Document:

FORM OF RESTRICTED STOCK AGREEMENT W/ CERTAIN EMPLOYEES

EXHIBIT 10.39 
 
RESTRICTED STOCK AGREEMENT 
 
THIS RESTRICTED STOCK AGREEMENT (the “Agreement”) is made this
             day of              by and among The TriZetto Group, Inc., a Delaware corporation (the
“Company”), and              (the “Grantee”). 
 
RECITALS 
 
A. WHEREAS, the Company desires to grant shares of its common stock to Grantee to encourage the continued service of Grantee as an
employee of the Company, which service is of benefit to the Company; 
 
B. WHEREAS, the Company desires to impose certain restrictions on the shares of common stock granted hereunder for the benefit of the Company; and 
 
C. WHEREAS, such grant is being made to Grantee in addition to, and not in lieu of, any other form of
compensation otherwise payable or to be paid to Grantee. 
 
NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:

 
1. Grant of Shares. The Company
hereby grants and delivers to Grantee              shares of its common stock (the “Shares”), subject to the terms and conditions set forth herein. 
 
2. Vesting of Shares. 
 
2.1 The Shares granted hereunder shall vest and become
“Vested Shares” in              equal annual installments commencing on the first anniversary date of this Agreement. Shares which have not yet become vested are herein
called “Unvested Shares.” No additional Shares shall vest after the date of termination (“Termination Date”) of Grantee’s “Continuous Service” (as defined below). 
 
2.2 Notwithstanding the foregoing, all of the Shares
shall become fully vested immediately prior to the consummation of a Change in Control (as defined in Section 10 below), unless prior to a Change in Control the Company’s Board of Directors determines that, upon its occurrence, the vesting of
the Shares will not accelerate or determines that only the vesting of certain Shares will be accelerated and/or establishes a different time in respect of such Change in Control for such acceleration. 
 
2.3 As used herein, the term “Continuous
Service” means so long as Grantee is an employee of the Company. Unless otherwise determined by the Company’s Board of Directors, a leave of absence (regardless of the reason therefor) shall be deemed to constitute the cessation of
Continuous Service as of the commencement date of the leave. 
 
2.4 In the event Grantee’s Continuous Service terminates due to death or Total Disability (as defined herein), the Shares shall vest and become Vested Shares on the Termination Date to the extent such Shares would have
vested in the 90-day period following the Termination Date. “Total Disability” means a “total and permanent disability” within the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (the
“Code”). 
 
3. Deposit of
Certificates. Grantee shall deposit with the Company all certificates evidencing the Shares together with a properly endorsed stock power assignment. Upon written 

 
request from Grantee, the
Company shall reissue and deliver to Grantee a new certificate evidencing the Vested Shares, and shall reissue a certificate evidencing the Unvested Shares as of the date thereof, which Grantee shall deposit with the Company, together with a new
properly endorsed stock power assignment. 
 
4.
Cancellation of Unvested Shares upon Termination. In the event of termination of Grantee’s Continuous Service, all Unvested Shares as of the Termination Date shall be immediately cancelled and become null and void. The Company shall
cancel the certificates then deposited with the Company evidencing the Unvested Shares and reissue a new certificate to Grantee evidencing only the Vested Shares, if any, as of the Termination Date. 
 
5. Restriction on Transfer. The Unvested Shares
shall not be sold, exchanged, transferred, pledged, hypothecated or otherwise disposed of, shall not be assigned or transferred, directly or indirectly, and shall not be subject to execution, attachment or similar process, and any attempted sale or
other disposition shall be null and void. 
 
6.
Representations and Warranties of the Company. The Company hereby represents and warrants to Grantee as follows: 
 
6.1 Authorization. All corporate action on the part of the Company, its officers and directors necessary for the
authorization, execution and delivery of this Agreement, the performance of all obligations of the Company hereunder and the authorization, issuance (or reservation for issuance) and delivery of the Shares being granted hereunder has been taken or
will be taken prior to the execution of this Agreement, and this Agreement constitutes a valid and legally binding obligation of the Company, which is enforceable in accordance with its terms. 
 
