Document:

Exhibit 4.2
                                                                     -----------

                                                                 EXECUTION COPY
                                                                 --------------

                          FIRST SUPPLEMENTAL INDENTURE

                                      among

                    VECTREN UTILITY HOLDINGS, INC., AS ISSUER

                     INDIANA GAS COMPANY, INC., AS GUARANTOR

             SOUTHERN INDIANA GAS AND ELECTRIC COMPANY, AS GUARANTOR

               VECTREN ENERGY DELIVERY OF OHIO, INC., AS GUARANTOR

                                       AND

                U.S. BANK TRUST NATIONAL ASSOCIATION, AS TRUSTEE

                             Dated October 19, 2001

<PAGE>
                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----
ARTICLE I    DEFINITIONS......................................................1

 SECTION 1.1.  Definition of Terms............................................1

ARTICLE II   GENERAL TERMS AND CONDITIONS OF THE NOTES........................2

 SECTION 2.1.  Designation and Principal Amount; Guarantees...................2
 SECTION 2.2.  Maturity.......................................................3
 SECTION 2.3.  Form and Payment...............................................3
 SECTION 2.4.  Global Note....................................................3
 SECTION 2.5.  Payment of Principal and Interest..............................4

ARTICLE III  REDEMPTION OF THE NOTES AND DEFEASANCE...........................5

 SECTION 3.1.  Redemption at the Company's Option.............................5
 SECTION 3.2.  No Sinking Fund................................................6
 SECTION 3.3.  Defeasance.....................................................6

ARTICLE IV   MISCELLANEOUS....................................................6

 SECTION 4.1.  Ratification of Indenture......................................6
 SECTION 4.2.  Trustee Not Responsible for Recitals...........................6
 SECTION 4.3.  Governing Law..................................................6
 SECTION 4.4.  Separability...................................................6
 SECTION 4.5.  Counterparts...................................................7
 SECTION 4.6.  Amendments.....................................................7

<PAGE>

          FIRST SUPPLEMENTAL INDENTURE, dated as of October 19, 2001 (the "First
Supplemental  Indenture"),  among  Vectren  Utility  Holdings,  Inc., an Indiana
corporation (the "Company"),  Indiana Gas Company,  Inc., an Indiana corporation
and an Ohio  corporation  ("Indiana  Gas"),  Southern  Indiana Gas and  Electric
Company, an Indiana corporation  ("SIGECO") and Vectren Energy Delivery of Ohio,
Inc., an Ohio corporation  ("VEDO"),  (Indiana Gas, SIGECO and VEDO are referred
to  herein  collectively  as the  "Guarantors")  and U.S.  Bank  Trust  National
Association ("Trustee").

          WHEREAS,  the Company executed and delivered the Indenture dated as of
October  19,  2001 (the "Base  Indenture")  to the  Trustee  to provide  for the
Company's  unsecured notes,  debentures or other evidence of indebtedness of the
Company (collectively,  the "Securities"),  and the Guarantees to be issued from
time to time in one or  more  series  (as  hereinafter  defined),  as  might  be
determined by the Company under the Base Indenture;

          WHEREAS,  pursuant  to the terms of the Base  Indenture,  the  Company
desires to provide for the establishment of a new series of its Securities to be
known as its 7-1/4%  Senior  Notes due October 15,  2031 (the  "Notes")  and the
unconditional  guarantees  by the  Guarantors of the payment of the amounts owed
with respect to the Notes (the  "Guarantees"),  the form and terms of such Notes
and the terms,  provisions  and conditions of the Notes and the Guarantees to be
set  forth  as  provided  in the Base  Indenture  and  this  First  Supplemental
Indenture (together, the "Indenture");

          WHEREAS,  the  Company  has  requested  that the  Trustee  execute and
deliver this First Supplemental Indenture and all requirements necessary to make
this First Supplemental Indenture a valid, binding and enforceable instrument in
accordance with its terms, and to make the Notes,  when executed,  authenticated
and  delivered  by the  Company  and with the  Guarantees  endorsed  thereon and
executed by the Guarantors,  the valid,  binding and enforceable  obligations of
the Company and the Guarantor, as applicable:

          NOW THEREFORE,  in consideration of the purchase and acceptance of the
Notes by the Holders thereof,  and for the purpose of setting forth, as provided
in the Base Indenture,  the form and terms of the Notes, each of the Company and
the Guarantors, as applicable, covenants and agrees with the Trustee as follows:

                                    ARTICLE I

                                   DEFINITIONS

SECTION 1.1.  Definition of Terms.

          Unless the context otherwise requires:

          (a) a term  defined in the Base  Indenture  has the same  meaning when
used in this First Supplemental Indenture;

          (b) a term defined anywhere in this First  Supplemental  Indenture has
the same meaning throughout;

<PAGE>

          (c) the singular includes the plural and vice versa;

          (d) headings are for  convenience  of reference only and do not affect
interpretation;

          (e) the  following  terms  have  the  meanings  given  to them in this
Section 1.1(e):

               "Notes" shall have the meaning specified in Section 2.1.

               "Global Note" shall have the meaning set forth in Section 2.4.

               "Interest  Payment  Date" means January 15, April 15, July 15 and
October 15 of each year, beginning January 15, 2002.

               "Maturity Date" shall have the meaning specified in Section 2.2.

               "Original Issue Date" means October 19, 2001.

               "Regular Record Date" means, with respect to any Interest Payment
Date for the Notes, the close of business on the first day of the month in which
such Interest Payment Date falls.

               The terms "First  Supplemental  Indenture"  and "Base  Indenture"
shall  have the  respective  meanings  set forth in the  recitals  to this First
Supplemental Indenture.

                                   ARTICLE II

                    GENERAL TERMS AND CONDITIONS OF THE NOTES

SECTION 2.1.  Designation and Principal Amount; Guarantees.

          There is hereby  authorized  a series  of  Securities  designated  the
7-1/4%  Senior  Notes due  October  15, 2031 (the  "Notes")  limited  (except as
otherwise provided in Article 2 of the Indenture) in aggregate  principal amount
to $100,000,000. The Notes may be issued from time to time upon written order of
the Company for the  authentication  and  delivery of Notes  pursuant to Section
2.03 of the Base Indenture.  Each of Indiana Gas, SIGECO and VEDO (together with
each other subsidiary of the Company that pursuant to the terms of the Indenture
guarantees  the Company's  obligations  under the Notes and the  Indenture,  the
"Guarantors")  unconditionally  and  jointly  and  severally  guarantees  to the
Holders of the Notes upon which the Guarantee is endorsed,  upon  authentication
and delivery by the Trustee,  the due and punctual  payment of the principal of,
and interest on, and any Redemption Price with respect to the Notes, when and as
the same  shall  become  due and  payable,  whether  at  Stated  Maturity,  upon
acceleration  or redemption or  otherwise,  in accordance  with the terms of the
Notes and of the Indenture.

SECTION 2.2.  Maturity.

          The date upon which the  principal  on the Notes shall  become due and
payable at final  maturity  is October 15, 2031 (the  "Maturity  Date"),  if not
redeemed in full previously in accordance with Article III of this  Supplemental
Indenture.

SECTION 2.3.  Form and Payment.

          Except as provided in Section  2.4, the Notes shall be issued in fully
registered certificated form without interest coupons,  bearing identical terms.
Principal  of and  interest on the Notes will be payable,  the  transfer of such
Notes will be registrable and such Notes will be exchangeable  for Notes bearing
identical terms and provisions at the office or agency of the Company maintained
for such purpose as described below.

          The Company hereby  designates  the Borough of Manhattan,  The City of
New York as a place of payment  ("Place  of  Payment")  for the  Notes,  and the
office or agency  maintained  by the  Company in such  Place of Payment  for the
purposes contemplated by this Section 2.3 shall initially be the Corporate Trust
Office of the Trustee at 100 Wall Street,  Suite 2000, New York, New York 10005,
Attention: Richard Prokosch.

          The Notes  shall be  issuable  in  denominations  of $25 and  integral
multiples of $25 in excess thereof.

          The Notes may be issued, in whole or in part, in permanent global form
and, if issued in permanent  global form, the Depository shall be The Depository
Trust  Company or such other  depositary  as any officer of the Company may from
time to time designate.

          The  Registrar,  the Paying Agent and the transfer agent for the Notes
shall initially be the Trustee.

          The Notes  shall be in  substantially  the form set forth in Exhibit A
hereto.

SECTION 2.4.  Global Note.

          (a)  Unless  and until it is  exchanged  for the  Notes in  registered
certificated  form,  a global Note in principal  amount  equal to the  aggregate
principal amount of all outstanding Notes ("Global Note") may be transferred, in
whole but not in part, only to the Depository or a nominee of the Depository, or
to a successor Depository or to a nominee of such successor Depository.

