) to make any presentment, protest, demand or notice of any kind;
(iii) to proceed directly against any person, including Lessee, or any other
Guarantor; (iv) to proceed directly against or exhaust any collateral held by
Lessor from Lessee, any Guarantor or any other person; or (v) to pursue any
other remedy within Lessor's power. Each Guarantor also waives any and all
rights, claims and defenses arising by reason of: (i) any law which may prevent
Lessor from bringing any action, including a claim for

                                       11
<PAGE>
deficiency, against any Guarantor, before or after Lessor's commencement or
completion of any foreclosure action; (ii) any election of remedies by Lessor
that may adversely affect any Guarantor's subrogation or reimbursement rights;
(iii) any other defense of Lessee, any Guarantor or any other person; (iv) any
right to claim discharge of the Obligations on the basis of unjustified
impairment of any collateral for the Obligations; (v) any statute of
limitations; or (vi) any defenses given to Guarantors at law or in equity other
than actual payment and performance of the Obligations. Each Guarantor further
waives any deductions to the amount guaranteed by virtue of any right of setoff,
counterclaim, subrogation, counter demand, recoupment or similar right, whether
asserted by Lessee or any Guarantor, until final payment of all the Obligations.

         WAIVERS OF SUBROGATION AND OTHER RIGHTS AND DEFENSES. Until final
payment of all the Obligations, each Guarantor waives (i) any right of
subrogation, reimbursement, indemnification, and contribution (contractual,
statutory, or otherwise) arising from the existence or performance of this
Guaranty, (ii) any right to enforce any remedy which Lessor now or may hereafter
have against Lessee, and (iii) any benefit of, and any right to participate in,
any of Lessor's collateral for the Obligations.

         INFORMATION REGARDING LESSEE. Each Guarantor acknowledges and agrees
that it has the sole responsibility for, and has adequate means of, obtaining
from Lessee such information concerning Lessee's financial condition and
business operations as such Guarantor requires. Each Guarantor further
acknowledges and agrees that Lessor has no duty, and such Guarantor is not
relying on Lessor, at any time to disclose to such Guarantor any information
relating to Lessee's financial condition and business operations.

         SETOFF. Each Guarantor grants to Lessor a security interest in all
deposits and other accounts now or hereafter maintained by such Guarantor with
Lessor (or any direct or indirect parent; subsidiary or affiliate of Lessor)
including, without limitation, all accounts held jointly with another person or
entity (except accounts in which a security interest is prohibited by law). Each
Guarantor authorizes Lessor (and each such parent, subsidiary and affiliate) to:
(i) charge or setoff any Obligations against deposits and accounts; and (ii)
administratively freeze all deposits and accounts.

         MISCELLANEOUS. If any of the Obligations are paid at any time and
Lessor is required to remit such payment to Lessee's trustee in bankruptcy (or
similar person) under any federal or state bankruptcy or insolvency law, the
Obligations shall be considered unpaid for the purpose of enforcement of this
Guaranty. No formal acceptance of this Guaranty is necessary to make it
effective. This Guaranty shall be continuing. The failure of any Guarantor to
sign this Guaranty shall not discharge or impair the liability of any Guarantor
who signs this Guaranty. This Guaranty shall be governed by, and interpreted in
accordance with, the laws of the State of Nevada.

         JURISDICTION. The parties consent to jurisdiction and venue in the
state or federal courts in any county where Lessor maintains an office.

                                       12
<PAGE>
         ADDITIONAL PROVISIONS:

PRESENTATION OF ANNUAL TAX RETURNS OF GUARANTOR WITHIN 120 DAYS OF YEAR END.

         ARBITRATION AND WAIVER OF JURY TRIAL. ANY CLAIM OR CONTROVERSY
         ("CLAIM") BETWEEN THE PARTIES, WHETHER ARISING IN CONTRACT OR TORT OR
         BY STATUTE INCLUDING, BUT NOT LIMITED TO, CLAIMS RESULTING FROM OR
         RELATING TO THIS GUARANTY SHALL, UPON THE REQUEST OF EITHER PARTY, BE
         RESOLVED BY ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION ACT
         (TITLE 9, US CODE). ARBITRATION PROCEEDINGS WILL BE CONDUCTED IN
         ACCORDANCE WITH THE RULES FOR ARBITRATION OF FINANCIAL SERVICES
         DISPUTES OF J.A.M.S./ENDISPUTE. THE ARBITRATION SHALL BE CONDUCTED IN
         ANY STATE WHERE REAL PROPERTY COLLATERAL FOR THIS GUARANTY OR THE BANK
         OFFICE ORIGINATING THE CREDIT IS LOCATED. THE ARBITRATION HEARING SHALL
         COMMENCE WITHIN 90 DAYS OF THE DEMAND FOR ARBITRATION AND CLOSE WITHIN
         90 DAYS OF COMMENCEMENT, AND ANY AWARD WHICH MAY INCLUDE LEGAL FEES
         SHALL BE ISSUED (WITH A BRIEF WRITTEN STATEMENT OF THE REASONS
         THEREFORE) WITHIN 30 DAYS OF THE CLOSE OF HEARING. ANY DISPUTE
         CONCERNING WHETHER A CLAIM IS ARBITRABLE OR BARRED BY THE STATUTE OF
         LIMITATIONS SHALL BE DETERMINED BY THE ARBITRATOR. THIS ARBITRATION
         PROVISION IS NOT INTENDED TO LIMIT THE RIGHT OF ANY PARTY TO EXERCISE
         SELF-HELP REMEDIES, TO SEEK AND OBTAIN INTERIM OR PROVISIONAL RELIEF OF
         ANY KIND OR TO INITIATE JUDICIAL OR NON-JUDICIAL FORECLOSURE AGAINST
         ANY REAL OR PERSONAL PROPERTY COLLATERAL. IF FOR ANY REASON A CLAIM IS
         NOT ARBITRATED, THE PARTIES IRREVOCABLY AND VOLUNTARILY AGREE TO WAIVE
         ANY RIGHT TO A TRIAL BY JURY IN RESPECT OF SUCH CLAIM.

