Document:

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                                 EXHIBIT 10.23

                                   401(k) Plan

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Rev. 4/97                                                          Plan Document
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                                   Chapter 15
                                  Plan Document

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MONTHLYB.WP                 ADP 401(k) ADMINISTRATIVE MANUAL                15-1

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                        AUTOMATIC DATA PROCESSING, INC
                             PROTOTYPE 401(k) PLAN

                           Monthly Valuation Product

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                              TABLE OF CONTENTS

                                                                          Page

TABLE OF CONTENTS............................................................i

ARTICLE I....................................................................1

Definitions and Rules of Construction........................................1
     1.1   Definitions.......................................................1
           Account...........................................................1
           Account Balance...................................................1
           Administrative Committee..........................................1
           Adoption Agreement................................................1
           Affiliate.........................................................1
           After-Tax Account.................................................2
           Beneficiary.......................................................2
           Benefit Commencement Date.........................................3
           Board of Directors................................................3
           Code..............................................................3
           Company...........................................................3
           Compensation......................................................3
           Determination Year................................................6
           Disability........................................................6
           Direct Rollover...................................................6
           Distributee.......................................................6
           Early Retirement Date.............................................7
           Earned Income.....................................................7
           Effective Date....................................................7
           Elective Deferrals................................................7
           Eligible Employee.................................................7
           Eligible Retirement Plan..........................................8
           Eligible Rollover Distribution....................................8
           Employee..........................................................8
           Employer..........................................................9
           Employer Contribution Account.....................................9
           Employment........................................................9
           Entry Date........................................................9
           ERISA.............................................................9
           Family Member....................................................10
           Highly Compensated Employee......................................10
           Hour of Service..................................................12
           Investment Fund..................................................13

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           Look-Back Year...................................................13
           Matching Contributions...........................................14
           Nonelective Contributions........................................14
           Non-Highly Compensated Employee..................................14
           Normal Retirement Age............................................14
           Owner-Employee...................................................14
           Participant......................................................14
           Participant 401(k) Account.......................................14
           Participant 401(k) Election......................................14
           Participating Affiliate..........................................14
           Period of Severance..............................................15
           Plan.............................................................16
           Plan Year........................................................16
           Prototype Sponsor................................................16
           Qualified Domestic Relations Order...............................17
           Qualified Matching Contributions.................................17
           Qualified Nonelective Contributions..............................17
           Rollover Contribution............................................17
           Self-Employed Individual.........................................18
           Transfer Contribution............................................18
           Trust............................................................18
           Trustee..........................................................18
           Valuation Date...................................................18
           Vesting Service..................................................19
           Year of Eligibility Service......................................19
           Years of Service.................................................19
     1.2   Additional Definitions...........................................20
     1.3   Rules of Construction............................................20
     1.4   Controlling Law..................................................21
     1.5   Savings Clause...................................................22

ARTICLE II..................................................................23

Participation...............................................................23
     2.1   Admission as a Participant.......................................23
     2.2   Termination of Participation.....................................24
     2.3   Provision of Information.........................................24
     2.4   Minimum Number of Participants...................................24
     2.5   Rollover Contributions...........................................25

ARTICLE III.................................................................26

Contributions and Account Allocations.......................................26

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     3.1   Employer Contributions...........................................26
     3.2   General Provisions Concerning Employer Contributions.............28
     3.3   Rollover Contributions...........................................29
     3.4   Transfer Contributions...........................................30
     3.5   Establishing of Accounts.........................................30
     3.6   Multiple Trades and Businesses...................................32

ARTICLE IV..................................................................34

Vesting.....................................................................34
     4.1   Determination of Vesting.........................................34
     4.2   Rules for Crediting Vesting Service..............................34
     4.3   Forfeitures......................................................35

ARTICLE V...................................................................36

Amount and Payment of Account Balances......................................36
     5.1   Termination of Employment........................................36
     5.2   Payment of Account Balances on Termination of Employment.........36
     5.3   Death Benefit....................................................37
     5.4   Beneficiaries....................................................37
     5.5   Limitation on Commencement of Benefits...........................40
     5.6   Withdrawals Before Termination of Employment.....................41
     5.7   Loans............................................................43
     5.8   Additional Distribution Events...................................47
     5.9   Distributions to Alternate Payees................................48

ARTICLE VI..................................................................49

Forms of Payment of Accounts................................................49
     6.1   Normal Form of Payment...........................................49
     6.2   Optional Form of Payment.........................................49
     6.3   Election of Optional Form........................................49
     6.4   Limitation on Options............................................50
     6.5   Change in Form or Timing of Payment..............................50
     6.6   Conditions to Distribution.......................................51
     6.7   Eligible Rollover Distributions..................................51

ARTICLE VII.................................................................52

Fiduciaries.................................................................52
     7.1   Named Fiduciaries................................................52
     7.2   Employment of Advisers...........................................52

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     7.3   Multiple Fiduciary Capacities....................................53
     7.4   Payment of Expenses..............................................53
     7.5   Indemnification..................................................53

ARTICLE VIII................................................................54

Plan Administration.........................................................54
     8.1   Administrative Committee.........................................54
     8.2   Powers and Duties of the Administrative Committee................55
     8.3   Delegation of Responsibility.....................................56
     8.4   Trustee..........................................................56
     8.5   Investment of Accounts...........................................57
     8.6   Valuation of Accounts............................................58

ARTICLE IX..................................................................59

Plan Amendment or Termination...............................................59
     9.1   Plan Amendment...................................................59
     9.2   Limitations on Plan Amendment....................................60
     9.3   Right of the Company to Terminate Plan or Discontinue
           Contributions....................................................61
     9.4   Effect of Partial or Complete Termination or Complete
           Discontinuance of Contributions..................................62
     9.5   Distribution Upon Termination....................................62
     9.6   Bankruptcy.......................................................63
     9.7   Action by Company................................................63

ARTICLE X...................................................................64

Miscellaneous Provisions....................................................64
     10.1  Exclusive Benefit of Participants................................64
     10.2  Plan Not a Contract of Employment................................65
     10.3  Type of Plan.....................................................65
     10.4  Source of Benefits...............................................65
     10.5  Benefits Not Assignable..........................................65
     10.6  Merger or Transfer of Assets.....................................66
     10.7  Participation in the Plan by an Affiliate........................66
     10.8  Conditional Adoption.............................................67
     10.9  Inability to Locate Participant or Beneficiary...................67
     10.10 Application of Prior Plan........................................68
     10.11 Failure of Qualified Status......................................68

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APPENDIX A...................................................................1

Limitations on Elective Deferrals and Matching Contributions.................1
     A.1   Definitions.......................................................1
           Actual Deferral Percentage........................................1
           Aggregate Limit...................................................2
           Average Actual Deferral Percentage................................2
           Average Contribution Percentage...................................2
           Contribution Percentage...........................................2
           Eligible Participant..............................................3
           Excess Aggregate Contributions....................................3
           Excess Contributions..............................................3
           Excess Deferral Amount............................................4
           Matching Contribution.............................................4
     A.2   Maximum Amount of Elective Deferrals..............................4
     A.3   Excess Deferral Amounts...........................................4
     A.4   Actual Deferral Percentage Test...................................6
     A.5   Excess Contributions..............................................9
     A.6   Average Contribution Percentage Test.............................10
     A.7   Excess Aggregate Contributions...................................13
     A.8   Coordination of Distributions of Excess Deferral Amounts,
           Excess Contributions, and Excess Aggregate Contributions.........15
     A.9   Multiple Use of Alternative Limitations..........................15

APPENDIX B...................................................................1

Limitations on Annual Additions..............................................1
     B.1   Definitions.......................................................1
           Annual Addition...................................................1
           Controlled Group Member...........................................2
           Defined Benefit Fraction..........................................2
           Defined Contribution Dollar Limitation............................3
           Defined Contribution Fraction.....................................3
           Excess Amount.....................................................4
           Limitation Compensation...........................................4
           Limitation Year...................................................6
           Master or Prototype Plan..........................................6
           Projected Annual Benefit..........................................6
     B.2   Maximum Annual Addition...........................................6
     B.3   Excess Amounts....................................................7

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APPENDIX C...................................................................1

Top-Heavy Provisions.........................................................1
     C.1   Definitions.......................................................1
           Aggregated Plans..................................................1
           Determination Date................................................1
           Group Participant.................................................2
           Key Employee......................................................2
           Non-Key Employee..................................................3
           Top-Heavy Ratio...................................................3
     C.2   Top-Heavy Plan....................................................5
     C.3   Minimum Benefits or Contributions.................................6
     C.4   Minimum Vesting...................................................7
     C.5   Adjustment to Maximum Benefits....................................8
     C.6   Discontinuance of Appendix........................................8

APPENDIX D...................................................................1

Distribution Requirements....................................................1
     D.1   Definitions.......................................................1
           Applicable Life Expectancy........................................1
           Distribution Calendar Year........................................2
           Participant's Benefit.............................................2
           Required Beginning Date...........................................2
           Valuation Calendar Year...........................................2
     D.2   General Rules.....................................................2

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                                  ARTICLE I

                    DEFINITIONS AND RULES OF CONSTRUCTION

I.1 DEFINITIONS.

         These terms have the following meanings in this Plan:

         ACCOUNT: The Participant 401(k) Account and/or Employer Contribution
Account and/or After-Tax Account.

         ACCOUNT BALANCE: The value of an Account determined as of any
Valuation Date.

         ADMINISTRATIVE COMMITTEE: The committee appointed under, and having
the responsibilities specified in, Articles VII and VIII.

         ADOPTION AGREEMENT: The instrument executed by the Company by which
it agrees to adopt the Plan. The Adoption Agreement contains all the options
that the Company may select under the Plan and is an integral part of the
Plan.

         AFFILIATE: Any corporation, partnership, or other entity (other than
the Company) which is:

         (a) a member of a "controlled group of corporations" (as defined in
Code Section 414(b)) of which the Company is a member;

         (b) a member of any trade or business under "common control" (as
defined in Code Section 414(c)) with the Company;

         (c) a member of an "affiliated service group" (as defined in Code
Section 414(m)) which includes the Company;

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         (d) a "leasing organization" which "leases" (as defined in Code
Section 414(n)) its employees to the Company or an Affiliate and which
otherwise satisfies the requirements of Code Section 414(n)(1) through (4) and
which employees who are so leased to the Company or an Affiliate are (i) not
covered by a money purchase pension plan providing (A) a nonintegrated
employer contribution rate of at least 10% of compensation as defined in Code
Section 415(c)(3) (but including amounts contributed under a salary reduction
agreement which are excludable from the employee's gross income under Code
Section 125, 402(e)(3), 402(h), or 403(b)), (B) immediate participation
(other than an individual whose compensation from the leasing organization in
each Plan Year during the 4-year period ending with the Plan Year is less
than $1,000), and (C) full and immediate vesting and (ii) leased employees do
not constitute more than 20% of the Company's non-highly compensated
workforce within the meaning of Code Section 414(n)(5)(C)(ii); or

         (e) an entity described in regulations promulgated by the Secretary
of the Treasury under Code Section 414(o).

         AFTER-TAX ACCOUNT: The Account under the Plan established for a
Participant under Section 3.5.4.

         BENEFICIARY: Any person, trust, estate, or charitable organization
designated or deemed designated by a Participant to receive payment of Plan
benefits due after the Participant's death, except to the extent the
designation or deemed designation is superseded by a state statute which is
not preempted by ERISA.

         BENEFIT COMMENCEMENT DATE: The first day on which all events have
occurred which entitle the Participant or Beneficiary to a Plan benefit, and
for purposes of Code Section 402(f) and 411(a)(11), the date on which a
distribution is received.

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     BOARD OF DIRECTORS: In the case of a corporation, the Company's Board of
Directors or other governing body. In the case of a partnership or in the
case of a sole proprietorship, the terms "general partners" and "sole
proprietor" respectively, shall be substituted for the term "Board of
Directors".

     CODE: The Internal Revenue Code of 1986, as amended from time to time.
Reference to a specific Code provision includes any valid regulation
promulgated under that provision.

     COMPANY: The entity that executes the Adoption Agreement, and any of its
successors.

     COMPENSATION: Compensation shall mean wages as defined in Code Section
3401(a) and all other payments of compensation to an Employee by the Employer
(in the course of the Employer's trade or business) for which the Employer is
required to furnish the Employee a written statement under Code Sections
6041(d) and 6051(a)(3). Compensation shall be determined without regard to
any rules under Code Section 3401(a) that limit the remuneration included in
wages based on the nature or location of the employment or the services
performed (such as the except for agricultural labor in Code Section
3401(a)(2)). Except for the purposes of Limitation Compensation under
Appendix B and Appendix Section C.3.1(b), Compensation shall include Employer
contributions made pursuant to a salary reduction agreement which are not
includible in the Participant's gross income under Code Section 125,
402(e)(3), 402(h), or 403(b). However, except for determining the Actual
Deferral Percentage and the Contribution Percentage under Appendix A, and
except for computing the minimum contribution under Appendix C if the Plan
becomes top-heavy, the Company may elect in Section III of the Adoption
Agreement to exclude

                                     -3-
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overtime, bonuses, commissions, severance pay, and/or other extraordinary
remuneration. In addition, any payment which is not directly paid through the
payroll system, such as group-term life insurance, tips and third-party sick
pay, will be excluded from the definition of Compensation. To the extent
permitted under the Code and any applicable regulations, the Company may
elect, in determining the Actual Deferral Percentage and the Contribution
Percentage under Appendix A to limit Compensation to that paid to a
Participant while participating in the Plan only if the Plan is otherwise
unable to pass the Actual Deferral Percentage test under Section A.4 or the
Average Contribution Percentage test under Section A.6.

     For any Self-Employed Individual, Compensation means Earned Income,
provided, however, that notwithstanding the foregoing, if an election is made
to use an alternative definition of Compensation under Code Section 414(s),
an equivalent alternative Compensation amount may be determined for any
Self-Employed Individual for purposes of nondiscrimination testing under Code
Section 401(a)(4).

     Compensation is determined from the Employer's records.

     A Participant's Compensation may not exceed $200,000 (as adjusted at the
same time and in the same manner as under Code Section 415(d)). In
determining the Compensation of a Participant under this limitation, the
family aggregation rules of Code Section 414(q)(6) apply. However, in
applying those rules, "family" includes only the spouse of the Participant
and any lineal descendants of the Participant who have not attained age 19
before the close of the year. If, by applying the family aggregation rules,
the adjusted $200,000 limitation would be exceeded, then the limitation is
prorated among the affected individuals in proportion to each individual's

                                    -4-

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Compensation as determined before the application of the $200,000 limitation.

     In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, for Plan
Years beginning on or after January 1, 1994, the annual Compensation of each
Employee taken into account under the Plan shall not exceed the OBRA '93
annual compensation limit. The OBRA '93 compensation limit is $150,000, as
adjusted for increases in the cost-of-living in accordance with Code Section
401(a)(17)(B). The cost-of-living adjustment in effect for a calendar year
applies to any period, not exceeding 12 months, over which Compensation is
determined (determination period) beginning in such calendar year. If a
determination period consists of fewer than 12 months, the OBRA '93 annual
compensation limit will be multiplied by a fraction, the numerator of which
is the number of months in the determination period, and the denominator of
which is 12.

     For the Plan Years beginning on or after January 1, 1994, any reference
in this Plan to the limitation under Code Section 401(a)(17) shall mean the
OBRA '93 annual compensation limit set forth in this provision.

     If Compensation for any prior determination period is taken into account
in determining an employee's benefits accruing in the current Plan Year, the
Compensation for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior determination period. For
this purpose, for the determination period beginning before the first day of
the first Plan Year beginning on or after January 1, 1994, the OBRA '93
annual compensation limit is $150,000.

     DETERMINATION YEAR: The period for which Highly Compensated Employees
are being identified. If the Plan Year is a calendar year, the Plan Year is
the Determination Year.

                                      -5-

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Otherwise, the months in the Plan Year which follow the Look-Back Year are
the Determination Year.

     DISABILITY: The inability of a Participant to continue in the service of
the Employer, as specifically defined in, and elected by the Employer under
Section VII of the Adoption Agreement.

     DIRECT ROLLOVER: A payment by the Plan to the Eligible Retirement Plan
specified by the Distributee.

     DISTRIBUTEE: An Employee or former Employee. In addition, the Employee's
or former Employee's surviving spouse and the Employee's or former Employee's
spouse or former spouse who is the alternate payee under a Qualified Domestic
Relations Order as defined in Code Section 414(p), are Distributees with
respect to the interest of the spouse or former spouse.

     EARLY RETIREMENT DATE:  If elected by the Company under the Adoption
Agreement, the date under which an Employee can separate from the service of
the Company or Participating Affiliate, as applicable, and be fully vested.

     EARNED INCOME: The net earnings from self-employment in the trade or
business with respect to which the Plan is established, for which personal
services of the individual are a material income-producing factor. Net
earnings are determined without regard to items not included in gross income
and the deductions allocable to those items. Net earnings are reduced by
contributions by an Employer to a qualified plan to the extent deductible
under Code Section 404. Earned Income is determined with regard to the
deduction allowed by Code Section 164(f).

     EFFECTIVE DATE:  The date designated in Section 1.B.3 of the Adoption
Agreement as the date on which the Plan, as originally adopted or as amended
and restated, will apply.

                                    -6-

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         ELECTIVE DEFERRALS: Employer contributions made to the Plan under
Participant 401(k) Elections.

         ELIGIBLE EMPLOYEE: All Employees of an Employer, except nonresident
aliens with no earned income from the Company or an Affiliate which
constitutes United States source income and those employees in the job
classifications specified in Section II.A of the Adoption Agreement.

         The Eligible Employees of a Participating Affiliate are those
Employees designated as eligible for the Plan by the Participating Affiliate
under Section 10.7.1.

         ELIGIBLE RETIREMENT PLAN: An individual retirement account described
in Code Section 408(a), an individual retirement annuity described in Code
Section 408(b), an annuity plan described in Code Section 403(a), or a
qualified trust described in Code Section 401(a), that accepts the
Distributee's Eligible Rollover Distribution. However, in the case of an
Eligible Rollover Distribution to the surviving spouse, an Eligible
Retirement Plan is an individual retirement account or individual retirement
annuity.

         ELIGIBLE ROLLOVER DISTRIBUTION: Any distribution of all or any
portion of the balance to the credit of the Distributee, except that an
Eligible Rollover Distribution shall not include any distribution that is one
of a series of substantially equal periodic payments (not less frequent than
annually) made for the life (or life expectancy) of the Distributee or the
joint lives (or joint life expectancies) of the Distributee and the
Distributee's designated Beneficiary, or for a specified period of 10 years
or more; any distribution to the extent such distribution is required under
Code Section 401(a)(9); and the portion of any distribution that is not
includible in gross income (determined without regard to the exclusion for
net unrealized appreciation with respect to employer securities).

                                      -7-

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         EMPLOYEE: All common law or contract Employees employed by the
Company or an Affiliate and in accordance with Code Section 7701(a)(20),
full-time life insurance salesmen who are considered employees for purposes
of social security withholding. Employee also includes all leased employees
within the meaning of Code Section 414(n) and 414(o). However, if the leased
employees constitute less than 20% of the non-highly compensated workforce of
the Company or an Affiliate within the meaning of Code Section
414(n)(1)(C)(ii), Employee does not include leased employees covered by a
plan described in Code Section 414(n)(5) unless otherwise provided by this
Plan. However, in determining the non-highly compensated workforce of the
Company or an Affiliate with the meaning of Code Section 414(n)(1)(C)(ii),
all Employees are taken into account.

         EMPLOYER: The Company or Participating Affiliate by whom an Employee
is employed.

         EMPLOYER CONTRIBUTION ACCOUNT: The account under the Plan
established for a Participant under Section 3.5.3.

         EMPLOYMENT: An Employee's Employment with the Company or an
Affiliate. An Employee will not have terminated Employment while on a leave
of absence for required military service or on a leave of absence for any
other purpose authorized in writing by the Company or an Affiliate under
uniform and nondiscriminatory rules if the Employee completes an Hour of
Service with the Company or an Affiliate within 90 days after his separation
from military service or within 90 days after the expiration of his other
leave of absence. If the Employee does not complete an Hour of Service during
the 90-day period, the Employee will be deemed to have terminated Employment
as of the first day of his leave of absence.

                                     -8-
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     ENTRY DATE: The first day of any month.

     ERISA: The Employee Retirement Income Security Act of 1974, as amended
from time to time. Reference to a specific provision of ERISA includes any
valid regulation promulgated under that provision.

     FAMILY MEMBER: An individual described in Code Section 414(q)(6)(B);
namely, the spouse of an Employee, the lineal ascendants of an Employee, the
lineal descendants of an Employee, the spouses of lineal ascendants of the
Employee, and the spouses of lineal descendants of the employee. Under this
definition, Employee refers only to a 5-percent owner of the Company or a
top-ten Highly Compensated Employee.

     HIGHLY COMPENSATED EMPLOYEE: An individual described in Code Section
414(q), including both Highly Compensated active Employees and Highly
Compensated former Employees. A Highly Compensated active Employee is an
Employee who performs service for the Company or an Affiliate during the
Determination Year and who, during the Look-Back Year (i) received
Compensation in excess of $75,000 (as adjusted under Code Section 415(d)),
(ii) received Compensation from the Company or an Affiliate in excess of
$50,000 (as adjusted under Code Section 415(d)) and was a member of the
top-paid group for that year, or (iii) was an officer of the Company or an
Affiliate and received Compensation during that year that is greater than 50%
of the dollar limitation in effect under Code Section 415(b)(1)(A). Highly
Compensated active Employees also include (i) an Employee who is described in
the preceeding sentence if the term "Determination Year" is substituted for
the term "Look-Back Year" and who is one of the 100 Employees who received
the Most Compensation from the Company or an Affiliate during the
Determination Year and (ii) an Employee who is a 5-percent owner at any time
during the

                                 -9-
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Look-Back Year or Determination Year.

     The highest paid officer for a year is treated as a Highly Compensated
Employee if no officer has Compensation in excess of 50% of the dollar
limitation in effect under Code Section 415(b)(1)(A) during either a
Determination Year or a Look-Back Year.

     A Highly Compensated former Employee includes any Employee who separated
from service (or was deemed to have separated) before the Determination Year,
performs no service for the Company or an Affiliate during the Determination
Year, and was a Highly Compensated active Employee for either the
Determination Year during which he separated from service (or was deemed to
have separated) or any Determination Year ending on or after the Employee's
55th birthday.

     The determination of who is a Highly Compensated Employee, including the
determination of the number and identity of the Employees in the top-paid
group, the top 100 Employees, the number of Employees treated as officers,
and the Compensation that is considered, is made in accordance with Code
Section 414(q) and the following:

     (a)  Leased Employees covered by a safe harbor pension plan are not
  treated as Employees with respect to retirement plans.

     (b)  In determining Compensation, accrued (not paid) compensation is not
  used and amounts other than wages, fees, bonuses, commissions, etc. are
  ignored in accordance with Treasury Regulation Section 1.415-2(d)(10).

     (c)  The top-paid group is the highest paid 20% of the number of
  "Employees" employed by the Company or an Affiliate during the testing year,
  excluding:

                                          -10-

<PAGE>

          (i)      nonresident aliens with no U.S. source of earned income;

          (ii)     leased Employees covered by a safe harbor pension plan who
                   are not treated as Employees;

          (iii)    bargaining unit workers if this Plan excludes all
                   bargaining unit workers and 90% or more of the work force
                   of the Company or an Affiliate consists of bargaining unit
                   workers;

          (iv)     probationary Employees who have not completed 6 months of
                   service;

          (v)      part-time Employees who normally work fewer that 17.5 hours
                   per week;

          (vi)     seasonal workers who normally work during less than 6
                   months in any testing year; and

          (vii)    Employees who have not attained age 21 in any testing
                   period.

     (d)  The simplified method for determining Highly Compensated Employees
  under Code Section 414(q)(12) does not apply.

      HOUR OF SERVICE:

      (a)  Each hour for which an Employee is paid, or entitled to payment,
for the performance of duties for the Company or an Affiliate. These hours
are credited to the Employee for the computation period in which the duties
are performed.

      (b)  Each hour for which an Employee is paid, or entitled to payment,
by the Company or an Affiliate on account of a period of time during which no
duties are performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday,

                                        -11-

<PAGE>

illness, incapacity (including disability), layoff, jury duty, military duty,
or leave of absence. No more than 501 Hours of Service may be credited under
this paragraph for any single continuous period (whether or not the period
occurs in a single computation period). Hours under this paragraph are
calculated and credited pursuant to Department of Labor Regulation Section
2530.200b-2, which is incorporated by this reference.

     (c)  Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Company or an Affiliate. The
same Hours of Service are not credited both under paragraph (a) or paragraph
(b), as the case may be, and under this paragraph (c). These hours are
credited to the Employee for the computation period or periods to which the
award or agreement pertains rather than the computation period in which the
award, agreement, or payment is made.

     If an Adoption Agreement allows an Employer to elect to determine an
Employee's eligibility for participation based on months of service, an
Employee will be credited with 190 Hours of Service for a month if the
Employee would be credited with at least one Hour of Service during that
month.

     INVESTMENT FUND: An Investment Fund selected by the Administrative
Committee under Section 8.5.

     LOOK-BACK YEAR: If the Plan Year is a calendar year, the Look-Back Year
is the preceding calendar year. Otherwise, the Look-Back Year is the calendar
year ending within the Plan Year.

     MATCHING CONTRIBUTIONS:  An Employer contribution to the Plan for the
benefit of a Participant because of the Participant's Elective Deferral.

                                          -12-

<PAGE>

     NONELECTIVE CONTRIBUTIONS: An Employer contribution to the Plan (other
than a Matching Contribution or Qualified Matching Contribution) which the
Participant could not have elected to receive in cash or as another taxable
benefit.

     NON-HIGHLY COMPENSATED EMPLOYEE: An Employee who is neither a Highly
Compensated Employee nor a Family Member.

     NORMAL RETIREMENT AGE: age 65.

     OWNER-EMPLOYEE: a sole proprietor, or a partner, who owns more than 10%
of either the capital or profits interest of the partnership.

     PARTICIPANT: An Employee who has commenced, but not terminated,
participation in the Plan under Article II.

     PARTICIPANT 401(k) ACCOUNT: The Account under the Plan established for a
Participant under Section 3.5.1.

     PARTICIPANT 401(k) ELECTION: The election by a Participant to have part
of the amount that otherwise would be paid as Compensation converted to an
Employer contribution in accordance with Section 3.1.1.

     PARTICIPATING AFFILIATE: An Affiliate which adopts, and has not
terminated participation in or withdrawn from, the Plan in accordance with
Section 10.7.

     PERIOD OF SEVERANCE: A period of at least 12 consecutive months
beginning on the later of (i) the date an Employee quits, retires, is
discharged, or dies or (ii) the first anniversary of the date that the
Employee is absent from work (with or without pay) for any other reason, and
ending on the date he again becomes an Employee. A Period of Severance is

                                      -13-

<PAGE>

measured in years with each annual anniversary of the date on which the
Period of Severance began measured as one year.

     However, a Period of Severance does not begin if the Employee is:

          (a)  on a leave of absence authorized by his Employer in accordance
     with standard personnel policies applied in a nondiscriminatory manner
     to all Employees similarly situated and returns to active Employment by
     the Company or an Affiliate within 90 days after the expiration of the
     leave of absence;

          (b)  on military leave while the Employee's reemployment rights are
     protected by law and returns to active Employment by the Company or an
     Affiliate within 90 days after his discharge or release (or such longer
     period as may be prescribed by law); or

          (c)  on layoff and returns to work within such period and in such a
     manner as to maintain seniority according to the rules of the Company or
     an Affiliate in effect on the date of return.

     Solely to determine whether a Period of Severance has occurred for
participation and vesting purposes for an Employee who is absent from work
for maternity or paternity reasons, the 24-consecutive month period beginning
on the first anniversary of the first date of the absence is not a Period of
Severance. However, the Employee is not credited for a Year of Service for
the 12-month period between the first and second anniversaries of the
absence. An absence from work for maternity or paternity reasons means an
absence (i) because of the Employee's pregnancy, (ii) because of the birth of
the Employee's child, (iii) because of the placement of a child with the
Employee in connection with the Employee's adoption of the child or (iv) for
caring for the Employee's child for a period beginning immediately after the
birth or

                                  -14-

<PAGE>

placement.

     Nothwithstanding the foregoing, if an Employer elects under Section V of
the Adoption Agreement to credit Vesting Service based on the number of Hours
of Service credited to an Employee during the computation period, an Employee
credited with fewer than 501 Hours of Service during a computation period
will incur a Period of Severance with respect to such computation period. The
computation period for determining a Period of Severance is the same as the
computation period for determining a Year of Service.

     Effective August 5, 1993, and solely to determine whether a Period of
Severance has occurred for participation and vesting purposes, the period of
a leave of absence pursuant to the Family Medical Leave Act shall not be taken
into account.

     PLAN: The name of the Plan as indicated in Section I.B.1. of the
Adoption Agreement and Appendices A through D.

