Document:

EXHIBIT 4.6

                                     BYLAWS

                                       OF

                                   CLARK, INC.

                             a Delaware Corporation

                                 (the "Company")

                          (Adopted as of June 10, 1998)

                             Company's Name Changes:

                   Clark/Bardes Organization, Inc. (06/09/98)

                     Clark/Bardes Holdings, Inc. (06/12/98)

                          Clark/Bardes, Inc. (05/31/01)

                             Clark, Inc. (06/09/03)

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                                     BYLAWS
                                       OF
                                   CLARK, INC.

                                   ARTICLE I.
                                     OFFICES

         Section 1.1 Registered Office. The registered office of the Company
within the State of Delaware shall be located at either (i) the principal place
of business of the Company in the State of Delaware or (ii) the office of the
corporation or individual acting as the Company's registered agent in Delaware.

         Section 1.2 Additional Offices. The Company may, in addition to its
registered office in the State of Delaware, have such other offices and places
of business, both within and without the State of Delaware, as the Board of
Directors of the Company (the "Board") may from time to time determine or as the
business and affairs of the Company may require.

                                   ARTICLE II.
                             STOCKHOLDERS' MEETINGS

         Section 2.1 Annual Meetings. Annual meetings of stockholders shall be
held at a place and time on any weekday which is not a holiday as shall be
designated by the Board and stated in the notice of the meeting, at which the
stockholders shall elect the directors of the Company and transact such other
business as may properly be brought before the meeting.

         Section 2.2 Special Meetings. Special meetings of the stockholders, for
any purpose or purposes, unless otherwise prescribed by law or by the
certificate of incorporation, (i) may be called by the chairman of the board or
the president and (ii) shall be called by the president or secretary at the
written request of a majority of the Board or at the request in writing by
stockholders owning capital stock of the Company representing 66-2/3% of the
votes of all capital stock of the Company entitled to vote thereat. Such request
shall state the purpose or purposes of the proposed meeting. At a special
meeting of stockholders, only such business shall be conducted as shall be
specified in the notice of meeting.

         Section 2.3 Notices. Written notice of each stockholders' meeting
stating the place, date and hour of the meeting shall be given to each
stockholder entitled to vote thereat by or at the direction of the officer
calling such meeting not less than ten (10) nor more than sixty (60) days before
the date of the meeting. If said notice is for a stockholders' meeting other
than an annual meeting, it shall in addition state the purpose or purposes for
which said meeting is called, and the business transacted at such meeting shall
be limited to the matters so stated in said notice and any matters reasonably
related thereto.

         Section 2.4 Quorum. The presence at a stockholders' meeting of the
holders, present in person or represented by proxy, of capital stock of the
Company representing a majority of the votes of all capital stock of the Company
entitled to vote thereat shall constitute a quorum at such meeting for the
transaction of business except as otherwise provided by law, the certificate of
incorporation or these Bylaws. If a quorum shall not be present or represented
at any meeting of the stockholders, a majority of the stockholders entitled to
vote thereat, present in person or

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represented by proxy, shall have power to adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum shall be
present or represented. At such reconvened meeting at which a quorum shall be
present or represented, any business may be transacted which might have been
transacted at the meeting as originally noticed. If the adjournment is for more
than thirty (30) days, or if after the adjournment a new record date is fixed
for the reconvened meeting, a notice of said meeting shall be given to each
stockholder entitled to vote at said meeting. The stockholders present at a duly
convened meeting may continue to transact business until adjournment,
notwithstanding the withdrawal of enough stockholders to leave less than a
quorum.

         Section 2.5 Voting of Shares.

                  Section 2.5.1. Voting Lists. The officer or agent who has
charge of the stock ledger of the Company shall prepare, at least ten (10) days
before every meeting of stockholders, a complete list of the stockholders
entitled to vote thereat arranged in alphabetical order and showing the address
and the number of shares registered in the name of each stockholder. Such list
shall be open to the examination of any such stockholder, for any purpose
germane to the meeting, during ordinary business hours for a period of at least
ten (10) days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present. The original stock transfer books shall be prima facie evidence as to
who are the stockholders entitled to examine such list or transfer books or to
vote at any meeting of stockholders. Failure to comply with the requirements of
this section shall not affect the validity of any action taken at said meeting.

                  Section 2.5.2. Votes Per Share. Unless otherwise provided in
the certificate of incorporation, each stockholder shall be entitled to one vote
in person or by proxy at every stockholders' meeting for each share of capital
stock held by such stockholder.

                  Section 2.5.3. Proxies. Every stockholder entitled to vote at
a meeting or to express consent or dissent without a meeting or a stockholder's
duly authorized attorney-in-fact may authorize another person or persons to act
for him by proxy. Each proxy shall be in writing, executed by the stockholder
giving the proxy or by his duly authorized attorney. No proxy shall be voted on
or after three (3) years from its date, unless the proxy provides for a longer
period. Unless and until voted, every proxy shall be revocable at the pleasure
of the person who executed it, or his legal representatives or assigns, except
in those cases where an irrevocable proxy permitted by statute has been given.

                  Section 2.5.4. Required Vote. When a quorum is present at any
meeting, the affirmative vote of the majority of shares present in person or
represented by proxy at the meeting and entitled to vote thereat shall be the
act of the stockholders, unless the question is one upon which, by express
provision of law or the certificate of incorporation or these Bylaws, a
different vote is required, in which case such express provision shall be the
act of the stockholders.

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                  Section 2.6 Consents in Lieu of Meeting. Any action required
or permitted to be taken by the stockholders of the corporation must be effected
at a duly called annual or special meeting of stockholders of the corporation,
and the ability of the stockholders to consent in writing to the taking of any
action is hereby specifically denied.

                                  ARTICLE III.
                                    DIRECTORS

         Section 3.1 Purpose. The business of the Company shall be managed by or
under the direction of the Board, which may exercise all such powers of the
Company and do all such lawful acts and things as are not by law, the
certificate of incorporation or these Bylaws directed or required to be
exercised or done by the stockholders. Directors need not be stockholders or
residents of the State of Delaware.

         Section 3.2 Number. The number of directors constituting the Board
shall never be less than one and shall be determined by resolution of the Board.

         Section 3.3 Election. The directors shall be divided into three classes
as provided in the certificate of incorporation. Each director, including a
director elected to fill a vacancy, shall hold office until the expiration of
the term for which elected and until a successor has been elected and qualified.
No decrease in the number of directors shall have the effect of shortening the
term of any incumbent director.

         Section 3.4 Vacancies. Vacancies and newly created directorships
resulting from any increase in the authorized number of directors may be filled
by a majority of the directors then in office, though less than a quorum, or by
a sole remaining director, and the directors so chosen shall hold office until
their successors are duly elected and qualified. If there are no directors in
office, then an election of directors may be held in the manner provided by law.
If, at the time of filling any vacancy or any newly created directorship, the
directors then in office shall constitute less than a majority of the whole
Board (as constituted immediately prior to any such increase), the Court of
Chancery may, upon application of any stockholder or stockholders holding at
least ten percent (10%) of the total number of the shares at the time
outstanding having the right to vote for such directors, summarily order an
election to be held to fill any such vacancies or newly created directorships,
or to replace the directors chosen by the directors then in office. No decrease
in the size of the Board shall serve to shorten the term of an incumbent
director.

         Section 3.5 Removal. Unless otherwise restricted by law or the
certificate of incorporation or these Bylaws, any director or the entire Board
may be removed only for cause, by a 66-2/3% vote of the shares entitled to vote
at an election of directors, if notice of the intention to act upon such matter
shall have been given in the notice calling such meeting.

         Section 3.6 Compensation. Unless otherwise restricted by the
certificate of incorporation or these Bylaws, the Board shall have the authority
to fix the compensation of directors. The directors may be reimbursed their
expenses, if any, of attendance at each meeting of the Board and may be paid
either a fixed sum for attendance at each meeting of the Board or a stated
salary as director. No such payment shall preclude any director from serving the

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Company in any other capacity and receiving compensation therefor. Members of
committees of the Board may be allowed like compensation for attending committee
meetings.

                                   ARTICLE IV.
                                 BOARD MEETINGS

         Section 4.1 Annual Meetings. The Board shall meet as soon as
practicable after the adjournment of each annual stockholders' meeting at the
place of the stockholders' meeting. No notice to the directors shall be
necessary to legally convene this meeting, provided a quorum is present.

