Document:

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                                   EXHIBIT 4.4

No. WC-01                                                       February 4, 2000

THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, (ii) TO THE
EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT
RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF
SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL FOR THE ISSUER, THAT AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.

THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED AS DESCRIBED HEREIN.

                               WARRANT TO PURCHASE
                             SHARES OF COMMON STOCK
                       OF TAKEOUTMUSIC.COM HOLDINGS, CORP.

                         (Void after December 28, 2004)

         This certifies that National Securities Corporation (the "Holder"), for
value received, is entitled to purchase from TAKEOUTMUSIC.COM HOLDINGS, CORP., a
Washington corporation (the "Company"), having a place of business at 381
Broadway, Suite 201, New York, NY 10013, 314,638 shares of fully paid and
nonassessable shares of the Company's common stock, par value $.01 per share
(the "Common Stock"), at a price of $.579713 per share (the "Exercise Price"),
at any time or from time to time beginning on the date hereof and ending at 5:00
p.m. (New York time) December 28, 2004 ( the "Expiration Date"), upon surrender
to the Company at its principal office (or at such other location as the Company
may advise the Holder in writing) of this Warrant properly endorsed with the
Notice of Exercise attached hereto duly filled in and executed and, if
applicable, upon payment in cash or by check of the aggregate Exercise Price for
the number of shares for which this Warrant is being exercised determined in
accordance with the provisions hereof. The Exercise Price and the number of
shares purchasable hereunder are subject to adjustment as provided in Section 4
of this Warrant. In addition to the method of payment set forth in the preceding
sentence and in lieu of any cash payment required thereunder, the Holder(s) of
the Warrant shall have the right at any time and from time to time while the
Warrants are exercisable to exercise the Warrants in full or in part by
surrendering the Warrant Certificate in the manner specified herein in exchange
for the number of shares of Common Stock equal to the product of (x) the number
of shares of Common Stock as to which the Warrants are being exercised,
multiplied by (y) a fraction, the numerator of which is the Market Price (as
defined below) of the shares of Common Stock minus the Exercise Price of the
shares of Common Stock and the denominator of which is the Market Price per
share of Common Stock. For the purposes of this provision, Market Price shall be
calculated either (i) on the date on which the Notice of Exercise is deemed to
have been sent to the Company pursuant to

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Section 10 hereof ("Notice Date") or (ii) as the average of the Market Price for
each of the five (5) trading days immediately preceding the Notice Date,
whichever of (i) or (ii) results in a greater Market Price. As used herein, the
phrase "Market Price" at any date shall be deemed to be the last reported sale
price, or, in case no such reported sale takes place on such day, the average of
the last reported sale prices for the last three (3) trading days, in either
case as officially reported by the principal securities exchange on which the
Common Stock is listed or admitted to trading, or, if the Common Stock is not
listed or admitted to trading on any national securities exchange, the average
closing sale price as furnished by the Nasdaq Stock Market ("Nasdaq") (or
similar organization if Nasdaq is no longer reporting such information), or if
the Common Stock is not quoted on Nasdaq or an exchange, as determined in good
faith by resolution of the Board of Directors of the Company, based on the best
information available to it.

                  1. Issuance of Certificates. Upon the exercise of the Warrant,
the issuance of certificates for shares of Common Stock, properties or rights
underlying the Warrant ("Warrant Shares") shall be made forthwith (and in any
event within five (5) business days thereafter) without charge to the Holder
thereof including, without limitation, any tax, other than income taxes, which
may be payable in respect of the issuance thereof, and such certificates shall
(subject to the provisions of Sections 2 and 3 hereof) be issued in the name of,
or in such names as may be directed by, the Holder thereof; provided, however,
that the Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issuance and delivery of any such
certificates in a name other than that of the Holder and the Company shall not
be required to issue or deliver such certificates unless or until the person or
persons requesting the issuance thereof shall have paid to the Company the
amount of such tax or shall have established to the satisfaction of the Company
that such tax has been paid.

                  This Warrant and the certificates representing the Warrant
Shares shall be executed on behalf of the Company by the manual or facsimile
signature of the then present President or any Vice President of the Company
under its corporate seal reproduced thereon, attested to by the manual or
facsimile signature of the then present Secretary or any Assistant Secretary of
the Company. This Warrant shall be dated the date of execution by the Company
upon initial issuance, division, exchange, substitution or transfer.

                  2. Transfer of Warrant. This Warrant shall be transferable
only on the books of the Company maintained at its principal office, where its
principal office may then be located, upon delivery thereof duly endorsed by any
Holder or by its duly authorized attorney or representative accompanied by
proper evidence of succession, assignment or authority to transfer. Upon any
registration of transfer, the Company shall execute and deliver the new Warrant
Certificate to the person entitled thereto.

                  3. Restriction on Transfer of Warrant. The Holder of a Warrant
Certificate, by its acceptance thereof, covenants and agrees that this Warrant
is being acquired as an investment and not with a view to the distribution
thereof, and that it may not be sold, transferred, assigned, hypothecated or
otherwise disposed of, in whole or in part, for a period of one year following
the date hereof.

                                       2
<PAGE>

                  4. Adjustments to Exercise Price and Number of Securities. The
Exercise Price in effect at any time and the number of Warrant Shares shall be
subject to adjustment from time to time only upon the happening of the following
events:

                           (a) Stock Dividend, Subdivision and Combination. In
case the Company shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common Stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, the Exercise Price in effect at the time of the
record date for such dividend or distribution or of the effective date of such
subdivision, combination or reclassification shall be adjusted so that it shall
equal the price determined by multiplying the Exercise Price by a fraction, the
denominator of which shall be the number of shares of Common Stock outstanding
after giving effect to such action, and the numerator of which shall be the
number of shares of Common Stock outstanding immediately prior to such action.
Such adjustment shall be made successively whenever any event listed above shall
occur.

                           (b) Adjustment in Number of Securities. Upon each
adjustment of the Exercise Price pursuant to the provisions of this Section 4,
the number of shares of Common Stock issuable upon the exercise at the adjusted
Exercise Price of this Warrant shall be adjusted to the nearest number of whole
shares of Common Stock by multiplying a number equal to the Exercise Price in
effect immediately prior to such adjustment by the number of shares of Common
Stock issuable upon exercise of this Warrant immediately prior to such
adjustment and dividing the product so obtained by the adjusted Exercise Price.

                           (c) Merger or Consolidation. In case of any
consolidation of the Company with, or merger of the Company into, another
corporation (other than a consolidation or merger which does not result in any
reclassification or change of the outstanding Common Stock), the corporation
formed by such consolidation or merger shall execute and deliver to the Holder
then outstanding a warrant agreement providing that each of such Holders shall
have the right thereafter (until the expiration of such Warrants) to receive,
upon exercise of such Warrants, the kind and amount of shares of stock and other
securities and property receivable upon such consolidation or merger by a holder
of the number of shares of Common Stock for which such Warrants might have been
exercised immediately prior to such consolidation, merger, sale or transfer.
Such warrant agreement shall provide for adjustments which shall be identical to
the adjustments provided in this Section 4 and registration rights which shall
be identical to the registration rights provided in Section 5 below. The above
provision of this subsection shall similarly apply to successive consolidations
or mergers.

                           (d) No Adjustment of Exercise Price in Certain Cases.
No adjustment of the Exercise Price shall be made if the amount of said
adjustment shall be less than two cents ($.02) per share, provided, however,
that in such case any adjustment that would otherwise be required then to be
made shall be carried forward and shall be made at the time of and together with
the next subsequent adjustment which, together with any adjustment so carried
forward, shall amount to at least two cents ($.02).

                                       3
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                           (e) No Adjustment in Number of Warrant Shares in
Certain Cases. No adjustment in the number of Warrant Shares shall be required
if such adjustment is less than one; provided, however, that any adjustments
which by reason of this Section 4(f) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment. All
calculations under this Section 4 shall be made to the nearest one-thousandth of
a share.

                           (f) Deferred Issuance. In any case in which this
Section 4 shall require that an adjustment in the number of Warrant Shares be
made effective as of a record date for a specified event, the Company may elect
to defer, until the occurrence of such event, issuing to the Holder, if the
Holder exercised this Warrant after the record date, the Warrant Shares, if any,
issuable upon such exercise over and above the Warrant Shares, if any, issuable
upon such exercise prior to such adjustment; provided, however, that the Company
shall deliver to the Holder a due bill or other appropriate instrument
evidencing the Holder's right to receive such additional Warrant Shares upon the
occurrence of the event requiring such adjustment.

                           (g) Notice of Adjustment. Whenever there shall be an
adjustment as provided in this Section 4, the Company shall promptly cause
written notice thereof to be sent by certified mail, postage prepaid, to the
Holder, at its address as it shall appear in the Warrant Register, which notice
shall be accompanied by an officer's certificate setting forth the number of
Warrant Shares issuable upon the exercise of this Warrant if such Warrant were
exercisable on the date of such notice, and setting forth a brief statement of
the facts requiring such adjustment and the computation thereof, which officer's
certificate shall be conclusive evidence of the correctness of any such
adjustment absent manifest error.