     PLAN YEAR: A period not to exceed 12 months, as specified in Sections
I.C.1. & I.C.2 of the Adoption Agreement.

     PROTOTYPE SPONSOR: Automatic Data Processing Federal Credit Union.

     QUALIFIED DOMESTIC RELATIONS ORDER: A "Qualified Domestic Relations
Order" as defined in Code Section 414(p), or any domestic relations order
entered before January 1, 1985, if either payment of benefits under the order
has begun as of that date or the Administrative Committee decides to treat
the order as a "Qualified Domestic Relations Order" within the meaning of
Code Section 414(p) even if it does not otherwise qualify as such.

     QUALIFIED MATCHING CONTRIBUTIONS: Matching Contributions which are
subject to the distribution and nonforfeitability requirements of Code
Section 401(k) when made.

                                     -15-

<PAGE>

         QUALIFIED NONELECTIVE CONTRIBUTIONS: Nonelective Contributions which
are subject to the distribution and nonforfeitability requirements of Code
Section 401(k) when made.

         ROLLOVER CONTRIBUTION: An amount received from a plan which
qualifies under Code Section 401 or 403(a) and which is rolled over to the
Plan under Code Section 402(a)(5) (or Code Section 402(c) with respect to
distributions after December 31, 1992). The following conditions must be
satisfied before a Rollover Contribution can be made:

         (a) The transfer to the Plan must occur within 60 days after the
     Employee's receipt of the last distribution from the other plan; and

         (b) The amount transferred must equal any portion of the
     distribution the Employee received from the other plan, subject to the
     maximum rollover provision of Code Section 402(a)(5)(B) (Code Section
     402(c)(2) with respect to distributions after December 31, 1992),
     limiting the amount to the fair market value of all property received in
     the distribution reduced by Employee contributions, as defined in Code
     Section 402(a)(5)(E) (with respect to distributions on or before
     December 31, 1992).

However, if an Employee had deposited a "qualified total distribution" within
the meaning of Code Section 402(a)(5)(E) (with respect to distributions on or
before December 31, 1992) into an individual retirement account as defined in
Code Section 408, he may transfer the amount of the distribution plus
earnings thereon from the individual retirement account to the Plan, provided
that the rollover amount is deposited with the Trustee within 60 days after
receipt from the individual retirement account.

         SELF-EMPLOYED INDIVIDUAL: An individual who has Earned Income for
the taxable year from the trade or business for which the Plan is
established; also, an individual who

                                      -16-

<PAGE>

would have had Earned Income except that the trade or business had no net
profits for the taxable year.

         TRANSFER CONTRIBUTION: A cash amount transferred on behalf of an
Eligible Employee to the Plan in a trust to trust transfer from a plan which
qualifies under Code Section 401 or 403(a) and in which the Participant has a
100% nonforfeitable interest, other than a Direct Rollover.

         TRUST: The Trust established under the Plan to which Plan
contributions are made and in which Plan assets are held.

         TRUSTEE: The person appointed as Trustee under, and having the
responsibilities specified in, Articles VII and VIII, and any successor
Trustee.

         VALUATION DATE: The last business day of each month.

         VESTING SERVICE: The Years of Service credited to an Employee under
Section 4.2 for determining the Participant's nonforfeitable percentage in
the Account Balance of his Employer Contribution Account.

         YEAR OF ELIGIBILITY SERVICE: A 12-consecutive month period during
which an Employee completes 1,000 Hours of Service. The initial 12-month
period begins on the date the Employee first performs an Hour of Service. The
succeeding 12-month periods begin with the first Plan Year commencing after
the date the Employee first performs an Hour of Service.

         YEARS OF SERVICE: An Employee's period of service with the Company
or an Affiliate. The Employee's Years of Service equals the sum of:

         (a) the period beginning on the date the Employee first performs an
     Hour of Service and ending on the date the Employee quits, retires, is
     discharged, dies or is

                                      -17-

<PAGE>

     absent from work (with or without pay) for any other reason; and

         (b) (i) if the Employee quits, retires, or is discharged, the period
     beginning on the date the Employee terminates Employment and ending on
     the first date on which the Employee again performs an Hour of Service,
     if that date is within 12 months of the date on which the Employee last
     performed an Hour of Service; or

             (ii) if the Employee is absent from work for any other reason
     and, within 12 months of the first day of the absence, the Employee quits,
     retires, or is discharged, the period beginning on the first date of the
     absence and ending on the first day the Employee again performs an Hour
     of Service if that date is within 12 months of the date the absence
     began.

         If the Company maintains this Plan as the plan of a predecessor
employer, service with the predecessor employer is treated as Years of
Service. If the Company does not maintain this Plan as the plan of a
predecessor employer, service with the predecessor employer is treated as
Years of Service only if approved by the Board of Directors. Notwithstanding
the foregoing, an Employer may elect under Section V.B of the Adoption
Agreement to have Vesting Service determined on an Hours of Service basis,
with an Employee credited with 190 Hours of Service for a month if the
Employee would be credited with at least one Hour of Service during that
month, so long as the Hours of Service basis was the method for determining
service for vesting purposes under the version of this Plan prior to its
amendment and restatement.

I.2   ADDITIONAL DEFINITIONS

         Additional definitions which relate only to a specific Appendix in
the Plan can be located as follows:

                                      -18-
<PAGE>

         (a) Limitations on Elective Deferrals and Matching Contributions -
     Section A.1;

         (b) Limitations on Annual Additions - Section B.1;

         (c) Top-Heavy Provisions - Section C.1; and

         (d) Distribution Requirements - Section D.1.

I.3   RULES OF CONSTRUCTION

         1.3.1 As used in this Plan, a pronoun or adjective in the masculine
gender includes the feminine gender and the singular includes the plural (and
vice versa), unless the context clearly indicates otherwise. Any reference to
Article, Section, Appendix, or paragraph means the Article, Section,
Appendix, or paragraph so delineated in this Plan.

         1.3.2 The titles and headings to Articles, Sections, and Appendices
are for convenience of reference. In case any conflict, the text of the Plan,
rather than the titles and headings, controls.

         1.3.3 For all purposes of the Plan other than eligibility to make
Elective Deferrals and to receive Matching Contributions, the term
"Participant" shall include any Eligible Employee who has not yet satisfied
the age and/or service requirement elected by the Employer under Section II.B
and Section II.C of the Adoption Agreement but who has made a Rollover
Contribution or Transfer Contribution to the Plan.

I.4   CONTROLLING LAW

         The Plan is intended to qualify under Code Section 401(a) and to
comply with ERISA and its terms will be interpreted accordingly. If any Plan
provision is subject to more than one construction, the ambiguity will be
resolved in favor of the interpretation or construction which is

                                      -19-

<PAGE>

consistent with that intent. Similarly, in the event of any conflict between
any provisions of the Plan or between any Plan provision and Beneficiary
designation form or any other form submitted to the Administrative Committee,
the Plan provisions necessary to retrain qualified status under Code Section
401(a) will prevail. Otherwise, to the extent not preempted by ERISA or as
expressly provided, the laws of New Jersey (other than its conflict of law
provisions) will control the interpretation and performance of the Plan.

I.5   SAVINGS CLAUSE

         Each Plan provision is independent of each other provision. If any
provision proves, or is held by any court, or tribunal, board, or authority
of competent jurisdiction, to be void or invalid as to any Participant or
group of Participants, that provision will be disregarded and deemed to be
void and no part of the Plan. However, the invalidation of any provision will
not impair or affect this Plan or any other provision.

                                        -20-

<PAGE>

                                  ARTICLE II

                                PARTICIPATION

II.1  ADMISSION AS A PARTICIPANT

     II.1.1 An Eligible Employee becomes a participant on the Entry Date
coincident with or next following the date he:

     (a) attains the age elected in Section II.B of the Adoption Agreement;
and

     (b) completes the service requirement elected in Section II.C of the
Adoption Agreement

However, if this Plan is a restatement of an existing plan, an Eligible
Employee who was a Participant in the existing plan on the day before the
Effective Date will continue as a Participant on the Effective Date.

     II.1.2 An Employee, who is not an Eligible Employee but who has met the
age and service requirements of Section 2.1.1, will become a Participant on
the Entry Date immediately after he becomes an Eligible Employee.

     II.1.3 A former Participant who again becomes an Eligible Employee with
credit for at least the minimum age and service requirement (if any) elected
in Sections II.B and II.C of the Adoption Agreement will become a Participant
on the Entry Date coincident with or next following the date on which he
again is an Eligible Employee.

II.2 TERMINATION OF PARTICIPATION

     A Participant ceases to be a Participant:

     (a) upon his death; or

                                     -21-

<PAGE>

     (b) upon payment to the Participant of all benefits due to him under the
Plan.

II.3 PROVISION OF INFORMATION

     Each Employee who becomes a Participant must execute such forms as the
Administrative Committee requires and must make available to the
Administrative Committee any information reasonably requested. By virtue of
participation in this Plan, an Employee agrees, on his own behalf and on
behalf of all persons who may have or claim any right by the Employee's
participation in the Plan, to be bound by all provisions of the Plan and the
trust agreement.

II.4 MINIMUM NUMBER OF PARTICIPANTS

     II.4.1 The minimum number of Employees deriving a benefit from the Plan
must equal the lesser of:

     (a) 50%; or

     (b) 40% or more of the Employees of the Company and its Affiliates. An
Employee is treated as deriving a benefit from the Plan if he is eligible to
make an Elective Deferral, regardless of whether the Employee makes a
Participant 401(k) Election.

     II.4.2 To determine the total number of Employees under subsection
2.4.1(b), the following Employees are disregarded:

          (a) Employees included in a unit of employees covered by a
     collective bargaining agreement between the Employer and employee
     representatives, if retirement benefits were the subject of good faith
     bargaining and if two percent or less of the employees who are covered
     pursuant to that agreement are professionals as defined in section
     1.410(b)-9 of the regulations. For this purpose, the term "employee

                                     -22-

<PAGE>

     representatives" does not include any organization more than half of
     whose members are employees who are owners, officers, or executives of
     the Employer; and

          (b) Employees who have not satisfied the age and service
     requirements of Section 2.1.1.

     II.4.3 This Section 2.4 is intended to be interpreted in accordance with
Code Section 401(a)(26) and the regulations promulgated thereunder.

II.5 ROLLOVER CONTRIBUTIONS

     An Eligible Employee who makes a Rollover Contribution to the Plan prior
to the date on which he or she has satisfied the eligibility requirements of
the Plan, as specified in Section II.B and II.C of the Adoption Agreement,
shall be treated as a Participant for all purposes of the Plan other than
making Participant 401(k) Elections and receiving Matching Contributions,
Qualified Matching Contributions, Nonelective Contributions and Qualified
Nonelective Contributions.

                                     -23-

<PAGE>

                                      ARTICLE III

                        CONTRIBUTIONS AND ACCOUNT ALLOCATIONS

III.1 EMPLOYER CONTRIBUTIONS

     III.1.1 An Employer shall contribute Elective Deferrals to the Trust for
each Participant who has a Participant 401(k) Election in effect.

     III.1.2 If elected by the Company in Section IV.B of the Adoption
Agreement, each Employer who adopts the Plan shall contribute to the Trust a
Matching Contribution. The Matching Contribution shall be made only for a
Participant who has a Participant 401(k) Election in effect, and Matching
Contributions will only be made if Elective Deferrals are made pursuant to a
Participant 401(k) Election during such period.

     III.1.3 Each such Employer may elect in its sole discretion to make an
additional Qualified Matching Contribution. The Employer shall determine
whether the additional Qualified Matching Contribution for a Plan Year is
allocated to the Employer Contribution Account for all Participants or only
for all Non-Highly Compensated Participants.

     III.1.4 Each Employer may elect in its sole discretion under Section
IV.C of the Adoption Agreement to make a Nonelective Contribution for any
Plan Year. The Employer shall elect whether the Nonelective Contribution for
a Plan Year is allocated to the Employer Contribution Account for all
Eligible Employees, whether or not a Participant on the last day of the Plan
Year, or only for Non-Highly Compensated Eligible Employees, whether or not a
Participant on the last day of the Plan Year. The allocation is made in the
ratio that the Compensation paid to the Participant for whom the Nonelective
Contribution is made bears to the total Compensation for the Plan Year of all
Participants for whom the Contribution is made.

                                           -24-
<PAGE>

     In the event it is necessary to make a corrective amendment as defined
in Treasury Regulation Section 1.401(a)(4)-11(g) to satisfy the minimum
coverage requirements of Code Section 410(b) and Treasury Regulation Section
1.410(b)-3(a)(2)(i), with respect to the cash or deferred portion of the
Plan, a Qualified Nonelective Contribution shall be made for those Non-Highly
Compensated Employees who were neither excludable Employees nor Eligible
Employees. The amount of the Qualified Nonelective Contribution to be made on
behalf of each person described in the preceding sentence shall be the
product of such Employee's Compensation and the Actual Deferral Percentage
for those Employees who were Eligible Employees.

     In the event it is necessary to make a corrective amendment as defined
in Treasury Regulation Section 1.401(a)(4)-11(g) to satisfy the minimum
coverage requirements of Code Section 410(b) and Treasury Regulation Section
1.410(b)-3(a)(2)(i) with respect to the Matching Contributions portion of the
Plan, a Qualified Nonelective Contribution shall be made for those Non-Highly
Compensated Employees who were neither excludable Employees nor Eligible
Employees. The amount of the Qualified Nonelective Contribution to be made on
behalf of each person described in the preceding sentence shall be the
product of such Employee's Compensation and the Actual Contribution
Percentage for those Non-Highly Compensated Employees who were Eligible
Employees.

III.2 GENERAL PROVISIONS CONCERNING EMPLOYER CONTRIBUTIONS

     III.2.1 A Participant 401(k) Election must be in 1% increments and
cannot be less than the minimum percentage, or greater than the maximum
percentage, elected in Section IV.A of the Adoption Agreement. No
Participant 401(k) Election may be made retroactively and no Participant
401(k) Election is effective before approval by the Administrative Committee.

                                      -25-

<PAGE>
     III.2.2 The Company may allow, on a nondiscriminatory basis, that a
Participant 401(k) Election may be stated as a dollar amount for one-time
Elective Deferrals. The stated dollar amount may not exceed 25% of the
Participant's Limitation Compensation (as defined in Appendix B) with respect
to which the one-time Elective Deferral is being made. The stated dollar
amount is also subject to the maximum percentage of annual Compensation
elected in Section IV.A of the Adoption Agreement.

     III.2.3 The amount of the Matching Contribution equals the amount of the
Participant's Elective Deferral multiplied by the percentage elected in
Section IV.B of the Adoption Agreement. The amount of the Matching
Contribution is subject to the percentage of Elective Deferral and/or dollar
limitations, if any, elected in Section IV.B of the Adoption Agreement. The
amount of any additional Qualified Matching Contribution described in Section
3.1.2 shall be determined by the Company in its sole discretion.

     III.2.4 All Elective Deferrals are made by payroll deduction.

     III.2.5 The Administrative Committee may reduce the amount of any
Participant 401(k) Election, or make such other modifications as necessary so
that the Plan complies with Code Section 401(k).

     III.2.6 A Participant 401(k) Election remains in effect until changed or
terminated. The Administrative Committee shall adopt rules and procedures
under which a Participant may make, suspend, reinstate, change, or terminate
his Participant 401(k) Election not less frequently than once a year.

     III.2.7 A Participant's initial Participant 401(k) Election and any
election to suspend, reinstate, or change a Participant 401(k) Election must
be given to the Administrative

                                    -26-

<PAGE>

Committee, on a form provided by the Administrative Committee, and within the
time specified by the Administrative Committee.

     III.2.8 A Participant 401(k) Election is suspended automatically while a
Participant is not an Eligible Employee.

     III.2.9 Contributions to the Plan are not integrated with Social
Security.

     III.2.10 Contributions to the Plan are subject to the Limitations on
Elective Deferrals and Matching Contributions in Appendix A, the Limitations
on Annual Additions in Appendix B, and the Top-Heavy Provisions in Appendix C.

III.3 ROLLOVER CONTRIBUTIONS

     Any Participant, or an Eligible Employee who has not yet become a
Participant, may make a Rollover Contribution to the Plan in cash. If an
Employee makes a contribution that is intended to be a Rollover Contribution
which the Administrative Committee later discovers not to be a Rollover
Contribution, the Administrative Committee will distribute to the Participant
as soon as practicable after discovery that portion of his Participant 401(k)
Account attributable to the mistaken Rollover Contribution. The amount to be
distributed will be determined as of the Valuation Date coincident with or
immediately succeeding the discovery.

III.4 TRANSFER CONTRIBUTIONS

     The Trustee may accept, only at the direction of the Administrative
Committee, a Transfer Contribution as part of the Trust. The Administrative
Committee may not approve a Transfer Contribution, other than in connection
with an acquisition, that would:

                                  -27-

<PAGE>

          (a) subject the Plan to the requirements of Code Sections
     401(a)(11) and 417;

          (b) require the Plan to offer a benefit other than a lump sum
     payment or a period certain installment; or

          (c) include after-tax Employee contributions.

III.5 ESTABLISHING OF ACCOUNTS

     III.5.1 The Administrative Committee shall establish a Participant
401(k) Account for each Participant to record all Elective Deferrals that are
made on behalf of a Participant and the earnings and losses allocated to the
Elective Deferrals. The Administrative Committee shall establish separate
sub-accounts (if applicable) within a Participant's Participant 401(k)
Account to record:

          (a) Rollover Contributions made by a Participant to the Trust and
     any earnings or losses allocated to the Rollover Contributions; and

          (b) Transfer Contributions transferred to the Trust on behalf of a
     Participant and any earnings or losses allocated to the Transfer
     Contributions.

     III.5.2 A Participant 401(k) Account (and the appropriate
sub-account(s), if applicable) will not be established for a Participant until
the Administrative Committee receives a Participant 401(k) Election (or
Rollover or Transfer Contributions) for that Participant.

     III.5.3 The Administrative Committee shall establish an Employer
Contribution Account for each Participant to record any Matching
Contributions, Qualified Matching Contributions, Nonelective Contributions,
and Qualified Nonelective Contributions that are made to the Trust on behalf
of a Participant and any earnings or losses allocated to those contributions.
The Administrative Committee shall separately account for, or cause to be
separately accounted

                                     -28-

<PAGE>

for, that portion of the Employer Contribution Account that is attributable
to Qualified Matching Contributions and Qualified Nonelective Contributions
that are treated as Elective Deferrals under Appendix A and any earnings or
losses allocated to those contributions.

     III.5.4 If the Plan is a restatement of an existing plan, and such plan
provided for nondeductible employee contributions, and at the time of
conversion to this Plan there remain under the Plan undistributed
nondeductible employee contributions, an After-Tax Account shall be
established for such individuals.

III.6 MULTIPLE TRADES AND BUSINESSES

     III.6.1 If this Plan provides contributions or benefits for one or more
Owner-Employees who control (as defined in Section 3.6.4) both the business
for which this Plan is established and one or more other trades or
businesses, this Plan and all plans established for the other trades or
businesses must, when looked at as a single plan, satisfy Code Sections
401(a) and (d) for the Employees of this and the other trades or businesses.

     III.6.2 If this Plan provides contributions and benefits for one or more
Owner-Employees who control one or more other trades or businesses, the
Employees of each other trade or business must be included in a plan which
satisfies Code Sections 401(a) and (d), although not necessarily this Plan,
and which provides contributions and benefits not less favorable than
provided for the Owner-Employees under this Plan.

     II.6.3 If an individual is covered as an Owner-Employee under the plans
of two or more trades or businesses at least one of which the Owner-Employee
does not control, then the

                                     -29-

<PAGE>

contributions or benefits of the Employees under a plan of a trade or
business which the Owner-Employee controls must be as favorable as those
provided for the Owner-Employee under the most favorable trade or business
which he does not control.

     III.6.4 An Owner-Employee is considered to control a trade or business
if the Owner-Employee, either alone or with other Owner-Employees:

          (a) owns the entire interest in an unincorporated trade or
     business; or

          (b) in the case of a partnership, owns more than 50% of either the
     capital interest or the profits interest in the partnership.

An Owner-Employee is treated as owning any interest in a partnership which is
owned, directly or indirectly, by another partnership controlled by the
Owner-Employee, either alone or with other Owner-Employees.

                                     -30-
<PAGE>

                                  ARTICLE IV

                                    VESTING

IV.1 DETERMINATION OF VESTING

     IV.1.1 A Participant has a nonforfeitable percentage of 100% at all
times in the Account Balance of his Participant 401(k) Account and After-Tax
Account.

     IV.1.2 A Participant has a nonforfeitable percentage in the Account
Balance of his Employer Contribution Account, other than amounts attributable
to Qualified Matching Contributions and Qualified Nonelective Contributions,
determined as follows:

          (a) 100%, (i) upon attaining Normal Retirement Age while in the
     active service of the Employer, (ii) if because of death or Disability
     while in the active service of the Employer, or (iii) upon attaining his
     or her Early Retirement Date while in the active service of the
     Employer, if elected under Section VI of the Adoption Agreement; or

          (b) in accordance with Section V of the Adoption Agreement, if he
     terminates Employment for any other reason.

If allowed under the Adoption Agreement, an Employer may have different
vesting schedules with respect to different types of contributions.

IV.2 RULES FOR CREDITING VESTING SERVICE

     IV.2.1 Except to the extent provided in Section 4.2.2., unless otherwise
elected in Section V of the Adoption Agreement, all Years of Service are
credited to determine a Participant's Vesting Service.

     IV.2.2 An Employee's Vesting Service after a Period of Severance of at
least 5 years is not counted in computing the nonforfeitable percentage in
his Employer Contribution

                                     -31-

<PAGE>

Account derived from contributions accrued before the Period of Severance.

IV.3 FORFEITURES

     IV.3.1 The non-vested portion of the Employer Contribution Account of a
Participant who has terminated Employment is forfeited as of the date on
which he has a 5-year Period of Severance or, if earlier, upon distribution
or deemed distribution of the Participant's entire Account Balance.

     IV.3.2 The forfeitures will be used to reduce Employer Contributions, or
to pay Plan expenses, if the Employer elects not to pay such expenses
directly. For a Participant who receives a distribution of any part of his
Account Balance, the forfeiture will be restored, however, if the Participant
returns to Employment as an Eligible Employee and the Participant repays to
the Plan the full amount of the distribution attributable to his Employer
Contribution Account before the earlier of 5 years after the first date on
which the Participant is subsequently reemployed by an Employer, or the date
the Participant incurs a 5-Year Period of Severance following the date of
distribution. For a Participant who is deemed to have received a distribution
pursuant to Section 5.2.3, the forfeiture will be restored if the Participant
returns to Employment as an Eligible Employee before the Participant incurs a
5-year Period of Severance.

                                     -32-

<PAGE>

                                  ARTICLE V

                    AMOUNT AND PAYMENT OF ACCOUNT BALANCES

V.1 TERMINATION OF EMPLOYMENT

     Upon termination of Employment, a Participant shall receive, subject to
the rules described below, the sum of:

          (a) the Account Balance of his Employer Contribution Account as of
     the Valuation Date coincident with or immediately after the date the
     Participant terminates Employment, multiple by his nonforfeitable
     percentage determined under Article IV;

          (b) the Account Balance of his Participant 401(k) Account as of
     that Valuation Date; and

          (c) the Account Balance of his After-Tax Account, if any.

V.2 PAYMENT OF ACCOUNT BALANCES ON TERMINATION OF EMPLOYMENT

     V.2.1 If the nonforfeitable portion of a Participant's Account Balances
as of the Valuation Date coincident with or immediately after the termination
of Employment is $3,500 or less, the nonforfeitable portion of the Account
Balances will be paid in a lump sum as soon as practicable thereafter.

     V.2.2 If the nonforfeitable portion of a Participant's Account Balances
as of the Valuation Date coincident with or immediately after termination of
Employment is more than (or at the time of any prior distribution after
termination of Employment was more than) $3,500, the Administrative Committee
shall notify the Participant of the right to defer payment of the
nonforfeitable portion. The notification must describe the material features
and, if applicable, explain the relative values of the optional forms of
payment available under the Plan in a manner

                                     -33-

<PAGE>

that would satisfy the notice requirements of Code Section 417(a)(3). The
notification must be provided not less than 30 or more than 90 days before
the Benefit Commencement Date. The nonforfeitable portion of the
Participant's Account Balances will be distributed as soon as practicable
after the Participant elects in writing to receive the distribution, but not
later than the date specified in Section 5.5.1 or 5.5.2.

     V.2.3 A Participant is deemed to have received a distribution if the
nonforfeitable percentage in his Employer Contribution Account is 0% on
termination of Employment.

V.3 DEATH BENEFIT

     V.3.1 The benefit payable to a Beneficiary on the death of a Participant
before the commencement of benefits equals the sum of the Participant's
Account Balances as of the Valuation Date coincident with or immediately
after the date of the Participant's death. The benefit payable to a
Beneficiary on the death of a Participant after distribution of his interest
has begun, but before distribution has been completed, equals the remaining
portion of the Participant's interest. The Beneficiary will be paid the
benefit in a lump sum within 90 days after the Administrative Committee has
been notified of the Participant's death unless payment is impracticable or
the Beneficiary cannot be located.

V.4 BENEFICIARIES

     V.4.1 Each participant shall designate one or more direct or contingent
Beneficiaries to receive any amounts which may become payable under the Plan
upon the participant's death. A Participant's designation of a Beneficiary
must be filed with the Administrative Committee on a form provided by the
Administrative Committee.

                                     -34-

<PAGE>

     V.4.2 Any designation of a Beneficiary may be revoked by filing a later
desgination or an instrument of revocation with the Administrative Committee
in a time and manner designated by the Administrative Committee. The last
designation received by the Administrative Committee is controlling over any
testamentary or other disposition. However, no designation, or change or
cancellation of a designation, is effective unless received by the
Administrative Committee before the Participant's death, and in no event may
it be effective as of a date before receipt.

     V.4.3 A married Participant's spouse must consent to a designation of a
Beneficiary other than the spouse. The spouse's consent to the designation
must be witnessed by a notary public or by a Plan representative and is
effective only with respect to the Beneficiary or Beneficiaries specified in
the designation (unless the consent expressly provides that the designation
may be changed without further consent from the spouse). If the Participant
establishes to the satisfaction of a Plan representative that written consent
cannot be obtained because there is no spouse or the spouse cannot be
located, the designation will be deemed effective. In addition, if the spouse
is legally incompetent to give consent, then the spouse's legal guardian,
even if the guardian is the Participant, may give consent. If a Participant is
legally abandoned or has been separated (under the state law of the
Participant's residence) and the Participant has a court order to that effect,
spousal consent is not required unless a Qualified Domestic Relations Order
provides otherwise. Any consent necessary under this provision is valid only
with respect to the spouse who signs the consent. A Participant may revoke a
prior waiver without the consent of the souse at any time before the
commencement of benefits. The number of revocations is not limited

                                  -35-

<PAGE>

     V.4.4 If a Participant is not married and fails to designate a
Beneficiary, or if no designated Beneficiary survives the Participant, any
amounts due after the Participant's death will be paid to his then living
issue, PER STIRPES, but if the Participant is not survived by issue, then to
the legal representative of his estate in a single lump sum.

     V.4.5 Subject to any Qualified Domestic Relations Order procedures as
may be established, if at any time any doubt exists about the right of any
person to any payment under the Plan, or about the amount or time of the
payment, the Administrative Committee may direct the Trustee to (i) hold the
sum as a segregated amount in trust until the right, amount, or time is
determined or until there is an order of a court of competent jurisdiction,
(ii) pay the sum into court in accordance with appropriate rules of law in
such case then provided or (iii) pay the sum only upon receipt of a bond or
similar indemnification (in such amount and in such form as is satisfactory
to the Administrative Committee).

     V.4.6 If a period certain distribution is elected, and a Beneficiary
dies after the death of the Participant but before distribution of the
Participant's entire Account Balances, then the remainder is paid to the
estate of the Beneficiary.

     V.4.7 No Beneficiary has any rights to benefits under the Plan unless he
survives the Participant.

     V.4.8 A Participant's former spouse is treated as his spouse to the
extent provided under a Qualified Domestic Relations Order.

     V.4.9 If the Participant and his Beneficiary die so that it is not
possible to determine who died first, it is presumed that the Participant
survived the Beneficiary.

     V.5 LIMITATION ON COMMENCEMENT OF BENEFITS

                                      -36-

<PAGE>

     V.5.1 Subject to Section 5.5.2, a Participant must begin to receive his
benefits no later than the 60th day after the close of the Plan Year in which
the latest of the following occurs:

     (a) the Participant attains Normal Retirement Age; or

     (b) the Participant terminates Employment.

If the amount of benefits payable cannot be determined within the 60-day
period, or if it is not possible to pay the benefits within that period
because the Administrative Committee has been unable to locate the
Participant after making reasonable efforts to do so, then a payment,
retroactive to the 60th day, will be made no later than 60 days after the
earliest date on which the amount of the benefits can be determined or the
Participant can be located, as the case may be.

     V.5.2 A Participant must begin to receive his benefits, either in the
form of a lump sum or in installments, no later than the first day of April
following the calendar year in which he attains age 70 1/2 except as provided
in Appendix D. All distributions under this Plan must be made in accordance
with Appendix D.

