Document:

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                                                                    EXHIBIT 4.5

                                  TELLIUM, INC.

                                     FORM OF
                         DIRECTOR STOCK OPTION AGREEMENT

         This Stock Option Agreement (this "Agreement"), made as of October 18,
2000 (the "Grant Date"), between Tellium, Inc., a Delaware corporation
(the "Company"), and ________ (the "Optionee").

         WHEREAS, the Company wishes to afford the Optionee the opportunity
to purchase shares of its common stock, par value $.001 per share (the
"Common Stock"); and

         WHEREAS, the Company has determined that it would be to the
advantage and in the best interest of the Company and its stockholders to
grant options to purchase the Common Stock to the Optionee.

         NOW, THEREFORE, the parties hereto agree as follows:

         1.       GRANT OF OPTION.

                  The Company hereby grants to the Optionee the right and
option (the "Option") to purchase all or any part of an aggregate of ________
whole shares of Common Stock subject to, and in accordance with, the terms
and conditions set forth in this Agreement. The number of shares of Common
Stock issuable on the exercise of the Option shall be adjusted from time to
time as set forth herein. The Option is not intended to qualify as an
Incentive Stock Option within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code").

         2.       PURCHASE PRICE.

                  The price at which the Optionee shall be entitled to
purchase shares of Common Stock upon the exercise of the Option shall
initially be $1.55 per share and shall be adjusted from time to time as set
forth herein (the "Purchase Price").

         3.       DURATION OF OPTION.

                  The Option shall be exercisable to the extent and in the
manner provided herein for a period of 10 (ten) years from the Grant Date
(the "Exercise Term"); PROVIDED, HOWEVER, that the Option may become
unexercisable earlier as provided in Section 4.4 hereof.

         4.       EXERCISABILITY OF OPTION.

                  4.1 VESTING SCHEDULE. The Option will become exercisable in
accordance with the following schedule (the "Vesting Schedule"): (i) the Option
with respect to fifty percent

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(50%) of the shares of Common Stock will vest immediately upon the Grant Date
and be immediately exercisable on and after the Grant Date; and (ii) the
Option with respect to the remaining fifty percent (50%) of the shares of
Common Stock will vest on the earlier of (1) the date of the annual meeting
of stockholders on which the Optionee's term as director of the Company
expires or (2) the first anniversary of the Grant Date (the "Second Vesting
Date"). Each such right of purchase shall be cumulative and shall continue,
unless sooner exercised or they expire as herein provided, during the
remaining period of the Exercise Term.

                  4.2      COMMENCEMENT OF EXERCISABILITY.

                           (a) Unless accelerated in the absolute discretion of
                  the Board of Directors of the Company (the "Board") or as
                  otherwise provided herein, the Option shall become exercisable
                  during its term in accordance with the Vesting Schedule.

                           (b) No portion of the Option which is unexercisable
                  at Termination of Service (as defined below) shall thereafter
                  become exercisable.

                  4.3 DURATION OF EXERCISABILITY. The installments provided
for in Section 4.1 are cumulative. Each such installment which becomes
exercisable pursuant to Section 4.1 shall remain exercisable until it becomes
unexercisable under Section 4.4.

                  4.4 EXPIRATION OF OPTION. The Option may not be exercised
to any extent by anyone after the first to occur of the following events:

                           (a)      The expiration of the Exercise Term; or

                           (b) The expiration of three (3) business days from
                  the time of the Optionee's Termination of Service, including,
                  but not by way of limitation, a termination by reason of his
                  resignation or removal, unless such Termination of Service
                  results from his death or Disability; or

                           (c) The expiration of one (1) year from the date of
                  the Optionee's Termination of Service by reason of his death
                  or Disability. In the event of the Optionee's Termination of
                  Service by reason of his death, the Option shall be
                  exercisable during the one (1) year period by the legatee or
                  legatees under his will, or by his personal representatives or
                  distributees and such person or persons shall be substituted
                  for the Optionee each time the Optionee is referred to herein.

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                  For purposes of this Agreement, "Termination of Service"
shall mean the time when the Optionee ceases to serve as a director of the
Company for any reason, including, but not by way of limitation, a
termination by his resignation, removal, death or Disability, but shall
exclude the date of the annual meeting of stockholders on which the
Optionee's term as director of the Company expires. The Board, in its
absolute discretion, shall determine the effect of all matters and questions
relating to Termination of Service.

                  For purposes of this Agreement, "Disability" shall mean,
with respect to the Optionee, the suffering of any mental or physical
illness, disability or incapacity that shall in all material respects
preclude the Optionee from performing his duties as a director of the
Company; PROVIDED, HOWEVER, that such illness, disability or incapacity shall
be reasonably determined by the Board to be of a permanent nature based on
the foregoing standards.

         5.       MANNER OF EXERCISE AND PAYMENT.

                  5.1 The Option or any exercisable portion thereof may be
exercised solely by delivery to the Secretary of the Company or his office of
all of the following prior to the time when the Option or such portion
becomes unexercisable under Section 4.4:

                           (a) A written notice complying with the applicable
                  rules established by the Board stating that the Option, or a
                  portion thereof, is exercised. The notice shall be signed by
                  the Optionee or other person then entitled to exercise the
                  Option or such portion; and

                           (b)      (i) Full cash payment to the Secretary of
                           the Company for the shares with respect to which such
                           Option or portion thereof is exercised; or

                                    (ii) With the consent of the Board, (A)
                           shares of Common Stock owned by the Optionee and,
                           unless the Committee provides otherwise in its sole
                           discretion, held by the Optionee for at least six (6)
                           months, duly endorsed for transfer to the Company,
                           with a Fair Market Value on the date of delivery
                           equal to the aggregate exercise price of the Option
                           or exercised portion thereof, or (B) shares of Common
                           Stock issuable to the Optionee upon exercise of the
                           Option or portion thereof, with a Fair Market Value
                           on the date of delivery equal to the aggregate
                           exercise price of the Option or exercised portion
                           thereof; or

                                    (iii) With the consent of the Board, a full
                           recourse promissory note bearing interest (at no less
                           than such rate as shall then preclude the imputation
                           of interest under the Code or successor provision)
                           and payable upon such terms as may be prescribed by
                           the Board. The Board may also prescribe the form of
                           such note and the security to be given for such note.
                           The Option may not be exercised, however, by delivery
                           of a promissory note or by a loan from the Company
                           when or where such loan or other extension of credit
                           is prohibited by law; or

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                                    (iv) With the consent of the Board, property
                           of any kind which constitutes good and valuable
                           consideration; or

                                    (v) With the consent of the Board, a notice
                           that the Optionee has placed a market sell order with
                           a broker with respect to shares of Common Stock then
                           issuable upon exercise of the Option or portion
                           thereof, and that the broker has been directed to pay
                           a sufficient portion of the net proceeds of the sale
                           to the Company in satisfaction of the Option exercise
                           price; or

                                    (vi) With the consent of the Board, any
                           combination of the consideration provided in the
                           foregoing subparagraphs (i), (ii), (iii), (iv) and
                           (v); and

                           (c) A bona fide written representation and agreement,
                  in a form satisfactory to the Board, signed by the Optionee or
                  other person then entitled to exercise such Option or portion
                  thereof, stating that the shares of stock are being acquired
                  for his own account, for investment and without any present
                  intention of distributing or reselling said shares or any of
                  them except as may be permitted under the Securities Act of
                  1933, as amended (the "Securities Act") and then applicable
                  rules and regulations thereunder, and that the Optionee or
                  other person then entitled to exercise such Option or portion
                  thereof will indemnify the Company against and hold it free
                  and harmless from any loss, damage, expense or liability
                  resulting to the Company if any sale or distribution of the
                  shares by such person is contrary to the representation and
                  agreement referred to above. The Board may, in its absolute
                  discretion, take whatever additional actions it deems
                  appropriate to ensure the observance and performance of such
                  representation and agreement and to effect compliance with the
                  Securities Act and any other federal or state securities laws
                  or regulations. Without limiting the generality of the
                  foregoing, the Board may require an opinion of counsel
                  acceptable to it to the effect that any subsequent transfer of
                  shares acquired on the exercise of the Option or portion
                  thereof does not violate the Securities Act, and may issue
                  stop-transfer orders covering such shares. Share certificates
                  evidencing stock issued on exercise of the Option shall bear
                  an appropriate legend referring to the provisions of this
                  subsection (c) and the agreements herein. The written
                  representation and agreement referred to in the first sentence
                  of this subsection (c) shall, however, not be required if the
                  shares to be issued pursuant to such exercise have been
                  registered under the Securities Act, and such registration is
                  then effective in respect of such shares; and

