Document:

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                                                                     EXHIBIT 4.1

        [SEAL]                [LOGO OF MEDIACOM]                [SEAL]

                      MEDIACOM COMMUNICATIONS CORPORATION
CLASS A                  INCORPORATED UNDER THE LAWS          SEE REVERSE FOR
COMMON STOCK              OF THE STATE OF DELAWARE          CERTAIN DEFINITIONS
                                                             CUSIP 58446K 10 5

THIS CERTIFIES THAT

is the owner of

        FULLY PAID AND NON-ASSESSABLE SHARES OF CLASS A COMMON STOCK,
                              PAR VALUE $.01 PER SHARE, OF
======================MEDIACOM COMMUNICATIONS CORPORATION=======================
(hereinafter, referred to as the "Corporation"), transferable on the books of
the Corporation by the holder hereof in person or by duly authorized Attorney
upon surrender of this Certificate properly endorsed. This Certificate and the
shares represented hereby are issued and shall be held subject to all provisions
of the Certificate of Incorporation and By-Laws of the Corporation and any
amendments thereto, to all of which the holder of this Certificate by acceptance
hereof assents.
        This certificate is not valid until countersigned and registered by the
Transfer Agent and Registrar.
        WITNESS the facsimile seal of the Corporation and the facsimile
signatures of its duly authorized officers.

        Dated:

            /s/                     [SEAL]      /s/
                SECRETARY                       CHAIRMAN and EXECUTIVE OFFICER

COUNTERSIGNED AND REGISTERED:
        ChaseMellon Shareholder Services, L.L.C.
                TRANSFER AGENT AND REGISTRAR,

BY
      AUTHORIZED SIGNATURE
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                      MEDIACOM COMMUNICATIONS CORPORATION

        The Corporation will furnish without charge to each stockholder who so
requests, the powers, designations, preferences and relative, participating,
optional or  other special rights of each class of stock or series thereof of
the Corporation and the qualifications, limitations, or restrictions of such
preferences and/or rights. Such request may be made to the Corporation or the
Transfer Agent.

        The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.

TEN COM -- as tenants in common
TEN ENT -- as tenants by the entireties
JT TEN  -- as joint tenants with right of
           survivorship and not as tenants
           in common

UNIF GIFT MIN ACT --  ________ Custodian _________
                       (Cust)             (Minor)

                      under Uniform Gifts to Minors
                      Act __________________
                               (State)

   Additional abbreviations may also be used though not in the above list.

For value received, _____________________________________________ hereby sells,
assigns and transfers unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE

__________________________

__________________________

________________________________________________________________________________
  (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)

________________________________________________________________________________

________________________________________________________________________________

_________________________________________________________________________ shares
of the Class A Common Stock represented by the within Certificate, and does
hereby irrevocably constitute and appoint

_____________________________________________________________________ Attorney
to transfer the said stock on the books of the within-named Corporation with
full power of substitution in the premises.

Dated___________________

                                ______________________________________________
                                NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST
                                CORRESPOND WITH THE NAME AS WRITTEN UPON THE
                                FACE OF THIS CERTIFICATE IN EVERY PARTICULAR,
                                WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE
                                WHATEVER.

Signature(s) Guaranteed:

______________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED
BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN
ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM), PURSUANT TO
S.E.C. RULE 17Ad-15.<PAGE>

                                                                    Exhibit 10.7

                      MEDIACOM COMMUNICATIONS CORPORATION
                             1999 STOCK OPTION PLAN
                             ----------------------

1.   Purpose of the Plan.

     The purpose of the Mediacom Communications Corporation 1999 Stock Option
Plan (the "Plan") is to promote the interests of Mediacom Communications
Corporation, a Delaware corporation (the "Company"), and its stockholders by
strengthening the Company's ability to attract and retain competent employees,
to make service on the Board of Directors of the Company (the "Board") more
attractive to present and prospective non-employee directors of the Company and
to provide a means to encourage stock ownership and proprietary interest in the
Company by officers, non-employee directors and valued employees and other
individuals upon whose judgment, initiative and efforts the financial success
and growth of the Company largely depend.

