Document:

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                              EMPLOYMENT AGREEMENT

           This Employment Agreement (the "Agreement") is between DME
Interactive Holdings, Inc. ("DME" or "Company") and Kathleen McQuaid Packard
("Employee").

           In consideration of the promises and covenants set forth in this
Agreement, DME and Employee hereby agree as follows:

          1.    EMPLOYMENT

           Company hereby employs Employee and Employee hereby accepts
employment, to render professional services to Company as Senior Vice President
of Internet Services in accordance with the terms and conditions set forth
herein. All of Employee's services and duties hereunder shall be performed when
Company may require and, except as specifically limited herein, subject to
Company's direction and control.

          2.    TERM

           Subject to the provisions for termination as hereinafter provided in
Section 7 of this Agreement , the Term of this Agreement shall begin on
September 1, 1999 and shall continue for a period of three (3) years. When used
herein, "Term" shall refer to the entire period of engagement of Employee,
whether for the period provided above or whether terminated earlier as
hereinafter provided.

          3.    DUTIES

                In Employee's capacity as Senior Vice President of Interactive
Services, Employee duties shall include such duties and responsibilities as
assigned from time to time by the Chief Executive Officer of the Company or its
board of directors. Employee agrees and acknowledges that Company retains sole
discretion to change the scope and extent of Employee's duties at any time,
subject only to the terms of this Agreement.

          4.    COMPENSATION

          (a) During the Term and conditioned upon full performance by Employee
of all of Employee's material obligations hereunder, Company agrees to pay
Employee, as full and complete compensation for all of the services to be
rendered by Employee, for all rights granted to Company, and for all
representations, warranties and agreements made by Employee hereunder, the
following, payable on a semi-monthly basis:

                               Annual Compensation

                      Year 1   -    $125,000.00

                      Year 2   -    $137,500.00

                      Year 3   -    $151,250.00
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          (b) Pursuant to the terms and conditions set forth in the Stock Option
Agreement attached hereto, Company grants to Employee an option to purchase up
to 60,000 shares of the Company's common stock at a per share exercise price of
$2.00.

          (c) If Employee submits a list of Employee's active existing clients
(the "Active Client List") to Company within ten (10) days of the commencement
of the Term, Employee will be entitled to additional compensation of five (5%)
percent of the gross revenues actually collected from clients on the Active
Client List ("Incentive Compensation") within the term of this agreement,
subject to the following terms:

                (i) Incentive Compensation will be paid in January for the
preceding six month period and in July for the preceding six months;

                (ii) Employee acknowledges that she will not be entitled to
receive any Incentive Compensation until the Company has collected gross
revenues from clients on the Employee's Active Client List in the amount of
$500,000, it being mutually agreed and understood that the first $25,000 of
Incentive Compensation otherwise payable to Employee will be paid by Company to
Kathoderay Media, Inc., pursuant to the terms of an Asset Purchase Agreement
dated September 1, 1999, between Kathoderay and Company. In calculating
Employee's Incentive Compensation, the first $500,000 of collections from
clients on the Employee's Active Client List shall be excluded and listed on the
Active Client List.

                (iii)Employee may add clients to the Employee's Active Client
List during the term, it being agreed and understood that the Active Client List
is limited to existing and future clients of the Company developed principally
by Employee and listed on the Active Client List.

          (d) Employee will be eligible for a bonus based upon her satisfactory
performance under this agreement at the discretion of the Company and subject to
the Company's overall performance.

          5.    BENEFITS

          (a) Benefits. Employee shall be entitled to participate in any Company
benefit plans now existing or hereafter adopted for which she may be eligible
pursuant to established Company policy, subject to the provisions of such plans
as the same may be in effect from time to time. Employee agrees that nothing
contained in this Agreement shall prevent Company from terminating or modifying
any such benefit plan in whole or in part at any time.

          (b) Vacation. Employee shall be entitled to two (2) week(s) per
contract year as hereinafter defined, of fully paid vacation time, and holidays
in accordance with current Company policy during the term of this Agreement
subject to Company's absolute approval of the dates when such vacation may be
taken. For purposes of this Agreement, the term "Contract Year" shall mean the
period commencing September 1, and ending August 31. Notwithstanding the above,
such

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vacation rights shall not vest until Employee has worked for Company for at
least six (6) months. Vacation rights shall not be cumulative from Contract Year
to Contract Year, nor shall Employee be paid for more than fifty-two (52) weeks
of employment in each Contract Year irrespective of whether or not vacation
rights are exercised.

          (c) Sick/Personal Days. Employees shall be entitled to six (6) days
per Contract Year of fully paid sick/personal days in accordance with current
Company policy during the term of this Agreement. Notwithstanding the above,
such sick/personal day rights shall not vest until Employee has worked for
Company for at least three (3) months. Sick/Personal Day rights shall not be
cumulative from Contract Year to Contract Year, nor shall Employee be paid for
more than fifty-two (52) weeks of employment in each Contract Year irrespective
of whether or not sick/personal days are exercised.