                           (d) Full payment to the Company of all amounts which,
                  under federal, state or local tax law, it is required to
                  withhold upon exercise of the Option or portion thereof in
                  cash, or with the consent of the Board, (i) shares of Common

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                  Stock owned by the Optionee and, unless the Committee provides
                  otherwise in its sole discretion, held by the Optionee for at
                  least six (6) months, duly endorsed for transfer, with a Fair
                  Market Value equal to the minimum amount required to be
                  withheld, or (ii) shares of Common Stock issuable to the
                  Optionee upon exercise of the Option or portion thereof with a
                  Fair Market Value equal to the minimum amount required to be
                  withheld, may be used to make all or part of such payment; and

                           (e) In the event the Option or portion thereof shall
                  be exercised by any person or persons other than the Optionee,
                  appropriate proof of the right of such person or persons to
                  exercise the Option.

                  5.2 Subject to Section 5.1(d), upon receipt of notice of
exercise and full payment for the shares in respect of which the Option is
being exercised, the Company shall take such action as may be necessary to
effect the transfer to the Optionee of the number of shares of Common Stock
as to which such exercise was effective.

                  5.3 The Optionee shall not be deemed to be the holder of,
or to have any of the rights of a holder with respect to any shares subject
to the Option until (i) the Option shall have been exercised pursuant to the
terms of this Agreement and the Optionee shall have paid the full purchase
price for the number of shares in respect of which the Option was exercised,
(ii) the Company shall have issued and delivered the shares to the Optionee,
and (iii) the Optionee's name shall have been entered as a stockholder of
record on the books of the Company, whereupon the Optionee shall have full
voting and other ownership rights with respect to such shares.

                  5.4 For purposes of this Agreement, the term "Fair Market
Value" of a share of Common Stock as of a given date shall be (i) the closing
price of a share of Common Stock on the principal exchange on which shares of
Common Stock are then trading, if any (or as reported on any composite index
which includes such principal exchange), on the trading day previous to such
date, or if shares were not traded on the trading day previous to such date,
then on the next preceding date on which a trade occurred, or (ii) if Common
Stock is not traded on an exchange but is quoted on National Association of
Securities Dealers Automated Quotation System (NASDAQ) or a successor
quotation system, the mean between the closing representative bid and asked
prices for the Common Stock on the trading day previous to such date as
reported by NASDAQ or such successor quotation system, or if shares were not
traded on the trading day previous to such date, then on the next preceding
date on which a trade occurred; or (iii) if Common Stock is not publicly
traded on an exchange and not quoted on NASDAQ or a successor quotation
system, the fair market value of a share of Common Stock as established by
the Board acting in good faith.

         6.       EFFECT OF CHANGE IN CONTROL.

                  Notwithstanding anything contained in this Agreement to the
contrary, in the event of a Change in Control (as described below), all
unvested shares subject to the Option shall immediately vest and become fully
exercisable during the Exercise Term; PROVIDED, HOWEVER, that

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this acceleration of exercisability shall not take place if:

                           (a) This Option becomes unexercisable under
                  Section 4.4 prior to said effective date; or

                           (b) In connection with such an event, provision is
                  made for an assumption of this Option or a substitution
                  therefor of a new option by a successor corporation, or a
                  parent or subsidiary of such a corporation, in either case,
                  with appropriate adjustments as to the number of shares of
                  stock covered by this Option, the purchase price of such
                  shares of stock and/or the kind of stock or securities that
                  may be acquired upon exercise of this Option.

                  For purposes of this Agreement, the term "Change in Control"
shall mean the occurrence of any of the following:

                           (a) An acquisition (other than directly from the
                  Company) of any voting securities of the Company entitled to
                  vote generally in the election of the Board ("Voting
                  Securities") by any Person, immediately after which such
                  Person has Beneficial Ownership of fifty percent (50%) or more
                  of the then outstanding shares of Common Stock and any other
                  securities into which such shares are changed or for which
                  such shares are exchanged (the "Shares") or the combined
                  voting power of the Company's then outstanding Voting
                  Securities, PROVIDED, HOWEVER, in determining whether a Change
                  in Control has occurred pursuant to this Section 6, Shares or
                  Voting Securities which are acquired in a "Non-Control
                  Acquisition" (as hereinafter defined) shall not constitute an
                  acquisition which would cause a Change in Control. A
                  "Non-Control Acquisition" shall mean an acquisition by (i) an
                  employee benefit plan (or a trust forming a part thereof)
                  maintained by (A) the Company or (B) any corporation or other
                  Person of which a majority of its voting power or its voting
                  equity securities or equity interest is owned, directly or
                  indirectly, by the Company (for purposes of this definition, a
                  "Related Entity"), (ii) the Company or any Related Entity, or
                  (iii) any Person in connection with a "Non-Control
                  Transaction" (as hereinafter defined);

                           (b) The individuals who, as of the date hereof, are
                  members of the Board (the "Incumbent Board"), cease for any
                  reason to constitute at least a majority of the members of the
                  Board, or following a Merger (as hereinafter defined) which
                  results in a Parent Corporation, the board of directors of the
                  ultimate Parent Corporation (as hereinafter defined);
                  PROVIDED, HOWEVER, that if the election, or nomination for
                  election by the Company's common stockholders, of any new
                  director was approved by a vote of at least two-thirds of the
                  Incumbent Board, such new director shall, for purposes of this
                  Section 6, be considered as a member of the Incumbent Board;
                  PROVIDED FURTHER, HOWEVER, that no individual shall be
                  considered a member of the Incumbent Board if such individual
                  initially assumed office as a result of either an actual or
                  threatened "Election Contest" (as described in Rule 14a-11
                  promulgated under the Securities Exchange Act of 1934,

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                  as amended (the "Exchange Act")) or other actual or
                  threatened solicitation of proxies or consents by or on
                  behalf of a Person other than the Board (a "Proxy Contest")
                  including by reason of any agreement intended to avoid or
                  settle any Election Contest or Proxy Contest; or

                           (c)      The consummation of:

                                    (i) A merger, consolidation or
                           reorganization with or into the Company or in which
                           securities of the Company are issued (a "Merger"),
                           unless such Merger is a "Non-Control Transaction." A
                           "Non-Control Transaction" shall mean a Merger where:

                                            (A) the stockholders of the Company,
                                    immediately before such Merger own directly
                                    or indirectly immediately following such
                                    Merger at least fifty percent (50%) of the
                                    combined voting power of the outstanding
                                    voting securities of (x) the corporation
                                    resulting from such Merger (the "Surviving
                                    Corporation") if fifty percent (50%) or more
                                    of the combined voting power of the then
                                    outstanding voting securities of the
                                    Surviving Corporation is not Beneficially
                                    Owned, directly or indirectly by another
                                    Person (a "Parent Corporation"), or (y) if
                                    there are one or more Parent Corporations,
                                    the ultimate Parent Corporation; and

                                            (B) the individuals who were members
                                    of the Incumbent Board immediately prior to
                                    the execution of the agreement providing for
                                    such Merger constitute at least a majority
                                    of the members of the board of directors of
                                    (x) the Surviving Corporation, if there is
                                    no Parent Corporation, or (y) if there are
                                    one or more Parent Corporations, the
                                    ultimate Parent Corporation; and

                                            (C) no Person other than (1) the
                                    Company, (2) any Related Entity, (3) any
                                    employee benefit plan (or any trust forming
                                    a part thereof) that, immediately prior to
                                    such Merger was maintained by the Company or
                                    any Related Entity, or (4) any Person who,
                                    together with its Affiliates, immediately
                                    prior to such Merger, had Beneficial
                                    Ownership of fifty percent (50%) or more of
                                    the then outstanding Voting Securities or
                                    Shares, owns, together with its Affiliates,
                                    Beneficial Ownership of (i) fifty percent
                                    (50%) or more of the combined voting power
                                    of the outstanding voting securities or
                                    common stock of (x) the Surviving
                                    Corporation if there is no Parent
                                    Corporation, or (y) if there are one or more
                                    Parent Corporations, the ultimate Parent
                                    Corporation.