<PAGE>

          (b) If at any (i) time the Depository  notifies the Company that it is
unwilling  or unable to continue  as a  Depository  for the Global  Notes and no
successor  Depository  shall  have  been  appointed  within 90 days  after  such
notification,  (ii) the  Depository  at any time ceases to be a clearing  agency
registered  under the  Securities  Exchange Act of 1934 or any other  applicable
rule or regulation and no successor  Depository shall have been appointed within
90 days after the Company  becoming aware of the  Depository's  ceasing to be so
registered,  (iii) the  Company,  in its sole  discretion,  determines  that the
Global Notes shall be so  exchangeable  or (iv) there shall have occurred and be
continuing  an Event of  Default,  the Company  will  execute,  and,  subject to
Article II of the Base  Indenture,  the Trustee,  upon  written  notice from the
Company,  will authenticate and deliver the Notes, with the Guarantees  endorsed
thereon and executed by the Guarantors,  in registered certificated form without
coupons, in authorized denominations, and in an aggregate principal amount equal
to the  principal  amount of the Global Note in exchange  for such Global  Note.
Upon the exchange of the Global Note for such Notes in  registered  certificated
form without  coupons,  in  authorized  denominations,  the Global Note shall be
cancelled by the Trustee.  Such Notes in registered  certificated form issued in
exchange  for the  Global  Note  shall be  registered  in such names and in such
authorized  denominations as the Depository,  pursuant to instructions  from its
direct or indirect  participants or otherwise,  shall instruct the Trustee.  The
Trustee shall deliver such Notes to the  Depository  for delivery to the Persons
in whose names such Notes are so registered.

SECTION 2.5.  Payment of Principal and Interest.

          The Notes  shall bear  interest  at the per annum rate of 7-1/4%.  The
following terms apply to the Notes:

          Interest shall be paid  quarterly in arrears on each Interest  Payment
Date commencing on the Interest  Payment Date next succeeding the Original Issue
Date and, if applicable,  on the Maturity Date or date of earlier redemption, as
the case may be. Payments of interest on the Notes will include interest accrued
from, and including,  the immediately  preceding  Interest Payment Date to which
interest  has been  paid or duly  provided  for (or  from,  and  including,  the
Original  Issue Date if no interest has been paid or duly  provided for) to, but
excluding,  the applicable Interest Payment Date or the Maturity Date or date of
earlier redemption, as the case may be. Interest payments for the Notes shall be
computed and paid on the basis of a 360-day  year  consisting  of twelve  30-day
months.

          The interest so payable and  punctually  paid or duly  provided for on
any Interest  Payment Date will be paid to the  Holder(s) of the Notes as of the
Regular  Record Date for such Interest  Payment Date.  Any such interest that is
not so punctually  paid or duly  provided for on any Interest  Payment Date will
forthwith  cease to be payable to the Holders of the particular  series of Notes
as of the close of business on such  Regular  Record Date and may either be paid
to the Person or Persons in whose name such Notes are registered at the close of
business on a Special Record Date for the payment of such defaulted  interest to
be fixed by the  Trustee,  notice  whereof  shall  be  given to  Holders  of the
particular  series of Notes by the Trustee not less than fifteen (15) days prior
to such Special  Record Date, or be paid at any time in any other lawful manner,
all as more fully provided in the Base Indenture.

<PAGE>

          Payment of the  principal  of and any interest on the Notes due on the
Maturity Date or date of earlier  redemption,  as the case may be, shall be made
in immediately available funds, in such coin or currency of the United States of
America  as at the time of payment  is legal  tender  for  payment of public and
private debts,  upon  presentation  and surrender of the applicable Notes at the
office or agency  maintained  by the Company for that  purpose in the Borough of
Manhattan,  The City of New York, currently the office of the Trustee located at
100 Wall Street,  Suite 2000, New York, New York 10005,  or at such other paying
agency in the  Borough of  Manhattan,  The City of New York,  as the Company may
determine.  Payment of interest due on any Interest  Payment Date other than the
Maturity  Date or date of earlier  redemption  will be made by wire  transfer of
immediately  available  funds at such  place  and to such  account  at a banking
institution  in the  United  States  as  may  be  designated  in  wire  transfer
instructions received in writing by the Trustee at least sixteen (16) days prior
to such Interest Payment Date. Any such wire transfer  instructions  received by
the Trustee shall remain in effect until revoked by such Holder.

          In the event that any Interest  Payment  Date or the Maturity  Date or
date of  earlier  redemption  falls on a day  that is not a  Business  Day,  the
required payment of principal and/or interest payable on such date shall be made
on the next succeeding  Business Day except that, if such Business Day is in the
next  succeeding  calendar  year,  payment  shall  be  made  on the  immediately
preceding  Business  Day, in each case with the same force and effect as if made
on the date such payment was due,  and no interest  shall accrue with respect to
such  payment for the period from and after such  Interest  Payment  Date or the
Maturity Date or date of earlier redemption,  as the case may be, to the date of
such payment on the next succeeding Business Day.

                                   ARTICLE III

                       REDEMPTION OF THE NOTES; DEFEASANCE

SECTION 3.1.  Redemption at the Company's Option.

          The Notes shall be subject to redemption at the option of the Company,
in whole or in part,  without  premium or  penalty,  at any time or from time to
time on or after  October  19, 2006 at a  Redemption  Price equal to 100% of the
principal  amount  to be  redeemed  plus  any  unpaid  interest  accrued  to the
Redemption Date.

          In the event of  redemption  of a series of Notes in part only,  a new
Note or Notes of such series for the  unredeemed  portion  will be issued in the
name or  names  of the  Holders  thereof  upon the  presentation  and  surrender
thereof, as set forth in Section 3A.08 of the Base Indenture.

          Notice of  redemption  shall be given as provided in Section  3A.05 of
the Base Indenture.

          Any  redemption  of less  than all of a series  of Notes  shall,  with
respect to the principal thereof, be divisible by $1,000.

SECTION 3.2.  No Sinking Fund.

          The Notes are not  subject  to, or  entitled  to the  benefit  of, any
sinking fund.

SECTION 3.3.  Defeasance.

          Defeasance and Covenant Defeasance shall apply to the Notes.

<PAGE>

                                   ARTICLE IV

                                  MISCELLANEOUS

SECTION 4.1.  Ratification of Indenture.

          The  Base  Indenture  as  supplemented  by  this  First   Supplemental
Indenture,   is  in  all  respects  ratified  and  confirmed,   and  this  First
Supplemental  Indenture  shall be deemed part of the Indenture in the manner and
to the extent herein and therein provided.

SECTION 4.2.  Trustee Not Responsible for Recitals.

          The recitals  herein  contained are made by the Company and not by the
Trustee,  and the Trustee assumes no responsibility for the correctness thereof.
The Trustee makes no  representation  as to the validity or  sufficiency of this
First Supplemental Indenture.

SECTION 4.3.  Governing Law.

          This First Supplemental Indenture and each Note issued hereunder shall
be deemed to be a contract  made under the internal laws of the State of Indiana
and for all purposes  shall be governed by and construed in accordance  with the
laws of said State without regard to principles of conflicts of law.

SECTION 4.4.  Separability.

          In case  any one or more of the  provisions  contained  in this  First
Supplemental  Indenture  or in the  Notes  shall  for any  reason  be held to be
invalid,  illegal or unenforceable in any respect, then, to the extent permitted
by law, such  invalidity,  illegality or  unenforceability  shall not affect any
other provisions of this First Supplemental  Indenture or of the Notes, but this
First Supplemental Indenture and the Notes shall be construed as if such invalid
or  illegal  or  unenforceable  provision  had never  been  contained  herein or
therein.

SECTION 4.5.  Counterparts.

          This First  Supplemental  Indenture may be simultaneously  executed in
any number of counterparts, each of which when so executed shall be an original,
and all  such  counterparts  shall  together  constitute  but  one and the  same
instrument.

SECTION 4.6.  Amendments.

          Notwithstanding any other provision hereof, all amendments to the Base
Indenture made hereby shall have effect only with respect to the Notes,  and not
with respect to the  Securities  of any other series  created  subsequent to the
date hereof.

<PAGE>

          IN  WITNESS  WHEREOF,  the  parties  hereto  have  caused  this  First
Supplemental  Indenture  to  be  duly  executed  by  their  respective  officers
thereunto duly authorized, on the date or dates indicated in the acknowledgments
and as of the day and year first above written.

                                           VECTREN UTILITY HOLDINGS, INC.
                                           as Issuer

                                           By: /s/ Jerome A. Benkert, Jr.
                                               ---------------------------------
                                           Name:  Jerome A. Benkert, Jr.
                                                 -------------------------------
                                           Title: Executive Vice President
                                                  ------------------------------

Attest:

By: /s/ Ronald E. Christian
    ---------------------------------------
Name: Ronald E. Christian
      -------------------------------------
Title: Secretary
       ------------------------------------

                                           INDIANA GAS COMPANY, INC.
                                           as Guarantor

                                           By: /s/ M. Susan Hardwick
                                               ---------------------------------
                                           Name:  M. Susan Hardwick
                                                 -------------------------------
                                           Title: Vice President and Controller
                                                  ------------------------------
Attest:

By: /s/ Ronald E. Christian
    ---------------------------------------
Name: Ronald E. Christian
      -------------------------------------
Title: Secretary
       ------------------------------------

                                           SOUTHERN INDIANA GAS AND ELECTRIC
                                             COMPANY
                                           as Guarantor

                                           By: /s/ M. Susan Hardwick
                                               ---------------------------------
                                           Name: M. Susan Hardwick
                                                 -------------------------------
                                           Title: Vice President and Controller
                                                  ------------------------------
Attest:

By: /s/ Ronald E. Christian
    ---------------------------------------
Name: Ronald E. Christian
      -------------------------------------
Title: Secretary
       ------------------------------------

                                           VECTREN ENERGY DELIVERY OF OHIO, INC.
                                           as Guarantor

                                           By: /s/ M. Susan Hardwick
                                               ---------------------------------
                                           Name: M. Susan Hardwick
                                                 -------------------------------
                                           Title: Vice President and Controller
                                                  ------------------------------
Attest:

