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                                                                    EXHIBIT 10.3

                              H&R BLOCK STOCK PLAN
                           FOR NON-EMPLOYEE DIRECTORS
                       (As Amended Through August 1, 2001)

ARTICLE I - PURPOSE OF THE PLAN

1.1 Purpose of Plan. H&R Block, Inc. (the "Company") adopts the H&R Block Stock
Plan for Non-Employee Directors (the "Plan") to provide for payment in shares of
the Company's Common Stock, without par value ("Stock"), of the retainers and
meeting fees of members of the Board of Directors of the Company who are not
employees of the Company or any of its affiliates or subsidiaries ("Non-Employee
Directors"), on a deferred basis. The Plan also provides for an optional award
of Stock Units (as defined in Section 3.1) to directors participating in the H&R
Block, Inc. Retirement Plan for Non-Employee Directors ("Retirement Plan") upon
the termination of the Retirement Plan and in lieu of benefits under such
Retirement Plan. The Plan is intended to provide Non-Employee Directors with a
larger equity interest in the Company, to enhance the identity of interests
between Non-Employee Directors and the shareholders of the Company, and to
assist the Company in attracting and retaining well-qualified individuals to
serve as Non-Employee Directors.

ARTICLE II -  ELIGIBILITY AND PARTICIPATION

2.1 Eligibility and Participation. Only Non-Employee Directors shall be eligible
to participate in the Plan, provided that, if a Non-Employee Director becomes an
employee of the Company or one or more of its affiliates or subsidiaries after
he or she commences participation in the Plan, he or she shall remain eligible
and shall continue to participate in the Plan until his or her service as a
director of the Company terminates and all benefits under the Plan are paid. An
eligible Plan participant may be referred to herein as "Participant."

ARTICLE III - STOCK UNITS AND DIRECTOR COMPENSATION DEFERRAL ELECTIONS

3.1 Retainers Payable in Stock Units. Each Non-Employee Director may elect to
have his or her director retainer fee that is payable in quarterly installments,
or in any other manner (determined without regard to the Plan)(the "Retainer")
paid in units ("Stock Units"), with each Stock Unit equivalent to one share of
Stock, and deferred in accordance with the Non-Employee Director's deferral
election.

3.2 Meeting Fees Payable in Stock Units. Each Non-Employee Director may elect to
have fees for attendance at meetings of the Company's Board of Directors and/or
committees thereof (determined without regard to the Plan) ("Meeting Fees") paid
in Stock Units and deferred in accordance with the Non-Employee

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Director's deferral election.

3.3 Deferral Elections. An election under either Section 3.1 or 3.2 to have
Retainer or Meeting Fees, as the case may be, paid in Stock Units and deferred
must be made in writing and delivered to the Company prior to the start of the
calendar year in which the Retainer or Meeting Fees would otherwise be paid (but
for the deferral election) and such election will be irrevocable for the
affected calendar year. To participate in the Plan during the calendar year in
which the Plan becomes effective, the Non-Employee Director must make an
election to defer Retainer and/or Meeting Fees for services to be performed
subsequent to the election within 30 days after the Effective Date (as defined
in Section 13.1) and such election will be irrevocable for the remainder of the
affected calendar year. To participate in the Plan during the first calendar
year in which a Non-Employee Director becomes eligible to participate in the
Plan, the new Non-Employee Director must make an election to defer Retainer
and/or Meeting Fees for services to be performed subsequent to the election
within 30 days after the date he or she becomes eligible and such election will
be irrevocable for the remainder of the affected calendar year. Each election
shall remain in effect until revoked in writing, and any such revocation shall
become effective no earlier than the first day of the first calendar year
commencing after such revocation is received by the Company.

3.4 Crediting Stock Units to Accounts. Amounts deferred by a Non-Employee
Director pursuant to Section 3.3 shall be credited in Stock Units as of the date
that payment would otherwise have been made in cash to a bookkeeping account
maintained by the Company for such Participant ("Account"). The number of Stock
Units credited to an Account with respect to any Non-Employee Director shall
equal the amount deferred divided by the Fair Market Value of one share of Stock
on the date on which such cash amount would have been paid but for the deferral
election pursuant to Section 3.3. For purposes of the Plan, the "Fair Market
Value" of Stock on any business day shall be the average of the high and low
sales prices quoted for such Stock on the New York Stock Exchange Composite
Listing on the day in question, or if there was no quotation on such date, on
the next preceding business day on which there was such a quotation. To the
extent that the application of any formula described in this Section 3.4 does
not result in a whole number of shares of Stock, the result shall be rounded
upwards to the next whole number such that no fractional shares of Stock shall
be issued under the Plan.