                                    (ii)    A complete liquidation or
                           dissolution of the

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                           Company; or

                                    (iii) The sale or other disposition of all
                           or substantially all of the assets of the Company to
                           any Person (other than a transfer to a Related Entity
                           or under conditions that would constitute a
                           Non-Control Transaction with the disposition of the
                           assets being regarded as a Merger for this purpose or
                           the distribution to the Company's stockholders of the
                           stock of a Related Entity or any other assets).

                  Notwithstanding the foregoing, a Change in Control shall
not be deemed to occur solely because any Person (the "Subject Person")
acquired Beneficial Ownership of more than the permitted amount of the then
outstanding Shares or Voting Securities as a result of the acquisition of
Shares or Voting Securities by the Company which, by reducing the number of
Shares or Voting Securities then outstanding, increases the proportional
number of shares Beneficially Owned by the Subject Persons, provided that if
a Change in Control would occur (but for the operation of this sentence) as a
result of the acquisition of Shares or Voting Securities by the Company, and
(1) before such share acquisition by the Company the Subject Person becomes
the Beneficial Owner of any new or additional Shares or Voting Securities in
contemplation of such share acquisition by the Company or (2) after such
share acquisition by the Company the Subject Person becomes the Beneficial
Owner of any new or additional Shares or Voting Securities which in either
case increases the percentage of the then outstanding Shares or Voting
Securities Beneficially Owned by the Subject Person, then a Change in Control
shall occur.

                  For purposes of this Section 6, "Person" shall mean
`person' as such term is used for purposes of Section 13(d) or 14(d) of the
Exchange Act, including without limitation, any individual, corporation,
limited liability company, partnership, trust, unincorporated organization,
government or any agency or political subdivision thereof, or any other
entity or any group of Persons.

                  For purpose of this Section 6, "Beneficial Ownership" shall
mean ownership within the meaning of Rule 13d-3 promulgated under the
Exchange Act.

         7.       RESTRICTIONS ON TRANSFER OF SHARES; RIGHT OF FIRST REFUSAL.

                  (a) Except for Transfers otherwise permitted by Section 7(c)
         below, the Optionee agrees that he will not transfer, sell, assign,
         pledge, hypothecate or otherwise dispose of (each, a "Transfer") any
         shares of Common Stock purchased upon exercise of the Option or any
         portion thereof (the "Exercise Shares") at any time without complying
         with the right of first refusal set forth in Section 7(b) below.

                  (b) If at any time the Optionee receives a bona fide offer
         ("Offer") to purchase any or all of his Exercise Shares from a third
         party (the "Offeror") which the Optionee wishes to accept, the Optionee
         shall cause the Offer to be reduced to writing and shall notify the
         Company in writing of his wish to accept the Offer. The Optionee's
         notice shall contain an irrevocable offer to sell such Exercise Shares
         to the Company (in the manner

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         set forth below) at a purchase price equal to the price contained
         in, and on the same terms and conditions of, the Offer, and shall be
         accompanied by a true copy of the Offer (which shall identify the
         Offeror). At any time within thirty (30) days after the date of the
         receipt by the Company of the Optionee's notice, the Company shall
         have the right and option to purchase all, but not less than all, of
         the Exercise Shares covered by the Offer either (i) at the same
         price and on the same terms and conditions as the Offer or (ii) if
         the Offer includes any consideration other than cash, then, at the
         sole option of the Company, at the all-equivalent cash price,
         determined in good faith by the Board, by delivering a check or
         checks in the appropriate amount to the Optionee against delivery of
         certificates or instruments representing the Exercise Shares so
         purchased, appropriately endorsed by the Optionee; provided that the
         price to be paid as described above shall be paid first by reducing
         the amount of any indebtedness due from the Optionee to the Company.
         The Company may also elect (but shall have no obligation) to cause
         its designee to purchase Exercise Shares covered by the Offer. If,
         at the end of such 30-day period, the Company has not tendered the
         purchase price for such Exercise Shares in the manner set forth
         above, the Optionee may during the succeeding 30-day period sell not
         less than all of the Exercise Shares covered by the Offer to the
         Offeror on terms no less favorable to the Optionee than those
         contained in the Offer. No sale may be made to any Offeror unless
         the Offeror agrees in writing with the Company to be bound by the
         provisions of this Section 7. Promptly after such sale, the Optionee
         shall notify the Company of the consummation thereof and shall
         furnish such evidence of the completion and time of completion of
         such sale and of the terms thereof as may reasonably be requested by
         the Company. If, at the end of 30 days following the expiration of
         the 30-day period during which the Company may purchase the Exercise
         Shares, the Optionee has not completed the sale of such Exercise
         Shares as aforesaid, all the restrictions on Transfer contained in
         this Agreement in effect at that time shall again be in effect with
         respect to such Exercise Shares.

                  (c) The provisions of Sections 7(a) and 7(b) shall not apply
         to the following Transfers of Exercise Shares:

                              (i) a Transfer made by the Optionee to the
                           Company; and

                             (ii) a Transfer made to any of the following
                           "Permitted Transferees":

                                    (1) upon the death of the Optionee to his
                           executors, administrators, testamentary trustees,
                           legatees or beneficiaries (the "Optionee's Estate")
                           or a Transfer to the executors, administrators,
                           testamentary trustees, legatees or beneficiaries of a
                           person who has become a holder of Exercise Shares in
                           accordance with the terms of this Agreement;

                                    (2) a Transfer made to a trust or
                           custodianship the beneficiaries of which include only
                           the Optionee, his spouse and his lineal descendants,

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                           including adopted children (an "Optionee's Trust");
                           or

                                    (3) a Transfer to the Optionee's spouse and
                           his lineal descendants, including adopted children.

                  (d) No Transfer of Exercise Shares, whether or not permitted
         by Sections 7(a), 7(b) or 7(c) hereof, shall be made or recorded on the
         books of the Company, and any such Transfer shall be void and of no
         effect, unless:

                           (i) Such Transfer of the Exercise Shares is made
                  pursuant to an effective registration statement under the
                  Securities Act, or pursuant to an exemption therefrom with
                  respect to which the Company may, upon request, require a
                  satisfactory opinion of counsel for the Optionee (which
                  counsel shall be acceptable to the Company) to the effect that
                  such Transfer is exempt from the provisions of Section 5 of
                  the Securities Act; and

                           (ii) The transferee of the Exercise Shares agrees to
                  be bound by, and executes a counterpart to, an agreement with
                  the Company with terms substantially similar to the terms set
                  forth in this Section 7.

                  (e) Immediately prior to any Transfer of Exercise Shares to an
         Optionee's Trust, the Optionee shall provide the Company with a copy of
         the instruments creating the Optionee's Trust with the identity of the
         beneficiaries of the Optionee's Trust. The Optionee shall notify the
         Company prior to any change in the identity of any beneficiary of the
         Optionee's Trust.

                  (f) No Transfer of Exercise Shares in violation of this
         Agreement shall be made or recorded on the books of the Company and any
         such Transfer shall be void and of no effect.

                  (g) This Section 7 shall terminate upon a Qualified Offering
         by the Company.

                  For purposes of this Agreement, "Qualified Offering" shall
mean a firm commitment underwritten initial public offering and sale of shares
of the Company's Common Stock under the Securities Act.