          6.    EMPLOYEE COVENANTS

               6.1. Notice of Creation. Employee shall both during and after the
Term of this Agreement promptly and fully disclose to the Company any and all
inventions, discoveries, improvements, ideas, devices, designs, models,
prototypes, processes, compositions, know-how, information, works (including
computer programs and written and graphics materials), mask works and data,
whether of a business, technical or other nature and whether or not protectable
under U.S. or foreign patent, copyright, trade secret or other law
(collectively, "Works"), that concern or relate to or are useful to the Company
in connection with its business activities ("Company Business") and that are
first conceived, reduced to practice, fixed in a tangible medium of expression
or are otherwise made by Employee solely or jointly with others during the Term
of this Agreement, whether during regular business hours or otherwise (the
"Intellectual Property").

               6.2. Ownership of Intellectual Property. Upon its respective
conception, reduction to practice or fixation in a tangible medium of expression
or other making, an item of Intellectual Property and all worldwide right, title
and interest in and to that Intellectual Property, including all common law,
statutory, treaty and convention rights, including the right to sue for all
past, present and future infringement, shall immediately become and forever
remain the property of Company without any further act or deed being required
and without any additional consideration from Company to Employee, and Employee
hereby irrevocably assigns to Company, and Company hereby accepts, all such
Intellectual Property and all such worldwide right, title and interest. The
Employee hereby waives and agrees not to assert any moral rights or similar
rights under the laws of any jurisdiction with respect to any Intellectual
Property.

               6.3. Further Assurances. Employee will from time to time, both
during and after the Term of this Agreement, upon the request and at the expense
of the Company, but without further consideration from the Company, (a) make
application through the attorneys for the Company for Letters Patent, utility
models, copyright registrations and other forms of intellectual property
protection for and on the Intellectual Property in the United States and in
countries foreign thereto, (b) cooperate with the attorneys in the prosecution,
maintenance, reissue, renewal, extension and defense of, and suit upon, all such
applications and resulting Letters Patent, utility models, copyright
registrations and other forms of intellectual property protection, and (c) do
and perform all acts, including executing documents, believed by the attorneys
to be necessary or desirable in furtherance of the foregoing and for assigning
and perfecting all right, title and interest

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in and to the Intellectual Property in the Company or its successors or assigns,
including executing applications and assignment documents. All decisions
concerning such applications and resulting Letters Patent, utility models,
copyright registrations and other forms of intellectual property protection,
including all decisions concerning their filing, prosecution, maintenance,
reissue, renewal, extension, defense and suits upon them, shall be solely those
of the Company, and Employee shall have no claim or cause of action against the
Company arising out of or concerning any such decisions of the Company or the
results of those decisions.

               6.4. Non-Competition. In addition to her obligations of
non-competition set forth in that Asset Purchase Agreement dated
contemporaneously herewith by and among Company, Employee and Employee's then
wholly owned corporation, Kathoderay Media, Inc., Employee hereby expressly
covenants and agrees that she shall not, without the express written consent of
the Company, for her own account or jointly with any other person, during the
Term of this Agreement and for a period of one year thereafter, for any reason,
directly or indirectly, (i) own, manage, operate, join, control, loan money to,
invest in, or otherwise participate in, or be connected with, or become or act
as an officer, employee, consultant, representative or agent of any business,
individual, partnership, firm or corporation (other than the Company) which is a
customer of the Company or was at any time during the Term of this Agreement a
customer of the Company ("Competitive Activities"); or (ii) intervene in or
interfere with any relationships between the Company and its vendors or
customers (including potential customers identified by the Company during the
Term of this Agreement) or disrupt its customer markets, anywhere in the world
in which the Company conducts Company business. Notwithstanding the foregoing,
the Employee may at any time own, solely as an inactive investor, securities of
any entity, whether or not in competition with the Company, if (i) such
securities are publicly traded on a nationally-recognized stock exchange or on
NASDAQ, and (ii) the aggregate holdings of such securities by the Employee and
her immediate family do not exceed two percent (2%) of the voting power or two
percent (2%) of the capital stock of such entity.

               6.5. Reasonableness of Restrictions. The Employee acknowledges
and agrees that the covenants contained herein with respect to non-competition
are reasonable in scope, geographic application and duration, in view of the
economic bargain contained herein. The Employee represents and warrants to the
Company that her experience, background and skills are such that she is able to
obtain employment on reasonable terms and conditions without violation of the
restrictive covenant contained herein with respect to non-competition; and that
such covenant does not and will not pose any undue hardship to the Employee.

               6.6. Tangible Things. Employee covenants and agrees that (i) all
tangible things, including confidential memoranda, notes, notebooks, drawings,
lists (including, without limitation, mailing and customer lists), records and
other confidential documents (and all copies thereof), made or compiled by
Employee or made available to Employee concerning the Company Business shall be
the property of the Company, and (ii) if such tangible things or copies thereof
are in the possession or control of Employee, Employee shall deliver them to the
Company promptly following the Term of this Agreement or at any other time upon
request of the Company.

               6.7. No Improper Disclosure. Employee represents and warrants
that Employee has not disclosed, and will not disclose, to the Company any
information, whether

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confidential, proprietary or otherwise, that the Employee possesses and that
Employee is not legally free to disclose.

