Document:

<PAGE>   1
                                                                    EXHIBIT 4(b)

                           CERTIFICATE OF DESIGNATION

                   OF THE BOARD OF DIRECTORS OF FIRST BANCORP

                   __% NONCUMULATIVE PERPETUAL MONTHLY INCOME
                            PREFERRED STOCK, SERIES B
              (Pursuant to Article 5.01 of the General Corporation
                     Law of the Commonwealth of Puerto Rico)

         We, the undersigned, Angel Alvarez-Perez and Antonio R. Escriba,
Chairman of the Board, Chief Executive Officer & President and Secretary,
respectively of FIRST BANCORP. (hereinafter called the "Corporation"), a
corporation duly organized and existing under the laws of the Commonwealth of
Puerto Rico, do hereby certify that, pursuant to the authority conferred upon
the Board of Directors of the Corporation by the Certificate of Incorporation of
the Corporation and resolutions adopted by the Board of Directors creating a
committee thereof known as the "Preferred Stock Designation and Pricing
Committee", the said Preferred Stock Designation and Pricing Committee on ,
__________, 2000, adopted the following resolutions creating a series of _____
shares of Preferred Stock designated as the "___% Noncumulative Perpetual
Monthly Income Preferred Stock, Series B."

                  RESOLVED, that pursuant to the authority expressly granted to
         and vested in the Board of Directors of the Corporation in accordance
         with the provisions of its Certificate of Incorporation, a series of
         Preferred Stock of the Corporation be and it hereby is created.

                  FURTHER RESOLVED, that the Preferred Stock Designation and
         Pricing Committee designated by the Board of Directors has determined
         that the preferences and relative, participating, optional or other
         special rights of the shares of such series of Preferred Stock, and the
         qualifications, limitations or restrictions thereof, as stated and
         expressed herein, are under the circumstances prevailing on the date
         hereof fair and equitable to all the existing shareholders of the
         Corporation.

                  FURTHER RESOLVED, that the designation and amount of such
         Series and the voting powers, preference and relative, participating,
         optional or other special rights of the shares of such series of
         Preferred Stock, and the qualifications, limitations or restrictions
         thereof are as follows:

         A.       DESIGNATION AND AMOUNT

                  The shares of such series of Preferred Stock shall be
         designated as the "__% Noncumulative Perpetual Monthly Income Preferred
         Stock, Series B" (hereinafter called the "Series B Preferred Stock"),
         and the number of authorized shares constituting such series shall be
         ________.

         B.       DIVIDENDS

                  1. Holders of record of the Series B Preferred Stock
         ("Holders") will be entitled to receive, when, as and if declared by
         the Board of Directors of the Corporation or an authorized committee
         thereof (the "Board of Directors"), out of funds of the Corporation
         legally available therefor, noncumulative cash dividends at the annual
         rate per share of __% of their liquidation preferences, or $____ per
         share per month, with each aggregate payment made to each record holder
         of the Series

<PAGE>   2

         B Preferred Stock being rounded to the next lowest cent.

                   2. Dividends on the Series B Preferred Stock will accrue from
         their date of original issuance and will be payable (when, as and if
         declared by the Board of Directors of the Corporation out of funds of
         the Corporation legally available therefor) monthly in arrears in
         United States dollars commencing on _____________, 2000, and on the
         last day of each calendar month of each year thereafter to the holders
         of record of the Series B Preferred Stock as they appear on the books
         of the Corporation on the fifteenth (15th) day of the month for which
         dividends are payable. In the case of the dividend payable on
         __________, 2000, such dividend shall cover the period from the date of
         issuance of the Series B Preferred Stock to __________, 2000. In the
         event that any date on which dividends are payable is not a Business
         Day, then payment of the dividend payable on such date will be made on
         the next succeeding Business Day without any interest or other payment
         in respect of any such delay, except that, if such Business Day is in
         the next succeeding calendar year, such payment will be made on the
         Business Day immediately preceding the relevant date of payment, in
         each case with the same force and effect as if made on such date. A
         "Business Day" is a day other than a Saturday, Sunday or a general bank
         holiday in San Juan, Puerto Rico or New York, New York.

                  3. Dividends on the Series B Preferred Stock will be
         noncumulative. The Corporation is not obligated or required to declare
         or pay dividends on the Series B Preferred Stock, even if it has funds
         available for the payment of such dividends. If the Board of Directors
         of the Corporation does not declare a dividend payable on a dividend
         payment date in respect of the Series B Preferred Stock, then the
         holders of such Series B Preferred Stock shall have no right to receive
         a dividend in respect of the monthly dividend period ending on such
         dividend payment date and the Company will have no obligation to pay
         the dividend accrued for such monthly dividend period or to pay any
         interest thereon, whether or not dividends on such Series B Preferred
         Stock are declared for any future monthly dividend period.

                  4. The amount of dividends payable for any monthly dividend
         period will be computed on the basis of twelve 30-day months and a
         360-day year. The amount of dividends payable for any period shorter
         than a full monthly dividend period will be computed on the basis of
         the actual number of days elapsed in such period.

                  5. Subject to any applicable fiscal or other laws and
         regulations, each dividend payment will be made by dollar check drawn
         on a bank in New York, New York or San Juan, Puerto Rico and mailed to
         the record holder thereof at such holder's address as it appears on the
         register for such Series B Preferred Stock.

                  6. So long as any shares of the Series B Preferred Stock
         remain outstanding, the Corporation shall not declare, set apart or pay
         any dividend or make any other distribution of assets (other than
         dividends paid or other distributions made in stock of the Corporation
         ranking junior to the Series B Preferred Stock as to the payment of
         dividends and the distribution of assets upon liquidation, dissolution
         or winding up of the Corporation) on, or redeem, purchase, set apart or
         otherwise acquire (except upon conversion or exchange for stock of the
         Corporation ranking junior to the Series B Preferred Stock as to the
         payment of dividends and the distribution of assets upon liquidation,
         dissolution or winding up of the Corporation), shares of common stock
         or of any other class of stock of the Corporation ranking junior to the
         Series B Preferred Stock as to the payment of dividends or

                                       2
<PAGE>   3

         the distribution of assets upon liquidation, dissolution or winding up
         of the Corporation, unless (i) all accrued and unpaid dividends on the
         Series B Preferred Stock for the twelve monthly dividend periods ending
         on the immediately preceding dividend payment date shall have been paid
         or are paid contemporaneously and the full monthly dividend on the
         Series B Preferred Stock for the then current month has been or is
         contemporaneously declared and paid or declared and set apart for
         payment, and (ii) the Corporation has not defaulted in the payment of
         the redemption price of any shares of Series B Preferred Stock called
         for redemption.

                  7. When dividends are not paid in full on the Series B
         Preferred Stock and any other shares of stock of the Corporation
         ranking on a parity as to the payment of dividends with the Series B
         Preferred Stock, all dividends declared upon the Series B Preferred
         Stock and any such other shares of stock of the Corporation will be
         declared pro rata so that the amount of dividends declared per share on
         the Series B Preferred Stock and any such other shares of stock will in
         all cases bear to each other the same ratio that the liquidation
         preference per share of the Series B Preferred Stock and any such other
         shares of stock bear to each other.