         8. NONTRANSFERABILITY.

                  Neither the Option nor any interest or right therein or part
thereof shall be sold, pledged, assigned or transferred in any manner other than
by will or the laws of descent and distribution, unless and until the Option has
been exercised or the shares underlying the Option have been issued and all
restrictions applicable to such shares have lapsed. Neither the Option nor any
interest or right therein or part thereof shall be liable for the debts,
contracts or engagements of the Optionee or his successors in interest or shall
be subject to disposition by transfer, alienation, anticipation, pledge,
encumbrance, assignment or any other means whether such

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disposition be voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy), and any attempted disposition thereof shall be null
and void and of no effect, except to the extent that such disposition is
permitted by the preceding sentence. Following transfer, for purposes of the
Option, a transferee of an Option shall be deemed to be the Optionee,
provided that the Option shall be exercisable by the transferee only to the
extent and for such periods that the Option would have been exercisable if
held by the original Optionee.

         9. ADJUSTMENTS.

                  9.1 ADJUSTMENT OF PURCHASE PRICE. The Purchase Price and
the number of shares of Common Stock issuable on exercise of the Option shall
be adjusted as set forth in this Section 9 with the intent that the economic
and other rights of the Optionee shall not be impaired.

                  9.2 ADJUSTMENT FOR COMBINATION OR CONSOLIDATION OF COMMON
STOCK. In the event the outstanding shares of Common Stock shall be combined
or consolidated, by reclassification or otherwise, into a lesser number of
shares of Common Stock, the Purchase Price in effect immediately prior to
such combination or consolidation shall, concurrently with the effectiveness
of such combination or consolidation, be proportionately increased and the
number of shares of Common Stock issuable on exercise of the Option shall be
proportionately decreased.

                  9.3 ADJUSTMENT FOR STOCK DIVIDEND OR SUBDIVISION. In the
event the Company at any time or from time to time after the Grant Date shall
declare or pay any dividend on the Common Stock payable in Common Stock, or
effect a subdivision of the outstanding shares of Common Stock into a greater
number of shares of Common Stock by reclassification or otherwise than by
payment of a dividend in Common Stock, then and in any such event, the
Purchase Price in effect immediately prior to such subdivision or stock
dividend shall forthwith be proportionately decreased and the number of
shares of Common Stock issuable on exercise of the Option shall be
proportionately increased.

         10. NO RIGHT TO CONTINUED MEMBERSHIP ON THE BOARD OF DIRECTORS.

                  Nothing in this Agreement shall be interpreted or construed
to confer any right with respect to continuance of membership on the Board,
nor shall this Agreement interfere in any way with the right of the Company's
stockholders or the Board to remove the Optionee from the Board at any time.

         11. RESERVATION OF SHARES.

                  The Company shall at all times during the term of the
Option reserve and keep available such number of shares of Common Stock as
will be sufficient to satisfy the requirements of this Agreement.

         12. SHARE LEGEND.

                  Each certificate representing shares of Common Stock issued
upon the exercise of

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the Option or portion thereof shall bear the following legend:

                  "THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
                  TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR
                  OTHERWISE DISPOSED OF (A "TRANSFER") EXCEPT IN ACCORDANCE WITH
                  THE PROVISIONS OF A STOCK OPTION AGREEMENT. COPIES OF THE
                  STOCK OPTION AGREEMENT ARE ON FILE WITH THE COMPANY.

                  THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
                  REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR
                  STATE SECURITIES LAWS AND NO TRANSFER OF THESE SECURITIES MAY
                  BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION
                  STATEMENT UNDER THE ACT, OR (B) PURSUANT TO AN EXEMPTION
                  THEREFROM WITH RESPECT TO WHICH THE COMPANY MAY, UPON REQUEST,
                  REQUIRE A SATISFACTORY OPINION OF COUNSEL FOR THE HOLDER THAT
                  SUCH TRANSFER IS EXEMPT FROM THE REQUIREMENTS OF THE ACT."

         13. MODIFICATION OF AGREEMENT.

                  This Agreement may be modified, amended, suspended or
terminated, and any terms or conditions may be waived, but only by a written
instrument executed by the parties hereto.

         14. SEVERABILITY.

                  Should any provision of this Agreement be held by a court of
competent jurisdiction to be unenforceable or invalid for any reason, the
remaining provisions of this Agreement shall not be affected by such holding and
shall continue in full force in accordance with their terms.

         15. GOVERNING LAW.

                  The validity, interpretation, construction and performance of
this Agreement shall be governed by the laws of the State of Delaware without
giving effect to the conflicts of laws principles thereof.

         16. SUCCESSORS IN INTEREST.

                  This Agreement shall inure to the benefit of and be binding
upon any successor to the Company. All obligations imposed upon the Optionee and
all rights granted to the Company under this Agreement shall be final, binding
and conclusive upon the Optionee's heirs, executors, administrators and
successors.

                                        12

<PAGE>

         17. TITLES.

                  Titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of this Agreement.

         18. NOTICES.

                  Any notice to be given under the terms of this Agreement to
the Company shall be addressed to the Company in care of its Secretary, and any
notice to be given to the Optionee shall be addressed to him at the address
given beneath his signature hereto. By a notice given pursuant to this Section
18, either party may hereafter designate a different address for notices to be
given to him. Any notice which is required to be given to the Optionee shall, if
the Optionee is then deceased, be given to the Optionee's personal
representative if such representative has previously informed the Company of his
status and address by written notice under this Section 18. Any notice shall be
deemed duly given when delivered in person or when deposited in the U.S. mail,
registered or certified, postage prepaid and mailed to the respective addresses
set forth herein, unless a party changes its address for receiving notices by
giving notice in accordance with this Section 18, in which case, to the address
specified in such notice.

         19. ADMINISTRATION.

                  The Board shall have the power to interpret this Agreement.
All actions taken and all interpretations and determinations made by the Board
in good faith shall be final and binding upon the Optionee, the Company and all
other interested persons. No member of the Board shall be personally liable for
any action, determination or interpretation made in good faith with respect to
the Option.

                                        13

<PAGE>

                  IN WITNESS WHEREOF, the Agreement has been executed by the
parties hereto effective as of the date first written above.

                                 TELLIUM, INC.

                                 By:
                                     -----------------------------------------

                                 ---------------------------------------------
                                 Name of the Optionee:
                                 Address of the Optionee:
                                                         ---------------------

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

                                 ---------------------------------------------<PAGE>

                                                                    Exhibit 10.9

                              AMENDED AND RESTATED
                              EMPLOYMENT AGREEMENT

            This AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("Agreement") is
dated as of the 26th day of March 2001, by and between WILLIS NORTH AMERICA,
INC. ("Willis US") and JOSEPH J. PLUMERI ("Executive").

            WHEREAS, on October 15, 2000 (the "Commencement Date"), Willis US
and Willis Group Limited (f/k/a/ Willis Group plc, "Willis UK") entered into an
employment agreement in order to employ Executive as Executive Chairman of
Willis US and Chairman and Chief Executive Officer of Willis UK, among other
things (the "Prior Employment Agreement"); and

            WHEREAS, effective on or about the date of this Agreement, Willis
Group Holdings Limited, a company established under the laws of Bermuda ("Willis
Group") shall, as a result of the exchange of ordinary shares of TA I Limited, a
company established under the laws of England and Wales and the former ultimate
parent company of Willis UK and Willis US, for shares of common stock of Willis
Group, instead become the ultimate parent company of TAI Limited, Willis US and
Willis UK (the " Share Exchange"); and

            WHEREAS, in connection with the Share Exchange, Willis US, Willis UK
and Willis Group desire to make certain changes to the Prior Employment
Agreement including, among other things, to provide that Executive become
Chairman and Chief Executive Officer of Willis Group, and that Executive shall
hold a position on the board of directors of Willis Group (the "Board"); and

            WHEREAS, Executive desires to accept such changes on the terms and
conditions set forth in this Agreement.

            NOW, THEREFORE, in consideration of the mutual covenants and
promises contained herein and for other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:

      1. EMPLOYMENT, COMPENSATION AND BENEFITS. During the period of this
      Agreement, Willis US agrees to employ Executive in the capacity, to pay
      the remuneration, and to provide the benefits, described below.