               6.8. No Employee Solicitation. The Employee hereby agrees that
during the Term of this Agreement and for a period of one (1) years thereafter,
she shall not, directly or indirectly, for her own account or jointly with
another, or for or on behalf of any entity, as principal, agent or otherwise,
solicit or induce or in any manner attempt to solicit or induce any person
employed by the Company or any of its affiliates to leave such employment,
whether or not such employment is pursuant to a written contract with the
Company or otherwise.

               6.9. Non-Disclosure. Employee acknowledges that Employee's work
for the Company is expected to bring Employee into close contact with various
confidential technical and research data, confidential business data and other
information of the Company not readily available to the public. The Employee
expressly covenants and agrees that she will not at any time, whether during or
after the Term of this Agreement, directly or indirectly, on any basis for any
reason, use or permit third parties within her control or authority or under her
supervision the use of any trade secrets, confidential information or
proprietary information of, or relating to, the Company, or any affiliate of the
Company (including, without limitation, data and other information relating to
any of the Company's processes, apparatus, products, software, packages,
programs, trends in research, product development techniques or plans, research
and development programs and plans or any works and all secrets, customer lists,
lists of employees, sales representatives and their territories, mailing lists,
details of consultant contracts, pricing policies, operational methods,
marketing plans or strategies, business acquisition plans, new personnel
acquisition plans, designs and design projects and other confidential business
affairs concerning the Company and the Company Business), in connection with any
activity or business, whether for her own account or otherwise, and will not
divulge such trade secrets, confidential information or proprietary information
to any person, firm, corporation or other entity whatsoever. The Employee shall
not be prohibited from divulging information deemed to be trade secret or
confidential or proprietary information of the Company: (i) if and to the extent
that disclosure of any such information is pursuant to appropriate safeguards on
confidentiality and (x) necessary and appropriate in connection with the
submission of bids by the Company in the ordinary course of business or (y)
required pursuant to the Company's marketing efforts directed to specific
clients or bona fide prospective clients or the provision of services to
existing clients in the ordinary course of business, (ii) if the specific item
of information becomes generally available to the public without violation of
this Agreement or any other confidentiality agreement between the Employee and
the Company or any other confidentiality agreement to which the Employee is a
party, or (iii) if such disclosure is compelled by law, in which event the
Employee agrees to give the Company prior written notice of any disclosure to be
made pursuant to this Subsection (iii), and the Employee, at the Company's
expense, shall cooperate fully with the Company to obtain protective orders,
confidential treatment or other such protective action as may be available to
preserve the confidentiality of the information required to be disclosed.

               6.10. Remedies. It is expressly understood and agreed that the
services to be rendered hereunder by the Employee are special, unique and of
extraordinary character, and in the event of the breach by the Employee of any
of the terms and conditions of this Agreement on her part to be performed
hereunder, or in the event of the breach or threatened breach by the Employee of
the terms and provisions of this Section 6 of this Agreement, then the Company
shall

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entitled, if it so elects, to institute and prosecute any proceedings in any
court of competent jurisdiction, either in law or equity, for such relief as it
deems appropriate, including without limiting the generality of the foregoing,
any proceedings to obtain damages for any breach of this Agreement or to enforce
the specific performance thereof by the Employee or to enjoin the Employee from
performing services which are prohibited by this Agreement for any other person,
firm or corporation.

               6.11. Enforcement. It is hereby expressly agreed by the Company
and the Employee that if any portion of the restrictive covenants and provisions
set forth in this Section 6 is held to be unreasonable, arbitrary, against
public policy or otherwise unenforceable for any reason, then each such covenant
or provision shall be considered divisible as to scope, time and geographical
area, with each month of a specified period being deemed a separate period of
time and each county within any geographical area being deemed a separate
geographic area. The parties hereto expressly agree that notwithstanding their
mutual expectation that the covenants and restrictions contained herein will be
enforceable and enforced, a lesser scope, period of time or geographic area
shall be enforced to the extent that the covenants contained herein may be
unenforceable as written. The existence of any claim or cause of action by the
Employee against the Company, whether predicated on this Agreement or otherwise,
shall not constitute a defense to the enforcement by the Company of the
restrictive covenants contained in this Section 6.

               6.12. Covenants Non-Exclusive. The Employee acknowledges and
agrees that the covenants contained in this Section 6 shall not be deemed
exclusive of any common law rights of the Company in connection with the
relationships contemplated hereby; and that the Company shall have any and all
rights as may be provided by law in connection with the relationships
contemplated hereby.

          7.    TERMINATION

            The Employee's employment hereunder shall terminate under the
following circumstances:

           (a) Termination by For Cause. Company may terminate the employment of
Employee for cause at any time upon written notice to Employee specifying the
cause for termination. For purposes of this Section, "for cause" shall include
discharge resulting from a determination by Company that the Employee has: (i)
been convicted of a criminal offense involving dishonesty, fraud, theft,
embezzlement, breach of trust or moral turpitude; (ii) performed an act or
failed to act, which, if she were prosecuted and convicted, would constitute a
crime or offense involving money or property of Company; or (iii) willfully
refused to perform the duties reasonably assigned to Employee and consistent
with her status as a Senior Vice President of Company; or (iv) violates any
non-competition or non-disclosure agreement of the Company.