3.5 Fully Vested Stock Units. All Stock Units credited to a Participant's
Account pursuant to this Article III shall be at all times fully vested and
nonforfeitable.

3.6 Payment of Stock Units. A deferral election made in accordance with Section
3.3 shall specify the date (the "Deferred Payment Date") on which the
Participant elects to receive payment for the Stock Units credited to such
Participant's Account pursuant to this Article III. Such Stock Units shall be
paid in an equal

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number of shares of Stock in a single distribution made on the Deferred Payment
Date specified by the Participant in the applicable deferral election, provided
that the Deferred Payment Date with respect to any election must be at least two
years after the first day of the calendar year during which the Stock Unit was
credited to the Participant's Account.

ARTICLE IV - AWARD OF STOCK UNITS IN LIEU OF BENEFITS UNDER THE H&R BLOCK, INC.
RETIREMENT PLAN FOR NON-EMPLOYEE DIRECTORS

4.1 Award of Stock Units. Each Non-Employee Director serving as such as of June
18, 1997 (the "Retirement Plan Termination Date") may, at his or her option,
have credited to his or her Account as of the Effective Date a number of Stock
Units equal to the quotient obtained by dividing (a) the present value on the
Retirement Plan Termination Date of his or her accrued benefits under the
Retirement Plan, as determined by an independent actuarial consultant without
regard to any service requirements under such Retirement Plan and utilizing an
annual director retainer rate equal to the annual retainer for Non-Employee
Directors in effect on the Retirement Plan Termination Date, divided by (b) the
Fair Market Value of one share of Stock on the Retirement Plan Termination Date,
provided, however that notwithstanding this formula, no such Non-Employee
Director shall be credited with less than 1,000 Stock Units pursuant to the
provisions of this Section 4.1. To the extent that the application of the
formula described in this Section 4.1 results in a number of Stock Units other
than an even 100-lot number of Stock Units, the result shall be rounded up
upwards to the next 100-lot whole number of Stock Units. For example, if the
application of the formula results in an award of 1,055.625 Stock Units, the
actual award shall be rounded up to 1,100 Stock Units. A Non-Employee Director
who elects to defer under the H&R Block Deferred Compensation Plan for
Directors, as amended, the present value of accrued benefits under the
Retirement Plan (determined as of the Retirement Plan Termination Date) shall
not be eligible for an award of Stock Units under this Section 4.1 of the Plan.

4.2 Fully Vested Stock Units. All Stock Units credited to a Participant's
Account pursuant to this Article IV shall be at all times fully vested and
nonforfeitable.

4.3 Payment of Stock Units. Upon termination of service as a director of the
Company for any reason, the total number of Stock Units credited to the
Participant's Account pursuant to this Article IV shall be paid to the
Participant in equal number of shares of Stock in a single distribution,
provided that no payment pursuant to this Section 4.3 shall be made less than
one year after the Effective Date.

4.4 Award in lieu of Benefits. The Stock Units credited to the Participant's
Account pursuant to this Article IV are so credited in consideration of the
termination of the Retirement Plan and in lieu of any benefits under the
Retirement Plan. The Non-Employee Directors shall not be entitled to any other
benefits under the Retirement Plan.

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ARTICLE V - DIVIDEND EQUIVALENT PAYMENTS

5.1 Dividend Equivalent Payments. As of each cash dividend payment date with
respect to Stock, each Participant shall have credited to his or her Account the
number of Stock Units equal to the quotient obtained by dividing (a) the product
of (i) the cash dividend payable with respect to each share of Stock on such
date and (ii) the total number of Stock Units credited to his or her Account as
of the close of business on the record date applicable to such dividend payment
date, by (b) the Fair Market Value of one share of Stock on such dividend
payment date. To the extent that the application of the formula described in
this Section 5.1 does not result in a whole number of Stock Units, the result
shall be rounded upwards to the next whole number.