2.   Options Granted under the Plan.

     (a)  The Company is authorized under this Plan to grant (i) incentive stock
options ("qualified incentive options") that are intended to satisfy the
requirements of Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code"), (ii) non-qualified stock options ("non-qualified options") that
are not intended to satisfy the requirements of Section 422 of the Code and
(iii) stock appreciation rights ("SARs"), in each case, with respect to shares
of the Company's Class A and/or Class B common stock, $0.01 par value per share
("Common Stock")

     (b) Options granted pursuant to the Plan shall be authorized by action of
the Board (or a committee designated by the Board) and may be designated as
either qualified incentive stock options that are intended to satisfy the
requirements of Section 422 of the Code, or non-qualified options that are not
intended to satisfy the requirements of Section 422 of the Code.  Such
designation shall be in the sole discretion of the Board.  Options designated as
qualified incentive stock options that fail to satisfy, or fail to continue to
satisfy, the requirements of Section 422 of the Code by reason of the transfer,
exercise or failure to exercise such options or as otherwise provided in Section
422 of the Code shall be redesignated as non-qualified options automatically on
the date of such failure without further action by the Board.

3.   Stock Subject to the Plan.

     (a)  The total number of shares (the "Total Authorized Plan Shares") of the
authorized but unissued or treasury shares of Common Stock for which the Company
is authorized under this Plan to grant qualified incentive stock options, non-
qualified options and SARs shall be equal, in the aggregate, to the greater of
                                                                    ----------
(x) seven million (7,000,000) shares of Common Stock or, (y) in the event of an
initial public offering of Common Stock of the Company during the term of this
Plan, an amount of shares of Common Stock determined as follows:
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          (A) 300,000; plus
                       ----

          (B) an amount equal to (i) the total number of shares of Common Stock
     outstanding upon the completion of the Company's initial public offering,
     including any shares issued by the Company pursuant to the underwriters'
     over-allotment option (collectively, the "Outstanding Shares"), divided by
     0.85, reduced by (ii) the total number of Outstanding Shares; minus
           ----------                                              -----

          (C) an amount equal to (i) 7.2% of (ii) the total number of
     Outstanding Shares divided by 0.9; and

          (D) which aggregate number of shares of Common Stock derived from
     clauses (A), (B) and (C) above shall be rounded to the next highest 100,000
     shares to arrive at the Total Authorized Plan Shares.

     (b)  Notwithstanding the number of Total Authorized Plan Shares determined
as set forth in clauses (A) - (D) of subsection (a)(y) above, the total number
of shares of Common Stock for which the Company is authorized under this Plan to
grant qualified incentive stock options shall not exceed seven million
(7,000,000) shares of Common Stock (the "Total Authorized QSO Shares"), and the
amount, if any, of the Total Authorized Plan Shares in excess of the Total
Authorized ISO Shares may only be applied in respect of non-qualified options
and SARs.

     (c)  The number of Total Authorized Plan Shares and Total Authorized ISO
Shares, as the case may be, shall be subject to adjustment as provided in
Section 14 hereof and may be shares of any class of Common Stock as determined
by the Board; provided, however, that, in either case, such number of shares may
from time to time be reduced by the Board to the extent that a corresponding
number of issued and outstanding shares of Common Stock are purchased by the
Company and set aside for issue upon the exercise of options hereunder.

     (d)  If an option granted or assumed hereunder shall expire, terminate or
be cancelled  for any reason without having been exercised in full, the
unpurchased shares subject thereto shall again be available for subsequent
option grants under the Plan; provided, however, that shares as to which an
option has been surrendered in connection with the exercise of a related SAR
will not again be available for subsequent option or SAR grants under the Plan.

     (e)  Stock issuable upon exercise of an option or SAR granted under the
Plan may be subject to such restrictions on transfer, repurchase rights or other
restrictions as shall be determined by the Board.

4.   Administration of the Plan.

     The Plan shall be administered by the Board. No member of the Board shall
act upon any matter exclusively affecting an option or SAR granted or to be
granted to himself or herself under the Plan. A majority of the members of the
Board shall constitute a quorum, and any action may be taken by a majority of
those present and voting at any meeting. The decision of the Board as to all
questions of interpretation and application of the Plan shall be final, binding
and conclusive on all