                  8. Holders of record of the Series B Preferred Stock will not
         be entitled to any dividend, whether payable in cash, property or
         stock, in excess of the dividends provided for herein on the shares of
         Series B Preferred Stock.

         C.       CONVERSION

                  1. The Series B Preferred stock will not be convertible into
         or exchangeable for any other securities of the Corporation.

         D.       REDEMPTION AT THE OPTION OF THE CORPORATION

                  1. The shares of the Series B Preferred Stock are not
         redeemable prior to ______, 2005. On and after that date, the shares of
         the Series B Preferred Stock will be redeemable in whole or in part
         from time to time at the option of the Corporation, with the consent of
         the Board of Governors of the Federal Reserve System (the "Federal
         Reserve Board") to the extent required by D.8 below, upon not less than
         thirty nor more than sixty days' notice by mail, at the redemption
         prices set forth below, during the twelve-month periods beginning on
         ___________ of the years set forth below, plus accrued and unpaid
         dividends from the dividend payment date immediately preceding the
         redemption date (without any cumulation for unpaid dividends for prior
         dividend periods on the Series B Preferred Stock) to the date fixed for
         redemption.

<TABLE>
<CAPTION>
                     Year                              Redemption Price
                     ----                              ----------------
<S>                                                    <C>
2005..............................................          $25.50
2006..............................................          $25.25
2007..............................................          $25.00
</TABLE>

                  2. In the event that less than all of the outstanding shares
         of the Series B Preferred Stock are to be redeemed in any redemption at
         the option of the Corporation, the total number of shares to be
         redeemed in such redemption shall be determined by the Board of
         Directors and the shares to be redeemed shall be allocated pro rata or
         by lot as may be determined by the Board of Directors or by

                                        3

<PAGE>   4

         such other method as the Board of Directors may approve and deem
         equitable, including any method to conform to any rule or regulation of
         any national or regional stock exchange or automated quotation system
         upon which the shares of the Series B Preferred Stock may at the time
         be listed or eligible for quotation.

                  3. Notice of any proposed redemption shall be given by the
         Corporation by mailing a copy of such notice to the holders of record
         of the shares of Series B Preferred Stock to be redeemed, at their
         address of record, not more than sixty nor less than thirty days prior
         to the redemption date. The notice of redemption to each holder of
         shares of Series B Preferred Stock shall specify the number of shares
         of Series B Preferred Stock to be redeemed, the redemption date and the
         redemption price payable to such holder upon redemption, and shall
         state that from and after said date dividends thereon will cease to
         accrue. If less than all the shares owned by a holder are then to be
         redeemed at the option of the Corporation, the notice shall also
         specify the number of shares of Series B Preferred Stock which are to
         be redeemed and the numbers of the certificates representing such
         shares. Any notice which is mailed as herein provided shall be
         conclusively presumed to have been duly given, whether or not the
         stockholder receives such notice; and failure duly to give such notice
         by mail, or any defect in such notice, to the holders of any stock
         designated for redemption shall not affect the validity of the
         proceedings for the redemption of any other shares of Series B
         Preferred Stock.

                  4. Notice having been mailed as aforesaid, from and after the
         redemption date (unless default be made in the payment of the
         redemption price for any shares to be redeemed), all dividends on the
         shares of Series B Preferred Stock called for redemption shall cease to
         accrue and all rights of the holders of such shares as stockholders of
         the Corporation by reason of the ownership of such shares (except the
         right to receive the redemption price, on presentation and surrender of
         the respective certificates representing the redeemed shares), shall
         cease on the redemption date, and such shares shall not after the
         redemption date be deemed to be outstanding. In case less than all the
         shares represented by such certificate are redeemed, a new certificate
         shall be issued without cost to the holder thereof representing the
         unredeemed shares.

                  5. At its option, the Corporation may, on or prior to the
         redemption date, irrevocably deposit the aggregate amount payable upon
         redemption of the shares of the Series B Preferred Stock to be redeemed
         with a bank or trust company designated by the Board of Directors
         having its principal office in New York, New York, San Juan, Puerto
         Rico, or any other city in which the Corporation shall at that time
         maintain a transfer agency with respect to its capital stock, and
         having a combined capital and surplus (as shown by its latest published
         statement) of at least $50,000,000 (hereinafter referred to as the
         "Depositary"), to be held in trust by the Depositary for payment to the
         holders of the shares of the Series B Preferred Stock then to be
         redeemed. If such deposit is made and the funds so deposited are made
         immediately available to the holders of the shares of the Series B
         Preferred Stock to be redeemed, the Corporation shall thereupon be
         released and discharged (subject to the provisions of Section D.6) from
         any obligation to make payment of the amount payable upon redemption of
         the shares of the Series B Preferred Stock to be redeemed, and the
         holders of such shares shall look only to the Depositary for such
         payment.

                  6. Any funds remaining unclaimed at the end of two years from
         and after the redemption date in respect of which such funds were
         deposited shall be returned to the Corporation forthwith and thereafter
         the holders of shares of the Series B Preferred Stock called for
         redemption with respect

                                        4

<PAGE>   5

         to which such funds were deposited shall look only to the Corporation
         for the payment of the redemption price thereof. Any interest accrued
         on any funds deposited with the Depositary shall belong to the
         Corporation and shall be paid to it from time to time on demand.

                  7. Any shares of the Series B Preferred Stock which shall at
         any time have been redeemed shall, after such redemption, have the
         status of authorized but unissued shares of Preferred Stock, without
         designation as to series, until such shares are once more designated as
         part of a particular series by the Board of Directors.

                  8. To the extent required to have the Series B Preferred Stock
         treated as Tier 1 capital for bank regulatory purposes or otherwise
         required by applicable regulations of the Federal Reserve Board, the
         shares of Series B Preferred Stock may not be redeemed by the Company
         without the prior consent of the Federal Reserve Board.

         E.       LIQUIDATION PREFERENCE

                  1. Upon any voluntary or involuntary liquidation, dissolution,
         or winding up of the Corporation, the then record holders of shares of
         Series B Preferred Stock will be entitled to receive out of the assets
         of the Corporation available for distribution to shareholders, before
         any distribution is made to holders of common stock or any other equity
         securities of the Corporation ranking junior upon liquidation to the
         Series B Preferred Stock, distributions upon liquidation in the amount
         of $25.00 per share plus an amount equal to any accrued and unpaid
         dividends (without any cumulation for unpaid dividends for prior
         dividend periods on the Series B Preferred Stock) for the current
         monthly dividend period to the date of payment. Such amount shall be
         paid to the holders of the Series B Preferred Stock prior to any
         payment or distribution to the holders of the common stock of the
         Corporation or any other class of stock or series thereof of the
         Corporation ranking junior to the Series B Preferred Stock in respect
         of dividends or as to the distribution of assets upon liquidation.