                  5. (a) Piggyback Registration. If, at any time during the
Exercise Period and for a period of two (2) years thereafter, the Company
proposes to register any of its securities under the Securities Act of 1933, as
amended (the "Act") (other than on a Form S-4 or a Form S-8 or successor form
thereto) it will give written notice by registered mail, at least thirty (30)
days prior to the filing of each such registration statement, to the Holders of
this Warrant or the Warrant Shares of its intention to do so. If any of the
Holders of this Warrant or the Warrant Shares notify the Company within twenty
(20) days after mailing of any such notice of its or their desire to include any
such securities in such proposed registration statement, the Company shall
afford such Holders the opportunity to have any such Warrant Shares registered
under such registration statement. In the event that the managing underwriter
for said offering advises the Company in writing that in its opinion the number
of securities requested to be included in such registration exceeds the number
which can be sold in such offering without causing a diminution in the offering
price or otherwise adversely affecting the offering, the Company will include in
such registration (a) first, the securities the Company proposes to sell, (b)
second, the securities held by entities that made have demand registration
rights, (c) third, the Warrant Shares requested to be included in such
registration which in the opinion of such underwriter can be sold, pro rata
among those persons having registration rights similar those set forth in this
Section 5 who requested such registration, and (d) fourth, other securities
requested to be included in such registration. Notwithstanding the provisions of
this Section 5, the Company shall have the right at any time after it shall have
given written notice pursuant to this Section 5 (irrespective of whether a
written request for inclusion of any such securities shall have been made) to
elect not to file any such proposed registration statement or to

                                       4
<PAGE>

withdraw the same after the filing but prior to the effective date thereof.

                           (b) Demand Registration. At any time during the
Exercise Period and for a period of two (2) years thereafter, the Holder shall
have the right, exercisable by written notice to the Company, to have the
Company prepare and file with the Securities and Exchange Commission, on one
occasion, a registration statement and such other documents, including a
prospectus, as may be necessary in the opinion of both counsel for the Company
and counsel for the Holder, in order to comply with the provisions of the Act,
so as to permit a public offering and sale by the Holder. The Company shall use
its commercially reasonable efforts to have such registration statement filed
with and declared effective by the Commission within one hundred twenty (120)
days of receipt of the notice from the Holder.

                           (c) Legend. Unless registered as contemplated by
Section 5 hereof, the Warrant Shares issued upon exercise of the Warrants shall
be subject to a stop transfer order and the certificate or certificates
evidencing such Warrant Shares shall bear the following legend:

                  "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE
                  BEEN NOT REGISTERED UNDER THE SECURITIES ACT OF
                  1933, AS AMENDED. SUCH SHARES MAY NOT BE OFFERED OR
                  SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
                  STATEMENT UNDER SUCH ACT, OR AN EXEMPTION FROM
                  REGISTRATION UNDER SUCH ACT. SUCH SHARES ARE SUBJECT
                  TO CERTAIN RESTRICTIONS ON TRANSFER CONTAINED IN A
                  WARRANT, DATED FEBRUARY 4, 2000, A COPY OF WHICH IS
                  ON FILE WITH THE SECRETARY OF THE COMPANY."

                  6. Exchange and Replacement of Warrant Certificates. This
Warrant is exchangeable, without expense, upon the surrender thereof by the
registered Holder at the principal executive office of the Company for a new
Warrant of like tenor and date representing in the aggregate the right to
purchase the same number of shares of Common Stock in such denominations as
shall be designated by the Holder thereof at the time of such surrender.

                  Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and, in case of loss, theft or destruction, of indemnity or security
reasonably satisfactory to it and reimbursement to the Company of all reasonable
expenses incidental thereto, and upon surrender and cancellation of the Warrant,
if mutilated, the Company will make and deliver a new Warrant of like tenor, in
lieu thereof.

                  7. Elimination of Fractional Interests. The Company shall not
be required to issue certificates representing fractions of shares of Common
Stock upon the exercise of this Warrant, nor shall it be required to issue scrip
or pay cash in lieu of fractional interests, it being the intent of the parties
that all fractional interests shall be eliminated by rounding any fraction up to
the nearest whole number of shares of Common Stock or other securities,
properties or rights.

                                  5
<PAGE>

                  8. Reservation and Listing of Securities. The Company shall at
all times reserve and keep available out of its authorized shares of Common
Stock, solely for the purpose of issuance upon the exercise of this Warrant,
such number of shares of Common Stock or other securities, properties or rights
as shall be issuable upon the exercise thereof. Every transfer agent ("Transfer
Agent") for the Common Stock and other securities of the Company issuable upon
the exercise of this Warrant will be irrevocably authorized and directed at all
times to reserve such number of authorized shares of Common Stock and other
securities as shall be requisite for such purpose. The Company will keep a copy
of this Warrant on file with every Transfer Agent for the Common Stock and other
securities of the Company issuable upon the exercise of this Warrant. The
Company will supply every such Transfer Agent with duly executed stock and other
certificates, as appropriate, for such purpose. The Company covenants and agrees
that, upon exercise of this Warrant and payment of the Exercise Price therefor,
all shares of Common Stock and other securities issuable upon such exercise
shall be duly and validly issued, fully paid, non-assessable and not subject to
the preemptive rights of any stockholder. As long as this Warrant shall be
outstanding, the Company shall use its best efforts to cause all shares of
Common Stock issuable upon the exercise of this Warrant to be listed (subject to
official notice of issuance) on all securities exchanges on which the Common
Stock issued to the public in connection herewith may then be listed and/or
quoted.

                  9. Notices to Holder. Nothing contained in this Warrant shall
be construed as conferring upon the Holders the right to vote or to consent or
to receive notice as a stockholder in respect of any meetings of stockholders
for the election of directors or any other matter, or as having any rights
whatsoever as a stockholder of the Company. If, however, at any time prior to
the expiration of this Warrant and its exercise, any of the following events
shall occur:

                           (a) the Company shall take a record of the holders of
its shares of Common Stock for the purpose of entitling them to receive a
dividend or distribution payable otherwise than in cash, or a cash dividend or
distribution payable otherwise than out of current or retained earnings, as
indicated by the accounting treatment of such dividend or distribution on the
books of the Company; or

                           (b) the Company shall offer to all the holders of its
Common Stock any additional shares of capital stock of the Company or securities
convertible into or exchangeable for shares of capital stock of the Company, or
any option, right or warrant to subscribe therefor; or

                           (c) a dissolution, liquidation or winding up of the
Company (other than in connection with a consolidation or merger) or a sale of
all or substantially all of its property, assets and business as an entirety
shall be proposed;

then in any one or more of said events, the Company shall give written notice of
such event at least fifteen (15) days prior to the date fixed as a record date
or the date of closing the transfer books for the determination of the
stockholders entitled to such dividend, distribution, convertible or
exchangeable securities or subscription rights, or entitled to vote on such
proposed dissolution, liquidation, winding up or sale. Such notice shall specify
such record date or the date of closing the transfer books, as the case may be.
Failure to give such notice or any defect therein shall not affect the validity
of any action taken in connection with the declaration or payment of any such
dividend,

                                  6
<PAGE>

or the issuance of any convertible or exchangeable securities, or subscription
rights, options or warrants, or any proposed dissolution, liquidation, winding
up or sale.

                  10. Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to have been
duly made and sent when delivered, or mailed by registered or certified mail,
return receipt requested:

                           (a) if to the Holder of this Warrant, to the address
as shown on the books of the Company; or

                           (b) if to the Company, to the address set forth in
the preamble hereof or to such other address as the Company may designate by
notice to the Holders.

                  11. Supplements; Amendments; Entire Agreement. This Warrant
contains the entire understanding between the parties hereto with respect to the
subject matter hereof and may not be modified or amended except by a writing
duly signed by the party against whom enforcement of the modification or
amendment is sought. The Company and the Holder of this Warrant may from time to
time supplement or amend this Warrant in writing.

                  12. Successors. All of the covenants and provisions of this
Warrant shall be binding upon and inure to the benefit of the Company, the
Holder and his/her respective successors and assigns hereunder.

                  13. Survival of Representations and Warranties. All statements
in any schedule, exhibit or certificate or other instrument delivered by or on
behalf of the parties hereto, or in connection with the transactions
contemplated by this Agreement, shall be deemed to be representations and
warranties hereunder. Notwithstanding any investigations made by or on behalf of
the parties to this Warrant, all representations, warranties and agreements made
by the parties to this Warrant or pursuant hereto shall survive.

                  14. Governing Law. This Warrant shall be deemed to be a
contract made under the laws of the State of New York and for all purposes shall
be construed in accordance with the laws of said State without giving effect to
the rules of said State governing the conflicts of laws.

                  15. Severability. If any provision of this Warrant shall be
held to be invalid or unenforceable, such invalidity or unenforceability shall
not affect any other provision of this Warrant.

                  16. Captions. The caption headings of the Sections of this
Warrant are for convenience of reference only and are not intended, nor should
they be construed as, a part of this Warrant and shall be given no substantive
effect.

                  17. Benefits of this Warrant. Nothing in this Warrant shall be
construed to give to any person or corporation other than the Company the
registered Holder of this Warrant any legal

                                  7
<PAGE>

or equitable right, remedy or claim under this Warrant; and this
Warrant shall be for the sole and exclusive benefit of the Company and
the Holder of this Warrant.

                  IN WITNESS WHEREOF, the Company has caused this Warrant to be
duly executed by its officers, thereunto duly authorized as of the 4th day of
February, 2000.

                                       TAKEOUTMUSIC.COM HOLDINGS, CORP.
                                       a Washington corporation

                                       By: /s/ MORI S. NINOMIYA
                                          ---------------------------
                                          Mori S. Ninomiya
                                          President

                                  8
<PAGE>

                          NOTICE OF EXERCISE

                                                        Date:
                                                             -------------------

takeoutmusic.com Holdings, Corp.
Attention: President

Ladies and Gentlemen:

/ / The undersigned hereby elects to exercise the warrant issued to it by
takeoutmusic.com Holdings, Corp. (the "Company") dated February 4, 2000, Warrant
No. WC-01 (the "Warrant") and to purchase thereunder
__________________________________ shares of Common Stock of the Company (the
"Shares") at a purchase price of $.579713 Dollars per Share or an aggregate
purchase price of _______________________ Dollars ($__________) (the "Purchase
Price").