         GUARANTOR:

         NAME: /S/ MICHAEL J. MCDERMOTT
               ------------------------
                MICHAEL J. MCDERMOTT

                                       13<PAGE>

                                                                   EXHIBIT 10.10

                                KONA GRILL, INC.
                                 2002 STOCK PLAN
                            (AS OF NOVEMBER 13, 2002)

1. Purpose. The purpose of the Kona Grill, Inc. 2002 Stock Plan (the "Plan") is
to promote the interests of Kona Grill, Inc. (the "Company") and its
shareholders by providing employees of the Company and any parent or
subsidiaries thereof, and any other individuals who provide services to the
Company or any parent or subsidiaries as non-employee directors, consultants or
advisors, with an opportunity to acquire a proprietary interest in the Company
and receive competitive performance-related incentives so as to develop a
stronger incentive to put forth maximum effort for the continued success and
growth of the Company. In addition, the opportunity to acquire a proprietary
interest in the Company and receive competitive performance-related incentives
will aid in attracting and retaining personnel of outstanding ability.

2. Definitions. The capitalized terms used in this Plan and not defined
elsewhere have the meanings set forth below.

      (a) "Affiliate" means any corporation that is a "parent corporation" or
"subsidiary corporation" of the Company, as those terms are defined in Code
Section 424(e) and (f), or any successor provisions.

      (b) "Agreement" means a written contract consistent with the terms of this
Plan entered into between the Company or an Affiliate and a Participant,
containing the terms and conditions of an Award in such form and not
inconsistent with this Plan as the Committee shall approve from time to time,
together with all amendments thereto.

      (c) "Award" means an award granted under this Plan in the form of Options,
SARs, or other Stock Awards.

      (d) "Board" means the Board of Directors of the Company.

      (e) "Cause" means (i) dishonesty, fraud or misrepresentation; (ii)
engaging in conduct that is injurious to the Company or any Affiliate in any
significant way, including by way of damage to its reputation or standing in the
industry; (iii) conviction of, or entering a plea of nolo contendre to, a crime
that constitutes a felony; (iv) breach of any employment agreement or other
agreement with, or duty owed to, the Company or any Affiliate, including any
agreement or duty not to make unauthorized disclosure of confidential or
proprietary information about the Company or any Affiliate, or not to compete
with the Company or any Affiliate; or (v) violation of any policy of the Company
or any Affiliate.

      (f) "Code" means the Internal Revenue Code of 1986, as amended and in
effect from time to time or any successor statute.

      (g) "Committee" means the two or more Non-Employee Directors designated by
the Board to administer this Plan under Section 3.1.

      (h) "Company" means Kona Grill, Inc., a Delaware corporation, or the
successor to all or substantially all of its businesses by merger,
consolidation, purchase of assets or otherwise.

      (i) "Disability" means, for purposes of exercising an Incentive Option, a
disability within the meaning of Code Section 22(e)(3), and for all other
purposes, any illness or other physical or mental condition of a Participant
that renders the Participant incapable of performing his or her customary and

<PAGE>

usual duties for the Company or any Affiliate, or any medically determinable
illness or other physical or mental condition resulting from a bodily injury,
disease or mental disorder which, in the judgment of the Committee, is permanent
and continuous in nature. The Committee may require such medical or other
evidence as it deems necessary to judge the nature and permanency of the
Participant's condition.

      (j) "Employee" means an employee, officer or director of the Company or an
Affiliate, except that for purposes of Incentive Stock Option Awards under the
Plan, the term "Employee" shall not include a Non-Employee Director.

      (k) "Exchange Act" means the Securities Exchange Act of 1934, as amended.

      (l) "Fair Market Value" as of any date means the value of a share of the
Company's common stock determined as follows:

            (1) If the Company's common stock is listed or admitted to trading
      on any established stock exchange or a national market system, including
      the Nasdaq National Market System or The Nasdaq SmallCap Market, its Fair
      Market Value shall be the closing per share sales price for such stock as
      quoted on such exchange or system for the last market trading day prior to
      the date of determination on which a sale of the Company's common stock
      occurred, as reported in The Wall Street Journal or such other source as
      the Committee deems reliable.

            (2) If clause (1) is inapplicable, the Fair Market Value shall be
      what the Committee determines in good faith to be 100% of the fair market
      value of a share of the Company's common stock on that date, using such
      criteria as it shall determine, in its sole discretion, to be appropriate
      for valuation.

      (m) "Fundamental Change" shall mean a dissolution or liquidation of the
Company, a sale of substantially all of the assets of the Company, a merger or
consolidation of the Company with or into any other corporation, regardless of
whether the Company is the surviving corporation, or a statutory share exchange
involving capital stock of the Company.

      (n) "Incentive Option" means any Option designated as such and granted in
accordance with the requirements of Code Section 422 or any successor provision.

      (o) "Non-Employee Director" means a member of the Board who is not an
employee of the Company or any Affiliate.

      (p) "Non-Statutory Option" means an Option other than an Incentive Option.

      (q) "Option" means a right to purchase Shares, including both
Non-Statutory Options and Incentive Options.

      (r) "Participant" means a person to whom an Award is or has been made in
accordance with this Plan.

      (s) "Plan" means this Kona Grill, Inc. 2002 Stock Plan, as may be amended
and in effect from time to time.