5.2 Deferral, Vesting and Payment of Stock Units under Article V. Each Stock
Unit determined and credited to the Participant's Account in accordance with
Section 5.1 shall automatically be deferred and shall be fully vested at all
times. Upon termination of service as a director of the Company for any reason,
the total number of Stock Units credited to the Participant's Account pursuant
to this Article V shall be paid to the Participant in equal number of shares of
Stock in a single distribution, provided that no payment pursuant to this
Section 5.2 shall be made less than one year after the Effective Date.

ARTICLE VI - DELIVERY OF STOCK CERTIFICATES

6.1 Stock Unit Payments. The Company shall issue and deliver to the Participant
a Stock certificate for payment of Stock Units as soon as practicable following
the date on which Stock Units are payable.

ARTICLE VII - STOCK

7.1 Authorized Stock. The aggregate number of shares of Stock that may be issued
under the Plan shall not exceed three hundred thousand (600,000) shares, unless
such number of shares is adjusted as provided in Article VIII of the Plan. Such
shares of Stock may be authorized but unissued shares, treasury shares or shares
acquired in the open market for the account of the Participant.

7.2 Fractional Shares. No fractional shares of Stock shall be issued under the
Plan under any circumstances.

ARTICLE VIII - ADJUSTMENT UPON CHANGES IN CAPITALIZATION

8.1 Adjustment Upon Changes in Capitalization. In the event of a stock dividend,
stock split or combination, reclassification, recapitalization or other capital
adjustment of shares of Stock, the number of shares of Stock that may be issued
pursuant to Stock Units and the number of Stock Units credited to

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Accounts shall be appropriately adjusted by the Board of Directors of the
Company, whose determination shall be final, binding on the Company and the
Participants and conclusive.

8.2 No Effect on Rights of Company. The grant of Stock Units pursuant to the
Plan shall not affect in any way the right or power of the Company to issue
additional Stock or other securities, make adjustments, reclassifications,
reorganizations or other changes in its corporate, capital or business
structure, to participate in a merger, consolidation or share exchange or to
transfer its assets or dissolve or liquidate.

ARTICLE IX - TERMINATION OR AMENDMENT OF THE PLAN

9.1 In General. The Plan shall remain in effect until all shares of Stock
authorized for issuance under the Plan have been issued. The Board of Directors
of the Company may at any time terminate, suspend or amend the Plan. If the Plan
shall at any time be terminated pursuant to this Section 9.1, Stock Units
credited to a Participant's Account shall be paid in equal number of shares of
Stock in a single distribution as if the Participant had terminated his or her
service as a director of the Company, provided that no payment pursuant to this
Section 9.1 shall be made less than one year after the Effective Date.

9.2 Written Consents. No amendment may adversely affect the right of any
Participant to receive any Stock pursuant to an outstanding Stock Unit without
the written consent of such Participant.

ARTICLE X - GOVERNMENT REGULATIONS

10.1 Government Regulations.

         (a) The obligations of the Company to issue any Stock pursuant to the
         Plan shall be subject to all applicable laws, rules and regulations and
         the obtaining of all such approvals by governmental agencies as may be
         deemed necessary or appropriate by the Board of Directors of the
         Company.

         (b) The Board of Directors of the Company may make such changes to the
         Plan as may be necessary or appropriate to comply with the rules and
         regulations of any governmental authority.

ARTICLE XI - ADMINISTRATION

11.1 In General. The Plan shall be administered by the Compensation Committee
of the Board of Directors (the "Committee"), which shall have full power and
authority, subject to the provisions of the Plan, to supervise administration of
the Plan and to interpret the provisions of the Plan and of any

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award, issuance or payment of Stock Units hereunder. Any decision by the
Committee shall be final and binding on all parties. No member of the Committee
shall be liable for any determination made, or any decision or action taken with
respect to the Plan or any award, issuance or payment of Stock Units under the
Plan. The Committee may delegate any of its responsibilities to one or more
agents, including employees of the Company or one or more of its affiliates and
subsidiaries, and may retain advisors to provide advice to the Committee. No
Participant shall participate in the making of any decision with respect to any
question relating to any Stock Unit issued under the Plan exclusively to that
Participant.

11.2 Rules and Interpretation. The Committee shall be vested with full authority
to make such rules and regulations as it deems necessary to administer the Plan
and to interpret and administer the provisions of the Plan in a uniform manner.
Any determination, decision or action of the Committee in connection with the
construction, interpretation, administration or application of the Plan shall be
final, conclusive and binding on all parties.