         Please issue a certificate or certificates representing said shares of
Common Stock in the name of the undersigned or in such other name as is
specified below:

                  -----------------------------------
                              (name)

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

                  -----------------------------------
                             (address)

         Pursuant to the terms of the Warrant the undersigned has delivered the
Purchase Price, if any, herewith in full in cash or by certified check or wire
transfer.

                                            Very truly yours,

                                            By:
                                               ---------------------------
                                               Name:
                                               Title:

                                       9
<PAGE>

                               FORM OF ASSIGNMENT

             (To be executed by the registered holder if such holder
                 desires to transfer the Warrant Certificate.)

FOR VALUE RECEIVED___________ here sells, assigns and transfers unto ___________
[NAME OF TRANSFEREE] this Warrant Certificate, together with all right, title
and interest therein, and does hereby irrevocably constitute and appoint________
Attorney, to transfer the within Warrant Certificate on the books of the
within-named Company, with full power of substitution.

Dated:
      -----------
                             Signature:
                                       -----------------------------------------
                             (Signature must conform in all respects to name of
                             holder as specified on the face of the Warrant
                             Certificate.)

                             Address:
                                      ------------------------------------------

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

                             ---------------------------------------------------
                             (Insert Social Security or Other Identifying Number
                             of Holder)

Signature Guaranteed:
                     -----------------------------------------------------------
(Signature must be guaranteed by a bank savings and loan association,
stockbroker, or credit union with membership in an approved signature guaranty
Medallion Program pursuant to Securities Exchange Act Rule 17Ad-15.)

                                       10<PAGE>

                                                                    EXHIBIT 10.1

                         TAKEOUTMUSIC.COM HOLDINGS CORP.
--------------------------------------------------------------------------------
                        1999 Incentive Compensation Plan
--------------------------------------------------------------------------------

<PAGE>

                               TABLE OF CONTENTS

                                                                            Page

1.       Purpose.............................................................-1-

2.       Definitions.........................................................-1-

3.       Administration......................................................-4-
         (a)      Authority of the Committee.................................-4-
         (b)      Manner of Exercise of Committee Authority..................-4-
         (c)      Limitation of Liability....................................-4-

4.       Stock Subject to Plan...............................................-5-
         (a)      Overall Number of Shares Available for Delivery............-5-
         (b)      Application of Limitation to Grants of Awards..............-5-
         (c)      Availability of Shares Not Delivered under Awards..........-5-

5.       Eligibility; Per-Person Award Limitations...........................-5-

6.       Specific Terms of Awards............................................-5-
         (a)      General....................................................-6-
         (b)      Options....................................................-6-
         (c)      Stock Appreciation Rights..................................-6-
         (d)      Restricted Stock...........................................-7-
         (e)      RSUs.......................................................-8-
         (f)      Bonus Stock and Awards in Lieu of Obligations..............-9-
         (g)      Dividend Equivalents.......................................-9-
         (h)      Annual Incentive and Performance Awards....................-9-
         (i)      Other Stock-Based Awards...................................-9-

7.       Certain Provisions Applicable to Awards.............................-9-
         (a)      Stand-Alone, Additional, Tandem, and Substitute Awards.....-9-
         (b)      Term of Awards............................................-10-
         (c)      Form and Timing of Payment under Awards; Deferrals........-10-
         (d)      Exemptions from Section 16(b) Liability...................-10-

8.       Performance and Annual Incentive Awards............................-10-
         (a)      Performance Conditions....................................-10-
         (b)      Performance Awards Granted to Designated Covered
                  Employees.................................................-11-
         (c)      Annual Incentive Awards Granted to Designated Covered
                  Employees.................................................-12-
         (d)      Written Determinations....................................-13-
         (e)      Status of Section 8(b) and Section 8(c) Awards under
                  Code Section 162(m).......................................-13-

                                       -i-

<PAGE>

9.       Change in Control..................................................-14-
         (a)      Effect of "Change In Control."............................-14-
         (b)      Definition of "Change in Control."........................-14-
         (c)      Definition of "Change in Control Price"...................-16-

10.      Options Granted Automatically to Non-Employee Directors............-16-
         (a)      Annual Option Grants......................................-16-
         (b)      Number of Shares Subject to Automatic Option Grants.......-16-
         (c)      Other Non-Employee Director Annual Option Terms...........-16-
         (d)      Method of Exercise........................................-16-
         (e)      Availability of Shares....................................-17-

11.      General Provisions.................................................-17-
         (a)      Compliance with Legal and Other Requirements..............-17-
         (b)      Limits on Transferability; Beneficiaries..................-17-
         (c)      Adjustments...............................................-17-
         (d)      Taxes.....................................................-18-
         (e)      Changes to the Plan and Awards............................-18-
         (f)      Limitation on Rights Conferred under Plan.................-19-
         (g)      Unfunded Status of Awards, Creation of Trusts.............-19-
         (h)      Nonexclusivity of the Plan................................-19-
         (i)      Payments in the Event of Forfeitures; Fractional Shares...-19-
         (j)      Governing Law.............................................-19-
         (k)      Plan Effective Date and Shareholder Approval..............-20-

                                      -ii-

<PAGE>

                         TAKEOUTMUSIC.COM HOLDINGS CORP.

                        1999 Incentive Compensation Plan

         1. Purpose. The purpose of this 1999 Incentive Compensation Plan (the
"Plan") is to assist takeoutmusic.com Holdings Corp., a Washington corporation
(the "Corporation"), and its subsidiaries in attracting, retaining, and
rewarding high-quality executives, employees, directors and other persons who
provide services to the Corporation and/or its subsidiaries, enabling such
persons to acquire or increase a proprietary interest in the Corporation to
strengthen the mutuality of interests between such persons and the Corporation's
shareholders, and providing such persons with annual and long-term performance
incentives to expend their maximum efforts in the creation of shareholder value.
The Plan is also intended to qualify certain compensation awarded under the Plan
for tax deductibility under Code Section 162(m) (as hereafter defined) to the
extent deemed appropriate by the Committee (or any successor committee) of the
Board of Directors of the Corporation.

         2. Definitions. For purposes of the Plan, the following terms shall be
defined as set forth below, in addition to such terms defined in Section 1
hereof:

            (a) "Annual Incentive Award" means a conditional right granted to a
Participant under Section 8(c) hereof to receive a cash payment, Stock or other
Award, unless otherwise determined by the Committee, after the end of a
specified fiscal year.

            (b) "Award" means any Option, SAR (including Limited SAR),
Restricted Stock, RSU, Stock granted as a bonus or in lieu of another award,
Dividend Equivalent, Other Stock-Based Award, Performance Award or Annual
Incentive Award, together with any other right or interest granted to a
Participant under the Plan.

            (c) "Beneficiary" means the person, persons, trust or trusts which
have been designated by a Participant in his or her most recent written
beneficiary designation filed with the Committee to receive the benefits
specified under the Plan upon such Participant's death or to which Awards or
other rights are transferred if and to the extent permitted under Section 11 (b)
hereof. If, upon a Participant's death, there is no designated Beneficiary or
surviving designated Beneficiary, then the term Beneficiary means person,
persons, trust or trusts entitled by will or the laws of descent and
distribution to receive such benefits.

            (d) "Beneficial Owner"shall have the meaning ascribed to such term
in Rule 13d- 3 under the Exchange Act and any successor to such Rule.

            (e) "Board" means the Corporation's Board of Directors.

            (f) "Change in Control" means Change in Control as defined with
related terms in Section 9 of the Plan.

<PAGE>

            (g) "Change In Control Price" means the amount calculated in
accordance with Section 9(c) of the Plan.

            (h) "Code" means the Internal Revenue Code of 1986, as amended from
time to time, including regulations thereunder and successor provisions and
regulations thereto.

            (i) "Committee" means a committee of two or more directors
designated by the Board to administer the Plan; provided, however, that, unless
otherwise determined by the Board, the Committee shall consist solely of two or
more directors, each of whom shall be (i) a "non employee director" within the
meaning of Rule 16b-3 under the Exchange Act, unless administration of the Plan
by "non-employee directors" is not then required in order for exemptions under
Rule 16b-3 to apply to transactions under the Plan, and (ii) an "outside
director" as defined under Code Section 162(m), unless administration of the
Plan by "outside directors" is not then required to qualify for tax
deductibility under Code Section 162(m).

            (j) "Covered Employee" means an Eligible Person who is a Covered
Employee as specified in Section 8(e) of the Plan.

            (k) "Dividend Equivalent" means a right granted to a Participant
under Section 6(g), to receive cash, Stock, other Awards or other property equal
in value to dividends paid with respect to a specified number of shares of
Stock, or other periodic payments.

            (l) "Effective Date" means July 16, 1999, subject to approval by
stockholders of the Company.

            (m) "Eligible Person" means each Executive Officer and other
officers and employees of the Corporation or of any subsidiary, and other
persons who provide services to the Corporation or any of its subsidiaries
including directors of the Corporation. An employee on leave of absence may be
considered as still in the employ of the Corporation or a subsidiary for
purposes of eligibility for participation in the Plan.

            (n) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, including rules thereunder and successor provisions
and rules thereto.

            (o) "Executive Officer" means an executive officer of the
Corporation as defined under the Exchange Act.