      (t) "SAR" means an Award or stock appreciation rights, the value of which
is determined in relation to the appreciation in value of Shares, made pursuant
to Section 8 of this Plan.

                                       2
<PAGE>

      (u) "Securities Act" means the Securities Act of 1933, as amended.

      (v) "Shares" means shares of the Company's common stock.

      (w) "Stock Award" means any one of the types of Awards that may be granted
by the Committee pursuant to Section 9.

      (x) "Transferee" means any member of the Participant's immediate family
(i.e., his or her children, step-children, grandchildren and spouse) or any
trust for the benefit of such family members or any partnership in which such
family members are the only partners.

3. Administration.

      (a) General. This Plan shall be administered by a committee of two or more
Non-Employee Directors (the "Committee"), appointed by the Company's Board of
Directors (the "Board"). If the Board has not appointed such a committee to
administer this Plan, then the Board shall constitute the Committee. The
Committee shall have the power, subject to the limitations contained in this
Plan, to determine when and to whom Awards will be granted, to specify the form
and amount of each Award and the terms and conditions for the grant or exercise
of any Award, to amend the terms and conditions (other than price) of any
outstanding Award, and to determine whether, to what extent and under what
circumstances Awards may be settled, paid or exercised in cash, Shares, other
Awards or other property or canceled, forfeited or suspended. Subject to the
provisions of this Plan, the Committee may from time to time adopt such rules
for the administration of this Plan as it deems appropriate. The decision or
interpretation of the Committee on any matter affecting this Plan or any
Agreement made under this Plan, or the rights and obligations arising under this
Plan or any Award granted hereunder, shall be final, conclusive and binding upon
all persons, including the Company and Participants.

      (b) Action by the Committee. A majority of the members of the Committee
shall constitute a quorum for any meeting of the Committee, and the act of a
majority of the members present at any meeting at which a quorum is present or
the act approved in writing by a majority of all the members of the Committee
shall be the act of the Committee. In the performance of their duties under this
Plan, the Committee members shall be entitled to rely upon information and
advice furnished by the Company's officers, employees, accountants or counsel,
or any executive compensation consultant or other professional retained by the
Company or the Committee to assist in the administration of this Plan, and no
member of the Committee shall be liable for any action taken or not taken in
good faith reliance upon any such information or advice.

      (c) Delegation of Authority. The Committee may delegate all or any part of
its authority under this Plan to one or more officers of the Company for
purposes of granting and administering Awards to persons other than persons who
are then subject to the reporting requirements of Section 16 of the Exchange
Act.

      (d) Awards to Non-Employee Directors. Notwithstanding any other provision
of this Plan, the granting, terms, and conditions of Awards granted to
Non-Employee Directors shall be determined by the Board, and the Board rather
than the Committee shall have discretion as to the granting of such Awards or as
to altering or amending any terms, conditions or eligibility requirements of
such Awards.

      (e) Rule 16b-3. It is the intent that this Plan and all Awards granted
pursuant to it shall be administered by the Committee so as to permit this Plan
and Awards to comply with Rule 16b-3 under the Exchange Act at any time that any
class of equity securities of the Company is registered pursuant to Section 12
of the Exchange Act. If any provision of this Plan or of any Agreement would
otherwise

                                       3
<PAGE>

frustrate or conflict with the intent expressed in this paragraph 3(e), that
provision to the extent possible shall be interpreted and deemed amended in the
manner determined by the Committee so as to avoid the conflict. To the extent of
any remaining irreconcilable conflict with this intent, the provision shall be
deemed void as applicable to Participants who are then subject to the reporting
requirements of Section 16 of the Exchange Act.

      (f) Indemnification. To the full extent permitted by law, (i) no member of
the Committee or any person to whom authority under this Plan is delegated shall
be liable for any action or determination taken or made in good faith with
respect to this Plan or any Award granted hereunder, and (ii) the members of the
Committee and each person to whom authority under this Plan is delegated shall
be entitled to indemnification by the Company against and from any loss or
liability (including reasonable expenses) incurred by such member or person by
reason of any such actions and determinations.

4. Shares Available Under this Plan.

      (a) Number of Shares. Subject to the following paragraphs of this Section
4, the number of Shares available for issuance pursuant to Awards under this
Plan shall not exceed 1,750,000. Shares issued pursuant to Awards may be shares
which have been authorized but unissued, or have previously been issued and
reacquired by the Company, or both.

      (b) Shares Again Available. Except as provided in the last sentence of
this paragraph 4(b), Awards or portions of Awards that are terminated, expired,
exchanged, forfeited or settled without the distribution of Shares, including
Shares that are not used because the terms and conditions of the applicable
Award are not met, shall not count toward the maximum number of Shares that may
be issued under this Plan as provided in Section 4(a), and the Shares that were
subject to such Awards or portions of Awards shall again be available for
further Awards. However, Shares with respect to which an SAR has been exercised,
whether paid in cash and/or in Shares, and shares of Restricted Stock which have
been granted with dividend or voting rights during the Term of the Restricted
Stock will count toward the maximum number of shares specified in Section 4(a)
and may not again be awarded under this Plan.

      (c) Shares Used to Pay Exercise Price. If the exercise price of any Option
is paid by surrendering previously owned Shares to the Company (either by actual
delivery or by attestation), only the number of Shares issued net of the Shares
surrendered shall be deemed issued for purposes of the determining maximum
number of Shares available for issuance under paragraph 4(a).

      (d) Fractional Shares. No fractional shares may be issued under this Plan.
Fractional shares will be rounded to the nearest whole share.