V.6 WITHDRAWALS BEFORE TERMINATION OF EMPLOYMENT

     V. 6.1 Each Participant who has attained age 59 1/2 may withdraw, as of
the Valuation Date coincident with or next following the filing of an
application with the Administrative Committee, all or any part of the
nonforfeitable portion of his Account Balances. If a Participant who has a
benefit option described in Section 6.2(b) elects to make a withdrawal under
this Section 5.6.1, spousal consent shall be required for such distribution
to the extent the amount withdrawn is an amount to which Section 6.2(b)
applies. In determining whether Section 6.2(b) applies, amounts withdrawn
shall be on a FIFO (first in, first out) basis.

                                       -37-

<PAGE>

     V.6.2 Each Participant who has not attained age 59 1/2 may make a hardship
withdrawal of he demonstrates to the Administrative Committee that the
withdrawal is necessitated by the Participant's immediate and heavy financial
need and the Participant lacks the available resources. A hardship withdrawal
may not exceed the amount of the immediate and heavy financial need and is
limited to the Participant's (i) Elective Deferrals, (ii) Rollover
Contributions, (iii) Transfer Contributions, (iv) earnings on Rollover
Contributions and Transfer Contributions and (v) the vested portion of the
Participant's Employer Contribution Account other than amounts attributable to
Qualified Matching Contributions and Qualified Nonelective Contributions. The
amount of any immediate and heavy financial need may include any amounts
necessary to pay any Federal, state or local income taxes or penalties
reasonably anticipated to result from the distribution.

     V.6.3 A distribution as deemed to be made on account of an immediate or
heavy financial need of the Participant only if the distribution is on account
of:

          (a) expenses incurred or necessary for medical care, described in Code
     Section 213(d), incurred by the Participant, the Participant's spouse, or
     an dependents of the Participant (within the meaning of Code Section 152);

          (b) purchase (excluding mortgage payments) of a principal residence
     for the Participant;

          (c) payment of tuition and related educational fees for the next 12
     months of post-secondary education for the Participant, his spouse,
     children, or dependents; or

          (d) the need to prevent the eviction of the Participant from his
     principal residence or foreclosure on the mortgage of the Participant's
     principal residence.

                                      -38-

<PAGE>

     V.6.4 Before receiving a hardship withdrawal, a Participant must obtain all
distributions and all nontaxable loans under all plans maintained by the Company
or an Affiliate.

     V.6.5 A Participant who receives a hardship withdrawal is suspended from
making any Elective Deferrals for 12 months after receiving the distribution.
The maximum amount of Elective Deferrals for the Participant's taxable year
after the taxable year of the hardship withdrawal is the dollar limit under
Section A.2 less the amount of the Participant's Elective Deferrals for the
taxable year of the hardship withdrawal.

     V.6.6 The minimum withdrawal under this Section 5.6 is $500.

     V.6.7 The Administrative Committee shall establish rules and procedures
with respect to any withdrawal, including (i) the requirements for requesting
and receiving the hardship withdrawals and (ii) suspension from further Elective
Deferrals.

     V.6.8 If a Participant who has a benefit option described in Section 6.2(b)
elects a hardship withdrawal, then spousal consent shall be required for such
distribution to the extent the amount withdrawn is an amount to which Section
6.2(b) applies. In determining whether Section 6.2(b) applies, the amount
withdrawn shall be determined on a FIFO (first-in, First out) basis.

     V.6.9 Each Participant who has not attained age 59 1/2 may withdraw, as of
the Valuation Date coincident with or next following the filing of an
application with the Administrative Committee, all or any portion of his
After-Tax Account, subject to such rules and procedures  as the Administrative
Committee may establish.

V.7 Loans
    -----

                                      -39-

<PAGE>

     V.7.1 A Participant who is (i) an Employee of the Company or an
Affiliate, or (ii) not described in (i), but nonetheless a party in interest
under ERISA Section3(14) may submit an application to borrow from his
Participant 401(k) Account and Employer Contribution Account (on such terms
and conditions as the Administrative Committee may prescribe). The amount of
the loan may not exceed the lesser of (i) $50,000 reduced by the excess (if
any) of the highest outstanding balance of all other loans from the Plan
during the one-year period ending the day before the loan was made or (ii)
50% of the sum of the Account Balance in his Participant 401(k) Account and
After-Tax Account and the nonforfeitable portion of the Account Balance in
his Employer Contribution Account on the Valuation Date coincident with or
immediately preceding the filing of the loan application with the
Administrative Committee. For the purpose of this limitation, all loans from
all plans of the Company and any Affiliates of the Company are aggregated.

     V.7.2 If approved, each loan must comply with the following conditions:

          (a) it must be evidenced by a negotiable promissory note;

          (b) the rate of interest payable on the unpaid balance of the loan
     must equal the prevailing interest rate charged by a bank for a secured
     personal loan, but may not exceed the rate that may be imposed by the
     state's usury law, if violation of that law subjects the violator to
     criminal sanctions;

          (c) the loan, by its terms, must be entirely repaid within 5 years
     unless the loan is to be used to acquire the principal residence of the
     Participant, in which case the loan must be entirely repaid within 30
     years;

                                    -40-

<PAGE>

          (d) the loan must be secured by the Participant's interest in his
     Account Balances and such additional collateral as the Administrative
     Committee may from time to time consider prudent;

          (e) the loan must be repaid with respect to both principal and
     interest by payroll deduction in substantially equal payments over the
     life of the loan, with payments not less frequently than quarterly;

          (f) the minimum loan under the Plan will be $500;

          (g) only one loan used to acquire the principal residence of a
     Participant may be outstanding at any time;

          (h) if available, up to three loans may be outstanding at any time,
     provided, however, only one of them may be used for the purpose of
     acquiring a principal residence of a Participant; and

          (i) in the event of the Participant's termination from Employment,
     the remaining payments on the loan will be due immediately, except with
     respect to a party in interest under ERISA Section3(14).

The level amortization requirement in paragraph (e) does not apply to a
period when a Participant is on leave of absence without pay for up to one
year. Nothing in the Plan precludes repayment or acceleration of the loan
before the end of the commitment period.

     V.7.3 If a Participant is granted a loan, the Administrative Committee
shall establish a "loan account" for the Participant. The Trustee shall hold
all loan accounts as part of the Trust. The Trustee shall transfer the amount
of the loan to the loan account from the Participant 401(k) Account and
Employer Contribution Account on a PRO RATA basis. The

                                    -41-

<PAGE>

amounts transferred shall be withdrawn from the Investment Funds in
accordance with rules established by the Administrative Committee. The
Trustee shall deposit the promissory note executed by the Participant in his
loan account. For purposes of the Plan, the promissory note is deemed to have
a fair market value at any given time equal to the unpaid balance of the note
plus accrued but unpaid interest.

     V.7.4 Principal and interest payments of a Participant's loan are
credited initially to that Participant's loan account and are transferred as
soon as reasonably practicable to the Participant's Accounts from which the
loan amount was originally withdrawn on a PRO RATA basis. The amounts
transferred are reinvested in the Investment Funds in accordance with rules
established by the Administrative Committee.

     V.7.5 Any loss caused by nonpayment or other default on a Participant's
loan obligations is borne solely by the Participant's loan account. To the
extent permissible by law, in the event of a default, foreclosure on the
promissory note and attachment of security will not occur until an event
occurs that would allow or require a distribution of a Participant's Account
Balances.

     V.7.6 The Administrative Committee shall make loans available to all
Participants and Beneficiaries who are parties in interest with respect to
the Plan within the meaning of ERISA Section3(14).

     V.7.7 Loans may not be made available to Highly Compensated Employees in
an amount greater than that available to other Employees.

     V.7.8 A Participant's loan request will be canceled if the Participant
dies before the loan amount requested is actually distributed.

                                   -42-

<PAGE>

     V.7.9 No loans may be made available to any shareholder-employee or
Owner-Employee unless the Plan receives an exemption from the Department of
Labor for such loan which exemption is received wholly at the Employee's
expense. A shareholder-employee is an employee or officer of an electing
small business (Subchapter S) corporation who owns (or is considered as
owning under Code Section 318(a)(1)), on any day during the taxable year of
the Corporation, more than 5% of the outstanding stock of the Corporation.

     V.7.10 If a Participant who has a benefit option described in Section
6.2(b) requests a loan, then spousal consent shall be required for such loan
to the extent the amount borrowed is an amount to which Section 6.2(b)
applies. In determining whether Section 6.2(b) applies, amounts borrowed
shall be determined on a FIFO (first in, first out) basis.

V.8 ADDITIONAL DISTRIBUTION EVENTS

     In addition to the other distribution events set forth in this Article
and Appendix A. a Participant is eligible to receive a lump sum distribution
from the Plan, either total or partial, upon the occurrence of any of the
following events;

          (a) termination of the Plan without the establishment of another
     defined contribution plan other than an employee stock ownership plan
     (as described in Code Section 4975(e) or 409) or a simplified employee
     pension plan as defined in Code Section 408(k);

          (b) disposition by a corporation to an unrelated corporation of
     substantially all of the assets (within the meaning of Code Section
     409(d)(2)) used in a trade or business of such corporation if such
     corporation continues to maintain this Plan after the disposition, but
     only with respect to Employees who continue employment with the
     corporation acquiring such assets; or

                                  -43-

<PAGE>

          (c) disposition by a corporation to an unrelated entity of such
     corporation's interest in a subsidiary (within the meaning of Code
     Section 409(d)(3)) if such corporation continues to maintain this Plan,
     but only with respect to Employees who continue employment with such
     subsidiary.

V.9 DISTRIBUTIONS TO ALTERNATE PAYEES

          An alternate payee, as defined under Code Section 414(p), may
receive a distribution pursuant to a Qualified Domestic Relations Order, as
defined under Code Section 414(p), even if a Participant is not eligible for
a distribution from the Plan.

                                  -44-

<PAGE>

                                  ARTICLE VI

                         FORMS OF PAYMENT OF ACCOUNTS

VI.1 NORMAL FORM OF PAYMENT

          The normal form of payment is a lump sum benefit.

VI.2 OPTIONAL FORM OF PAYMENT

          (a) The only optional form of payment is in installments over a
     period certain. The period may not extend beyond the life expectancy
     of the Participant or the joint life expectancy of the Participant and his
     Beneficiary.

          (b) Notwithstanding Section 6.2(a) of the Plan, if a benefit is
     entitled to protection under Code Section 411(d)(6), such benefit shall be
     provided hereunder, but only with respect to benefits accrued to the
     Effective Date.

VI.3 ELECTION OF OPTIONAL FORM

     VI.3.1 Not more than 90 nor less than 30 days before a Participant's
Benefit Commencement Date, the Administrative Committee shall furnish the
Participant with a notice containing information about electing the form in
which benefits are to be paid. Each Participant may elect in writing not to
take the normal form of payment and to elect the optional form of payment.
The election period is the 90-day period ending on the Participant's Benefit
Commencement Date. The Administrative Committee may, on a uniform and
nondiscriminatory basis, provide for other periods that comply with
regulations issued under Code Sections 401(a)(11) and 417

                                      -45-

<PAGE>

              VI.3.2    If a married Participant is entitled to an annuity
form of distribution with respect to all or a portion of a distribution
hereunder, then such distribution (to the extent accrued to the Effective
Date) will be in the form of a qualified joint and survivor annuity, unless
his or her spouse elects in writing to waive such distribution during the 90
day period prior to the benefit Commencement Date.

              VI.3.3    A Participant may revoke an election to take an
optional form of payment, and elect the normal form of payment, at any time
during the election period.

VI.4     LIMITATION ON OPTIONS.

              A Participant or a Beneficiary may not elect to receive
benefits in either of the following forms:

              (a)       a benefit in such form that, as of the time payment
         commences, the present value of the benefits payable to the
         Participant or Beneficiary is less than 50% of the total benefits
         payable or that would violate the incidental death benefit rule; or

              (b)       a benefit in such form that all or any portion of the
         value of the benefit otherwise payable to the Participant during his
         lifetime is either (i) paid instead to his Beneficiary or (ii) set
         aside for payment to his survivor at death.

VI.5     CHANGE IN FORM OR TIMING OF PAYMENT

              Any Participant or Beneficiary whose payments are being
deferred or who is receiving installment payments may request acceleration or
other modification of the form of distribution.

VI.6     CONDITIONS TO DISTRIBUTION

                                     -46-

<PAGE>

              Before any distribution is made, the Participant or Beneficiary
must furnish the Administrative Committee with all applications,
certificates, tax waivers, signature guarantees, and any other documents
which the Administrative Committee considers necessary or advisable.

VI.7     ELIGIBLE ROLLOVER DISTRIBUTIONS

              This section applies to distributions made on or after
January 1, 1993. Notwithstanding any provision of the Plan to the contrary
that would limit a Distributee's election under this section, a Distributee
may elect, at the time and in the manner prescribed by the Administrative
Committee, to have any portion of an Eligible Rollover Distribution paid
directly to an Eligible Retirement Plan specified by the Distributee in a
Direct Rollover.

                                     -47-

<PAGE>

                                  ARTICLE VII

                                  FIDUCIARIES

VII.1    NAMED FIDUCIARIES

              VII.1.1   The Board of Directors, the Administrative Committee,
and the Trustee are each a "named fiduciary" of the Plan, as the term is
defined in ERISA Section 402(a)(2), but only for the specific
responsibilities of each described in the Plan or the trust agreement
establishing the Trust.

              VII.1.2   The Board of Directors has the sole authority to
appoint and remove the members of the Administrative Committee and the
Trustee. The Administrative Committee has the sole authority to control and
manage the operation and administration of the Plan, other than authority to
manage and control Plan assets. The Administrative Committee has the sole
authority to approve the Investment Funds established by the Trustee. The
Administrative Committee is the "administrator" and "plan administrator" of
the Plan, as those terms are defined in ERISA Section 3(16)(A) and in Code
Section 414(g), respectively. The Trustee has the sole authority to manage
and control all Trust assets.

VII.2.   EMPLOYMENT OF ADVISERS

              A named fiduciary, and any fiduciary appointed by a named
fiduciary, may employ one or more persons to render advice with regard to any
responsibility of the named fiduciary or fiduciary under the Plan.

VII.3    MULTIPLE FIDUCIARY CAPACITIES

                                     -48-

<PAGE>

              Any fiduciary may serve in more than one fiduciary capacity
with respect to the Plan.

VII.4    PAYMENT OF EXPENSES

              VII.4.1   The Administrative Committee may elect that all
transactional costs or charges imposed or incurred for an Investment Fund be
charged to the Account of the Participant directing the investment.
Transactional costs and charges include charges for the acquisition, sale, or
exchange of assets, brokerage commissions, service charges, loan expenses,
and professional fees.

              VII.4.2   All other Plan expenses, including expenses of the
Administrative Committee and the Trustee, to the extent permitted by law, are
paid by the Trust. However, an Employer may elect to pay these expenses.

VII.5    INDEMNIFICATION

              To the extent not prohibited by state or Federal law, the
Company or an Affiliate will indemnify and hold harmless any named fiduciary
or any other Employee, officer, or director of the Company or an Affiliate
from all claims for liability, loss, or damage (including payment of expenses
in connection with defense against any claim) which result from any exercise
or failure to exercise any responsibilities with respect to the Plan, other
than willful misconduct or willful failure to act.

                                     -49-

<PAGE>

                                 ARTICLE VIII

                              PLAN ADMINISTRATION

VIII.1   ADMINISTRATIVE COMMITTEE

              VIII.1.1  Unless the Board of Directors otherwise provides, any
member of the Administrative Committee who is an Employee of the Company or
an Affiliate when appointed will be considered to have resigned from the
Administrative Committee when no longer an Employee. Employees of the Company
or an Affiliate may receive no compensation for their services rendered to or
as members of the Administrative Committee.

              VIII.1.2  The Administrative Committee shall act by a majority
of its members at the time in office and any action may be taken either by a
vote at a meeting or in writing without a meeting. However, if less than
three members are appointed, the Administrative Committee shall act only upon
the unanimous consent of its members. The Administrative Committee may
authorize in writing any person to execute any document or documents on its
behalf. Any interested person, upon receipt of notice of the authorization
directed to it, may accept and rely on any document executed by the
authorized person until the Administrative Committee delivers to the
interested person a written revocation of the authorization.

              VIII.1.3  A member of the Administrative Committee who is also
a Participant may not vote or act upon any matter relating to himself.

VIII.2   POWERS AND DUTIES OF THE ADMINISTRATIVE COMMITTEE

              VIII.2.1  The Administrative Committee has discretionary
authority to construe the Plan and determine all questions of fact or
interpretation that may arise. Any

                                     -50-

<PAGE>

construction or determination is conclusively binding on all persons
interested in the Plan.

              VIII.2.2  The Administrative Committee may promulgate such
rules and procedures and issue such forms as it considers necessary or proper
for the administration of the Plan.

              VIII.2.3  The Administrative Committee shall maintain or cause
to be maintained sufficient records of Employment, compensation, and other
relevant data pertaining to Participants, including records which demonstrate
compliance with the nondiscrimination requirements of Code Sections 401(k)
(including the extent to which Qualified Matching Contributions are treated
as Elective Deferrals) and 401(m) (including the extent to which Elective
Deferrals are treated as Matching Contributions).

              VIII.2.4  Subject to the terms of the Plan, the Administrative
Committee shall determine the time and manner in which all elections
authorized by the Plan will be made or revoked.

              VIII.2.5  The Administrative Committee shall establish a claims
procedure.

              VIII.2.6  The Administrative Committee may require a
Participant or Beneficiary to file an application for a benefit and to
furnish all pertinent information it may request. The Administrative
Committee may rely on all information furnished, including the Participant's
or Beneficiary's current mailing address.

              VIII.2.7  The Administrative Committee may make and deal with
any investment of the Trust in any manner consistent with the Plan which it
considers advisable.

                                     -51-

<PAGE>

              VIII.2.8  The Administrative Committee shall establish and
carry out a funding policy consistent with the objectives of the Plan and the
requirements of ERISA.

              VIII.2.9  The Administrative Committee has all the rights,
power, duties, and obligations granted or imposed upon it elsewhere in the
Plan.

              VIII.2.10 The Administrative Committee must exercise its
responsibilities in a uniform and nondiscriminatory manner.

VIII.3   DELEGATION OF RESPONSIBILITY

              The Administrative Committee may designate persons, including
persons other than named fiduciaries, to carry out the specified
responsibilities of the Administrative Committee and will not be liable for
any act or omission of a person so designated.

VIII.4.  TRUSTEE

              VIII.4.1  The Trustee shall accept its appointment by executing
a trust agreement as Trustee.

              VIII.4.2  The Trustee may make and deal with any investment of
the Trust in any manner consistent with the Plan and the trust agreement
which it considers advisable.

              VIII.4.3  The Trustee has all the rights, powers, duties, and
obligations granted or imposed upon it elsewhere in the Plan or in the trust
agreement.

              VIII.4.4  The Trustee must exercise all of its responsibilities
in a uniform and nondiscriminatory manner.

              VIII.4.5  The Trustee may designate persons, including persons
other than named fiduciaries, to carry out the specified responsibilities of
the Trustee and will not be

                                     -52-

<PAGE>

liable for any act or omission of a person so designated.

              VIII.4.6  The Trustee shall be paid such reasonable
compensation, in addition to its expenses, as the Board of Directors and the
Trustee agree upon from time to time, provided, however, that no compensation
may be paid to any person who is an Employee.

VIII.5   INVESTMENT OF ACCOUNTS

              VIII.5.1  It is intended that the Plan meet the requirements of
ERISA Section 404(c). In this regard, the Trustee, with the approval of the
Administrative Committee, shall establish, or terminate, Investment Funds for
the investment of Participant's Accounts. Each Investment Fund shall have the
investment objective or objectives as established by the Trustee in
accordance with ERISA Section 404(c). The Trustee's selection of Investment
Funds must comply with the following rules:

              (a)       no assets of the Trust, excluding assets
         which have been invested in an Investment Fund, shall be invested in
         any security issued by the Company or any affiliate of the Company;

              (b)       each Investment Fund shall limit investment
         in any security issued by any Company which establishes a plan
         using the Prototype Sponsor's prototype documents or by an
         affiliate of any such Company to the extent required for the
         exemption contained in Section 3(a)(2) of the Securities Act of
         1933, as amended, to be available with respect to the Plan and the
         interests therein; and

              (c)       each Investment Fund shall, to the extent
         required to satisfy the requirements of ERISA Section 404(c),
         prohibit investment in any security issued by any Company which
         establishes a plan using the Prototype Sponsor's prototype
         documents or

                                     -53-

<PAGE>

         by any affiliate of any such Company.

              VIII.5.2  The Trustee shall adopt rules and
procedures for the Investment Funds in accordance with ERISA
Section 404(c) that, among other things, (i) allow Participants to
determine the portion of their Accounts that will be invested in
each Investment Fund and (ii) determine what transfers between
Investment Funds will be allowed.

VIII.6   VALUATION OF ACCOUNTS

              A Participant's Accounts are revalued at fair market
value on each Valuation Date. On that date, the earnings and losses
of the Investment Funds are allocated in the ratio that the portion
of the Participant's Account Balances invested in a particular
Investment Fund bears to the total amount invested in that
Investment Fund. The Trustee shall adopt rules and procedures for
valuing a Participant's Account Balances and allocating earnings
and losses of the Investment Funds.

                                     -54-

<PAGE>

                                  ARTICLE IX

                         PLAN AMENDMENT OR TERMINATING

IX.1     PLAN AMENDMENT

              IX.1.1    The Prototype Sponsor may amend any part of the Plan
at any time including retroactive amendments necessary to assure that the
Plan qualifies or continues to quality under the Code, regulations, revenue
rulings, and any other guidelines published by the Internal Revenue Service.
The Prototype Sponsor shall provide written notice of any amendment to the
Company, so long as the Company has engaged Automatic Data Processing, Inc.
to perform administrative services under an administrative services agreement
from time to time in effect.

              IX.1.2    The Company may at any time amend the choice of
options in the Adoption Agreement, by an instrument in writing, effective
retroactively or otherwise.

              IX.1.3    The Company may at any time amend the Plan by adding
overriding language to the Adoption Agreement where the language is necessary
to satisfy Code Section 415 or 416 because of the required aggregation of
multiple plans under those sections.

              IX.1.4    The Company also may at any time amend the Plan by
adding model amendments published by the Internal Revenue Service and which
specifically provide that their adoption will not cause the Plan to be
treated as individually designed.

              IX.1.5    In accordance with the preceding provisions, the
Company shall give the Prototype Sponsor an executed copy of any amendment to
the Adoption Agreement or the Plan.

              IX.1.6    Except for amendments described in this Section, a
Company that amends any portion of this Plan and its Adoption Agreement
(other than to change the choice of options)

                                     -55-
<PAGE>

will be deemed to have adopted an individually designed plan. Notwithstanding
the foregoing, the Company may not amend the choice of options retroactively
under the Plan qualifies or continues to qualify under the Code, regulations,
revenue rulings, and any other guidance issued by the Internal Revenue
Service. In addition, the Prototype Sponsor may deem any amendment described
in Sections 9.1.3 and 9.1.4 as causing the Plan to be treated as an
individually designed plan, and the Company will no longer be adopting
employer of the Prototype Sponsor's "prototype plan" (as defined in Section
3.02 or Rev. Proc. 89-9).

IX.2     LIMITATIONS ON PLAN AMENDMENT

              IX.2.1    No Plan amendment, including the revision of any
option selected in the Adoption Agreement or the adoption of a new "prototype
plan" (as defined in Section 3.02 or Rev. Proc. 89-9), may:

              (a)  authorize any part of the Trust to be used for,
     or diverted to, purposes other than for the exclusive benefit of
     Participants or their Beneficiaries;

              (b)  increase the duties or liabilities of the Trustee or
     affect the Trustee's fees for services, unless the Trustee consents in
     writing;

              (c)  decrease the accrued benefits of any Participant or
     Beneficiary under the Plan except to the extent permissible under Code
     Section 412(c)(8);

              (d)  eliminate an optional form of benefit of any Participant
     or Beneficiary for the payment of Account Balances attributable to
     Employment before the amendment, except to the extent permissible by law;

              (e)  reduce the nonforfeitable percentage of any Employee who
     is a Participant as of the date the amendment is (i) adopted or if
     later, (ii) effective, or

                                       -56-
<PAGE>

              (f)  change the vesting schedule, unless each Participant
     having not less than 3 years of Vesting Service is permitted to elect,
     within a reasonable period specified by the Administrative Committee
     after the adoption of the amendment, to have his nonforfeiture
     percentage computed without regard to the amendment. However, no
     election need be provided to any Participant whose nonforfeitable
     percentage under the Plan, as amended, cannot at any time be less than
     the percentage determined without regard to the amendment.

               IX.2.2   The period during which the election may be made will
commence with the date the amendment is adopted and end as the later of:

               (a)      60 days after the amendment if adopted;

               (b)      60 days after the amendment becomes effective, or

               (c)      60 days after the Participant is issued written
     notice by the Administrative Committee.

IX.3     RIGHT OF THE COMPANY TO TERMINATE
         PLAN OR DISCONTINUE CONTRIBUTIONS

               The Company has the BONA FIDE intention and expectation that
from year to year it will be able to and will consider it advisable to
continue this Plan in effect and to make contributions. However, the Company
reserves the right to terminate the Plan with respect to its Employees at any
time by an instrument in writing delivered to the Administrative Committee or
to completely discontinue its contributions at any time.

IX.4     EFFECT OF PARTIAL OR COMPLETE TERMINATION
         OR COMPLETE DISCONTINUANCE OF CONTRIBUTIONS.

                                     -57-
<PAGE>

     IX.4.1 As of the date of a partial termination of the Plan, no further
contributions will be made after that date with respect to each affected
Participant, and each affected Participant will (i) have his forfeitures
reinstated and (ii) become 100% vested in his Employer Contribution Account.

     IX.4.2 As of the date of the complete termination of the Plan, or the
complete discontinuance of contributions under the Plan:

          (a) no further contributions will be made after that date;

          (b) no Employee may become a Participant after that date;

          (c) each affected Participant will become 100% vested in his
     Employer Contribution Account; and

          (d) forfeitures will not be used to reduce future Employer
     contributions.

     IX.4.3 All other provisions of the Plan will remain in effect unless
otherwise amended.

IX.5 DISTRIBUTION UPON TERMINATION

     As soon as administratively feasible after the date of termination of
the Plan, the Participant's Account will, without the Participant's consent,
be distributed to the Participant or transferred to another defined
contribution plan (other than an employee stock ownership plan as defined in
Code Section 4975(e)(7)) maintained by the Company or an Affiliate, unless
pursuant to Section 6.2(b) of the Plan, a Participant is entitled to receive
an annuity option from a commercial insurer, and the Participant's Account
Balance exceeds $3,500.

IX.6 BANKRUPTCY

                                     -58-

<PAGE>

     If the Company is at any time judicially declared bankrupt or insolvent
without any provision being made for the continuation of this Plan, the Plan
will be completely terminated in accordance with Section 9.4.2.

IX.7 Action by Company

     If the Company is a corporation, any action by the Company or its Board
of Directors under this Plan must be by resolution of its Board of Directors,
or by any person duly authorized by resolution of the Board to take the
action.

     If the Company is a partnership, then any action by the Company must be
by written action of any general partner, and if the Company is a
self-employed business, then by its sole proprietor.

                                     -59-

<PAGE>

                                    ARTICLE X

                              MISCELLANEOUS PROVISIONS

X.1 EXCLUSIVE BENEFIT OF PARTICIPANTS

     At no time may any part of the Trust (other than such part as is
required to pay expenses) be used for, or diverted to, purposes other than
for the exclusive benefit of Participants or their Beneficiaries, except
that, upon the direction of the Administrative Committee:

          (a) any contribution made by an Employer by a mistake of fact will be
     returned by the Trustee within 1 year after the payment of the
     contribution;

          (b) any contribution made by an Employer will be returned by the
     Trustee within 1 year after the denial of initial qualification of the
     Plan under Code Section 401(a), provided that the application for a
     determination letter was filed within the time prescribed by law for
     filing the Employer's return for the taxable year in which the Plan was
     adopted or such later date as the Secretary of the Treasury may prescribe;
     and

          (c) any contribution made by an Employer will be returned by the
     Trustee to the extent disallowed as a deduction under Code Section 404
     within 1 year after the disallowance.

     However, any contribution returned under clause (a) or (c) will be
reduced by any losses attributable thereto and will be limited to the extent
necessary to avoid a reduction in any Participant's Account below the balance
that would have been in that Account had the mistaken or nondeductible
contribution not been made.

X.2 PLAN NOT A CONTRACT OF EMPLOYMENT

                                     -60-

<PAGE>

     The Plan is not a contract of Employment. The terms of Employment of any
Employee are not affected in any way by the Plan or related instruments
except as specifically provided therein.

X.3 Type of Plan

     The Plan is a profit sharing plan for purposes of Code
Sections 401(a), 402, 412, and 417.