                  2. If upon any voluntary or involuntary liquidation,
         dissolution or winding up of the Corporation, the amounts payable with
         respect to the Series B Preferred Stock and any other shares of stock
         of the Corporation ranking as to any such distribution on a parity with
         the Series B Preferred Stock are not paid in full, the holders of the
         Series B Preferred Stock and of such other shares will share ratably in
         any such distribution of assets of the Corporation in proportion to the
         full liquidation preferences to which each is entitled. After payment
         of the full amount of the liquidation preference to which they would
         otherwise be entitled, the holders of shares of Series B Preferred
         Stock will not be entitled to any further participation in any
         distribution of assets of the Corporation.

                  3. Neither the consolidation or merger of the Corporation with
         any other corporation, nor any sale, lease or conveyance of all or any
         part of the property or business of the Corporation, shall be deemed to
         be a liquidation, dissolution, or winding up of the Corporation.

         F.       VOTING RIGHTS

                  1. Except as described in this Section F, or except as
         required by applicable law, holders of the Series B Preferred Stock
         will not be entitled to receive notice of or attend or vote at any
         meeting of stockholders of the Corporation.

                                        5

<PAGE>   6

                  2. If the Corporation does not pay dividends in full on the
         Series B Preferred Stock for eighteen monthly dividend periods (whether
         consecutive or not), the holders of outstanding shares of the Series B
         Preferred Stock, together with the holders of any other shares of stock
         of the Corporation having the right to vote for the election of
         directors solely in the event of any failure to pay dividends, acting
         as a single class without regard to series, will be entitled, by
         written notice to the Corporation given by the holders of a majority in
         liquidation preference of such shares or by ordinary resolution passed
         by the holders of a majority in liquidation preference of such shares
         present in person or by proxy at a separate general meeting of such
         holders convened for the purpose, to appoint two additional members of
         the Board of Directors of the Corporation, to remove any such member
         from office and to appoint another person in place of such member. Not
         later than 30 days after such entitlement arises, if written notice by
         a majority of the holders of such shares has not been given as provided
         for in the preceding sentence, the Board of Directors or an authorized
         committee thereof will convene a separate general meeting for the above
         purpose. If the Board of Directors or such authorized committee fails
         to convene such meeting within such 30-day period, the holders of 10%
         of the outstanding shares of the Series B Preferred Stock and any such
         other stock will be entitled to convene such meeting. The provisions of
         the Certificate of Incorporation and By-laws of the Corporation
         relating to the convening and conduct of general meetings of
         stockholders will apply with respect to any such separate general
         meeting. Any member of the Board of Directors so appointed shall vacate
         office if, following the event which gave rise to such appointment, the
         Corporation shall have resumed the payment of dividends in full on the
         Series B Preferred Stock and each such other series of stock for twelve
         consecutive monthly dividend periods.

                  3. Any amendment, alteration or repeal of the rights,
         preferences and privileges of the Series B Preferred Stock by way of
         amendment of the Corporation's Certificate of Incorporation or
         otherwise (including, without limitation, the authorization or issuance
         of any shares of the Corporation ranking, as to dividend rights or
         rights on liquidation, winding up and dissolution, senior to the Series
         B Preferred Stock) which would materially and adversely affect the
         poers, preferences or special rights of the Series B Preferred Stock
         shall not be effective (unless otherwise required by applicable law)
         except with the consent in writing of the holders of at least two
         thirds of the outstanding aggregate liquidation preference of the
         outstanding shares of the Series B Preferred Stock or with the sanction
         of a special resolution passed at a separate general meeting by the
         holders of at least two thirds of the aggregate liquidation preference
         of the outstanding shares of the Series B Preferred Stock.
         Notwithstanding the foregoing, the Corporation may, without the consent
         or sanction of the holders of the Series B Preferred Stock, authorize
         and issue shares of the Corporation ranking, as to dividend rights and
         rights on liquidation, winding up and dissolution, on a parity with or
         junior to the Series B Preferred Stock.

                  The foregoing voting provisions shall not apply if, at or
         prior to the time when the act with respect to which such vote would
         otherwise be required shall be effected, all outstanding shares of the
         Series B Preferred Stock shall have been redeemed or called for
         redemption upon proper notice and sufficient funds shall have been
         deposited in trust to effect such redemption.

                  4. No vote of the holders of the Series B Preferred Stock will
         be required for the Corporation to redeem or purchase and cancel the
         Series B Preferred Stock in accordance with the Certificate of
         Incorporation of the Corporation.

                  5. The Corporation will cause a notice of any meeting at which
         holders of any series of

                                        6

<PAGE>   7

         Preferred Stock are entitled to vote to be mailed to each record holder
         of such series of Preferred Stock. Each such notice will include a
         statement setting forth (i) the date of such meeting, (ii) a
         description of any resolution to be proposed for adoption at such
         meeting on which such holders are entitled to vote and (iii)
         instructions for deliveries of proxies.

                  6. Except as set forth in this Section F, holders of Series B
         Preferred Stock shall have no special voting rights and their consent
         shall not be required (except to the extent they are entitled to vote
         as set forth herein) for taking any corporate action.

         G.       RANK

                  The Series B Preferred Stock will, with respect to dividend
         rights and rights on liquidation, winding up and dissolution, rank (i)
         senior to all classes of common stock of the Corporation and to all
         other equity securities issued by the Corporation the terms of which
         specifically provide that such equity securities will rank junior to
         the Series B Preferred Stock (or to a number of series of Preferred
         Stock which includes the Series B Preferred Stock); (ii) on a parity
         with the Corporation's 7.125% Noncumulative Perpetual Monthly Income
         Preferred Stock, Series A and with all other equity securities issued
         by the Corporation the terms of which specifically provide that such
         equity securities will rank on a parity with the Series B Preferred
         Stock (or with a number of series of Preferred Stock which includes the
         Series B Preferred Stock); and (iii) junior to all equity securities
         issued by the Corporation the terms of which specifically provide that
         such equity securities will rank senior to the Series B Preferred Stock
         (or to a number of series of Preferred Stock which includes the Series
         B Preferred Stock). For this purpose, the term "equity securities" does
         not include debt securities convertible into or exchangeable for equity
         securities.

         H.       FORM OF CERTIFICATE FOR Series B PREFERRED STOCK; TRANSFER AND
                  REGISTRATION

                  1. The Series B Preferred Stock shall be issued in registered
         form only. The Corporation may treat the record holder of a share of
         Series B Preferred Stock, including the Depository Trust Company and
         its nominee and any other holder that holds such share on behalf of any
         other person, as such record holder appears on the books of the
         registrar for the Series B Preferred Stock, as the sole owner of such
         share for all purposes.

                  2. The transfer of a share of Series B Preferred Stock may be
         registered upon the surrender of the certificate evidencing the share
         of Series B Preferred Stock to be transferred, together with the form
         of transfer endorsed on it duly completed and executed, at the office
         of the transfer agent and registrar.

                  3. Registration of transfers of shares of Series B Preferred
         Stock will be effected without charge by or on behalf of the
         Corporation, but upon payment (or the giving of such indemnity as the
         transfer agent and registrar may require) in respect of any tax or
         other governmental charges which may be imposed in relation to it.

                  4. The corporation will not be required to register the
         transfer of a share of Series B Preferred Stock after such share has
         been called for redemption.