           In the event of Employee's termination under this Section 7(a),
Company shall have no further obligation to Employee except for any amounts
earned by, or accrued for, Employee under any employee benefit plans in which
the Employee is then a participant, earned and unpaid salary, accrued and unused
vacation pay, and any rights of Employee under any bonus or stock option
agreement, which right has been earned by Employee at the time of such
termination pursuant to the terms of such plan or agreement. Employee shall not
be entitled to any further Base

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Salary, Incentive Compensation, severance pay, fringe benefits, additional stock
options, or any other compensation or benefits, except as otherwise provided
herein.

           (b) Termination by Employee Without Cause. Employee may terminate
this Agreement at any time upon thirty (30) days' prior written notice to
Company. In the event of such termination, Company shall have no further
obligations to Employee under this Agreement except for any amounts earned by,
or accrued for, Employee under any employee benefit plans in which the Employee
is then a participant, earned and unpaid salary and accrued and unused vacation
pay and any rights of Employee under any bonus or stock option agreement, which
right has been earned by Employee at the time of such termination pursuant to
the terms of such plan or agreement. Employee shall not after termination be
entitled to Base Salary, Incentive Compensation, severance pay, fringe benefits,
additional stock options, or any other compensation or benefits. Company may, in
its sole discretion, accept Employee's resignation and terminate her employment
prior to the expiration of the thirty (30) day notice period and pay Employee's
compensation for the notice period (or remaining term thereof).

           (c) Employee's employment hereunder shall also terminate
automatically, and without any further action by the Employee or the Company,
upon the earlier to occur of (i ) the death of the Employee; (ii) the
adjudicated incompetency of the Employee; or (iii) the disability of the
Employee to perform a material portion of her duties for 180 consecutive days,
or for 100 business days, which need not be consecutive, during any twelve-month
period.

          8.    GENERAL

               8.1. No Brokers. Each of the parties to this Agreement represents
and warrants, each to the other, that it has not utilized the services of any
finder, broker or agent. Each of the parties agrees to indemnify the other party
against and hold it harmless from any and all liabilities to any person, firm or
corporation claiming any broker's or finder's fee or commission of any kind on
account of services rendered on behalf of such party in connection with the
transactions contemplated by this Agreement.

               8.2. Applicable Law. This Agreement shall, in all respects, be
governed by the laws of the State of New York.

               8.3. Venue; Process. The parties to this Agreement agree that
jurisdiction and venue shall properly lie only in any New York state court
located in New York County or the City of New York or in the United States
District Court for the Southern District of New York, with respect to any legal
proceedings arising from this Agreement. The parties agree that they will not
object that any action commenced in the foregoing jurisdictions is commenced in
a forum non conveniens. The parties further agree that the mailing by certified
or registered mail, return receipt requested, of any process required by any
such court shall constitute valid and lawful service of process against them,
without the necessity for service by any other means provided by statute or rule
of court. Notwithstanding the foregoing, however, nothing contained in this
Subsection 8.3 shall be deemed to limit or waive any right of the parties to
remove any dispute to federal court in New York which might otherwise properly
be removed to such court.

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               8.4. Survival The parties hereto agree that the covenants
contained in Section 6 hereof shall survive any termination of employment by the
Employee and any termination of this Agreement.

               8.5. Notices. Any and all notices required or desired to be given
hereunder by any party shall be in writing and shall be validly given or made to
another party if delivered either personally, by telex, facsimile transmission,
same day delivery service, overnight delivery service, or if deposited in the
United States mail, certified or registered, postage prepaid, return receipt
requested. If notice is served personally, notice shall be deemed effective upon
receipt. If notice is served by telex or by facsimile transmission, notice shall
be deemed effective upon transmission, provided that such notice is confirmed in
writing by the sender within one day after transmission. If notice is served by
same day delivery service or overnight expedited delivery service, notice shall
be deemed effective the day after it is sent, and if notice is given by mail,
notice shall be deemed effective five days after it is sent. In all instances,
notice shall be sent to the parties at the respective addresses set forth above.
Any party may change its address for the purpose of receiving notices by a
written notice given to the other party.

               8.6. Modifications or Amendments. No amendment, change or
modification of this document shall be valid unless in writing and signed by all
of the parties hereto.

               8.7. Waiver. Failure of either party to exercise in any respect
any right provided for herein shall not be deemed a waiver of any right
hereunder.

               8.8. Successors and Assigns. All of the terms and provisions
contained herein shall inure to the benefit of and shall be binding upon the
parties hereto and their respective heirs, personal representatives, successors
and assigns, but Employee's rights and obligations hereunder are personal to
Employee and shall not be subject to voluntary or involuntary alienation,
assignment or transfer.

               8.9. Separate Counterparts. This document may be executed in one
or more separate counterparts, each of which, when so executed, shall be deemed
to be an original. Such counterparts shall, together, constitute and shall be
one and the same instrument.

               8.10. Specific Performance. It is agreed that the rights granted
to the parties hereunder are of a special and unique kind and character and
that, if there is a breach by any party of any material provision of this
document, the other party would not have any adequate remedy at law. It is
expressly agreed, therefore, that the rights of the parties hereunder may be
enforced by an action for specific performance and other equitable relief.

               8.11. Further Assurances. Each of the parties hereto shall
execute and deliver any and all additional papers, documents and other
assurances, and shall do any and all acts and things reasonably necessary in
connection with the performance of their obligations hereunder and to carry out
the intent of the parties hereto.