By: /s/ Ronald E. Christian
    ---------------------------------------
Name: Ronald E. Christian
      -------------------------------------
Title: Secretary
       ------------------------------------

                                           U.S. BANK TRUST NATIONAL ASSOCIATION
                                           as Trustee

                                           By: /s/ Julie Eddington
                                               ---------------------------------
                                           Name:  Julie Eddington
                                                 -------------------------------
                                           Title: Assistant Vice President
                                                  ------------------------------
Attest:

By: /s/ Lori-Anne Rosenberg
    ---------------------------------------
Name:  Lori-Anne Rosenberg
      -------------------------------------
Title: Assistant Vice President
       ------------------------------------

<PAGE>

                             [Form of Face of Note]

          UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED  REPRESENTATIVE  OF
THE DEPOSITORY TRUST COMPANY ("DTC"), 55 WATER STREET, NEW YORK, NEW YORK TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,  EXCHANGE OR PAYMENT, AND SUCH
SECURITY  ISSUED IS  REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED  REPRESENTATIVE OF DTC, ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR  OTHERWISE  BY OR TO ANY PERSON IS  WRONGFUL,  SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

          UNLESS  IT  IS  EXCHANGED  IN  WHOLE  OR IN  PART  FOR  SECURITIES  IN
DEFINITIVE  REGISTERED  FORM,  THIS SECURITY MAY NOT BE TRANSFERRED  EXCEPT AS A
WHOLE  BY DTC TO A  NOMINEE  OF DTC  OR BY A  NOMINEE  OF DTC TO DTC OR  ANOTHER
NOMINEE OF DTC OR BY DTC OR ANY SUCH  NOMINEE TO A SUCCESSOR OF DTC OR A NOMINEE
OF SUCH SUCCESSOR.

                         Vectren Utility Holdings, Inc.
                    7 1/4 % Senior Note due October 15, 2031

RATE OF INTEREST             STATED MATURITY DATE         ORIGINAL ISSUE DATE
----------------             --------------------         -------------------
    7 1/4%                     October 15, 2031             October 19, 2001

Registered No. 1                                          CUSIP No.  92239M 20 0

          Vectren  Utility  Holdings,  Inc., a  corporation  duly  organized and
existing under the laws of the State of Indiana  (herein called the  "Company"),
for value  received,  hereby  promises to pay,  without relief from valuation or
appraisement  laws,  to Cede & Co. or registered  assigns,  the principal sum of
$100,000,000  on the Stated  Maturity  Date shown above or any  earlier  date of
redemption in accordance  with the  provisions on the reverse  hereof (each such
date shall be  referred  to herein as the  "Maturity  Date" with  respect to the
principal  payable  on  such  date),  and to  pay  interest  on the  outstanding
principal of this Note , at the annual Rate of Interest  shown  above,  from the
Original  Issue Date shown above or from the most recent  Interest  Payment Date
(as  hereinafter  defined) to which interest has been paid or duly provided for,
payable  quarterly on January 15, April 15, July 15 and October 15 of each year,
commencing on January 15, 2002 (an "Interest Payment Date"), and on the Maturity
Date.

          The interest so payable and  punctually  paid or duly  provided for on
any  Interest  Payment  Date  will be paid to the  Holder of this Note as of the
Regular  Record Date for such Interest  Payment Date.  Any such interest that is
not so punctually  paid or duly  provided for on any Interest  Payment Date will
forthwith  cease to be  payable  to the  Holders of this Note as of the close of
business  on such  Regular  Record  Date and may either be paid to the Person or
Persons  in whose name this Note is  registered  at the close of  business  on a
Special  Record Date for the payment of such  defaulted  interest to be fixed by
the Trustee referred to on the reverse hereof,  notice whereof shall be given to
Holders of the Notes by the Trustee not less than  fifteen  (15)  calendar  days
prior to such Special  Record  Date,  or be paid at any time in any other lawful
manner,  all as more fully provided in the Indenture  referred to on the reverse
hereof.

          Interest  payable on this Note on any Interest Payment Date and on the
Maturity Date, as the case may be, will be the amount of interest accrued during
the applicable Interest Period (as defined below).

          An "Interest Period" is each period from and including the immediately
preceding  Interest Payment Date (or from and including  October 19, 2001 in the
case of the initial  Interest  Period) to but excluding the applicable  Interest
Payment Date or the Maturity  Date, as the case may be. If any Interest  Payment
Date or Maturity Date falls on a day that is not a Business  Day,  principal and
interest  payable on such date will be paid on the succeeding  Business Day with
the same force and effect as if it were paid on the date such  payment  was due,
and no  interest  will  accrue on the amount so payable  for the period from and
after such date to such succeeding  Business Day.  "Business Day" means any day,
other than a Saturday or a Sunday,  on which banking  institutions  in New York,
New York are not required to be open.

          Payment of the  principal of, and any interest on this Note due on the
Maturity  Date shall be made in  immediately  available  funds,  in such coin or
currency  of the  United  States of  America  as at the time of payment is legal
tender for payment of public and private debts,  upon presentation and surrender
of this Note at the office or agency  maintained by the Company for that purpose
in the Borough of Manhattan,  The City of New York,  currently the office of the
Trustee located at 100 Wall Street,  Suite 2000, New York, New York 10005, or at
such other paying agency in the Borough of  Manhattan,  The City of New York, as
the Company may determine.  Payment of interest due on this Note on any Interest
Payment  Date  other than the  Maturity  Date will be made by wire  transfer  of
immediately  available  funds at such  place  and to such  account  at a banking
institution  in the  United  States  as  may  be  designated  in  wire  transfer
instructions received in writing by the Trustee at least sixteen (16) days prior
to such Interest Payment Date. Any such wire transfer  instructions  received by
the Trustee shall remain in effect until revoked by such Holder.

          Reference  is hereby made to the further  provisions  of this Note set
forth on the reverse  hereof,  which further  provisions  shall for all purposes
have the same effect as if set forth at this place.

          Unless the certificate of  authentication  hereon has been executed by
the Trustee by manual signature,  this Note shall not be entitled to any benefit
under the Indenture or the Guarantees  (as defined on the reverse  hereof) or be
valid or obligatory for any purpose.

<PAGE>

          In Witness  Whereof,  Vectren Utility  Holdings,  Inc. has caused this
Note to be executed by two of its duly authorized officers.

                                           Vectren Utility Holdings, Inc.

                                           By:
                                                --------------------------------
                                           Title:
                                                  ------------------------------

                                           By:
                                                --------------------------------
                                           Title:
                                                  ------------------------------

DATED:  October 19, 2001

TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Notes referred to in the within-mentioned Indenture.

U.S. BANK TRUST NATIONAL ASSOCIATION,
As Trustee

By:
   -------------------------------------
         Authorized Signatory

<PAGE>

                            [Form of Reverse of Note]

                         Vectren Utility Holdings, Inc.
                    7 1/4 % Senior Notes due OCTOBER 15, 2031

          This  Note is one of a duly  authorized  series of  Securities  of the
Company  (which term  includes any successor  corporation  under the Indenture )
designated  as its "7 1/4 % Senior  Notes due October 15,  2031" (the  "Notes"),
issued or to be issued  pursuant to an Indenture,  dated as of October 10, 2001,
as amended by the First  Supplemental  Indenture  dated  October  19,  2001 (the
"Indenture"),  delivered by the Company and Indiana Gas Company,  Inc., Southern
Indiana Gas and Electric Company, and Vectren Energy Delivery of Ohio, Inc. (the
"Initial  Guarantors"  and,  together with each other  subsidiary of the Company
that pursuant to the terms of the Indenture guarantees the Company's obligations
under the Indenture, the "Guarantors"), to U.S. Bank Trust National Association,
as Trustee (the "Trustee,"  which term includes any successor  trustee under the
Indenture).  The terms of this Note include  those stated in the  Indenture  and
those made part of the  Indenture  by reference  to the Trust  Indenture  Act of
1939, as in effect on the date of the Indenture. Reference is hereby made to the
Indenture and all further supplemental indentures thereto for a statement of the
respective rights, limitation of rights, duties and immunities thereunder of the
Company, the Guarantors, the Trustee and the Holders and of the terms upon which
the Notes are, and are to be, authenticated and delivered. All capitalized terms
not defined herein shall have the meanings given to them in the Indenture.

          Payments  of  principal  and  interest in respect of the Notes will be
fully  and  unconditionally   and  jointly  and  severally   guaranteed  by  the
Guarantors,  subject  to the  termination  of  any  Guarantee  of any  Guarantor
pursuant to the terms of Article Ten of the Indenture.

          The Notes are a series  of debt  securities  issued or to be issued by
the  Company  under the  Indenture,  and this  Series is  limited  in  aggregate
principal  amount to  $100,000,000,  subject to the reopening  provisions of the
Indenture.  The  Indenture  provides  that the debt  securities  of the  Company
issuable or issued thereunder ("Securities"), including the Notes, may be issued
in one or more series,  which  different  series may be issued in such aggregate
principal  amounts  and on such terms  (including,  but not  limited  to,  terms
relating to interest rate or rates,  provisions  for  determining  such interest
rate or rates  and  adjustments  thereto,  maturity,  redemption  (optional  and
mandatory), sinking fund, covenants and Events of Default) as may be provided in
or pursuant to the Authorizing  Resolutions  and/or  supplemental  indenture (if
any) relating to the Series.