            (a) TITLE AND DUTIES

                (i) During the Term (as defined in Section 2 herein), Executive
      shall be employed as Executive Chairman of Willis US and shall hold the
      offices of Executive Chairman and Chief Executive Officer of Willis Group
      and the offices of Chairman, Chief Executive Officer and Senior Managing
      Director of Willis UK. Executive shall also be elected to the most senior
      governing board and Executive Committee of Willis Group, Willis UK and
      Willis US. Executive shall also be appointed to such senior

<PAGE>

      director and executive positions, as the Board, after consultation with
      Executive, deems appropriate, of each subsidiary of Willis Group.

                (ii) Executive shall have the customary duties, responsibilities
      and authority of a chairman and a chief executive officer at a corporation
      of a similar size and status as Willis Group.

                (iii) Executive shall report directly to the Board.

                (iv) Executive's principal office shall be located at an office
      of Willis US in Manhattan, New York City, New York.

            (b) REMUNERATION

                (i) BASE SALARY. Beginning on the Commencement Date, Executive's
      base salary shall be at the rate of U.S. $1,000,000 per annum, payable in
      the United States in accordance with Willis U.S.'s normal payroll
      practices. On each anniversary of the Commencement Date, the amount of
      Executive's Base Salary shall be reviewed and may, at the discretion of
      the Board, be adjusted (but never below the then Base Salary). Any such
      increased amount shall constitute "Base Salary" hereunder.

                (ii) BONUS. So long as Executive remains employed hereunder,
      Executive shall receive an annual cash bonus (a "Guaranteed Bonus") equal
      to 100% of Executive's Base Salary, in respect of each fiscal year ending
      during the Term (the "FISCAL YEAR") (and, subject to Section 3 of this
      Agreement, prorated based on the period within the Term for any partial
      Fiscal Year ending after the Term); the amount of which shall be payable
      in U.S. dollars in the United States within the first quarter following
      the end of each such Fiscal Year. An additional annual or other bonus
      amount in excess of the Guaranteed Bonus shall be payable to Executive if
      extraordinary performance targets, established at the beginning of each
      Fiscal Year by the Board after consultation with the Executive, are
      achieved.

            (c) BENEFITS. Willis US shall provide Executive with those
      benefits, including medical, life insurance, disability, pension and
      other benefit programs, plans and practices to which
      similarly-situated, full-time executive employees of Willis US and its
      subsidiaries (commensurate with Executive's position with Willis US)
      are entitled (under the applicable benefit plans as in effect as of the
      Commencement Date or as may be amended from time to time), as set forth
      in the Staff Handbook (the "COMPANY PLANS"), as well as fringe benefits
      commensurate with the Executive's position, including, at Willis US's
      expense, reasonable availability of private air transportation, as
      determined appropriate for business travel by Executive in his
      reasonable, good faith discretion and, when reasonably necessary for
      security reasons, personal travel of Executive and his family.

            (d) TEMPORARY HOUSING. In addition to the benefits provided in
      Section 1(c), above, Willis US shall make available for use by Executive
      (and make payment of all rent, broker's fees, and other related expenses
      for an apartment in London, England, suitable to Executive's status in his
      role as Executive Chairman and Chief Executive

<PAGE>

      Officer of Willis Group, which apartment (and the expenses budgeted for
      decorating such apartment) have been agreed upon by the board of directors
      of Willis US.

            (e) OTHER EXPENSES. All expenses of Executive incurred in connection
      with the performance of his services hereunder or prior hereto, other than
      with respect to the commutation by Executive from his home in New Jersey
      to his office in New York City shall be payable or reimbursed by Willis
      US, including but not limited to those fringe benefits set forth in(c)
      above and (d) and, to the extent, if any, such benefits would be taxable
      to Executive, shall be grossed up by Willis US such that Executive has no
      after-tax cost for such expenses or additional gross-up amount.

            (f) INDEMNIFICATION. Willis US and Willis Group shall provide
      Executive with Directors and Officers and Errors and Omissions insurance
      in amounts reasonably acceptable to Executive. Willis US agrees, and shall
      cause Wills Group to agree to indemnify and defend Executive to the
      fullest extent permitted by applicable law, Willis US's and/or Willis
      Group's Articles of Incorporation and bylaws (or the applicable equivalent
      governing documents) with respect to any and all claims which arise from
      or relate to Executive's duties as an officer, member of the Board (and
      any other board of directors of Willis UK, Willis US or any of their
      affiliates), employee of Willis US, and duties performed in connection
      with the offices of Wills UK and Willis Group held by Executive, or as a
      fiduciary of any employee benefit plan or a similar capacity with any
      other entity for which Executive is performing services at Willis US's or
      Willis Group's request, whether performed heretofore or hereafter.

            (g) EQUITY PARTICIPATION. Prior to or simultaneously with the
      commencement of the Term, Executive invested US$5,000,000 in non-voting
      ordinary shares of TA I Limited (which shares shall be exchanged for
      shares of common stock of Willis Group (such shares, the "Shares"), at a
      per share purchase price equal to(pound)2.00 (the "Initial Price Per
      Share"). For each Share that Executive purchased, Executive was granted an
      option to purchase three (3) Shares, at a per share exercise price equal
      to the Initial Price Per Share, which option shall become vested in equal
      annual installments (20% per year) on each of the first five anniversaries
      of the date of grant, or (x) earlier in full upon a Change in Control (as
      defined in the Share Option Agreement) and (y) for an additional year in
      the case of a termination of employment (A) due to Executive's death or
      Disability (as hereinafter defined) at any time after the third
      anniversary of the Commencement Date and (B) by Willis US other than for
      Cause or by Executive for Good Reason (as such terms are hereinafter
      defined) after the five-hundred forty-seventh (547th) day of the Term. The
      foregoing equity arrangements, to the extent not inconsistent herewith,
      shall be governed by the terms and conditions, generally as set forth on
      Exhibit A, and specifically of certain documents, including a Management
      Shareholder and Subscription Agreement by and among TA I Limited, Mourant
      & Co. Trustees Limited and various management and employee subscribers, as
      amended or superceded to give effect to the Share Exchange, (the
      "Subscription Agreement"), the 1998 Share Purchase and Option Plan for Key
      Executives of TA I Limited (as amended or superceded to give effect to the
      Share Exchange), the Share Option Agreement, the Sale Participation
      Agreement, and the Registration Rights Agreement. Executive entered into a
      Subscription Agreement, a

<PAGE>

      Share Option Agreement, and a Sale Participation Agreement, substantially
      in the forms attached hereto.

            (h) Executive shall be entitled to vacation time and holidays as are
      provided in general to executive employees of Willis US but shall, in any
      event, be entitled to no less than four (4) weeks of vacation per year.
      Any unused days accrued in a particular year may not be carried over to a
      subsequent year.

            (i) Willis US and Executive shall cooperate to take all actions
      necessary to promptly obtain all necessary immigration or similar
      approvals required by applicable law for Executive to perform his duties
      hereunder.

      2. TERM AND TERMINATION.

            (a) TERM. This Agreement shall become effective as of the
      Commencement Date. Unless terminated earlier pursuant to Section 2(b),
      below, Executive's employment hereunder shall remain in effect until the
      day after the fifth anniversary of the Commencement Date. For purposes of
      this Agreement, the five-year employment term (which begins on the
      Commencement Date) shall be deemed to be the "Term".

            (b) TERMINATION. The Term shall terminate on the earlier to occur of
      (i) the expiration of the Term and (ii) the date upon which Executive's
      employment is terminated, either by Willis US or Executive. Subject to the
      conditions of Section 3(d)(i) and (ii), either party may terminate the
      Term and Executive's employment at any time by providing 90 days' prior
      written notice to the other party of the termination of Executive's
      employment.