            (p) "Fair Market Value" means the fair market value of Stock, Awards
or other property as determined by the Committee or under procedures established
by the Committee. Unless otherwise determined by the Committee, the Fair Market
Value of Stock shall be the last reported sale price, or, in case no such
reported sale takes place on such day, the average of the last reported sale
prices for the last three (3) trading days, in either case as officially
reported by the principal securities exchange on which the Stock is listed or
admitted to trading or by the Nasdaq National Market or the Nasdaq Small Cap
Market, or, if the Stock is not listed or admitted to trading on any national
securities exchange or quoted by the National Association of Securities Dealers
Automated

                                       -2-

<PAGE>

Quotation System ("Nasdaq"), the average closing bid price as furnished by the
National Association of Securities Dealers, Inc. through Nasdaq or by the OTC
Electronic Bulletin Board or similar organization if Nasdaq is no longer
reporting such information.

            (q) "Incentive Stock Option" or "ISO" means any Option intended to
be and designated as an incentive stock option within the meaning of Code
Section 422 or any successor provision thereto.

            (r) "Limited SAR" means a right granted to a Participant under
Section 6(c) hereof.

            (s) "Option" means a right, granted to a Participant under Section
6(b) hereof, to purchase Stock or other Awards at a specified price during
specified time periods.

            (t) "Other Stock-Based Awards" means Awards granted to a Participant
under Section 6(h) hereof.

            (u) "Participant" means a person who has been granted an Award under
the Plan which remains outstanding, including a person who is no longer an
Eligible Person.

            (v) "Performance Award" means a right, granted to a Participant
under Section 8 hereof, to receive Awards based upon performance criteria
specified by the Committee.

            (w) "Person" shall have the meaning ascribed to such term in Section
3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, and
shall include a "group" as defined in Section 13(d) thereof.

            (x) "Qualified Member" means a member of the Committee who is a
"Non- Employee Director" within the meaning of Rule 16b-3(b)(3) and an "outside
director" within the meaning of Regulation 1-162-27 under Code Section 162(m).

            (y) "Restricted Stock" means Stock granted to a Participant under
Section 6(d) hereof, that is subject to certain restrictions and to a risk of
forfeiture.

            (z) "Restricted Stock Unit or "RSU" means a right, granted to a
Participant under Section 6(e) hereof, to receive Stock, cash or a combination
thereof at the end of a specified deferral period.

            (aa) "Rule 16b-3" means Rule 16b-3, as from time to time in effect
and applicable to the Plan and Participants, promulgated by the Securities and
Exchange Commission under Section 16 of the Exchange Act.

            (bb) "Stock" means the Corporation's Common Stock, $0.01 par value
per share, and such other securities as may be substituted (or resubstituted)
for Stock pursuant to Section 11(c) hereof.

                                       -3-

<PAGE>

            (cc) "Stock Appreciation Rights" or "SAR" means a right granted to a
Participant under Section 6(c) hereof.

         3. Administration.

            (a) Authority of the Committee. The Plan shall be administered by
the Committee except to the extent the Board elects to administer the Plan, in
which case references herein to the "Committee" shall be deemed to include
references to the "Board." The Committee shall have full and final authority, in
each case subject to and consistent with the provisions of the Plan, to select
Eligible Persons to become Participants, grant Awards, determine the type,
number and other terms and conditions of, and all other matters relating to,
Awards, prescribe Award agreements (which need not be identical for each
Participant) and rules and regulations for the administration of the Plan,
construe and interpret the Plan and Award agreements and correct defects, supply
omissions or reconcile inconsistencies therein, and to make all other decisions
and determinations as the Committee may deem necessary or advisable for the
administration of the Plan.

            (b) Manner of Exercise of Committee Authority. At any time that a
member of the Committee is not a Qualified Member, any action of the Committee
relating to an Award granted or to be granted to a Participant who is then
subject to Section 16 of the Exchange Act in respect of the Corporation, or
relating to an Award intended by the Committee to qualify as "performance- based
compensation" within the meaning of Code Section 162(m) and regulations
thereunder, may be taken either (i) by a subcommittee, designated by the
Committee, composed solely of two or more Qualified Members, or (ii) by the
Committee but with each such member who is not a Qualified Member abstaining or
recusing himself or herself from such action; provided, however, that, upon such
abstention or recusal, the Committee remains composed solely of two or more
Qualified Members. Such action, authorized by such a subcommittee or by the
Committee upon the abstention or recusal of such non-Qualified Member(s), shall
be the action of the Committee for purposes of the Plan. Any action of the
Committee shall be final, conclusive and binding on all persons, including the
Corporation, its subsidiaries, Participants, Beneficiaries, transferees under
Section 11(b) hereof or other persons claiming rights from or through a
Participant, and shareholders. The express grant of any specific power to the
Committee, and the taking of any action by the Committee, shall not be construed
as limiting any power or authority of the Committee. The Committee may delegate
to officers or managers of the Corporation or any subsidiary, or committees
thereof, the authority, subject to such terms as the Committee shall determine,
to perform such functions, including administrative functions, as the Committee
may determine, to the extent that such delegation will not result in the loss-of
an exemption under Rule 16b-3(d)(1) for Awards granted to Participants subject
to Section 16 of the Exchange Act in respect of the Corporation and will not
cause Awards intended to qualify as "performance-based compensation" under Code
Section 162(m) to fail to so qualify. The Committee may appoint agents to assist
it in administering the Plan.

            (c) Limitation of Liability. The Committee and each member thereof
shall be entitled to, in good faith, rely or act upon any report or other
information furnished to him or her by any executive officer, other officer or
employee of the Corporation or a subsidiary, the Corporation's independent
auditors, consultants or any other agents assisting in the administration of the
Plan. Members of the Committee and any officer or employee of the Corporation or
a subsidiary acting

                                       -4-

<PAGE>

at the direction or on behalf of the Committee shall not be personally liable
for any action or determination taken or made in good faith with respect to the
Plan, and shall, to the extent permitted by law, be fully indemnified and
protected by the Corporation with respect to any such action or determination.

         4. Stock Subject to Plan.

            (a) Overall Number of Shares Available for Delivery. Subject to
adjustment as provided in Section 11(c) hereof, the total number of shares of
Stock reserved and available for delivery in connection with Awards under the
Plan shall be 1,200,000. Any shares of stock delivered under the Plan shall
consist of authorized and unissued shares or treasury shares.

            (b) Application of Limitation to Grants of Awards. No Award may be
granted if the number of shares of Stock to be delivered in connection with such
Award or, in the case of an Award relating to shares of Stock but settleable
only in cash (such as cash-only SARs), the number of shares to which such Award
relates, exceeds the number of shares of Stock remaining available under the
Plan minus the number of shares of Stock issuable in settlement of or relating
to then outstanding Awards. The Committee may adopt reasonable counting
procedures to ensure appropriate counting, avoid double counting (as, for
example, in the case of tandem or substitute awards) and make adjustments if the
number of shares of Stock actually delivered differs from the number of shares
previously counted in connection with an Award.

            (c) Availability of Shares Not Delivered under Awards. Shares of
Stock subject to an Award under the Plan that are canceled, expired, forfeited,
settled in cash or otherwise terminated without a delivery of shares to the
Participant, including (i) the number of shares withheld in payment of any
exercise or purchase price of an Award or award or taxes relating to Awards or
awards, and (ii) the number of shares surrendered in payment of any exercise or
purchase price of an Award or award or taxes relating to any Award or award,
will again be available for Awards under the Plan, except that if any such
shares could not again be available for Awards to a particular Participant under
any applicable law or regulation, such shares shall be available exclusively for
Awards to Participants who are not subject to such limitation.

         5. Eligibility; Per-Person Award Limitations. Awards may be granted
under the Plan only to Eligible Persons. In each fiscal year during any part of
which the Plan is in effect, an Eligible Person may not be granted Awards
relating to more than a number of shares of Common Stock recommended by the
Compensation Committee, subject to adjustment as provided in Section 11 (c),
under each of Sections 6(b), 6(c), 6(d), 6(e), 6(f), 6(g), 6(h), 8(b) and 8(c).
In addition, the maximum cash amount that may be earned under the Plan as a
final Annual Incentive Award or other cash annual Award in respect of any fiscal
year by any one Participant shall not exceed an amount recommended by the
Compensation Committee, and the maximum cash amount that may be earned under the
Plan as a final Performance Award or other cash Award in respect of a
performance period other than an annual period by any one Participant on an
annualized basis shall not exceed an amount recommended by the Compensation
Committee.

         6. Specific Terms of Awards.

                                       -5-

<PAGE>

            (a) General. Awards may be granted on the terms and conditions set
forth in this Section 6. In addition, the Committee may impose on any Award or
the exercise thereof, at the date of grant or thereafter (subject to Section 11
(e)), such additional terms and conditions, not inconsistent with the provisions
of the Plan, as the Committee shall determine, including terms requiring
forfeiture of Awards in the event of termination of employment by the
Participant and terms permitting a Participant to make elections relating to his
or her Award. The Committee shall retain full power and discretion to
accelerate, waive or modify, at any time, any term or condition of an Award that
is not mandatory under the Plan; provided, however, that the Committee shall not
have any discretion to accelerate, waive or modify any term or condition of an
Award that is intended to qualify as "performance-based compensation" for
purposes of Code Section 162(m) if such discretion would cause the Award not to
so qualify. Except in cases in which the Committee is authorized to require
other forms of consideration under the Plan, or to the extent other forms of
consideration must by paid to satisfy the requirements of state law, no
consideration other than services may be required for the grant (but not the
exercise) of any Award.