          This Note is are subject to redemption  upon not less than 30 nor more
than 60 days'  written  notice  to the  Holder  hereof,  at any time on or after
October  19,  2006,  without  premium or  penalty,  in whole or in part,  at the
election of the  Company at a  Redemption  Price equal to 100% of the  principal
amount hereof, together with any unpaid interest accrued to the Redemption Date.

          In the event of  redemption  of this Note in part only,  a new Note or
Notes  for the  unredeemed  portion  hereof  shall be  issued in the name of the
Holder hereof upon the surrender hereof.

          If an Event of Default,  as defined in the Indenture,  shall occur and
be  continuing,  the principal of all the Notes may be (and,  in certain  cases,
shall be) declared due and payable in the manner and with the effect provided in
the Indenture.

          The Indenture  permits,  with certain  exceptions as therein provided,
the amendment  thereof and the modification of the rights and obligations of the
Company and, if applicable, the Guarantors, and the rights of the Holders of the
Notes at any time by the Company, the Guarantors, if applicable, and the Trustee
with the consent of the Holders of a majority in aggregate  principal  amount of
the Securities affected thereby, voting as a single class (which may include the
Notes),  at  the  time  outstanding.  The  Indenture  also  contains  provisions
permitting the Holders of a majority in aggregate  principal  amount of the then
outstanding  Securities  affected  thereby,  voting as a single class (which may
include the Notes) to waive compliance by the Company with certain provisions of
the  Indenture  and  certain  past  defaults   under  the  Indenture  and  their
consequences.  Any such  consent  or waiver by the  Holder of this Note shall be
conclusive and binding upon such Holder and upon all future Holders of this Note
and of any Note issued upon the  registration  of transfer hereof or in exchange
herefor in lieu  hereof,  whether or not  notation of such  consent or waiver is
made upon this Note.

          The Indenture  provides that no Holder may pursue any remedy under the
Indenture  unless the Trustee  shall have failed to act after notice of an Event
of Default and written request by Holders of at least 25% in aggregate principal
amount of the Notes and the offer to the Trustee of  indemnity  satisfactory  to
it;  provided  however,  such provision does not affect the right of a Holder to
sue for enforcement of any overdue payment on this Note.

          No reference  herein to the Indenture and no provision of this Note or
of the Indenture  shall alter or impair the obligation of the Company,  which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, places and rates, and in the coin or currency, herein prescribed.

          As provided in the Indenture and subject to certain limitations herein
and therein set forth,  the transfer of this Note is registrable in the Security
Register upon surrender of this Note for  registration of transfer at the agency
of the Company  provided for that purpose duly endorsed by, or  accompanied by a
written  instrument of transfer in substantially the form accompanying this Note
duly executed by, the Holder hereof or his attorney duly  authorized in writing,
and thereupon one or more new Notes,  of  authorized  denominations  and for the
same aggregate principal amount, will be issued to the designated  transferee or
transferees.

          The Notes are issuable  only in  registered  form  without  coupons in
denominations  of $25 and any  integral  multiple  thereof.  As  provided in the
Indenture and subject to certain  limitations  herein and therein set forth, the
Notes  are  exchangeable  for a like  aggregate  principal  amount of Notes of a
different authorized denominations,  as requested by the Holder surrendering the
same.

          No service charge shall be made for any such  registration of transfer
or exchange,  but the Company may require  payment of a sum  sufficient to cover
any transfer tax or similar  governmental charge payable in connection therewith
(other than any such transfer taxes or similar  governmental charge payable upon
exchanges  pursuant to Section 2.11,  3A.08 or 9.05, in which case such transfer
taxes or similar governmental charges shall be paid by the Company).

          Prior to due  presentment of this Note for  registration  of transfer,
the  Company,  the  Guarantors,  the Trustee and any agent of the  Company,  the
Guarantors  or the Trustee may treat the Holder of this Note as the owner hereof
for all purposes,  whether or not this Note be overdue, and none of the Company,
the Guarantors, the Trustee or any such agent shall be affected by notice to the
contrary.

          This  Note  shall  be  governed  by the laws of the  State of  Indiana
without regard to principles of conflicts of law.

<PAGE>

                                 ASSIGNMENT FORM

If you the Holder want to assign this Note, fill in the form below and have your
signature guaranteed:

I or we assign and transfer this Note to:

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
(PRINT OR TYPE NAME,  ADDRESS AND ZIP CODE AND SOCIAL  SECURITY OR TAX ID NUMBER
OF ASSIGNEES)

and irrevocably appoint,  __________________  agent to transfer this Note on the
books of the Company. The agent may substitute another to act for him.

Dated:                                     Signed:
      ----------------------------                ------------------------------

      ----------------------------                ------------------------------

                                                  (SIGN EXACTLY AS NAME
                                                  APPEARS ON THE OTHER SIDE
                                                  OF THIS NOTE.)

SIGNATURE GUARANTEE:

---------------------------------------------------------

Notice:  Signature(s)  must be guaranteed by a member firm of the New York Stock
Exchange or a commercial bank or trust company.

<PAGE>

                           [Form of Guarantee of Note]

          For good  and  valuable  consideration  receipt  of  which  is  hereby
acknowledged,  and  intending to be legally  bound  hereby,  each of Indiana Gas
Company,  Inc.,  Southern Indiana Gas and Electric  Company,  and Vectren Energy
Delivery of Ohio, Inc.  (together with each other subsidiary of the Company that
pursuant to the terms of the  Indenture  guarantees  the  Company's  obligations
under the Notes and the Indenture,  the "Guarantors") hereby unconditionally and
jointly  and  severally  guarantees  to the  Holder  of the note  (the  "Note"),
authenticated  and  delivered by the  Trustee,  upon which this  guarantee  (the
"Guarantee") is endorsed,  the due and punctual  payment of the principal of and
interest on, and any Redemption  Price with respect to the Note, when and as the
same shall become due and payable, whether at Stated Maturity, upon acceleration
or redemption or otherwise, in accordance with the terms of this Note and of the
Indenture.

          The Guarantors agree to determine,  at least one Business Day prior to
the date upon which a payment of principal of and/or  interest on the Note,  and
any Redemption  Price with respect to the Note, is due and payable,  whether the
Company has  available  the funds to make such  payment as the same shall become
due and  payable.  In case of the failure of the Company to  punctually  pay any
such principal of or interest on, or any  Redemption  Price with respect to, the
Note,  the  Guarantors  hereby  agree  to  cause  any  such  payment  to be made
punctually when and as the same shall become due and payable,  whether at Stated
Maturity, upon acceleration or redemption,  or otherwise, and as if such payment
were made by the Company.

          The Guarantors hereby agree that their obligations  hereunder shall be
as principal and not merely as surety, and shall be unconditional,  irrevocable,
and  absolute,  irrespective  of, and shall be  unaffected  by, any  invalidity,
irregularity,  or unenforceability of the Note or such Indenture, any failure to
enforce  the  provisions  of  the  Note  or  the   Indenture,   or  any  waiver,
modification,  consent or indulgence granted to the Company with respect thereto
(unless the same shall also be provided to the  Guarantors) by the Holder of the
Note or the Trustee with respect to any provisions thereof,  the recovery of any
judgment  against the  Company or any action to enforce  the same,  or any other
circumstance which might otherwise  constitute a legal or equitable discharge or
defense of a surety or of a guarantor.  The Guarantors  hereby waive  diligence,
presentment,  demand of  payment,  filing of claims with a court in the event of
merger,  insolvency  or  bankruptcy  of the  Company,  any  right to  require  a
proceeding first against the Company,  protest or notice with respect to any the
Note or the  indebtedness  evidenced  thereby,  and all demands  whatsoever  and
covenants that this  Guarantee will not be discharged  except by payment in full
of the principal of and interest on, and any  Redemption  Price with respect to,
the Note and the complete performance of the obligations  contained in the Note,
this Guarantee and the Indenture.

The  Guarantors  shall be  subrogated  to all  rights of the  Holder of the Note
against  the  Company  in  respect  of all  amounts  paid to such  Holder by the
Guarantors pursuant to the provisions of this Guarantee; provided, however, that
the  Guarantors  shall not,  without  the  consent of the  Holders of all of the
outstanding  Notes (the  "Notes") of the series of which the Note is a part,  be
entitled to enforce or to receive any payments arising out of or based upon such
right of subrogation  until the principal of and interest on, and any Redemption
Price with respect to all Notes shall have been paid in full or payment  thereof
shall have been  provided for and all other  obligations  contained in the Notes
and the Indenture shall have been performed.  If any amount shall be paid to any
Guarantor  in  violation of the  preceding  sentence and all amounts  payable in
respect of the Securities shall not have been paid in full, such amount shall be
deemed to have been paid to such Guarantor for the benefit of, and held in trust
for the benefit of, the Holders,  and shall forthwith be paid to the Trustee for
the benefit of the Holders to be credited  and applied upon such  amounts.  Each
Guarantor  acknowledges  that it will receive direct and indirect  benefits from
the issuance of the Notes pursuant to this Indenture.

          Notwithstanding   anything  to  the  contrary   contained  herein,  if
following  any  payment of the  principal  Redemption  Price or  interest by the
Company in respect of the Notes to the Holders of the Notes it is  determined by
a final decision of a court of competent jurisdiction that such payment shall be
avoided by a trustee in bankruptcy  (including  any  debtor-in-possession)  as a
preference  under 11 U.S.C.  Section  547 and such  payment is  returned by such
Holder to such trustee in  bankruptcy,  then the  obligations  of the Guarantors
hereunder shall remain in full force and effect to the extent of such repayment.