                                        7

<PAGE>   8

         I.       REPLACEMENT OF LOST CERTIFICATES

                  If any certificate for a share of Series B Preferred Stock is
         mutilated or alleged to have been lost, stolen or destroyed, a new
         certificate representing the same share shall be issued to the holder
         upon request subject to delivery of the old certificate or, if alleged
         to have been lost, stolen or destroyed, compliance with such conditions
         as to evidence, indemnity and the payment of out-of-pocket expenses of
         the Corporation in connection with the request as the Board of
         Directors of the Corporation may determine.

         J.       NO PREEMPTIVE RIGHTS

                  Holders of the Series B Preferred Stock will have no
         preemptive or preferential rights to purchase any securities of the
         Corporation.

         K.       NO REPURCHASE AT THE OPTION OF HOLDERS; MISCELLANEOUS

                  Holders of Series B Preferred Stock will have no right to
         require the Corporation to redeem or repurchase any shares of Series B
         Preferred Stock, and the shares of Series B Preferred Stock are not
         subject to any sinking fund or similar obligation. The Corporation may,
         at its option, purchase shares of the Series B Preferred Stock from
         holders thereof from time to time, by tender, in privately negotiated
         transactions or otherwise.

         The undersigned hereby certify that the capital of the Corporation will
not be reduced under or by reason of the adoption of the above resolutions
providing for the creation of the above described series of Preferred Stock.

         IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be
hereunto affixed and this Certificate to be signed by Angel Alvarez-Perez, its
Chief Executive Officer and President, and Antonio R. Escriba its Secretary,
this __ day of ______, 2000.

                                                     FIRST BANCORP

                                            By:
                                               ------------------------------
                                                     Angel Alvarez-Perez
[CORPORATE SEAL]

                                            By:
                                               ------------------------------
                                                     Antonio R. Escriba

                                        8<PAGE>   1
                                                                     EXHIBIT 4.1

                            800 TRAVEL SYSTEMS, INC.
                           2000 STOCK INCENTIVE PLAN

I.       PURPOSE.

                  The purpose of this 800 Travel Systems, Inc. Stock Incentive
Plan is to promote the growth and profitability of 800 Travel Systems, Inc. (the
"Corporation") by rewarding and incentivizing individuals who make valuable
contributions to the Corporation's success, including officers and employees of
the Corporation and its subsidiaries, and directors, consultants and advisors of
the Corporation.

                  The 2000 Stock Incentive Plan has been approved by the Board
of Directors effective as of March 27, 2000, and has been submitted for
approval by the Company's stockholders at the Annual Meeting of Stockholders
scheduled in 2000.

II.      DEFINITIONS.

                  The following terms shall have the meanings shown:

         2.1 "Board of Directors" means the Board of Directors of the
Corporation.

         2.2 "Change of Control" means any event described in Section 8.1.

         2.3 "Code" means the Internal Revenue Code of 1986, as the same may be
amended from time to time.

         2.4 "Committee" means the Committee appointed by the Board of Directors
pursuant to Article XI of the Plan. This Committee may, but is not required to
be, identical to the Compensation Committee.

         2.5 "Common Stock" means the common stock, par value $.01 per share, of
the Corporation, except as provided in Section 9.2 of the Plan.

         2.6 "Compensation Committee" shall mean the Compensation Committee of
the Board of Directors. All persons appointed to be members of the Compensation
Committee shall be directors who qualify as "Non-Employee Directors" within the
meaning of Rule 16b-3 and "outside directors" within the meaning of Treasury
Regulation Section 1.162-27.

         2.7 "Consultant" shall mean any individual engaged by the Corporation
to perform services for the Corporation or any Subsidiary on a regular and
on-going basis who is not a common law employee of the Corporation.

         2.8 "Date of Grant" means the date specified by the Plan Administrator
on which a grant of Options, SARs or a grant or sale of Restricted Shares shall
become effective.

                                      -1-
<PAGE>   2

         2.9 "Director" means a member of the Board of Directors.

         2.10 "Disability" shall mean a medically diagnosable mental or physical
condition which the Committee has determined, based on such medical evidence as
it may find satisfactory, will prevent a Participant from performing his or her
duties for the Corporation and is expected to be permanent.

         2.11 "Executive Officer" means any Named Executive Officer and any
other officer of the Corporation who is subject to the reporting requirements of
Section 16 of the Securities and Exchange Act of 1934.

         2.12 "Fair Market Value" means the fair market value of a share of
Common Stock as determined by the Committee by reference to the closing price
quotation, or, if none, the average of the bid and asked prices, reported on
Nasdaq as of the most recent available date with respect to the sale of Common
Stock.

         2.13 "Incentive Stock Options" means Options intended to qualify for
favorable tax treatment as incentive stock options under Code Section 422.

         2.14 "Named Executive Officer" shall mean the Company's Chief Executive
Officer and the four highest compensated officers (other than the Chief
Executive Officer), as determined pursuant to the executive compensation
disclosure rules under the Securities Exchange Act of 1934.

         2.15 "Option Agreement" means a written agreement between the
Corporation and a Participant who has been granted Options under this Plan. Each
Option Agreement shall be subject to the terms and conditions of the Plan.

         2.16 "Option Price" means, with respect to any Option (or related SAR),
the amount designated in a Participant's Option Agreement as the price per share
he or she will be required to pay to exercise the Option and acquire the shares
subject to such Option.

         2.17 "Options" means any rights to purchase shares of Common Stock
granted pursuant to Article IV of this Plan, including Incentive Stock Options
subject to the additional requirements described in Article V.

         2.18 "Participant" shall mean any current or former employee of the
Corporation or any Subsidiary, or any Consultant or Director, who has been
granted Options, SARs or Restricted Stock under the terms of this Plan.

         2.19 "Plan" means this 800 Travel Systems, Inc. 2000 Stock Incentive
Plan, as the same may be amended from time to time.

         2.20 "Reload Option Rights" means the right to have additional Options
automatically granted to the Participant upon the exercise of his or her
Options, as granted pursuant to Section 4.6 of this Plan.

                                      -2-
<PAGE>   3

         2.21 "Restricted Stock" means shares of Common Stock that are issued to
eligible Participants and made subject to restrictions in accordance with
Article VII of the Plan.

         2.22 "Restricted Stock Agreement" means a written agreement between the
Corporation and a Participant who has been granted or sold Restricted Stock
pursuant to Article VII of the Plan.

         2.23 "SARs" shall mean stock appreciation rights granted pursuant to
Article VI of the Plan.

         2.24 "Subsidiary" shall mean any corporation which, on the date of
determination, qualifies as a subsidiary corporation of the Corporation under
Section 425(f) of the Code.

III.     ELIGIBILITY.

        3.1 PARTICIPATION. The Committee may grant Options, SARs and/or awards
of Restricted Stock under this Plan to any officer, employee or Consultant of
the Corporation or any Subsidiary. The Committee may also grant Options and/or
awards of Restricted Stock to any Director, subject to the restrictions in
Section 3.3. In granting such awards and determining their form and amount, the
Committee shall give consideration to the functions and responsibilities of the
individual, his or her potential contributions to profitability and sound growth
of the Corporation and such other factors as the Committee may, in its
discretion, deem relevant.