         Section 4.2 Regular Meetings. Regularly scheduled, periodic meetings of
the Board may be held without notice at such times and places as shall from time
to time be determined by resolution of the Board and communicated to all
directors.

         Section 4.3 Special Meetings. Special meetings of the Board (i) may be
called by the chairman of the board or president and (ii) shall be called by the
president or secretary on the written request of two directors or the sole
director, as the case may be. Notice of each special meeting of the Board shall
be given, either personally or as hereinafter provided, to each director at
least 24 hours before the meeting if such notice is delivered personally or by
means of telephone, telegram, telex or facsimile transmission and delivery; two
days before the meeting if such notice is delivered by a recognized express
delivery service; and three days before the meeting if such notice is delivered
through the United States mail. Any and all business may be transacted at a
special meeting which may be transacted at a regular meeting of the Board.
Except as may be otherwise expressly provided by law, the certificate of
incorporation or these Bylaws, neither the business to be transacted at, nor the
purpose of, any special meeting need be specified in the notice or waiver of
notice of such meeting.

         Section 4.4 Quorum Required Vote. A majority of the directors shall
constitute a quorum for the transaction of business at any meeting of the Board,
and the act of a majority of the directors present at any meeting at which there
is a quorum shall be the act of the Board, except as may be otherwise
specifically provided by law, the certificate of incorporation or these Bylaws.
If a quorum shall not be present at any meeting, a majority of the directors
present may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum is present.

         Section 4.5 Consent In Lieu of Meeting. Unless otherwise restricted by
the certificate of incorporation or these Bylaws, any action required or
permitted to be taken at any meeting of the Board or any committee thereof may
be taken without a meeting, if all members of the Board or committee, as the
case may be, consent thereto in writing, and the writing or writings are filed
with the minutes of proceedings of the Board or committee.

                                   ARTICLE V.
                             COMMITTEES OF DIRECTORS

Section 5.1 Establishment; Standing Committees. The Board may by resolution
establish, name or dissolve one or more committees, each committee to consist of
one or more of the directors. Each committee shall keep regular minutes of its
meetings and report the same to

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the Board when required. There shall exist the following standing committees,
which committees shall have and may exercise the following powers and authority:

                  Section 5.1.1. Finance Committee. The Finance Committee shall,
from time to time, meet to review the Company's consolidated operating and
financial affairs, both with respect to the Company and all of its subsidiaries,
and to report its findings and recommendations to the Board for final action.
The Finance Committee shall not be empowered to approve any corporate action, of
whatever kind or nature, and the recommendations of the Finance Committee shall
not be binding on the Board, except when, pursuant to the provisions of Section
5.2 hereof, such power and authority have been specifically delegated to such
committee by the Board by resolution. In addition to the foregoing, the specific
duties of the Finance Committee shall be determined by the Board by resolution.

                  Section 5.1.2. Audit Committee. The Audit Committee shall,
from time to time, but no less than two times per year, meet to review and
monitor the financial and cost accounting practices and procedures of the
Company and all of its subsidiaries and to report its findings and
recommendations to the Board for final action. The Audit Committee shall not be
empowered to approve any corporate action, of whatever kind or nature, and the
recommendations of the Audit Committee shall not be binding on the Board, except
when, pursuant to the provisions of Section 5.2 hereof, such power and authority
have been specifically delegated to such committee by the Board by resolution.
In addition to the foregoing, the specific duties of the Audit Committee shall
be determined by the Board by resolution.

                  Section 5.1.3. Compensation Committee. The Compensation
Committee shall, from time to time, meet to review the various compensation
plans, policies and practices of the Company and all of its subsidiaries and to
report its findings and recommendations to the Board for final action. The
Compensation Committee shall not be empowered to approve any corporate action,
of whatever kind or nature, and the recommendations of the Compensation
Committee shall not be binding on the Board, except when, pursuant to the
provisions of Section 5.2 hereof, such power and authority have been
specifically delegated to such committee by the Board by resolution. In addition
to the foregoing, the specific duties of the Compensation Committee shall be
determined by the Board by resolution.

         Section 5.2 Available Powers. Any committee established pursuant to
Section 5.1 hereof, including the Finance Committee, the Audit Committee and the
Compensation Committee, but only to the extent provided in the resolution of the
Board establishing such committee or otherwise delegating specific power and
authority to such committee and as limited by law, the certificate of
incorporation and these Bylaws, shall have and may exercise all the powers and
authority of the Board in the management of the business and affairs of the
Company, and may authorize the seal of the Company to be affixed to all papers
which may require it. Without limiting the foregoing, such committee may, but
only to the extent authorized in the resolution or resolutions providing for the
issuance of shares of stock adopted by the Board as provided in Section 151(a)
of the General Corporation Law of the State of Delaware, fix any of the
preferences or rights of such shares relating to dividends, redemption,
dissolution, any distribution of assets of the Company or the conversion into,
or the exchange of such shares for, shares of any other class or classes or any
other series of the same or any other class or classes of stock of the Company.

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         Section 5.3 Unavailable Powers. No committee of the Board shall have
the power or authority to amend the certificate of incorporation (except in
connection with the issuance of capital stock as provided in the previous
section); adopt an agreement of merger or consolidation; recommend to the
stockholders the sale, lease or exchange of all or substantially all of the
Company's property and assets, a dissolution of the Company or a revocation of
such a dissolution; amend the Bylaws of the Company; or, unless the resolution
establishing such committee or the certificate of incorporation expressly so
provides, declare a dividend, authorize the issuance of stock or adopt a
certificate of ownership and merger.

         Section 5.4 Alternate Members. The Board may designate one or more
directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of such committee. In the absence or
disqualification of a member of a committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not he or
they constitute a quorum, may unanimously appoint another member of the Board to
act at the meeting in the place of any such absent or disqualified member.

         Section 5.5 Procedures. Time, place and notice, if any, of meetings of
a committee shall be determined by such committee. At meetings of a committee, a
majority of the number of members designated by the Board shall constitute a
quorum for the transaction of business. The act of a majority of the members
present at any meeting at which a quorum is present shall be the act of the
committee, except as otherwise specifically provided by law, the certificate of
incorporation or these Bylaws. If a quorum is not present at a meeting of a
committee, the members present may adjourn the meeting from time to time,
without notice other than an announcement at the meeting, until a quorum is
present.

                                   ARTICLE VI.
                                    OFFICERS

         Section 6.1 Elected Officers. The Board shall elect a chairman of the
Board, a president, a treasurer and a Secretary (collectively, the "Required
Officers") having the respective duties enumerated below and may elect such
other officers having the titles and duties set forth below which are not
reserved for the Required Officers or such other titles and duties as the Board
may by resolution from time to time establish:

                  Section 6.1.1. Chairman of the Board. The chairman of the
board, or, in his absence, the president, shall preside when present at all
meetings of the stockholders and the Board. The chairman of the board shall
advise and counsel the president and other officers and shall exercise such
powers and perform such duties as shall be assigned to or required of him from
time to time by the Board or these Bylaws. The chairman of the board may execute
bonds, mortgages and other contracts requiring a seal under the seal of the
Company, except where required or permitted by law to be otherwise signed and
executed and except where the signing and execution thereof shall be expressly
delegated by the Board to some other officer or agent of the Company. The
chairman of the board may delegate all or any of his powers or duties to the
president, if and to the extent deemed by the chairman of the board to be
desirable or appropriate.

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                  Section 6.1.2. President. The president shall be the chief
executive officer of the Company, shall have general and active management of
the business of the Company and shall see that all orders and resolutions of the
Board are carried into effect. In the absence of the chairman of the board or in
the event of his inability or refusal to act, the president shall perform the
duties and exercise the powers of the chairman of the board.

                  Section 6.1.3. Vice Presidents. In the absence of the
president or in the event of his inability or refusal to act, the vice president
(or, in the event there be more than one vice president, the vice presidents in
the order designated by the Board, or, in the absence of any designation, then
in the order of their election or appointment) shall perform the duties of the
president, and, when so acting, shall have all the powers of and be subject to
all the restrictions upon the president. The vice presidents shall perform such
other duties and have such other powers as the Board may from time to time
prescribe.