               8.12. Legal Fees. Each party in any action, proceeding,
arbitration or similar legal proceeding arising under this agreement shall be
responsible for such party's own attorneys' fees.

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           PLEASE NOTE: BY SIGNING THIS AGREEMENT, EMPLOYEE IS HEREBY CERTIFYING
THAT EMPLOYEE (A) RECEIVED A COPY OF THIS AGREEMENT FOR REVIEW AND STUDY BEFORE
EXECUTING IT; (B) READ THIS AGREEMENT CAREFULLY BEFORE SIGNING IT; (C) HAD
SUFFICIENT OPPORTUNITY BEFORE SIGNING THE AGREEMENT TO ASK ANY QUESTIONS
EMPLOYEE HAD ABOUT THE AGREEMENT AND RECEIVED SATISFACTORY ANSWERS TO ALL SUCH
QUESTIONS; AND (D) UNDERSTANDS EMPLOYEE'S RIGHTS AND OBLIGATIONS UNDER THE
AGREEMENT.

           IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.

DME INTERACTIVE HOLDINGS, INC.            KATHLEEN  MCQUAID  PACKARD

By:   /s/ Darien Dash                     /s/    Kathleen McQuaid Packard
   ------------------                     -------------------------------

Title:     Chief Executive Officer
      -----------------------------<PAGE>

            DME INTERACTIVE HOLDINGS, INC. STOCK OPTION PLAN OF 2000

1.      Purpose of the Plan.

        The purpose of this DME Interactive Holdings, Inc. Stock Option Plan of
2000 ("Plan") is to further the growth and development of DME Interactive
Holdings, Inc. (the "Company") and its subsidiaries by encouraging selected
employees, consultants, officers, directors, independent contractors and other
persons who contribute and are expected to contribute materially to the success
of the Company or any subsidiary to obtain a proprietary interest in the Company
through the ownership of stock, thereby providing such persons with an added
incentive to promote the long-term financial interests of the Company and
enhancement of long-term stockholder return. The Plan is further intended to
afford the Company and any subsidiary a means of attracting to its service
persons of outstanding ability. Certain options granted hereunder may qualify as
incentive stock options ("Incentive Stock Options") within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), and
other options granted hereunder may not qualify as Incentive Stock Options
("Nonqualified Stock Options"), as determined in each instance by the Committee
referred to in Paragraph 4 (the "Committee").

2.      Stock Subject to the Plan.

         A total of three million (3,000,000) shares of the authorized but
unissued Common Stock have been allocated to the Plan and will be reserved for
issue upon the exercise of options granted under the Plan. The Company may, in
its discretion, use shares held in the treasury in lieu of authorized but
unissued shares. If any such option shall expire or terminate for any reason
without having been exercised in full, the unpurchased shares subject thereto
shall again be available for the purposes of the Plan. Any shares of Common
Stock issued pursuant to the Plan which are used by an optionee as full or
partial payment to the Company of the purchase price of shares of Common Stock
upon exercise of a stock option shall again be available for the purposes of the
Plan. The number of shares with respect to which options may be granted to any
individual during any calendar year may not exceed one million (1,000,000)
shares.

3.      Administration.

        The Plan shall be administered by the Committee. Subject to the express
provisions of the Plan, the Committee shall have plenary authority, in its
discretion, to determine the individuals to whom, and the time or times at
which, options shall be granted and the number of shares to be subject to each
option. In making such determinations the Committee may take into account the
nature of the services rendered by the respective individuals, their present and
potential contributions to the Company's success and such other factors as the
Committee, in its discretion, shall deem relevant. Subject to the express
provisions of the Plan, the Committee shall also have plenary authority to
interpret the Plan, to prescribe, amend and rescind rules and regulations
relating to it, to determine the terms and provisions of the respective stock
option agreements or certificates (which need not be identical) and to make all
other determinations necessary or advisable for the administration of the Plan.
The Committee's determinations on the matters referred to in this Paragraph 3
shall be final, binding and conclusive. Except to the extent prohibited by
applicable law, the Committee may grant to one or more of its members or to any
person(s) selected by it, subject to revocation or modification by the
Committee, the

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authority to grant options under the Plan to eligible persons described in
Paragraph 5 hereof, except that the no such person may be delegated authority to
grant options to any employee who is subject to the reporting requirements of
Section 16(a) of the Securities Exchange Act of 1934 or who is a "covered
employee" within the meaning of Section 162(m)(3) of the Code.

 4.     The Committee.

        The Committee shall consist of two or more directors appointed by the
Board of Directors, which may from time to time appoint members of the Committee
in substitution for members previously appointed and may fill vacancies, however
caused, in the Committee. The Board shall select a chairman of the Committee.
The Committee shall hold its meetings at such times and places as it may
determine. A majority of its members shall constitute a quorum. All
determinations of the Committee shall be made by a majority of its members
present at any meeting at which there is a quorum. Any decision or determination
reduced to writing and signed by all of the members shall be fully as effective
as if it had been made by a majority vote at a meeting duly called and held. The
Committee may appoint a secretary, shall keep minutes of its meetings and shall
make such rules and regulations for the conduct of its business as it shall deem
advisable.