            (b) Options. The Committee is authorized to grant Options to
Participants on the following terms and conditions:

                (i) Exercise Price. The exercise price per share of Stock
purchasable under an Option shall be determined by the Committee, provided that
such exercise price shall be not less than the Fair Market Value of a share of
Stock on the date of grant of such Option except as provided under Section 7(a)
hereof.

                (ii) Time and Method of Exercise. The Committee shall determine
the time or times at which or the circumstances under which an Option may be
exercised in whole or in part (including based on achievement of performance
goals and/or future service requirements), the methods by which such exercise
price may be paid or deemed to be paid, the form of such payment, including,
without limitation, cash, Stock, other Awards or awards granted under other
plans of the Corporation or any subsidiary, or other property (including notes
or other contractual obligations of Participants to make payment on a deferred
basis), and the methods by or forms in which Stock will be delivered or deemed
to be delivered to Participants. In no event may an Option remain exercisable
more than ten years following the date of grant.

                (iii) ISOs. The terms of any ISO granted under the Plan shall
comply in all respects with the provisions of Code Section 422. Anything in the
Plan to the contrary notwithstanding, no term of the Plan relating to ISOs
(including any SAR in tandem therewith) shall be interpreted, amended or
altered, nor shall any discretion or authority granted under the Plan be
exercised, so as to disqualify either the Plan or any ISO under Code Section
422, unless the Participant has first requested the change that will result in
such disqualification.

            (c) Stock Appreciation Rights. The Committee is authorized to grant
SAR's to Participants on the following terms and conditions:

                (i) Right to Payment. A SAR shall confer on the Participant to
whom it is granted a right to receive, upon exercise thereof, the excess of (A)
the Fair Market Value of one

                                       -6-

<PAGE>

share of Stock on the date of exercise (or, in the case of a "Limited SAR," the
Fair Market Value determined by reference to the Change in Control Price, as
defined under Section 9(c) hereof) over (B) the grant price of the SAR as
determined by the Committee provided that such grant price shall not be less
than the Fair Market Value of a share of Stock on the date of grant of such SAR
except as provided under Section 7(a) hereof.

                (ii) Other Terms. The Committee shall determine at the date of
grant or thereafter, the time or times at which and the circumstances under
which a SAR may be exercised in whole or in part (including based on achievement
of performance goals and/or future service requirements), the method of
exercise, method of settlement, form of consideration payable in settlement,
method by or forms in which Stock will be delivered or deemed to be delivered to
Participants, whether or not a SAR shall be in tandem or in combination with any
other Award, and any other terms and conditions of any SAR. Limited SARs that
may only be exercised in connection with a Change in Control or other event as
specified by the Committee may be granted on such terms, not inconsistent with
this Section 6(c), as the Committee may determine. SARs and Limited SARs may be
either freestanding or in tandem with other Awards.

            (d) Restricted Stock. The Committee is authorized to grant
Restricted Stock to Participants on the following terms and conditions:

                (i) Grant and Restrictions. Restricted Stock shall be subject to
such restrictions on transferability, risk of forfeiture and other restrictions,
if any, as the Committee may impose, which restrictions may lapse separately or
in combination at such times, under such circumstances (including based on
achievement of performance goals and/or future service requirements), in such
installments or otherwise, as the Committee may determine at the date of grant
or thereafter. Except to the extent restricted under the terms of the Plan and
any Award agreement relating to the Restricted Stock, a Participant granted
Restricted Stock shall have all of the rights of a shareholder, including the
right to vote the Restricted Stock and the right to receive dividends thereon
(subject to any mandatory reinvestment or other requirement imposed by the
Committee). During the restricted period applicable to the Restricted Stock,
subject to Section 11(b) below, the Restricted Stock may not be sold,
transferred, pledged, hypothecated, margined or otherwise encumbered by the
Participant.

                (ii) Forfeiture. Except as otherwise determined by the
Committee, upon termination of employment during the applicable restriction
period, Restricted Stock that is at that time subject to restrictions shall be
forfeited and reacquired by the Corporation; provided that the Committee may
provide, by rule or regulation or in any Award agreement, or may determine in
any individual case, that restrictions or forfeiture conditions relating to
Restricted Stock shall be waived in whole or in part in the event of
terminations resulting from specified causes, and the Committee may in other
cases waive in whole or in part the forfeiture of Restricted Stock.

                (iii) Certificates for Stock. Restricted Stock granted under the
Plan may be evidenced in such manner as the Committee shall determine. If
certificates representing Restricted Stock are registered in the name of the
Participant, the Committee may require that such certificates bear an
appropriate legend referring to the terms, conditions and restrictions
applicable to such

                                       -7-

<PAGE>

Restricted Stock, that the Corporation retain physical possession of the
certificates, and that the Participant deliver a stock power to the Corporation,
endorsed in blank, relating to the Restricted Stock.

                (iv) Dividends and Splits. As a condition to the grant of an
Award of Restricted Stock, the Committee may require or permit a Participant to
elect that any cash dividends paid on a share of Restricted Stock be
automatically reinvested in additional shares of Restricted Stock or applied to
the purchase of additional Awards under the Plan. Unless otherwise determined by
the Committee, Stock distributed in connection with a Stock split or Stock
dividend, and other property distributed as a dividend, shall be subject to
restrictions and a risk of forfeiture to the same extent as the Restricted Stock
with respect to which such Stock or other property has been distributed.

            (e) RSUs. The Committee is authorized to grant RSUs to Participants,
which are rights to receive Stock, cash, or a combination thereof at the end of
a specified deferral period, subject to the following terms and conditions:

                (i) Award and Restrictions. Satisfaction of an Award of RSUs
shall occur upon expiration of the deferral period specified for such RSUs by
the Committee (or, if permitted by the Committee, as elected by the
Participant). In addition, RSUs shall be subject to such restrictions (which may
include a risk of forfeiture) as the Committee may impose, if any, which
restrictions may lapse at the expiration of the deferral period or at earlier
specified times (including based on achievement of performance goals and/or
future service requirements), separately or in combination, in installments or
otherwise, as the Committee may determine. RSUs may be satisfied by delivery of
Stock, cash equal to the Fair Market Value of the specified number of shares of
Stock covered by the RSUs, or a combination thereof, as determined by the
Committee at the date of grant or thereafter.

                (ii) Forfeiture. Except as otherwise determined by the
Committee, upon termination of employment during the applicable deferral period
or portion thereof to which forfeiture conditions apply (as provided in the
Award agreement evidencing the RSUs), all RSUs that are at that time subject to
deferral (other than a deferral at the election of the Participant) shall be
forfeited; provided that the Committee, may provide, by rule or regulation or in
any Award agreement, or may determine in any individual case, that restrictions
or forfeiture conditions relating to RSUs shall be waived in whole or in part in
the event of terminations resulting from specified causes, and the Committee may
in other cases waive in whole or in part the forfeiture of RSUs.

                (iii) Dividend Equivalents. Unless otherwise determined by the
Committee at date of grant, Dividend Equivalents on the specified number of
shares of Stock covered by an Award of RSUs shall be either (A) paid with
respect to such RSUs at the dividend payment date in cash or in shares of
unrestricted Stock having a Fair Market Value equal to the amount of such
dividends, or (B) deferred with respect to such RSUs and the amount or value
thereof automatically deemed reinvested in additional RSUs, other Awards or
other investment vehicles, as the Committee shall determine or permit the
Participant to elect.

                                       -8-

<PAGE>

            (f) Bonus Stock and Awards in Lieu of Obligations. The Committee is
authorized to grant Stock as a bonus, or to grant Stock or other Awards in lieu
of obligations to pay cash or deliver other property under the Plan or under
other plans or compensatory arrangements, provided that, in the case of
Participants subject to Section 16 of the Exchange Act, the amount of such
grants remains within the discretion of the Committee to the extent necessary to
ensure that acquisitions of Stock or other Awards are exempt from liability
under Section 16(b) of the Exchange Act. Stock or Awards granted hereunder shall
be subject to such other terms as Shall be determined by the Committee.

            (g) Dividend Equivalents. The Committee is authorized to grant
Dividend Equivalents to a Participant, entitling the Participant to receive
cash, Stock, other Awards, or other property equal in value to dividends paid
with respect to a specified number of shares of Stock, or other periodic
payments. Dividend Equivalents may be awarded on a free-standing basis or in
connection with another Award. The Committee may provide that Dividend
Equivalents shall be paid or distributed when accrued or shall be deemed to have
been reinvested in additional Stock, Awards, or other investment vehicles, and
subject to such restrictions on transferability and risks of forfeiture, as the
Committee may specify.

            (h) Annual Incentive and Performance Awards. The Committee is
authorized to make Annual Incentive Awards and Performance Awards payable in
cash, Shares, or other Awards, on terms and conditions established by the
Committee, subject to Section 8 in the event of Annual Incentive Awards or
Performance Awards intended to qualify as "performance-based compensation" for
purposes of Code Section 162(m).

            (i) Other Stock-Based Awards. The Committee is authorized, subject
to limitations under applicable law, to grant to Participants such other Awards
that may be denominated or payable in, valued in whole or in part by reference
to, or otherwise based on, or related to, Stock, as deemed by the Committee to
be consistent with the purposes of the Plan, including, without limitation,
convertible or exchangeable debt securities, other rights convertible or
exchangeable into Stock, purchase rights for Stock, Awards with value and
payment contingent upon performance of the Corporation or any other factors
designated by the Committee, and Awards valued by reference to the book value of
Stock or the value of securities of or the performance of specified
subsidiaries. The Committee shall determine the terms and conditions of such
Awards. Stock delivered pursuant to an Award in the nature of a purchase right
granted under this Section 6(h) shall be purchased for such consideration, paid
for at such times, by such methods, and in such forms including, without
limitation, cash, Stock, other Awards, or other property, as the Committee shall
determine. Cash awards, as an element of or supplement to any other Award under
the Plan, may also be granted pursuant to this Section 6(h).