Notwithstanding  anything to the contrary contained herein, this Guarantee shall
be, and hereby is,  limited to the maximum  amount that may be guaranteed by the
applicable  Guarantor  without  rendering this Guarantee,  as it relates to such
Guarantor,  voidable under any applicable law relating to fraudulent conveyance,
fraudulent transfer or similar laws affecting the rights of creditors generally.

          This  Guarantee is intended for the benefit of the Trustee and each of
the  Holders  of the Notes and shall be  enforceable  by such  Trustee  and such
Holders.

          This  Guarantee  is  subject to  termination  in  accordance  with the
provisions of Article 10 of the Indenture.

          This  Guarantee  shall be governed by the laws of the State of Indiana
without regard to principles of conflicts of law.

<PAGE>

          IN  WITNESS  WHEREOF,  Indiana  Gas  Company,  Inc.  has  caused  this
Guarantee to be executed by two of its duly authorized officers.

                                        By:
                                           -------------------------------------
                                             Name:
                                             Title:

                                        By:
                                           -------------------------------------
                                             Name:
                                             Title:

<PAGE>

          IN WITNESS  WHEREOF,  Southern  Indiana Gas and  Electric  Company has
caused this Guarantee to be executed by two of its duly authorized officers.

                                        By:
                                           -------------------------------------
                                             Name:
                                             Title:

                                        By:
                                           -------------------------------------
                                             Name:
                                             Title:

<PAGE>

          IN WITNESS  WHEREOF,  Vectren Energy Delivery of Ohio, Inc. has caused
this Guarantee to be executed by two of its duly authorized officers.

                                        By:
                                           -------------------------------------
                                             Name:
                                             Title:

                                        By:
                                           -------------------------------------
                                             Name:
                                             Title:<PAGE>

                                                                     Exhibit 4.1

EXPLANATORY NOTE: The Luminate Software Corporation 1996 Equity Incentive Plan,
as amended, was assumed by EMC Corporation pursuant to an Agreement and Plan of
Merger dated as of September 4, 2001 except that the options granted thereunder
relate to rights to purchase shares of common stock, par value $0.01 per share,
of EMC Corporation.

                          LUMINATE SOFTWARE CORPORATION

                           1996 EQUITY INCENTIVE PLAN

                           AS ADOPTED JANUARY 9, 1996
                       AMENDED AND RESTATED JUNE 29, 1998
                       AMENDED THROUGH SEPTEMBER 17, 1999

     1. PURPOSE. The purpose of this Plan is to provide incentives to attract,
retain and motivate eligible persons whose present and potential contributions
are important to the success of the Company, its Parent and Subsidiaries, by
offering them an opportunity to participate in the Company's future performance
through awards of Options and Restricted Stock. Capitalized terms not defined in
the text are defined in Section 22 hereof. This Plan is intended to be a written
compensatory benefit plan within the meaning of Rule 701 promulgated under the
Securities Act.

     2. SHARES SUBJECT TO THE PLAN.

          2.1 NUMBER OF SHARES AVAILABLE. Subject to Sections 2.2 and 17 hereof,
the total number of Shares reserved and available for grant and issuance
pursuant to this Plan will be 3,795,000 Shares or such lesser number of Shares
as permitted under Section 260.140.45 of Title 10 of the California Code of
Regulations. Subject to Sections 2.2 and 17 hereof, Shares will again be
available for grant and issuance in connection with future Awards under this
Plan that: (a) are subject to issuance upon exercise of an Option but cease to
be subject to such Option for any reason other than exercise of such Option or
(b) are subject to a Restricted Stock Award that otherwise terminates without
Shares being issued. At all times the Company will reserve and keep available a
sufficient number of Shares as will be required to satisfy the requirements of
all Awards granted under this Plan.

          2.2 ADJUSTMENT OF SHARES. In the event that the number of outstanding
shares of the Company's Common Stock is changed by a stock dividend,
recapitalization, stock split, reverse stock split, subdivision, combination,
reclassification or similar change in the capital structure of the Company
without consideration, then (a) the number of Shares reserved for issuance under
this Plan, (b) the Exercise Prices of and number of Shares subject to
outstanding Options and (c) the Purchase Prices of and number of Shares subject
to other outstanding Awards will be proportionately adjusted, subject to any
required action by the Board or the shareholders of the Company and compliance
with applicable securities laws; provided, however, that fractions of a Share
will not be issued but will either be paid in cash at Fair Market Value of such
fraction of a Share or will be rounded down to the nearest whole Share, as
determined by the Committee.

     3. ELIGIBILITY. ISOs (as defined in Section 5 hereof) may be granted only
to employees (including officers and directors who are also employees) of the
Company or of a Parent or Subsidiary of the Company. NQSOs (as defined in
Section 5 hereto) and Restricted Stock Awards may be granted to employees,
officers, directors and consultants of the Company or any Parent or Subsidiary
of the Company; provided such consultants render bona fide services not in
connection with the offer and sale of securities in a capital-raising
transaction. A person may be granted more than one Award under this Plan.

<PAGE>

     4. ADMINISTRATION.

          4.1 COMMITTEE AUTHORITY. This Plan will be administered by the
Committee or the Board acting as the Committee. Subject to the general purposes,
terms and conditions of this Plan, and to the direction of the Board, the
Committee will have full power to implement and carry out this Plan. Without
limitation, the Committee will have the authority to:

          (a) construe and interpret this Plan, any Award Agreement and any
              other agreement or document executed pursuant to this Plan;

          (b) prescribe, amend and rescind rules and regulations relating to
              this Plan;

          (c) select persons to receive Awards;

          (d) determine the form and terms of Awards;

          (e) determine the number of Shares or other consideration subject to
              Awards;

          (f) determine whether Awards will be granted singly, in combination
              with, in tandem with, in replacement of, or as alternatives to,
              other Awards under this Plan or awards under any other incentive
              or compensation plan of the Company or any Parent or Subsidiary
              of the Company;

          (g) grant waivers of Plan or Award conditions;

          (h) determine the vesting, exercisability and payment of Awards;

          (i) correct any defect, supply any omission, or reconcile any
              inconsistency in this Plan, any Award, any Award Agreement, any
              Exercise Agreement or any Restricted Stock Purchase Agreement;

          (j) determine whether an Award has been earned; and

          (k) make all other determinations necessary or advisable for the
              administration of this Plan.

          4.2 COMMITTEE DISCRETION. Any determination made by the Committee with
respect to any Award will be made in its sole discretion at the time of grant of
the Award or, unless in contravention of any express term of this Plan or Award,
and subject to Section 5.9 hereof, at any later time, and such determination
will be final and binding on the Company and on all persons having an interest
in any Award under this Plan. The Committee may delegate to one or more officers
of the Company the authority to grant an Award under this Plan, provided such
officer or officers are members of the Board.

     5. OPTIONS. The Committee may grant Options to eligible persons and will
determine whether such Options will be Incentive Stock Options within the
meaning of the Code ("ISOs") or Nonqualified Stock Options ("NQSOs"), the number
of Shares subject to the Option, the Exercise Price of the Option, the period
during which the Option may be exercised, and all other terms and conditions of
the Option, subject to the following:

          5.1 FORM OF OPTION GRANT. Each Option granted under this Plan will be
evidenced by an Award Agreement which will expressly identify the Option as an
ISO or an NQSO ("STOCK OPTION AGREEMENT"), and will be in such form and contain
such provisions (which need not be the same for each Participant) as the
Committee may from time to time approve, and which will comply with and be
subject to the terms and conditions of this Plan.

          5.2 DATE OF GRANT. The date of grant of an Option will be the date on
which the Committee makes the determination to grant such Option, unless
otherwise specified by the Committee. The Stock Option

                                       2
<PAGE>

Agreement and a copy of this Plan will be delivered to the Participant within a
reasonable time after the granting of the Option.

          5.3 EXERCISE PERIOD. Options may be exercisable immediately (subject
to repurchase pursuant to Section 11 hereof) or may be exercisable within the
times or upon the events determined by the Committee as set forth in the Stock
Option Agreement governing such Option; provided, however, that no Option will
be exercisable after the expiration of ten (10) years from the date the Option
is granted; and provided further that no ISO granted to a person who directly or
by attribution owns more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or of any Parent or Subsidiary of
the Company ("TEN PERCENT SHAREHOLDER") will be exercisable after the expiration
of five (5) years from the date the ISO is granted. The Committee also may
provide for Options to become exercisable at one time or from time to time,
periodically or otherwise, in such number of Shares or percentage of Shares as
the Committee determines. Subject to earlier termination of the Option as
provided herein, each Participant who is not an officer, director or consultant
of the Company or of a Parent or Subsidiary of the Company shall have the right
to exercise an Option granted hereunder at the rate of at least twenty percent
(20%) per year over five (5) years from the date such Option is granted.

          5.4 EXERCISE PRICE. The Exercise Price of an Option will be determined
by the Committee when the Option is granted and may not be less than eighty-five
percent (85%) of the Fair Market Value of the Shares on the date of grant;
provided that (a) the Exercise Price of an ISO will not be less than one hundred
percent (100%) of the Fair Market Value of the Shares on the date of grant and
(b) the Exercise Price of any Option granted to a Ten Percent Shareholder will
not be less than one hundred ten percent (110%) of the Fair Market Value of the
Shares on the date of grant. Payment for the Shares purchased must be made in
accordance with Section 7 hereof.