11.3 Expenses. The cost of issuing and paying Stock Units pursuant to the Plan
and the expenses of administering the Plan shall be borne by the Company.

ARTICLE XII - MISCELLANEOUS

12.1 Unfunded Plan. The Plan shall be unfunded with respect to the Company's
obligation to pay any Stock Units and a Participant's rights to receive any
payment of any Stock Unit shall not be greater than the rights of an unsecured
general creditor of the Company.

12.2 Assignment; Non-Alienation. Stock Units, the right to receive Stock Units
under the Plan and the right to receive payment with respect to a Stock Unit
under the Plan are not assignable or transferable and shall not be subject in
any manner to alienation, sale or any encumbrances, liens, levies, attachments,
pledges or charges of the Participant or his or her creditors. Any attempt to
assign, transfer or hypothecate any Stock Unit, any right to receive Stock Units
or the right to receive payment with respect to a Stock Unit shall be void and
of no force and effect.

12.3 Death Benefit; Designation of Beneficiaries. Upon the death of a
Participant, the Stock Units remaining in his or her Account as of the date of
death shall be paid to the beneficiary or beneficiaries of the Participant, or
to his or her estate, as described in this Section 12.3, in equal number of
shares of Stock in a single distribution. A Participant may designate a
beneficiary or beneficiaries to receive any payments under the Plan upon his or
her death. A beneficiary designation shall be in writing on a form acceptable to
the Company and shall be effective only upon delivery to the Company. A
beneficiary designation may be revoked by a Participant at any time by
delivering to the

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Company either written notice of revocation or a new written beneficiary
designation. The written beneficiary designation last delivered to the Secretary
of the Company prior to the death of the Participant shall control. If no
beneficiary has been designated, amounts due hereunder shall be paid to the
Participant's estate.

12.4 Release. Any payment of Stock Units to or for the benefit of a Participant
or his or her beneficiaries that is made in good faith by the Company in
accordance with the Company's good faith interpretation of its obligations
hereunder shall be in full satisfaction of all claims against the Company for
benefits under the Plan to the extent of such payment.

12.5 No Guarantee of Directorship. Neither the adoption and maintenance of the
Plan nor any election made hereunder by a Participant shall be deemed to be a
contract between the Company and the Participant to retain his or her position
as a director of the Company.

12.6 Applicable Law. The validity, interpretation and administration of the Plan
and any rules, regulations, determinations or decisions hereunder, and the
rights of any and all persons having or claiming to have any interest herein or
hereunder, shall be determined exclusively in accordance with the laws of the
State of Missouri (without regard to the choice of laws provisions thereof),
except to the extent such laws are preempted by the laws of the United States of
America.

12.7 Notices. All notices, elections or other communications made or given
pursuant to the Plan shall be in writing and shall be sufficiently made or given
if hand-delivered or mailed by certified mail, addressed (if from the Company to
the Participant) to any Participant at the address contained in the records of
the Company for such Participant, or addressed (if from the Participant to the
Company) to the Secretary of the Company at its principal office.

12.8 Headings. The headings in the Plan are for reference purposes only and
shall not affect the meaning or interpretation of the Plan.

ARTICLE XIII - EFFECTIVE DATE OF THE PLAN

13.1 Effective Date. The Plan shall be effective immediately upon the date of
its approval by the shareholders of the Company (the "Effective Date").

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                                                                    EXHIBIT 10.4

                                 H&R BLOCK, INC.

                  1989 STOCK OPTION PLAN FOR OUTSIDE DIRECTORS

                                  (AS AMENDED)

         1. PURPOSES. The purposes of this 1989 Stock Option Plan for Outside
Directors are to attract and retain experienced and qualified directors who are
not employees of the Company or any Subsidiary of the Company, and to secure for
the Company and its shareholders the benefits of stock ownership in the Company
by those directors.

         2. DEFINITIONS.

         (a) "Board of Directors" shall mean the board of directors of the
Company or any Subsidiary of the Company, as the case may be.

         (b) "Common Stock" shall mean the common stock, without par value, of
the Company.

         (c) "Company" shall mean H&R Block, Inc., a Missouri corporation.