         7. Certain Provisions Applicable to Awards.

                (a) Stand-Alone, Additional, Tandem, and Substitute Awards.
Awards granted under the Plan may, in the discretion of the Committee, be
granted either alone or in addition to, in tandem with, or in substitution or
exchange for, any other Award or any award granted under another plan of the
Corporation, any subsidiary, or any business entity to be acquired by the
Corporation or

                                       -9-

<PAGE>

a subsidiary, or any other right of a Participant to receive payment from the
Corporation or any subsidiary. Such additional, tandem, and substitute or
exchange Awards may be granted at any time. If an Award is granted in
substitution or exchange for another Award or award, the Committee shall require
the surrender of such other Award or award in consideration for the grant of the
new Award. In addition, Awards may be granted in lieu of cash compensation,
including in lieu of cash amounts payable under other plans of the Corporation
or any subsidiary, in which the value of Stock subject to the Award is
equivalent in value to the cash compensation (for example, RSUs or Restricted
Stock), or in which the exercise price, grant price or purchase price of the
Award in the nature of a right that may be exercised is equal to the Fair Market
Value of the underlying Stock minus the value of the cash compensation
surrendered (for example, Options granted with an exercise price "discounted" by
the amount of the cash compensation surrendered).

            (b) Term of Awards. The term of each Award shall be for such period
as may be determined by the Committee; provided that in no event shall the term
of any Option or SAR exceed a period of ten years (or such shorter term as may
be required in respect of an ISO under Code Section 422).

            (c) Form and Timing of Payment under Awards; Deferrals. Subject to
the terms of the Plan and any applicable Award agreement, payments to be made by
the Corporation or a subsidiary upon the exercise of an Option or other Award or
settlement of an Award may be made in such forms as the Committee shall
determine, including, without limitation, cash, Stock, other Awards or other
property, and may be made in a single payment or transfer, in installments, or
on a deferred basis. The settlement of any Award may be accelerated, and cash
paid in lieu of Stock in connection with such settlement, in the discretion of
the Committee or upon occurrence of one or more specified events (in addition to
a Change in Control). Installment or deferred payments may be required by the
Committee (subject to Section 11(e) of the Plan, including the consent
provisions thereof in the case of any deferral of an outstanding Award not
provided for in the original Award agreement) or permitted at the election of
the Participant on terms and conditions established by the Committee. Payments
may include, without limitation, provisions for the payment or crediting of
reasonable interest on installment or deferred payments or the grant or
crediting of Dividend Equivalents or other amounts in respect of installment or
deferred payments denominated in Stock.

            (d) Exemptions from Section 16(b) Liability. It is the intent of the
Corporation that the grant of any Awards to or other transaction by a
Participant who is subject to Section 16 of the Exchange Act shall be exempt
from Section 16 pursuant to an applicable exemption (except for transactions
acknowledged in writing to be non-exempt by such Participant). Accordingly, if
any provision of this Plan or any Award agreement does not comply with the
requirements of Rule 16b-3 as then applicable to any such transaction, such
provision shall be construed or deemed amended to the extent necessary to
conform to the applicable requirements of Rule 16b-3 so that such Participant
shall avoid liability under Section 16(b).

         8. Performance and Annual Incentive Awards.

            (a) Performance Conditions. The right of a Participant to exercise
or receive a grant or settlement of any Award, and the timing thereof, may be
subject to such performance

                                      -10-

<PAGE>

conditions as may be specified by the Committee. The Committee may use such
business criteria and other measures of performance as it may deem appropriate
in establishing any performance conditions, and may exercise its discretion to
reduce or increase the amounts payable under any Award subject to performance
conditions, except as limited under Sections 8(b) and 8(c) hereof in the case of
a Performance Award or Annual Incentive Award intended to qualify under Code
Section 162(m).

            (b) Performance Awards Granted to Designated Covered Employees. If
the Committee determines that a Performance Award to be granted to an Eligible
Person who is designated by the Committee as likely to be a Covered Employee
should qualify as "performance- based compensation" for purposes of Code Section
162(m), the grant, exercise and/or settlement of such Performance Award shall be
contingent upon achievement of preestablished performance goals and other terms
set forth in this Section 8(b).

                (i) Performance Goals Generally. The performance goals for such
Performance Awards shall consist of one or more business criteria and a targeted
level or levels of performance with respect to each of such criteria, as
specified by the Committee consistent with this Section 8(b). Performance goals
shall be objective and shall otherwise meet the requirements of Code Section
162(m) and regulations thereunder (including Regulation 1.162-27 and successor
regulations thereto), including the requirement that the level or levels of
performance targeted by the Committee result in the achievement of performance
goals being "substantially uncertain." The Committee may determine that such
Performance Awards shall be granted, exercised and/or settled upon achievement
of any one performance goal or that two or more of the performance goals must be
achieved as a condition to grant, exercise and/or settlement of such Performance
Awards. Performance goals may differ for Performance Awards granted to any one
Participant or to different Participants.

                (ii) Business Criteria. One or more of the following business
criteria for the Corporation, on a consolidated basis, and/or for specified
subsidiaries or business or geographical units of the Corporation (except with
respect to the total shareholder return and earnings per share criteria), shall
be used by the Committee in establishing performance goals for such Performance
Awards: (1) earnings per share; (2) increase in revenues or margin; (3) increase
in cash flow; (4) operating margin; (5) return on net assets, return on assets,
return on investment, return on capital, return on equity; (6) economic value
added; (7) direct contribution; (8) net income; pretax earnings; pretax earnings
before interest; depreciation and amortization (EBITDA); pretax earnings after
interest expense and before extraordinary or special items; operating income;
income before interest income or expense, unusual items and income taxes (local,
state or federal) and excluding budgeted and actual bonuses which might be paid
under any ongoing bonus plans of the Corporation; (9) working capital; (10)
management of fixed costs or variable costs; (11) identification or consummation
of investment opportunities or completion of specified projects in accordance
with corporate business plans, including strategic mergers, acquisitions or
divestitures; (12) total shareholder return; (13) debt reduction; and (14) any
of the above goals determined on an absolute or relative basis or as compared to
the performance of a published or special index deemed applicable by the
Committee including, but not limited to, the Standard & Poors 500 Stock Index or
a group of comparator companies. One or more of the foregoing business criteria
shall also be

                                      -11-

<PAGE>

exclusively used in establishing performance goals for Annual Incentive Awards
granted to a Covered Employee under Section 8(c) hereof.

                (iii) Performance Period; Timing for Establishing Performance
Goals. Achievement of performance goals in respect of such Performance Awards
shall be measured over a performance period of up to ten years, as specified by
the Committee. Performance goals shall be established not later than 90 days
after the beginning of any performance period applicable to such Performance
Awards, or at such other date as may be required or permitted for
"performance-based compensation" under Code Section 162(m).

                (iv) Performance Award Pool. The Committee may establish a
Performance Award pool, which shall be an unfunded pool, for purposes of
measuring performance of the Corporation in connection with Performance Awards.
The amount of such Performance Award pool shall be based upon the achievement of
a performance goal or goals based on one or more of the business criteria set
forth in Section 8(b)(ii) hereof during the given performance period, as
specified by the Committee in accordance with Section 8(b)(iii) hereof. The
Committee may specify the amount of the Performance Award pool as a percentage
of any of such business criteria, a percentage thereof in excess of a threshold
amount, or as another amount which need not bear a strictly mathematical
relationship to such business criteria.

                (v) Settlement of Performance Awards; Other Terms. After the end
of each performance period, the Committee shall determine the amount, if any, of
(A) the Performance Award pool, and the maximum amount of potential Performance
Award payable to each Participant in the Performance Award pool, or (B) the
amount of potential Performance Award otherwise payable to each Participant.
Settlement of such Performance Awards shall be in cash, Stock, other Awards or
other property, in the discretion of the Committee. The Committee may, in its
discretion, reduce the amount of a settlement otherwise to be made in connection
with such Performance Awards, but may not exercise discretion to increase any
such amount payable to a Covered Employee in respect of a Performance Award
subject to this Section 8(b). The Committee shall specify the circumstances in
which such Performance Awards shall be paid or forfeited in the event of
termination of employment by the Participant prior to the end of a performance
period or settlement of Performance Awards.

            (c) Annual Incentive Awards Granted to Designated Covered Employees.
If the Committee determines that an Annual Incentive Award to be granted to an
Eligible Person who is designated by the Committee as likely to be a Covered
Employee should qualify as a performance- based compensation" for purposes of
Code Section 162(m), the grant, exercise and/or settlement of such Annual
Incentive Award shall be contingent upon achievement of preestablished
performance goals and other terms set forth in this Section 8(c).

                (i) Annual Incentive Award Pool. The Committee may establish an
Annual Incentive Award pool, which shall be an unfunded pool, for purposes of
measuring performance of the Corporation in connection with Annual Incentive
Awards. The amount of such Annual Incentive Award pool shall be based upon the
achievement of a performance goal or goals based on one or more of the business
criteria set forth in Section 8(b)(ii) hereof during the given

                                      -12-

<PAGE>

performance period, as specified by the Committee in accordance with Section
8(b)(iii) hereof. The Committee may specify the amount of the Annual Incentive
Award pool as a percentage of any of such business criteria, a percentage
thereof in excess of a threshold amount, or as another amount which need not
bear a strictly mathematical relationship to such business criteria.