          5.5 METHOD OF EXERCISE. Options may be exercised only by delivery to
the Company of a written stock option exercise agreement (the "EXERCISE
AGREEMENT") in a form approved by the Committee (which need not be the same for
each Participant), stating the number of Shares being purchased, the
restrictions imposed on the Shares purchased under such Exercise Agreement, if
any, and such representations and agreements regarding Participant's investment
intent and access to information and other matters, if any, as may be required
or desirable by the Company to comply with applicable securities laws, together
with payment in full of the Exercise Price, and any applicable taxes, for the
number of Shares being purchased.

          5.6 TERMINATION. Subject to earlier termination pursuant to Sections
17 and 18 hereof and notwithstanding the exercise periods set forth in the Stock
Option Agreement, exercise of an Option will always be subject to the following:

          (a) If the Participant is Terminated for any reason except death,
              Disability or for Cause, then the Participant may exercise such
              Participant's Options only to the extent that such Options are
              exercisable upon the Termination Date and such Options must be
              exercised by the Participant, if at all, as to all or some of the
              Vested Shares calculated as of the Termination Date, within three
              (3) months after the Termination Date (or within such shorter
              time period, not less than thirty (30) days, or within such
              longer time period, not exceeding five (5) years, after the
              Termination Date as may be determined by the Committee, with any
              exercise beyond three (3) months after the Termination Date
              deemed to be an NQSO) but in any event, non later than the
              expiration date of the Options.

          (b) If the Participant is Terminated because of Participant's death or
              Disability (or the Participant dies within three (3) months after
              a Termination other than for Cause), then Participant's Options
              may be exercised only to the extent that such Options are
              exercisable by Participant on the Termination Date and must be
              exercised by Participant (or Participant's legal representative
              or authorized assignee), if at all, as to all or some of the
              Vested Shares calculated as of the Termination Date, within
              twelve (12) months after the Termination Date (or within such
              shorter time period, not less than six (6) months, or within such
              longer time period, not exceeding five (5) years, after the
              Termination Date as may be determined by the Committee, with any
              exercise beyond (i) three (3) months

                                       3
<PAGE>

              after the Termination Date when the Termination is for any reason
              other than the Participant's death or disability, within the
              meaning of Section 22(e)(3) of the Code, or (ii) twelve (12)
              months after the Termination Date when the Termination is for
              Participant's disability, within the meaning of Section 22(e)(3)
              of the Code, deemed to be an NQSO) but in any event no later than
              the expiration date of the Options.

          (c) If the Participant is terminated for Cause, then Participant's
              Options shall expire on such Participant's Termination Date, or
              at such later time and on such conditions as are determined by
              the Committee.

          5.7 LIMITATIONS ON EXERCISE. The Committee may specify a reasonable
minimum number of Shares that may be purchased on any exercise of an Option,
provided that such minimum number will not prevent Participant from exercising
the Option for the full number of Shares for which it is then exercisable.

          5.8 LIMITATIONS ON ISOs. The aggregate Fair Market Value (determined
as of the date of grant) of Shares with respect to which ISOs are exercisable
for the first time by a Participant during any calendar year (under this Plan or
under any other incentive stock option plan of the Company or any Parent or
Subsidiary of the Company) will not exceed $100,000. If the Fair Market Value of
Shares on the date of grant with respect to which ISOs are exercisable for the
first time by a Participant during any calendar year exceeds $100,000, then the
Options for the first $100,000 worth of Shares to become exercisable in such
calendar year will be ISOs and the Options for the amount in excess of $100,000
that become exercisable in that calendar year will be NQSOs. In the event that
the Code or the regulations promulgated thereunder are amended after the
Effective Date (as defined in Section 18 hereof) to provide for a different
limit on the Fair Market Value of Shares permitted to be subject to ISOs, then
such different limit will be automatically incorporated herein and will apply to
any Options granted after the effective date of such amendment.

          5.9 MODIFICATION, EXTENSION OR REMOVAL. The Committee may modify,
extend or renew outstanding Options and authorize the grant of new Options in
substitution therefor, provided that any such action may not, without the
written consent of a Participant, impair any of such Participant's rights under
any Option previously granted. Any outstanding ISO that is modified, extended,
renewed or otherwise altered will be treated in accordance with Section 424(h)
of the Code. Subject to Section 5.10 hereof, the Committee may reduce the
Exercise Price of outstanding Options without the consent of Participants
affected by a written notice to them; provided, however, that the Exercise Price
may not be reduced below the minimum Exercise Price that would be permitted
under Section 5.4 hereof for Options granted on the date the action is taken to
reduce the Exercise Price.

          5.10 NO DISQUALIFICATION. Notwithstanding any other provision in this
Plan, no term of this Plan relating to ISOs will be interpreted, amended or
altered, nor will any discretion or authority granted under this Plan be
exercised, so as to disqualify this Plan under Section 422 of the Code or,
without the consent of the Participant affected, to disqualify any ISO under
Section 422 of the Code.

     6. RESTRICTED STOCK. A Restricted Stock Award is an offer by the Company to
sell to an eligible person Shares that are subject to restrictions. The
Committee will determine to whom an offer will be made, the number of Shares the
person may purchase, the Purchase Price, the restrictions to which the Shares
will be subject, and all other terms and conditions of the Restricted Stock
Award, subject to the following:

          6.1 FORM OF RESTRICTED STOCK AWARD. All purchases under a Restricted
Stock Award made pursuant to this Plan will be evidenced by an Award Agreement
("RESTRICTED STOCK PURCHASE AGREEMENT") that will be in such form (which need
not be the same for each Participant) as the Committee will from time to time
approve, and will comply with and be subject to the terms and conditions of this
Plan. The Restricted Stock Award will be accepted by the Participant's execution
and delivery of the Restricted Stock Purchase Agreement and full payment for the
Shares to the Company within thirty (30) days from the date the Restricted Stock
Purchase Agreement is delivered to the person. If such person does not execute
and deliver the Restricted Stock Purchase Agreement along with full payment for
the Shares to the Company within such thirty (30) days , then the offer will
terminate, unless otherwise determined by the Committee.

                                       4
<PAGE>

          6.2 PURCHASE PRICE. The Purchase Price of Shares sold pursuant to a
Restricted Stock Award will be determined by the Committee and will be at least
eighty-five percent (85%) of the Fair Market Value of the Shares on the date the
Restricted Stock Award is granted or at the time the purchase is consummated,
except in the case of a sale to a Ten Percent Shareholder, in which case the
Purchase Price will be one hundred percent (100%) of the Fair Market Value on
the date the Restricted Stock Award is granted or at the time the purchase is
consummated. Payment of the Purchase Price must be made in accordance with
Section 7 hereof.

          6.3 RESTRICTIONS. Restricted Stock Awards may be subject tot he
restrictions set forth in Section 11 hereof or such other restrictions not
inconsistent with Section 25102(o) of the California Corporations Code.

     7. PAYMENT FOR SHARE PURCHASES.

          7.1 PAYMENT. Payment for Shares purchased pursuant to this Plan may be
made in cash (by check) or, where expressly approved for the Participant by the
Committee and where permitted by law:

          (a) by cancellation of indebtedness of the Company to the Participant;

          (b) by surrender of shares that: (i) either (A) have been owned by
              Participant for more than six (6) months and have been paid for
              within the meaning of SEC Rule 144 (and, if such shares were
              purchased from the Company by use of a promissory note, such note
              has been fully paid with respect to such shares) or (B) were
              obtained by Participant in the public market and (ii) are clear
              of all liens, claims, encumbrances or security interests;

          (c) by tender of a full recourse promissory note having such terms as
              may be approved by the Committee and bearing interest at a rate
              sufficient to avoid imputation of income under Sections 483 and
              1274 of the Code; provided, however, that Participants who are
              not employees or directors of the Company will not be entitled to
              purchase Shares with a promissory note unless the note is
              adequately secured by collateral other than the Shares;

          (d) by waiver of compensation due or accrued to the Participant for
              services rendered;

          (e) with respect only to purchases upon exercise of an Option, and
              provided that a public market for the Company's stock exists:

               (1) through a "same day sale" commitment from the Participant and
                   a broker-dealer that is a member of the National Association
                   of Securities Dealers (an "NASD DEALER") whereby the
                   Participant irrevocably elects to exercise the Option and to
                   sell a portion of the Shares so purchased to pay for the
                   Exercise Price, and whereby the NASD Dealer irrevocably
                   commits upon receipt of such Shares to forward the Exercise
                   Price directly to the Company; or

               (2) through a "margin" commitment from the Participant and an
                   NASD Dealer whereby the Participant irrevocably elects to
                   exercise the Option and to pledge the Shares so purchased to
                   the NASD Dealer in a margin account as security for a loan
                   from the NASD Dealer in the amount of the Exercise Price,
                   and whereby the NASD Dealer irrevocably commits upon receipt
                   of such Shares to forward the Exercise Price directly to the
                   Company; or

          (f) by any combination of the foregoing.

          7.2 LOAN GUARANTEES. The Committee may help the Participant pay for
Shares purchased under this Plan by authorizing a guarantee by the Company of a
third-party loan to the Participant.

                                       5
<PAGE>

     8. WITHHOLDING TAXES.

          8.1 WITHHOLDING GENERALLY. Whenever Shares are to be issued in
satisfaction of Awards granted under this Plan, the Company may require the
Participant to remit to the Company an amount sufficient to satisfy federal,
state and local withholding tax requirements prior to the delivery of any
certificate or certificates for such Shares. Whenever, under this Plan, payments
in satisfaction of Awards are to be made in cash, such payment will be net of an
amount sufficient to satisfy federal, state, and local withholding tax
requirements.