      (e) Adjustments for Changes in Capitalization. In the event of any stock
dividend, stock split, combination of shares, reorganization, merger,
consolidation, recapitalization, liquidation, reclassification, rights offering,
or extraordinary dividend or distribution (including a spin-off), or any other
change in the corporate structure or Shares, the Committee (or if the Company
does not survive any such transaction, the board of directors of the surviving
corporation) may, in order to prevent dilution or enlargement of rights of
Participants and without the consent of any Participant, make such adjustments
as it determines in its discretion to be appropriate as to (i) the number and
kind of securities subject to and available for Awards under this Plan, (ii) the
number and type of securities and amount of cash subject to Awards then
outstanding, and (iii) the exercise price applicable to any outstanding Award.

5. Eligibility. Awards of any kind may granted under this Plan to any Employee
at the discretion of the Committee. Non-Statutory Options also may be granted to
(i) other individuals who are not Employees or Non-Employee Directors but who
provide services to the Company or an Affiliate in the

                                       4
<PAGE>

capacity of an advisor or consultant, and (ii) any individual that the Company
desires to induce to become an Employee, advisor or consultant, but any such
grant shall be contingent upon such individual or entity becoming employed or
retained by the Company or an Affiliate. References in the remainder of this
Plan to "employment" and similar terms (other than "Employee") shall include the
providing of services in the capacity of an advisor or consultant.

6. General Terms of Awards.

      (a) Agreements. Each Award will be evidenced by an Agreement setting forth
the terms, conditions and restrictions, as determined by the Committee, which
will apply to such Award, in addition to the terms and conditions specified in
this Plan. The Committee need not require the signing of an Agreement by a
Participant, in which case acceptance of the Award by the Participant will
constitute agreement by the Participant to the terms, conditions and
restrictions of the Award as set forth in the Agreement and this Plan.

      (b) Term. Each Agreement shall set forth the scheduled term of the Award,
the applicable exercisability or vesting schedule, and any applicable
performance period, as the case may be. The scheduled term of an Incentive
Option shall not exceed ten years from the date of its grant. Acceleration of
the vesting or exercisability schedule of an Award and of the expiration of the
applicable term is permitted upon such terms and conditions as shall be set
forth in the Agreement.

      (c) Transferability. Except as provided in this paragraph, during the
lifetime of a Participant to whom an Award is granted, only that Participant (or
that Participant's legal representative) may exercise an Option or SAR, or
receive payment with respect to any other Stock Award. Except as otherwise
provided in the applicable Agreement, no Award may be assigned, transferred, or
encumbered by a Participant other than by will or the laws of descent and
distribution, or, with regard to Awards other than Incentive Options, pursuant
to a qualified domestic relations order as defined in the Code or Title 1 of the
Employee Retirement Income Security Act or the rules thereunder. The Committee,
in its discretion, may provide in an Agreement that (i) the Award subject to the
Agreement may be transferable to a beneficiary designated on a form provided for
such purpose and filed by the Participant with the Company in the event of a
Participant's death, or (ii) the Award (other than an Incentive Option) may be
transferred to a Transferee so long as the Participant receives no consideration
for the transfer. Any Award held by a Transferee or beneficiary shall continue
to be subject to the same terms and conditions that were applicable to that
Award immediately prior to its transfer. An Award may be exercised by, or paid
to, a Transferee, beneficiary or other successor of a Participant following the
death of the Participant to the extent, and during the period of time, if any,
provided in the applicable Agreement.

      (d) Termination of Employment. Except as otherwise provided by the
Committee in an applicable Agreement, the following provisions shall apply in
case of a termination of employment:

            (1) Options and SARs.

                  (A) Death or Disability. If a Participant's employment
            terminates because of Disability or death, any outstanding Option or
            SAR granted to such Participant shall become exercisable in full and
            may be exercised by the Participant or his or her successor at any
            time until the earlier of (i) one year after the date of such
            termination, or (ii) the expiration of the scheduled term of such
            Award.

                  (B) Cause or Resignation. If a Participant's employment is
            terminated by the Company or any Affiliate for Cause, or by the
            Participant other than due to reasons

                                       5
<PAGE>

            specified in subparagraph (1)(A) above, any outstanding Option or
            SAR granted to such Participant will terminate immediately.

                  (C) Other Reasons. If a Participant's employment terminates
            for any reason other than those specified in subparagraphs (1)(A)
            and (B) above, the portion of any Option or SAR that was unvested
            and unexercisable immediately prior to the termination of employment
            will terminate immediately, but the portion of the Option or SAR
            that was exercisable immediately prior to the termination of
            employment will continue to be exercisable until the earlier of (i)
            three months after the termination of employment, or (ii)) the
            expiration of the scheduled term of such Award.

            (2) Restricted Stock and Stock Units.

                  (A) Death or Disability. If a Participant's employment
            terminates because of death or Disability, a pro rata portion of
            Shares of Restricted Stock (as described in paragraph 10(c)) or of
            Stock Units (as described in paragraph 10(d)) held by such
            Participant will become vested as of the termination of employment,
            based upon that portion of the scheduled term of the Award that had
            expired prior to the termination of employment and, where vesting of
            the Award was also contingent upon the achievement of performance
            objectives, the extent to which such performance objectives were
            achieved.

                  (B) Other Reasons. If a Participant's employment terminates
            for any reason other than those specified in subparagraph (2)(A)
            above, any Shares of Restricted Stock or Stock Units that have not
            yet vested will immediately be forfeited.

For purposes of this paragraph 6(d), a Participant's employment shall be
considered terminated if (i) the Company subsidiary, division or business unit
to which the Participant is assigned or provides services is divested by the
Company and is thereafter no longer an Affiliate or part of the Company or an
Affiliate, and (ii) in connection therewith the Participant is not reassigned to
the Company or any of its continuing Affiliates.