                (ii) Potential Annual Incentive Awards. Not later than the end
of the 90th day of each fiscal year, or at such other date as may be required or
permitted in the case of Awards intended to be "performance-based compensation"
under Code Section 162(m), the Committee shall determine the Eligible Persons
who will potentially receive Annual Incentive Awards, and the amounts
potentially payable thereunder, for that fiscal year, either out of an Annual
Incentive Award pool established by such date under Section 8(c)(i) hereof or as
individual Annual Incentive Awards. In the case of individual Annual Incentive
Awards intended to qualify under Code Section 162(m), the amount potentially
payable shall be based upon the achievement of a performance goal or goals based
on one or more of the business criteria set forth in Section 8(b)(ii) hereof in
the given performance year, as specified by the Committee; in other cases, such
amount shall be based on such criteria as shall be established by the Committee.
In all cases, the maximum Annual Incentive Award of any Participant shall be
subject to the limitation set forth in Section 5 hereof.

                (iii) Payout of Annual Incentive Awards. After the end of each
fiscal year, the Committee shall determine the amount, if any, of (A) the Annual
Incentive Award pool, and the maximum amount of potential Annual Incentive Award
payable to each Participant in the Annual Incentive Award pool, or (B) the
amount of potential Annual Incentive Award otherwise payable to each
Participant. The Committee may, in its discretion, determine that the amount
payable to any Participant as a final Annual Incentive Award shall be increased
or reduced from the amount of his or her potential Annual Incentive Award,
including a determination to make no final Award whatsoever, but may not
exercise discretion to increase any such amount in the case of an Annual
Incentive Award intended to qualify under Code Section 162(m). The Committee
shall specify the circumstances in which an Annual Incentive Award shall be paid
or forfeited in the event of termination of employment by the Participant prior
to the end of a fiscal year or settlement of such Annual Incentive Award.

            (d) Written Determinations. All determinations by the Committee as
to the establishment of performance goals, the amount of any Performance Award
pool or potential individual Performance Awards and as to the achievement of
performance goals relating to Performance Awards under Section 8(b), and the
amount of any Annual Incentive Award pool or potential individual Annual
Incentive Awards and the amount of final Annual Incentive Awards under Section
8(c), shall be made in writing in the case of any Award intended to qualify
under Code Section 162(m). The Committee may not delegate any responsibility
relating to such Performance Awards or Annual Incentive Awards.

            (e) Status of Section 8(b) and Section 8(c) Awards under Code
Section 162(m). It is the intent of the Corporation that Performance Awards and
Annual Incentive Awards under Sections 8(b) and B(c) hereof granted to persons
who are designated by the Committee as likely to be Covered Employees within the
meaning of Code Section 162(m) and regulations thereunder (including Regulation
1.162-27 and successor regulations thereto) shall, if so designated by the

                                      -13-
<PAGE>

Committee, constitute "performance-based compensation" within the meaning of
Code Section 162(m) and regulations thereunder. Accordingly, the terms of
Sections 8(b), (c), (d) and (e), including the definitions of Covered Employee
and other terms used therein, shall be interpreted in a manner consistent with
Code Section 162(m) and regulations thereunder. The foregoing notwithstanding,
because the Committee cannot determine with certainty whether a given
Participant will be a Covered Employee with respect to a fiscal year that has
not yet been completed, the term Covered Employee as used herein shall mean only
a person designated by the Committee, at the time of grant of Performance Awards
or an Annual Incentive Award, as likely to be a Covered Employee with respect to
that fiscal year. If any provision of the Plan as in effect on the date of
adoption or any agreements relating to Performance Awards or Annual Incentive
Awards that are designated as intended to comply with Code Section 162(m) does
not comply or is inconsistent with the requirements of Code Section 182(m) or
regulations thereunder, such provision shall be construed or deemed amended to
the extent necessary to conform to such requirements.

            9. Change in Control.

            (a) Effect of "Change In Control." In the event of a "Change in
Control," the following provisions shall apply unless otherwise provided in the
Award agreement:

                (i) Any Award carrying a right to exercise that was not
previously exercisable and vested shall become fully exercisable and vested as
of the time of the Change in Control and shall remain exercisable and vested for
the balance of the stated term of such Award without regard to any termination
of employment by the Participant, subject only to applicable restrictions set
forth in Section 11 (a) hereof;

                (ii) Any optionee who holds an Option shall be entitled to
elect, during the 60 day period immediately following a Change in Control, in
lieu of acquiring the shares of Stock covered by such Option, to receive, and
the Corporation shall be obligated to pay, in cash the excess of the Change in
Control Price over the exercise price of such Option, multiplied by the number
of shares of Stock covered by such Option;

                (iii) The restrictions, deferral of settlement, and forfeiture
conditions applicable to any other Award granted under the Plan shall lapse and
such Awards shall be deemed fully vested as of the time of the Change in
Control, except to the extent of any waiver by the Participant and subject to
applicable restrictions set forth in Section 11(a) hereof; and

                (iv) With respect to any outstanding Award subject to
achievement of performance goals and conditions under the Plan, such performance
goals and other conditions will be deemed to be met if and to the extent so
provided in the Award agreement relating to such Award.

            (b) Definition of "Change in Control." A "Change in Control" shall
be deemed to have occurred if:

                (i) any Person (other than the Corporation, any trustee or other
fiduciary holding securities under any employee benefit plan of the Corporation,
or any company owned,

                                      -14-

<PAGE>

directly or indirectly, by the stockholders of the Corporation immediately prior
to the occurrence with respect to which the evaluation is being made in
substantially the same proportions as their ownership of the common stock of the
Corporation) acquires securities of the Corporation and immediately thereafter
is the Beneficial Owner (except that a Person shall be deemed to be the
Beneficial Owner of all shares that any such Person has the right to acquire
pursuant to any agreement or arrangement or upon exercise of conversion rights,
warrants or options or otherwise, without regard to the sixty day period
referred to in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Corporation representing 20% or more of the combined voting
power of the Corporation's then outstanding securities (except that an
acquisition of securities directly from the Corporation shall not be deemed an
acquisition for purposes of this clause (i));

                (ii) during any period of two consecutive years, individuals who
at the beginning of such period constitute the Board, and any new director
(other than a director designated by a person who has entered into an agreement
with the Corporation to effect a transaction described in clause (i), (iii), or
(iv) of this paragraph) whose election by the Board or nomination for election
by the Corporation's stockholders was approved by a vote of at least two thirds
of the directors then still in office who either were directors at the beginning
of the two-year period or whose election or nomination for election was
previously so approved but excluding for this purpose any such new director
whose initial assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in Rule 148-11 of Regulation
14A promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of an individual,
corporation, partnership, group, associate or other entity or Person other than
the Board, cease for any reason to constitute at least a majority of the Board;

                (iii) the consummation of a merger or consolidation of the
Corporation with any other entity, other than (i) a merger or consolidation
which would result in the voting securities of the Corporation outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving or
resulting entity) more than 50% of the combined voting power of the surviving or
resulting entity outstanding immediately after such merger or consolidation or
(ii) a merger or consolidation in which no premium is intended to be paid to any
shareholder participating in the merger or consolidation;

                (iv) the stockholders of the Corporation approve a plan or
agreement for the sale or disposition of all or substantially all of the
consolidated assets of the Corporation (other than such a sale or disposition
immediately after which such assets will be owned directly or indirectly by the
stockholders of the Corporation, in substantially the same proportions as their
ownership of the common stock of the Corporation immediately prior to such sale
or disposition) in which case the Board shall determine the effective date of
the Change in Control resulting therefrom; or

                (v) any other event occurs which the Board determines, in its
discretion, would materially alter the structure of the Corporation or its
ownership.

         For purposes of this definition:

                                      -15-

<PAGE>

                                    (1) The term "Beneficial Owner" shall have
                           the meaning ascribed to such term in Rule 13d-3 under
                           the Exchange Act (including any successor to such
                           Rule).

                                    (2) The term "Exchange Act" means the
                           Securities Exchange Act of 1934, as amended from time
                           to time, or any successor act thereto.

                                    (3) The term "Person" shall have the meaning
                           ascribed to such term in Section 3(a)(9) of the
                           Exchange Act and used in Sections 13(d) and 14(d)
                           thereof, including "group" as defined in Section
                           13(d) thereof.

            (c) Definition of "Change in Control Price." The "Change in Control
Price" means an amount in cash equal to the higher of (i) the amount of cash and
fair market value of property that is the highest price per share paid
(including extraordinary dividends) in any transaction triggering the Change in
Control or any liquidation of shares following a sale of substantially all
assets of the Corporation, or (ii) the highest Fair Market Value per share at
any time during the 60-day period preceding and 60-day period following the
Change in Control.

         10. Options Granted Automatically to Non-Employee Directors.

            (a) Annual Option Grants. A Non-Employee Director Annual Option will
be automatically granted at the close of business on the last trading day of
each March.

            (b) Number of Shares Subject to Automatic Option Grants. Unless
otherwise determined by the Board in a resolution adopted on or prior to the
date of the annual meeting of the Company's shareholders that coincides with or
most recently precedes the date of grant of an Option to a Non-Employee
Director, the number of shares of Stock to be subject to each Annual Option
shall be 5,000, in each case subject to adjustment as provided in Section 11(c).

            (c) Other Non-Employee Director Annual Option Terms. Unless
otherwise determined by the Board, other terms of Annual Options shall be as
follows:

                (i) The exercise price per share of Stock purchasable upon
exercise of a Non-Employee Director Annual Option will be equal to 100% of the
Fair Market Value of a share of Stock on the date of grant of the Option.