X.4 Source of Benefits

     Benefits under the Plan are paid or provided for solely from the Trust,
and the Company, Participating Affiliates, and any fiduciary to the Plan
assume no liability therefor. No Employee, Participant, former Participant
or Beneficiary has any right to, or interest in any assets of the Trust on
termination of Employment or otherwise, except as specifically provided under
the Plan.

X.5 Benefits Not Assignable

     Benefits provided under the Plan may not be assigned or alienated either
voluntarily or involuntarily, except for loans as provided in Section 5.7 or
as may otherwise be required by law. The preceding sentence also applies to
the creation, assignment, or recognition of a right to any benefit payable
with respect to a Participant pursuant to a domestic relations order, unless
the order is determined to be a Qualified Domestic Relations Order. The
Administrative Committee has all powers necessary with respect to the Plan
for the proper operation of Code Section 414(p) with respect to Qualified
Domestic Relations Orders including, but not limited to, the power to
establish all necessary or appropriate procedures, and to authorize the
establishment of new accounts with such assets and subject to such investment
control by the

                                     -61-

<PAGE>

Administrative Committee as the Administrative Committee may consider
appropriate, and the Trustee may decide upon and make appropriate
distributions therefrom.

X.6 Merger or Transfer of Assets

     X.6.1 The merger or consolidation of an Employer with any other person,
or the transfer of the assets of an Employer to any other person, or the
merger of the Plan with any other plan will not constitute a termination of
the Plan.

     X.6.2 The Plan may not merge or consolidate with, or transfer any assets
or liabilities to, any other plan, unless each Participant would (if the Plan
then terminated) receive a benefit immediately after the merger,
consolidation, or transfer equal to or greater than the benefit he would have
been entitled to receive immediately before the merger, consolidation, or
transfer (if the Plan had then terminated).

X.7 Participation in the Plan by an Affiliate

     X.7.1 With the Company's consent, any Affiliate, by appropriate action
of its board of directors, a general partner, or the sole proprietor, as the
case may be, may adopt the Plan. The Affiliate will determine the classes of
its Employees eligible to participate in this Plan.

     X.7.2 A Participating Affiliate may terminate its participation in the
Plan with the Company's consent.

     X.7.3 A Participating Affiliate may withdraw from the Plan and the Trust
with the Company's consent. The withdrawal will be deemed an adoption by the
Participating Affiliate of a plan and trust identical to the Plan and the
Trust, except that all references to the Company will be deemed to refer to
the Participating Affiliate. As such time and in such manner

                                     -62-

<PAGE>

as the Trustee directs, the assets of the Trust allocable to Employees of the
Participating Affiliate will be transferred to the trust deemed adopted by
the Participating Affiliate.

     X.7.4 A Participating Affiliate has no power with respect to the Plan
except as specifically provided in the Plan.

X.8 Conditional Adoption

     The Company has adopted the Plan on the express condition that the
Internal Revenue Service will consider it as initially qualifying under Code
Section 401(a) and the Trust qualifying for exemption from taxation under Code
Section 501(a). If the Internal Revenue Service determines that the Plan or
Trust does not so qualify, the Plan may be amended or terminated as decided
by the Company. If the Plan is terminated, the Company may withdraw its
contributions and the rights of all Employees will cease as if the Plan had
never been adopted.

X.9 Inability to Locate Participant or Beneficiary

     If, after the exercise of due diligence by the Administrative Committee,
a Participant or Beneficiary to whom Plan benefits are due cannot be located,
the Trustee shall hold benefits as a segregated amount in trust for a period
one month less than the relevant state escheat law to the extent that the
escheat law is not preempted by ERISA. If not claimed by that date, the
amount will be treated as a forfeiture and used to reduce future Employer
contributions. However, if the Participant or Beneficiary is subsequently
located and makes a claim for Plan benefits, the amount forfeited under the
preceding sentence will be restored.

X.10 Application of Prior Plan

     The Plan benefit of any Participant who terminates Employment is
determined in accordance with the provisions of the Plan in effect on the
date of the termination of

                                     -63-

<PAGE>

Employment.

     Where the Plan constitutes a restatement and amendment of a predecessor
plan of the Company, that plan will be applied to the extent permitted by law
in determining the rights and duties of any persons with respect to any
allocations before the Effective Date.

X.11 Failure of Qualified Status

     If the Company fails to attain or retain this Plan as a plan which
qualifies under Code Section 401(a), then the Plan as adopted by the Company
will no longer represent a prototype plan covered by an opinion letter issued
by the Internal Revenue Service to the Prototype Sponsor as to the
acceptability of the form of the Plan under Code Section 401(a). Rather, it
will be considered an individually designed plan.

                                     -64-

<PAGE>

                                      APPENDIX B
                           LIMITATIONS ON ELECTIVE DEFERRALS
                               AND MATCHING CONTRIBUTIONS

B.1. DEFINITIONS

     These terms have the following meanings in this Appendix:

     ACTUAL DEFERRAL PERCENTAGE: The ratio of Elective Deferrals (and
Qualified Matching Contributions and Qualified Nonelective Contributions to
the extent treated as Elective Deferrals under Section A-4) on behalf of the
Eligible Participant for the Plan Year to the Eligible Participant's
Compensation for the Plan Year. In calculating the Actual Deferral
Percentage, Elective Deferrals include Excess Deferral Amounts of Highly
Compensated Employees, but do not include Elective Deferrals that are taken
into account in the Average Contribution Percentage Test (provided the Actual
Deferral Percentage Test is satisfied both with and without the exclusion of
these Elective Defferals). In addition, Elective Deferrals do not include
Excess Deferral Amounts of Non-Highly Compensated Employees that arise solely
from Elective Deferrals made under the Plan or plans of the Company. The
Actual Deferral Percentage of an Eligible Participant who does not make an
Elective Deferral is zero. The amount of Compensation taken into account for
an Employee who is an Eligible Participant at any time during the Plan Year,
including the first Plan Year, equals the total Compensation received by the
Employee for the Plan Year (whether or not the Participant was an Eligible
Participant for the entire Plan Year).

     AGGREGATE LIMIT: The greater of (a) or (b), where:

                                      A-1

<PAGE>

          (a) is the sum of (i) 1.25 multiplied by the greater of the Average
     Actual Deferral Percentage or the Average Contribution Percentage for
     Eligible Participants who are Non-Highly Compensated Employees and (ii)
     the lesser of 200% or 2 plus the lesser of the Average Actual Deferral
     Percentage or the Average Contribution Percentage for Eligible
     Participants who are Non-Highly Compensated Employees; and

          (b) is the sum of (i) 1.25 multiplied by the lesser of the Average
     Actual Deferral Percentage of the Average Contribution Percentage for
     Eligible Participants who are Non-Highly Compensated Employees and (ii)
     the lesser of 200% or 2 plus the greater of the Average Actual Deferral
     Percentage or the Average Contribution Percentage for Eligible
     Participants who are Non-Highly Compensated Employees.

     AVERAGE ACTUAL DEFERRAL PERCENTAGE: The average of the Actual Deferral
Percentages of the Eligible Participants in a group.

     AVERAGE CONTRIBUTION PERCENTAGE: The average of the Contribution
Percentages of the Eligible Participants in a group.

     CONTRIBUTION PERCENTAGE: The ratio of Matching Contributions (and
Qualified Matching Contributions to the extent not taken into account for
purposes of the Actual Deferral Percentage Test) and Elective Deferrals (and
Qualified Nonelective Contributions to the extent treated as Matching
Contributions under Section A.6) on behalf of the Eligible Participant for
the Plan Year to the Eligible Participant's Compensation for the Plan Year.
However, Matching Contributions that are forfeited either to correct Excess
Aggregate Contributions or because the contributions to which they relate are
Excess Deferral Amounts, Excess Contributions, or Excess Aggregate
Contributions shall be disregarded.

                                     A-2

<PAGE>

     ELIGIBLE PARTICIPANT: To determine the Actual Deferral Percentage, any
Employee who is eligible to have Elective Deferrals allocated to his
Participant 401(k) Account for the Plan Year. To determine the Contribution
Percentage, any Employee who is eligible to have Matching Contributions
allocated to his Employer Contribution Account for the Plan Year.

     EXCESS AGGREGATE CONTRIBUTIONS: For any Plan Year, the excess of:

          (a) the aggregate amount of Matching Contributions (and participant
     contributions to another plan and, if applicable, Elective Deferrals,
     Qualified Matching Contributions and Qualified Nonelective
     Contributions) actually made on behalf of Highly Compensated Employees
     for the Plan Year; over

          (b) the maximum amount of the contributions described in paragraph
     (a) permitted under the Average Contribution Percentage test in Section
     A.6 (determined by reducing contributions made on behalf of Highly
     Compensated Employees in the order of their Contribution Percentages
     beginning with the highest Contribution Percentage).

     EXCESS CONTRIBUTIONS: For any Plan Year, the excess of:

          (a) the aggregate amount of Elective Deferrals (and, if applicable,
     Qualified Matching Contributions and Qualified Nonelective
     Contributions) actually made on behalf of Highly Compensated Employees
     for the Plan Year; over

          (b) the maximum amount of those contributions permitted under the
     Actual Deferral Percentage test in Section A.4 (determined by reducing
     contributions made on behalf of Highly Compensated Employees in the
     order of their Actual Deferral Percentages beginning with the highest
     Actual Deferral Percentage).

     EXCESS DEFERRAL AMOUNT: The amount of Elective Deferrals for a taxable
year.

                                      A-3
<PAGE>

that are includible in a Participant's gross income under Code Section 402(g)
to the extent the Participant's Elective Deferrals exceed the dollar
limitation under Code Section 402(g).

     MATCHING CONTRIBUTION: Under this Appendix, Matching Contribution also
includes Employer contributions made to any other defined contribution plan
on behalf of a Participant on account of a Participant contribution made to
any other plan of an Employer or on account of the Participant's Elective
Deferrals to this or any other plan of an Employer.

B.2 MAXIMUM AMOUNT OF ELECTIVE DEFERRALS

     No Employee may have Elective Deferrals under this Plan, or any other
qualified plan of an Employer, during any taxable year in excess of the
dollar limitation in Code Section 402(g) in effect at the beginning of that
taxable year.

B.3 EXCESS DEFERRAL AMOUNTS

     B.3.1 Excess Deferral Amounts and income or loss allocable to those
amounts will be distributed no later than April 15 of each year to
Participants who claim allocable Excess Deferral Amounts for the preceding
calendar year.

     B.3.2 The Participant's claim must be written and submitted to the
Administrative Committee as soon as administratively practicable. The claim
must specify the Participant's Excess Deferral Amount for the preceding
calendar year and must be accompanied by the Participant's written statement
that if those amounts are not distributed, the Excess Deferral Amount, when
added to amounts deferred under other plans or arrangements described in Code
Section 401(k), 402(h)(1)(B), 403(b), 457, or 501(c)(18) exceeds the limit
imposed on the Participant by Code Section 402(g) for the year in which the
deferral occurred. Elective Deferrals shall not include any deferrals
properly distributed as excess Annual Additions. A participant shall be

                                    A-4

<PAGE>

deemed to have notified the Administrative Committee of any Excess Deferral
Amounts that arise by taking into account only those Elective Deferrals made
to this Plan or any other plan of the Company.

     B.3.3 The Excess Deferral Amount distributed to a Participant shall be
adjusted for income or loss allocable thereto. Income and loss allocable to
Excess Deferral Amounts shall be the income or loss allocable to the
Participant's Elective Deferrals for the taxable year multiplied by a
fraction, the numerator of which is the Participant's Excess Deferral Amount
for the taxable year, and the denominator of which is the Account Balance in
his Participant 401(k) Account attributable to Elective Deferrals on the last
day of that taxable year without regard to any income or loss occurring
during that taxable year.

     B.3.4 The Excess Deferral Amount distributed to a Participant is reduced
by any Excess Contributions previously distributed to the Participant for the
Plan Year beginning with or within that taxable year. In no event may the
amount distributed exceed the Participant's total Elective Deferrals for the
taxable year.

     B.3.5 Excess Deferral Amounts are treated as Annual Additions under
Appendix B, unless such amounts are distributed no later than the first
April 15 following the close of the Participant's taxable year.

B.4 ACTUAL DEFERRAL PERCENTAGE TEST

     B.4.1 The Average Actual Deferral Percentage for Eligible Participants
who are Highly Compensated Employees for the Plan Year may not exceed:

                                    A-5

<PAGE>

          (a) The Average Actual Deferral Percentage for Eligible
     Participants who are Non-Highly Compensated Employees for the Plan Year
     multiplied by 1.25; or

          (b) the Average Actual Deferral Percentage for Eligible
     Participants who are Non-Highly Compensated Employees for the Plan Year
     multiplied by 2, provided that the Average Actual Deferral Percentage
     for Eligible Participants who are Highly Compensated Employees does not
     exceed the Average Actual Deferral Percentage for Eligible Participants
     who are Non-Highly Compensated Employees by more than 2 percentage points
     or such lesser amount as the Secretary of the Treasury may prescribe to
     prevent the multiple use of this alternative limitation with respect to
     any Highly Compensated Employee.

     B.4.2 The provisions of Code Section 401(k)(3) and Treasury Regulation
Section 1.401(k)-1(b) are incorporated by reference.

     B.4.3 To the extent Elective Deferrals are taken into account under
Section A.6, they are disregarded under this Section A.4.

     B.4.4 The Administrative Committee shall determine for any Plan Year
whether Qualified Matching Contributions and/or Qualified Nonelective
Contributions will be treated as Elective Deferrals in the Actual Deferral
Percentage test under this Section A.4, and, if so, whether such Qualified
Matching Contributions and Qualified Nonelective Contributions will be
allocated to all Employees or allocated to all Non-Highly Compensated
Employees. The Administrative Committee shall also determine whether the
amounts treated as Elective Deferrals, subject to such other requirements as
the Secretary of the Treasury may prescribe, are:

          (a) all Qualified Matching Contributions;

                                     A-6

<PAGE>

          (b) all Qualified Nonelective Contributions;

          (c) such Qualified Matching Contributions as are needed to satisfy
     the Actual Deferral Percentage test; or

          (d) such Qualified Nonelective Contributions as are needed to satisfy
     the Actual Deferral Percentage test.

     B.4.5 The Actual Deferral Percentage for any Eligible Participant who is
a Highly Compensated Employee for the Plan Year and who is eligible to have
Elective Deferrals allocated to his account under 2 or more plans or
arrangements described in Code Section 401(k) that are maintained by the
Company or an Affiliate is determined as if all Elective Deferrals (and, if
applicable, Qualified Matching Contributions and Qualified Nonelective
Contributions) were made under a single arrangement. If the cash or deferred
arrangements have different plan years, all cash or deferred arrangements
ending within the same calendar year are treated as a single arrangement.
Notwithstanding the foregoing, certain plans shall be treated as separate if
mandatorily disaggregated under regulations under Code Section 401(k).

     B.4.6 If this Plan satisfies the requirements of Code Section 401(a)(4),
401(k), or 410(b) only if aggregated with one or more other plans, or if one
or more other plans satisfy the requirements of those Code sections only if
aggregated with this Plan, then this Section A.4 is applied by determining
the Actual Deferral Percentage of Eligible Participants as if all the plans
were a single plan.

     B.4.7 The Administrative Committee also may treat one or more plans as a
single plan with the Plan whether or not the aggregated plans satisfy Code
Sections 401(a)(4) and 410(b). However, those plans must then be treated
as one plan under Code Sections 401(a)(4), 401(k),

                                     A-7

<PAGE>

and 410(b). Plans may be aggregated under this Section A.4.7 only if they
have the same plan year.

     B.4.8 To determine the Actual Deferral Percentage of a Participant who
is a 5-percent owner or one of the 10 most highly paid Highly Compensated
Employees, the Elective Deferrals (and, if applicable, Qualified Matching
Contributions and Qualified Non-elective Contributions) and Compensation of
the Participant include the Elective Deferrals (and, if applicable, Qualified
Matching Contributions and Qualified Nonelective Contributions) and
Compensation for the Plan Year of Family Members who are Eligible Employees.
Family Members, with respect to Highly Compensated Employees, are disregarded
as separate employees in determining the Actual Deferral Percentage both for
Participants who are Non-Highly Compensated Employees and for Participants
who are Highly Compensated Employees.

     B.4.9 Elective Deferrals, Qualified Matching Contributions, and
Qualified Nonelective Contributions are considered made for a Plan Year if
made no later than the end of the 12-month period beginning on the day after
the close of the Plan Year.

     B.4.10 The determination and treatment of the Elective Deferrals,
Qualified Matching Contributions, Qualified Nonelective Contributions, and
Actual Deferral Percentage of any Participant must satisfy such other
requirements as the Secretary of the Treasury may prescribe.

B.5 EXCESS CONTRIBUTIONS

                                     A-8
<PAGE>

     B.5.1 Excess Contributions, plus any income and minus any loss allocable
to those contributions, will be distributed no later than the last day of
each Plan Year to Participants to whose Account the Excess Contributions were
made for the preceding Plan Year. Excess Contributions of Participants who
are subject to the family member aggregation rules shall be allocated among
the Family Members in proportion to the Elective Deferrals (and amounts
treated as Elective Deferrals) of each Family Member that is considered to
determine the combined Actual Deferral Percentage. The Administrative
Committee anticipates that the Excess Contributions will be distributed to
affected Participants within 2-1/2 months after the close of the Plan Year in
which the Excess Contribution occurred. If Excess Contributions are not
distributed to affected Participants within 2-1/2 months after the close of
the Plan Year, the Employer will be subject to a 10% excise tax under Code
Section 4979.

     B.5.2 The Excess Contributions shall be adjusted for income and losses
allocable thereto. The income or loss allocable to Excess Contributions shall
be the income or loss allocable to the Participant's Elective Deferrals (and,
if applicable, Qualified Matching Contributions and Qualified Nonelective
Contributions treated as Elective Deferrals) for the Plan Year multiplied by
a fraction, the numerator of which is the Participant's Excess Contributions
for the Plan Year and the denominator of which is the Participant's Account
Balances attributable to Elective Deferrals (and, if applicable, Qualified
Matching Contributions and Qualified Nonelective Contributions) on the last
day of the Plan Year without regard to any income or loss occurring during
that Plan Year.

     B.5.3 The Excess Contributions distributed to a Participant are also
reduced by the amount of Excess Deferral Amounts distributed to the
Participant.

                                     A-9

<PAGE>

     B.5.4 Amounts distributed under this Section A.5 are first treated as
distributions from the Participant 401(k) Account and are treated as
distributed from the Participant's Employer Contribution Account only to the
extent the Excess Contributions exceed the balance in his Participant 401(k)
Account.

     B.5.5 Excess Contributions are treated as Annual Additions under
Appendix B.

B.6 AVERAGE CONTRIBUTION PERCENTAGE TEST

     B.6.1 The Average Contribution Percentage for Eligible Participants who
are Highly Compensated Employees for the Plan Year may not exceed:

          (a) the Average Contribution Percentage for Eligible Participants
     who are Non-Highly Compensated Employees for the Plan Year multiplied by
     1.25; or

          (b) the Average Contribution Percentage for Eligible Participants
     who are Non-Highly Compensated Employees for the Plan Year multiplied by
     2, provided that the Average Contribution Percentage for Eligible
     Participants who are Highly Compensated Employees does not exceed the
     Average Contribution Percentage for Eligible Participants who are
     Non-Highly Compensated Employees by more than 2 percentage points or such
     lesser amount as the Secretary of the Treasury may prescribe to prevent
     the multiple use of this alternative limitation with respect to any Highly
     Compensated Employee.

     B.6.2 The provisions of Code Section 401(m) and any regulations issued
thereunder are incorporated by reference.

     B.6.3 To the extent that Qualified Matching Contributions are taken into
account under Section A.4, they are disregarded under this Section A.6.

                                     A-10

<PAGE>

     B.6.4 The Administrative Committee shall determine for any Plan Year
whether Elective Deferrals and/or Qualified Nonelective Contributions will be
treated as Matching Contributions in the Average Contribution Percentage test
under this Section A.6. The Administrative Committee shall also determine
whether the amounts treated as Matching Contributions, subject to such other
requirements as the Secretary of the Treasury may prescribe are:

          (a) all Elective Deferrals;

          (b) all Qualified Nonelective Contributions;

          (c) such Elective Deferrals as are needed to satisfy the Average
     Contribution Percentage test; or

          (d) such Qualified Nonelective Contributions as are needed to
     satisfy the Average Contribution Percentage test.

     B.6.5 The Contribution Percentage for any Eligible Participant who is a
Highly Compensated Employee for the Plan Year and who is eligible to receive
Matching Contributions under 2 or more plans described in Code Section 401(a)
or arrangements described in Code Section 401(k) that are maintained by the
Company or an Affiliate is determined as if all Matching Contributions (and
Participant contributions to another plan) (and, if applicable, Elective
Deferrals and Qualified Nonelective Contributions) were made under a single
plan. If the plans have different plan years, all plans ending within the
same calendar year are treated as a single plan. Notwithstanding the
foregoing, certain plans shall be treated as separate if mandatorily
disaggregated under regulations under Code Section 401(m).

                                     A-11

<PAGE>

     B.6.6 If this Plan satisfies the requirements of Code Section 401(a)(4),
401(m), or 410(b) only if aggregated with one or more other plans, or if one
or more other plans satisfy the requirements of those Code sections only if
aggregated with this Plan, then this Section A.6 is applied by determining
the Contribution Percentages of Eligible Participants as if all the plans
were a single plan. In calculating Contribution Percentages under this
paragraph, Participant contributions to the other plans are considered.

     B.6.7 The Administrative Committee may treat one or more plans as a
single plan with the Plan whether or not the aggregated plans satisfy Code
Sections 401(a)(4) and 410(b). However, those plans must then be treated
as one plan under Code Sections 401(a)(4), 401(m), and 410(b). Plans may be
aggregated under this Section A.6.7 only if they have the same plan year.

     B.6.8 To determine the Contribution Percentage of an Eligible
Participant who is a 5-percent owner or one of the 10 most highly-paid Highly
Compensated Employees, Matching Contributions (and Participant contributions
to another plan) (and, if applicable, Elective Deferrals and Qualified
Nonelective Contributions) and Compensation of the Participant includes the
Matching Contributions (and Participant contributions to another plan) (and,
if applicable, Elective Deferrals and Qualified Nonelective Contributions)
and Compensation for the Plan Year of eligible Family Members. Family
Members, with respect to Highly Compensated Employees, are disregarded as
separate employees in determining the Contribution Percentage both for
Participants who are Non-Highly Compensated Employees and for Participants
who are Highly Compensated Employees.

     B.6.9 Matching Contributions and Qualified Nonelective Contributions are
considered made for a Plan Year if made no later than the end of the 12-month
period beginning

                                               A-12

<PAGE>

on the day after the close of the Plan Year.

     B.6.10 The determination and treatment of the Contribution Percentage of
any Participant must satisfy such other requirements as the Secretary of the
Treasury may prescribe.

B.7 EXCESS AGGREGATE CONTRIBUTIONS

     B.7.1 Excess Aggregate Contributions, plus any income and minus any loss
allocable to those contributions, are forfeited, if otherwise forfeitable
under this Plan, or if not forfeitable, distributed no later than the last
day of each Plan Year, to Participants to whose Accounts Matching
Contributions were allocated for the preceding Plan Year. Excess Aggregate
Contributions of Participants who are subject to the family member
aggregation rules shall be allocated among the Family Members in proportion
to the Matching Contributions of each Family Member that is considered to
determine the combined Actual Contribution Percentage. The Administrative
Committee anticipates that the Excess Aggregate Contribution will be
distributed to affected Participants within 2-1/2 months after the close of
the Plan Year in which the Excess Aggregate Contributions occurred.

     B.7.2 If Excess Aggregate Contributions are not distributed to affected
Participants within 2-1/2 months after the close of the Plan Year, the
Employer will be subject to a 10% excise tax under Code Section 4979.

     B.7.3 The Excess Aggregate Contributions to be distributed are adjusted
for income and losses allocable thereto. The income or loss allocable to
Excess Aggregate Contributions shall be the income or loss allocable to the
Participant's Matching Contributions (and, if applicable, Elective Deferrals,
Qualified Matching Contributions and Qualified Nonelective Contributions
treated as Matching Contributions) for the Plan Year multiplied by a

                                     A-13

<PAGE>

fraction, the numerator of which is the Participant's Excess Aggregate
Contributions for the Plan Year and the denominator of which is the
Participant's Account Balances attributable to Matching Contributions (and,
if applicable, Elective Deferrals, Qualified Matching Contributions and
Qualified Nonelective Contributions) on the last day of the Plan Year without
regard to any income or loss occurring during that Plan Year.

     B.7.4 Amounts distributed under this Section A.7 are treated as
distributions from the Participant's Employer Contribution Account and, if
applicable, on a PRO RATA basis from his Participant 401(k) Account.

     B.7.5 Amounts forfeited by Highly Compensated Employees under this
Section A.7 are used to reduce Employer Contributions.

     B.7.6 Excess Aggregate Contributions are treated as Annual Additions
under Appendix B.

B.8 COORDINATION OF DISTRIBUTIONS OF EXCESS DEFERRAL AMOUNTS,
    EXCESS CONTRIBUTIONS, AND EXCESS AGGREGATE CONTRIBUTIONS

     Excess Deferral Amounts, Excess Contributions, and Excess Aggregate
Contributions are calculated and distributed in that order.

B.9 MULTIPLE USE OF ALTERNATIVE LIMITATION

     If the sum of the average Actual Deferral Percentage and the Average
Contribution Percentage for Eligible Participants who are Highly Compensated
Employees exceeds the Aggregate Limit, a multiple use of the alternative
limitation (within the meaning of Code Section 401(m)(9)) occurs. However,
multiple use does not occur if either the Average Actual Deferral Percentage
or the Average Contribution Percentage for Eligible Participants who are

                                     A-14

<PAGE>

Highly Compensated Employees does not exceed 1.25 multiplied by the Average
Actual Deferral Percentage or the Average Contribution Percentage, as
applicable, for Eligible Participants who are Non-Highly Compensated
Employees. Under this Section A.9, the Average Actual Deferral Percentage and
the Average Contribution Percentage for Eligible Participants who are Highly
Compensated Employees are determined after any corrections required to meet
the Actual Deferral Percentage test and the Average Contribution Percentage
test. Multiple use is corrected by either reducing the Actual Deferral
Percentage or the Average Contribution Percentage of all Highly Compensated
Employees in the Plan, or by reducing the actual Deferral Percentage or
Average Contribution Percentage of only those Highly Compensated Employees
who are eligible to have both Elective Deferrals and Matching Contributions
allocated to their Plan Accounts so that the Aggregate Limit is not exceeded.
The amount of the reduction is treated as an Excess Contribution or Excess
Aggregate Contribution, depending upon whether the Actual Deferral Percentage
or Actual Contribution Percentage is reduced. The amount of the reduction of
Excess Contributions or Excess Aggregate Contributions shall be in accordance
with Treasury Regulation Section 1.401(k)-1(f)(2) or 1.401(m)-1(e)(2), as
applicable.

                                     A-15

<PAGE>

                                  APPENDIX C

                        LIMITATIONS ON ANNUAL ADDITIONS

C.1  DEFINITIONS

     These terms have the following meanings in this Appendix:

     ANNUAL ADDITION: The sum of the following amounts credited to a
Participant's Accounts for any Limitation Year:

          (a)  contributions made by any Controlled Group Member;

          (b)  participant contributions to any other qualified plan of a
     Controlled Group Member even if withdrawn during the same Limitation
     Year including without limitation, nondeductible employee contributions
     to all defined benefit plans whether or not terminated, maintained by the
     Controlled Group Member;

          (c)  forfeitures allocated to any defined contribution plan
     maintained by a Controlled Group Member;

          (d)  amounts attributable to post-retirement medical benefits,
     allocated to the separate account of a key employee as defined in Code
     Section 419A(d)(3), under all welfare benefit funds as defined in Code
     Section 419(e) maintained by any Controlled Group Member;

          (e)  amounts allocated to an individual medical account as defined
     in Code Section 415(l)(2) which is part of a pension or annuity plan
     maintained by any Controlled Group Member; and

          (f)  allocations under a simplified employee pension.

Any Excess Amount applied under Sections B.3.1 and B.3.4 in the Limitation
Year to reduce Controlled Group Member contributions will be considered
Annual Additions for that Limitation

                                       B-1
<PAGE>

Year.

     CONTROLLED GROUP MEMBER: Any corporation during the time it is a member
of a "controlled group of corporations" (as defined in Code Section 414(b),
as modified by Code Section 415(h)) of which the Company is a member and any
trade or business during the time it is under "common control" (as defined in
Code Section 414(c), as modified by Code Section 414(h)) with the Company, or
any affiliated service group as defined in Code Section 414(m), or any other
entity required to be aggregated with the Employer under Code Section 414(o).

     DEFINED BENEFIT FRACTION: For any Participant, the fraction (determined
as of the last day of the Limitation Year) with a numerator equal to the
Projected Annual Benefit of the Participant and a denominator equal to the
lesser of:

          (a)  1.25 multiplied by the dollar limitation in effect under Code
     Section 415(b)(1)(A) and (d) for that Limitation Year; or

          (b)  1.4 multiplied by the amount of the Participant's average
     Limitation Compensation for the consecutive 3 Years of Service that
     produces the highest average, including any adjustments under Code
     Section 415(b).