      3. EFFECT OF CERTAIN TERMINATIONS.

            (a) TERMINATION WITHOUT CAUSE BY WILLIS US OR RESIGNATION WITH
      GOOD REASON BY EXECUTIVE. In the event that Willis US terminates
      Executive without Cause or the Executive terminates his employment for
      Good Reason: (i) at any time during the first five hundred forty-seven
      (547) days of the Term, (the "Initial Period"), Willis US shall, within
      thirty (30) days after such termination, pay Executive an amount equal
      to the sum of (x) his Base Salary and Guaranteed Bonus and (y) his
      Accrued Amounts, in addition to providing Executive with his Accrued
      Rights, and (ii) at any time after the Initial Period but prior to the
      end of the Term, Willis US shall, within thirty (30) days after such
      termination, pay Executive an amount equal to the sum of (x) the lesser
      of (A) the product of two times his Base Salary and Guaranteed Bonus
      and (B) the remainder of his Base Salary and Guaranteed Bonus due and
      payable through the end of the Term and (y) his Accrued Amounts, in
      addition to providing Executive with his Accrued Rights; PROVIDED,
      HOWEVER, in the event that after the occurrence of a Change in Control
      (or prior thereto at the direction of an anticipated successor, or
      otherwise in connection therewith) Executive's employment is terminated
      for any reason by Willis US (or its successor) or by Executive, Willis
      US (or its successor) shall be required to pay Executive, within thirty
      (30) days thereafter, an amount equal to the sum of (x) the product of
      three times

<PAGE>

      the sum of his Base Salary and Guaranteed Bonus, and (y) his Accrued
      Amounts, in addition to providing Executive with his Accrued Rights.

            (b) OTHER TERMINATIONS. In the case of any other termination not
      covered by Section 3(a) alone, Executive shall only be entitled to his
      Accrued Amounts and Accrued Rights.

            (c) NO MITIGATION; NO OFFSET. The amounts due under Section 3(a)
      shall be paid without any obligation of mitigation or offset for future
      earnings or other amounts, and shall be paid without setoff, counterclaims
      or defense; PROVIDED, HOWEVER, that such amounts shall be offset by any
      amounts payable to Executive pursuant to other severance plans of Willis
      US.

            (d) DEFINITIONS. For purposes of this Agreement, the capitalized
      terms used above shall have the following meanings:

                (i) "CAUSE" shall mean (A) Executive's conviction of, or
      pleading nolo contendere to, a felony or misdemeanor involving sexual
      misconduct (other than a traffic infraction not involving actual
      imprisonment), (B) Executive's willful and continuous misconduct with
      regard to his material duties and responsibilities which causes
      demonstrable harm of a material nature (C) Executive's serious or
      persistent breach of Executive's material obligations under this
      Agreement (including any repeated failure to abide by the legal,
      written directives presented to him by the Board, which directives are
      not in violation of Section 1(a)(ii) hereof) or (D) gross negligence
      (other then as a result of physical or mental impairment) with regard
      to his duties; PROVIDED, that, in the case of (B), (C) and (D), above,
      such misconduct, breach or negligence was not resolved or cured within
      fifteen (15) days following Willis US's written notice to Executive of
      Willis US's intention to terminate Executive's employment for Cause as
      a result of such circumstances, which notice (pursuant to Section 2(b))
      describes such circumstances with sufficient particularity to give
      Executive a reasonable opportunity to resolve or cure any such
      misconduct, breach or negligence. For purposes of this definition, an
      act (or omission) shall not be deemed "willful", if, in the good faith
      belief of Executive, such act (or omission) was in the best interests
      of Willis US (or any of its subsidiaries), and such belief was
      reasonable.

                (ii) "GOOD REASON" shall mean Executive terminates his
      employment as a result of (A) any diminution by Willis US or Willis Group
      of his titles, positions or status, (B) any material diminution of his
      duties, responsibilities or authority, or the assignment to him of any
      duties materially inconsistent with his positions, (C) any relocation of
      his principal office from New York, New York, (D) any material breach of
      this Agreement by Willis US, (E) a Change in Control or (F) the Board
      repeatedly overrides, supersedes or disregards reasonable decisions by
      Executive or recommendations made by Executive to the Board, such that the
      Board materially interferes with Executive's ability to effectively
      function as the Executive Chairman and Chief Executive Officer, or the
      Board otherwise takes actions that constructively represent a lack of
      confidence in Executive's ability to perform his duties and
      responsibilities; PROVIDED, that in all cases (other than (E) above), such
      action or breach is not resolved or cured within fifteen (15) days
      following

<PAGE>

      Executive's written notice(pursuant to Section 2(b)) to Willis US of the
      event that he asserts is the basis for Good Reason, and which event or
      behavior Willis US does not resolve or cure during such 15-day period.

                (iii) "ACCRUED AMOUNTS" shall mean all accrued but unpaid Base
      Salary and vacation pay, any bonus due for any completed fiscal year and a
      pro rata Guaranteed Bonus for the Fiscal Year in which the termination
      occurs; PROVIDED, HOWEVER, that upon a termination of Executive's
      employment for Cause or by Executive without Good Reason (other than as a
      result of death or Disability (as hereinafter defined) prior to the end of
      the Term, "Accrued Amounts" shall not include the prorated Guaranteed
      Bonus for the Fiscal Year in which the termination occurs.

                (iv) "ACCRUED RIGHTS" shall mean any amounts or benefits due to
      Executive under any benefit or equity plan or program (other than a
      severance plan), and Executive's rights under Sections 1(e), 1(f), 4 and 7
      hereof.

            (e) DISABILITY TERMINATION. Willis US may terminate Executive's
      employment as a result of a "Disability" if Executive, as a result of
      mental or physical incapacity, has been unable to perform his material
      duties for six (6) consecutive months (or 180 days in any 360-day period).
      Such termination shall be only permitted while Executive is still so
      disabled and shall be effective on thirty (30) days written notice to
      Executive, provided that such termination shall not be effective if
      Executive returns to full time performance of his material duties within
      such thirty (30) day period and continues in such full time capacity
      (which full time status shall be deemed to continue even in the event that
      vacation or intermittent and de minimis sick leave is taken) for six (6)
      consecutive months thereafter. For the avoidance of doubt, in the event
      that Executive does return to full time performance but does not continue
      in such full time capacity for six (6)) consecutive months thereafter, the
      termination shall be deemed effective on thirty (30) days written notice
      following the most recent date that Executive fails to continue in such
      full time capacity.

      4. EXCISE TAX.

            (a) In the event it shall be determined that any payment, benefit or
      distribution (or combination thereof) by Willis US, any of its affiliates,
      one or more trusts established by Willis US for the benefit of its
      employees, or any other person or entity, to or for the benefit of
      Executive (whether paid or payable or distributed or distributable
      pursuant to the terms of this Agreement, or otherwise pursuant to or by
      reason of any other agreement, policy, plan, program or arrangement,
      including without limitation any stock option, stock appreciation right,
      phantom equity awards or similar right, or the lapse or termination of any
      restriction on the vesting or exercisability of any of the foregoing) (a
      "PAYMENT") would be subject to the excise tax imposed by Section 4999 of
      the Internal Revenue Code of 1986, as amended (the "CODE") by reason of
      being "contingent on a change in ownership or control" of Willis US,
      within Section 280G of the Code (or any successor provision thereto) or
      any interest or penalties are incurred by Executive with respect to such
      excise tax (such excise tax, together with any such interest and
      penalties, hereinafter collectively referred to as the "EXCISE TAX"), then
      Executive shall be entitled

<PAGE>

      to receive an additional payment or payments (a "GROSS-UP PAYMENT") in an
      amount such that after payment by Executive of all taxes (including any
      interest or penalties imposed with respect to such taxes), including,
      without limitation, any income taxes (and any interest and penalties
      imposed with respect thereto) and the Excise Tax imposed upon the Gross-Up
      Payment, Executive retains an amount of the Gross-Up Payment equal to the
      Excise Tax imposed upon the Payments.