                  Section 6.1.4. Secretary. The secretary shall attend all
meetings of the stockholders, the Board and (as required) committees of the
Board and shall record all the proceedings of such meetings in books to be kept
for that purpose. He shall give, or cause to be given, notice of all meetings of
the stockholders and special meetings of the Board and shall perform such other
duties as may be prescribed by the Board or the president. He shall have custody
of the corporate seal of the Company and he, or an assistant secretary, shall
have authority to affix the same to any instrument requiring it, and, when so
affixed, it may be attested by his signature or by the signature of such
assistant secretary. The Board may give general authority to any other officer
to affix the seal of the Company and to attest the affixing thereof by his
signature.

                  Section 6.1.5. Assistant Secretaries. The assistant secretary,
or, if there be more than one, the assistant secretaries in the order determined
by the Board (or, if there be no such determination, then in the order of their
election or appointment) shall, in the absence of the secretary or in the event
of his inability or refusal to act, perform the duties and exercise the powers
of the secretary and shall perform such other duties and have such other powers
as the Board may from time to time prescribe.

                  Section 6.1.6. Treasurer. Unless the Board by resolution
otherwise provides, the treasurer shall be the chief accounting and financial
officer of the Company. The Treasurer shall have the custody of the corporate
funds and securities, shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Company and shall deposit all moneys and
other valuable effects in the name and to the credit of the Company in such
depositories as may be designated by the Board. He shall disburse the funds of
the Company as may be ordered by the Board, taking proper vouchers for such
disbursements, and shall render to the president and the Board, at its regular
meetings, or when the Board so requires, an account of all his transactions as
treasurer and of the financial condition of the Company.

                  Section 6.1.7. Assistant Treasurers. The assistant treasurer,
or, if there shall be more than one, the assistant treasurers in the order
determined by the Board (or, if there be no such determination, then in the
order of their election or appointment) shall, in the absence of the treasurer
or in the event of his inability or refusal to act, perform the duties and
exercise the

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powers of the treasurer and shall perform such other duties and have such other
powers as the Board may from time to time prescribe.

                  Section 6.1.8. Divisional Officers. Each division of the
Company, if any, may have a president, secretary, treasurer or controller and
one or more vice presidents, assistant secretaries, assistant treasurers and
other assistant officers. Any number of such offices may be held by the same
person. Such divisional officers will be appointed by, report to and serve at
the pleasure of the Board and such other officers that the Board may place in
authority over them. The officers of each division shall have such authority
with respect to the business and affairs of that division as may be granted from
time to time by the Board, and in the regular course of business of such
division may sign contracts and other documents in the name of the division
where so authorized; provided that in no case and under no circumstances shall
an officer of one division have authority to bind any other division of the
Company except as necessary in the pursuit of the normal and usual business of
the division of which he is an officer.

         Section 6.2 Election. All elected officers shall serve until their
successors are duly elected and qualified or until their earlier death,
disqualification, retirement, resignation or removal from office.

         Section 6.3 Appointed Officers. The Board may also appoint or delegate
the power to appoint such other officers, assistant officers and agents, and may
also remove such officers and agents or delegate the power to remove same, as it
shall from time to time deem necessary, and the titles and duties of such
appointed officers may be as described in Section 6.1 hereof for elected
officers; provided that the officers and any officer possessing authority over
or responsibility for any functions of the Board shall be elected officers.

         Section 6.4 Multiple Officeholders, Stockholder and Director Officers.
Any number of offices may be held by the same person, unless the certificate of
incorporation or these Bylaws otherwise provide. Officers need not be
stockholders or residents of the State of Delaware. Officers, such as the
chairman of the board, possessing authority over or responsibility for any
function of the Board must be directors.

         Section 6.5 Compensation, Vacancies. The compensation of elected
officers shall be set by the Board. The Board shall also fill any vacancy in an
elected office. The compensation of appointed officers and the filling of
vacancies in appointed offices may be delegated by the Board to the same extent
as permitted by these Bylaws for the initial filling offices.

         Section 6.6 Additional Powers and Duties. In addition to the foregoing
especially enumerated powers and duties, the several elected and appointed
officers of the Company shall perform such other duties and exercise such
further powers as may be provided by law, the certificate of incorporation or
these Bylaws or as the Board may from time to time determine or as may be
assigned to them by any competent committee or superior officer.

         Section 6.7 Removal. Any officer may be removed, either with or without
cause, by a majority of the directors at the time in office, at any regular or
special meeting of the Board.

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                                  ARTICLE VII.
                               SHARE CERTIFICATES

         Section 7.1 Entitlement to Certificates. Every holder of the capital
stock of the Company, unless and to the extent the Board by resolution provides
that any or all classes or series of stock shall be uncertificated, shall be
entitled to have a certificate, in such form as is approved by the Board and
conforms with applicable law, certifying the number of shares owned by him.

         Section 7.2 Multiple Classes of Stock. If the Company shall be
authorized to issue more than one class of capital stock or more than one series
of any class, a statement of the powers, designations, references and relative,
participating, optional or other special rights of each class of stock or series
thereof and the qualification, limitations or restrictions of such preferences
and/or rights shall, unless the Board shall by resolution provide that such
class or series of stock shall be uncertificated, be set forth in full or
summarized on the face or back of the certificate which the Company shall issue
to represent such class or series of stock; provided that, to the extent allowed
by law, in lieu of such statement, the face or back of such certificate may
state that the Company will furnish a copy of such statement without charge to
each requesting stockholder.

         Section 7.3 Signatures. Each certificate representing capital stock of
the Company shall be signed by or in the name of the Company by (1) the chairman
of the board, the president or a vice president; and (2) the treasurer, an
assistant treasurer, the secretary or an assistant secretary of the Company. The
signatures of the officers of the Company may be facsimiles. In case any officer
who has signed or whose facsimile signature has been placed upon a certificate
shall have ceased to hold such office before such certificate is issued, it may
be issued by the Company with the same effect as if he held such office on the
date of issue.

         Section 7.4 Issuance and Payment. Subject to the provisions of the law,
the certificate of incorporation or these Bylaws, shares may be issued for such
consideration and to such persons as the Board may determine from time to time.
Shares may not be issued until the full amount of the consideration has been
paid, unless upon the face or back of each certificate issued to represent any
partly paid shares of capital stock there shall have been set forth the total
amount of the consideration to be paid therefor and the amount paid thereon up
to and including the time said certificate is issued.

         Section 7.5 Lost Certificates. The Board may direct a new certificate
or certificates to be issued in place of any certificate or certificates
theretofore issued by the Company alleged to have been lost, stolen or destroyed
upon the making of an affidavit of that fact by the person claiming the
certificate of stock to be lost, stolen or destroyed. When authorizing such
issue of a new certificate or certificates, the Board may, in its discretion and
as a condition precedent to the issuance thereof, require the owner of such
lost, stolen or destroyed certificate or certificates, or his legal
representative, to advertise the same in such manner as it shall require and/or
to give the Company a bond in such sum as it may direct as indemnity against any
claim that may be made against the Company with respect to the certificate
alleged to have been lost, stolen or destroyed.

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         Section 7.6 Transfer of Stock. Upon surrender to the Company or its
transfer agent, if any, of a certificate for shares duly endorsed or accompanied
by proper evidence of succession, assignation or authority to transfer and of
the payment of all taxes applicable to the transfer of said shares, the Company
shall be obligated to issue a new certificate to the person entitled thereto,
cancel the old certificate and record the transaction upon its books; provided,
however, that the Company shall not be so obligated unless such transfer was
made in compliance with applicable state and federal securities laws.

         Section 7.7 Registered Stockholders. The Company shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, vote and be held liable for calls and
assessments and shall not be bound to recognize any equitable or other claim to
or interest in such share or shares on the part of any person other than such
registered owner, whether or not it shall have express or other notice thereof
except as otherwise provided by law.

                                  ARTICLE VIII.
                                 INDEMNIFICATION

         Section 8.1 General. The Company shall indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Company), by
reason of the fact that he is or was a director, officer, employee or agent of
the Company, or is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal action or
proceeding, have reasonable cause to believe that his conduct was unlawful.

         Section 8.2 Actions by or in the Right of the Company. The Company
shall indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action or suit by or in the right
of the Company to procure a judgment in its favor by reason of the fact that he
is or was a director, officer, employee or agent of the Company, or is or was
serving at the request of the Company as a director, officer, employee or agent
of another corporation, partnership, joint venture or trust or other enterprise,
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company and except that no indemnification
shall be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the Company unless and only to the
extent that the Court of Chancery or the court in which such action or suit was
brought shall determine upon

                                       10

<PAGE>

application that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.