      (e) Tax Withholding. Delivery of Shares pursuant to a Stock Award or upon
exercise of any Non-Statutory option, and payment of any cash in settlement of
any Award, shall be subject to any required withholding taxes. A person
receiving Shares under a Stock Award or exercising a Non-Statutory option may,
as a condition precedent to receiving the Shares, be required to pay the Company
a cash amount equal to the amount of any required withholdings. In lieu of all
or any part of such a cash payment, the Committee may provide in any Agreement
(or provide by Committee action with respect to any Award already outstanding)
that a person exercising an Option or receiving Shares pursuant to a Stock Award
may cover all or any part of the required withholdings, and any additional
withholdings up to the amount needed to cover the individual's full FICA and
federal, state and local income tax liability with respect to income arising
from the exercise of the option or receipt of the Shares, through the delivery
to the Company of unencumbered Shares, through a reduction in the number of such
Shares to be delivered to the person, or through a subsequent return to the
Company of Shares delivered to the person (in each case, such Shares having an
aggregate Fair Market Value on the date of exercise or receipt of the Shares
equal to the amount of the withholding taxes being paid through such delivery,
reduction or subsequent return of Shares).

      (f) Rights as Shareholder. A Participant shall have no rights as a
shareholder with respect to any securities covered by an Award until the date
the Participant becomes the holder of record of the Shares, if any, to which the
Award relates.

                                       6
<PAGE>

7. Options.

      (a) Terms Applicable to All Options.

            (1) Grant of Options. Subject to the terms and conditions of this
      Plan, the Committee may, from time to time during the term of this Plan,
      grant to eligible Employees, consultants and advisors of the Company and
      its Affiliates Options on such terms and conditions as the Committee
      determines. Options granted under this Plan may be either Incentive
      Options or Non-Statutory Options. Only Non-Statutory Options may be
      granted to Participants who are not Employees or who are Non-Employee
      Directors. The date of approval by the Committee of the granting of an
      Option shall be considered the grant date of such Option.

            (2) Exercise Price. The exercise price per share for each Option
      shall be determined by the Committee and set forth in the applicable
      Agreement, but for Incentive Options shall not be less than 100% of the
      Fair Market Value of a Share as of the date the Incentive Option is
      granted (except as provided in Section 15 of this Plan).

            (3) Exercisability. Each option will be exercisable in whole or in
      part on the terms provided in the Agreement. No option will be exercisable
      at any time after the expiration of its scheduled term. When an option is
      no longer exercisable, it shall be deemed to have lapsed or terminated.

            (4) Method of Exercise. Upon satisfaction of the applicable
      conditions relating to exercisability, a person entitled to exercise an
      Option may exercise it during its scheduled term in whole or in part from
      time to time, by providing the Company with a notice of exercise in the
      form and manner that the Committee may prescribe. The exercise price of
      Shares with respect to which an Option is being exercised is payable in
      full at the time of exercise, except that if the exercise arrangement
      described in clause (iv) below is utilized, payment of the exercise price
      may be made as soon as practicable after exercise. The exercise price of
      an Option may be paid by methods permitted by the Committee from time to
      time, including any one or more of the following: (i) cash, (ii)
      tendering, either by actual delivery of shares or by attestation, to the
      Company Shares already owned by the Participant for a period of six months
      and having a Fair Market Value on the date of exercise equal to the
      aggregate exercise price for the Shares as to which the Option is being
      exercised, (iii) authorizing the Company to withhold from the total number
      of Shares as to which the Option is being exercised the number of Shares
      having a Fair Market Value on the date of exercise equal to the aggregate
      exercise price for the total number of Shares as to which the Option is
      being exercised, and (iv) irrevocably authorizing a third party with which
      the Participant has a brokerage or similar relationship to sell the Shares
      (or a sufficient portion of such Shares) acquired upon the exercise of the
      Option and remit to the Company a portion of the sale proceeds sufficient
      to pay the entire exercise price to the Company.

            (5) Termination. Except as otherwise provided in an applicable
      Agreement, each Option shall expire, and all rights to purchase Shares
      thereunder will terminate, on the earliest of:

                  (A) ten years after the date such Option is granted;

                  (B) the expiration of any period after the termination of the
            Participant's employment within which the option is exercisable as
            specified in subparagraph 6(d)(1) or the applicable Agreement; or

                                       7
<PAGE>

                  (C) the date, if any, fixed for cancellation pursuant to
            paragraph 11(b).

            (6) Reload Options. The Committee may provide in an Agreement that a
      Participant who exercises an Option and pays the Option price in whole or
      in part with Shares then owned by the Participant will be entitled to
      receive another Option covering the same number of Shares tendered and
      with an exercise price of no less than the Fair Market Value of a Share on
      the date of grant of such additional Option ("Reload Option"). Unless
      otherwise provided in the Agreement, a Participant, in order to be
      entitled to a Reload Option, must pay with Shares that he or she has owned
      for at least the preceding six months.

      (b) Terms Applicable to Incentive Options. In addition to the terms and
conditions applicable to all Options, the following additional terms and
conditions apply to Incentive Options:

            (1) To the extent that the aggregate Fair Market Value (determined
      as of the date the Option is granted) of Shares with respect to which
      Incentive Options are exercisable for the first time by any Participant
      during any calendar year (under all incentive stock option plans of the
      Company and any parent or subsidiary) exceeds $100,000, such Options shall
      be treated as Non-Statutory Options.

            (2) An Incentive Option shall not be exercisable more than 10 years
      after the date of grant (or such other limit as may be required by the
      Code) if this limitation is necessary to qualify the option as an
      Incentive option.