         (d) "Director" shall mean a member of the Board of Directors of the
Company or a member of the Board of Directors of any Subsidiary of the Company,
as the case may be.

         (e) "Outside Director" shall mean a member of the Board of Directors of
the Company or any Subsidiary of the Company who is not an employee of the
Company on the date of grant of the Stock Option. As used herein, "employee of
the Company" means any full-time employee of the Company, its subsidiaries and
their respective divisions, departments and subsidiaries and the respective
divisions, departments and subsidiaries of such subsidiaries who is employed at
least thirty-five (35) hours a week; provided, however, it is expressly
understood that an employee of the Company does not include independent
contractors or other persons not otherwise employed by the Company or any
Subsidiary of the Company but who provide legal, accounting, investment banking
or other professional services to the Company or any Subsidiary of the Company.

         (f) "Plan" shall mean this 1989 Stock Option Plan for Outside
Directors, as the same may be amended from time to time.

         (g) "Recipient" shall mean an Outside Director of the Company or any
Subsidiary of the Company who has been granted a Stock Option under the Plan or
any person who succeeds to the rights of such Outside Director under this Plan
by reason of the death of such Outside Director.

         (h) "Stock Option" shall mean the right to purchase, upon exercise of a
Stock Option granted under this Plan, shares of the Common Stock. Such Stock
Options are non-statutory stock options and are not intended to be "incentive
stock options" as defined in the Internal Revenue Code of 1986, as amended.

         (i) "Subsidiary of the Company" shall mean a subsidiary of the Company,
its divisions, departments, and subsidiaries and the respective divisions,
departments and subsidiaries of such subsidiaries.

         3. ADMINISTRATION OF THE PLAN. The Plan may be administered by the
Company's Board of Directors or an Option Committee (the "Committee"), as the
Board of Directors of the Company may in its sole discretion decide. All Outside
Directors shall be ineligible to vote upon any matter concerning the Stock
Options including adoption of this Plan. The Committee, if it is established by
the Company's Board of Directors to administer the Plan, shall consist of
directors of the Company who are not Outside Directors, to be appointed by and
to serve at the pleasure of the Board of Directors of the Company. A majority of
the Committee members shall constitute a quorum and the acts of a majority of
the members present at any meeting at which a quorum is present, or acts
approved in writing by all members of the Committee, shall be valid acts of the
Committee. All references herein to the Committee shall

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be deemed to mean any successor to the Committee, however designated, or the
Board of Directors of the Company if the Board has not approved a Committee.

         The Committee shall have full power and authority to construe,
interpret and administer the Plan and, subject to the powers herein specifically
reserved to the Company's Board of Directors and subject to the other provisions
of this Plan, to make determinations which shall be final, conclusive and
binding upon all persons, including, without limitation, the Company, the
shareholders of the Company, the Board of Directors, the Recipients and any
persons having any interest in any Stock Options which may be granted under this
Plan. The Committee shall impose such additional conditions upon Stock Options
granted under this Plan and the exercise thereof as may from time to time be
deemed necessary or advisable, in the opinion of counsel to the Company, to
comply with applicable laws and regulations. The Committee from time to time may
adopt rules and regulations for carrying out the Plan and written policies for
implementation of the Plan. Such policies may include, but need not be limited
to, the type, size and terms of Stock Options to be granted to Outside Directors
of the Subsidiaries of the Company and the conditions for payment of Stock
Options by Recipients.

         The initial Committee shall consist of Henry W. Bloch, Chairman and
Chief Executive Officer of the Company, Jerome B. Grossman, Vice Chairman of the
Company, and Thomas M. Bloch, President of the Company.

         4. ABSOLUTE DISCRETION. The Committee may, in its sole and absolute
discretion, from time to time during the continuance of the Plan, (i) determine
which Outside Directors of any Subsidiary of the Company shall be granted Stock
Options under the Plan, (ii) grant Stock Options to any Outside Directors of any
Subsidiary of the Company so selected, (iii) determine the type, date of grant,
size and terms of Stock Options to be granted to Outside Directors of any
Subsidiary of the Company (subject to Sections 7, 9 and 10 hereof, as the same
may be hereafter amended), (iv) determine the terms other than the date of
grant, size and stock option price of Stock Options granted pursuant to Section
6 hereof to Outside Directors of the Company, (v) place conditions or
restrictions on the receipt of Stock Options by Outside Directors of any
Subsidiary of the Company or on the payment or exercise of any Stock Options,
and (vi) do all other things necessary and proper to carry out the intentions of
this Plan.