6.2 Valid Issuance of Shares. The Shares which
are being granted hereunder, when issued, sold and delivered in accordance with the terms hereof for the consideration expressed herein, will be duly and validly issued, fully paid and nonassessable (except as set forth herein) and, based in part
upon the representations of Grantee in this Agreement, will be issued in compliance with all applicable federal and state securities laws. 
 
7. Representations and Warranties of Grantee. Grantee represents and warrants to the Company as follows: 
 
7.1 Grantee understands that the Shares will be issued
by the Company without registration under the Securities Act of 1933 (“Securities Act”) and without qualification or registration under applicable state securities laws (“Blue Sky Laws”) pursuant to exemptions from registration
or qualification contained in the Securities Act and in the Blue Sky Laws. Grantee understands that the Shares must be held indefinitely unless subsequently registered or qualified under the Securities Act and under the Blue Sky Laws or unless
exemptions from the registration or qualification requirements under the Securities Act and under the Blue Sky Laws are available in connection with any proposed transfer of the Shares by Grantee. 
 
7.2 Grantee is acquiring the Shares solely for
Grantee’s own account for investment and not with a view to or for sale or distribution of the Shares or any portion thereof and not with any present intention of selling, offering to sell or otherwise disposing of or distributing the Shares or
any portion thereof. Grantee also represents that the entire legal and beneficial interest of the Shares is being acquired for, and will be held for the account of, Grantee only and neither in whole nor in part for any other person. 
 
7.3 Grantee is sophisticated in financial matters and
is able to evaluate the risks and benefits of the investment in the Shares. 
 

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7.4
Grantee has had an opportunity to ask questions and receive answers concerning the terms and conditions of the Shares and has had full access to such other information concerning the Company as Grantee has requested. 
 
7.5 Grantee agrees that none of the Shares, nor any
interest in the Shares, will be resold or otherwise transferred by Grantee without registration or qualification under the Securities Act and the Blue Sky Laws unless Grantee first demonstrates to the satisfaction of the Company that specific
exemptions from such registration or qualification requirements are available with respect to the proposed transfer and provides the Company an opinion of counsel satisfactory to the Company that the proposed transfer may be made without violation
of the Securities Act or the Blue Sky Laws and will not affect the exemptions relied upon by the Company in connection with the original issuance of the Shares. 
 
7.6 Grantee acknowledges that the certificates representing the Shares shall bear the following
restrictive legends: 
 
THE SECURITIES EVIDENCED
HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT COVERING SUCH SECURITIES OR IF
TRIZETTO RECEIVES AN OPINION OF COUNSEL FOR GRANTEE OF THESE SECURITIES REASONABLY SATISFACTORY TO TRIZETTO, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE
1933 ACT. 
 
ANY SALE, ASSIGNMENT, TRANSFER,
PLEDGE, OR OTHER DISPOSITION OF THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE IS RESTRICTED BY, AND SUBJECT TO, THE TERMS OF A RESTRICTED STOCK AGREEMENT DATED AS OF
            . A COPY OF SAID AGREEMENT IS ON FILE WITH THE SECRETARY OF THIS CORPORATION. 
 
7.7 Grantee understands that the Shares are restricted securities within the meaning of Rule 144 promulgated under the Securities
Act; that the exemption from registration under Rule 144 will not be available in any event for at least one year from the date of grant of the Shares to Grantee, and even then will not be available unless (i) a public trading market then exists for
the Shares of the Company, (ii) adequate current public information concerning the Company is then available to the public, (iii) Grantee has been the beneficial owner of the Shares at least one year prior to the sale, and (iv) other terms and
conditions of Rule 144 are complied with; and that any sale of the Shares may be made by it only in limited amounts in accordance with such terms and conditions, as amended from time to time. 
 