         Section 8.3 Indemnification Against Expenses. To the extent that a
present or former director or officer of the Company has been successful on the
merits or otherwise in defense of any action, suit or proceeding referred to in
Sections 8.l and 8.2 hereof, or in defense of any claim, issue or matter
therein, such person shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by such person in connection therewith.

         Section 8.4 Board Determinations. Any indemnification under Sections
8.1 and 8.2 hereof (unless ordered by a court) shall be made by the Company only
as authorized in the specific case upon a determination that indemnification of
the present or former director, officer, employee or agent is proper in the
circumstances because he has met the applicable standard of conduct set forth in
Sections 8.1 and 8.2 hereof. Such determination shall be made, with respect to a
person who is a director or officer at the time of such determination, (1) by a
majority vote of the directors who were not parties to such action, suit or
proceeding, even though less than a quorum, or (2) by a committee of such
directors designated by majority vote of such directors, even though less than a
quorum, or (3) if there are no such disinterested directors or if such directors
so direct, by independent legal counsel in a written opinion, or (4) by the
stockholders.

         Section 8.5 Advancement of Expenses. Expenses incurred by an officer or
director in defending a civil or criminal action, suit or proceeding may be paid
by the Company in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that such
person is not entitled to be indemnified by the Company as authorized by law or
in this section. Such expenses incurred by former directors and officers or
other employees and agents may be so paid upon such terms and conditions, if
any, as the Company deems appropriate.

         Section 8.6 Nonexclusive. The indemnification and advancement of
expenses provided by, or granted pursuant to, this section shall not be deemed
exclusive of any other rights to which any director, officer, employee or agent
of the Company seeking indemnification or advancement of expenses may be
entitled under any other Bylaw, agreement, vote of stockholders' or
disinterested directors or otherwise, both as to action in such person's
official capacity and as to action in another capacity while holding such
office, and shall, unless otherwise provided when authorized or ratified,
continue as to a person who has ceased to be a director, officer, employee or
agent of the Company and shall inure to the benefit of the heirs, executors and
administrators of such a person.

         Section 8.7 Insurance. The Company may purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee or agent of
the Company, or is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against any liability asserted against such person
and incurred by such person in any such capacity or arising out of such person's
status as such, whether or not the Company would have the power to indemnify
such person against such liability under the provisions of the statutes, the
Certificate of Incorporation or this section.

                                       11

<PAGE>

         Section 8.8 Certain Definitions. For purposes of this Section 8.8, (a)
references to "the Company" shall include, in addition to the resulting
corporation, any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers and employees or agents, so that any person who is or was a
director, officer, employee or agent of such constituent corporation, or is or
was serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, shall stand in the same position under the provisions
of this section with respect to the resulting or surviving corporation as such
person would have with respect to such constituent corporation if its separate
existence had continued; (b) references to "other enterprises" shall include
employee benefit plans; (c) references to "fines" shall include any excise taxes
assessed on a person with respect to an employee benefit plan; and (d)
references to "serving at the request of the Company" shall include any service
as a director, officer, employee or agent of the Company which imposes duties
on, or involves services by, such director, officer, employee or agent with
respect to any employee benefit plan, its participants or beneficiaries; and a
person who acted in good faith and in a manner such person reasonably believed
to be in the interests of the participants and beneficiaries of an employee
benefit plan shall be deemed to have acted in a manner "not opposed to the best
interests of the Company" as referred to in this section.

         Section 8.9 Change in Governing Law. In the event of any amendment or
addition to Section 145 of the General Corporation Law of the State of Delaware
or the addition of any other section to such law which shall limit
indemnification rights thereunder, the Company shall, to the extent permitted by
the General Corporation Law of the State of Delaware, indemnify to the fullest
extent authorized or permitted hereunder, any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(including an action by or in the right of the corporation), by reason of the
fact that he is or was a director, officer, employee or agent of the Company, or
is or was serving at the request of the Company as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding.

                                  ARTICLE IX.
                 INTERESTED DIRECTORS, OFFICERS AND STOCKHOLDERS

         Section 9.1 Validity. Any contract or other transaction between the
Company and any of its directors, officers or stockholders (or any corporation
or firm in which any of them are directly or indirectly interested) shall be
valid for all purposes notwithstanding the presence of such director, officer or
stockholder at the meeting authorizing such contract or transaction, or his
participation or vote in such meeting or authorization.

         Section 9.2 Disclosure, Approval. The foregoing shall, however, apply
only if the material facts of the relationship or the interest of each such
director, officer or stockholder is known or disclosed:

                                       12

<PAGE>

                  (A) to the Board and it nevertheless in good faith authorizes
         or ratifies the contract or transaction by a majority of the directors
         present, each such interested director to be counted in determining
         whether a quorum is present but not in calculating the majority
         necessary to carry the vote; or

                  (B) to the stockholders and they nevertheless in good faith
         authorize or ratify the contract or transaction by a majority of the
         shares present, each such interested person to be counted for quorum
         and voting purposes.

         Section 9.3 Nonexclusive. This provision shall not be construed to
invalidate any contract or transaction which would be valid in the absence of
this provision.

                                   ARTICLE X.
                                  MISCELLANEOUS

         Section 10.1 Place of Meetings. All stockholders, directors and
committee meetings shall be held at such place or places, within or without the
State of Delaware, as shall be designated from time to time by the Board or such
committee and stated in the notices thereof. If no such place is so designated,
said meetings shall be held at the principal business office of the Company.

         Section 10.2 Fixing Record Dates.

                  (a) In order that the Company may determine the stockholders
         entitled to notice of or to vote at any meeting of stockholders or any
         adjournment thereof, the Board may fix, in advance, a record date,
         which shall not precede the date upon which the resolution fixing the
         record date is adopted by the Board, and which record date shall not be
         more than sixty (60) nor less than ten (10) days prior to any such
         action. If no record date is fixed by the Board, the record date for
         determining stockholders entitled to notice of or to vote at a meeting
         of stockholders shall be at the close of business on the day next
         preceding the day notice is given or, if notice is waived, at the close
         of business on the day next preceding the day on which the meeting is
         held. A determination of stockholders of record entitled to notice of
         or to vote at a meeting of stockholders shall apply to any adjournment
         of the meeting; provided, however, that the Board may fix a new record
         date for the adjourned meeting.

                  (b) In order that the Company may determine the stockholders
         entitled to consent to corporate action in writing without a meeting,
         the Board may fix a record date, which record date shall not precede
         the date upon which the resolution fixing the record date is adopted by
         the Board, and which date shall not be more than ten days after the
         date upon which the resolution fixing the record date is adopted by the
         Board. If no record date has been fixed by the Board, the record date
         for determining stockholders entitled to consent to corporate action in
         writing without a meeting, when no prior action by the Board is
         otherwise required, shall be the first date on which a signed written
         consent setting forth the action taken or proposed to be taken is
         delivered to the Company by delivery to its registered office in the
         State of Delaware, its principal place of business, or an officer or
         agent of the Company having custody of the book in which

                                       13

<PAGE>

         proceedings of meetings of stockholders are recorded. Delivery made to
         the Company's registered office shall be by hand or by certified or
         registered mail, return receipt requested. If no record date has been
         fixed by the Board and prior action by the Board is required, the
         record date for determining stockholders entitled to consent to
         corporate action in writing without a meeting shall be at the close of
         business on the day on which the Board adopts the resolution taking
         such prior action.

                  (c) In order that the Company may determine the stockholders
         entitled to receive payment of any dividend or other distribution or
         allotment of any rights or the stockholders entitled to exercise any
         rights in respect of any change, conversion or exchange of stock, or
         for the purpose of any other lawful action, the Board may fix a record
         date, which record date shall not precede the date upon which the
         resolution fixing the record date is adopted, and which record date
         shall be not more than sixty (60) days' prior to such action. If no
         record date is fixed, the record date for determining stockholders for
         any such purpose shall be at the close of business on the day on which
         the Board adopts the resolution relating thereto.