          8.2 STOCK WITHHOLDING. When, under applicable tax laws, a Participant
incurs tax liability in connection with the exercise or vesting of any Award
that is subject to tax withholding and the Participant is obligated to pay the
Company the amount required to be withheld, the Committee may in its sole
discretion allow the Participant to satisfy the minimum withholding tax
obligation by electing to have the Company withhold from the Shares to be issued
that number of Shares having a Fair Market Value equal to the minimum amount
required to be withheld, determined on the date that the amount of tax to be
withheld is to be determined. All elections by a Participant to have Shares
withheld for this purpose will be made in accordance with the requirements
established by the Committee for such elections and be in writing in a form
acceptable to the Committee.

     9. PRIVILEGES OF STOCK OWNERSHIP.

          9.1 VOTING AND DIVIDENDS. No Participant will have any of the rights
of a shareholder with respect to any Shares until the Shares are issued to the
Participant. After Shares are issued to the Participant, the Participant will be
a shareholder and have all the rights of a shareholder with respect to such
Shares, including the right to vote and receive all dividends or other
distributions made or paid with respect to such Shares; provided, that if such
Shares are Restricted Stock, then any new, additional or different securities
the Participant may become entitled to receive with respect to such Shares by
virtue of a stock dividend, stock split or any other change in the corporate or
capital structure of the Company will be subject to the same restrictions as the
Restricted Stock; provided, further, that the Participant will have no right to
retain such stock dividends or stock distributions with respect to Unvested
Shares that are repurchased pursuant to Section 11 hereof. The Company will
comply with Section 260.140.1 of Title 10 of the California Code of Regulations
with respect to the voting rights of Common Stock.

          9.2 FINANCIAL STATEMENTS. The Company will provide financial
statements to each Participant prior to such Participant's purchase of Shares
under this Plan, and to each Participant annually during the period such
Participant has Awards outstanding, or as otherwise required under Section
260.140.46 of Title 10 of the California Code of Regulations. Notwithstanding
the foregoing, the Company will not be required to provide such financial
statements to Participants when issuance is limited to key employees whose
services in connection with the Company assure them access to equivalent
information.

     10. TRANSFERABILITY. Awards granted under this Plan, and any interest
therein, will not be transferable or assignable by Participant, and may not be
made subject to execution, attachment or similar process, otherwise than by will
or by the laws of descent and distribution. During the lifetime of the
Participant an Award will be exercisable only by the Participant or
Participant's legal representative and any elections with respect to an Award,
may be made only by the Participant or Participant's legal representative.

     11. RESTRICTIONS OF SHARES.

          11.1 RIGHT OF FIRST REFUSAL. At the discretion of the Committee, the
Company may reserve to itself and/or its assignee(s) in the Award Agreement a
right of first refusal to purchase all Shares that a Participant (or a
subsequent transferee) may propose to transfer to a third party, unless
otherwise not permitted by Section 25102(o) of the California Corporations Code,
provided, that such right of first refusal terminates upon the Company's initial
public offering of Common Stock pursuant to an effective registration statement
filed under the Securities Act.

          11.2 RIGHT OF REPURCHASE. At the discretion of the Committee, the
Company may reserve to itself and/or its assignee(s) in the Award Agreement a
right to repurchase Unvested Shares held by a Participant for cash and/or
cancellation of purchase money indebtedness following such Participant's
Termination at any time within the later of ninety (90) days after the
Participant's Termination Date and the date the Participant purchases

                                       6
<PAGE>

Shares under the Plan at the Participant's Exercise Price or Purchase Price, as
the case may be, provided, that unless the Participant is an officer, director
or consultant of the Company or of a Parent or Subsidiary of the Company, such
right of repurchase lapses at the rate of at least twenty percent (20%) per year
over five (5) years from: (a) the date of grant of the Option or (b) in the case
of Restricted Stock, the date the Participant purchases the Shares.

     12. CERTIFICATES. All certificates for Shares or other securities delivered
under this Plan will be subject to such stock transfer orders, legends and other
restrictions as the Committee may deem necessary or advisable, including
restrictions under any applicable federal, state or foreign securities law, or
any rules, regulations and other requirements of the SEC or any stock exchange
or automated quotation system upon which the Shares may be listed or quoted.

     13. ESCROW; PLEDGE OF SHARES. To enforce any restrictions on a
Participant's Shares, the Committee may require the Participant to deposit all
certificates representing Shares, together with stock powers or other
instruments of transfer approved by the Committee, appropriately endorsed in
blank, with the Company or an agent designated by the Company to hold in escrow
until such restrictions have lapsed or terminated, and the Committee may cause a
legend or legends referencing such restrictions to be placed on the
certificates. Any Participant who is permitted to execute a promissory note as
partial or full consideration for the purchase of Shares under this Plan will be
required to pledge and deposit with the Company all or part of the Shares so
purchased as collateral to secure the payment of Participant's obligation to the
Company under the promissory note; provided, however, that the Committee may
require or accept other or additional forms of collateral to secure the payment
of such obligation and, in any event, the Company will have full recourse
against the Participant under the promissory note notwithstanding any pledge of
the Participant's Shares or other collateral. In connection with any pledge of
the Shares, Participant will be required to execute and deliver a written pledge
agreement in such form as the Committee will from time to time approve. The
Shares purchased with the promissory note may be released from the pledge on a
pro rata basis as the promissory note is paid.

     14. EXCHANGE AND BUYOUT OF AWARDS. The Committee may, at any time or from
time to time, authorize the Company, with the consent of the respective
Participants, to issue new Awards in exchange for the surrender and cancellation
of any or all outstanding Awards. The Committee may at any time buy from a
Participant an Award previously granted with payment in cash, shares of Common
Stock of the Company (including Restricted Stock) or other consideration, based
on such terms and conditions as the Committee and the Participant may agree.

     15. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. This Plan is intended
to comply with Section 25102(o) of the California Corporations Code. Any
provision of this Plan which is inconsistent with Section 25102(o) shall,
without further act or amendment by the Company or the Board, be reformed to
comply with the requirements of Section 25102(o). An Award will not be effective
unless such Award is in compliance with all applicable federal and state
securities laws, rules and regulations of any governmental body, and the
requirements of any stock exchange or automated quotation system upon which the
Shares may then be listed or quoted, as they are in effect on the date of grant
of the Award and also on the date of exercise or other issuance. Notwithstanding
any other provision in this Plan, the Company will have no obligation to issue
or deliver certificates for Shares under this Plan prior to (a) obtaining any
approvals from governmental agencies that the Company determines are necessary
or advisable, and/or (b) compliance with any exemption, completion of any
registration or other qualification of such Shares under any state or federal
law or ruling of any governmental body that the Company determines to be
necessary or advisable. The Company will be under no obligation to register the
Shares with the SEC or to effect compliance with the exemption, registration,
qualification or listing requirements of any state securities laws, stock
exchange or automated quotation system, and the Company will have no liability
for any inability or failure to do so.

     16. NO OBLIGATION TO EMPLOY. Nothing in this Plan or any Award granted
under this Plan will confer or be deemed to confer on any Participant any right
to continue in the employ of, or to continue any other relationship with, the
Company or any Parent or Subsidiary of the Company or limit in any way the right
of the Company or any Parent or Subsidiary of the Company to terminate
Participant's employment or other relationship at any time, with or without
Cause.

                                       7
<PAGE>

     17. CORPORATE TRANSACTIONS.

          17.1 ASSUMPTION OR REPLACEMENT OF AWARDS BY SUCCESSOR OR ACQUIRING
CORPORATION. In the event of (a) a dissolution or liquidation of the Company,
(b) a merger or consolidation in which the Company is not the surviving
corporation (other than a merger or consolidation with a wholly-owned
subsidiary, a reincorporation of the Company in a different jurisdiction, or
other transaction in which there is no substantial change in the shareholders of
the Company or their relative stock holdings and the Awards granted under this
Plan are assumed, converted or replaced by the successor or acquiring
corporation, which assumption, conversion or replacement will be binding on all
Participants), (c) a merger in which the Company is the surviving corporation
but after which the shareholders of the Company immediately prior to such merger
(other than any shareholder which merges with the Company in such merger, or
which owns or controls another corporation which merges, with the Company in
such merger) cease to own their shares or other equity interests in the Company,
or (d) the sale of all or substantially all of the assets of the Company, any or
all outstanding Awards may be assumed, converted or replaced by the successor or
acquiring corporation (if any), which assumption, conversion or replacement will
be binding on all Participants. In the alternative, the successor or acquiring
corporation may substitute equivalent Awards or provide substantially similar
consideration to Participants as was provided to shareholders (after taking into
account the existing provisions of the Awards). The successor or acquiring
corporation may also issue, in place of outstanding Shares of the Company held
by the Participant, substantially similar shares or other property subject to
repurchase restrictions and other provisions no less favorable to the
Participant than those which applied to such outstanding Shares immediately
prior to such transaction described in this Section 17.1. In the event such
successor or acquiring corporation (if any) refuses to assume or substitute
Awards, as provided above, pursuant to a transaction described in this Section
17.1, then notwithstanding any other provision in this Plan to the contrary,
unless otherwise determined by the Board, such Awards will expire on such
transaction at such time and on such conditions as the Board will determine.