7.8 Grantee understands that counsel for the Company
may rely upon the foregoing for the purposes of rendering an opinion in connection with the issuance of the Shares. Grantee hereby agrees to indemnify the Company and its officers, directors, agents, and counsel and hold them harmless from and
against any and all damages suffered and liabilities incurred by them (including costs of investigation, defense, and attorneys’ fees) arising out of any breach by Grantee of the agreements or inaccuracy in the representations and warranties
which Grantee has made herein. 
 

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8.
Shares Free and Clear. All Shares relinquished to the Company, or its assignee(s), as the case may be, pursuant to this Agreement shall be delivered by Grantee free and clear of all claims, liens and encumbrances of every nature (except
the provisions of this Agreement and any conditions concerning the Shares relating to compliance with applicable federal or state securities laws), and the purchaser thereof shall acquire full and complete title and right to all of the shares, free
and clear of any claims, liens and encumbrances of every nature (again except for the provisions of this Agreement and such securities laws). 
 
9. Recapitalization. In the event that, as the result of a stock split or stock dividend or combination of shares or any
other change, or exchange for other securities, by reclassification, or recapitalization of the Shares, Grantee shall be entitled to new or additional or different shares of stock or securities, such new or additional or different shares of stock or
securities shall be deemed “Shares” for the purposes of this Agreement and shall be subject to all of the terms and conditions hereof, and the certificate or certificates for, or other evidences of, such shares shall be imprinted with the
legend provided in Section 7.6 above. 
 
10.
Change in Control. For the purposes of this Agreement, “Change in Control” means any of the following: 
 
(a) Approval by the stockholders of the Company of the dissolution or liquidation of the Company; 
 
(b) Approval by the stockholders of the
Company of an agreement to merge or consolidate, or otherwise reorganize, with or into one or more entities that are not Subsidiaries or other affiliates, as a result of which less than 50% of the outstanding voting securities of the surviving or
resulting entity immediately after the reorganization are, or will be, owned, directly or indirectly, by stockholders of the Company immediately before such reorganization (assuming for purposes of such determination that there is no change in the
record ownership of the Company’s securities from the record date for such approval until such reorganization and that such record owners hold no securities of the other parties to such reorganization), but including in such determination any
securities of the other parties to such reorganization held by affiliates of the Company); 
 
(c) Approval by the stockholders of the Company of the sale of substantially all of the Company’s business and/or
assets to a person or entity that is not a Subsidiary or other affiliate; 
 
(d) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act but excluding any person described in and satisfying the conditions of Rule 13d-1(b)(1) thereunder),
other than a person that is a stockholder of the Company on the date hereof, becoming the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than 50% of the
combined voting power of the Company’s then outstanding securities entitled to then vote generally in the election of directors of the Company; or 
 
(e) During any period not longer than two consecutive years, individuals who at the beginning of such period constituted
the Board cease to constitute at least a majority thereof, unless the election, or the nomination for election by the Company’s stockholders, of each new Board member was approved by a vote of at least three-fourths of the Board members then
still in office who were Board members at the beginning of such period (including for these purposes, new members whose election or nomination was so approved). 
 

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11.
No Agreement to Retain Status. Nothing in this Agreement shall be construed to constitute or be evidence of any agreement or understanding, express or implied, on the part of the Company to retain Grantee in his or her status as an
employee of the Company. 
 
12.
IRC Section 83(b) Election. Grantee acknowledges that he or she has consulted with a tax advisor and considered the advisability of all tax elections in connection with the grant of the Shares and the execution and delivery of this
Agreement, including the making of an election under Section 83(b) of the Code, and any similar elections under applicable federal or state law. Grantee acknowledges that he or she is solely responsible to make any such election and that the Company
has no responsibility to make any such election. If Grantee desires to make the election provided under Section 83(b) of the Code, Grantee must file such election with the Internal Revenue Service within thirty (30) days of the date of this
Agreement, substantially in the form attached as Exhibit A hereto and, if required, a comparable form of election with applicable state taxing authorities. The parties hereto acknowledge and agree that the total fair market value of the Shares as of
the date of this Agreement is $             per share. 
 