         Section 10.3 Means of Giving Notice. Whenever, under law, the
certificate of incorporation or these Bylaws, notice is required to be given to
any director or stockholder, such notice may be given in writing and delivered
personally, through the United States mail, by a recognized express delivery
service (such as Federal Express) or by means of telegram, telex or facsimile
transmission, addressed to such director or stockholder at his address or telex
or facsimile transmission number, as the case may be, appearing on the records
of the Company, with postage and fees thereon prepaid. Such notice shall be
deemed to be given at the time when the same shall be deposited in the United
States mail or with an express delivery service or when transmitted, as the case
may be. Notice of any meeting of the Board may be given to a director by
telephone and shall be deemed to be given when actually received by the
director.

         Section 10.4 Waiver of Notice. Whenever any notice is required to be
given under law, the certificate of incorporation or these Bylaws, a written
waiver of such notice, signed before or after the date of such meeting by the
person or persons entitled to said notice, shall be deemed equivalent to such
required notice. All such waivers shall be filed with the corporate records.
Attendance at a meeting shall constitute a waiver of notice of such meeting,
except where a person attends for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.

         Section 10.5 Attendance via Communications Equipment. Unless otherwise
restricted by law, the certificate of incorporation or these Bylaws, members of
the Board, any committee thereof or the stockholders may hold a meeting by means
of conference telephone or other communications equipment by means of which all
persons participating in the meeting can effectively communicate with each
other. Such participation in a meeting shall constitute presence in person at
the meeting, except where a person participates in the meeting for the express
purpose of objecting to the transaction of any business on the ground that the
meeting is not lawfully called or convened.

         Section 10.6 Dividends. Dividends on the capital stock of the Company,
paid in cash, property or securities of the Company and as may be limited by
applicable law and applicable

                                       14

<PAGE>

provisions of the certificate of incorporation (if any), may be declared by the
Board at any regular or special meeting.

         Section 10.7 Reserves. Before payment of any dividend, there may be set
aside out of any funds of the Company available for dividends such sum or sums
as the Board from time to time, in its absolute discretion, thinks proper as a
reserve or reserves to meet contingencies, for equalizing dividends, for
repairing or maintaining any property of the Company or for such other purpose
as the Board shall determine to be in the best interests of the Company, and the
Board may modify or abolish any such reserve in the manner in which it was
created.

         Section 10.8 Reports to Stockholders. The Board shall present at each
annual meeting of stockholders, and at any special meeting of stockholders when
called for by vote of the stockholders, a statement of the business and
condition of the Company.

         Section 10.9 Contracts and Negotiable Instruments. Except as otherwise
provided by law or these Bylaws, any contract or other instrument relative to
the business of the Company may be executed and delivered in the name of the
Company and on its behalf by the chairman of the board or the president; and the
Board may authorize any other officer or agent of the Company to enter into any
contract or execute and deliver any contract in the name and on behalf of the
Company, and such authority may be general or confined to specific instances as
the Board may by resolution determine. All bills, notes, checks or other
instruments for the payment of money shall be signed or countersigned by such
officer, officers, agent or agents and in such manner as are permitted by these
Bylaws and/or as, from time to time, may be prescribed by resolution (whether,
general or special) of the Board. Unless authorized so to do by these Bylaws or
by the Board, no officer, agent or employee shall have any power or authority to
bind the Company by any contract or engagement, or to pledge its credit, or to
render it liable pecuniarily for any purpose or to any amount.

         Section 10.10 Fiscal Year. The fiscal year of the Company shall be
fixed by resolution of the Board.

         Section 10.11 Seal. The seal of the Company shall be in such form as
shall from time to time be adopted by the Board. The seal may be used by causing
it or a facsimile thereof to be impressed, affixed or otherwise reproduced.

         Section 10.12 Books and Records. The Company shall keep correct and
complete books and records of account and shall keep minutes of the proceedings
of its stockholders, Board and committees and shall keep at its registered
office or principal place of business, or at the office of its transfer agent or
registrar, a record of its stockholders, giving the names and addresses of all
stockholders and the number and class of the shares held by each.

         Section 10.13 Resignation. Any director, committee member, officer or
agent may resign by giving written notice to the chairman of the board, the
president or the secretary. The resignation shall take effect at the time
specified therein, or immediately if no time is specified. Unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.

                                       15

<PAGE>

         Section 10.14 Surety Bonds. Such officers and agents of the Company (if
any) as the president or the Board may direct, from time to time, shall be
bonded for the faithful performance of their duties and for the restoration to
the Company, in case of their death, resignation, retirement, disqualification
or removal from office, of all books, papers, vouchers, money and other property
of whatever kind in their possession or under their control belonging to the
Company, in such amounts and by such surety companies as the president or the
Board may determine. The premiums on such bonds shall be paid by the Company and
the bonds so furnished shall be in the custody of the Secretary.

         Section 10.15 Proxies in Respect of Securities of Other Corporations.
The chairman of the board, the president, any vice president or the secretary
may from time to time appoint an attorney or attorneys or an agent or agents for
the Company to exercise, in the name and on behalf of the Company, the powers
and rights which the Company may have as the holder of stock or other securities
in any other corporation to vote or consent in respect of such stock or other
securities, and the chairman of the board, the president, any vice president or
the secretary may instruct the person or persons so appointed as to the manner
of exercising such powers and rights; and the chairman of the board, the
president, any vice president or the secretary may execute or cause to be
executed, in the name and on behalf of the Company and under its corporate seal
or otherwise, all such written proxies or other instruments as he may deem
necessary or proper in order that the Company may exercise such powers and
rights.

         Section 10.16 Amendments. These Bylaws maybe altered, amended, repealed
or replaced by the stockholders, or by the Board when such power is conferred
upon the Board by the certificate of incorporation, at any annual stockholders'
meeting, or annual or regular meeting of the Board, or at any special meeting of
the stockholders or of the Board in the manner provided for in the certificate
of incorporation if notice of such alteration, amendment, repeal or replacement
is contained in the notice of such special meeting. If the power to adopt,
amend, repeal or replace these Bylaws is conferred upon the Board by the
certificate of incorporation, the power of the stockholders to so adopt, amend,
repeal or replace these Bylaws shall not be divested or limited thereby.

                                       16<PAGE>

                               KH FUNDING COMPANY
                          1998 STOCK AND INCENTIVE PLAN

Section 1. Purpose

          The purpose of the KH Funding Company 1998 Stock and Incentive Plan
(the "Plan") is to attract and retain outstanding individuals as Key Employees
of KH Funding Company (the "Company") and its Affiliates, as hereinafter
defined, and to motivate such individuals to achieve the long-term performance
goals of the Company by providing incentives to such individuals in the form of
stock ownership or monetary payments based on the value of the capital stock of
the Company or its financial performance, or both, on the terms and conditions
set forth herein.

Section 2. Definitions

          As used in the Plan and unless the context clearly indicates
otherwise, the following terms shall have the respective meanings set forth
below:

          (a) "Affiliate" shall mean any entity that, directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, the Company.

          (b) "Award" shall mean any Option, Stock Appreciation Right,
Restricted Stock, Restricted Stock Unit or Performance Award granted under the
Plan.

          (c) "Award Agreement" shall mean any written agreement, contract or
other instrument or document evidencing any Award granted under the Plan.

          (d) "Beneficiary" shall mean the person designated by the Participant,
on a form provided by the Company, to exercise the Participant's rights in
accordance with Section 7(f) of the Plan in the event of death, or, if no such
person is designated, the estate or personal representatives of such
Participant.

          (e) "Board of Directors" shall mean the Board of Directors of the
Company.

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

          (g) "Commission" shall mean the United States Securities and Exchange
Commission or any successor agency.

<PAGE>

          (h) "Committee" shall mean the Compensation Committee of the Board of
Directors. The Committee shall be composed of two or more directors, all of whom
shall be "non-employee directors" within the meaning of Rule 16b-3 and "outside
directors" within the meaning of Section 162(m)(4)(C) of the Code and any
regulations issued thereunder.

          (i) "Disability" shall mean a total and permanent disability within
the meaning of the Company's long-term disability plan, as amended from time to
time.

          (j) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

          (k) "Fair Market Value" shall mean the average of the highest and
lowest selling prices of the Shares as reported on the NASDAQ National Market or
such national securities exchange as may be designated by the Committee or, in
the event that the Shares are not listed for trading on a national securities
exchange or the NASDAQ National Market, the average of the highest and lowest
quoted bid prices of the Shares as reported by the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") or, if not listed on
NASDAQ, the fair market value of the Shares as determined in good faith by the
Board of Directors or the Committee, in any such case as of the valuation date.