        3.2 EXECUTIVE OFFICERS. Notwithstanding Section 3.1 or any other
provisions of this Plan, any Named Executive Officer shall not be granted
Options, SARs or awards of Restricted Stock unless the grant has been approved
by the Compensation Committee, and all grants to Executive Officers must be
approved in advance by either the Committee or the Compensation Committee.

        3.3 DIRECTORS. Members of the Board of Directors who are officers of the
Corporation or Consultants shall be eligible for Options or other awards under
this Plan on the same terms as other officers or Consultants. Other members of
the Board of Directors shall be eligible for Options or Restricted Stock awards
only to the extent specified in such general policy on compensation of
nonemployee Directors as may be established by the Board of Directors.

IV.      OPTIONS.

         4.1 TERMS AND CONDITIONS. Subject to Section 3.2 and 3.3, the Committee
may, in its sole discretion, from time to time grant Options to any officer,
employee, Director or Consultant of the Corporation or any Subsidiary selected
by the Committee pursuant to Section 3.1. The grant of an Option to a
Participant shall be evidenced by a written Option Agreement in substantially
the form approved by the Committee. Such Option shall be subject to the
following express terms and conditions and to such other terms and conditions,
not inconsistent with the terms of this Plan, as the Committee may determine to
be appropriate.

                                      -3-
<PAGE>   4

                  (a) SHARES COVERED. The Committee shall, in its discretion,
determine the number of shares of Common Stock to be covered by the Options
granted to any Participant. The maximum number of shares of Common Stock with
respect to which Options may be granted to any Participant during any one
calendar year is 100,000 shares.

                  (b) EXERCISE PERIOD. The term of each Option shall be for such
period as the Committee shall determine, but for not more than ten years from
the Date of Grant thereof. The Committee shall also have the discretion to
determine when each Option granted hereunder shall become exercisable, and to
prescribe any vesting schedule limiting the exercisability of such Options as it
may deem appropriate.

                  (c) OPTION PRICE. The Option Price payable for the shares of
Common Stock covered by any Option shall be determined by the Committee, but
shall in no event be less than the Fair Market Value of Common Stock on the Date
of Grant.

                  (d) EXERCISE OF OPTIONS. A Participant may exercise his or her
Options from time to time by written notice to the Corporation of his or her
intent to exercise the Options with respect to a specified number of shares. The
specified number of shares will be issued and transferred to the Participant
upon receipt by the Corporation of (i) such notice and (ii) payment in full for
such shares, and (iii) receipt of any payments required to satisfy the
Corporation's tax withholding obligations pursuant to Section 8.3.

                  (e) PAYMENT OF OPTION PRICE UPON EXERCISE. Each Option
Agreement shall provide that the Option Price for the shares with respect to
which an Option is exercised may be paid to the Corporation at the time of
exercise, in the form of (i) cash, (ii) delivery to the Corporation of whole
shares of Common Stock already owned by the Participant, valued at their Fair
Market Value on the day immediately preceding the date of exercise, (iii) at the
discretion of the Committee, a promissory note secured by a pledge of the shares
of Common Stock, or (iv) a combination of any of the above equal to the Option
Price for the shares.

                  (f) BROKER ASSISTED EXERCISES. Alternatively, the Corporation
may permit the Participant to exercise an Option by delivery of a signed,
irrevocable notice of exercise, accompanied by payment in full of the Option
Price by the Participant's stockbroker and an irrevocable instruction to the
Corporation to deliver the shares of Common Stock issuable upon exercise of the
Option promptly to the Participant's stockbroker for the Participant's account,
provided that at the time of such exercise, such exercise would not be illegal
under the federal securities laws, including laws governing margin loans.

         4.2      EFFECT OF TERMINATION.

                  (a) If a Participant ends his employment or other relationship
with the Corporation (or with the relevant Subsidiary) for any reason other than
retirement, disability or death, his or her Options shall terminate immediately
upon the date of the termination, unless the Committee decides in its sole
discretion, to waive this termination and amends the Participant's Option
Agreement to provide for an extended exercise period.

                                      -4-
<PAGE>   5

                  (b) Any Option Agreement may, in the Committee's sole
discretion, include such provisions as the Committee deems advisable with
respect to the Participant's right to exercise the Option subsequent to
retirement or other voluntary termination of employment (or other relationship
with the Corporation), or subsequent to termination of such employment (or other
relationship) by reason of total and permanent disability; PROVIDED, that, in no
event shall any Option be exercisable after the fixed termination date set forth
in the Participant's Option Agreement pursuant to Section 4.1(b).

                  (c) Any Option Agreement may, in the Committee's sole
discretion, provide that, in the event of the Participant's death while he or
she has the right to exercise his or her Options, the Options may be exercised
(to the extent they had become exercisable prior to the time of the
Participant's death), during such period of up to one year after date of the
Participant's death as the Committee deems to be appropriate, by the personal
representative of the Participant's estate, or by the person or persons to whom
the Options shall have been transferred by will or by the laws of descent and
distribution.

         4.3 INCENTIVE STOCK OPTIONS. The Options granted under this Plan may be
either Incentive Stock Options or options not intended to constitute incentive
stock options qualifying under Code Section 422; PROVIDED THAT, Incentive Stock
Options may only be granted to common employees of the Corporation or its
Subsidiaries; and FURTHER PROVIDED, any Incentive Stock Option shall be subject
to the additional requirements stated in Article V of this Plan.

         4.4 AUTHORITY TO WAIVE RESTRICTIONS ON EXERCISABILITY. The Committee
may, in its sole discretion, determine at any time that all or any portion of
the Options granted to a Participant under the Plan shall, notwithstanding any
restrictions on exercisability imposed pursuant to Section 4.1(b), become
immediately exercisable in full. The Committee may make such further adjustments
to the terms of such Options as it may deem necessary or appropriate in
connection therewith.

         4.5 NON-ASSIGNABILITY. Options granted under this Plan shall generally
not be assignable or transferable by the Participant, except by will or by the
laws of descent and distribution, or as described in the next paragraph.

         Notwithstanding the foregoing, the Committee may, in its discretion,
permit a Participant to transfer all or a portion of his or her Options to
members of his or her immediate family, to trusts for the benefit of members of
his immediate family, or to family partnerships in which immediate family
members are the only partners, provided that the Participant may receive no
consideration for such transfers, and that such Options shall still be subject
to termination in accordance with Section 4.2 above in the hands of the
transferee.

         4.6 RELOAD OPTIONS. The Committee may, in its discretion, also grant a
Participant Reload Option Rights with respect to his or her Options. If a
Participant who has been granted Reload Option Rights with respect to Options,
exercises his or her Options by paying the Option Price by delivering previously
owned shares of Common Stock, as authorized under Section 4.1(e) above, the
Participant shall automatically be granted additional Options on the same terms

                                      -5-
<PAGE>   6

for the number of shares delivered to pay such Option Price; provided, however,
that the term of any Reload Option shall not extend beyond the term of the
Option originally exercised.