13. Miscellaneous. 
 
13.1 Notices. Any notice required or permitted to be given to a party pursuant to the provisions of this Agreement shall be
in writing and shall be effective upon personal delivery or upon deposit in the U.S. mail, postage prepaid and properly addressed to the party to be notified as set forth below such party’s signature or at such other address as such party may
designate by ten days’ advance written notice to the other parties hereto. 
 
13.2 Stop Transfer Orders. Grantee understands and agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate
“stop-transfer” instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records. 
 
13.3 “Market Stand-Off” Agreement.
Grantee agrees that, if requested by the Company or the managing underwriter of any proposed public offering of the Company’s securities, Grantee will not sell or otherwise transfer or dispose of any Shares held by Grantee without the prior
written consent of the Company or such underwriter, as the case may be, during such period of time, not to exceed 180 days following the effective date of the registration statement filed by the Company with respect to such offering, as the Company
or the underwriter may specify. 
 
13.4
Successors and Assigns. This Agreement and the rights and obligations of the parties hereunder shall inure to the benefit of, and be binding upon, their respective permitted successors, assigns and legal representatives. 
 
13.5 Severability. In the event one or more of
the provisions of this Agreement should, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. 
 
13.6 Amendments and Waivers. Any amendment or modification of this Agreement shall be effective only if evidenced by a
written instrument executed by duly authorized representatives of the parties hereto. Any party may waive its individual rights hereunder, either prospectively or retroactively, which shall be effective only if evidenced by a written instrument
executed by a duly authorized representative of such party. In no event shall such waiver of any rights hereunder constitute the waiver of such rights in any future instance unless the waiver so specifies in writing. 
 

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13.7
Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware without regard to conflict of law principles thereunder. 
 
13.8 Attorneys’ Fees. If any party shall
bring an action in law or equity against another to enforce or interpret any of the terms, covenants and provisions of this Agreement, the prevailing party in such action shall be entitled to reasonable attorneys’ fees, which the other party
hereby agrees to pay. 
 
13.9 Entire
Agreement. This Agreement constitutes the entire agreement between the parties pertaining to its subject matter and supersedes all prior or contemporaneous written or oral agreements and understandings of the parties, either express or implied.

 
13.10 Counterparts. This Agreement
may be executed in counterparts, each of which shall be an original but all of which together shall constitute one instrument. 
 
IN WITNESS WHEREOF, the parties have executed this Restricted Stock Agreement as of the day and first above written. 
 

	 	 	 COMPANY:
  
 THE TRIZETTO GROUP, INC.

	
	 	 	  

	
	 Name:
	 	

	
	 Title:
	 	

	
	 Address:
	 	

	
	 	 	

	
	 	 	 HOLDER:

	
	 	 	  

	
	 Name:
	 	

	
	 Address:
	 	

	
	 	 	

 

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EXHIBIT A 
 
 
Internal Revenue
Service Center 
5104 N. Blyth 
Fresno, California 93722 
 

	 	Re:	 	Election Under Section 83(b) of the Internal Revenue Code 

 
Dear Sir or Madam: 
 
The undersigned performed services in connection with which property was transferred to the undersigned that,
at the time of transfer, was not transferable by the undersigned and was subject to a substantial risk of forfeiture. The undersigned hereby makes this election pursuant to Section 83(b) of the Internal Revenue Code. 
 
In connection with this election, the undersigned hereby
provides you with the following information: 
 
1.
The undersigned’s name, address, social security number, and taxable year are as follows: 
 

	 Name and Address: 
	  	  

	 	  	  

	 	  	  

	 Social Security No.:
	  	  

	 Taxable Year: 
	  	  

 
2. A
description of the property with respect to which the election is being made: 
 
             shares of Common Stock, $.001 par value per share, (the “Shares”), of The TriZetto Group, Inc., a Delaware
corporation (the “Company”). 
 