          (l) "Incentive Stock Option" shall mean a stock option granted under
Section 7(a) of the Plan that is intended to meet the requirements of Section
422 of the Code or any successor provision thereto.

          (m) "Key Employee" shall mean any officer or other employee of the
Company or any Affiliate who is described in Section 6 of the Plan.

          (n) "Non-Qualified Stock Option" shall mean a stock option granted
under Section 7(a) of the Plan that is not intended to be an Incentive Stock
Option.

          (o) "Option" shall mean an Incentive Stock Option or a Non-Qualified
Stock Option.

          (p) "Participant" shall mean a Key Employee who is designated to be
granted or has received an Award under the Plan.

          (q) "Performance Award" shall mean any Award granted under Section
7(e) of the Plan.

                                      -2-

<PAGE>

          (r) "Person" shall mean any individual, corporation, partnership,
limited liability company, association, joint-stock company, trust,
unincorporated organization or government or political subdivision thereof.

          (s) "Released Securities" shall mean Restricted Stock with respect to
which all applicable restrictions have expired, lapsed or been waived.

          (t) "Restricted Stock" shall mean any Shares granted and issued under
Section 7(c) of the Plan.

          (u) "Restricted Stock Unit" shall mean any Award granted under Section
7(c) of the Plan that is denominated in Shares.

          (v) "Restriction Period" shall mean, with respect to Restricted Stock
or Restricted Stock Units, that period of time determined by the Committee
pursuant to Section 7(c) of the Plan.

          (w) "Retirement" shall mean termination of a Participant's employment
with the Company or any Affiliate at his or her "normal retirement date" as
defined in the Company's section 401(k) plan or any successor plan.

          (x) "Termination" shall mean any resignation or discharge from
employment with the Company or any Affiliate except in the event of Disability,
Retirement or death.

          (y) "Rule 16b-3" shall mean Rule 16b-3 promulgated by the Commission
under the Exchange Act or any successor rule or regulation thereto.

          (z) "Shares" shall mean shares of the Class B common stock of the
Company and such other securities or property as may become the subject of
Awards pursuant to an adjustment made under Section 8 of the Plan.

          (aa) "Stock Appreciation Right" shall mean any Award granted under
Section 7(b) of the Plan.

Section 3. Effective Date; Stockholder Approval; Termination

          (a) Effective Date and Stockholder Approval. Subject to the approval
of the Plan by the stockholders of the Company in accordance with the provisions
of Rule 16b-3, the Plan shall be effective as of January 1, 1998.

          (b) Termination. No Award shall be granted under the Plan after
January 1, 2008; provided, however, that any Award granted on or before
January 1,

                                      -3-

<PAGE>

2008 may extend beyond such date unless expressly provided otherwise herein or
in the applicable Award Agreement; provided further, to the extent set forth in
Section 8 hereof, the authority of the Committee to amend, alter, adjust,
suspend, discontinue or terminate any Award or to waive any conditions or
restrictions with respect to any Award, and the authority of the Board of
Directors to amend the Plan, shall extend beyond such date.

Section 4. Administration

          (a) The Plan shall be administered by the Committee; provided,
however, that if at any time the Committee shall not be in existence, the
functions of the Committee as specified in the Plan shall be exercised by those
members of the Board of Directors who qualify as "non-employee directors" under
Rule 16b-3 and as "outside directors" under Section 162(m)(4)(C) of the Code and
any regulations issued thereunder.

          Subject to the terms of the Plan and applicable law, the Committee
shall have full power and authority with respect to the Plan, including, without
limitation, the power to:

               (i) designate Participants;

               (ii) determine the types of Awards to be granted to each
Participant under the Plan;

               (iii) determine the number of Shares to be covered by (or with
respect to which payments, rights or other matters are to be calculated in
connection with) Awards;

               (iv) determine the terms and conditions of any Award;

               (v) determine whether, to what extent, under what circumstances
and the method by which Awards may be settled or exercised in cash, Shares,
other securities, other Awards or other property, or canceled, forfeited or
suspended;

               (vi) determine whether, to what extent and under what
circumstances cash, Shares, other securities, other Awards, other property and
other amounts payable with respect to an Award shall be deferred either
automatically or at the election of the holder thereof or of the Committee;

               (vii) interpret and administer the Plan and any instrument or
agreement relating to, and any Award made under, the Plan (including, without
limitation, any Award Agreement);

                                      -4-

<PAGE>

               (viii) establish, amend, suspend and waive such rules and
regulations and appoint such agents as it shall deem appropriate for the proper
administration of the Plan; and

               (ix) make any other determination and take any other action that
the Committee deems necessary or desirable for the administration of the Plan.

          Unless otherwise expressly provided in the Plan, all designations,
determinations, interpretations and other decisions under or with respect to the
Plan, or any Award, shall be within the sole discretion of the Committee, may be
made at any time and shall be final, conclusive and binding upon all Persons,
including the Company, any Affiliate, any Participant, any holder or Beneficiary
of any Award, any stockholder and any employee of the Company or any Affiliate.

          (b) No member of the Committee shall be liable for any action or
determination made in good faith, and the members of the Committee shall be
entitled to indemnification and reimbursement in the manner provided in the
Company's Charter and Bylaws, as amended from time to time.

          (c) The Committee may designate persons other than its members to
carry out its responsibilities under such conditions or limitations as it may
set, except that the Committee may not delegate: (i) its authority with regard
to Awards (including decisions concerning the timing, pricing and amount of
Awards) granted to Key Employees who are officers or directors for purposes of
Section 16(b) of the Exchange Act; or (ii) its authority pursuant to Section 8
to amend the Plan.

Section 5. Grants of Awards; Shares Available for Award

          (a) The Committee may, from time to time, grant Awards to one or more
Key Employees; provided, however, that:

               (i) subject to any adjustment pursuant to Section 8, the
aggregate number of Shares available with respect to which Awards may be granted
under the Plan shall be 100,000;

               (ii) to the extent that any Shares covered by an Award granted
under the Plan, or to which any Award relates, are forfeited, or if an Award
otherwise terminates, expires or is canceled prior to the delivery of all of the
Shares or of other consideration issuable or payable pursuant to such Award,
then the number of Shares counted against the number of Shares available under
the Plan in connection with the grant of such Award, to the extent of any such
forfeiture, termination, expiration or cancellation, shall be available for
granting of Awards under the Plan;

                                      -5-

<PAGE>

               (iii) Shares which have been issued, or any other shares of the
capital stock of the Company which a Participant tenders to the Company in
satisfaction of income and payroll tax withholding obligations or in
satisfaction of the exercise price of any Award shall be available for granting
of Awards under the Plan;

               (iv) notwithstanding anything herein to the contrary, the
Committee may limit the application of Sections 5(ii) and 5(iii) in any manner
that it considers necessary or appropriate to ensure that the Plan complies with
the requirements of Rule 16b-3 under the Exchange Act or any successor
provision; and

               (v) notwithstanding anything herein to the contrary, any Shares
ceasing to be subject to an Award due to the exercise of an Award or expiration
of a Restriction Period shall no longer be available for granting of Awards
under the Plan.

          (b) For purpose of this Section 5:

               (i) if an Award is denominated in Shares, the number of Shares
covered by such Award, or to which such Award relates, shall be counted on the
date of grant of such Award against the number of Shares available for granting
of Awards under the Plan; and

               (ii) if an Award is not denominated in Shares, the number of
Shares shall be counted on the date of grant of such Award against the number of
Shares available for granting Awards under the Plan equal to the quotient of the
Fair Market Value (calculated as of the date of grant) of the maximum amount of
cash or other consideration payable pursuant to such Award, divided by the Fair
Market Value of one Share on the date of grant.

          (c) Any Shares delivered by the Company pursuant to an Award may
consist, in whole or in part, of authorized and unissued Shares or of treasury
Shares. In determining the size of any Award, the Committee may take into
account a Participant's responsibility level, performance, potential, cash
compensation level, the Fair Market Value of the Shares at the time of the Award
and such other considerations as it deems appropriate.