     If the Participant was a participant as of the first day of the
Limitation Year beginning after December 31, 1986, in one or more defined
benefit plans maintained by a Controlled Group Member which were in existence
on May 6, 1986, the denominator of this fraction will not be less than 125%
of the sum of the annual benefits under those plans which the Participant had
accrued as of the close of the last Limitation Year beginning before January 1,
1987, disregarding any changes in the terms and conditions of the plan after
May 5, 1986. The preceding sentence applies only if the defined benefit
plans individually and in the aggregate

                                       B-2
<PAGE>

satisfied requirements of Code Section 415 for all Limitation Years beginning
before January 1, 1987.

     DEFINED CONTRIBUTION DOLLAR LIMITATION: $30,000 or, if greater, 1/4 of
the dollar limitation in effect under Code Section 415(b)(1)(A) as in effect
for the Limitation Year.

     DEFINED CONTRIBUTION FRACTION: For any Participant, the fraction
(determined as of the last day of the Limitation Year) with a numerator equal
to the sum of all the Participant's Annual Additions under all Defined
Contribution Plans (whether or not terminated) maintained by a Controlled
Group Member for the current and all prior Limitation Years and a denominator
equal to the sum of the lesser of the following amounts determined for the
Limitation Year and for each prior Limitation Year for which the Participant
was credited with a Year of Service (regardless of whether a Defined
Contribution Plan was maintained by a Controlled Group Member):

          (a)  1.25 multiplied by the Defined Contribution Dollar Limitation
     in effect for that Limitation Year; or

          (b)  1.4 multiplied by 25% of the Participant's Limitation
     Compensation for that Limitation Year.

     If the Participant was a participant as of the first day of the
Limitation Year beginning after December 31, 1986, in one or more defined
contribution plans maintained by a Controlled Group Member which were in
existence on May 6, 1986, the numerator of this fraction will be adjusted if
the sum of this fraction and the Defined Benefit Fraction would otherwise
exceed 1.0 under the terms of this Plan. Under the adjustment, an amount
equal to the product of (i) the excess of the sum of the fractions over 1.0
times (ii) the denominator of this fraction, will be permanently subtracted
from the numerator of this fraction. The adjustment is

                                       B-3
<PAGE>

calculated using the fractions as they would be computed as of the end of the
last Limitation Year beginning before January 1, 1987, disregarding any
changes in the terms and conditions of the Plan after May 5, 1986, but using
the Code Section 415 limitation applicable to the first Limitation Year
beginning on or after January 1, 1987.

     The Annual Addition for any Limitation Year beginning before January 1,
1987, is not recomputed to treat all employee contributions as Annual
Additions.

     EXCESS AMOUNT: The excess of the Participant's Annual Additions for the
Limitation Year over the maximum Annual Addition permitted under Section B.2.

     LIMITATION COMPENSATION: A Participant's Earned Income, wages, salaries,
and fees for professional services and other amounts received for personal
services actually rendered in the course of employment with the Controlled
Group Member maintaining the Plan (including, but not limited to, commissions
paid to salesmen, compensation for services on the basis of a percentage of
profits, commissions on insurance premiums, tips, bonuses, fringe benefits,
and reimbursements or other expense allowance under a nonaccountable plan (as
described in Treasury Regulation Section 1.62-2(c)), and excluding the
following:

          (a) Controlled Group Member contributions to a plan of deferred
     compensation which are not includible in the Participant's gross income
     for the taxable year in which contributed, or Controlled Group Member
     contributions under a simplified employee pension plan to the extent those
     contributions are deductible by the Participant or any distributions from
     a plan of deferred compensation;

          (b) Amounts realized from the exercise of a non-qualified stock
     option, or when restricted stock (or property) held by the Participant
     either becomes freely

                                     B-4

<PAGE>

     transferable or is no longer subject to a substantial risk of forfeiture;

          (c) Amounts realized from the sale, exchange, or other disposition of
     stock acquired under a qualified stock option; and

          (d) Other amounts which received special tax benefits, or
     contributions made by the Controlled Group Member (whether or not under a
     salary reduction agreement) toward the purchase of an annuity contract
     described in Code Section 403(b) (whether or not the contributions are
     actually excludable from the gross income of the Participant).

For Limitation Years beginning after December 31, 1991, for purposes of
applying the limitations of the Section, compensation for a Limitation Year
is the compensation actually paid or made available during the Limitation
Year. However, for a Non-Highly Compensated Employee who is permanently and
totally disabled within the meaning of Code Section 22(e)(3) and for whom
contributions are nonforfeitable when made, "Limitation Compensation" means
the Limitation Compensation the Participant would have received if the
Participant was paid at the same rate as immediately before becoming
permanently and totally disabled.

     LIMITATION YEAR: The Plan Year. All qualified plans maintained by a
Controlled Group Member must use the same Limitation Year. If the Limitation
Year is amended to a different 12 consecutive month period, the new
Limitation Year must begin on a date within the Limitation Year in which the
amendment is made.

     MASTER OR PROTOTYPE PLAN: A plan the form of which is the subject of a
favorable opinion letter from the Internal Revenue Service.

     PROJECTED ANNUAL BENEFIT: The Participant's annual benefit payable in
the form of a straight life annuity or a qualified joint and survivor annuity
under all defined benefit plans

                                     B-5

<PAGE>

qualified under Code Section 401 maintained at any time (whether or not
terminated) by the Company or any other Controlled Group Member. The Project
Annual Benefit is computed assuming that the Participant will remain
employed until normal retirement age under the plan (or his current age, if
later) and that the Participant's Compensation (and all other relevant
factors used to determine benefits) will remain at its current level until
that time.

C.2 MAXIMUM ANNUAL ADDITION

     C.2.1 A Participant's Annual Addition in any Limitation Year may not
exceed the lesser of:

          (a) the Defined Contribution Dollar Limitation; or

          (b) 25% of the Participant's Limitation Compensation (other than
     any contribution for medical benefits within the meaning of Code Section
     401(h) or 419A(f)(2) which is treated as an Annual Addition) for that
     Limitation Year.

If a short Limitation Year is created by an amendment changing the Limitation
Year to a different 12-month period, the maximum Annual Addition may not
exceed the Defined Contribution Dollar Limitation multiplied by the following
fraction, the numerator of which is the number of months in the short
Limitation Year and the denominator of which is 12.

     C.2.2 Before determining the Participant's actual Limitation
Compensation for the Limitation Year, the Employer may determine the maximum
Annual Addition under Section B.2.1 for a Participant on the basis of a
reasonable estimation of the Participant's Limitation Compensation for the
Limitation Year, uniformly determined for all Participants similarly situated.

                                     B-6

<PAGE>

     C.2.3  As soon as administratively feasible after the end of the
Limitation Year, the maximum Annual Addition under Section B.2.1 will be
determined on the basis of the Participant's actual Limitation Compensation
for the Limitation Year.

C.3  EXCESS AMOUNTS

     C.3.1 If the Participant does not participate in, and has never
participated in another qualified plan maintained by a Controlled Group
Member, a welfare benefit fund as defined in Code Section 419(e) maintained
by a Controlled Group Member, or an individual medical account as defined in
Code Section 415(l)(2) maintained by a Controlled Group Member, or a
simplified employee pension as defined in Code Section 408(k) maintained by a
Controlled Group Member, which provides an Annual Addition, the Employer
contribution to this Plan that would otherwise be contributed or allocated to
the Participant's Account will be limited to ensure that there will be no
Excess Amount for the Limitation Year. If the Employer contribution that
would otherwise be contributed or allocated to the Participant's Account
would cause the Annual Addition for the Limitation Year to exceed the maximum
Annual Addition, then subject to Section B.3.8, the amount contributed or
allocated will be reduced so that the Annual Additions for the Limitation
Year will equal the maximum Annual Addition. However, if pursuant to Section
B.2.3, there is an Excess Amount, the excess will be disposed of as follows:

          (a)  If the Participant is covered by the Plan at the end of the
     Limitation Year, the Excess Amount in the Participant's Account will be
     used to reduce Employer contributions (including any allocation of
     forfeitures) for that Participant in the next Limitation Year, and each
     succeeding Limitation Year, if necessary.

                                       B-7
<PAGE>

          (b)  If the Participant is not covered by the Plan at the end of a
     Limitation Year, the Excess Amount is held unallocated in a suspense
     account and will be used to reduce future Employer contributions for all
     remaining Participants in the next Limitation Year and each succeeding
     Limitation Year, if necessary.

          (c)  A suspense account may not participate in the allocation of
     the gains and losses of the Investment Funds. All amounts in the
     suspense account must be allocated and reallocated to Participants'
     Accounts before any Employer or Employee contributions may be made for
     that Limitation Year. Excess Amounts in a suspense account may not be
     distributed to Participants or former Participants.

     C.3.2  This Section B.3.2 and Section B.3.3 and B.3.4 apply if, in
addition to this Plan, the Participant is covered under another qualified
defined contribution Master or Prototype Plan maintained by a Controlled
Group Member, a welfare benefit fund, as defined in Code Section 419(e),
maintained by a Controlled Group Member, or an individual medical account, as
defined in Code Section 415(l)(2), maintained by a Controlled Group Member,
or a simplified employee pension as defined in Code Section 408(k),
maintained by a Controlled Group Member, which provides an Annual Addition
during any Limitation Year. The Annual Additions which may be credited to a
Participant's Account under this Plan for any such Limitation Year when added
to the Annual Additions credited to Participant's Account under the other
plans, welfare benefit funds and simplified employee pensions for the same
Limitation Year may not exceed the maximum Annual Addition under Section
B.2.1. If the Annual Additions with respect to the Participant under other
defined contribution plans, welfare benefit funds and simplified employee
pensions maintained by a Controlled Group Member are less than the maximum
Annual Addition under

                                       B-8
<PAGE>

Section B.2.1 and the Controlled Group Member contribution that would
otherwise be contributed or allocated to the Participant's Account under this
Plan would cause the Annual Additions for the Limitation Year to exceed this
limitation, the amount contributed or allocated will be reduced so that the
Annual Additions under all such plans and funds for the Limitation Year will
equal the maximum Annual Addition under Section B.2.1. If the Annual
Additions with respect to the Participant under the other defined
contribution plans, welfare benefit funds and simplified employee pensions in
the aggregate are equal to or greater than the maximum Annual Addition, no
amount will be contributed or allocated to the Participant's Account under
this Plan for the Limitation Year.

     C.3.3  If, pursuant to Section B.2.2 or as a result of the allocation of
forfeitures, a Participant's Annual Additions under this Plan and the other
plans would result in an Excess Amount for a Limitation Year, the Excess
Amount will be deemed to consist of the Annual Additions last allocated,
except that Annual Additions attributable to a welfare benefit fund,
individual medical account or simplified employee pension will be deemed to
have been allocated first regardless of the actual allocation date.

     C.3.4  If an Excess Amount was allocated to a Participant on an
allocation date of this Plan which coincides with an allocation date of
another plan, the Excess Amount attributed to this Plan will be the product of:

          (a)  the total Excess Amount allocated as of that date; times

          (b)  the ratio of (i) the Annual Additions allocated to the
     Participant for the Limitation Year as of that date under this Plan to
     (ii) the total Annual Additions allocated to the Participant for the
     Limitation Year as of that date under this and all the other

                                       B-9
<PAGE>

     Master or Prototype Plans.

Any Excess Amount attributed to this Plan will be disposed in the manner
described in Section B.3.1.

     C.3.5 This Section B.3.5 applies if the Participant is covered under
another qualified defined contribution plan maintained by a Controlled Group
Member which is not a Master or Prototype Plan. Annual Additions which may be
credited to the Participant's Account under this Plan for any Limitation Year
will be limited in accordance with Sections B.3.2 through B.3.4 as though the
other plan were a Master or Prototype Plan unless the Company provides other
limitations in Section I.A of the Addendum to the Adoption Agreement.

     C.3.6 This Section B.3.6 applies in addition to the limitations of
Section B.2.1 if a Participant has participated in any defined benefit plan
maintained at any time (whether or not terminated) by the Company or any
other Controlled Group Member. The sum of the Participant's Defined Benefit
Fraction and the Participant's Defined Contribution Fraction may not exceed
1.0. If necessary, the Annual Addition which may be credited under this Plan
for any Limitation Year will be reduced in accordance with Section 1.B of the
Addendum to the Adoption Agreement.

     C.3.7 If this Plan is a restatement of a plan which satisfied Code
Section 415 for all Limitation Years beginning before January 1, 1987, then,
in accordance with regulations promulgated by the Secretary of the Treasury,
an amount (not exceeding the numerator of the Defined Contribution Plan
Fraction) is subtracted from that numerator so that the sum of the Defined
Benefit Plan Fraction and the Defined Contribution Plan Fraction under Code
Section 415(e)(1) does not exceed 1.0 for the year. The adjustment described
in the preceding sentence is

                                     B-10

<PAGE>

determined as if the Tax Reform Act of 1986 changes to the limitation on
contributions and benefits were in effect for the last year beginning before
January 1, 1987.

     C.3.8 Excess Annual Additions resulting from a reasonable error in
determining the amount of Elective Deferrals that may be contributed pursuant
to a Participant 401(k) Election under Code Section 415 may be corrected
through a distribution of such excess Elective Deferrals, but only to the
extent that the distribution of the Elective Deferrals would reduce the
excess Annual Addition. The amount so distributed shall be includible in
income in the year distributed. Such distribution shall be made without
regard to any notice or consent requirements under Code Section 411(a)(11),
and also without regard to any restrictions on distribution under Code
Section 401(k)(2)(B)(i). Such distribution shall not constitute an Eligible
Rollover Distribution.

     C.3.9 The limitations of this Appendix B are intended to comply with
Code Section 415 so that the maximum contributions and benefits provided by
the Company and Controlled Group Members will exactly equal the maximum
amounts allowed under Code Section 415. Any discrepancy between this Section
and Code Section 415 will be resolved so as to give full effect to Code
Section 415.

                                     B-11

<PAGE>

                                   APPENDIX D

                              TOP-HEAVY PROVISIONS

D.1 DEFINITIONS

     These terms have the following meanings in this Appendix:

     AGGREGATED PLANS: (a) All plans of the Company or an Affiliate which
must be aggregated with the Plan; and (b) all plans of the Company or an
Affiliate which may be aggregated with the Plan and which the Administrative
Committee elects to aggregate with the Plan, in determining whether the Plan
is top-heavy. A plan must be aggregated with the Plan if the plan (whether or
not terminated) includes or included as a participant a Key Employee or if
the plan enables any plan of the Company or Affiliate in which a Key Employee
participates to qualify under Code Section 401(a)(4) or 410(b). A plan of the
Company or an Affiliate may be permissibly aggregated with the Plan (whether
or not terminated) if the plan satisfies the requirements of Code Sections
401(a)(4) and 410(b), when considered together with this Plan and all plans
which must be aggregated with this Plan. No plan may be aggregated with this
Plan unless it is a qualified plan under Code Section 401(a). The top-heavy
status of Aggregated Plans is determined by aggregating the plans' respective
top-heavy determinations that are made as of the Determination Dates that
fall within the same calendar year.

     DETERMINATION DATE: The date as of which it is determined whether a plan
is top-heavy or super top-heavy for the Plan Year. The Determination Date for
any Plan Year is the last day of the preceding Plan Year, or for the first
Plan Year, the last day of that Plan Year.

     GROUP PARTICIPANT: Anyone who is or was a participant in any Aggregated
Plan

                                     C-1

<PAGE>

as of the Determination Date or any of the 4 immediately preceding Plan
Years. Any Beneficiary of a Group Participant who has received, or is
expected to receive, a benefit from an Aggregated Plan is considered a Group
Participant solely for determining whether the Plan is top-heavy or super
top-heavy.

     KEY EMPLOYEE: Any Employee or former Employee, or their Beneficiaries,
of the Company or an Affiliate who, as of a Determination Date, or as of any
of the 4 immediately preceding Plan Years, was:

          (a) an officer of the Company earning an annual compensation in
     excess of 50% of the amount in effect under Code Section 415(b)(1)(A);

          (b) a 5-percent owner of the Company;

          (c) a 1-percent owner of the Company whose total annual
     compensation from the Company and the Affiliates exceeds $150,000; or

          (d) an Employee whose compensation equals or exceeds $30,000 (or
     such higher amount as may be defined under Code Section 415(c)(1)(A)),
     and whose ownership interest (determined in accordance with Code Section
     318) in the Company and the Affiliates is among the 10 largest.

Under this Appendix, "compensation" means compensation as defined in Code
Section 415(c)(3), but including Employer contributions made pursuant to a
salary reduction agreement which are not includible in the individual's gross
income under Code Section 125, 402(e)(3), 402(h), or 403(b).

     The determination of who is a Key Employee is made in accordance with
Code Section 416(i)(1).

     NON-KEY EMPLOYEE: Any Employee who is not a Key Employee including an

                                     C-2

<PAGE>

Employee who is a former Key Employee.

     TOP-HEAVY RATIO: (a) If the Employer maintains one or more defined
contribution plans (including any simplified employee pension plan) and the
Employer has not maintained any defined benefit plan which during the 5-year
period ending on the Determination Date(s) has or has had accrued benefits,
the Top-Heavy Ratio for Aggregated Plans as appropriate is a fraction, the
numerator of which is the sum of the Account Balances of all Key Employees as
of the Determination Date(s) (including any part of any Account Balance
distributed in the 5-year period ending on the Determination Date(s)), and
the denominator of which is the sum of all Account Balances (including any
part of any Account Balance distributed in the 5-year period ending on the
Determination Date(s)), both computed in accordance with Code Section 416 and
the regulations thereunder. Both the numerator and denominator of the
Top-Heavy Ratio are increased to reflect any contribution not actually made
as of the Determination Date, but which is required to be taken into account
on that date under Code Section 416 and the regulations thereunder.

     (b) If the Employer maintains one or more defined contribution plans
(including any simplified employee pension plan) and the Employer maintains
or has maintained one or more defined benefit plans which during the 5-year
period ending on the Determination Date(s) has or has had any accrued
benefits, the Top-Heavy Ratio for the Aggregated Plans is a fraction, the
numerator of which is the sum of Account Balances under the aggregated
defined contribution plan or plans for all Key Employees, determined in
accordance with (a) above, and the present value of accrued benefits under
the aggregated defined benefit plan or plans for all Key Employees as of the
Determination Date(s) and the denominator of which is the sum of the

                                     C-3

<PAGE>

Account Balances under the aggregated defined contribution plan or plans for
all Participants, determined in accordance with (a) above, and the present
value of accrued benefits under the defined benefit plan or plans for all
Participants as of the Determination Date(s), all determined in accordance
with Code Section 416 and the regulations thereunder. The accrued benefits
under a defined benefit plan in both the numerator and denominator of the
Top-Heavy Ratio are increased for any distribution of an accrued benefit made
in the 5-year period ending on the Determination Date.

     (c) For purposes of (a) and (b) above, the value of Account Balances and
the present value of accrued benefits will be determined as of the most
recent Valuation Date that falls within or ends with the 12-month period
ending on the Determination Date, except as provided in Code Section 416 and
the regulations thereunder for the first and second plan years of a defined
benefit plan. The account balances and accrued benefits of a Participant (i)
who is not a Key Employee but who was a Key Employee in a prior year or (ii)
who has not been credited with at least one Hour of Service with any Employer
maintaining the plan at any time during the 5-year period ending on the
Determination Date will be disregarded. The calculation of the Top-Heavy
Ratio, and the extent to which distributions, rollovers, and transfers are
taken into account will be made in accordance with Code Section 416 and the
regulations thereunder. Deductible employee contributions will not be taken
into account for purposes of computing the Top-Heavy Ratio. When aggregating
plans, the value of account balances and accrued benefits will be calculated
with reference to the Determination Dates that fall within the same calendar
year.

     The accrued benefit of a Participant other than a Key Employee shall be
determined under (i) the method, if any, that uniformly applies for accrual
purposes under all

                                     C-4

<PAGE>

defined benefit plans maintained by the Employer or (ii) if there is no such
method, as if such benefit accrued not more rapidly than the slowest accrual
rate permitted under the fractional rule of Code Section 411(b)(1)(C).

D.2  TOP-HEAVY PLAN

     D.2.1  The rules in this Appendix apply to a Plan for the first Plan
Year beginning after the Determination Date as of which the Plan is top-heavy
or super top-heavy, and also apply to the first Plan Year if the Plan is
top-heavy as of the initial Determination Date. Except where expressly
indicated otherwise, those rules continue to apply until as of a later
Determination Date, the Plan is no longer top-heavy or super top-heavy.
However, if the Plan changes from being super top-heavy to being top-heavy,
the rules for a top-heavy plan will apply and if the Plan changes from being
top-heavy to being super top-heavy, the rules for a super top-heavy plan will
apply.

     D.2.2  For any Plan Year, the Plan is "top-heavy" if the Top-Heavy
Ratio exceeds 60% determined as of the Determination Date.

     C.2.3  For any Plan Year, the Plan is "super top-heavy" if the
Top-Heavy Ratio exceeds 90% determined as of the Determination Date.

D.3.  MINIMUM BENEFITS OR CONTRIBUTIONS

     D.3.1  For any Plan Year in which the Plan is top-heavy, the minimum
rate of contributions and forfeitures allocated to the account either of any
Participant who is not a Key Employee and is employed by the Company on the
last day of the Plan Year, or any Eligible Employee regardless of whether
employed on the last day of the Plan Year, as elected under Section II.B of
the Addendum to the Adoption Agreement, is determined without regard to any

                                     C-5

<PAGE>

Social Security contribution and regardless of whether the Participant has
completed 1,000 Hours of Service (or any equivalent provided in the Plan) or
whether the Participant has compensation less than a stated amount. The
minimum contribution is equal to the lesser of:

          (a)  the highest rate of Employer contributions and forfeitures
     (determined as a percentage of Limitation Compensation) (as defined in
     Appendix B) allocated to the account of any Key Employee; or

          (b)  3% (4% if the Plan is super top-heavy) of Compensation.

     D.3.2  If a Participant also participates in another defined
contribution plan of the Company or an Affiliate, the minimum allocation
described above will be provided under the other plan or this Plan as elected
in Section II.A of the Addendum to the Adoption Agreement. If the Participant
also participates in one or more defined benefit plans of the Company or an
Affiliate, the minimum required benefits or allocations under Code Section
416 will be provided under either this Plan or the defined benefit plan as
elected in Section II.B of the Addendum to the Adoption Agreement. If a
Participant also participates in both another defined contribution plan of
the Company or an Affiliate and a defined benefit plan of the Company or an
Affiliate, the minimum required benefits or allocations under Code Section
416 will be provided as elected in Section II.C of the Addendum to the
Adoption Agreement.

     D.3.3  Neither Elective Deferrals nor Matching Contributions made on
behalf of Non-Key Employees may be used to satisfy the minimum contribution
requirement of this Section C.3.

D.4  MINIMUM VESTING

                                     C-6

<PAGE>

     For any Plan Year in which the Plan is top-heavy, and the Employer has
not elected either three year cliff vesting, immediate vesting, or any other
vesting schedule that would satisfy the requirements of Code Section 416(b)
under Section V of the Adoption Agreement, an active Participant's vested
interest in the Account Balance of his Employer Contribution Account, other
than amounts attributable to Qualified Matching Contributions and Qualified
Nonelective Contributions, as of the first day of the Plan Year, and as of
any future date while the Plan continues to be top-heavy, shall be no less
than as determined under the following table:

<TABLE>
<CAPTION>

                YEARS OF SERVICE                   VESTING PERCENTAGE
                ----------------                   ------------------

<S>                                               <C>
                Less than 2 years                        None
                2 but less than 3                         20%
                3 but less than 4                         40%
                4 but less than 5                         60%
                5 but less than 6                         80%
                6 years or more                          100%

</TABLE>

     Even if the Plan is subsequently determined to no longer be top-heavy,
the preceding vesting schedule shall be retained. The above minimum vesting
schedule applies to all benefits within the meaning of Code Section
411(a)(7), except those attributable to Employee contributions, including
benefits accrued before the Plan becomes top-heavy. Further, no decrease in a
Participant's nonforfeitable percentage may occur in the event the Plan's
status as a top-heavy plan changes for any Plan Year.

D.5  ADJUSTMENT TO MAXIMUM BENEFITS

     For any Plan Year in which the Plan is top-heavy, the maximum benefit
which may be provided under Appendix B is determined by substituting "1.00"
for "1.25" wherever it

                                     C-7

<PAGE>

appears in that Appendix. However, if the Plan is not super-heavy for that
Plan Year, then the preceding sentence does not apply if "4%" is substituted
for "3%" in Section C.3.1(b).

D.6  DISCONTINUANCE OF APPENDIX

     If any provision of this Appendix is no longer required to qualify the
Plan under the Code, then that provision will become void without the
necessity of further Plan amendment.

                                     C-8

<PAGE>

                                  APPENDIX E

                          DISTRIBUTION REQUIREMENTS

E.1  DEFINITIONS

     These terms have the following meanings in this Appendix:

     APPLICABLE LIFE EXPECTANCY: (a) The life expectancy (or joint and last
survivor expectancy) calculated using the attained age of the Participant (or
the Participant's spouse) in the first Distribution Calendar Year, and the
life expectancy (or joint and last survivor expectancy) recalculated using
the employee's (and the spouse's) attained age as of the Participant's
birthday (and the surviving spouse's birthday) in each succeeding calendar
year, reduced by one for each calendar year which has elapsed since the date
life expectancy was first calculated.

     (b)  If the Beneficiary is not the Participant's spouse, the applicable
life expectancy for determining the minimum distribution for each
Distribution Calendar Year will be determined by recalculating the
Participant's life expectancy but not recalculating the Beneficiary's life
expectancy. Such applicable life expectancy is the joint life and last
survivor expectancy using the Participant's attained age as of the
Participant's birthday in the Distribution Calendar Year and an adjusted age
(within the meaning of Proposed Regulation Section 1.401(a)(9)-1, Q&A E-8)
for the Beneficiary.

     (c)  Life expectancy and joint and last survivor expectancy are computed
by use of the expected return multiples in Tables V and VI of Income Tax
Regulation Section 1.72-9.

     DISTRIBUTION CALENDAR YEAR: A calendar year for which a minimum
distribution is required. For distributions beginning before the
Participant's death, the first Distribution Calendar Year is the calendar
year immediately preceding the calendar year which contains the

                                       D-1
<PAGE>

Participant's Required Beginning Date. For a distribution beginning after a
Participant's death, the first distribution calendar year is the calendar
year in which distributions are required to begin pursuant to Section 5.3 of
the Plan.

     PARTICIPANT'S BENEFIT: (a) The Account Balances as of the last Valuation
Date in the Valuation Calendar Year increased by the amount of any
contributions allocated as of dates in the Valuation Calendar Year after the
Valuation Date and decreased by distributions made in the Valuation Calendar
Year after the Valuation Date.

     (b)  For purposes of paragraph (a) above, if any portion of the minimum
distribution for the first Distribution Calendar Year is made in the second
Distribution Calendar Year on or before the Required Beginning Date, the
amount of the minimum distribution made in the second Distribution Calendar
Year is treated as if it had been made in the immediately preceding
Distribution Year.

     REQUIRED BEGINNING DATE: The first day of April of the calendar year
following the calendar year in which the Participant attains age 70 1/2.

     VALUATION CALENDAR YEAR: The calendar year immediately preceding the
Distribution Calendar Year.

E.2  GENERAL RULES

     E.2.1  The requirements of this Appendix apply to any distribution of
the Participant's interest and take precedence over any inconsistent
provisions of this Plan.

                                       D-2
<PAGE>

     E.2.2  All distributions required under this Plan are determined and
made in accordance with the proposed regulations under Code Section 401(a)(9),
including the minimum distribution incidental benefit requirement of proposed
Treasury Regulation Section 1.401(a)(9)-2.

     E.2.3  The amount required to be distributed for each Distribution
Calendar Year must at least equal the quotient obtained by dividing the
Participant's Benefit by the lesser of (i) the Applicable Life Expectancy or
(ii) if the Participant's spouse is not the designated Beneficiary, the
applicable divisor determined from the table set forth in Q&A 4 of proposed
Treasury Regulation Section 1.401(a)(9)-2.

     E.2.4  The minimum distribution required for the Participant's first
Distribution Calendar Year must be made on or before the Participant's
Required Beginning Date. The minimum distribution for other calendar years,
including the minimum distribution for the Distribution Calendar Year in
which the Participant's Required Beginning Date occurs, must be made on or
before December 31 of that Distribution Calendar Year.

     E.2.5  If an amount is transferred or rolled over from another plan to
this Plan, the rules in Q&A J-2 and Q&A J-3 of proposed Treasury Regulation
Section 1.401(a)(9)-1 apply.

     E.2.6  The entire interest of a Participant must be distributed or begin
to be distributed not later than the Participant's Required Beginning Date.

     E.2.7  The life expectancy of a Participant and the Participant's spouse
shall be recalculated.