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persons. The Board may, in its sole discretion, grant options to purchase shares
of Common Stock, grant SARs and issue shares upon exercise of such options and
SARs, as provided in the Plan. The Board shall have authority, subject to the
express provisions of the Plan, to construe the respective option and SAR
agreements and the Plan, to prescribe, amend and rescind rules and regulations
relating to the Plan, to determine the terms and provisions of the respective
option and SAR agreements, which may but need not be identical, and to make all
other determinations in the judgment of the Board necessary or desirable for the
administration of the Plan. The Board may correct any defect or supply any
omission or reconcile any inconsistency in the Plan or in any option or SAR
agreement in the manner and to the extent it shall deem expedient to carry the
Plan into effect and shall be the sole and final judge of such expediency. No
director shall be liable for any action or determination made in good faith. The
Board may, in its discretion, delegate its power, duties and responsibilities to
a committee, consisting of two or more members of the Board, all of whom are
"Non-Employee Directors" (as hereinafter defined). If a committee is so
appointed, all references to the Board herein shall mean and relate to such
committee, unless the context otherwise requires. For the purposes of the Plan,
a director or member of such committee shall be deemed to be a "Non-Employee
Director" only if such person qualifies as a "Non-Employee Director" within the
meaning of paragraph (b)(3)(i) of Rule 16b-3 promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as such term is
interpreted from time to time.

5.   Eligibility.

     (a)  Options designated as qualified incentive stock options may be granted
only to officers and key employees of the Company or of any subsidiary (herein
called "subsidiary" or "subsidiaries"), as defined in Section 424 of the Code
and the Treasury Regulations promulgated thereunder (the "Regulations").
Directors who are not otherwise employees of the Company or a subsidiary shall
not be eligible to be granted qualified incentive stock options pursuant to the
Plan. SARs and options designated as non-qualified options may be granted to (i)
officers and key employees of the Company or of any of its subsidiaries, or (ii)
agents and directors of and consultants to the Company, whether or not otherwise
employees of the Company.

     (b)  In determining the eligibility of an individual to be granted an
option or SAR, and in determining the number of shares to be optioned to any
individual, the Board shall take into account the recommendation of the
Company's Chairman of the Board, the position and responsibilities of the
individual being considered, the length of such individual's employment with or
services to the Company or the subsidiaries, the nature and value to the Company
or its subsidiaries of his or her service and accomplishments, his or her
present and potential contribution to the success of the Company or its
subsidiaries, and such other factors as the Board may deem relevant.

6.   Restrictions on Qualified Incentive Stock Options.

     Qualified incentive stock options (but not non-qualified options) granted
under this Plan shall be subject to the following restrictions:

     (a)  Limitation on Number of Shares.  The aggregate fair market value of
the shares of Common Stock with respect to which qualified incentive stock
options are granted, determined as of the date the qualified incentive stock
options are granted, exercisable for the first time by an

                                      -3-
<PAGE>

individual during any calendar year shall not exceed $100,000. If a qualified
incentive stock option is granted pursuant to which the aggregate fair market
value of shares with respect to which it first becomes exercisable in any
calendar year by an individual exceeds such $100,000 limitation, the portion of
such option which is in excess of the $100,000 limitation, and any such options
issued subsequently which first becomes exercisable in the same such calendar
year, shall be treated as a non-qualified option pursuant to section 422(d)(1)
of the Code. In the event that an individual is eligible to participate in any
other stock option plan of the Company or any parent or subsidiary of the
Company which is also intended to comply with the provisions of Section 422 of
the Code, such $100,000 limitation shall apply to the aggregate number of shares
for which qualified incentive stock options may be granted under this Plan and
all such other plans.

     (b)  Ten Percent (10%) Stockholder.  If any employee to whom a qualified
incentive stock option is granted pursuant to the provisions of this Plan is on
the date of grant the owner of stock (as determined under Section 424(d) of the
Code) possessing more than 10% of the total combined voting power of all classes
of stock of the Company or any parent or subsidiary of the Company, then the
following special provisions shall be applicable to the qualified incentive
stock options granted to such individual:

          (i)  The option price per share subject to such qualified incentive
     stock options shall not be less than 110% of the fair market value of the
     stock determined at the time such option was granted. In determining the
     fair market value under this clause (i), the provisions of Section 8 hereof
     shall apply.

          (ii)  The qualified incentive stock option shall have a term expiring
     not more than five (5) years from the date of the granting thereof.

7.   Option Agreement.

     Each option and SAR shall be evidenced by a written agreement (the
"Agreement") duly executed on behalf of the Company and by the grantee to whom
such option or SAR is granted, which Agreement shall comply with and be subject
to the terms and conditions of the Plan. The Agreement may contain such other
terms, provisions and conditions which are not inconsistent with the Plan as may
be determined by the Board, provided that options designated as qualified
incentive stock options shall meet all of the conditions for qualified incentive
stock options as defined in Section 422 of the Code. No option or SAR shall be
granted within the meaning of the Plan and no purported grant of any option or
SAR shall be effective until the Agreement shall have been duly executed on
behalf of the Company and the optionee. More than one option and SAR may be
granted to an individual.