         5. ELIGIBILITY. Stock Options may be granted to any Outside Director;
however, subject to Section 6 hereof, no Outside Director or other person shall
have any claim or right to be granted a Stock Option under the Plan. No member
of the Committee (other than an ex officio member) shall be eligible for grants
of Stock Options under the Plan.

         6. PRESCRIBED STOCK OPTIONS FOR OUTSIDE DIRECTORS OF THE COMPANY.
During the continuance of the Plan, a Stock Option to purchase an aggregate of
4,000 shares of Common Stock shall be granted on each date of grant specified in
this Section 6 to each Outside Director of the Company serving as such on such
date of grant. Stock Options specified in this Section 6 shall be granted on
September 11, 1991, and on June 30 of each year thereafter in which the Plan is
in effect. The stock option price of each share of Common Stock subject to a
Stock Option granted pursuant to this Section 6 shall be determined in
accordance with Section 9 hereof. Outside Directors of the Company shall not be
granted Stock Options pursuant to the Plan other than as specified in this
Section 6, provided that no Stock Options granted pursuant to this Plan prior to
September 11, 1991, shall be invalidated or otherwise affected by the provisions
of this Section 6. This Section 6 shall not apply to Outside Directors of
Subsidiaries of the Company who are not also Outside Directors of the Company on
the date of grant.

         7. STOCK SUBJECT TO THE PLAN. The total number of shares of Common
Stock issuable under this Plan may not at any time exceed 800,000 shares,
subject to adjustment as provided in Sections 14 and 15 hereof. Shares of Common
Stock not actually issued pursuant to Stock Options shall be available for
future Stock Options. Shares of Common Stock to be delivered or purchased under
the Plan may be either authorized but unissued Common Stock or treasury shares.

         8. VESTING REQUIREMENTS. The Committee may determine that all or a
portion of a Stock Option shall be vested at such times and upon such terms as
may be selected by it. All

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Stock Options shall expire as to all of their unexercised shares ten years after
the date of their grant.

         9. STOCK OPTION PRICE. The purchase price per share of Common Stock
under each Stock Option granted hereunder shall be equal to the last reported
sale price, regular way, for the Common Stock on the New York Stock Exchange on
the date of grant (or, if said date of grant falls on a non-business day, then
on the next preceding business date on which the stock is quoted) of such Stock
Option.

         10. PAYMENT OF STOCK OPTION PRICE. Payment for exercise of any Stock
Option granted hereunder shall be made (a) in cash, or (b) by delivery of Common
Stock having a market value equal to the aggregate option price, or (c) by a
combination of payment of cash and delivery of Common Stock in amounts such that
the amount of cash plus the market value of the Common Stock equals the
aggregate option price.

         11. CONTINUATION AS DIRECTOR. The Committee shall require that a
Recipient be an Outside Director at the time a Stock Option is granted and may
require that a Recipient be an Outside Director at the time a Stock Option is
exercised. The Committee may provide for the termination of an outstanding Stock
Option if a Recipient ceases to be an Outside Director and may establish such
other provisions with respect to the termination or disposition of a Stock
Option on the death or retirement of a Recipient as it, in its sole discretion,
deems advisable. The Committee shall have the sole power to determine the date
of any circumstances which shall constitute cessation as a Director and to
determine whether such cessation is the result of retirement, death or any other
reason.

         12. REGISTRATION OF STOCK. No Stock Option may be exercised at any time
when its exercise or the delivery of shares of Common Stock or other securities
thereunder would, in the opinion of counsel for the Company, be in violation of
any state or federal law, rule or ordinance, including any state or federal
securities laws or any regulation or ruling of the Securities and Exchange
Commission. If at any time counsel for the Company shall determine that
qualification or registration under any state or federal law of the shares of
Common Stock or other securities thereby covered, or the consent or approval of
any governmental regulatory body, is necessary or desirable as a condition of or
in connection with the exercise of such Stock Option or the purchase of shares
thereunder, the Stock Option may not be paid or exercised in whole or in part
unless and until such qualification, registration, consent or approval shall
have been effected or obtained free of any conditions such counsel deems
unacceptable.