                                       D-3<PAGE>

                                    EXHIBIT 10.24

                               2000 STOCK INCENTIVE PLAN

<PAGE>

                            2000 STOCK INCENTIVE PLAN

                        HYDROGEN BURNER TECHNOLOGY, INC.
                            A CALIFORNIA CORPORATION

                                  KEY FEATURES

--------------------------------------------------------------------------------
SIZE OF SHARE POOL                        1,575,000 Common Shares
--------------------------------------------------------------------------------
TYPES OF GRANTS                           Incentive Stock Options (ISOs)

                                          Nonstatutory Stock Options (NSOs)

                                          Shares of Restricted Stock
--------------------------------------------------------------------------------
ADMINISTRATION                            Compensation Committee
--------------------------------------------------------------------------------
ELIGIBILITY                               Employees

                                          Non-Employee Directors

                                          Consultants

                                          ISOs are available only to employees.
                                          Only natural persons can be
                                          consultants
--------------------------------------------------------------------------------
EXERCISE PRICE OF OPTIONS                 Minimum exercise price of ISOs is 100%
                                          of fair value at time of grant

                                          Minimum exercise price of NSOs is 85%
                                          of fair value at time of grant
--------------------------------------------------------------------------------
EARLY EXERCISE/REVERSE VESTING            Company intends to permit the exercise
                                          of unvested options, with option
                                          shares subject to repurchase at
                                          exercise price until vested
--------------------------------------------------------------------------------
VESTING OF OPTIONS                        Minimum vesting is 20% per year for
                                          five years after grant (not applicable
                                          to officers, directors and
                                          consultants)

                                          In general, options will vest over
                                          three years, but Committee may grant
                                          immediately vested option or extend
                                          vesting.

                                          33 1/3% vesting after a 12-month
                                          cliff, where vesting required, monthly
                                          increments thereafter.
--------------------------------------------------------------------------------
ACCELERATED VESTING                       No acceleration necessarily provided
                                          in the event of a change in control or
                                          upon termination without cause before
                                          or after a change in control. However,
                                          Committee intends to grant
                                          acceleration on change in control.
--------------------------------------------------------------------------------

                                 -1-

<PAGE>
--------------------------------------------------------------------------------
PAYMENT OF EXERCISE PRICE                 Cash "Stock swap" (paying the exercise
                                          price with shares already owned for at
                                          least six months)

                                          Same-day sale (only possible after an
                                          IPO)

                                          Margin loan (only possible after an
                                          IPO)

                                          Plan also allows the use of promissory
                                          notes, but Company does not intend to
                                          use that feature for now
--------------------------------------------------------------------------------
TERM OF OPTIONS                           Maximum term is 10 years (seven is
                                          intended generally)
--------------------------------------------------------------------------------
POST-TERMINATION EXERCISE GRACE PERIOD    3 months for normal employment
(MAY BE VARIED BY COMMITTEE)              termination

                                          3 years in case of disability, death,
                                          retirement after age 55 and completion
                                          of 5 years of service, or change in
                                          control

                                          No grace period in case of termination
                                          for cause
--------------------------------------------------------------------------------
SPECIAL RULES FOR 10% STOCKHOLDERS        Minimum exercise price of ISOs and
                                          NSOs is 110% of fair value at time of
                                          grant

                                          Maximum term of ISOs is 5 years
                                          (instead of 10)
--------------------------------------------------------------------------------
TRANSFER RESTRICTIONS                     Transfer only upon death or disability
                                          unless option agreement provides
                                          otherwise.  Option can only provide
                                          for the limited transferability
                                          permitted by California law.

                                          Company has right of first refusal on
                                          option shares

                                          Optionees are subject to market
                                          stand-off (lock-up) in the event of an
                                          IPO
--------------------------------------------------------------------------------
STOCKHOLDER APPROVAL                      Stockholder approval is required
                                          within 12 months after adoption of
                                          Plan (but should occur as soon as
                                          possible for accounting reasons)
--------------------------------------------------------------------------------
NON-COMPETITION AND CONFIDENTIALITY       Can forfeit award under certain
                                          circumstances.
--------------------------------------------------------------------------------
OUTSIDE DIRECTOR GRANTS                   7,000 shares as of 1999, 5,000 shares
                                          each year thereafter.
--------------------------------------------------------------------------------

                                      -2-
<PAGE>

                        HYDROGEN BURNER TECHNOLOGY, INC.

                            2000 STOCK INCENTIVE PLAN

<PAGE>

                        HYDROGEN BURNER TECHNOLOGY, INC.

                            2000 STOCK INCENTIVE PLAN

                      ADOPTED BY THE BOARD ON APRIL 1, 2000
                          APPROVED BY SHAREHOLDERS [ ]

     1. PURPOSE.

     The purpose of the Plan is to offer selected employees, directors and
consultants an opportunity to acquire a proprietary interest in the success of
the Company, or to increase such interest, to encourage such persons to remain
in the employ of the Company and to attract new employees with outstanding
qualifications.

     The Plan provides for the direct grant or sale of Common Stock and for the
grant of Options to purchase Common Stock. Options granted under the Plan may
include Nonstatutory Options as well as Incentive Stock Options intended to
qualify under section 422 of the Internal Revenue Code.

     2. DEFINITIONS.

     (a)  "BOARD" shall mean the Board of Directors of the Company, as
constituted from time to time.

     (b)  "CHANGE IN CONTROL" shall mean any one of the following events:

               (i)  The consummation of a merger, consolidation or other
     reorganization of the Company (other than a reincorporation of the
     Company), if after giving effect to such merger, consolidation or other
     reorganization of the Company, the stockholders of the Company immediately
     prior to such merger, consolidation or other reorganization do not
     represent a majority in interest of the holders of voting securities (on a
     fully diluted basis) with the ordinary voting power to elect directors of
     the surviving or resulting entity after such merger, consolidation or other
     reorganization; provided, however, that in no event shall the initial
     public offering of the Company's common stock constitute a Change in
     Control; or

               (ii) The sale of all or substantially all of the assets of the
     Company to a third party who is not an affiliate of the Company.

     (c)  "CODE" shall mean the Internal Revenue Code of 1986, as amended.

     (d)  "COMMITTEE" shall mean a committee consisting of one or more members
of the Board that is appointed by the Board to administer the Plan.

     (e)  "COMMON STOCK" means the Company's common stock.

                                      -1-
<PAGE>

     (f)  "COMPANY" shall mean Hydrogen Burner Technology Inc., a California
corporation.

     (g)  "CONFIDENTIAL INFORMATION" shall mean any information not generally
known to he public, including, without limiting the generality of the foregoing,
any customer lists, supplier lists, trade secrets, invention, formulas, methods
or processes, whether or not patented or patentable, channels of distribution,
business plans, pricing policies and records, financial information of any sort
and inventory records of the Company or any affiliate (and such other
information normally understood to be confidential or otherwise designated as
such in writing by the Company or its subsidiaries). It is not necessary,
however, that any information be formally designated as "confidential" if it
falls within any of the foregoing categories and is not generally known to the
public.

     (h)  "CONSULTANT" shall mean an individual who performs bona fide services
to the Company, a Parent or a Subsidiary other than as an Employee or a member
of the Board.

     (i)  "EMPLOYEE" shall mean any individual who is a common-law employee of
the Company, a Parent or a Subsidiary.

     (j)  "EXERCISE PRICE" shall mean the amount for which one share of Common
Stock may be purchased upon exercise of an Option, as specified by the Board in
the applicable Stock Option Agreement.

     (k)  "FAIR MARKET VALUE" shall mean the fair market value of a share of
Common Stock, as determined by the Board in good faith. Such determination shall
be conclusive and binding on all persons.

     (l)  "INCENTIVE STOCK OPTION" or "ISO" shall mean an incentive stock option
described in Code section 422(b).

     (m)  "NON-EMPLOYEE DIRECTOR" shall mean a member of the Board who is not an
Employee.

     (n)  "NONSTATUTORY OPTION" or "NSO" shall mean a stock option that is not
an ISO.

     (o)  "OFFEREE" shall mean an individual to whom the Board has offered the
right to acquire Common Stock other than upon exercise of an Option.

     (p)  "OPTION" shall mean an ISO or NSO granted under the Plan entitling the
holder to purchase Common Stock.

     (q)  "OPTIONEE" shall mean an individual who holds an Option.

     (r)  "PARENT" shall have the meaning set forth in section 424(e) of the
Code.

     (s)  "PLAN" shall mean this 2000 Stock Incentive Plan.

                                      -2-
<PAGE>

     (t)  "PURCHASE PRICE" shall mean the consideration for which one share of
Common Stock may be acquired under the Plan pursuant to a grant or sale under
Section 6, as specified by the Board.

     (u)  "SERVICE" shall mean service as an Employee, Non-Employee Director or
Consultant.

     (v)  "STOCK OPTION AGREEMENT" shall mean the agreement between the Company
and an Optionee that contains the terms, conditions and restrictions pertaining
to an Option.

     (w)  "STOCK PURCHASE AGREEMENT" shall mean the agreement between the
Company and an Offeree who acquires Common Stock under the Plan (other than
pursuant to an Option) that contains the terms, conditions and restrictions
pertaining to the acquisition of such Common Stock.

     (x)  "SUBSIDIARY" shall have the meaning set forth in section 424(f) of the
Code. A corporation that attains the status of a Subsidiary on a date after the
adoption of the Plan shall be considered a Subsidiary commencing as of such
date.

     (y)  "TEN PERCENT STOCKHOLDER" means an individual who owns more than ten
percent (10%) of the total combined voting power of all classes of outstanding
stock of the Company, its Parent or any of its Subsidiaries. In determining
stock ownership, the attribution rules of section 424(d) of the Code shall be
applied.

     3.   ADMINISTRATION.

     (a)  COMMITTEES OF THE BOARD. The Plan shall be administered by the Board.
However, any or all administrative functions otherwise exercisable by the Board
may be delegated to a Committee. Members of the Committee shall serve for such
period of time as the Board may determine and shall be subject to removal by the
Board at any time. The Board may also at any time terminate the functions of the
Committee and reassume all powers and authority previously delegated to the
Committee. Any reference to the Board in the Plan shall be construed as a
reference to the Committee (if any) to whom the Board has assigned a particular
function.

     (b)  AUTHORITY OF THE BOARD. Subject to the provisions of the Plan, the
Board shall have full authority and discretion to take any actions it deems
necessary or advisable for the administration of the Plan. All decisions,
interpretations and other actions of the Board shall be final and binding on all
parties who have an interest in the Plan or any option or shares issued
thereunder.

     4.   ELIGIBILITY.

     (a)  Only Employees, Non-Employee Directors and Consultants shall be
          eligible for the grant of Options or the direct grant or sale of
          Common Stock. Only Employees shall be eligible for the grant of ISOs.

     (b)  The Board or its delegate shall cause shares of stock options to be
          issued to each Outside Director as soon as administratively feasible
          upon his or her election, re-election, continuance of a Director in
          the absence of an election, or appointment as a Director of

                                      -3-
<PAGE>

          the Company. The number of shares of stock options to be issued to
          Outside Directors shall be 7,000 with a Grant Date of January 15, 1999
          and an exercise price of $5.00 per share, and 5,000 with a Grant Date
          of January 15, 2000 and an exercise price of $5.00 per share. Grants
          of 5,000 shares as of January 15 of each subsequent year shall be made
          with an exercise price of the then fair market value, as determined by
          the Board in good faith. The number of shares of stock options to be
          issued to an Outside Director who is elected or appointed at any time
          other than January 1 shall be 5,000 multiplied by a fraction, the
          numerator of which shall be the number of days remaining in the
          current year and the denominator of which shall be 365; provided,
          however, that in case of an Outside Director elected to the Board for
          the first time, the number of such options shall not be-prorated; and
          each such Outside Director shall receive 5,000 shares for the period
          of his service between the date of his election and January 1 or the
          next year.

     5.   STOCK SUBJECT TO PLAN.

     (a)  BASIC LIMITATION. The stock issuable under the Plan shall be shares of
authorized but unissued or reacquired Common Stock. The maximum number of shares
of Common Stock which may be issued under the Plan shall not exceed one million
five hundred seventy-five thousand (1,575 ,000) shares, subject to adjustment
pursuant to Section 10.

     (b)  ADDITIONAL SHARES. If any outstanding Option or other right to acquire
Common Stock for any reason expires or is canceled, forfeited or otherwise
terminated, the Common Stock allocable to the unexercised portion of such Option
or other right shall again be available for the purposes of the Plan. If shares
of Common Stock issued under the Plan are reacquired by the Company pursuant to
any right of repurchase or right of first refusal, such shares of Common Stock
shall again be available for the purposes of the Plan, except such shares shall
not be available for ISOs.

     6.   TERMS AND CONDITIONS OF GRANTS OR SALES.

     (a)  STOCK PURCHASE AGREEMENT . Each grant or sale of Common Stock under
the Plan other than upon exercise of an Option shall be evidenced by a Stock
Purchase Agreement between the Offeree and the Company. Such grant or sale shall
be subject to all applicable terms and conditions of the Plan and may be subject
to any other terms and conditions that are not inconsistent with the Plan and
that the Board deems appropriate for inclusion in a Stock Purchase Agreement.
The provisions of the various Stock Purchase Agreements entered into under the
Plan need not be identical.

     (b)  DURATION OF OFFERS AND NONTRANSFERABILITY OF RIGHTS. Any right to
acquire Common Stock under the Plan other than an Option shall automatically
expire if not exercised by the Offeree within the number of days specified by
the Board and communicated to the Offeree. Such right shall not be transferable
and shall be exercisable only by the Offeree to whom such right was granted.

     (c)  PURCHASE PRICE. The Purchase Price shall be established by the Board
and set forth in the Stock Purchase Agreement and, to the extent required to
comply with the California Corporations Code or the regulations thereunder,
shall not be less than eighty-five percent (85%)

                                      -4-

<PAGE>

of Fair Market Value (one hundred ten percent (110%) for Ten Percent
Stockholders). The Purchase Price shall be payable in a form described in
Section 8 or, in the discretion of the Board, in consideration for past
services rendered to the Company or for its benefit.

     (d)  WITHHOLDING TAXES. As a condition to the purchase of Common Stock, the
Offeree shall make such arrangements as the Board may require for the
satisfaction of any federal, state or local withholding tax obligations that may
arise in connection with such purchase.

     (e)  RESTRICTIONS ON TRANSFER OF COMMON STOCK. No Common Stock granted or
sold under the Plan may be sold, made the subject of any short sale or loan,
hypothecated, pledged, optioned or otherwise transferred or disposed of by the
Offeree for such period of time not to exceed one hundred eighty (180) days
following the effective date of a registration statement covering securities of
the Company filed under the Securities Act of 1933, as amended, unless such
restriction is consented to or waived by the managing underwriter. Subject to
the preceding sentence, any Common Stock granted or sold under the Plan shall be
subject to such special conditions, rights of repurchase, rights of first
refusal and other transfer restrictions as the Board may determine. Such
restrictions shall apply in addition to any general restrictions that may apply
to all holders of Common Stock. In particular, in the event the Common Stock
becomes publicly tradable, the holder thereof shall observe trading rules
established by the Committee (which for this purpose shall consist of two or
more outside directors) for purposes of Section 16 of the Securities Exchange
Act.

     7.   TERMS AND CONDITIONS OF OPTIONS.

     (a)  STOCK OPTION AGREEMENT. Each grant of an Option under the Plan shall
be evidenced by a Stock Option Agreement between the Optionee and the Company.
Such Option shall be subject to all applicable terms and conditions of the Plan
and may be subject to any other terms and conditions that are not inconsistent
with the Plan and that the Board deems appropriate for inclusion in a Stock
Option Agreement. The provisions of the various Stock Option Agreements entered
into under the Plan need not be identical.

     (b)  NUMBER OF SHARES. Each Stock Option Agreement shall specify the number
of shares of Common Stock that are subject to the Option and shall provide for
the adjustment of such number in accordance with Section 9. The Stock Option
Agreement shall also specify whether the Option is an ISO or a NSO. To the
extent that the aggregate Fair Market Value of the Common Stock subject to ISOs
that are exercisable for the first time by any Optionee during any calendar year
(under all plans of the Company and any Parent or Subsidiary) exceeds $100,000,
such Options shall be treated as NSOs. For purposes of this Section 7(b), ISOs
shall be taken into account in the order in which they were granted. The Fair
Market Value of the Common Stock shall be determined as of the time the Option
with respect to such Common Stock is granted.

     (c)  EXERCISE PRICE. An Option's Exercise Price shall be established by the
Board and set forth in a Stock Option Agreement. The Exercise Price of an ISO
shall not be less than one hundred percent (100%) of the Fair Market Value (one
hundred ten percent (110%) for Ten Percent Stockholders) on the date of grant.
The Exercise Price of a NSO shall not be less than eight-five percent (85%) of
the Fair Market Value (one hundred ten percent (110%) for Ten Percent
Stockholders) on the date of grant. The Exercise Price shall be payable in a
form

                                      -5-
<PAGE>

described in Section 8. Notwithstanding the foregoing, an Option may be granted
with an exercise price lower than that prescribed in this paragraph if the
Option grant is attributable to the issuance or assumption of an option in a
transaction to which Code section 424(a) applies.

     (d)  WITHHOLDING TAXES. As a condition to the exercise of an Option, the
Optionee shall make such arrangements as the Board may require for the
satisfaction of any federal, state, local or foreign withholding tax obligations
that may arise in connection with such exercise. The Optionee shall also make
such arrangements as the Board may require for the satisfaction of any federal,
state, local or foreign withholding tax obligations that may arise in connection
with the disposition of Common Stock acquired by exercising an Option.

     (e)  VESTING/EXERCISABILITY. Each Stock Option Agreement shall specify the
date when all or any installment of the Option is to vest or become exercisable.
To the extent required to comply with the California Corporations Code or the
regulations thereunder, an Option granted to Employees who are not officers
shall vest and become exercisable no less rapidly than the rate of twenty
percent (20%) per year for each of the first five (5) years from the date of
grant. Subject to the preceding sentence, the vesting of any Option shall be
determined by the Board in its sole discretion. A Stock Option Agreement may
permit an Optionee to exercise an Option before it is vested, subject to the
Company's right of repurchase over any shares acquired under the unvested
portion of the Option (an "early exercise"), which right of repurchase shall
lapse at the same rate the Option would have vested had there been no early
exercise. A Stock Option Agreement may, but need not, provide for full or
partial vesting in connection with a Change in Control.

     (f)  TERM. The Stock Option Agreement shall specify the term of the Option.
The term shall not exceed ten (10) years from the date of grant (five (5) years
in the case of an ISO granted to a Ten Percent Stockholder). Subject to the
preceding sentence, the Board at its sole discretion shall determine when an
Option is to expire.

     (g)  NONTRANSFERABILITY. No Option shall be transferable by the Optionee
other than by will or by the laws of descent and distribution. An Option may be
exercised during the lifetime of the Optionee only or by the guardian or legal
representative of the Optionee. No Option or interest therein may be
transferred, assigned, pledged or hypothecated by the Optionee during his
lifetime, whether by operation of law or otherwise, or be made subject to
execution, attachment or similar process.

     (h)  EXERCISE OF OPTIONS ON TERMINATION OF SERVICE. To the extent required
to comply with the California Corporations Code or the regulations thereunder,
each Stock Option Agreement shall provide that the Optionee shall have the right
to exercise the Option following termination of the Optionee's Service, during
the Option's term, for at least thirty (30) days following termination of
Service for any reason except cause, death or disability, and for at least six
(6) months following termination of Service due to death or disability.

     (i)  NO RIGHTS AS A STOCKHOLDER. An Optionee, or a transferee of an
Optionee, shall have no rights as a stockholder with respect to any Common Stock
covered by an Option until such person becomes entitled to receive such Common
Stock by filing a notice of exercise and paying the Exercise Price pursuant to
the terms of such Option.

                                      -6-
<PAGE>

     (j)  MODIFICATION, EXTENSION AND ASSUMPTION OF OPTIONS. Within the
limitations of the Plan, the Board may modify, extend or assume outstanding
Options or may accept the cancellation of outstanding Options (whether granted
by the Company or another issuer) in return for the grant of new Options for the
same or a different number of shares of Common Stock and at the same or a
different Exercise Price. Notwithstanding the foregoing, no modification of an
Option shall, without the consent of the Optionee, impair the Optionee's rights
or increase the Optionee's obligations under such Option.

     (k)  RESTRICTIONS ON TRANSFER. No shares of Common Stock issued upon
exercise of an Option may be sold or otherwise transferred or disposed of by the
Optionee during the one hundred eighty (180) day period following the effective
date of a registration statement covering securities of the Company filed under
the Securities Act of 1933 (unless such restriction is consented to or waived by
the managing underwriter). Subject to the preceding sentence, any Common Stock
issued upon exercise of an Option shall be subject to such rights of repurchase,
rights of first refusal and other transfer restrictions as the Board may
determine. Such restrictions shall apply in addition to any restrictions that
may apply to holders of Common Stock generally. Any right to repurchase an
Optionee's Common Stock at the original Exercise Price upon termination of the
Optionee's Service shall lapse at least as rapidly as the schedule set forth in
Subsection (e) above. Any such repurchase right may be exercised only within
ninety (90) days after the termination of the Optionee's Service for cash or for
cancellation of indebtedness incurred in purchasing the Common Stock. In the
event the Common Stock becomes publicly tradable, the holder thereof shall
observe trading rules established by the Committee (which for this purpose shall
consist of two or more outside directors) for purposes of Section 16 of the
Securities Exchange Act.

     8.   CONFIDENTIALITY AND NON-COMPETITION: CONDUCT NOT IN THE INTEREST OF
THE CORPORATION

     By accepting grants or sales of Common Stock or Options under the Plan and
as a condition to the exercise of Options and the enjoyment of any of the
benefits of the Plan, each Employee, Non-employee Director, or Consultant
benefiting under the Plan ("Participants") agrees as follows:

     (a)  Confidentiality - During the period of each Participant's Service (or
          the Participant's engaging in any other activity with or for the
          Company) and for a two year period thereafter, each Participant shall
          treat and safeguard as confidential and secret all Confidential
          Information received by such Participant at any time. Without the
          prior written consent of the Company, except as required by law, such
          Participant will not disclose or reveal any Confidential Information
          to any third party whatsoever or use the same in any manner except in
          connection with the businesses of the Company and its subsidiaries. In
          the event that a Participant is requested or required (by oral
          questions, interrogatories, requests for information or documents,
          subpoena, civil investigative demand or other process) to disclose (i)
          any Confidential Information or (ii) any information relating to his
          grant or Option, judgment or recommendations concerning the Company or
          its subsidiaries as developed from the Confidential Information,
          Participant will provide the Company with prompt written notice of any
          such request or

                                      -7-
<PAGE>

          requirement so that the Company may seek an appropriate protective
          order or waive compliance with the provisions contained herein. If,
          failing the entry of a protective order or the receipt of a waiver
          hereunder, Participant is, in the reasonable opinion of his counsel,
          compelled to disclose Confidential Information, Participant shall
          disclose only that portion of the Confidential Information which his
          counsel advises that he is compelled to disclose and will exercise
          best efforts to obtain assurances that confidential treatment will be
          accorded such Confidential Information.

     (b)  Non-Competition - During the period of employment with the Company or
          its subsidiaries and, for a two-year period thereafter (the
          "Non-Compete Period"), each Participant shall not, without prior
          written consent of the Board, do, directly or indirectly, any of the
          following:

          (1)  own, manage, control or participate in the ownership, management,
               or control of, or be employed or engaged by or otherwise
               affiliated or associated with, any other corporation,
               partnership, proprietorship, firm, association or other business
               entity, or otherwise engage in any business which competes with
               the business of the Company or any of its subsidiaries (as such
               business is conducted during the term of such Participant's
               Service with the Company or its subsidiaries) in the geographical
               regions in which such business is conducted; provided, however,
               that the ownership of a maximum of one percent of the outstanding
               stock of any publicly traded corporation shall not violate this
               covenant; or

          (2)  employ, solicit for employment or assist in employing or
               soliciting for employment any present, former or future employee,
               officer or agent of the Company or any of its subsidiaries.

     In the event any court of competent jurisdiction should determine that the
     foregoing covenant of noncompetition is not enforceable because of the
     extent of the geographical area or the duration thereof, then the Company
     and the affected Participant hereby petition such court to modify the
     foregoing covenant to the extent, but only to the extent, necessary to
     create a covenant which is enforceable in the opinion of such court, with
     the intention of the parties that the Company shall be afforded the maximum
     enforceable covenant of non-competition which may be available under the
     circumstances and applicable law.

(c)  Each Participant acknowledges that remedies at law for any breach by him of
     this Section 8 may be inadequate and that the damages resulting from any
     such breach are not readily susceptible to being measured in monetary
     terms. Accordingly, each Participant acknowledges that upon his violation
     of any provisions of this Section 8, the Company will be entitled to
     immediate injunctive relief and may obtain an order restraining any
     threatened or future breach. Each Participant further agrees, subject to
     the proviso at the end of this sentence, that if he violates any provision
     of this Section 8, he shall immediately forfeit any rights and benefits
     under this Plan and shall return to the

                                      -8-
<PAGE>

     Company any unexercised Options and shall return any shares of stock held
     by such Participant received upon exercise of any Option granted hereunder,
     together with any proceeds from sales of any shares of Stock received upon
     exercise of such Options, provided, however, that upon violation of
     subsection (b) of this Section, the forfeiture and return provisions
     contained in the sentence shall apply only to Options which have been
     exercised, and in any such case the proceeds of sales therefrom, during the
     six-month period immediately prior to the Participant's violation of
     subsection (b) of this Section 8. Nothing in this Section 8 will be deemed
     to limit, in any way, the remedies at law or in equity of the Company, for
     the breach by Participant of any of the provisions of this Section 8.

(d)  Each Participant agrees to provide written notice of the provisions of this
     Section 8 to any future potential employer of Participant, and the Company
     expressly reserves the right to provide such notice to such employer(s).

(e)  If any provision or part of any provision of this Section 8 is held for any
     reason to be unenforceable, (i) the remainder of this Section 8 shall
     nevertheless remain in full force and effect and (ii) such provision or
     part shall be deemed to be amended in such manner as to render such
     provision

     9.   FORMS OF PAYMENT.

     (a)  GENERAL RULE. The entire Purchase Price or Exercise Price shall be
payable in cash or cash equivalents acceptable to the Company at the time of
exercise or purchase, except as otherwise provided in this Section 9.

     (b)  SURRENDER OF STOCK. To the extent that a Stock Option Agreement or
Stock Purchase Agreement so provides, payment may be made all or in part with
Common Stock that has already been owned by the Optionee or the Optionee's
representative for any time period specified by the Board and that are
surrendered to the Company in good form for transfer. Such Common Stock shall be
valued at Fair Market Value on the date when the new Common Stock is purchased
under the Plan.

     (c)  PROMISSORY NOTES. To the extent that a Stock Option Agreement or Stock
Purchase agreement so provides, payment may be made all or in part with a full
recourse promissory note executed by the Optionee. The interest rate and other
terms and conditions of such note shall be determined by the Board. The Board
may require that the Optionee pledge his or her Common Stock to the Company for
the purpose of securing the payment of such note. In no event shall the stock
certificate(s) representing such Common Stock be released to the Optionee until
such note is paid in full, unless otherwise provided in the Stock Option
Agreement or Stock Purchase Agreement.

     (d)  EXERCISE/SALE. To the extent that a Stock Option Agreement so
provides, and if the Common Stock is publicly traded, all or any part of the
Exercise Price and any withholding taxes may be paid by delivering (on a form
prescribed by the Company) an irrevocable direction to a securities broker
approved by the Company to sell all or part of the Common Stock being purchased
under the Plan and to deliver all or part of the sales proceeds to the Company.

                                      -9-
<PAGE>

      (e) EXERCISE/PLEDGE. To the extent that a Stock Option Agreement so
provides, and if the Common Stock is publicly traded, all or any part of the
Exercise Price and any withholding taxes may be paid by delivering (on a form
prescribed by the Company) an irrevocable direction to pledge all or part of
the Common Stock being purchased under the Plan to a securities broker or
lender approved by the Company, as security for a loan, and to deliver all or
part of the loan proceeds to the Company.

     10.  ADJUSTMENTS UPON CHANGES IN COMMON STOCK.

     (a)  GENERAL. In the event of a subdivision of the outstanding Common
Stock, a declaration of a dividend payable in Common Stock, a declaration of an
extraordinary dividend payable in a form other than Common Stock in an amount
that has a material effect on the value of Common Stock, a combination or
consolidation of the outstanding Common Stock into a lesser number of shares, a
recapitalization, a reclassification or a similar occurrence, the Board shall
make appropriate adjustments in one or more of (i) the number of shares of
Common Stock available for future grants of Options or other rights to acquire
Common Stock under Section 5, (ii) the number of shares of Common Stock covered
by each outstanding Option or other right to acquire Common Stock or (iii) the
Exercise Price of each outstanding Option or the Purchase Price of each other
right to acquire Common Stock.