                (ii) A Non-Employee Director Annual Option will expire at the
earlier of (A) 10 years after the date of grant or (B) three months after the
date the Participant ceases to serve as a director of the Company for any
reason.

                (iii) Each Non-Employee Director Annual Option will become
exercisable in three equal installments after each of the first, second and
third anniversaries of the date of grant.

            (d) Method of Exercise. A Participant may exercise a Non-Employee
Director Annual Option, in whole or in part, at such time as it is exercisable
and prior to its expiration, by

                                      -16-

<PAGE>

giving written notice of exercise to the Secretary of the Company, specifying
the Option to be exercised and the number of shares to be purchased, and paying
in full the exercise price in cash (including by check) or by surrender of
shares of Stock already owned by the Participant (except for shares acquired
from the Company by exercise of an option less than six months before the date
of surrender) having a Fair Market Value at the time of exercise equal to the
exercise price, or by a combination of cash and shares.

            (e) Availability of Shares. If an automatic grant of Options
authorized under Section 10(a) or (b) cannot be made in full due to the
limitation set forth in Section 4(a), such grant shall be made (together with
other automatic grants to occur at the same time) to the greatest extent then
permitted under Section 4(a).

         11. General Provisions.

            (a) Compliance with Legal and Other Requirements. The Corporation
may, to the extent deemed necessary or advisable by the Committee, postpone the
issuance or delivery of Stock or payment of other benefits under any Award until
completion of such registration or qualification of such Stock or other required
action under any federal or state law, rule or regulation, listing or other
required action with respect to any stock exchange or automated quotation system
upon which the Stock or other securities of the Corporation are listed or
quoted, or compliance with any other obligation of the Corporation, as the
Committee may consider appropriate, and may require any Participant to make such
representations, furnish such information and comply with or be subject to such
other conditions as it may consider appropriate in connection with the issuance
or delivery of Stock or payment of other benefits in compliance with applicable
laws, rules, and reasons, listing requirements, or other obligations.

            (b) Limits on Transferability; Beneficiaries. No Award or other
right or interest granted under the Plan shall be pledged, hypothecated or
otherwise encumbered or subject to any lien, obligation or liability of such
Participant to any party (other than the Corporation or a subsidiary), or
assigned or transferred by such Participant otherwise than by will or the laws
of descent and distribution or to a Beneficiary upon the death of a Participant,
and such Awards or rights that may be exercisable shall be exercised during the
lifetime of the Participant only by the Participant or his or her guardian or
legal representative, except that Awards and other rights (other than ISOs and
SARs in tandem therewith) may be transferred to one or more Beneficiaries or
other transferees during the lifetime of the Participant, and may be exercised
by such transferees in accordance with the terms of such Award, but only if and
to the extent such transfers are permitted by the Committee pursuant to the
express terms of an Award agreement (subject to any terms and conditions which
the Committee may impose thereon). A Beneficiary, transferee, or other person
claiming any rights under the Plan from or through any Participant shall be
subject to all terms and conditions of the Plan and any Award agreement
applicable to such Participant, except as otherwise determined by the Committee,
and to any additional terms and conditions deemed necessary or appropriate by
the Committee.

            (c) Adjustments. In the event that any dividend or other
distribution (whether in the form of cash, Stock, or other property),
recapitalization, forward or reverse split, reorganization,

                                      -17-

<PAGE>

merger, consolidation, spin-off, combination, repurchase, share exchange,
liquidation, dissolution or other similar transaction or event affects the Stock
such that an adjustment is determined by the Committee to be appropriate under
the Plan, then the Committee shall, in such manner as it may deem equitable,
adjust any or all of (i) the number and kind of shares of Stock which may be
delivered in connection with Awards granted thereafter, (ii) the number and kind
of shares of Stock by which annual per-person Award limitations are measured
under Section 5 hereof, (iii) the number and kind of shares of Stock subject to
or deliverable in respect of outstanding Awards and (iv) the exercise price,
grant price or purchase price relating to any Award and/or make provision for
payment of cash or other property in respect of any outstanding Award. In
addition, the business unit, or the financial statements of the Corporation or
any subsidiary, or in response to changes in applicable laws, regulations,
accounting principles, tax rates and regulations or business conditions or in
view of the Committee's assessment of the, business strategy of the Corporation,
any subsidiary or business unit thereof, performance of comparable
organizations, economic and business conditions, personal performance of a
Participant, and any other circumstances deemed relevant; provided, that no such
adjustment shall be authorized or made if and to the extent that such authority
or the making of such adjustment would cause Options, SARs, Performance Awards
granted under Section 8(b) hereof or Annual Incentive Awards granted under
Section 8(c) hereof to Participants designated by the Committee as Covered
Employees and intended to qualify as "performance-based compensation" under Code
Section 162(m) and regulations thereunder to otherwise fail to qualify as
"performance-based compensation" under Code Section 162(m) and regulations
thereunder.

            (d) Taxes. The Corporation and any subsidiary is authorized to
withhold from any Award granted, any payment relating to an Award under the
Plan, including from a distribution of Stock, or any payroll or other payment to
a Participant, amounts of withholding and other taxes due or potentially payable
in connection with any transaction involving an Award, and to take such other
action as the Committee may deem advisable to enable the Corporation and
Participants to satisfy obligations for the payment of withholding taxes and
other tax obligations relating to any Award. This authority shall include
authority to withhold or receive Stock or other property and to make cash
payments in respect thereof in satisfaction of a Participants tax obligations,
either on a mandatory or elective basis in the discretion of the Committee.

            (e) Changes to the Plan and Awards. The Board may amend, alter,
suspend, discontinue or terminate the Plan or the Committee's authority to grant
Awards under the Plan without the consent of shareholders or Participants,
except that any amendment or alteration to the Plan shall be subject to the
approval of the Corporation's shareholders not later than the annual meeting
next following such Board action if such shareholder approval is required by any
federal or state law or regulation or the rules of any stock exchange or
automated quotation system on which the Stock may then be listed or quoted, and
the Board may otherwise, in its discretion, determine to submit other such
changes to the Plan to shareholders for approval; provided that, without the
consent of an affected Participant, no such Board action may materially and
adversely affect the rights of such Participant under any previously granted and
outstanding Award. The Committee may waive any conditions or rights under, or
amend, alter, suspend, discontinue or terminate any Award theretofore granted
and any Award agreement relating thereto, except as otherwise provided in the
Plan; provided that, without the consent of an affected Participant, no such
Committee action may materially and adversely affect the rights of such
Participant under such Award. Notwithstanding

                                      -18-

<PAGE>

anything in the Plan to the contrary, if any right under this Plan would cause a
transaction to be ineligible for pooling of interest accounting that would, but
for the right hereunder, be eligible for such accounting treatment, the
Committee may modify or adjust the right so that pooling of interest accounting
shall be available, including the substitution of Stock having a Fair Market
Value equal to the cash otherwise payable hereunder for that right which caused
the transaction to be ineligible for pooling of interest accounting. In
addition, the Board shall also have the authority to modify the Plan, to the
extent it deems necessary or desirable in its sole discretion, to minimize the
taxes incurred by either the Company or any Participant relating to any Award.

            (f) Limitation on Rights Conferred under Plan. Neither the Plan nor
any action taken hereunder shall be construed as (i) giving any Eligible Person
or Participant the right to continue as an Eligible Person or Participant or in
the employ or service of the Corporation or a subsidiary, (ii) interfering in
any way with the right of the Corporation or a subsidiary to terminate any
Eligible Person's or Participant's employment or service at any time, (iii)
giving an Eligible Person or Participant any claim to be granted any Award under
the Plan or to be treated uniformly with other Participants and employees, or
(iv) conferring on a Participant any of the rights of a shareholder of the
Corporation unless and until the Participant is duly issued or transferred
shares of Stock in accordance with the terms of an Award.

            (g) Unfunded Status of Awards, Creation of Trusts. The Plan is
intended to constitute an "unfunded" plan for certain incentive awards and
deferred compensation. With respect to any payments not yet made to a
Participant or obligation to deliver Stock pursuant to an Award, nothing
contained in the Plan or any Award shall give any such Participant any rights
that are greater than those of a general creditor of the Corporation.

            (h) Nonexclusivity of the Plan. Neither the adoption of the Plan by
the Board nor its submission to the shareholders of the Corporation for approval
shall be construed as creating any limitations on the power of the Board or a
committee thereof to adopt such other incentive arrangements as it may deem
desirable including incentive arrangements and awards which do not qualify under
Code Section 162(m).

            (i) Payments in the Event of Forfeitures; Fractional Shares. Unless
otherwise determined by the Committee, in the event of a forfeiture of an Award
with respect to which a Participant paid cash or other consideration, the
Participant shall be repaid the amount of such cash or other consideration. No
fractional shares of Stock shall be issued or delivered pursuant to the Plan or
any Award. The Committee shall determine whether cash, other Awards or other
property shall be issued or paid in lieu of such fractional shares or whether
such fractional shares or any rights thereto shall be forfeited or otherwise
eliminated.

            (j) Governing Law. The validity, construction and effect of the
Plan, any rules and regulations under the Plan, and any Award agreement shall be
determined in accordance with the laws of the State of New York, without giving
effect to principles of conflicts of laws, and applicable federal law.

                                      -19-

<PAGE>

            (k) Plan Effective Date and Shareholder Approval. The Plan has been
adopted by the Board effective February 4, 2000, subject to approval by the
shareholders of the Corporation.

                                      -20-

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