            (b) Subject to the provisions of Section 4(a) hereof, all
      determinations required to be made under this Section 4, including whether
      and when a Gross-Up Payment is required and the amount of such Gross-Up
      Payment and the assumptions to be utilized in arriving at such
      determination, shall be made by a nationally recognized certified public
      accounting firm as may be designated by Willis US, and reasonably
      satisfactory to Executive (the "ACCOUNTING FIRM"), which shall provide
      detailed supporting calculations both to Willis US and Executive within
      fifteen (15) business days of Termination Date, or such earlier time as is
      requested by Willis US; PROVIDED that for purposes of determining the
      amount of any Gross-Up Payment, Executive shall be deemed to pay federal
      income tax at the highest marginal rates applicable to individuals in the
      calendar year in which any such Gross-Up Payment is to be made and deemed
      to pay state and local income taxes at the highest effective rates
      applicable to individuals in the state or locality of Executive's
      residence or place of employment in the calendar year in which any such
      Gross-Up Payment is to be made, net of the maximum reduction in federal
      income taxes that can be obtained from deduction of such state and local
      taxes, taking into account limitations applicable to individuals subject
      to federal income tax at the highest marginal rates. All fees and expenses
      of the Accounting Firm shall be borne solely by Willis US. Any Gross-Up
      Payment, as determined pursuant to this Section 4, shall be paid by Willis
      US to Executive (or to the appropriate taxing authority on Executive's
      behalf) when due immediately prior to the date Executive is required to
      make payment of any Excise Tax or other taxes. If the Accounting Firm
      determines that no Excise Tax is payable by Executive, it shall so
      indicate to Executive in writing, with an opinion that Executive has
      substantial authority not to report any Excise Tax on his/her federal
      state, local income or other tax return. Any determination by the
      Accounting Firm shall be binding upon Willis US and the Executive absent a
      contrary determination by the Internal Revenue Service or a court of
      competent jurisdiction; PROVIDED, HOWEVER, that no such determination
      shall eliminate or reduce Willis US's obligation to provide any Gross-Up
      Payment that shall be due as a result of such contrary determination. As a
      result of the uncertainty in the application of Section 4999 of the Code
      (or any successor provision thereto) and the possibility of similar
      uncertainty regarding state or local tax law at the time of any
      determination by the Accounting Firm hereunder, it is possible that the
      amount of the Gross-Up Payment determined by the Accounting Firm to be due
      to (or on behalf of) Executive was lower than the amount actually due
      ("UNDERPAYMENT"). In the event that Willis US exhausts its remedies
      pursuant to Section 4(c) and Executive thereafter is required to make a
      payment of any Excise Tax, the Accounting Firm shall determine the amount
      of the Underpayment that has occurred as promptly as possible and notify
      Willis US and Executive of such calculations, and any such Underpayment
      (including the Gross-Up Payment to Executive) shall be promptly paid by
      Willis US to or for the benefit of Executive within five (5) business days
      after receipt of such determination and calculations.

<PAGE>

            (c) Executive shall notify Willis US in writing of any claim by the
      Internal Revenue Service that, if successful, would require the payment by
      Willis US of any Gross-Up Payment. Such notification shall be given as
      soon as practicable but no later than ten (10) business days after
      Executive is informed in writing of such claim and shall apprise Willis US
      of the nature of such claim and the date on which such claim is requested
      to be paid. The Executive shall not pay such claim prior to the expiration
      of the thirty (30) day period following the date on which he gives such
      notice to Willis US (or such shorter period ending on the date that any
      payment of taxes with respect to such claim is due). If Willis US notifies
      Executive in writing prior to the expiration of such period that it
      desires to contest such claim, Executive shall (i) give Willis US any
      information which is in Executive's possession reasonably requested by
      Willis US relating to such claim, (ii) take such action in connection with
      contesting such claim as Willis US shall reasonably request in writing
      from time to time, including, without limitation, accepting legal
      representation with respect to such claim by an attorney reasonably
      selected by Willis US, (iii) cooperate with Willis US in good faith in
      order to effectively contest such claim, and (iv) permit Willis US to
      participate in any proceedings relating to such claim; PROVIDED, HOWEVER,
      that Willis US shall bear and pay directly all costs and expenses
      (including additional interest and penalties) incurred in connection with
      such contest and shall indemnify and hold Executive harmless, on an
      after-tax basis, for any Excise Tax or income tax (including interest and
      penalties with respect thereto) imposed as a result of such representation
      and payment of costs and expenses. Without limitation on the foregoing
      provisions of this Section 4(c), Willis US shall control all proceedings
      taken in connection with such contest and, at its sole option, may pursue
      or forego any and all administrative appeals, proceedings, hearings and
      conferences with the taxing authority in respect of such claim and may, at
      its sole option, either direct Executive to pay the tax claimed and sue
      for a refund or contest the claim in any permissible manner, and Executive
      agrees to prosecute such contest to a determination before any
      administrative tribunal, in a court of initial jurisdiction and in one or
      more appellate courts, as Willis US shall determine; PROVIDED, FURTHER,
      that if Willis US directs Executive to pay such claim and sue for a
      refund, Willis US shall advance the amount of such payment to Executive,
      on an interest-free basis, and shall indemnify and hold Executive
      harmless, on an after-tax basis, from any Excise Tax or income tax
      (including interest or penalties with respect thereto) imposed with
      respect to such advance or with respect to any imputed income with respect
      to such advance (including the applicable Gross-Up Payment); PROVIDED,
      FURTHER, that if Executive is required to extend the statute of
      limitations to enable Willis US to contest such claim, Executive may limit
      this extension solely to such contested amount. Willis US's control of the
      contest shall be limited to issues with respect to which a Gross-Up
      Payment would be payable hereunder and Executive shall be entitled to
      settle or contest, as the case may be, any other issue raised by the
      Internal Revenue Service or any other taxing authority.

            (d) If, after the receipt by Executive of an amount paid or advanced
      by Willis US pursuant to this Section 4, Executive becomes entitled to
      receive any refund with respect to a Gross-Up Payment, Executive shall
      (subject to Willis US's complying with the requirements of Section 4(c))
      promptly pay to Willis US the amount of such refund received (together
      with any interest paid or credited thereon after taxes applicable
      thereto). If, after the receipt by Executive of an amount advanced by
      Willis US pursuant

<PAGE>

      to Section 4(c), a determination is made that Executive shall not be
      entitled to any refund with respect to such claim and Willis US does not
      notify Executive in writing of its intent to contest such denial of refund
      prior to the expiration of thirty (30) days after such determination, then
      such advance shall be forgiven and shall not be required to be repaid and
      the amount of such advance shall offset, to the extent thereof, the amount
      of the Gross-Up Payment required to be paid.

      5. OWNERSHIP OF BUSINESS. All business activity participated in by
      Executive as an employee of Willis US, and Executive's execution of his
      duties and responsibilities to Willis Group, Willis US and their related
      entities as set forth in Section 1(a), above (the "BUSINESS ACTIVITY")
      shall be conducted solely on behalf of Willis Group, Willis US and their
      related entities. Executive shall have no right to share in any commission
      or fee resulting from such Business Activity, other than the compensation
      referred to in Section 1(b), above, and any monies due to Willis Group,
      Willis US or their related entities as a result of Business Activity which
      may be collected by Executive on behalf of Willis Group, Willis US or
      their related entities shall be promptly paid over to Willis Group, Willis
      US or their related entities.

      6. CONFIDENTIAL INFORMATION; NONCOMPETITION AND NONSOLICITATION. In
      consideration of Willis US entering into this Agreement with Executive,
      Executive hereby agrees effective as of the Effective Date that, without
      Willis US's prior written consent, Executive shall not:

            (a) While employed and at any time thereafter, directly or
      indirectly, disclose any Confidential Information (as defined below)
      pertaining to the business of any member of the Restricted Group (as
      defined below), except when required by law; or

            (b) At any time during Executive's employment with Willis US and
      thereafter during the Noncompete Period, directly or indirectly (i) be
      engaged in or have financial interest (other than an ownership position of
      less than 5% in any company whose shares are publicly traded or any
      non-voting non-convertible debt securities in any company or through a
      mutual fund, private equity fund or other pooled account in which
      Executive has no discretion as to investment decisions) in any business in
      Competition (as defined below) with the Restricted Group (as defined
      below), (ii) solicit, accept or perform, other than on the Restricted
      Group's behalf, (x) insurance or fidelity or surety bond brokerage, or
      agency, business, (y) risk management, claims administration,
      self-insurance, or related consulting or (z) any other material types of
      business performed by the Restricted Group for any client with whom
      Executive has had business dealings, or any prospective client from whom
      Executive has materially participated in soliciting business, in either
      case on behalf of the Restricted Group within the last twelve (12) months
      of Executive's employment with Willis US or (iii) other than in performing
      his duties for Willis US, solicit any person who is or has been employed
      by any member of the Restricted Group at any time during the 6 months
      prior to the date of such solicitation to Compete with any member of the
      Restricted Group, PROVIDED that the foregoing shall not prevent Executive
      from serving as a reference for any given individual employee.