3. The
date on which the property was transferred: 

 
4. A
description of the nature of the restrictions to which the property is subject: 
 
The Company may cancel all or a portion of the Shares from the undersigned in accordance with the terms of a Restricted Stock Agreement between the undersigned and the Company. In the event the
undersigned should cease to be a service provider to the Company at any time, the unvested Shares will be cancelled by the Company. The Shares will vest in              equal annual
installments commencing on the first anniversary date of the Restricted Stock Agreement. 
 
5. The fair market value at the time of transfer (determined without regard to any restriction other than a restriction which by its terms will never lapse) of the property with respect to which the
election is being made: $             per share, which results in an aggregate fair market value of $            .

 
6. The amount paid for such property: $0.

 
There are enclosed herewith two copies of this
written statement for filing. Please stamp the third copy enclosed herewith as having been received and return it to the undersigned in the enclosed, self-addressed, postage-paid envelope. 
 
The undersigned has also submitted a copy of this statement to the person for whom the services were
performed. 
 

	 Very truly yours,

	
	 
	

 
STOCK
ASSIGNMENT SEPARATE FROM CERTIFICATE 
 
FOR VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers an aggregate of
                              
(            ) shares of Common Stock of The TriZetto Group, Inc., a Delaware corporation (the “Company”), standing in the undersigned’s name on the books of said
Company represented by Certificate No.             . 
 
The undersigned further does hereby irrevocably constitute and appoint
                             as its attorney-in-fact, with full power of substitution, to transfer
said stock on the books of the Company. 
 

	 Dated:
	  	
	  	 	  	 	  	

	
	 	  	 	  	 	  	 Name:<PAGE>
                                                                    Exhibit 10.8

              DYNAMIC DETAILS, INC. KEY EMPLOYEE RETENTION PROGRAM

1.    Purpose and Effective Date.  This Program,  effective as of December 19,
2002 (the "Effective Date") shall be known as the Dynamic Details, Incorporated
Key Employee Retention Program (the "KERP"). It is a discretionary retention
bonus program for the benefit of a select group of employees (the "Key
Employees") who are selected for participation as provided herein. Those Key
Employees selected for participation and notified of their participation as of
the Effective Date are identified in Schedule 1 hereto as the same may be
modified from time to time in accordance with the provisions of the KERP. The
KERP is intended to qualify as a compensation or bonus plan that is exempt from
the application of the Employee Retirement Income Security Act of 1974, as
amended, by reason of Section 3 of such Act.

2.    Eligibility and Participation. Eligibility and participation shall be at
the sole discretion of DDI. In order to become a Participant eligible to receive
benefits, an employee must be a Key Employee and must be selected for
participation, both of which determinations are within the sole discretion of
DDI's Board of Directors. DDI will notify those employees it determines to be
eligible for participation in the KERP in writing of their participation. The
Board of Directors has determined the employees listed on Schedule 1 hereto to
be Key Employees, who are divided into four (4) Tiers, based on their positions
within the DDI organization, as follows:

      .    Tier I:   President & Chief Executive Officer (1 person)

      .    Tier II:  Vice Presidents and other Key Officers (9 persons)

      .    Tier III: Key Managers and Professionals (9 persons)

      .    Tier IV:  Key Managers and Professionals (76 persons)

3.    Stay Bonus. The KERP is designed to encourage Participants to remain with
the Company or a Successor Employer and perform in a satisfactory manner during
a prescribed stay period which begins upon the Effective Date and ends on
January 1, 2004 (the "Stay Bonus Period"). The Maximum Stay Bonus payable to
Participants who remain for the entire Stay Bonus Period is a specified
percentage of Base Salary (as defined in paragraph 3.b. below), dependent on the
Key Employee Tier to which the employee is assigned, as set forth in Table 3(a).
The Stay Bonus is earned and payable in three Installments, each contingent on
satisfactory service through each of three specified Service Dates and
satisfaction of all terms and conditions specified herein. The Service Dates and
percentage of the Maximum Stay Bonus payable on each Service Date is set forth
in Paragraph and Table 3(b).