         4.7 COVENANTS NOT TO COMPETE. The Committee may, in its discretion,
condition any Option granted to an Employee, Consultant or Director on such
Participants agreement to enter into such covenant not to compete with the
Corporation as the Committee may deem to be desirable. Such covenant not to
compete shall be set forth in the Participant's Stock Option Agreement, and the
Stock Option Agreement shall provide that the Option shall be forfeited
immediately, whether otherwise vested or not, if the Board of Directors
determines that the Participant has violated his or her covenant not to compete.
In addition, in the Committee's discretion, the Participant's Stock Option
Agreement may also provide that if the Participant breaches his or her covenant
not to compete, the Corporation shall have the right to repurchase any shares of
Common Stock previously issues to the Participant pursuant to an exercise of the
Option, at a repurchase price equal to the Option Price paid by the Participant.

V.       INCENTIVE STOCK OPTIONS.

         The Committee may, in its discretion, specify that any Options granted
to a Participant who is an employee of the Corporation or a Subsidiary shall be
ISOs qualifying under Code Section 422.

         5.1 Each Stock Option Agreement which provides for the grant of ISOs
shall expressly state that such Options are intended to qualify as ISOs. Each
provision of the Plan and of each Stock Option Agreement relating to an Option
designated as an ISO shall be construed so that such Option qualifies as an ISO,
and any provision that cannot be so construed shall be disregarded.

         5.2 Any Options granted under this Plan which are designated as ISOs
shall comply with the following additional requirements:

                  (a) The aggregate Fair Market Value (determined at the time an
         ISO is granted) of the shares of Common Stock (together with all other
         stock of the Corporation and all stock of any Parent or Subsidiary)
         with respect to which the ISOs may first become exercisable by an
         individual Participant during any calendar year, under all stock option
         plans of the Corporation (or any Parent or Subsidiaries) shall not
         exceed $100,000. To the extent this limitation would otherwise be
         exceeded, the Option shall be deemed to consist of an ISO for the
         maximum number of shares which may be covered by ISOs pursuant to the
         preceding sentence, and a nonstatutory option for the remaining shares
         subject to the Option.

                  (b) The Option Price payable upon the exercise of an ISO shall
         not be less than the Fair Market Value of a share of Common Stock on
         the Date of Grant.

                  (c) In the case of an ISO granted to a Participant who is a
         ten percent shareholder of the Corporation, the period of the Option
         shall not exceed five years from the Date of Grant, and the Option
         Price shall not be less than 110 percent of the Fair Market Value of
         Common Stock on the Date of Grant.

                                      -6-
<PAGE>   7

                  (d) No ISO granted under this Plan shall be assignable or
         transferable by the Participant, except by will or by the laws of
         descent and distribution. During the life of the Participant, any ISO
         shall be exercisable only by the Participant.

VI.      STOCK APPRECIATION RIGHTS.

         6.1 GRANT OF SARS. The Committee may, in its discretion, from time to
time grant stock appreciation rights to a Participant in connection with Options
granted under this Plan. Participants granted SARs shall be entitled to receive
upon exercise thereof, in cash or Common Stock as provided in Paragraph 6.3(c),
the difference between the Fair Market Value of the Common Stock on the day
preceding the exercise date and the Option Price of the underlying Option. SARs
may be granted with respect to all or part of the Common Stock under a
particular Option, except as otherwise expressly provided herein.

         6.2 TANDEM OPTIONS. SARs shall entitle the Participant holding the
related Option, upon exercise, in whole or in part, of the SARs, to receive
payment in the amount and form determined pursuant to Paragraph 6.3(c). SARs may
be exercised only to the extent that the related Option has not been exercised.
The exercise of SARs shall result in a pro rata surrender of the related Option
to the extent that the SARs have been exercised.

         6.3 TERMS AND CONDITIONS. The grant of SARs shall be evidenced by
including provisions with respect to such SARs in the Participant's Option
Agreement in a form approved by the Committee. Such SARs shall be subject to the
following express terms and conditions and to such other terms and conditions,
not inconsistent with the terms of the Plan, which the Committee may deem
appropriate.

                  (a) SARs shall be exercisable at such time or times and to the
         extent, but only to the extent, that the Option to which they relate
         shall be exercisable.

                  (b) SARs (and any Option related thereto) shall in no event be
         exercisable during the first six months after the date of grant and
         such rights shall not be transferable other than by will or by the laws
         of descent and distribution and shall be exercisable during the
         Participant's lifetime only by the Participant.

                  (c) Upon exercise of SARs, the Participant shall be entitled
         to receive an amount equal in value to the difference between the
         Option Price and the Fair Market Value per share of Common Stock on the
         day preceding the exercise date, multiplied by the number of shares in
         respect of which the SARs shall have been exercised. Such amount shall
         be paid in the form of (i) cash, (ii) shares of Common Stock with a
         Fair Market Value on the day preceding the exercise date equal to such
         amount or (iii) a combination of cash and shares of Common Stock, all
         as determined by the Committee.

                  (d) In no event shall an SAR be exercisable at a time when the
         Option Price of the underlying Option is greater than the Fair Market
         Value of the shares subject to the related Option.

                                      -7-
<PAGE>   8

VII.     RESTRICTED STOCK.

         7.1 RIGHTS AS A SHAREHOLDER. The Committee may, in its discretion,
grant a Participant an award consisting of shares of Restricted Stock. At the
time of the award, the Committee shall cause the Corporation to deliver to the
Participant, or to a custodian or an escrow agent designated by the Committee, a
certificate or certificates for such shares of Restricted Stock, registered in
the name of the Participant. The Participant shall have all the rights of a
stockholder with respect to such Restricted Stock, subject to the terms and
conditions, including forfeiture or resale to such Corporation, if any, as the
Committee may determine to be desirable pursuant to Section 7.3 of the Plan. The
Committee may designate the Corporation or one or more of its executive officers
to act as custodian or escrow agent for the certificates.

         7.2 AWARDS AND CERTIFICATES.

                  (a) A Participant granted an award of Restricted Stock shall
         not be deemed to have become a stockholder of the Corporation, or to
         have any rights with respect to such shares of Restricted Stock, until
         and unless such Participant shall have executed a restricted stock
         agreement or other instrument evidencing the award and delivered a
         fully executed copy thereof to the Corporation and otherwise complied
         with the then applicable terms and conditions of such award.

                  (b) When a Participant is granted shares of Restricted Stock,
         the Corporation shall issue a stock certificate or certificates in
         respect of shares of Restricted Stock. Such certificates shall be
         registered in the name of the Participant, and shall bear an
         appropriate legend referring to the terms, conditions and restrictions
         applicable to such award substantially in the following form:

                           "The transferability of the shares of stock
                  represented by this Certificate are subject to the terms and
                  conditions (including forfeiture) of a Restricted Stock
                  Agreement entered into between the registered owner and 800
                  Travel Systems, Inc. A copy of such Agreement is on file in
                  the offices of the Secretary of the Company, 4802 Gunn
                  Highway, Tampa, Florida 33624.

                  (c) Except as may be otherwise determined by the Committee (or
         as required in order to satisfy the tax withholding obligations imposed
         under Section 11.3 of this Plan), Participants granted awards of
         Restricted Stock under this Plan will not be required to make any
         payment or provide consideration to the Corporation other than the
         rendering of services.