8.   Option Price.

     (a)  The option price or prices of shares of Common Stock for options
designated as non-qualified stock options shall be as determined by the Board.

     (b)  Subject to the conditions set forth in Section 6(b) hereof, the option
price or prices of shares of Common Stock for options designated as qualified
incentive stock options shall be at least

                                      -4-
<PAGE>

the fair market value of such Common Stock at the time the option is granted as
determined by the Board in accordance with subsection (c) below.

     (c)  The fair market value of Common Stock shall be determined as follows:

          (i)  If the Common Stock is listed on any established stock exchange
     or a national market system, including without limitation the Nasdaq
     National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market,
     its fair market value shall be the closing sales price for such stock (or
     the closing bid, if no sales were reported) as quoted on such exchange or
     system for the last market trading day on the date of such determination,
     as reported in The Wall Street Journal or such other source as the Board
     deems reliable;

          (ii)  If the Common Stock is regularly quoted by a recognized
     securities dealer but selling prices are not reported, its fair market
     value shall be the mean of the closing bid and asked prices for the Common
     Stock on the date of such determination, as reported in The Wall Street
     Journal or such other source as the Board deems reliable;

          (iii)  In the absence of an established market for the Common Stock,
     the fair market value thereof shall be determined in good faith by the
     Board; or

          (iv)  For purposes of determining the fair market value of Common
     Stock in connection with the grant of a qualified incentive stock option at
     the time of the initial public offering of the Company's Common Stock, the
     fair market value shall be the initial price to the public as set forth in
     the final prospectus included within the registration statement in Form S-1
     filed with the Securities and Exchange Commission for such initial public
     offering.

9.   Manner of Payment; Manner of Exercise.

     (a)  Options granted under the Plan may provide for the payment of the
exercise price by delivery of (i) cash or a check payable to the order of the
Company in an amount equal to the exercise price of such options, (ii) shares of
Common Stock owned by the optionee having a fair market value equal in amount to
the exercise price of such options, or (iii) any combination of (i) and (ii);
provided, however, that payment of the exercise price by delivery of shares of
Common Stock owned by such optionee may be made only upon the condition that
such payment does not result in a charge to earnings for financial accounting
purposes as determined by the Board, unless such condition is waived by the
Board. The fair market value of any shares of Common Stock which may be
delivered upon exercise of an option shall be determined by the Board in
accordance with Section 8 hereof.

     (b)  To the extent that the right to purchase shares under an option has
accrued and is in effect, options may be exercised in full at one time or in
part from time to time, by giving written notice, signed by the person or
persons exercising the option, to the Company, stating the number of shares with
respect to which the option is being exercised, accompanied by payment in full
for such shares as provided in subparagraph (a) above. Upon such exercise,
delivery of a certificate for paid-up non-assessable shares shall be made at the
principal office of the Company to the person or persons exercising the option
at such time, or as shall be designated in such notice, during ordinary

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business hours, after three (3) days but not more than ninety (90) days from the
date of receipt of the notice by the Company, or at such time, place and manner
as may be agreed upon by the Company and the person or persons exercising the
option.

10.  Exercise of Options and SARs.

     Each option and SAR granted under the Plan shall, subject to Section 11 and
Section 13 hereof, be exercisable at such time or times and during such period
as shall be set forth in the Agreement; provided, however, that no option or SAR
granted under the Plan shall have a term in excess of ten (10) years from the
date of grant.  To the extent that an option or SAR is not exercised when it
becomes initially exercisable, such option or SAR shall not expire but shall be
carried forward and shall be exercisable, on a cumulative basis, until the
expiration of the exercise period provided in the Agreement unless and until
such option or SAR sooner terminates or is cancelled pursuant to Section 11 or
Section 13 hereof.  No partial exercise may be made for less than twenty
(20) full shares of Common Stock.  The exercise of an option shall result in
the cancellation of the SAR to which it relates with respect to the same number
of shares of Common Stock as to which the option was exercised.

11.  Term, Expiration, Exercisability and Rescission of Options and SARs.

     (a) Term and Expiration.

          (i)  Except as otherwise expressly provided by Section 6(b) of this
     Plan, each option and SAR granted under the Plan shall expire ten (10)
     years from the date of the granting thereof unless sooner terminated or
     cancelled as provided in this Section 11 or in the Agreement.