           a.     Maximum Stay Bonus. The Maximum Stay Bonus for each Tier is
the specified percentage of base salary set forth in Table 3(a) below:

                     --------------------------------------------
                     Tier               Percentage of Base Salary
                     --------------------------------------------
                     Tier I             100%
                     --------------------------------------------
                     Tier II             60%
                     --------------------------------------------
                     Tier III            40%
                     --------------------------------------------
                     Tier IV             30%
                     --------------------------------------------

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      b.   Installments and Service Dates. If the Participant remains employed
at DDI for the entire Stay Bonus Period and continues to satisfy all of the
conditions for participation, such Participant shall receive the Maximum Stay
Bonus in three installments (collectively, "Installments", individually, the
"First Installment," "Second Installment" and "Third Installment,"
respectively), each of which shall be equal to (i) the product of the
Participant's Base Salary (which, for purposes of this plan shall mean (x) in
the case of Participants in Tiers I and II, the then current annual base salary
in effect as of each of the Service Dates and (y) in the case of Participants in
Tiers III and IV, the sum of the then current annual base salary in effect as of
each of the Service Dates plus sales commissions received by the Participant
during calendar year 2002 for such employee) multiplied by the applicable
Percentage of Base Salary set forth in Table 3.a, multiplied by (ii) the
applicable Installment Percentage set forth in Table 3.b. Each installment is
not accrued until the Participant has performed in a satisfactory manner through
the applicable Service Date and has satisfied all of the terms and conditions of
eligibility as to each of the three Service Dates as set forth in Table 4.b (the
"First Service Date," "Second Service Date," and "Third Service Date",
respectively), as follows in Table 3(b):

                                  Table 3(b)
           --------------------------------------------------------------
           Tier      First Service Date     Second          Third Service
                     --December 31,         Service         Date--
                     2002                   Date--          January 1,
                                            July 1, 2003    2004
           --------------------------------------------------------------
           Tier I    50%                    25%             25%
           --------------------------------------------------------------
           Tier II   33%                    33%             34%
           --------------------------------------------------------------
           Tier III  33%                    33%             34%
           --------------------------------------------------------------
           Tier IV   33%                    33%             34%
           --------------------------------------------------------------

      c.   Form and Time of Payment. Each Installment payable to a Participant
shall be paid in a lump sum and shall be subject to payroll taxes and other
withholdings according to DDI's standard payroll practices.

      d.   Satisfactory Performance Required. Notwithstanding any provisions of
the KERP to the contrary, DDI retains the right to reduce, eliminate or
otherwise modify the Stay Bonus for any Participant if at any time during the
Stay Bonus Period, DDI, in its sole judgment, determines that such Participant's
performance is substandard, provided (i) DDI gives the Participant written
notice of that determination and a reasonable period of time within which to
improve his or her performance, and (ii) the Participant fails to improve his or
her performance to DDI's satisfaction within that time.

      e.   Discretionary Payments. The Company reserves the right to award Stay
Bonuses, as necessary, to employees who are not participants in the KERP in
order to retain their services and avoid the disruption and cost of attrition
among employees with critical knowledge and/or skills. These retention costs
will, in the aggregate, not exceed the greater of (i) $250,000; or (ii) such
amount as the Board of Directors of the Company may authorize. Such
discretionary payments shall be made only to those who are selected by the Chief
Executive Officer in his

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<PAGE>

sole discretion, and such employees may be placed on a payment schedule other
than that set forth in section 4.b above in the Chief Executive Officer's sole
discretion.