            (3) No Award of an Incentive Stock Option shall be made more than 10
      years after the effective date of this Plan (or such other limit as may be
      required by the Code) if this limitation is necessary to qualify the
      Option as an Incentive Stock Option.

            (4) The Agreement covering an Incentive Option shall contain such
      other terms and provisions that the Committee determines necessary to
      qualify this Option as an Incentive Option.

            (5) Notwithstanding any other provision of this Plan to the
      contrary, no Participant may receive an Incentive Option under this Plan
      if, at the time the Award is granted, the Participant owns (after
      application of the rules contained in Code Section 424(d), or its
      successor provision), Shares possessing more than ten percent of the total
      combined voting power of all classes of stock of the Company or its
      subsidiaries, unless (i) the exercise price for that Incentive Option is
      at least 110 percent of the Fair Market Value of the Shares subject to
      that Incentive Option on the date of grant and (ii) that Incentive Option
      is not exercisable more than five years after the date that it is granted.

8. Stock Appreciation Rights. An Award of an SAR shall entitle the Participant,
subject to terms and conditions determined by the Committee, to receive upon
exercise of the SAR all or a portion of the excess of (i) the Fair Market Value
of a specified number of Shares as of the date of exercise of the SAR over (ii)
a specified price that shall not be less than the Fair Market Value of the same
number of Shares as of the date of grant of the SAR. An SAR may be granted in
connection with, or completely independent of, an Option or any other Award
under this Plan. If issued in connection with a previously or contemporaneously
granted Option, the Committee may impose a condition that exercise of an SAR
cancels a pro rata portion of the Option with which it is connected and vice
versa. Each SAR may be exercisable in whole or in part on the terms provided in
the applicable Agreement, but no SAR shall be exercisable at any time after the
expiration of its scheduled term. Upon exercise of an SAR, payment shall be made
at such time or times as shall be provided in the Agreement in the form of cash,
Shares or a combination of cash and Shares as provided in the Agreement. The
Agreement may provide for a

                                       8
<PAGE>

limitation upon the amount or percentage of the total appreciation on which
payment (whether in cash or Shares) may be made in the event of the exercise of
an SAR.

9. Stock Awards.

      (a) Form of Awards. The Committee may grant Stock Awards that are payable
in Shares or denominated in units equivalent in value to Shares or are otherwise
based on or related to Shares, including Awards of Restricted Stock, Stock Units
and Performance Units, subject to such terms, conditions and restrictions as the
Committee may determine to be applicable to such Awards in its discretion.

      (b) Stock Payment. Shares may be used as payment for compensation that
otherwise would have been delivered in cash (including compensation that is
intended to qualify as performance-based compensation for purposes of Section
162(m) of the Code), and no minimum vesting period will apply to such shares
unless otherwise determined by the Committee. Any Shares used for such payment
will be valued at their Fair Market Value at the time of such payment, and will
be subject to such terms and conditions as determined by the Committee.

      (c) Restricted Stock. An Award of Restricted Stock shall consist of Shares
subject to restrictions on transfer and conditions of forfeiture. The terms and
conditions of any Restricted Stock Award, including restrictions on transfer,
forfeiture conditions, performance conditions, circumstances under which the
transfer restrictions and forfeiture conditions will lapse and the Restricted
Stock vest, and scheduled term of the Award, will be established by the
Committee and included in the applicable Agreement. The Committee may provide
for the lapse or waiver of any restriction or condition based on such factors or
criteria as the Committee may determine. Until shares subject to a Restricted
Stock Award vest, they shall be evidenced by a certificate deposited with the
Company or its designee, or by a book-entry notation on the records of the
Company's transfer agent. Upon the vesting of such Shares, certificate(s) shall
be issued to the Participant. No Award of Restricted Stock may vest earlier than
one year from the date of grant, unless otherwise provided in the applicable
Agreement. Unless otherwise provided in the applicable Agreement, a Participant
with a Restricted Stock Award shall have all the other rights of a shareholder
of the Company, including the right to receive dividends and the right to vote
the Shares of Restricted Stock.

      (d) Stock Units. An Award of Stock Units shall be denominated in Shares
and shall provide a Participant with the right to receive Shares (or, to the
extent specified by the Committee in the applicable Agreement, the cash value of
such shares) in the future, after the satisfaction of specified vesting
conditions. The terms and conditions of any Stock Unit Award will be established
by the Committee and included in the applicable Agreement, and such terms may
include the payment by the Company of dividend equivalents on such Stock Units
equal to the dividends that would have been payable on the corresponding number
of Shares.

      (e) Performance Units. An Award of Performance Units shall entitle the
Participant to future payments of cash, Shares or a combination of cash and such
shares, as provided in the Agreement, based upon the achievement of
pre-established performance targets. These performance targets may include
targets selected by the Committee and consisting of one or any combination of
earnings or earnings per share before income tax (profit before taxes); earnings
before interest, taxes, depreciation and amortization; net earnings or net
earnings per share (profit after taxes); inventory, total or net operating asset
turnover; accounts receivable (measured in terms of days sales outstanding);
operating expenses, operating profit; total shareholder return; return on
equity; pre-tax and pre-interest expense return on average invested capital,
which may be expressed on a current value basis; profit before taxes or profit
after taxes less the Company's cost of capital; or sales growth. Any such
targets may relate to one or any

                                       9
<PAGE>

combination of two or more of the Company's or a group's, unit's, division's,
Affiliate's or an individual's performance. The Agreement may establish that a
portion of the total potential of a Participant's Award will be paid for
performance that exceeds the minimum target but falls below the maximum target
applicable to the Award. Following the conclusion of each performance period,
the Committee shall determine the extent to which (i) performance targets have
been attained, (ii) any other terms and conditions with respect to an Award
relating to the performance period have been satisfied and (iii) payment is due
with respect to an Award of Performance Units. The Agreement may permit an
acceleration of the performance period and an adjustment of performance targets
and payments with respect to some or ail of the Performance Units awarded to a
Participant, upon such terms and conditions as shall be set forth in the
Agreement, upon the occurrence of events such as those discussed in paragraph
4(e).