          (ii)  The term of any option or SAR granted to any grantee who ceases
     for any reason to perform services for the Company or one of its
     subsidiaries shall automatically expire, terminate and be cancelled to the
     extent such option is not then vested, accrued or otherwise exercisable
     under the Agreement and this Plan on the earlier of (A) the date such
     grantee ceases to perform services for the Company or one of its
     subsidiaries or (B) the date on which the option or SAR expires by its
     terms; provided, however, that the Chairman of the Board, in his sole
     discretion, may at any time (x) permit the option or SAR to continue in
     effect in accordance with the terms of the Agreement and this Plan after
     the grantee ceases to perform services for the Company or a subsidiary
     and/or (y) accelerate the vesting and exercisability of such option or SAR
     with respect to shares that are not vested or otherwise exercisable under
     the provision of the Agreement or this Plan at the time the grantee ceases
     to perform such services.

     (b)  Limitations on Exercise.

          (i)  Except as provided in the Agreement or under this Plan, in the
     event a grantee of an option or SAR ceases for any reason to perform
     services for the Company or one of its subsidiaries, any option or SAR
     granted to such grantee that is vested, accrued and otherwise exercisable
     and in effect under this Plan on the date such grantee ceases to perform
     such services shall automatically terminate and be cancelled unless such
     option or SAR, as the

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<PAGE>

     case may be, is exercised in accordance with the Agreement and this Plan
     within 90 days after the grantee ceases to perform such services; provided,
     however, that the Chairman of the Board, in his sole discretion, may at any
     time extend the period within which such option or SAR may be exercised
     beyond such 90 day period, subject to earlier cancellation pursuant to
     clause (ii) of this subsection 11(b) and/or rescission pursuant to
     subsection 11(c) hereof.

          (ii)  Notwithstanding any provisions of the Agreement or under this
     Plan, in the event the Company or a subsidiary terminates the employment of
     any grantee of an option or SAR on the grounds that such grantee engaged in
     any of the following activities ("Wrongful Activities"), or if at any time
     it is determined by the Board that the grantee engaged in any Wrongful
     Activity either during or after his or her employment with the Company or a
     subsidiary, then, in either of such events, any and all options or SARs
     granted to such grantee hereunder shall automatically terminate and be
     cancelled upon such termination of employment or determination by the
     Board, as the case may be, regardless of the extent to which such options
     and/or SARs are or were otherwise vested, accrued and exercisable:

               (A)  the commission by the grantee of a criminal act punishable
          as a felony with respect to his or her employment with the Company or
          any subsidiary; or

               (B)  the unlawful taking or use by the grantee of any asset or
          property of the Company or of any subsidiary; or

               (C)  the breach by the grantee of the terms of the Agreement or
          of any other written agreement between the employee and the Company or
          a subsidiary (which for these purpose shall include any predecessor
          entity or equity owner of such entity) insofar as such terms prohibit
          or otherwise restrict the grantee from (x) using or disclosing any
          confidential information of the Company or any subsidiary, (y)
          competing with, or rendering services to any competitor of, the
          Company or any subsidiary or (iii) making or publishing any statement
          (oral or written) that is negative or derogatory in any way to the
          Company, any subsidiary or any of their respective executive officers.

     (c)  Rescission.  Upon the exercise of any option or SAR at any time during
or after the grantee's employment with the Company or a subsidiary, the grantee
shall certify on a form acceptable to the Board that the grantee is in
compliance with all of the terms and conditions of the Agreement and Plan and
has not engaged in any Wrongful Activities.  If at any time following the
exercise of any option or SAR the Board determines that the grantee engaged in
any Wrongful Activities at any time either prior to or within one year after
such exercise, the exercise of such option or SAR, and any payment and delivery
in connection therewith, shall be cancelled and rescinded.  The Company shall
notify the grantee in writing of any such rescission within two years after such
exercise.  Within ten days after delivery of such notice to the grantee, the
grantee shall pay to the Company the amount of any gain realized or payment
received as a result of the rescinded exercise, payment or delivery.  Such
payment shall be made, in the discretion of the Board, either in cash or by
returning to the Company the number of shares of common Stock received by the
grantee in connection with the rescinded exercise, payment or delivery.  The
remedies contained in this Section 11 with respect to the rescission and/or
cancellation of any option or SAR granted to any

                                      -7-
<PAGE>

grantee who engages in any Wrongful Activity shall be in addition to, and shall
not be construed as a limitation of, any and all other remedies available to the
Company against such grantee by reason of such Wrongful Activity.