         7.3 RESTRICTIONS AND FORFEITURES. Restricted Stock awarded to a
Participant pursuant to this Article VII shall be subject to the following
restrictions and conditions:

                  (a) During a period set by the Committee of not less than six
         (6) months, but not more than eight (8) years, commencing with the date
         of an award (the "Restriction Period"), the Participant will not be
         permitted to sell, transfer, pledge or assign shares of Restricted
         Stock awarded to him or her. Within these limits, the Committee may
         provide for the lapse of such restrictions in installments where deemed
         appropriate.

                                      -8-
<PAGE>   9

                  (b) Except as provided in Section 7.3(a), the Participant
         shall have with respect to the Restricted Stock all of the rights of a
         stockholder of the Corporation, including the right to vote the shares
         and receive dividends and other distributions.

                  (c) Subject to the provisions of Section 7.3(d), upon any
         termination of the Participant's employment or other relationship with
         the Corporation during the Restriction Period for any reason, all
         shares of Restricted Stock with respect to which the restrictions have
         not yet expired shall be forfeited to the Corporation, or, in the case
         of shares of Restricted Stock sold to the Participant, repurchased by
         the Corporation at the initial purchase price.

                  (d) In the event of a Participant's retirement from his or her
         employment (or other relationship) with the Corporation, total
         Disability, or death, or in cases of special circumstances, the
         Committee may, in its sole discretion, when it finds that a waiver
         would be in the best interests of the Corporation, waive in whole or in
         part any or all remaining restrictions with respect to such
         Participant's Restricted Stock.

                  (e) Notwithstanding the other provisions of this Section 7.3,
         the Committee may adopt rules which would permit a gift by a
         Participant of shares of Restricted Stock to a spouse, child,
         stepchild, grandchild or to a trust the beneficiary or beneficiaries of
         which shall be either such a person or persons or the Participant,
         provided that the Restricted Stock so transferred shall be similarly
         restricted.

                  (f) Any attempt to dispose of shares of Restricted Stock in a
         manner contrary to the restrictions set forth herein shall be
         ineffective.

                  (g) Nothing in this Section 7.3 shall preclude a Participant
         from exchanging any Restricted Stock for any other shares of the Common
         Stock that are similarly restricted.

VIII.    CHANGE IN CONTROL TRANSACTIONS.

         8.1 CHANGE IN CONTROL. For purposes of this Plan, a "Change in Control"
shall include any of the events described below:

                  (a) The acquisition in one or more transactions of more than
         thirty percent of the Corporation's outstanding Common Stock, or the
         equivalent in voting power of any classes or classes of securities of
         the Corporation entitled to vote in elections of directors by any
         corporation, or other person or group (within the meaning of Section
         14(d)(3) of the Securities Exchange Act of 1934, as amended);

                  (b) Any merger or consolidation of the Corporation into or
         with another corporation in which the Corporation is not the surviving
         entity, or any transfer or sale of substantially all of the assets of
         the Corporation or any merger or consolidation of the Corporation into
         or with another corporation in which the Corporation is the surviving
         entity and, in connection with such merger or consolidation, all or

                                      -9-
<PAGE>   10

         part of the outstanding shares of Common Stock shall be changed into or
         exchanged for other stock or securities of the Corporation or any other
         person, or cash, or any other property.

                  (c) Any election of persons to the Board of Directors which
         causes a majority of the Board of Directors to consist of persons other
         than (i) persons who were members of the Board of Directors on March
         27, 2000, and (ii) persons who were nominated for election as members
         of the Board by the Board of Directors (or by a Committee of the Board)
         at a time when the majority of the Board (or of such Committee)
         consisted of persons who were members of the Board of Directors on
         March 27, 2000; PROVIDED, that any person nominated for election by the
         Board of Directors composed entirely of persons described in (i) or
         (ii), or of persons who were themselves nominated by such Board, shall
         for this purpose be deemed to have been nominated by a Board composed
         of persons described in (i).

                  (d) Any person, or group of persons, announces a tender offer
         for at least thirty percent (30%) of the Corporation's Common Stock.

         8.2 EFFECT OF CHANGE IN CONTROL. In the event of a pending or
threatened Change in Control, the Committee may, in its sole discretion, take
any one or more of the following actions with respect to all Participants:

                           (i) Accelerate the exercise dates of any outstanding
                  Options, and make all outstanding Options fully vested and
                  exercisable;

                           (ii) Waive all or any portion of the vesting
                  requirements or other conditions associated with a Restricted
                  Stock Award;

                           (iii) Grant Stock Appreciation Rights to the holders
                  of outstanding Options;

                           (iv) Pay cash to any or all Option holders in
                  exchange for the cancellation of their outstanding Options;

                           (v) Make any other adjustments or amendments to the
                  Plan and outstanding Options, or Restricted Stock Awards
                  and/or substitute new Options or other awards.

IX.      AGGREGATE LIMITATION ON SHARES OF COMMON STOCK.

         9.1 NUMBER OF SHARES OF COMMON STOCK.

                  (a) Shares of Common Stock which may be issued to Participants
         pursuant to Options, SARs, or Restricted Stock awards granted under the
         Plan may be either authorized and unissued shares of Common Stock or of
         Common Stock held by the Corporation as treasury stock.

                                      -10-
<PAGE>   11

                  (b) The number of shares of Common Stock reserved for issuance
         under this Plan on the date of any grant shall not exceed 500,000
         shares of Common Stock, subject to such adjustments as may be made
         pursuant to Section 9.2.

                  (c) For purposes of Section 9.1(b), upon the exercise of an
         Option or SAR, the number of shares of Common Stock available for
         future issuance under the Plan shall be reduced by the number of shares
         actually issued to the Participant, exclusive of any shares surrendered
         to the Corporation as payment of the Option price.

                  (d) Any shares of Common Stock subject to an Option which for
         any reason is cancelled, terminates unexercised or expires, except by
         reason of the exercise of a related SAR, shall again be available for
         issuance under the Plan.

                  (e) In the event that any award of Restricted Stock is
         forfeited, cancelled or surrendered for any reason, the shares of
         Common Stock constituting such Restricted Stock award shall again be
         available for issuance under the Plan.

         9.2 ADJUSTMENTS OF STOCK. In the event of any change or changes in the
outstanding Common Stock of the Corporation by reason of any stock dividend,
recapitalization, reorganization, merger, consolidation, split-up, combination
or any similar transaction, the number of shares of Common Stock which may be
issued under this Plan, the number of shares of Common Stock subject to Options
theretofore granted under this Plan, the Option Price of such Options, the
number of SARs theretofore granted in conjunction with an Option, the number of
shares of Restricted Stock shall each be adjusted in such manner as the Board of
Directors deems appropriate to prevent substantial dilution or enlargement of
the rights granted to a Participant.

                  New option rights may be substituted for the Options granted
under the Plan, or the Corporation's duties as to Options and SARs outstanding
under the Plan may be assumed by a Subsidiary, by another corporation or by a
parent or subsidiary (within the meaning of Section 425 of the Code) of such
other corporation, in connection with any merger, consolidation, acquisition,
separation, reorganization, liquidation or like occurrence in which the
Corporation is involved. In the event of such substitution or assumption, the
term Common Stock shall thereafter include the stock of the corporation granting
such new option rights or assuming the Corporation's duties as to such Options
or SARs.