      f.   Corporate Transactions and Change of Control. The obligations of the
KERP shall be binding on a Successor Employer, which means any employer that
acquires, through a stock purchase or merger, or through an asset purchase, or
otherwise, part or all of the Company or an employer following a Change of
Control. A "Change of Control" means (A) the acquisition of 50 percent or more
of each class of the outstanding shares of the Company by a third party which is
not a member of a Controlled Group (within the meaning of the Internal Revenue
Code) including the Company, (B) a merger, consolidation or other reorganization
of the Company (other than reincorporation), if after giving effect to such
merger, consolidation, or other reorganization, the shareholders of the Company
immediately prior to such merger, consolidation, or other reorganization do not
represent a majority in interest of the holders of voting securities (on a fully
diluted basis) with the ordinary power to elect directors of the surviving
entity after such merger, consolidation or other reorganization, or (C) the sale
of all or substantially all of the assets of the Company to a third party who is
not a member of a Controlled Group (within the meaning of the Internal Revenue
Code) including the Company.

4.    TERMINATION OF PARTICIPATION

      a.   Events. A Participant's participation in the KERP shall automatically
terminate, without notice to or consent by such Participant, upon the first to
occur of the following events with respect to such Participant:

                  1)    Involuntary termination of employment,

                  2)    Voluntary Resignation

                  3)    Death, or

                  4)    Disability.

      b.   Effect of Termination For Cause or Resignation without Good Reason.
In the event a Participant's employment is terminated by DDI for Cause or a
Participant voluntarily terminates employment with DDI other than for Good
Reason, the Participant shall forfeit his or her entire right to the full amount
of any and all Installments that would otherwise have been earned and payable
after the date thereof.

      c.   Effect of Other Events; Pro Rata Payments. Pro rata payments will be
made only in the following circumstances and calculated in the manner specified
herein:

           1)     Termination by DDI for reasons other than Cause, Termination
because of Death or Disability, or Resignation For Good Reason.

      In the event a Participant's employment is terminated by DDI prior to the
Third Service Date, for any reason other than Cause, if employment is terminated
by death or Disability, or in

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<PAGE>

the event that a Participant resigns for Good Reason, the Participant shall be
entitled to receive a pro-rata amount of the portion of the Stay Bonus be
calculated as either: (i) in the event such termination or resignation occurs
after the Effective Date but before the First Service Date, the product of the
amount of the First Installment, as calculated in section 3 above, multiplied by
a fraction, the numerator of which shall be the number of days from the
Effective Date through and including the date of such termination or resignation
and the denominator of which shall be the number of days from the Effective Date
through and including the First Service Date; or ((ii) in the event that such
termination or resignation occurs after the First Service Date, the product of
the amount of the next scheduled Installment immediately following such
termination or resignation date as calculated in section 3 above, multiplied by
a fraction, the numerator of which shall be the number of days from the Service
Date immediately preceding such termination or resignation date through and
including such termination or resignation date, and the denominator of which
shall be the number of days from the Service Date immediately preceding such
termination or resignation date through and including the date of the next
scheduled Service Date.

      In addition, DDI, in consultation with (and upon approval by) the Board of
Directors, shall review the payments to be made to Participants who are
terminated due to death or Disability, and when appropriate, may award the full
amount of Stay Bonus Payments to such Participants giving full consideration to
the value contributed both before and during the Stay Bonus Period.

           2)     Employees on Leave. If a Participant is on an approved
leave of absence during the Stay Bonus Period, he or she will receive a pro rata
Stay Bonus based on the time actually  worked  during the Stay Bonus Period,  as
calculated in section c, 1 above.