Section 6. Eligibility

          Any Key Employee, including any executive officer or employee-director
of the Company or any Affiliate, who is not a member of the Committee and who,
in the opinion of the Committee, contributes to the continued growth,
development and financial success of the Company or an Affiliate shall be
eligible to be designated as a Participant.

                                      -6-

<PAGE>

Section 7. Awards

          (a) Options. The Committee is hereby authorized to grant Options to
Participants in the form of either Non-Qualified Stock Options or Incentive
Stock Options with the terms and conditions set forth in this Section 7 and with
such additional terms and conditions, in either case not inconsistent with the
provisions of the Plan, as the Committee shall determine.

               (i) Limitations on Incentive Stock Options.

               (A)  In the event the Committee grants Incentive Stock Options,
                    the aggregate Fair Market Value (determined at the time the
                    Incentive Stock Options are granted) of the Shares
                    underlying any such Incentive Stock Options, together with
                    the shares underlying any incentive stock options (as
                    defined in Section 422 of the Code) under any other plans of
                    the Company or any Affiliate, which shall be first
                    exercisable by any one Participant shall not, during any
                    calendar year, exceed $100,000, or such other limitation as
                    may be provided in the Code.

               (B)  The grant of Incentive Stock Options hereunder shall be
                    subject to guidelines adopted by the Committee with respect
                    to the timing and size of Incentive Stock Options.

               (C)  The terms of any Incentive Stock Option granted under the
                    Plan shall comply in all respects with the provisions of
                    Section 422 of the Code, or any successor provision thereto,
                    and any regulations promulgated thereunder.

               (ii) Exercise Price. The exercise price per Share purchasable
under an Option shall be determined by the Committee; provided, however, that
such exercise price shall not be less than the Fair Market Value of a Share on
the date of grant of the Option (or, if the Committee so determines, in the case
of any Option granted in tandem with or in substitution for another Award or any
outstanding award granted under any other plan of the Company, on the date of
grant of such other Award or award).

               (iii) Option Term. The term of each Option shall be fixed by the
Committee; provided, however, that in no event shall the term of an Incentive
Stock Option exceed a period of ten years from the date of its grant.

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               (iv) Exercisability and Method of Exercise. Except for such
limitations as may be set forth herein, an Option shall become exercisable in
such manner and within such period or periods and in such installments as shall
be determined by the Committee and set forth in the Award Agreement evidencing
the Option. The Committee also shall determine the method or methods by which,
and the form or forms in which, payment of the exercise price with respect to
any Option may be made or deemed to have been made.

          (b) Stock Appreciation Rights. The Committee is hereby authorized to
grant Stock Appreciation Rights to Participants. Subject to the terms of the
Plan and any applicable Award Agreement, a Stock Appreciation Right granted
under the Plan shall confer on the holder thereof a right to receive, upon
exercise thereof, the difference of (i) the Fair Market Value of one Share on
the date of exercise or, if the Committee shall so determine in the case of any
such right other than one related to any Incentive Stock Option, at any time
during a specified period before or after the date of exercise, less (ii) the
grant price of the right as specified by the Committee, which shall not be less
than the Fair Market Value of one Share on the date of grant of the Stock
Appreciation Right (or, if the Committee so determines, in the case of any Stock
Appreciation Right granted in tandem with or in substitution for another Award
or any outstanding award granted under any other plan of the Company, on the
date of grant of such other Award or award). Subject to the terms of the Plan
and any applicable Award Agreement, the grant price, term, methods of exercise,
methods of settlement and any other terms and conditions of any Stock
Appreciation Right shall be as determined by the Committee. The Committee may
impose such conditions or restrictions on the exercise of any Stock Appreciation
Right as it may deem appropriate, including, without limitation, restricting the
time of exercise of the Stock Appreciation Right to specified periods as may be
necessary to satisfy the requirements of Rule 16b-3.

          (c) Restricted Stock and Restricted Stock Units.

               (i) Issuance. The Committee is hereby authorized to grant Awards
of Restricted Stock and Restricted Stock Units to Participants, such Awards,
including the total number of Shares to which they pertain, to be evidenced by
an Award Agreement.

               (ii) Restrictions. Shares of Restricted Stock and Restricted
Stock Units shall be issued in the name of the Participant without payment of
consideration, and shall be subject to such restrictions as the Committee may
impose (including, without limitation, a Restriction Period, any limitation on
the right to vote a Share of Restricted Stock or the right to receive any
dividend or other right or property), which restrictions may lapse separately or
in combination at such time or times, in such installments or otherwise, as the
Committee may deem appropriate. Different Restricted Stock or

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Restricted Stock Unit Awards may, among other things, have different Restriction
Periods.

               (iii) Registration. Any Restricted Stock granted under the Plan
may be evidenced in such manner as the Committee may deem appropriate,
including, without limitation, book-entry registration or issuance of a stock
certificate or certificates. In the event any stock certificate is issued to
evidence Shares of Restricted Stock granted under the Plan, such certificate
shall be registered in the name of the Participant and shall bear an appropriate
legend (as determined by the Committee) referring to the terms, conditions and
restrictions applicable to such Restricted Stock. Upon completion of the
applicable Restriction Period, the related restriction or restrictions upon the
Award shall expire and new certificates representing the Award shall be issued
without the applicable restrictive legend described herein. Such Shares shall be
delivered in accordance with the terms and conditions of such Participant's
Award Agreement.

          (d) Other Stock or Stock-Based Awards. An Award other than as
described in (a) through (c) above may be granted pursuant to which Shares are,
or in the future may be acquired, or which is valued or determined in whole or
in part by reference to, or otherwise based upon, Shares.

          (e) Code Section 162(m) Requirements. The Committee in its sole
discretion shall determine whether Awards made pursuant to the Plan shall be
designed to meet the requirements of performance-based compensation within the
meaning of Section 162(m) of the Code and any regulations issued thereunder.

          (f) Termination of Employment. The Agreement relating to an Award will
set forth provisions governing the disposition of an Award in the event of the
retirement, disability, death or other termination of a Participant's
employment.

          (g) Election to Recognize Income. If a Participant makes an election
in a timely manner pursuant to Section 83(b) of the Code to recognize income for
tax purposes when an Award is first made, the Participant shall notify the
Company within 10 days of the making of such election.

          (h) General.

               (i) Award Agreements. Each Award granted under the Plan shall be
evidenced by an Award Agreement in such form as shall have been approved by the
Committee.

               (ii) Awards May Be Granted Separately or Together. Awards may be
granted either alone or in addition to, in tandem with, or in substitution for
any other Award or any award granted under any other plan of the Company or any
Affiliate.

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Awards granted in addition to or in tandem with other Awards, or in addition to
or in tandem with awards granted under any other plan of the Company or any
Affiliate, may be granted either at the same time as or at a different time from
the grant of such other Awards or awards.

               (iii) Forms of Payment Under Awards. Subject to the terms of the
Plan and of any applicable Award Agreement, payments or transfers to be made by
the Company or any Affiliate upon the grant, exercise or payment of an Award may
be made in such form or forms as the Committee shall determine, including,
without limitation, cash, Shares, other securities, other Awards or other
property, or any combination thereof, and may be made in a single payment or
transfer, in installments or on a deferred basis, in each case in accordance
with the rules and procedures established by the Committee. Such rules and
procedures may include, without limitation, provisions for the payment or
crediting of interest in installments or deferred payments.

               (iv) Limits on Transfer of Awards. No Award (other than Released
Securities), except as otherwise provided by the Committee in its discretion,
and no right under any such Award, shall be assignable, alienable, saleable or
transferable by a Participant otherwise than by will or by the laws of descent
and distribution or pursuant to a qualified domestic relations order as defined
in the Code or Title I of ERISA (or, in the case of an Award of Restricted
Stock, to the Company); provided, however, that, if so determined by the
Committee, a Participant may, in the manner established by the Committee,
designate a Beneficiary to exercise the rights of the Participant, and to
receive any property distributable with respect to any Award upon the death of
the Participant. Each Award, and each right under any Award, shall be
exercisable, during the Participant's lifetime, only by the Participant or, if
permissible under applicable law, by the Participant's guardian or legal
representative. No Award (other than Released Securities), and no right under
any such Award, may be pledged, alienated, attached or otherwise encumbered, and
any purported pledge, alienation, attachment or encumbrance thereof shall be
void and unenforceable against the Company or any Affiliate.

               (v) Term of Awards. Except as otherwise provided herein, the term
of each Award shall be for such period as may be determined by the Committee.