          17.2 OTHER TREATMENT OF AWARDS. Subject to any greater rights granted
to Participants under the foregoing provisions of this Section 17, in the event
of the occurrence of any transaction described in Section 17.1 hereof, any
outstanding Awards will be treated as provided in the applicable agreement or
plan of merger, consolidation, dissolution, liquidation or sale of assets.

          17.3 ASSUMPTION OF AWARDS BY THE COMPANY. The Company, from time to
time, also may substitute or assume outstanding awards granted by another
company, whether in connection with an acquisition of such other company or
otherwise, by either (a) granting an Award under this Plan in substitution of
such other company's award or (b) assuming such award as if it had been granted
under this Plan if the terms of such assumed award could be applied to an Award
granted under this Plan. Such substitution or assumption will be permissible if
the holder of the substituted or assumed award would have been eligible to be
granted an Award under this Plan if the other company had applied the rules of
this Plan to such grant. In the event the Company assumes an award granted by
another company, the terms and conditions of such award will remain unchanged
(except that the exercise price and the number and nature of shares issuable
upon exercise of any such option will be adjusted appropriately pursuant to
Section 424(a) of the Code). In the event the Company elects to grant a new
Option rather than assuming an existing option, such new Option may be granted
with a similarly adjusted Exercise Price.

     18. ADOPTION AND SHAREHOLDER APPROVAL. This Plan will become effective on
the date that it is adopted by the Board (the "EFFECTIVE DATE"). This Plan will
be approved by the shareholders of the Company (excluding Shares issued pursuant
to this Plan), consistent with applicable laws, within twelve (12) months before
or after the Effective Date. Upon the effective Date, the Board may grant Awards
pursuant to this Plan; provided, however, that: (a) no Option may be exercised
prior to initial shareholder approval of this Plan; (b) no Option granted
pursuant to an increase in the number of Shares approved by the Board shall be
exercised prior to the time such increase has been approved by the shareholders
of the Company; (c) in the event that initial shareholder approval is not
obtained within the time period provided herein, all Awards granted hereunder
shall be canceled, any Shares issued pursuant to any Award shall be canceled and
any purchase of Shares issued hereunder shall be rescinded; and (d) Awards
granted pursuant to an increase in the number of Shares approved by the Board
which increase is not timely approved by shareholders shall be canceled, any
Shares issued pursuant to any such Awards shall be canceled, and any purchase of
Shares subject to any such Award shall be rescinded. In the event

                                       8
<PAGE>

that initial shareholder approval is not obtained within twelve (12) months
before or after the date this Plan is adopted by the Board, all Awards granted
hereunder will be canceled, any Shares issued pursuant to any Award will be
canceled and any purchase of Shares hereunder will be rescinded.

     19. TERM OF PLAN/GOVERNING LAW. Unless earlier terminated as provided
herein, this Plan will terminate ten (10) years from the Effective Date or, if
earlier, the date of shareholder approval. This Plan and all agreements
hereunder shall be governed by and construed in accordance with the laws of the
State of California.

     20. AMENDMENT OR TERMINATION OF PLAN. Subject to Section 5.9 hereof, the
Board may at any time terminate or amend this Plan in any respect, including
without limitation amendment of any form of Award Agreement or instrument to be
executed pursuant to this Plan; provided, however, that the Board will not,
without the approval of the shareholders of the Company, amend this Plan in any
manner that requires such shareholder approval pursuant to Section 25102(o) of
the California Corporations Code or the Code or the regulations promulgated
thereunder as such provisions apply to ISO plans.

     21. NONEXCLUSIVITY OF THE PLAN. Neither the adoption of this Plan by the
Board, the submission of this Plan to the shareholders of the Company for
approval, nor any provision of this Plan will be construed as creating any
limitations on the power of the Board to adopt such additional compensation
arrangements as it may deem desirable, including, without limitation, the
granting of stock options and other equity awards otherwise than under this
Plan, and such arrangements may be either generally applicable or applicable
only in specific cases.

     22. DEFINITIONS. As used in this Plan, the following terms will have the
following meanings:

     "AWARD" means any award under this Plan, including any Option or Restricted
Stock Award.

     "AWARD AGREEMENT" means, with respect to each Award, the signed written
agreement between the Company and the Participant setting forth the terms and
conditions of the Award.

     "BOARD" means the Board of Directors of the Company.

     "CAUSE" means Termination because of (i) any willful material violation by
the Participant of any law or regulation applicable to the business of the
Company or a Parent or Subsidiary of the Company, the Participant's conviction
for, or guilty plea to, a felony or a crime involving moral turpitude, any
willful perpetration by the Participant of a common law fraud, (ii) the
Participant's commission of an act of personal dishonesty which involves
personal profit in connection with the Company or any other entity having a
business relationship with the Company, (iii) any material breach by the
Participant of any provision of any agreement or understanding between the
Company or any Parent or Subsidiary of the Company and the Participant regarding
the terms of the Participant's service as an employee, director or consultant to
the Company or a Parent or Subsidiary of the Company, including without
limitation, the willful and continued failure or refusal of the Participant to
perform the material duties required of such Participant as an employee,
director or consultant of the Company or a Parent or Subsidiary of the Company,
other than as a result of having a Disability, or a breach of any applicable
invention assignment and confidentiality agreement or similar agreement between
the Company and the Participant, (iv) Participant's disregard of the policies of
the Company or any Parent or Subsidiary of the Company so as to cause loss,
damage or injury to the property, reputation or employees of the Company or a
Parent or Subsidiary of the Company, or (v) any other misconduct by the
Participant which is materially injurious to the financial condition or business
reputation of, or is otherwise materially injurious to, the Company or a Parent
or Subsidiary of the Company.

     "CODE" means the Internal Revenue Code of 1986, as amended.

     "COMMITTEE" means the committee appointed by the Board to administer this
Plan, or if no committee is appointed, the Board.

     "COMPANY" means Luminate Software Corporation, or any successor
corporation.

                                       9
<PAGE>

     "DISABILITY" means a disability, whether temporary or permanent, partial or
total, as determined by the Committee.

     "EXERCISE PRICE" means the price at which a holder of an Option may
purchase the Shares issuable upon exercise of the Option.

     "FAIR MARKET VALUE" means, as of any date, the value of a share of the
Company's Common Stock determined as follows:

          (a) if such Common Stock is then quoted on the Nasdaq National Market,
              its closing price on the Nasdaq National Market on the date of
              determination as reported in THE WALL STREET JOURNAL;

          (b) if such Common Stock is publicly traded and is then listed on a
              national securities exchange, its closing price on the date of
              determination on the principal national securities exchange on
              which the Common Stock is listed or admitted to trading as
              reported in THE WALL STREET JOURNAL;

          (c) if such Common Stock is publicly traded but is not quoted on the
              Nasdaq National Market nor listed or admitted to trading on a
              national securities exchange, the average of the closing bid and
              asked prices on the date of determination as reported by THE WALL
              STREET JOURNAL (or, if not so reported, as otherwise reported by
              any newspaper or other source as the Board may determine); or

          (d) if none of the foregoing is applicable, by the Committee in good
              faith.

     "OPTION" means an award of an option to purchase Shares pursuant to Section
5 hereof.

     "PARENT" means any corporation (other than the Company) in an unbroken
chain of corporations ending with the Company if each of such corporations other
than the Company owns stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain

     "PARTICIPANT" means a person who receives an Award under this Plan

     "PLAN" means this Luminate Software Corporation 1996 Equity Incentive Plan,
as amended from time to time.

     "PURCHASE PRICE" means the price at which a Participant may purchase
Restricted Stock

     "RESTRICTED STOCK" means Shares purchased pursuant to a Restricted Stock
Award.

     "RESTRICTED STOCK AWARD" means an award of Shares pursuant to Section 6
hereof.

     "SEC" means the Securities and Exchange Commission.

     "SECURITIES ACT" means the Securities Act of 1933, as amended.

     "SHARES" means shares of the Company's Common Stock reserved for issuance
under this Plan, as adjusted pursuant to Sections 2 and 17 hereof, and any
successor security.

     "SUBSIDIARY" means any corporation (other than the Company) in an unbroken
chain of corporations beginning with the Company if each of the corporations
other than the last corporation in the unbroken chain owns stock possessing
fifty percent (50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.

                                       10

<PAGE>

     "TERMINATION" or "TERMINATED" means, for purposes of this Plan with respect
to a Participant, that the Participant has for any reason ceased to provide
services as an employee, officer, director or consultant to the Company or a
Parent or Subsidiary of the Company. A Participant will not be deemed to have
ceased to provide services in the case of (i) sick leave, (ii) military leave,
or (iii) any other leave of absence approved by the Committee, provided that
such leave is for a period of not more than ninety (90) days unless
reinstatement (or, in the case of an employee with an ISO, reemployment) upon
the expiration of such leave is guaranteed by contract or statute, or unless
provided otherwise pursuant to formal policy adopted from time to time by the
Company and issued and promulgated in writing. In the case of any Participant on
(i) sick leave, (ii) military leave or (iii) an approved leave of absence, the
Committee may make such provisions respecting suspension of vesting of the Award
while on leave from the Company or a Parent or Subsidiary of the Company as it
may deem appropriate, except that in no event may an Option be exercised after
the expiration of the term set forth in the Stock Option Agreement. The
Committee will have sole discretion to determine whether a Participant has
ceased to provide services and the effective date on which the Participant
ceased to provide services (the "TERMINATION DATE").

     "UNVESTED SHARES" means "Unvested Shares" as defined in the Award
Agreement.

     "VESTED SHARES" means "Vested Shares" as defined in the Award Agreement.

                                       11

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