     (b)  MERGERS AND CONSOLIDATIONS. In the event that the Company is a party
to a merger or consolidation, outstanding Options or other rights to acquire
Common Stock shall be subject to the agreement of merger or reorganization. Such
agreement, without an Optionee's consent, may provide for:

          (i)  The continuation of such outstanding Options by the Company (if
     the Company is the surviving corporation);

          (ii) The assumption of the Plan and such outstanding Options by the
     surviving corporation or its parent;

          (iii) The substitution by the surviving corporation or its parent of
     options with substantially the same terms for such outstanding Options; or

          (iv) The cancellation of such outstanding Options to the extent not
     exercised before the merger or consolidation; provided, however, that such
     cancellation shall not occur unless the Optionee has received either an
     opportunity to exercise the vested portion of the Options prior to
     cancellation or a cash payment equal in value to the built-in option gain
     on the vested portion of the Options, less applicable withholding.

     (c)  RESERVATION OF RIGHTS. Except as provided in this Section 9, an
Optionee or Offeree shall have no rights by reason of (i) any subdivision or
consolidation of shares of stock of any class, (ii) the payment of any dividend,
or (iii) any other increase or decrease in the number of shares of stock of any
class. Any issue by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number of shares
of Common Stock subject to an Option, or the number of shares subject to any
other right to acquire Common Stock and/or the Exercise Price or Purchase Price.
The grant of an Option or other right to acquire Common

                                      -10-
<PAGE>

Stock pursuant to the Plan shall not affect in any way the right or power of the
Company to make adjustments, reclassifications, reorganizations or changes of
its capital or business structure, to merge or consolidate or to dissolve,
liquidate, sell or transfer all or any part of its business or assets.

     11.  LEGAL REQUIREMENTS.

     (a)  RESTRICTIONS ON ISSUANCE. Common Stock shall not be issued under the
Plan unless the issuance and delivery of such Common Stock complies with (or is
exempt from) all applicable requirements of law, including (without limitation)
the Securities Act of 1933, as amended, the rules and regulations promulgated
thereunder, state securities laws and regulations, and the regulations of any
stock exchange on which the Company's securities may then be listed, and the
Company has obtained the approval or favorable ruling from any governmental
agency that the Company determines is necessary or advisable.

     (b)  FINANCIAL REPORTS. To the extent required to comply with the
California Corporations Code or the regulations thereunder, not less often than
annually the Company shall furnish to Optionees and Offerees Company summary
financial information including a balance sheet regarding the Company's
financial condition and results of operations, unless such Optionees or Offerees
have duties with the Company that assure them access to equivalent information.
Such financial statements need not be audited.

     12.  NO EMPLOYMENT RIGHTS.

     No provision of the Plan, nor any Option granted or other right to acquire
Common Stock granted under the Plan, shall be construed to give any person any
right to become, to be treated as, or to remain an Employee, Consultant or
Non-Employee Director. The Company and its Subsidiaries reserve the right to
terminate any person's Service at any time and for any reason.

     13.  DURATION AND AMENDMENTS.

     (a)  TERM OF THE PLAN. The Plan, as set forth herein, shall become
effective on the date of its adoption by the Board, subject to the approval of
the Company's stockholders. In the event that the stockholders fail to approve
the Plan within twelve (12) months after its adoption by the Board, any Option
grants or other right to acquire Common Stock already made shall be null and
void, and no additional Option grants or other right to acquire Common Stock
shall be made after such date. The Plan shall terminate automatically ten (10)
years after its adoption by the Board and may be terminated on any earlier date
pursuant to Subsection (b) below.

     (b)  RIGHT TO AMEND OR TERMINATE THE PLAN. The Board may amend or terminate
the Plan at any time. Rights under any Option granted or other right to acquire
Common Stock granted before amendment of the Plan shall not be materially
altered, or impaired adversely, by such amendment, except with consent of the
Optionee or Offeree. An amendment of the Plan shall be subject to the approval
of the Company's stockholders only to the extent required by applicable laws,
regulations or rules.

     (c)  EFFECT OF AMENDMENT OR TERMINATION. No Common Stock shall be issued or
sold under the Plan after the termination thereof, except upon exercise of an
Option granted prior to

                                      -11-
<PAGE>

such termination. The termination of the Plan, or any amendment thereof, shall
not affect any Common Stock previously issued or Option previously granted under
the Plan.

     14.  EXECUTION.

     To record the adoption of the Plan, the Company has caused its authorized
officer to execute the same.

                                          Hydrogen Burner Technology, Inc.

                                          By
                                            -----------------------------------
                                                      David M. Moard

                                          Title  PRESIDENT
                                               --------------------------------

                                          Date  APRIL 1, 2000
                                               --------------------------------

                                      -12-
<PAGE>

                        HYDROGEN BURNER TECHNOLOGY, INC.

                            2000 STOCK INCENTIVE PLAN

                             STOCK OPTION AGREEMENT

     Hydrogen Burner Technology, Inc., a California corporation (the "Company"),
hereby grants an option to purchase its Common Stock to the optionee named
below. The terms and conditions of the option are set forth in this Stock Option
Agreement and in the Company's 2000 Stock Incentive Plan (the "Plan").

1.   GRANT INFORMATION

Date of Grant:                                  __________, 2000

Name of Optionee:

Optionee's Social Security Number:              ________-______-________

Type of Option:                                 __ Incentive ("ISO")
                                                __ Nonstatutory ("NSO")

Number of Shares of Common Stock:               ___________

Exercise Price per Share:                       $__________

Vesting Start Date:                             __________,  2000

Vesting Schedule:                               Subject to attached Terms and
                                                Conditions, the option shall
                                                vest as to 1/3 of the shares as
                                                of each January 1 following the
                                                Date of Grant if you are then in
                                                Service.

         BY SIGNING BELOW, YOU AGREE TO ALL OF THE TERMS AND CONDITIONS
         DESCRIBED IN THIS STOCK OPTION AGREEMENT, INCLUDING THE ATTACHED TERMS
         AND CONDITIONS, NOTICE OF EXERCISE AND PLAN.

Optionee:
          ---------------------------------------------------------------------
                                   (Signature)

Company:
          ---------------------------------------------------------------------
                                   (Signature)

Title:
          ---------------------------------------------------------------------

                                      -1-
<PAGE>

2.   TERMS AND CONDITIONS

     (a)  VESTING. Your option vests during your Service on the dates specified
in the first page of this Stock Option Agreement. Vesting will cease if your
Service terminates for any reason.

     (b)  SERVICE; LEAVES OF ABSENCE. Your Service shall cease when you cease to
be actively employed by, or a consultant or adviser to, the Company (or any
subsidiary) as determined in the sole discretion of the Board. For purposes of
your option, your Service does not terminate when you go on a BONA FIDE leave of
absence, that was approved by the Company in writing, if the terms of the leave
provide for continued service crediting, or when continued service crediting is
required by applicable law. However, for purposes of determining whether your
option is entitled to ISO status, your Service will be treated as terminating
ninety (90) days after you went on leave, unless your right to return to active
work is guaranteed by law or by a contract. Your Service terminates in any event
when the approved leave ends, unless you immediately return to active work. The
Company determines which leaves count toward Service, and when your Service
terminates for all purposes under the Plan.

     (c)  TERM OF OPTION. Your option expires on the day before the 7th
anniversary of the Date of Grant, and will expire earlier if your Service
terminates as follows:

     (1)  REGULAR TERMINATION. If your Service terminates for any reason except
          Cause, death, Disability, retirement or Change in Control, then your
          Option will expire at the close of business at Company headquarters
          three (3) months after your termination date, provided that such three
          month period shall be extended by nine months in the event it is the
          Company that terminates your Service.

     (2)  CAUSE. If your Service terminates for cause (as defined by the Company
          and consistent with applicable law), your Option will expire
          immediately.

     (3)  DEATH. If you die while in Service, then your Option will expire at
          the close of business at Company headquarters on the date three years
          after the date of death. During that three year period, your estate or
          heirs may exercise the vested portion of your Option.

     (4)  DISABILITY. If your Service terminates because of your Disability,
          then your Option will expire at the close of business at Company
          headquarters on the date three years after your termination date.
          Disability shall have the meaning set forth in section 22(e)(3) of the
          Code.

     (5)  RETIREMENT. If your Service terminates after the attainment of age 55
          and completion of five years of Service with the Company and such
          termination is not for cause, and you do not thereafter become
          employed in the energy industry, then your Option will expire at the
          close of business at Company headquarters on the date three years
          after your termination date.

     (6)  CHANGE IN CONTROL. If your Service terminates within three months
          before or after a Change in Control and primarily as a result of such
          Change in Control (as determined

                                      -2-
<PAGE>

          by the Company), then your Option will expire at the close of business
          at Company headquarters on the date three years after your termination
          date.

     (d)  EXERCISE OF OPTION.

     (1)  LEGAL RESTRICTIONS. The Company will not permit you to exercise your
          option if the issuance of Common Stock at that time would violate any
          law or regulation. You represent and agree that the Common Stock to be
          acquired upon exercising your option will be acquired for investment,
          and not with a view to the sale or distribution thereof. If the sale
          of Common Stock under the Plan is not registered under the Securities
          Act but an exemption is available which requires an investment
          representation or other representation, you shall represent and agree
          at the time of exercise to make such representations as are deemed
          necessary or appropriate by the Company and its counsel.

     (2)  METHOD OF EXERCISE. To exercise your option, you must complete and
          file the Company's "Notice of Exercise" form at the address given on
          the form, together with full payment. The Notice of Exercise will be
          effective when it is received by the Company. If someone else wants to
          exercise your option after your death, that person must prove to the
          Company's satisfaction that he or she is entitled to do so.

     (3)  FORM OF PAYMENT. When you submit a Notice of Exercise, you must
          include payment of the aggregate Exercise Price for the Common Stock
          you are purchasing. Payment may be made in one (or a combination) of
          the following forms.

     -    Your personal check, a cashier's check or a money order.

     -    Your delivery of shares of Common Stock that have been owned by you
          for at least six months (or such other period of time as may be
          necessary to avoid adverse accounting consequences to the Company).

     -    To the extent that the Common Stock is publicly traded, your delivery,
          on a form prescribed by the Company, of an irrevocable direction to a
          securities broker approved by the Company to sell all or part of the
          Common Stock and to deliver all or part of the sales proceeds to the
          Company.

     -    To the extent that the Common Stock is publicly traded, your delivery,
          on a form prescribed by the Company, of an irrevocable direction to
          pledge all or part of the Common Stock to a securities broker or
          lender approved by the Company, as security for a loan, and to deliver
          all or part of the loan proceeds to the Company.

     (4)  WITHHOLDING TAXES. You will not be allowed to exercise your option
          unless you make acceptable arrangements to pay any withholding or
          other taxes that may be due as a result of the option exercise or the
          sale of Common Stock acquired upon exercise of your option.

     (e)  EXERCISE OF OPTION BEFORE VESTING ("EARLY EXERCISE"). You may not
exercise your option before it is vested.

                                      -3-
<PAGE>

     (f)  CONFIDENTIALITY AND NON-COMPETITION: CONDUCT NOT IN THE INTEREST OF
THE CORPORATION

     By accepting this Option Agreement and as a condition to the exercise of
the Option, you agree as follows:

     (1)  Confidentiality - During the period of your Service (or your engaging
     in any other activity with or for the Company) and for a two year period
     thereafter, you shall treat and safeguard as confidential and secret all
     Confidential Information received by you at any time. Without the prior
     written consent of the Company, except as required by law, you will not
     disclose or reveal any Confidential Information to any third party
     whatsoever or use the same in any manner except in connection with the
     businesses of the Company and its subsidiaries. In the event that you are
     requested or required (by oral questions, interrogatories, requests for
     information or documents, subpoena, civil investigative demand or other
     process) to disclose (i) any Confidential Information or (ii) any
     information relating to your Option, judgment or recommendations concerning
     the Company or its subsidiaries as developed from the Confidential
     Information, you will provide the Company with prompt written notice of any
     such request or requirement so that the Company may seek an appropriate
     protective order or waive compliance with the provisions contained herein.
     If, failing the entry of a protective order or the receipt of a waiver
     hereunder, you are, in the reasonable opinion of your counsel, compelled to
     disclose Confidential Information, you shall disclose only that portion of
     the Confidential Information which your counsel advises that you are
     compelled to disclose and will exercise best efforts to obtain assurances
     that confidential treatment will be accorded such Confidential Information.

     (2)  Non-Competition - During the period of employment with the Company or
     its subsidiaries and, for a two-year period thereafter (the "Non-Compete
     Period"), you shall not, without prior written consent of the Committee,
     do, directly or indirectly, any of the following:

          (A)  own, manage, control or participate in the ownership, management,
               or control of, or be employed or engaged by or otherwise
               affiliated or associated with, any other corporation,
               partnership, proprietorship, firm, association or other business
               entity, or otherwise engage in any business which competes with
               the business of the Company or any of its subsidiaries (as such
               business is conducted during the term of your Service with the
               Company or its subsidiaries) in the geographical regions in which
               such business is conducted; provided. however. that the ownership
               of a maximum of one percent of the outstanding stock of any
               publicly traded corporation shall not violate this covenant; or

          (B)  employ, solicit for employment or assist in employing or
               soliciting for employment any present, former or future employee,
               officer or agent of the Company or any of its subsidiaries.

                                      -4-
<PAGE>

     In the event any court of competent jurisdiction should determine that the
     foregoing covenant of noncompetition is not enforceable because of the
     extent of the geographical area or the duration thereof, then the Company
     and you hereby agree to petition such court to modify the foregoing
     covenant to the extent, but only to the extent, necessary to create a
     covenant which is enforceable in the opinion of such court, with the
     intention of the parties that the Company shall be afforded the maximum
     enforceable covenant of non-competition which may be available under the
     circumstances and applicable law.

     (3)  You acknowledge that remedies at law for any breach by you of this
     subsection (f) may be inadequate and that the damages resulting from any
     such breach are not readily susceptible to being measured in monetary
     terms. Accordingly, you acknowledge that upon your violation of any
     provisions of this subsection (f), the Company will be entitled to
     immediate injunctive relief and may obtain an order restraining any
     threatened or future breach. You further agree, subject to the proviso at
     the end of this sentence, that if you violate any provision of this
     subsection (f), you shall immediately forfeit any rights and benefits under
     this Option Agreement and shall return to the Company any unexercised
     Options hereunder and shall return any shares of stock held by you received
     upon exercise of any Option granted hereunder, together with any proceeds
     from sales of any shares of Stock received upon exercise of such Options,
     provided, however, that upon violation of paragraph (2) of this subsection
     (f), the forfeiture and return provisions contained in the sentence shall
     apply only to Options which have been exercised, and in any such case the
     proceeds of sales therefrom, during the six-month period immediately prior
     to your violation of subsection (f)(2) of this Section 2. Nothing in this
     subsection (f) will be deemed to limit, in any way, the remedies at law or
     in equity of the Company, for the breach by you of any of the provisions of
     this subsection (f).

     (4)  You agree to provide written notice of the provisions of this
     subsection (f) to any future employer that proposes to employ you, and the
     Company expressly reserves the right to provide such notice to the such
     employer(s).

     (5)  If any provision or part of any provision of this subsection (f) is
     held for any reason to be unenforceable, (i) the remainder of this
     subsection (f) shall nevertheless remain in full force and effect and (ii)
     such provision or part shall be deemed to be amended in such manner as to
     render such provision enforceable.

     (6)  For purposes of this Agreement, "Confidential Information" means any
     information not generally known to he public, including, without limiting
     the generality of the foregoing, any customer lists, supplier lists, trade
     secrets, invention, formulas, methods or processes, whether or not patented
     or patentable, channels of distribution, business plans, pricing policies
     and records, financial information of any sort and inventory records of the
     Company or any affiliate (and such other information normally understood to
     be confidential or otherwise designated as such in writing by the Company
     or its subsidiaries). It is not necessary, however, that any information be
     formally designated as "confidential" if it falls within any of the
     foregoing categories and is not generally known to the public.

                                      -5-
<PAGE>

     (g)  RESALE RESTRICTIONS/MARKET STAND-OFF. In connection with any
underwritten public offering by the Company of its equity securities pursuant to
an effective registration statement filed under the Securities Act of 1933, as
amended, including the Company's initial public offering, you shall not sell,
make any short sale of, loan, hypothecate, pledge, grant any option for the
purchase of, or otherwise dispose or transfer for value or agree to engage in
any of the foregoing transactions with respect to any Common Stock without the
prior written consent of the Company or its underwriters, for such period of
time after the effective date of such registration statement as may be requested
by the Company or such underwriters, not to exceed one hundred eighty (180)
days. To enforce the provisions of this paragraph, the Company may impose
stop-transfer instructions with respect to the Common Stock until the end of the
applicable stand-off period. You may not sell any Common Stock at a time when
applicable laws, regulations or Company or underwriter trading policies prohibit
a sale. In particular, you shall confine trading in Common Stock to those
windows established by the Committee for purposes of Section 16 of the
Securities Exchange Act, in the event the Common Stock becomes publicly
tradable.

     (h)  RIGHT OF FIRST REFUSAL. If you propose to sell, pledge or otherwise
transfer to a third party any Common Stock acquired under this Stock Option
Agreement, or any interest in such Common Stock, the Company shall have the
"Right of First Refusal" with respect to all (and not less than all) of such
Common Stock. If you desire to transfer Common Stock acquired under this Stock
Option Agreement, you must give a written notice ("Transfer Notice") to the
Company describing fully the proposed transfer, including the number of shares
proposed to be transferred, the proposed transfer price and the name and address
of the proposed transferee. The Transfer Notice shall be signed both by you and
by the proposed new transferee and must constitute a binding commitment of both
parties to the transfer of the Common Stock. The Company shall have the right to
purchase all, and not less than all, of the Common Stock on the terms of the
proposal described in the Transfer Notice (subject, however, to any change in
such terms permitted in the next paragraph) by delivery of a notice of exercise
of the Right of First Refusal within thirty (30) days after the date when the
Transfer Notice was received by the Company.

     If the Company fails to exercise its Right of First Refusal before or
within thirty (30) days after the date when it received the Transfer Notice, you
may, not later than ninety (90) days following receipt of the Transfer Notice by
the Company, conclude a transfer of the Common Stock subject to the Transfer
Notice on the terms and conditions described in the Transfer Notice. Any
proposed transfer on terms and conditions different from those described in the
Transfer Notice, as well as any subsequent proposed transfer by you, shall again
be subject to the Right of First Refusal and shall require compliance with the
procedure described in the paragraph above. If the Company exercises its Right
of First Refusal, the parties shall consummate the sale of the Common Stock on
the terms set forth in the Transfer Notice within sixty (60) days after the date
when the Company received the Transfer Notice (or within such longer period as
may have been specified in the Transfer Notice); provided, however, that if the
Transfer Notice provided that payment for the Common Stock was to be made in a
form other than lawful money paid at the time of transfer, the Company shall
have the option of paying for the Common Stock with lawful money equal to the
present value of the consideration described in the Transfer Notice.

                                      -6-

<PAGE>

     The Company's Right of First Refusal shall inure to the benefit of its
successors and assigns, shall be freely assignable in whole or in part and shall
be binding upon any transferee of the Common Stock. The Company's right of First
Refusal shall terminate if the Company's Common Stock is listed on an
established stock exchange or is quoted regularly on the Nasdaq Stock Market.

     (i)  TRANSFER OF OPTION. Prior to your death, only you may exercise your
option. You cannot transfer or assign your option. For instance, you may not
sell your option or use it as security for a loan. If you attempt to do any of
these things, your option will immediately become invalid. You may, however,
dispose of your option in your will. Regardless of any marital property
settlement agreement, the Company is not obligated to honor a notice of exercise
from your spouse or former spouse, nor is the Company obligated to recognize
such individual's interest in your option in any other way.

     (j)  NO RETENTION RIGHTS. Your option does not give you the right to be
retained by the Company (or any subsidiaries) in any capacity. The Company
reserves the right to terminate your Service at any time and for any reason.

     (k)  SHAREHOLDER RIGHTS. You, or your estate or heirs, have no rights as a
shareholder of the Company until a certificate for your fully vested Common
Stock has been issued. No adjustments are made for dividends or other rights if
the applicable record date occurs before your stock certificate is issued,
except as described in the Plan.

     (l)  ADJUSTMENTS TO COMMON STOCK. In the event of a stock split, a stock
dividend or a similar change in the Company's Common Stock, the number of shares
covered by your option and the exercise price per share may be adjusted pursuant
to the Plan. Your option shall be subject to the terms of the agreement of
merger or consolidation in the event the Company is subject to such corporate
activity, as described in the Plan.

     (m)  LEGENDS. All certificates representing the Common Stock issued upon
exercise of your option shall, where applicable, have endorsed thereon any
legends required by applicable law, including the following legends:

     "THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD,
     TRANSFERRED, ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN COMPLIANCE
     WITH THE TERMS OF A WRITTEN AGREEMENT BETWEEN THE COMPANY AND THE INITIAL
     HOLDER HEREOF. SUCH AGREEMENT PROVIDES FOR CERTAIN TRANSFER RESTRICTIONS,
     INCLUDING RIGHTS OF FIRST REFUSAL UPON AN ATTEMPTED TRANSFER OF THE
     SECURITIES. THE SECRETARY OF THE COMPANY WILL UPON WRITTEN REQUEST FURNISH
     A COPY OF SUCH AGREEMENT TO THE HOLDER HEREOF WITHOUT CHARGE."

     "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED OR
     QUALIFIED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
     LAWS OF ANY STATE, AND MAY BE OFFERED AND SOLD ONLY IF REGISTERED AND
     QUALIFIED

                                      -7-
<PAGE>

     PURSUANT TO THE RELEVANT PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS OR
     IF THE COMPANY IS PROVIDED AN OPINION OF COUNSEL SATISFACTORY TO THE
     COMPANY THAT REGISTRATION AND QUALIFICATION UNDER FEDERAL AND STATE
     SECURITIES LAWS ARE NOT REQUIRED."

     (n)  APPLICABLE LAW. This Agreement will be interpreted and enforced under
the laws of the State of California.

     (o)  INCORPORATION OF PLAN BY REFERENCE. The text of the Plan is
incorporated in this Agreement by reference. Certain capitalized terms used in
this Agreement are defined in the Plan.

     This Agreement and the Plan constitute the entire understanding between you
and the Company regarding your option. Any prior agreements, commitments or
negotiations concerning your option are superseded.

                                      -8-
<PAGE>

                               NOTICE OF EXERCISE
                               (exercise by check)

HYDROGEN BURNER TECHNOLOGY, INC.
3925 Vernon Street
Long Beach, California   90815-1727
Attn:  Larry Frost

         Re:  Exercise of Stock Option

Dear Sir or Madam:

     Pursuant to the Stock Option Agreement dated __________, 20__ (the "Stock
Option Agreement") and the Company's 2000 Stock Incentive Plan (the "Plan"), I
hereby elect to purchase _____________ shares of the Common Stock of the Company
at aggregate exercise price of $__________. I enclose payment by my check in the
amount of $ ; ______________

         The Common Stock is to be issued and registered in the name(s) of:

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

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

     I understand that there may be tax consequences as a result of the purchase
or disposition of the Common Stock, and I have consulted with any tax
consultants I wished to consult and I am not relying on the Company for any tax
advice. I understand that my exercise is governed by my Stock Option Agreement
and the Plan and agree to abide by and be bound by their terms and conditions. I
represent that the Common Stock is being acquired solely for my own account and
not as a nominee for any other party, or for investment, and that I will not
offer, sell or otherwise dispose of any such Common Stock except under
circumstances that will not result in a violation of the Securities Act of 1933,
as amended, or any state securities laws.

      Dated:  __________, 20__.

                                                   -----------------------------
                                                            (Signature)

                                                   -----------------------------
                                                         (Please Print Name)

                                                   -----------------------------
                                                   -----------------------------
                                                              (Address)

<PAGE>

             TAX CONSEQUENCES RELATED TO YOUR INCENTIVE STOCK OPTION

     THIS MEMORANDUM IS PROVIDED TO YOU MERELY AS A SERVICE AND IS NOT MEANT TO
ADVISE YOU AS TO YOUR PERSONAL TAX SITUATION. YOU SHOULD CONTACT YOUR PERSONAL
LEGAL OR TAX ADVISERS WITH RESPECT TO THE STATE AND FEDERAL INCOME TAX TREATMENT
OF PURCHASING AND DISPOSING OF YOUR STOCK.

INTERNAL REVENUE CODE SECTIONS

     Section 421 of the Internal Revenue Code (the "Code") provides rules for
the tax treatment of "incentive stock options"("ISOs"), as that term is defined
by Section 422 of the Code. Section 83 of the Code provides special rules for
the tax treatment of property which is received in connection with the
performance of services and which is subject to vesting.

ISO TAX TREATMENT - USUALLY NO TAX UNTIL YOU SELL YOUR STOCK

     Your option is intended to be an ISO. If you hold the stock you are
purchasing under your option for more than two (2) years from the date of grant
AND more than one (1) year from the date of exercise, upon any subsequent sale
or other disposition of such shares you will have capital gains or loss. Capital
gains are taxed at reduced rates if you held the shares for more than 1 year
(20% federal rate).

     If you sell or dispose of the stock within two (2) years from the date of
grant OR within 1 year from the date of exercise (a "disqualifying
disposition"), the special capital gains tax treatment of Code Section 421 will
not apply. GENERALLY, in that event, you will recognize taxable ordinary income
in an amount equal to the lesser of: (i) the excess of the fair market value of
the shares at the time of exercise over the exercise price of the option, or
(ii) your actual gain on the purchase and sale. The gain (if any) in excess of
the amount of ordinary income recognized, or the loss (if any) will be a capital
gain or loss. An exception to this general rule applies if your stock is subject
to the company's repurchase right (see "Early Exercise" below).

ALTERNATIVE MINIMUM TAX - POTENTIAL TAX AT EXERCISE

     The alternative minimum tax is a separately computed tax that is imposed
only if and to the extent it exceeds your regular tax for the taxable year.
Basically, the alternative minimum tax is an amount equal to twenty-six percent
(26%) of your "alternative minimum taxable income" for the year of up to
$175,000 and twenty-eight percent (28%) of any excess ($87,500 in the case of a
married individual filing a separate return). "Alternative minimum taxable
income" generally is determined by (i) reducing adjusted gross income by an
exemption amount ($45,000 for joint declarations and $33,750 for single
taxpayers, less $0.25 for each dollar of alternative minimum taxable income in
excess of $150,000 or $112,500, respectively) and certain specifically defined
deductions, and (ii) by adding to the amount so calculated certain tax
preference items and other adjustments.

     As a general rule, WHEN YOU EXERCISE AN ISO, the excess of the (1) fair
market value of the stock acquired on the date of exercise over (2) the exercise
price (the "spread") is added to your alternative minimum taxable income.

<PAGE>

                        HYDROGEN BURNER TECHNOLOGY, INC.

                            2000 STOCK INCENTIVE PLAN

                             STOCK OPTION AGREEMENT

                    (WITH EXERCISE BEFORE VESTING PERMITTED)

     Hydrogen Burner Technology, Inc., a California corporation (the "Company"),
hereby grants an option to purchase its Common Stock to the optionee named
below. The terms and conditions of the option are set forth in this Stock Option
Agreement and in the Company's 2000 Stock Incentive Plan (the "Plan").

     3.   GRANT INFORMATION

Date of Grant:                                  __________, 20__

Name of Optionee:

Optionee's Social Security Number:              ________-______-________

Type of Option:                                 __ Incentive ("ISO")
                                                __ Nonstatutory ("NSO")

Number of Shares of Common Stock:               ___________

Exercise Price per Share:                       $__________

Vesting Start Date:                             __________, 20__

Vesting Schedule:                               Subject to attached Terms and
                                                Conditions, the option shall
                                                vest as to 1/3 of the shares as
                                                of each January 1 following the
                                                Date of Grant if you are then
                                                in Service.

         BY SIGNING BELOW, YOU AGREE TO ALL OF THE TERMS AND CONDITIONS
         DESCRIBED IN THIS STOCK OPTION AGREEMENT, INCLUDING THE ATTACHED TERMS
         AND CONDITIONS, NOTICE OF EXERCISE AND PLAN.

Optionee:
         -----------------------------------------------------------------------
                                   (Signature)

Company:
         -----------------------------------------------------------------------
                                   (Signature)
Title:
         -----------------------------------------------------------------------

<PAGE>

     1.   TERMS AND CONDITIONS

     (a)  VESTING. Your option vests during your Service on the dates specified
in the first page of this Stock Option Agreement. Vesting will cease if your
Service terminates for any reason.

     (b)  SERVICE; LEAVES OF ABSENCE. Your Service shall cease when you cease to
be actively employed by, or a consultant or adviser to, the Company (or any
subsidiary) as determined in the sole discretion of the Board. For purposes of
your option, your Service does not terminate when you go on a BONA FIDE leave of
absence, that was approved by the Company in writing, if the terms of the leave
provide for continued service crediting, or when continued service crediting is
required by applicable law. However, for purposes of determining whether your
option is entitled to ISO status, your Service will be treated as terminating
ninety (90) days after you went on leave, unless your right to return to active
work is guaranteed by law or by a contract. Your Service terminates in any event
when the approved leave ends, unless you immediately return to active work. The
Company determines which leaves count toward Service, and when your Service
terminates for all purposes under the Plan.