10. Limitations on Transfer of Shares. The Committee may provide in any
Agreement that, during any time prior to the consummation of an underwritten
public offering and sale by the Company of Shares to the public pursuant to an
effective registration statement under the Securities Act (other than an
offering made in connection with a business acquisition or combination pursuant
to a registration statement on Form S-4 or any similar form, or an employee
benefit plan pursuant to a registration statement on Form S-8 or any similar
form):

      (a) Termination Repurchase Right. If a Participant ceases to be employed
by the Company and its Affiliates for any reason, then such Participant's Shares
issued pursuant to Awards, whether issued prior to or following termination of
employment ("Award Shares"), will be subject to repurchase by the Company, in
the Company's sole discretion, pursuant to the terms and conditions set forth in
this Plan and the applicable Agreement. The purchase price will be equal to the
Fair Market Value of such Award Shares as of the date that the Company delivers
a repurchase notice to a Participant.

      (b) Right of First Refusal. If a Participant receives a bona fide offer to
purchase any Award Shares, and the Participant wishes to accept such offer, then
the Participant must first offer such Award Shares for sale to the Company at
the same price and upon the same terms (or terms as similar as reasonably
possible) as those offered to the Participant, and pursuant to the procedures
and terms set forth in the applicable Agreement. If the Company elects not to
exercise its right of first refusal, any transferee must agree in writing to
also be subject to the Company's right of first refusal as set forth in the
applicable Agreement.

      (c) Restrictions on Transfer. No Participant may sell, pledge, transfer or
otherwise dispose of any interest in any Award Shares except, subject to any
additional limitations contained in the Company's Articles of Incorporation or
Bylaws, (i) to the Company, (ii) in a public offering registered under the
Securities Act, (iii) pursuant to Participant's will or beneficiary designation
or applicable laws of descent and distribution, (iv) to a Transferee, or (v) in
a transaction that is exempt from registration under the Securities Act and any
applicable state securities laws. The restrictions contained in this paragraph
10(c) will continue to be applicable to Award Shares after any transfer of the
type referred to in clauses (iii), (iv) or (v) above and, as a condition to any
such transfer, each transferee of such Award Shares must agree in writing to be
bound by such restrictions. A transfer will be permitted pursuant to clause (v)
above only if the transferor of the Award Shares has first complied with
paragraphs 10(a) and (b), as applicable, and delivers to the Company an opinion
of counsel reasonably acceptable in form and substance to the Company that
registration under the Securities Act is not required in connection with such
transfer.

11. Fundamental Change. In the event of a proposed Fundamental Change, the
Committee may, but shall not be obligated to do any of the following.

                                       10
<PAGE>

      (a) Replacement of Options or SARs. If the Fundamental Change is a merger
or consolidation or statutory share exchange, the Committee may make appropriate
provision for the protection of the outstanding Options and SARs by the
substitution of options, stock appreciation rights and appropriate voting common
stock of the corporation surviving any merger or consolidation or, if
appropriate, the parent corporation of the Company or such surviving
corporation, in lieu of Options, SARs and capital stock of the Company.

      (b) Cancellation of Options or SARs. At least 30 days prior to the
occurrence of the Fundamental Change, declare, and provide written notice to
each holder of an Option or SAR of the declaration, that each outstanding option
and SAR, whether or not then exercisable, shall be canceled at the time of, or
immediately prior to the occurrence of the Fundamental Change in exchange for
payment to each holder of an option or SAR, within ten days after the
Fundamental Change, of cash equal to the product of (i) the amount, if any, by
which the Event Proceeds per Share (as defined below) exceeds, in the case of an
option, the exercise price per share of such Option or, in the case of an SAR,
the specified price per share as of the date of grant, and (ii) the number of
Shares subject to such Option or SAR. At the time of such a declaration, each
SAR and each Option shall immediately become exercisable in full and each person
holding an Option or a SAR shall have the right, during the period preceding the
time of cancellation of the Option or SAR, to exercise the Option as to all or
any part of the Shares covered thereby or the SAR in whole or in part, as the
case may be. If such a declaration occurs, each outstanding Option and SAR that
has not been exercised prior to the Fundamental Change shall be canceled at the
time of, or immediately prior to, the Fundamental Change. No person holding an
Option or a SAR shall be entitled to any payment under this Section 11(b) if the
scheduled term of such Option or SAR expires before the Fundamental Change. For
purposes of this paragraph 11(b), "Event Proceeds per Share" shall mean the cash
plus the fair market value, as determined in good faith by the Committee, of the
non-cash consideration to be received for each Share by the shareholders of the
Company upon the occurrence of the Fundamental Change.

12. Forfeitures. The Committee may provide in any Agreement that:

      (a) Termination. If a Participant has received cash, Shares, or a
combination thereof pursuant to an Award within six months prior to the
termination of Participant's employment by the Company or any Affiliate for
Cause, or by the Participant for any reason other than death or Disability, the
Committee may require the Participant to return to the Company the cash and
Shares received, or in lieu of such Shares, the economic value thereof. If the
Shares were received upon the exercise of an Option, upon the return of the
Shares the Company will pay the Participant an amount per Share equal to the
exercise price paid by the Participant to acquire such Shares. For purposes of
this paragraph, the "economic value thereof" means the number of Shares received
multiplied by the difference between (i) the Fair Market Value of a Share on the
date received by the Participant and (ii) the exercise price per Share, if any,
paid by the Participant to acquire the Shares.