           3)     Promoted  Employees.  Participants  who are  hired or
promoted  to  replace  Participants  participating  in the Stay  Bonus  Plan who
voluntarily terminated their own employment or who were terminated for Cause (as
defined below) may be selected for participation and eligible for payments under
the KERP on a pro-rata basis, at the sole discretion of DDI management.

      d.   Definitions. For purposes of the KERP, the following terms shall have
the following meaning:

           1)     "Cause",  with  respect  to  any  Participant   (including
those  with Employment Agreements) shall be defined as the Participant's:

                  (i)    willful refusal to perform, in any material respect,
                         his or her duties or responsibilities for DDI;

                  (ii)   material breach of his or her duties or
                         responsibilities to DDI;

                  (iii)  gross negligence or willful disregard in the
                         performance of his or her duties or responsibilities;

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<PAGE>

                  (iv)   willful disregard, in any material respect, of any
                         financial or other budgetary limitations established in
                         good faith by the Board of Directors of DDI if
                         continuing after written notice;

                  (v)    engaging in conduct that causes material and
                         demonstrable injury, monetarily or otherwise, to DDI,
                         including, but not limited to, misappropriation or
                         conversion of DDI's assets; or

                  (vi)   conviction of or entry of a plea of nolo contendere to
                         a felony.

           2)     "Disability" means a physical or mental condition that
renders the Participant unable to perform the essential  functions of his or her
job with or without a reasonable  accommodation  for a period of 180 consecutive
days or more.

           3)     "Good Reason" with respect to any Participant shall mean the
occurrence of one or more of the following with respect to such Participant: (i)
a material reduction in compensation or benefits (provided, however, that a
reduction in salary that is both (x) made part of a company-wide salary
reduction and (y) no greater than the percentage reduction made for the
applicable salary level in the Company salary reduction of July 2001, shall be
deemed to be immaterial); (ii) involuntary relocation of primary work location
more than 50 miles from the current location; and/or (iii) any other event so
defined in any applicable employment Agreement.

5.    Binding Authority. Subject to the review and approval of the Board of
Directors provided herein, the decisions of DDI, or its duly authorized
delegate, shall be final and conclusive for all purposes of the KERP and shall
not be subject to any appeal or review.

6.    Source of Payments. All Stay Bonus Payments will be paid in cash from the
general funds of DDI; no separate fund will be established.

7.    Amendment or Termination. The KERP may be amended, modified, suspended or
terminated by DDI's Board of Directors at any time and without notice to or the
consent of Participants.

8.    Severability. If any term or condition of the KERP shall be invalid or
unenforceable, the remainder of the KERP shall not be affected thereby and shall
continue in effect and application to the fullest extent permitted by law.

9.    No Employment Rights. Neither the establishment nor the terms of the KERP
shall be held or construed to confer upon any employee the right to a
continuation of employment by DDI, nor constitute a contract of employment,
express or implied. Subject to any applicable employment agreement, DDI reserves
the right to dismiss or otherwise deal with any employee, including the
Participants, to the same extent as though the KERP had not been adopted.
Nothing in the KERP is intended to alter the "AT-WILL" status of Participants,
it being understood that, except to the extent otherwise expressly set forth to
the contrary in a written

                                        5

<PAGE>

employment agreement, the employment of any Participant can be terminated at any
time by either DDI or the employee with or without notice, with or without
cause.

10.   Transferability of Rights. DDI shall have the right to transfer its
obligations under the KERP, with respect to one or more Participants, to any
person, including any purchaser of all or any part of DDI's business. No
Participant or spouse shall have any right to commute, encumber, transfer or
otherwise dispose of or alienate any present or future right or expectancy which
the Participant may have at any time to receive payments of benefits hereunder,
which benefits and the rights thereto are expressly declared to be nonassignable
and nontransferable, except to the extent required by law. Any attempt by a
Participant to transfer or assign a benefit or any rights granted hereunder
shall (after consideration of such facts as DDI deems pertinent) be grounds for
terminating any rights of the Participant to any portion of the KERP benefits
not previously paid.

11.   Governing Law. The KERP shall be construed, administered and enforced
according to the laws of the State of California.

                                        6

<PAGE>

                                   Schedule 1

               DDI Key Employee Retention Plan (KERP) Participants
                                       and
                            Stay Bonus Cost Analysis

                                        7

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