         13. NON-ASSIGNABILITY. No Stock Option granted pursuant to the Plan
shall be transferable or assignable by the Recipient other than by will or the
laws of descent and distribution or pursuant to a qualified domestic relations
order as defined by the Internal Revenue Code of 1986, as amended, or Title I of
the Employee Retirement Security Act, or the rules thereunder. During the
lifetime of the Recipient a Stock Option granted pursuant to the Plan shall be
exercisable only by the Recipient.

         14. DILUTION OR OTHER ADJUSTMENTS. In the event of any change in the
capital structure of the Company, including but not limited to a change
resulting from a stock dividend or split-up, or combination or reclassification
of shares, the Board of Directors of the Company shall make such equitable
adjustments with respect to the Stock Options or any provisions of this Plan as
it deems necessary or appropriate, including, if necessary, any adjustment in
the maximum number of shares of Common Stock subject to an outstanding Stock
Option.

         15. MERGER, CONSOLIDATION, REORGANIZATION, LIQUIDATION, ETC. If the
Company shall become a party to any corporate merger, consolidation, major
acquisition of property for stock, reorganization or liquidation, the Board of
Directors of the Company shall make such arrangements it deems advisable with
respect to outstanding Stock Options, which shall be binding upon the Recipients
of outstanding Stock Options, including, but not limited to, the substitution of
new Stock Options for any Stock Options then outstanding, the assumption of such
Stock Options and the termination of or payment for such Stock Options.

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         16. COSTS AND EXPENSES. The cost and expenses of administering the Plan
shall be borne by the Company and not charged to any Stock Option nor to any
Recipient.

         17. STOCK OPTION AGREEMENTS. The Committee shall have the power to
specify the form of Stock Option Agreements to be granted from time to time
pursuant to and in accordance with the provisions of the Plan and such
agreements shall be final, conclusive and binding upon the Company, the
shareholders of the Company and the Recipients. No Recipient shall have or
acquire any rights under the Plan except such as are evidenced by a duly
executed agreement in the form thus specified.

         18. NO SHAREHOLDER PRIVILEGES. Neither the Recipient nor any person
claiming under or through him or her shall be or have any of the rights or
privileges of a shareholder of the Company in respect to any of the Common Stock
issuable upon the exercise of any Stock Option, unless and until certificates
evidencing such shares of Common Stock shall have been duly issued and
delivered.

         19. GUIDELINES. The Board of Directors of the Company shall have the
power to provide guidelines for administration of the Plan by the Committee and
to make any changes in such guidelines as from time to time the Board deems
necessary.

         20. AMENDMENT AND DISCONTINUANCE. The Board of Directors of the Company
shall have the right at any time during the continuance of the Plan to amend,
modify, supplement, suspend or terminate the Plan, provided that (a) no
amendment, supplement, modification, suspension or termination of the Plan shall
in any manner affect any Stock Option of any kind theretofore granted under the
Plan without the consent of the Recipient of the Stock Option, unless such
amendment, supplement, modification, suspension or termination is by reason of
any change in capital structure referred to in Section 14 hereof or unless the
same is by reason of the matters referred to in Section 15 hereof; (b) Sections
6 and 9 herein shall not be amended or modified more than once in any six-month
period, other than to comport with changes in the Internal Revenue Code of 1986,
as amended, or the rules thereunder and (c) if the Plan is duly approved by the
shareholders of the Company, no amendment, modification or supplement to the
Plan shall thereafter, in the absence of the approval of the holders of a
majority of the shares of Common Stock of the Company present in person or by
proxy at a duly constituted meeting of shareholders of the Company, (i) increase
the aggregate number of shares which may be issued under the Plan, unless such
increase is by reason of any change in capital structure referred to in Section
14 hereof, (ii) change the termination date of the Plan provided in Section 21
hereof, or (iii) delete or amend the provisions of Section 9 hereof relating to
the establishment of the stock option price.

         21. TERMINATION. Stock Options may be granted in accordance with the
terms of the Plan until December 5, 2004, on which date this Plan will terminate
except as to Stock Options then outstanding hereunder, which Stock Options shall
remain in effect until they have expired according to their terms.

         22. APPROVAL. This Plan shall take effect upon due approval by the
Board of Directors of the Company.

                                       4

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