5.      Eligibility.

        Options may be granted to employees, consultants or advisors of the
Company or its subsidiaries selected by the Committee, which may include
officers, whether or not they are directors, but does not include directors who
are not also executive employees of the Company, or a subsidiary thereof, but
may include directors of subsidiaries which are organized under laws outside the
United States. Provided, that Incentive Stock Options may only be granted to
employees of the Company or a subsidiary. The term "subsidiary" shall mean any
corporation, partnership, limited liability company or other entity (other than
the Company), in an unbroken chain of entities beginning with the Company if, at
the time of the granting of the option, each of the entities other than the last
entity in the unbroken chain owns equity possessing 50% or more of the total
combined voting power of all classes of equity in one of the other entities in
such chain, or such other meaning as may be hereafter ascribed to it in Section
424 of the Code.

6.      Option Prices.

        (a) The purchase price of the Common Stock under each option shall not
be less than 100% of the fair market value of the stock on the date of the grant
of the option as determined by the by the Committee in accordance with Section
6.b.. The purchase price is to be paid in full upon the exercise of the option,
either (i) in cash, (ii) in the discretion of the Committee, by the tender,
either actually or by attestation, to the Company of shares of the Common Stock
of the Company, owned by the optionee and registered in his name, having a fair
market value, as defined above, on the date of exercise equal to the cash
exercise price of the option being exercised, or (iii) in the discretion of the
Committee, by any combination of the payment methods specified in clauses (i)
and (ii) hereof; provided that, no shares of Common Stock may be tendered in
exercise of an Incentive Stock Option if such shares were acquired by the
optionee through the exercise of an Incentive Stock Option unless (i) such
shares have been held by the optionee for at least one year and (ii) at least
two years have elapsed since such Incentive Stock Option was granted; provided
further, that no shares may be tendered in exercise of an option

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unless such shares have been held by the optionee for at least six (6) months.
In addition, the optionee may effect a "cashless exercise" of an option in lieu
of paying the option price in cash or shares owned by the optionee, provided
that such "cashless exercise" is facilitated through a third party, other than
the Company, in accordance with the rules and procedures adopted by the
Committee. Further, the Committee, in its discretion, may approve such other
methods or forms of payment of the purchase price, and establish rules and
procedures therefor. The proceeds of sale of stock subject to option are to be
added to the general funds of the Company or to the shares of the Common Stock
of the Company held in its Treasury, and used for such corporate purposes as the
Board of Directors shall determine.

        (b) The "fair market value" of a share of Common Stock as of a specified
date shall mean (i) the closing sale price of the Common Stock on the Nasdaq
Small Cap Market (or on such other body on which the Common Stock is then
traded) on the trading day immediately preceding the date as of which the Fair
Market Value is being determined, (ii) if the closing sale price of the Common
Stock is not so quoted, then the mean between the high and low quoted sale
prices of the Common Stock on the last preceding date on which sales were
reported, (iii) if neither of the above is available, then the mean between the
most recent bid and asked prices of the Common Stock quoted by a market maker or
other recognized specialist in the Common Stock, or (iv) if there is no market
maker for the Common Stock, as reasonably determined by the Committee.

7.      Option Amounts.

        The maximum aggregate fair market value (determined at the time an
option is granted in the same manner as provided for in Paragraph 6 hereof) of
the Common Stock of the Company with respect to which Incentive Stock Options
are exercisable for the first time by any optionee during any calendar year
(under all plans of the Company and its subsidiaries) shall not exceed
$100,000.

8.      Exercise of Options.

        (a) The term of each option shall be not more than ten (10) years from
the date of granting thereof or such shorter period as is prescribed in
Paragraph 9 hereof; Within such limit, options will be exercisable at such time
or times, and subject to such restrictions and conditions, as the Committee
shall, in each instance, approve, which need not be uniform for all optionees;
provided, however, that except as provided in Subparagraph (b) of this Paragraph
8 or Paragraph 9 hereof, no option may be exercised at any time unless the
optionee is then an employee of the Company or a subsidiary and has been so
employed continuously since the granting of the option. Upon exercise of an
option the Committee shall withhold a sufficient number of shares to satisfy the
Company's withholding obligations for any taxes incurred as a result of such
exercise, based on the fair market value thereof, as defined above, as of the
date taxes are required to be withheld; provided, that in lieu of all or part of
such withholding, the optionee may pay an equivalent amount of cash to the
Company.

        (b) Notwithstanding any other provision of the Plan, unless otherwise
provided by the Committee in the option agreement, each outstanding option shall
become immediately and fully exercisable for a one (1) year period following the
date of a "Change of Control" but in no

                                       3
<PAGE>

event beyond the specified term of such options; provided that, after such one
(1) year period, the normal option exercise provisions of the Plan and such
option shall govern; and provided further, that in the event an optionee's
employment with the Company or any subsidiary is terminated within two (2) years
of a Change of Control, all outstanding stock options of such optionee at the
date of termination shall be exercisable for a period of six (6) months
beginning on the date of termination but in no event beyond the specified term
of such options. The option agreements may contain such other or different
provisions as the Committee, in its discretion, may approve in addition to, or
in lieu of, this Subparagraph (b) of Paragraph 8. In addition, the Committee
shall have the authority, in its discretion, to accelerate the vesting and
permit the immediate exercisability of outstanding options under such other
circumstances as it may deem appropriate.