12.  Options Not Transferable.

     The right of any grantee to exercise any option or SAR granted to him or
her shall not be assignable or transferable by such grantee other than by will
or the laws of descent, and any such option or SAR shall be exercisable during
the lifetime of such grantee only by him; provided, that the Board may permit a
grantee, by expressly so providing in the related Agreement, to assign or
transfer, without consideration (and only without consideration), the right to
exercise any option or SAR granted to him or her to such grantee's children,
grandchildren or spouse, to trusts for the benefit of such family members and to
partnerships in which such family members are the only partners.  Any option or
SAR granted under this Plan shall be null and void and without effect upon the
bankruptcy of the grantee to whom the option is granted, or upon any attempted
assignment or transfer except as herein provided, including without limitation,
any purported assignment, whether voluntary or by operation of law, pledge,
hypothecation or other disposition, attachment, trustee process or similar
process, whether legal or equitable, upon such option or SAR.

13.  Terms and Conditions of SARs.

     (a)  An SAR may be granted separately or in connection with an option
(either at the time of grant or at any time during the term of the option).

     (b)  The exercise of an SAR granted in connection with an option shall
result in the cancellation of the option to which it relates with respect to the
same number of shares of Common Stock as to which the SAR was exercised.

     (c)  An SAR granted in connection with an option shall be exercisable or
transferable only to the extent that such related option is exercisable or
transferable.

     (d)  Upon the exercise of an SAR related to an option, the holder will be
entitled to receive payment of an amount determined by multiplying:

          (i)  the difference obtained by subtracting the purchase price of a
     share of Common Stock specified in the related option from the fair market
     value of a share of Common Stock on the date of exercise of such SAR (as
     determined by the Board in accordance with Section 8 hereof), by

          (ii)  the number of shares as to which such SAR is exercised.

     (e)  An SAR granted without relationship to an option shall be exercisable
as determined by the Board, but in no event after ten years from the date of
grant.

     (f)  An SAR granted without relationship to an option will entitle the
holder, upon exercise of the SAR, to receive payment of an amount determined by
multiplying:

                                      -8-
<PAGE>

          (i)  the difference obtained by subtracting the fair market value of a
     share of Common Stock on the date the SAR was granted from the fair market
     value of a share of Common Stock on the date of exercise of such SAR (as
     determined by the Board in accordance with Section 8 hereof), by

          (ii)  the number of shares as to which such SAR is exercised.

     (g)  Notwithstanding subsections (d) and (f) above, the Board may limit the
amount payable upon exercise of an SAR. Any such limitation shall be determined
as of the date of grant and noted on the instrument evidencing the SAR granted.

     (h)  At the discretion of the Board, payment of the amount determined under
subsections (d) and (f) above may be made either in whole shares of Common Stock
valued at their fair market value on the date of exercise of the SAR (as
determined by the Board in accordance with Section 8 hereof), or solely in cash,
or in a combination of cash and shares.  If the Board decides to make full
payment in shares of Common Stock and the amount payable results in a fractional
share, payment for the fractional share shall be made in cash.

     (i)  Neither an SAR nor an option granted in connection with an SAR granted
to a person subject to Section 16(b) of the Exchange Act may be exercised before
six months after the date of grant.

14.  Recapitalization, Reorganization and the Like.

     (a)  In the event that the outstanding shares of Common Stock are changed
into or exchanged for a different number or kind of shares or other securities
of the Company or of another corporation by reason of any reorganization,
merger, consolidation, recapitalization, reclassification, stock split-up,
combination of shares, or dividends payable in capital stock, appropriate
adjustment shall be made in accordance with Section 424(a) of the Code in the
number and kind of shares as to which options and SARs may be granted under the
Plan and as to which outstanding options and SARs or portions thereof then
unexercised shall be exercisable, to the end that the proportionate interest of
the grantee shall be maintained as before the occurrence of such event.  Such
adjustment in outstanding options and SARs shall be made without change in the
total price applicable to the unexercised portion of such options and SARs and
with a corresponding adjustment in the exercise price per share.