     (c)  TERM OF OPTION. Your option expires on the day before the 7th
anniversary of the Date of Grant, and will expire earlier if your Service
terminates as follows:

     (1)  REGULAR TERMINATION. If your Service terminates for any reason except
          Cause, death, Disability, retirement or Change in Control, then your
          Option will expire at the close of business at Company headquarters
          three (3) months after your termination date, provided that such three
          month period shall be extended by nine months in the event it is the
          Company that terminates your Service.

     (2)  CAUSE. If your Service terminates for cause (as defined by the Company
          and consistent with applicable law), your Option will expire
          immediately.

     (3)  DEATH. If you die while in Service, then your Option will expire at
          the close of business at Company headquarters on the date three years
          after the date of death. During that three year period, your estate or
          heirs may exercise the vested portion of your Option.

     (4)  DISABILITY. If your Service terminates because of your Disability,
          then your Option will expire at the close of business at Company
          headquarters on the date three years after your termination date.
          Disability shall have the meaning set forth in section 22(e)(3) of the
          Code.

     (5)  RETIREMENT. If your Service terminates after the attainment of age 55
          and completion of five years of Service with the Company and such
          termination is not for cause, and you do not thereafter become
          employed in the energy industry, then your Option will expire at the
          close of business at Company headquarters on the date three years
          after your termination date.

     (6)  CHANGE IN CONTROL. If your Service terminates within three months
          before or after a Change in Control and primarily as a result of such
          Change in Control (as determined

<PAGE>

          by the Company), then your Option will expire at the close of business
          at Company headquarters on the date three years after your termination
          date.

     (d)  EXERCISE OF OPTION.

          (1)  LEGAL RESTRICTIONS. The Company will not permit you to exercise
     your option if the issuance of Common Stock at that time would violate any
     law or regulation. You represent and agree that the Common Stock to be
     acquired upon exercising your option will be acquired for investment, and
     not with a view to the sale or distribution thereof. If the sale of Common
     Stock under the Plan is not registered under the Securities Act but an
     exemption is available which requires an investment representation or other
     representation, you shall represent and agree at the time of exercise to
     make such representations as are deemed necessary or appropriate by the
     Company and its counsel.

          (2)  METHOD OF EXERCISE. To exercise your option, you must complete
     and file the Company's "Notice of Exercise" form at the address given on
     the form, together with full payment. The Notice of Exercise will be
     effective when the Company receives it. If someone else wants to exercise
     your option after your death, that person must prove to the Company's
     satisfaction that he or she is entitled to do so.

          (3)  FORM OF PAYMENT. When you submit a Notice of Exercise, you must
     include payment of the aggregate Exercise Price for the Common Stock you
     are purchasing. Payment may be made in one (or a combination) of the
     following forms.

     -    You're personal check, a cashier's check or a money order.

     -    Your delivery of shares of Common Stock that have been owned by you
          for at least six months (or such other period of time as may be
          necessary to avoid adverse accounting consequences to the Company).

     -    To the extent that the Common Stock is publicly traded, your delivery,
          on a form prescribed by the Company, of an irrevocable direction to a
          securities broker approved by the Company to sell all or part of the
          Common Stock and to deliver all or part of the sales proceeds to the
          Company.

     -    To the extent that the Common Stock is publicly traded, your delivery,
          on a form prescribed by the Company, of an irrevocable direction to
          pledge all or part of the Common Stock to a securities broker or
          lender approved by the Company, as security for a loan, and to deliver
          all or part of the loan proceeds to the Company.

          (4)  WITHHOLDING TAXES. You will not be allowed to exercise your
     option unless you make acceptable arrangements to pay any withholding or
     other taxes that may be due as a result of the option exercise or the sale
     of Common Stock acquired upon exercise of your option.

     (e)  EXERCISE OF OPTION BEFORE VESTING ("EARLY EXERCISE"). You may exercise
your option before it is fully vested.

<PAGE>

     Common Stock received upon the exercise of the unvested portion of your
option shall be subject to the Company's right of repurchase, which right of
repurchase shall lapse at the rate and at such times the option would have
vested had there been no exercise. The Company's right of repurchase shall
terminate ninety (90) days after the later of (a) your Service termination or
(b) your date of exercise.

     The certificates for the Common Stock subject to the Company's right of
repurchase shall be deposited in escrow with the Secretary of the Company to be
held as described herein. Each deposited certificate shall be accompanied by a
duly executed Assignment Separate from Certificate in the form attached. The
deposited certificates, shall remain in escrow until such time or times as the
certificates are to be released or otherwise surrendered for cancellation as
discussed below.

     All regular cash dividends on the Common Stock (or other securities at the
time held in escrow) shall be paid directly to you and shall not be held in
escrow. However, in the event of any stock dividend, stock split,
recapitalization or other change affecting the Company's outstanding Common
Stock as a class effected without receipt of consideration, any new, substituted
or additional securities or other property which is by reason of such
transaction distributed shall be immediately delivered to the Secretary of the
Company to be held in escrow hereunder, but only to the extent the Common Stock
is at the time subject to the escrow requirements hereof.

     The Common Stock held in escrow hereunder shall be subject to the following
terms and conditions relating to their release from escrow or their surrender to
the Company for repurchase and cancellation:

     -    As your interest in the Common Stock vests, the certificates for such
          vested Common Stock shall be released from escrow and delivered to
          you, at your request, in accordance with the following schedule:

          -    The initial release of any vested Common Stock (or other vested
               assets and securities) from escrow shall be effected within
               thirty (30) days following the expiration of the initial twelve
               (12) month period measured from the Vesting Start Date.

          -    Subsequent releases of any vested Common Stock from escrow shall
               be effected at annual intervals thereafter, with the first such
               annual release to occur twenty-four (24) months after the Vesting
               Start Date.

          -    Upon termination of your Service, any escrowed Common Stock in
               which you are at the time vested shall be promptly released from
               escrow.

     -    Should the Company exercise its right of repurchase with respect to
          any unvested Common Stock held at the time in escrow hereunder, then
          the escrowed certificates for such unvested Common Stock shall,
          concurrently with the payment of the purchase price for such Common
          Stock, be surrendered to the
<PAGE>

          Company for cancellation, and you shall have no further rights with
          respect to such Common Stock.

     -    Should the Company elect not to exercise its right of repurchase with
          respect to any Common Stock held at the time in escrow hereunder, then
          the escrowed certificates for such Common Stock shall be surrendered
          to you.

     (f)  CONFIDENTIALITY AND NON-COMPETITION: CONDUCT NOT IN THE INTEREST OF
THE CORPORATION

     By accepting this Option Agreement and as a condition to the exercise of
the Option, you agree as follows:

     (1)  Confidentiality - During the period of your Service (or your engaging
     in any other activity with or for the Company) and for a two year period
     thereafter, you shall treat and safeguard as confidential and secret all
     Confidential Information received by you at any time. Without the prior
     written consent of the Company, except as required by law, you will not
     disclose or reveal any Confidential Information to any third party
     whatsoever or use the same in any manner except in connection with the
     businesses of the Company and its subsidiaries. In the event that you are
     requested or required (by oral questions, interrogatories, requests for
     information or documents, subpoena, civil investigative demand or other
     process) to disclose (i) any Confidential Information or (ii) any
     information relating to your Option, judgment or recommendations concerning
     the Company or its subsidiaries as developed from the Confidential
     Information, you will provide the Company with prompt written notice of any
     such request or requirement so that the Company may seek an appropriate
     protective order or waive compliance with the provisions contained herein.
     If, failing the entry of a protective order or the receipt of a waiver
     hereunder, you are, in the reasonable opinion of your counsel, compelled to
     disclose Confidential Information, you shall disclose only that portion of
     the Confidential Information which your counsel advises that you are
     compelled to disclose and will exercise best efforts to obtain assurances
     that confidential treatment will be accorded such Confidential Information.

     (2)  Non-Competition - During the period of employment with the Company or
     its subsidiaries and, for a two-year period thereafter (the "Non-Compete
     Period"), you shall not, without prior written consent of the Committee,
     do, directly or indirectly, any of the following:

          (A)  own, manage, control or participate in the ownership, management,
               or control of, or be employed or engaged by or otherwise
               affiliated or associated with, any other corporation,
               partnership, proprietorship, firm, association or other business
               entity, or otherwise engage in any business which competes with
               the business of the Company or any of its subsidiaries (as such
               business is conducted during the term of your Service with the
               Company or its subsidiaries) in the geographical regions in which
               such business is conducted; provided. however. that the ownership
               of a
<PAGE>

               maximum of one percent of the outstanding stock of any publicly
               traded corporation shall not violate this covenant; or

          (B)  employ, solicit for employment or assist in employing or
               soliciting for employment any present, former or future employee,
               officer or agent of the Company or any of its subsidiaries.

     In the event any court of competent jurisdiction should determine that the
     foregoing covenant of noncompetition is not enforceable because of the
     extent of the geographical area or the duration thereof, then the Company
     and you hereby agree to petition such court to modify the foregoing
     covenant to the extent, but only to the extent, necessary to create a
     covenant which is enforceable in the opinion of such court, with the
     intention of the parties that the Company shall be afforded the maximum
     enforceable covenant of non-competition which may be available under the
     circumstances and applicable law.

     (3)  You acknowledge that remedies at law for any breach by you of this
     subsection (f) may be inadequate and that the damages resulting from any
     such breach are not readily susceptible to being measured in monetary
     terms. Accordingly, you acknowledge that upon your violation of any
     provisions of this subsection (f), the Company will be entitled to
     immediate injunctive relief and may obtain an order restraining any
     threatened or future breach. You further agree, subject to the proviso at
     the end of this sentence, that if you violate any provision of this
     subsection (f), you shall immediately forfeit any rights and benefits under
     this Option Agreement and shall return to the Company any unexercised
     Options hereunder and shall return any shares of stock held by you received
     upon exercise of any Option granted hereunder, together with any proceeds
     from sales of any shares of Stock received upon exercise of such Options,
     provided, however, that upon violation of paragraph (2) of this subsection
     (f), the forfeiture and return provisions contained in the sentence shall
     apply only to Options which have been exercised, and in any such case the
     proceeds of sales therefrom, during the six-month period immediately prior
     to your violation of subsection (f)(2) of this Section 2. Nothing in this
     subsection (f) will be deemed to limit, in any way, the remedies at law or
     in equity of the Company, for the breach by you of any of the provisions of
     this subsection (f).

     (4)  You agree to provide written notice of the provisions of this
     subsection (f) to any future employer that proposes to employ you, and the
     Company expressly reserves the right to provide such notice to the such
     employer(s).

     (5)  If any provision or part of any provision of this subsection (f) is
     held for any reason to be unenforceable, (i) the remainder of this
     subsection (f) shall nevertheless remain in full force and effect and (ii)
     such provision or part shall be deemed to be amended in such manner as to
     render such provision enforceable.

     (6)  For purposes of this Agreement, "Confidential Information" means any
     information not generally known to he public, including, without limiting
     the generality of the foregoing, any customer lists, supplier lists, trade
     secrets, invention, formulas, methods or processes, whether or not patented
     or patentable, channels of distribution, business

<PAGE>

     plans, pricing policies and records, financial information of any sort and
     inventory records of the Company or any affiliate (and such other
     information normally understood to be confidential or otherwise designated
     as such in writing by the Company or its subsidiaries). It is not
     necessary, however, that any information be formally designated as
     "confidential" if it falls within any of the foregoing categories and is
     not generally known to the public.

     (g)  RESALE RESTRICTIONS/MARKET STAND-OFF. In connection with any
underwritten public offering by the Company of its equity securities pursuant to
an effective registration statement filed under the Securities Act of 1933, as
amended, including the Company's initial public offering, you shall not sell,
make any short sale of, loan, hypothecate, pledge, grant any option for the
purchase of, or otherwise dispose or transfer for value or agree to engage in
any of the foregoing transactions with respect to any Common Stock without the
prior written consent of the Company or its underwriters, for such period of
time after the effective date of such registration statement as may be requested
by the Company or such underwriters, not to exceed one hundred eighty (180)
days. To enforce the provisions of this paragraph, the Company may impose
stop-transfer instructions with respect to the Common Stock until the end of the
applicable stand-off period. You may not sell any Common Stock at a time when
applicable laws, regulations or Company or underwriter trading policies prohibit
a sale. In particular, you shall confine trading in Common Stock to those
windows established by the Committee for purposes of Section 16 of the
Securities Exchange Act, in the event the Common Stock becomes publicly
tradable.

     (h)  RIGHT OF FIRST REFUSAL. If you propose to sell, pledge or otherwise
transfer to a third party any Common Stock acquired under this Stock Option
Agreement, or any interest in such Common Stock, the Company shall have the
"Right of First Refusal" with respect to all (and not less than all) of such
Common Stock. If you desire to transfer Common Stock acquired under this Stock
Option Agreement, you must give a written notice ("Transfer Notice") to the
Company describing fully the proposed transfer, including the number of shares
proposed to be transferred, the proposed transfer price and the name and address
of the proposed transferee. The Transfer Notice shall be signed both by you and
by the proposed new transferee and must constitute a binding commitment of both
parties to the transfer of the Common Stock. The Company shall have the right to
purchase all, and not less than all, of the Common Stock on the terms of the
proposal described in the Transfer Notice (subject, however, to any change in
such terms permitted in the next paragraph) by delivery of a notice of exercise
of the Right of First Refusal within thirty (30) days after the date when the
Transfer Notice was received by the Company.

     If the Company fails to exercise its Right of First Refusal before or
within thirty (30) days after the date when it received the Transfer Notice, you
may, not later than ninety (90) days following receipt of the Transfer Notice by
the Company, conclude a transfer of the Common Stock subject to the Transfer
Notice on the terms and conditions described in the Transfer Notice. Any
proposed transfer on terms and conditions different from those described in the
Transfer Notice, as well as any subsequent proposed transfer by you, shall again
be subject to the Right of First Refusal and shall require compliance with the
procedure described in the paragraph above. If the Company exercises its Right
of First Refusal, the parties shall consummate the sale of the Common Stock on
the terms set forth in the Transfer Notice within sixty (60) days

<PAGE>

after the date when the Company received the Transfer Notice (or within such
longer period as may have been specified in the Transfer Notice); provided,
however, that if the Transfer Notice provided that payment for the Common Stock
was to be made in a form other than lawful money paid at the time of transfer,
the Company shall have the option of paying for the Common Stock with lawful
money equal to the present value of the consideration described in the Transfer
Notice.

     The Company's Right of First Refusal shall inure to the benefit of its
successors and assigns, shall be freely assignable in whole or in part and shall
be binding upon any transferee of the Common Stock. The Company's right of First
Refusal shall terminate if the Company's Common Stock is listed on an
established stock exchange or is quoted regularly on the Nasdaq Stock Market.

     (i)  TRANSFER OF OPTION. Prior to your death, only you may exercise your
option. You cannot transfer or assign your option. For instance, you may not
sell your option or use it as security for a loan. If you attempt to do any of
these things, your option will immediately become invalid. You may, however,
dispose of your option in your will. Regardless of any marital property
settlement agreement, the Company is not obligated to honor a notice of exercise
from your spouse or former spouse, nor is the Company obligated to recognize
such individual's interest in your option in any other way.

     (j)  NO RETENTION RIGHTS. Your option does not give you the right to be
retained by the Company (or any subsidiaries) in any capacity. The Company
reserves the right to terminate your Service at any time and for any reason.

     (k)  SHAREHOLDER RIGHTS. You, or your estate or heirs, have no rights as a
shareholder of the Company until a certificate for your fully vested Common
Stock has been issued. No adjustments are made for dividends or other rights if
the applicable record date occurs before your stock certificate is issued,
except as described in the Plan.

     (l)  ADJUSTMENTS TO COMMON STOCK. In the event of a stock split, a stock
dividend or a similar change in the Company's Common Stock, the number of shares
covered by your option and the exercise price per share may be adjusted pursuant
to the Plan. Your option shall be subject to the terms of the agreement of
merger or consolidation in the event the Company is subject to such corporate
activity, as described in the Plan.

     (m)  LEGENDS. All certificates representing the Common Stock issued upon
exercise of your option shall, where applicable, have endorsed thereon any
legends required by applicable law, including the following legends:

          "THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD,
          TRANSFERRED, ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN
          COMPLIANCE WITH THE TERMS OF A WRITTEN AGREEMENT BETWEEN THE COMPANY
          AND THE INITIAL HOLDER HEREOF. SUCH AGREEMENT PROVIDES FOR CERTAIN
          TRANSFER RESTRICTIONS, INCLUDING RIGHTS OF FIRST REFUSAL UPON AN
          ATTEMPTED TRANSFER OF THE SECURITIES AND CERTAIN REPUR-

<PAGE>

          CHASE RIGHTS IN FAVOR OF THE COMPANY UPON TERMINATION OF SERVICE WITH
          THE COMPANY. THE SECRETARY OF THE COMPANY WILL UPON WRITTEN REQUEST
          FURNISH A COPY OF SUCH AGREEMENT TO THE HOLDER HEREOF WITHOUT CHARGE."

         "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
         REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
         OR THE SECURITIES LAWS OF ANY STATE, AND MAY BE OFFERED AND SOLD ONLY
         IF REGISTERED AND QUALIFIED PURSUANT TO THE RELEVANT PROVISIONS OF
         FEDERAL AND STATE SECURITIES LAWS OR IF THE COMPANY IS PROVIDED AN
         OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION AND
         QUALIFICATION UNDER FEDERAL AND STATE SECURITIES LAWS ARE NOT
         REQUIRED."

     (n)  APPLICABLE LAW. This Agreement will be interpreted and enforced under
the laws of the State of California.

     (o)  INCORPORATION OF PLAN BY REFERENCE. The text of the Plan is
incorporated in this Agreement by reference. Certain capitalized terms used in
this Agreement are defined in the Plan.

     This Agreement and the Plan constitute the entire understanding between you
and the Company regarding your option. Any prior agreements, commitments or
negotiations concerning your option are superseded.

<PAGE>

                               NOTICE OF EXERCISE
                               (exercise by check)

Hydrogen Burner Technology, Inc.
3925 Vernon Street
Long Beach, California  90815-1727
Attn:  Larry Frost

         Re:  Exercise of Stock Option

Dear Sir or Madam:

     Pursuant to the Stock Option Agreement dated __________, 20__ (the "Stock
Option Agreement") and the Company's 2000 Stock Incentive Plan (the "Plan"), I
hereby elect to purchase _____________ shares of the Common Stock of the Company
at aggregate exercise price of $__________. I enclose payment and other
documents (check all that are applicable):

         /_/      My check in the amount of $___________;

         /_/      If I am exercising an unvested option, I also enclose an
                  executed Assignment Separate from Certificate. I am aware of
                  the tax consequences of exercising before my options is
                  vested, including the requirement that I file any election
                  under Section 83(b) of the Internal Revenue Code within 30
                  days of my exercise.

         The Common Stock is to be issued and registered in the name(s) of:

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

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

     I understand that there may be tax consequences as a result of the purchase
or disposition of the Common Stock, and I have consulted with any tax
consultants I wished to consult and I am not relying on the Company for any tax
advice. I understand that my exercise is governed by my Stock Option Agreement
and the Plan and agree to abide by and be bound by their terms and conditions. I
represent that the Common Stock is being acquired solely for my own account and
not as a nominee for any other party, or for investment, and that I will not
offer, sell or otherwise dispose of any such Common Stock except under
circumstances that will not result in a violation of the Securities Act of 1933,
as amended, or any state securities laws.

         Dated:  __________, 2000.

                                                    ----------------------------
                                                           (Signature)

                                                    ----------------------------
                                                         (Please Print Name)

                                                    ----------------------------
                                                    ----------------------------
                                                               (Address)

                                       1
<PAGE>

                      ASSIGNMENT SEPARATE FROM CERTIFICATE

     FOR VALUE RECEIVED and pursuant to that certain Stock Option Agreement
dated as of __________, 20__, the undersigned hereby sells, assigns and
transfers unto ___________________________ (__________) shares of the Common
Stock of Hydrogen Burner Technology Inc., a California corporation, standing in
the undersigned's name on the books of said corporation represented by
certificate No. _________ herewith, and does hereby irrevocably constitute and
appoint ________________________________________ attorney to transfer the said
stock on the books of the said corporation with full power of substitution in
the premises.

         Dated:  __________, 20__.

                                                    ----------------------------
                                                              Signature

                                                    ----------------------------
                                                              Print Name

<PAGE>

             TAX CONSEQUENCES RELATED TO YOUR INCENTIVE STOCK OPTION

     THIS MEMORANDUM IS PROVIDED TO YOU MERELY AS A SERVICE AND IS NOT MEANT TO
ADVISE YOU AS TO YOUR PERSONAL TAX SITUATION OR WHETHER OR NOT TO MAKE AN 83(B)
ELECTION. YOU SHOULD CONTACT YOUR PERSONAL LEGAL OR TAX ADVISERS WITH RESPECT TO
THE STATE AND FEDERAL INCOME TAX TREATMENT OF PURCHASING AND DISPOSING OF YOUR
STOCK.

INTERNAL REVENUE CODE SECTIONS

     Section 421 of the Internal Revenue Code (the "Code") provides rules for
the tax treatment of "incentive stock options"("ISOs"), as that term is defined
by Section 422 of the Code. Section 83 of the Code provides special rules for
the tax treatment of property which is received in connection with the
performance of services and which is subject to vesting.

ISO TAX TREATMENT - USUALLY NO TAX UNTIL YOU SELL YOUR STOCK

     Your option is intended to be an ISO. If you hold the stock you are
purchasing under your option for more than two (2) years from the date of grant
AND more than one (1) year from the date of exercise, upon any subsequent sale
or other disposition of such shares you will have capital gains or loss. Capital
gains are taxed at reduced rates if you held the shares for more than 1 year
(20% federal rate).

     If you sell or dispose of the stock within two (2) years from the date of
grant OR within 1 year from the date of exercise (a "disqualifying
disposition"), the special capital gains tax treatment of Code Section 421 will
not apply. GENERALLY, in that event, you will recognize taxable ordinary income
in an amount equal to the lesser of: (i) the excess of the fair market value of
the shares at the time of exercise over the exercise price of the option, or
(ii) your actual gain on the purchase and sale. The gain (if any) in excess of
the amount of ordinary income recognized, or the loss (if any) will be a capital
gain or loss. An exception to this general rule applies if your stock is subject
to the company's repurchase right (see "Early Exercise" below).

ALTERNATIVE MINIMUM TAX - POTENTIAL TAX AT EXERCISE

     The alternative minimum tax is a separately computed tax that is imposed
only if and to the extent it exceeds your regular tax for the taxable year.
Basically, the alternative minimum tax is an amount equal to twenty-six percent
(26%) of your "alternative minimum taxable income" for the year of up to
$175,000 and twenty-eight percent (28%) of any excess ($87,500 in the case of a
married individual filing a separate return). "Alternative minimum taxable
income" generally is determined by (i) reducing adjusted gross income by an
exemption amount ($45,000 for joint declarations and $33,750 for single
taxpayers, less $0.25 for each dollar of alternative minimum taxable income in
excess of $150,000 or $112,500, respectively) and certain specifically defined
deductions, and (ii) by adding to the amount so calculated certain tax
preference items and other adjustments.

     As a general rule, WHEN YOU EXERCISE AN ISO, the excess of the (1) fair
market value of the stock acquired on the date of exercise over (2) the exercise
price (the "spread") is added to your alternative minimum taxable income.

                                      -1-
<PAGE>

EARLY EXERCISE - EXERCISE BEFORE VESTING

     If your option agreement permits you to "early exercise," you can exercise
an UNVESTED option and, instead, receive unvested stock. Unvested stock is stock
that the Company can buy back from you at the price you paid. The unvested stock
will become vested - meaning that the Company's buy-back right lapses - as the
option would have vested.

     The main reasons for exercising before you are vested are: (i) to minimize
the ordinary income portion (and maximize the capital gains portion) of your
option gain and (ii) to minimize your alternative minimum tax liability. To gain
these tax advantages, you must file an 83(b) election within thirty (30) days
after your exercise.

ALTERNATIVE MINIMUM TAX CONSEQUENCES OF EARLY EXERCISE

     If you early exercise and do not file an 83(b) election, the addition to
your alternative minimum taxable income is not calculated on the date of
exercise. Instead, it is calculated on the date your stock vests. This means
that the excess of (i) the fair market value of the stock on the DATE OF VESTING
over (ii) the option exercise price, will be included in alternative minimum
taxable income for the year in which the date of vesting occurs.

     However, if you make a valid 83(b) election within THIRTY (30) DAYS FROM
THE DATE OF EXERCISE, you can use the fair market value on the date of exercise
(determined without regard to the repurchase option) to calculate any potential
alternative minimum tax in the year of exercise. Thus, if you early exercise
while the fair market value of the stock is low and make an 83(b) election, you
can minimize your potential alternative minimum tax liability.

ORDINARY INCOME TAX CONSEQUENCES OF EARLY EXERCISE

     If you early exercise and do not file an 83(b) election, upon a
disqualifying disposition you will have ordinary income equal to the excess of
(i) the fair market value of the shares ON THE DATE(S) YOUR RIGHTS IN THE SHARES
"VESTED" over (ii) the exercise price. The amount of ordinary income recognized
will normally be limited to your gain. Any gain that is not taxed as ordinary
income will be capital gain.

     Because Section 83 is used to measure ordinary income following a
disqualifying disposition, it may be possible to make an election under Section
83(b) of the Code within 30 days of the exercise of your option, so that the
ordinary income you recognize upon a disqualifying disposition will be no
greater than the spread between (i) the option exercise price, and (ii) the
value of the stock ON THE DATE OF EXERCISE (rather than the date the option
vests). Thus, if you exercise early and file an 83(b) election, any increase in
the fair market value of the stock after the date of exercise would be capital
gain.

     However, because there is no express IRS authority advising that an 83(b)
election can limit the recognition of ordinary income upon a disqualifying
disposition, you should consult with your tax advisor before relying on such an
election.

     YOU HAVE ONLY THIRTY (30) DAYS FROM THE DATE OF EXERCISE TO FILE THE
ELECTION.

                                      -2-
<PAGE>

INSTRUCTIONS FOR FILING ELECTIONS

     Attached is a form of election under Section 83(b). If you wish to make the
election described above, you should complete, sign and date the election and
then proceed as follows:

          (A)  Make four (4) copies of the completed election.

          (B)  Mail the signed original election to the IRS Service Center with
               whom you file your federal income tax return. This should be
               mailed via certified mail, return receipt requested. This
               election SHOULD BE SENT IMMEDIATELY, as you have only thirty (30)
               days from the date of purchase to make the election; no waivers,
               late filings or extensions are permitted. See
               http://www.irs.ustreas.gov/prod/where_file/index.html for a
               listing of IRS Service Centers.

          (C)  Deliver one (1) copy of the completed election to the Company for
               its files.

          (D)  Attach one (1) copy of the election to your IRS Personal Income
               Tax Return (Form 1040) when you file it next year.

          (E)  Attach one (1) copy of the election to your California income tax
               return (Form 540) when you file it next year (assuming you file a
               California income tax return).

          (F)  Retain one (1) copy of the election for your personal permanent
               records.

     A separate 83(b) election is not required to be filed in California if you
file a federal Section 83(b) election.

         IT IS YOUR RESPONSIBILITY, NOT THE COMPANY'S, TO MAKE SURE THAT THE
         ELECTION IS PROPERLY MAILED TO THE TAXING AUTHORITIES AND ATTACHED TO
         YOUR TAX RETURN FILED NEXT YEAR.

     Remember, that, if you desire to make the election, a separate election
must be made with regard to the exercise of each portion of your option if any
of the stock acquired is subject to a risk of forfeiture.

                                      -3-

<PAGE>

Internal Revenue Service Center

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

          Re:  Protective Election Under Section 83(b) of the Internal Revenue
               Code of 1986

Ladies and Gentlemen:

     I hereby made a protective election under section 83(b) of the Internal
Revenue Code of 1986 to include in gross income on the date of transfer any
excess of fair market value over purchase price with respect to the transfer of
the property described below:

1.   Name:

2.   Address:

3.   Social Security Number:

4.   Tax Year of Election: Calendar Year of .

5.   Description of Property: _________ shares of Common Stock of Hydrogen
     Burner Technology, Inc., (the "Company").

6.   Date of Property Transfer: _________.

7.   Nature of Property Restrictions: Property is subject to the Company's right
     to repurchase the stock at the undersigned's original purchase price if the
     undersigned ceases to be associated with the Company, which right will
     generally lapse over a designated vesting period.

8.   Fair Market Value at the Time of Transfer: $_________ per share for an
     aggregate of $_________. The Fair Market Value at the time of transfer was
     determined without regard to any lapse restrictions as defined in section
     1.83-3(i) of the Income Tax Regulations.

9.   Amount Paid for Property: $_________ per share for an aggregate of
     $_________.

10.  A copy of this election has been furnished to the Company, the person for
     whom the services are performed.

                                                Sincerely,_____________________

                                      -4-

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