        (c) "Change of Control," as used in Paragraph 8(b) shall be deemed to
have occurred if any individual, corporation, partnership or other person or
entity, together with its Affiliates and Associates, acquires as the Beneficial
Owner more than thirty-five percent (35%) in the aggregate of the voting power
of outstanding shares of capital stock of the Company entitled to vote in the
election of Directors, and within a 400-day period thereafter a majority of
Directors elected to the Board of Directors of the Company, or a majority of the
persons constituting a group authorized to hire or terminate employment of
officers, if other than the Board, are different from the Directors or persons
constituting the Board or group just prior to the start of such period or a
group other than the Board is created to hire or terminate employment of
officers. The terms "Affiliates," "Associate" and "Beneficial Owner" as used in
this Paragraph 8(c) shall be defined by reference to the Securities Exchange Act
of 1934, as amended, and the rules and regulations in effect thereunder.

9.      Termination of Employment.

        The holder of any option issued hereunder must exercise the option prior
to his termination of employment, except that if the employment of an optionee
terminates with the consent and approval of his employer, the Committee in its
absolute discretion may permit the optionee to exercise his option, to the
extent that he was entitled to exercise it at the date of such termination of
employment, at any time within ninety (90) days after such termination, but
not after ten (10) years from the date of the granting thereof. If a subsidiary
of the Company ceases to be a subsidiary of the Company, an optionee who is
employed by such former subsidiary and is no longer employed by either the
Company or any current subsidiary of the Company shall be deemed to have
terminated employment with the Company and every subsidiary of the Company. If
the optionee terminates employment on account of disability he may exercise such
option to the extent he was entitled to exercise it at the date of such
termination at any time within one (1) year of the termination of his employment
but not after ten (10) years from the date of the granting thereof. For this
purpose a person shall be deemed to be disabled if he is permanently and totally
disabled within the meaning of Section 422(c)(6) of the Code, which, as of the
date hereof, shall mean that he is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
which can be expected to result in death or which has lasted or can be expected
to last for a continuous period of not less than 12 months. A person shall be
considered disabled only if he furnishes such proof of disability as the
Committee may require. Options granted under the Plan shall not be affected by
any change of employment so long as the holder continues to be an employee of
the Company or a subsidiary thereof. The option agreements may contain such
provisions as the Committee shall approve

                                       4
<PAGE>

with reference to the effect of approved leaves of absence. Nothing in the Plan
or in any option granted pursuant to the Plan shall confer on any individual any
right to continue in the employ of the Company or any subsidiary or interfere in
any way with the right of the Company or any subsidiary thereof to terminate his
employment at any time.

10.     Non-Transferability of Options.

        Each option granted under the Plan shall, by its terms, be
non-transferable otherwise than by will or the laws of descent and distribution
and an option may be exercised, during the lifetime of the holder thereof, only
by him; provided, however, that the Committee may, in its sole discretion permit
an optionee to transfer a Nonqualified Stock Option to such persons or entities
as the Committee may approve, in its discretion. In the event of any such
transfer, the option shall still be subject to the provisions of Paragraphs 8
and 9 hereof concerning the exercisability during the optionee's employment.

11.     Successive Option Grants.

        Successive option grants may be made to any holder of options under the
Plan.

12.     Investment Purpose.

        Each option under the Plan shall be granted only on the condition that
all purchases of stock thereunder shall be for investment purposes, and not with
a view to resale or distribution, except that the Committee may make such
provision with respect to options granted under this Plan as it deems necessary
or advisable for the release of such condition upon the registration with the
Securities and Exchange Commission of stock subject to the option, or upon the
happening of any other contingency warranting the release of such condition.

13.     Adjustments Upon Changes in Capitalization or Corporate Acquisitions.

        In the event of increases or decreases in the outstanding Common Stock ,
or such shares are exchanged or changed, by reason of any stock dividend, stock
split, reverse stock split, reclassification, recapitalization, merger,
consolidation, reorganization, split-up, spin-off, combination or exchange of
shares or the like, and, in the event of any such increase, decrease, exchange
or change in the outstanding Common Stock, (i) the aggregate number, kind and
class of shares available for issuance under the Plan, (ii) the maximum number
of shares as to which options may be granted to any individual, and (iii) the
number, kind and class of shares subject to outstanding options and the exercise
prices of such options, shall be appropriately and proportionately adjusted or
substituted by the Committee, whose determination shall be final, binding and
conclusive; provided that the number of shares subject to any award shall always
be a whole number. Notwithstanding the foregoing: (1) in the event the Company
or a subsidiary enters into a transaction described in Section 424(a) of the
Code with any other corporation, the Committee may, in its discretion, grant
options to employees or former employees of such corporation in substitution of
options previously granted to them upon such terms and conditions as shall be
necessary to qualify such grant as a substitution described in Section 424(a) of
the Code; and (2) in the event of a special, non-recurring distribution with
respect to the Company's Common Stock, the Committee may, in its discretion,
adjust the number of shares subject to each

                                       5
<PAGE>

option and the option price per share in such manner as the Committee deems just
and equitable to reflect such distribution, but in no event shall the total
number of shares of Common Stock used under the Plan exceed the number
authorized under Paragraph 2.