      (b) Proscribed Conduct. If a Participant engages in certain proscribed
conduct during the term of any Award or within one year after the Participant's
termination of employment, whichever is later, the Award will immediately
terminate on the date the Participant enters into such conduct, and the Company
will have the same rights to the return of cash and Shares (or the economic
value thereof) as are specified in paragraph 12(a) with respect to cash and/or
Shares that are or were received by the Participant pursuant to an Award after
the date one year prior to the date the Participant first engaged in such
conduct. The proscribed conduct may include competition with the Company or any
Affiliate, unauthorized disclosure of material proprietary information of the
Company or any Affiliate, a violation of applicable business ethics policies of
the Company or any Affiliate or any other conduct specified in the Agreement.

                                       11
<PAGE>

      (c) Setoff. The Company may deduct from any amounts the Company may owe a
Participant from time to time (including amounts owed as wages or other
compensation, fringe benefits, or vacation pay) any amounts the Participant may
owe the Company under paragraphs 12(a) and (b).

13. Effective Date and Duration of this Plan. This Plan shall be effective as of
November 13, 2002. This Plan will remain in effect until all Shares subject to
it are distributed, or until all Awards have expired or lapsed, or until this
Plan is terminated pursuant to Section 14. Awards made prior to the termination
of this Plan may be exercised, vested or otherwise effectuated beyond such
termination unless limited in an Agreement or otherwise.

14. Amendment, Modification and Termination of this Plan. The Board may at any
time terminate, suspend or amend this Plan. The Committee may at any time amend
any or all Agreements under this Plan to the extent permitted by law. No
termination, suspension, or amendment of this Plan or amendment of any Agreement
may materially and adversely affect any right acquired by any Participant under
an Award granted before the date of such termination, suspension, or amendment,
unless consented to by the Participant or required as a matter of law. No
amendment to this Plan shall require shareholder approval unless such approval
is required under applicable law.

15. Substitute Awards. The Committee may also grant Options, SARs, or other
Stock Awards under this Plan having terms, conditions and provisions that vary
from those specified in this Plan if any such Awards are granted in substitution
for, or in connection with the assumption of, existing options, stock
appreciation rights, or other awards granted, awarded or issued by another
corporation and assumed or otherwise agreed to be provided for by the Company
pursuant to or by reason of a transaction involving a corporate merger,
consolidation, acquisition of property or stock, separation, reorganization or
liquidation to which the Company or a Subsidiary is a party.

16. General Provisions.

      (a) Plan Does Not Affect Employment Status. No person shall have any claim
or right to be granted an Award, and neither the grant of an Award nor anything
contained in this Plan or an Agreement shall confer upon any Participant any
right to continue in the employment of the Company or any Affiliate, or to
participate in any other compensation or benefit plan or program, or limit in
any way the right of the Company or any Affiliate to terminate such
Participant's employment at any time.

      (b) Unfunded Plan. This Plan will be unfunded and the Company will not be
required to segregate any assets that may at any time be represented by Awards
under this Plan. Neither the Company, its Affiliates, the Committee, nor the
Board shall be deemed to be a trustee of any amounts to be paid under this Plan
nor shall anything contained in this Plan or any action taken pursuant to its
provisions create or be construed to create a fiduciary relationship between the
Company or its Affiliates, and a Participant or his or her successor or
Transferee.

      (c) Limits of Liability. Any liability of the Company to any Participant
with respect to an Award shall be based solely upon contractual obligations
created by this Plan and the Agreement.

      (d) Compliance with Applicable Legal Requirements. No Shares distributable
pursuant to this Plan shall be issued unless the issuance complies with all
applicable legal requirements including, without limitation, compliance with the
provisions of applicable state securities laws, the Securities Act, the Exchange
Act and the requirements of the exchanges on which the Company's Shares may, at
the time, be listed. This Plan is a compensatory benefit plan within the meaning
of Rule 701 under the Securities Act and, unless and until Shares are publicly
traded, the issuance of Shares pursuant to this Plan is intended to qualify for
the exemption from registration under the Securities Act provided by Rule 701,
except to the

                                       12
<PAGE>

extent that the Company relies upon Regulation D under the Securities Act for
sales to "accredited investors" (as defined in Rule 501(a) of Regulation D).

      (e) Deferrals and Settlements. The Committee may require or permit
Participants to elect to defer the issuance of Shares or the settlement of
Awards in cash under such rules and procedures as it may establish under this
Plan. it may also provide that deferred settlements include the payment or
crediting of interest on the deferral amounts.

      (f) Other Benefit and Compensation Programs. Payments and other benefits
received by a Participant under an Award made pursuant to this Plan shall not be
deemed a part of a Participant's regular, recurring compensation for purposes of
any termination, indemnity or severance pay laws and shall not be included in,
nor have any effect on, the determination of benefits under any other employee
benefit plan, contract or similar arrangement provided by the Company or an
Affiliate unless expressly so provided by such other plan, contract or
arrangement, or unless the Committee determines that an Award or portion of an
Award should be included to accurately reflect competitive compensation
practices or to recognize that an Award has been made in lieu of a portion of
competitive cash compensation.

      (g) Requirements of Law.

            (1) To the extent that federal laws do not otherwise control, this
      Plan and all determinations made and actions taken pursuant to this Plan
      shall be governed by the laws of Delaware without regard to its conflicts
      of law principles and construed accordingly.

            (2) In the event any provision of this Plan shall be held illegal or
      invalid for any reason, the illegality or invalidity shall not effect the
      remaining parts of this Plan, and this Plan shall be construed and
      enforced as if the illegal or invalid provision had not been included.

                                       13

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