               (vi) Share Certificates and Representation by Participants. All
certificates for Shares or other securities delivered under the Plan pursuant to
any Award or the exercise thereof shall be subject to such stop transfer orders
and other restrictions as the Committee may deem advisable under the Plan or the
rules, regulations and other requirements of the Commission, any stock exchange
or other market upon which such Shares or other securities are then listed or
traded, and any applicable federal or state securities laws, and the Committee
may cause a legend or legends to be inscribed upon any such certificate(s) to
make appropriate reference to such restrictions. The Committee

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may require each Participant or other Person who acquires Shares or other
securities under the Plan to represent to the Company in writing that such
Participant or other Person is acquiring the Shares or other securities without
a view to the distribution thereof.

Section 8. Amendment and Termination; Adjustments; Corrections

          (a) Amendments to the Plan. The Committee may, at any time or from
time to time, amend, alter, suspend, discontinue or terminate the Plan in whole
or in part; provided, however, that no amendment, alteration, suspension,
discontinuation or termination of the Plan shall in any manner (except as
otherwise provided in this Section 8) adversely affect the rights of any
Participant under any Award granted and then outstanding under the Plan, without
the consent of the respective Participant; provided further, however, that any
amendment which under the requirements of applicable law or stock exchange or
NASDAQ rule or policy must be approved by the stockholders of the Company shall
not be effective unless and until such stockholder approval has been obtained in
compliance with such law. No termination or amendment of the Plan may, without
the consent of the Participant to whom an Award has been granted, adversely
affect the rights of such Participant under such Award.

          (b) Certain Adjustments of Awards.

               (i) In the event the Company or any Affiliate shall assume
outstanding employee awards or the right or obligation to make future such
awards in connection with the acquisition of another business or business
entity, the Committee may make such adjustments in the terms of Awards, not
inconsistent with the terms of the Plan, as it shall deem appropriate in order
to achieve reasonable comparability or other equitable relationship between the
assumed awards and the Awards granted under the Plan, as so adjusted.

               (ii) In the event that the Committee shall determine that any
dividend or other distribution (whether in the form of cash, Shares, other
securities or other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase or exchange of Shares or other securities of the Company, issuance of
warrants or other rights to purchase Shares or other securities of the Company,
or other similar corporate transaction, change in applicable laws, regulations
or financial accounting principles or other event affects the Shares, such that
an adjustment is determined by the Committee to be appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits intended
to be made available under the Plan, then the Committee may, in such manner as
it may deem equitable, adjust any or all of: (A) the number and type of Shares
(or other securities or property) which thereafter may be made the subject of
Awards under the Plan; (B) the number and type of Shares (or other securities or
property) subject to outstanding

                                      -11-

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Awards; and (C) the grant, purchase or exercise price with respect to any Award,
or, if deemed appropriate, make provision for a cash payment to the holder of an
outstanding Award; provided, however, in each case, that with respect to Awards
of Incentive Stock Options, no such adjustment shall be authorized to the extent
that such authority would cause the Plan to violate Section 422(b)(1) of the
Code or any successor provision thereto; provided further, that the number of
Shares subject to any Award denominated in Shares shall always be a whole
number. The foregoing adjustments shall be determined by the Committee in its
sole discretion.

          (c) Correction of Defects, Omissions and Inconsistencies. The
Committee may correct any defect, supply any omission or reconcile any
inconsistency in any Award or Award Agreement in the manner and to the extent it
shall deem desirable to carry the Plan into effect.

Section 9. General Provisions

          (a) No Rights to Awards. No Key Employee, Participant or other Person
shall have any claim to be granted any Award under the Plan, and there is no
obligation for uniformity of treatment of Key Employees, Participants or holders
or Beneficiaries of Awards under the Plan. The terms and conditions of Awards
need not be the same with respect to each Participant.

          (b) Withholding. No later than the date as of which an amount first
becomes includable in the gross income of a Participant for federal income tax
purposes with respect to any Award under the Plan, the Participant shall pay to
the Company, or make arrangements satisfactory to the Company regarding the
payment of, any federal, state, local or foreign taxes of any kind required by
law to be withheld with respect to such amount. Unless otherwise determined by
the Committee, withholding obligations arising with respect to Awards under the
Plan may be settled with Shares (other than Restricted Stock), including Shares
that are part of, or are received upon exercise of, the Award that gives rise to
the withholding requirement. The obligations of the Company under the Plan shall
be conditioned on such payment or arrangements, and the Company and any
Affiliate shall, to the extent permitted by law, have the right to deduct any
such taxes from any payment otherwise due to the Participant. The Committee may
establish such procedures as it deems appropriate for the settling of
withholding obligations with Shares, including, without limitation, the
establishment of such procedures as may be necessary to satisfy the requirements
of Rule 16b-3.

          (c) Acceleration. Except as otherwise provided hereunder, the
Committee may, in its discretion, accelerate the time at which an outstanding
Award granted hereunder may be exercised. With respect to Restricted Stock, in
the event of a public tender offer for all or any portion of the Shares of the
Company, or in the event that any proposal to merge or consolidate the Company
with another entity is submitted

                                      -12-

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to the stockholders of the Company for a vote, the Committee, in its sole
discretion, may shorten or eliminate the Restriction Period consistent with the
best interests of the Company.

          (d) No Right to Employment. The grant of an Award shall not be
construed as giving a Participant the right to be retained in the employ of the
Company or any Affiliate. Further, the Company or any Affiliate may at any time
dismiss a Participant from employment, free from any liability or any claim
under the Plan, unless otherwise expressly provided in the Plan or in any Award
Agreement.

          (e) Unfunded Status of the Plan. Unless otherwise determined by the
Committee, the Plan shall be unfunded and shall not create (or be construed to
create) a trust or a separate fund or funds. The Plan shall not establish any
fiduciary relationship between the Company and any Participant or other Person.
To the extent any Person holds any right by virtue of the grant of an Award
under the Plan, such right (unless otherwise determined by the Committee) shall
be no greater than the right of an unsecured general creditor of the Company.

          (f) Government and Other Regulations. The obligation of the Company to
make payment of Awards in Shares or otherwise shall be subject to all applicable
laws, rules and regulations, and to such approvals by any government agencies as
may be required. If Shares awarded hereunder may in certain circumstances be
exempt from registration under the Securities Act of 1933, as amended, the
Company may restrict its transfer in such manner as it deems advisable to ensure
such exempt status.

          (g) No Restriction on Right of Company to Effect Corporate Changes.
The Plan shall not affect in any way the right or power of the Company or its
stockholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or any issue of stock
or options, warrants or rights to purchase stock or of bonds, debentures,
preferred or prior preference stocks whose rights are superior to or affect the
Shares or the rights thereof or which are convertible into or exchangeable for
the Shares, or dissolution or liquidation of the Company, or any sale or
transfer of all or any part of its assets or business, or any other corporate
act or proceeding, whether of a similar character or otherwise.

          (h) Governing Law. The validity, construction and effect of the Plan,
and any rules and regulations relating to the Plan, shall be determined in
accordance with the laws of the State of Maryland, exclusive of its conflicts of
law provisions, and applicable Federal law.

                                      -13-

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          (i) Severability. If any provision of the Plan, any Award Agreement or
any Award is or becomes or is deemed to be invalid, illegal or unenforceable in
any jurisdiction, or as to any Person or Award, or would disqualify the Plan,
any Award Agreement or any Award under any law deemed applicable by the
Committee, such provision shall be construed or deemed amended to conform to
applicable laws, or, if it cannot be so construed or deemed amended without, in
the determination of the Committee, materially altering the intent of the Plan,
the Award Agreement or the Award, such provision shall be stricken as to such
jurisdiction, Person or Award, and the remainder of the Plan, such Award
Agreement and such Award shall remain in full force and effect.

          (j) No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to the Plan, any Award Agreement or any Award, and the
Committee shall determine whether cash, other securities or other property shall
be paid or transferred in lieu of any fractional Shares, or whether such
fractional Shares or any rights thereto shall be canceled, terminated or
otherwise eliminated.

          (k) Headings. Headings are given to the sections and subsections of
the Plan solely as a convenience to facilitate reference. Such headings shall
not be deemed in any way material or relevant to the construction or
interpretation of the Plan or any provision thereof.

                                      -14-

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