<PAGE>

            (c) As used in this Agreement, the term "CONFIDENTIAL INFORMATION"
      means all non-public information (where such information is not otherwise
      public as a result of Executive's breach of this Section 6) concerning the
      financial data, strategic business plans, and other non-public,
      proprietary, and confidential information of Willis Group, Willis UK,
      Willis US or any of their subsidiaries (the "RESTRICTED GROUP") as in
      existence during Executive's employment with, or performance of any
      consulting services for, Willis US (and/or any other member of the
      Restricted Group) and as of the date of any termination of such employment
      or such performance of services. As used in this Agreement, a business
      shall be in "COMPETITION" if, at the time of Executive joining such
      business, it is principally engaged in (i) the insurance or surety or
      fidelity bond brokerage, or agency, business, (ii) risk management, claims
      administration, self-insurance, or risk management consulting, (iii) other
      material business performed by any member of the Restricted Group at the
      time of Executive's termination of Employment or (iv) if it is a business
      in which any member of the Restricted Group has taken material steps
      toward engaging. The Executive shall not be in competition if he is
      involved in a portion of a business of a competitor that is itself not in
      Competition. Finally the "NONCOMPETE PERIOD" shall mean (i) upon a
      termination of employment at any time during the Initial Period, twelve
      (12) months; (ii) upon a termination of employment on or after the end of
      the Initial Period but prior to the end of the Term, the lesser of (x)
      twenty-four (24) months and (y) the remainder of the Term; PROVIDED,
      HOWEVER, that in no event shall the Noncompete Period be less than twelve
      (12) months.

      7. MISCELLANEOUS

            (a) INTEGRATED AGREEMENT. Except as otherwise provided in this
      Section 6, this document, together with the letter agreement dated as of
      March 26, 2001, executed simultaneously herewith, embodies the complete
      understanding and agreement of the parties hereto relating to Executive's
      employment; PROVIDED, HOWEVER, that this Agreement shall be in addition to
      and not in lieu of the agreements relating to Executive's subscription to,
      purchase of, and option to purchase, Shares, as referenced in Section
      1(g), above. This Agreement may not be amended or terminated orally, but
      only by a writing executed by both parties hereto.

            (b) SEVERABILITY. If any term of this Agreement is rendered,
      declared or held to be invalid or unenforceable by any judicial,
      legislative or administrative action, the remaining provisions hereof
      shall remain in full force and effect, shall in no way be affected,
      impaired or invalidated, and shall be enforced to the full extent
      permitted by law and equity.

            (c) NOTICES. Any notices given pursuant to this Agreement shall be
      sent by certified mail or a nationally recognized courier service, with
      proof of delivery, to the addresses set forth below (or, in the event of
      an address change by either party, to the then-current address of the
      party, as specified in any written change-of-address notice properly
      furnished under this Section 7(c)).

<PAGE>

      If to Willis US:

      Willis North America, Inc.
      26 Century Boulevard
      Nashville, Tennessee 37214
      Attention:  Mary Caiazzo, Esq.

      If to Willis Group:

      Willis Group Holdings Limited
      c/o Willis Group Limited
      Ten Trinity Square
      London England EC3P 3AX
      Attention:  Corporate Secretary

      With a copy to:

      Simpson Thacher & Bartlett
      425 Lexington Avenue
      New York, New York 10017
      Attention:  Alvin Brown, Esq.

      If to Executive:

      Mr. Joseph Plumeri

      To the most recent address set forth in the personnel records of Willis US

      With a copy to:

      Proskauer Rose LLP
      1585 Broadway
      New York, New York 10036
      Attention:  Michael S. Sirkin, Esq.

            (d) GOVERNING LAW; REMEDIES. The substantive laws of New York shall
      govern this Agreement, without giving effect to its conflicts of law
      principles. Any disputes or issues arising out of or relating to any
      equity in Willis Group that Executive has received or may become entitled
      to receive shall also be governed by the laws of the State of New York or,
      with respect to any stock options granted on Shares, (except to the extent
      it involves interpretation under the Employment Agreement), the laws of
      Bermuda, without regard to conflicts of law principles in any event.
      Executive acknowledges that there is no adequate remedy at law for any
      breach of the provisions of Section 6 of this Agreement and that, in
      addition to any other remedies to which it may otherwise be entitled as a
      matter of law, Willis US shall be entitled to injunctive relief in the
      event of any such breach.
<PAGE>

            (e) WAIVER. The waiver by any party of any breach of this Agreement
      shall not operate or be construed as a waiver of that party's rights upon
      any subsequent or different breach.

            (f) SUCCESSORS AND ASSIGNS; THIRD-PARTY BENEFICIARIES. This
      Agreement shall inure to the benefit of and be binding upon and
      enforceable against the heirs, legal representatives and assigns of
      Executive and the successors and permitted assigns of Willis US. Any
      amounts due Executive as of his death shall be paid to his designated
      beneficiary, or if none, his estate. Willis Group's direct and indirect
      subsidiaries are intended third-party beneficiaries of all promises and
      covenants made by Executive herein in favor of Willis US in Section 6
      hereof. As such, insofar as they are affected by any breach, of this
      Agreement by Executive, Willis Group's direct and indirect subsidiaries
      may enforce Executive's covenants and promises herein to the same extent
      that Willis US has a right to do. Willis US may not assign this Agreement
      or its rights hereunder except as part of a sale of, and to the acquirer
      of, all or substantially all of the securities and/or assets of Willis US
      and then only if the assignee and the ultimate parent entity of the
      assignee (if applicable) promptly deliver to Executive a written
      assumption of the obligations hereunder in a form reasonably acceptable to
      Executive (or, to the extent otherwise required to bind an entity other
      than an entity incorporated under the laws of the United States, the
      equivalent documentation therefor).

            (g) COUNTERPARTS. This Agreement may be signed in counterparts, each
      of which shall be an original, with the same effect as if the signatures
      thereto and hereto were upon the same instrument.

            (h) LEGAL FEES. Willis US shall promptly pay Executive's reasonable
      legal and financial advisory fees incurred in connection with entering
      into this Agreement and shall, to the extent such amounts would be taxable
      to Executive, fully gross up such payments so that Executive shall have no
      net after-tax cost in respect of such payments.

            (i) ARBITRATION. Any dispute hereunder or with regard to any
      document or agreement referred to herein, other than injunctive relief
      under Section 7(d) hereof, shall be resolved by arbitration before the
      American Arbitration Association in New York City, New York. The
      determination of the arbitrator shall be final and binding on the parties
      hereto and may be entered in any court of competent jurisdiction. In the
      event of any arbitration or other disputes with regard to this Agreement
      or any other document or agreement referred to herein, Willis US shall pay
      Executive's legal fees and disbursements promptly upon presentation of
      invoices thereof, subject to an obligation of Executive to repay such
      amounts if an arbitrator finds Executive's positions in such arbitration
      or dispute to have been frivolous or made in bad faith.

            (j) JURISDICTION. Willis US and Wills Group each hereby consents to
      the jurisdiction of the federal and state courts in the State of New York,
      irrevocably waives any objection it may now or hereafter have to laying of
      the venue of any suit, action, or proceeding in connection with this
      Agreement in any such court, and agrees that service upon it shall be
      sufficient if made by registered mail.

<PAGE>

            IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the date first above written.

EMPLOYER:

WILLIS NORTH AMERICA, INC.

By: __________________________
Name: ________________________
Title: _______________________

AND, signed as a Deed and delivered    )  _____________________________
By WILLIS GROUP HOLDINGS               )  Director
LIMITED for the limited purpose of     )
Sections 1(f), 7(i) and 7(j).          )  _____________________________
                                          Director/Secretary
EXECUTIVE:

__________________________
Joseph J. Plumeri

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