     (b)  In addition, unless otherwise determined by the Board in its sole
discretion, in the case of any (i) sale or conveyance to another entity of all
or substantially all of the property and assets of the Company or (ii) Change in
Control (as hereinafter defined) of the Company, the purchaser(s) of the
Company's assets or stock may, in his, her or its discretion, deliver to the
optionee the same kind of consideration that is delivered to the stockholders of
the Company as a result of such sale, conveyance or Change in Control, or the
Board may cancel all outstanding options and SARs in exchange for consideration
in cash or in kind which consideration in both cases shall be equal in value to
the value of those shares of stock or other securities the optionee would have
received had the option been exercised (to the extent then exercisable) and no
disposition of the shares acquired

                                      -9-
<PAGE>

upon such exercise had been made prior to such sale, conveyance or Change in
Control, less the exercise price therefor. Upon receipt of such consideration,
the options and SARs shall immediately terminate and be of no further force and
effect. The value of the stock or other securities the grantee would have
received if the option had been exercised shall be determined in good faith by
the Board, and in the case of shares of Common Stock, in accordance with the
provisions of Section 8 hereof.

     (c)  The Board shall also have the power and right to accelerate the
exercisability of any options or SARs, notwithstanding any limitations in this
Plan or in the Agreement, upon such a sale, conveyance or Change in Control.
Upon such acceleration, any options or portion thereof originally designated as
qualified incentive stock options that no longer qualify as qualified incentive
stock options under Section 422 of the Code as a result of such acceleration
shall be redesignated as non-qualified stock options.

     (d)  A "Change in Control" shall be deemed to have occurred if any person,
or any two or more persons acting as a group, and all affiliates of such person
or persons, who prior to such time owned less than fifty percent (50%) of the
then outstanding Common Stock, shall acquire such additional shares of Common
Stock in one or more transactions, or series of transactions, such that
following such transaction or transactions, such person or group and affiliates
beneficially own fifty percent (50%) or more of the Common Stock outstanding.

     (e)  If by reason of a corporate merger, consolidation, acquisition of
property or stock, separation, reorganization, or liquidation, the Board shall
authorize the issuance or assumption of a stock option or stock options in a
transaction to which Section 424(a) of the Code applies, then, notwithstanding
any other provision of the Plan, the Board may grant an option or options upon
such terms and conditions as it may deem appropriate for the purpose of
assumption of the old option, or substitution of a new option for the old
option, in conformity with the provisions of such Section 424(a) of the Code and
the Regulations thereunder, and any such option shall not reduce the number of
shares otherwise available for issuance under the Plan.

     (f)  No fraction of a share shall be purchasable or deliverable upon the
exercise of any option or SAR, but in the event any adjustment hereunder in the
number of shares covered by the option or SAR shall cause such number to include
a fraction of a share, such fraction shall be adjusted to the nearest smaller
whole number of shares.

15.  No Special Employment Rights.

     Nothing contained in the Plan or in any option or SAR granted under the
Plan shall confer upon any grantee any right with respect to the continuation of
his or her employment by the Company (or any subsidiary) or interfere in any way
with the right of the Company (or any subsidiary), subject to the terms of any
separate employment agreement to the contrary, at any time to terminate such
employment or to increase or decrease the compensation of the grantee from the
rate in existence at the time of the grant of an option or SAR. Whether an
authorized leave of absence, or absence in military or government service, shall
constitute termination of employment shall be determined in accordance with
Regulations Section 1.421-7(h)(2).

                                      -10-
<PAGE>

16.  Withholding.

     The Company's obligation to deliver shares upon the exercise of any non-
qualified option or SAR granted under the Plan shall be subject to the option
holder's satisfaction of all applicable Federal, state and local income and
employment tax withholding requirements.  The Company and optionee may agree to
withhold shares of Common Stock purchased upon exercise of an option or SAR to
satisfy the above-mentioned withholding requirements; provided, however, that no
such agreement may be made by a grantee who is an "officer" or "director" within
the meaning of Section 16 of the Exchange Act, except pursuant to a standing
election to so withhold shares of Common Stock purchased upon exercise of an
option, such election to be made not less than six months prior to such exercise
and which election may be revoked only upon six months prior written notice.

17.  Restrictions on Issuance of Shares.

     (a)  Notwithstanding the provisions of Section 9 hereof, the Company may
delay the issuance of shares covered by the exercise of an option or SAR and the
delivery of a certificate for such shares until one of the following conditions
shall be satisfied:

          (i)  The shares with respect to which such option or SAR has been
     exercised are at the time of the issue of such shares effectively
     registered or qualified under applicable Federal and state securities acts
     now in force or as hereafter amended; or

          (ii)  Counsel for the Company shall have given an opinion, which
     opinion shall not be unreasonably conditioned or withheld, that such shares
     are exempt from registration and qualification under applicable Federal and
     state securities acts now in force or as hereafter amended.