14.     Amendment and Termination.

        Either the Board of Directors or the Committee may at any time terminate
the Plan, or make such modifications of the Plan as it shall deem advisable;
provided, however, that neither the Board of Directors nor the Committee may,
without further approval by the holders of Common Stock, increase the maximum
numbers of shares as to which options may be granted under the Plan (except
under the anti-dilution provisions hereof). No termination or amendment of the
Plan may, without the consent of the optionee to whom any option shall
theretofore have been granted, adversely affect the rights of such optionee
under such option.

15.     Effectiveness of the Plan.

        The Plan shall become effective upon adoption by the Board of Directors
or the Committee subject, however, to its further approval by the shareholders
of the Company given within twelve (12) months of the date the Plan is adopted
by the Board of Directors or the Committee at a regular meeting of the
shareholders or at a special meeting duly called and held for such purpose.
Grants of options may be made prior to such shareholder approval but all option
grants made prior to shareholder approval shall be subject to the obtaining of
such approval and if such approval is not obtained, such options shall not be
effective for any purpose.

16.     Time of Granting of Options.

        An option grant under the Plan shall be deemed to be made on the date on
which the Committee (or other person to whom the Committee shall have delegated
authority pursuant to Paragraph 3 hereof) makes an award of an option to an
eligible employee of the Company or its subsidiaries (but in no event prior to
the adoption of the Plan by the Board of Directors), provided that such option
is evidenced by a written option agreement or certificate duly executed on
behalf of the Company and on behalf of the optionee within a reasonable time
after the date of the action of the Committee (or other person to whom the
Committee shall have delegated authority pursuant to Paragraph 3 hereof).

17.     Term of Plan.

        This Plan shall commence on the date specified herein, and subject to
Paragraph 15, shall remain in effect thereafter. Options outstanding at the
termination of the Plan shall continue in full force and effect and shall not be
affected thereby.

18.     Indemnification and Exculpation

        Each person who is or shall have been a member of the Board of Directors
or of the Committee (and each such person to whom the Committee shall have
delegated authority pursuant to Paragraph 3 hereof) shall be indemnified and
held harmless by the Company against and from any and all loss, cost, liability
or expense that may be imposed upon or reasonably incurred in connection with or
resulting from any claim, action, suit or proceeding to which the

                                       6
<PAGE>

person may be a party or in which they may be involved by reason of any action
taken or failure to act under the Plan and against and from any and all amounts
paid by them in settlement thereof (with the Company's written approval) or paid
by them in satisfaction of a judgment in any such action, suit or proceeding,
except a judgment based upon a finding of his or her bad faith; subject,
however, to the condition that upon the institution of any claim, action, suit
or proceeding against them, they shall in writing give the Company an
opportunity, at its own expense, to handle and defend the same before
undertaking to handle and defend it on their own behalf. The foregoing right to
indemnification shall not be exclusive of any other right to which such person
may be entitled as a matter of law or otherwise, or any power that the Company
may have to indemnify or hold such person harmless.

        Each member of the Board of Directors or of the Committee (and each such
person to whom the Committee shall have delegated authority pursuant to
Paragraph 3 hereof), and each officer and employee of the Company, shall be
fully justified in relying or acting upon any information furnished to or on
behalf of the Company by any person or persons, other than said individual, in
connection with the administration of the Plan. In no event shall any person who
is or shall have been a member of the Board of Directors or of the Committee (or
any such person to whom the Committee shall have delegated authority pursuant to
Paragraph 3 hereof), or an officer or employee of the Company, be liable for any
determination made or other action taken or any omission to act in reliance upon
any such information, or for any action (including the furnishing of
information) taken or any failure to act, if in good faith.

19.     Miscellaneous.

        (a) Nothing in the Plan or in any option agreement or certificate
granted pursuant to the Plan shall confer on any individual any right to
continue in the employ of the Company or any subsidiary or interfere in any way
with the right of the Company or any subsidiary thereof to terminate his or her
employment at any time, with or without cause.

        (b) The holder of an option shall have none of the rights of a
shareholder with respect to the shares subject to option until such shares shall
be issued to him or her upon the exercise of such option.

        (c) This Plan and all award agreements or certificates made and actions
taken hereunder and thereunder shall be governed by and construed in accordance
with the laws of the State of Delaware, without regard for conflicts of laws
principles thereof.

        (d) In the event any provision of this Plan or any option agreement or
certificate hereunder shall be held illegal or invalid for any reason, the
illegality or invalidty shall not affect the remaining provisions of this Plan
or such agreement, and this Plan and such agreement or certificate shall be
construed and enforced as if the illegal or invalid provision had not been
included.

        (e) The granting of awards and the issuance of shares of Common Stock
under this Plan shall be subject to all applicable laws, rules and regulations,
and to such approvals by any governmental agencies or bodies as may be required.

                                       7
<PAGE>

        (f) Captions are provided for convenience only, and shall not serve as a
basis for interpretation or construction of this Plan or any option agreement or
certificate.

                                     * * *

        The foregoing Plan was approved and adopted by the Board of Directors of
the Company on February 29, 2000.

                                       8

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