X.       MISCELLANEOUS.

         10.1 GENERAL RESTRICTION. Any Option, SAR, or Restricted Stock award
granted under this Plan shall be subject to the requirement that, if at any time
the Committee shall determine that any registration of the shares of Common
Stock, or any consent or approval of any governmental body, or any other
agreement or consent, is necessary as a condition of the granting of an Option
or other award, or the issuance of Common Stock in satisfaction thereof, such
Common Stock will not be issued or delivered until such requirement is satisfied
in a manner acceptable to the Committee.

                                      -11-
<PAGE>   12

         10.2     WITHHOLDING TAXES.

                  (a) If the Corporation determines that the Corporation has any
         tax withholding obligation with respect to a Participant, the
         Corporation shall have the right to require that Participant to remit
         to the Corporation an amount sufficient to satisfy any federal, state
         and local withholding tax requirements prior to the delivery of any
         shares of Common Stock under the Plan.

                  (b) The Corporation shall have the right to withhold from
         payments made in cash to a Participant under the terms of the Plan, an
         amount sufficient to satisfy any federal, state and local withholding
         tax requirements imposed with respect to such cash payments.

                  (c) Amounts to which the Corporation is entitled pursuant to
         Section 10.2(a) or (b), may be paid, at the election of the Participant
         and with the approval of the Committee, either (i) paid in cash, (ii)
         withheld from any compensation payable to the Participant by the
         Corporation, including cash payments made under this Plan, or (iii) in
         shares of Common Stock otherwise issuable to the Participant upon
         exercise of an Option or SAR, that have a Fair Market Value on the date
         on which the amount of tax to be withheld is determined (the "Tax
         Date") not less than the minimum amount of tax the Corporation is
         required to withhold. A Participant's election to have shares of Common
         Stock withheld that are otherwise issuable shall be in writing, shall
         be irrevocable upon approval by the Committee, and shall be delivered
         to the Corporation prior to the Tax Date with respect to the exercise
         of an Option or SAR.

         10.3 INVESTMENT REPRESENTATION. If the Committee determines that a
written representation is necessary in order to secure an exemption from
registration under the Securities Act of 1933, the Committee may demand that the
Participant deliver to the Corporation at the time of any exercise of any Option
or SAR, or at time of the transfer of shares of Restricted Stock, any written
representation that Committee determines to be necessary or appropriate for such
purpose, including but not limited to a representation that the shares to be
issued are to be acquired for investment and not for resale or with a view to
the distribution thereof. If the Committee makes such a demand, delivery of a
written representation satisfactory to the Committee shall be a condition
precedent to the right of the Participant to acquire such shares of Common
Stock.

         10.4 NON-UNIFORM DETERMINATIONS. The Committee's determinations under
this Plan (including without limitation its determinations of the persons to
receive Options, SARs, or awards of Restricted Stock, the form, amount and
timing of such awards and the terms and provisions of such awards) need not be
uniform and may be made by it selectively among Participants who receive, or are
eligible to receive, awards under this Plan, whether or not such Participants
are similarly situated.

         10.5 NO RIGHTS AS SHAREHOLDERS. Participants granted Options or SARs
under this Plan shall have no rights as shareholders of the Corporation as
applicable with respect thereto unless and until certificates for shares of
Common Stock are issued to them.

                                      -12-
<PAGE>   13

         10.6 TRANSFER RESTRICTIONS. The Committee may determine that any Common
Stock to be issued by the Corporation upon the exercise of Options or SARs shall
be subject to such further restrictions upon transfer as the Committee
determines to be appropriate.

XI.      ADMINISTRATION OF THE PLAN.

         11.1     COMMITTEE.

                  (a) The Plan shall be administered on a day to day basis by
         the Board of Directors or, if the Board determines it is desirable to
         delegate its authority to administer the Plan, by a Committee appointed
         by the Board of Directors. The Plan Committee appointed by the Board
         may be the Compensation Committee of the Board of Directors or one or
         more directors or executive or officers of the Corporation serving
         under the supervision of such Compensation Committee, and, except as
         expressly stated otherwise in this Plan with respect to Executive
         Officers, need not be composed of directors or directors who qualify as
         "disinterested" within the meaning of SEC Rule 16b-3. The Plan
         Committee shall serve at the pleasure of the Board of Directors.

                  (b) If the Committee is not the Board of Directors, the
         Committee shall be monitored and supervised by the Compensation
         Committee of the Board of Directors with respect to any actions related
         to Named Executive Officers. All grants of Options, SARs or Restricted
         Stock to Executive Officers shall be approved in advance by the
         Compensation Committee.

                  (c) The Committee shall have the authority, in its discretion
         but subject to Sections 3.2 and 3.3 of this Plan, and subject to the
         overall supervision of the Compensation Committee or the Board, from
         time to time: (i) to grant Options, SARs, or shares of Restricted Stock
         to eligible employees, Directors and Consultants, as provided for in
         this Plan; (ii) to prescribe such limitations, restrictions and
         conditions upon any such awards as the Committee shall deem
         appropriate; or (iii) to determine the periods during which Options may
         be exercised and to accelerate the exercisability of outstanding
         Options or SARs, or the vesting of Restricted Stock, as it may deem
         appropriate;

                  (d) The Committee shall have the authority, in its discretion,
         from time to time, to: (i) modify, cancel, or replace any prior Options
         or other awards and to amend the relevant Option Agreements or
         Restricted Stock Agreements with the consent of the affected
         Participants, including amending such agreements to amend vesting
         schedules, extend exercise periods or increase or decrease the Option
         Price for Options, as it may deem to be necessary; and (ii) to
         interpret the Plan, to adopt, amend and rescind rules and regulations
         relating to the Plan, and to make all other determinations and to take
         all other action necessary or advisable for the implementation and
         administration of the Plan. A majority of the Committee shall
         constitute a quorum, and the action of a majority of members of the
         Committee present at any meeting at which a quorum is present, or acts
         unanimously adopted in writing without the holding of a meeting, shall
         be the acts of the Committee.

                  (e) All actions taken by the Committee shall be final,
         conclusive and binding upon any eligible Participant. Neither the
         Committee nor any members of the Committee shall be liable for any

                                      -13-
<PAGE>   14

         action taken or decision made in good faith relating to the Plan or any
         award thereunder.

XII.     AMENDMENT AND TERMINATION.

         12.1 AMENDMENT OR TERMINATION OF THE PLAN. The Board of Directors may
at any time terminate this Plan or any part thereof and may from time to time
amend this Plan as it may deem advisable. The termination or amendment of this
Plan shall not, without the consent of the Participant, affect any Participant's
rights under an award previously granted.

         12.2 TERM OF PLAN. Unless previously terminated pursuant to Section
12.1, the Plan shall terminate on March 27, 2010, the tenth anniversary of the
date on which the Plan became effective, and no Options, SARs, or awards of
Restricted Stock may be granted on or after such date.

                                      -14-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00014-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00014-of-00352.parquet"}]]