     (b)  It is intended that all exercises of options and SARs shall be
effective, and the Company shall use its best efforts to bring about compliance
with the above conditions, within a reasonable time, except that the Company
shall be under no obligation to qualify shares or to cause a registration
statement or a post-effective amendment to any registration statement to be
prepared for the purpose of covering the issue of shares in respect of which any
option may be exercised, except as otherwise agreed to by the Company in
writing.

     18.  Purchase for Investment; Rights of Holder on Subsequent Registration.

     (a)  Unless the shares to be issued upon exercise of an option or SAR
granted under the Plan have been effectively registered under the Securities Act
of 1933, as amended (the "1933 Act"), the Company shall be under no obligation
to issue any shares covered by any option or SAR unless the person who exercises
such option, in whole or in part, shall give a written representation and
undertaking to the Company which is satisfactory in form and scope to counsel
for the Company and upon which, in the opinion of such counsel, the Company may
reasonably rely, that he or she is acquiring the shares issued pursuant to such
exercise of the option or SAR for his or her own account as an investment and
not with a view to, or for sale in connection with, the distribution of any such
shares, and that he or she will make no transfer of the same except in
compliance with any rules and regulations in force at the time of such transfer
under the 1933 Act, or any other applicable law, and

                                      -11-
<PAGE>

that if shares are issued without such registration, a legend to this effect may
be endorsed upon the securities so issued.

     (b)  In the event that the Company shall, nevertheless, deem it necessary
or desirable to register under the 1933 Act or other applicable statutes any
shares with respect to which an option or SAR shall have been exercised, or to
qualify any such shares for exemption from the 1933 Act or other applicable
statutes, then the Company may take such action and may require from each
grantee such information in writing for use in any registration statement,
supplementary registration statement, prospectus, preliminary prospectus or
offering circular as is reasonably necessary for such purpose and may require
reasonable indemnity to the Company and its officers and directors from such
holder against all losses, claims, damages and liabilities arising from such use
of the information so furnished and caused by any untrue statement of any
material fact therein or caused by the omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made.

19.  Loans.

     At the discretion of the Board, the Company may loan to the optionee some
or all of the purchase price of the shares acquired upon exercise of an option
granted under the Plan.

20.  Modification of Outstanding Options and SARs.

     Subject to limitations contained herein, the Board may authorize the
amendment of any outstanding option or SAR with the consent of the grantee when
and subject to such conditions as are deemed to be in the best interests of the
Company and in accordance with the purposes of the Plan.

21.  Term of Plan.

     The Plan shall become effective upon the earlier to occur of its adoption
by the Board of Directors or its approval by the shareholders of the Company.
It shall continue in effect for a term of ten (10) years unless sooner
terminated under Section 22 hereof.  The Board may grant options and SARs under
the Plan prior to stockholder approval, but any such option shall become
effective as of the date of grant only upon such approval and, accordingly, no
such option may be exercisable prior to such approval.

22.  Termination and Amendment of Plan.

     The Board may at any time terminate the Plan or make such modification or
amendment thereof as it deems advisable; provided, however, that (i) the Board
may not, without approval by a majority vote of the stockholders of the Company,
increase the maximum number of shares for which options and SARs may be granted
or change the designation of the class of persons eligible to receive options
and SARs under the Plan, and (ii) any such modification or amendment of the Plan
shall be approved by a majority vote of the stockholders of the Company to the
extent that such stockholder approval is necessary to comply with applicable
provisions of the Code, rules promulgated pursuant to Section 16 of the Exchange
Act, applicable state law, or applicable National

                                      -12-
<PAGE>

Association of Securities Dealers, Inc. or exchange listing requirements.
Termination or any modification or amendment of the Plan shall not, without the
consent of an optionee, affect his or her rights under an option or SAR
theretofore granted to him or her.

23.  Limitation of Rights in the Underlying Shares.

     A holder of an option or SAR shall not be deemed for any purpose to be a
stockholder of the Company with respect to such option or SAR except to the
extent that such option or SAR shall have been exercised with respect thereto
and, in addition, a stock certificate shall have been issued theretofore and
delivered to the holder.

24.  Notices.

     Any communication or notice required or permitted to be given under the
Plan shall be in writing, and shall be deemed given and delivered when mailed by
registered or certified mail or delivered by hand and addressed, if to the
Company, at its principal place of business, attention: Chairman, and, if to the
grantee or holder of an option or SAR, at the address of the grantee or holder
appearing on the records of the Company.

                                      -13-

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