Document:

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                              EMPLOYMENT AGREEMENT

THIS AGREEMENT, dated as of June 23, 2000, is made and entered into by and
between billserv.com inc., a Nevada corporation, having an office address at
14607 San Pedro Ave., Suite 100, San Antonio, Texas 78232 ("billserv.com" or the
"Company") and the individual named in Schedule 1 hereto, residing at the
address listed in Schedule 1 (hereinafter referred to as the "Executive").

                              W I T N E S S E T H:

WHEREAS, the Company desires to hire and retain the Executive as an Executive to
perform certain services for the Company.

NOW, THEREFORE, in consideration of the mutual covenants contained herein and on
the attached Schedule, and for other good and valuable consideration the receipt
of which is hereby acknowledged, the Company and the Executive hereby agree as
follows:

1.    Employment of Executive.

      (a)   The Company hereby employs the Executive in the capacity and for the
            position set forth on Schedule 1 attached hereto. Executive hereby
            accepts such employment with the Company upon the terms and
            conditions hereinafter set forth.

      (b)   The duties of the Executive shall include the duties and services
            described in Schedule 1, which duties and services shall at all
            times be subject to the direction, approval and control of the Board
            and shall include such other duties, as may be assigned by the Board
            commensurate with the responsibilities normally associated with
            Executive's position.

2.    Services to be Rendered.

      (a)   Executive shall perform such duties as are usually performed by an
            Executive with the position set forth in Schedule 1 of a business
            similar in size and scope as the Company and such other reasonable
            additional duties as may be prescribed from time to time by the
            Company which are reasonable and consistent with the Company's
            operations, taking into account Executive's expertise and job
            responsibilities. During the term of this Agreement, Executive
            agrees to devote his full time and attention to the business and
            affairs of the Company to the extent necessary to discharge the
            responsibilities assigned to Executive and to use reasonable efforts
            to perform faithfully and efficiently such responsibilities. The
            Executive will use Executive's best efforts to promote the interests
            of the Company.

      (b)   During this Agreement, it shall not be a violation of this Agreement
            for Executive to (i) serve on corporate, civic or charitable boards
            or committees; (ii) deliver lectures, fulfill speaking engagements
            or teach at educational institutions; or (iii) manage personal
            investments or companies in which personal investments are made so
            long as such activities do not significantly interfere with the
            performance of Executive's responsibilities with the Company and
            which companies are not in direct competition with the Company. Any
            income

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            incurred by Executive outside the scope of his employment and
            permitted pursuant to the provisions hereof, shall inure to the
            benefit of Executive, and the Company shall not claim any
            entitlement thereto; provided, however, that any income derived by
            Executive related to the business of the Company, including, without
            limitation, compensation for serving on boards of directors of
            companies in which the Company has a significant investment, shall
            be paid over to the Company as and when received.

      (c)   During the term of this Agreement, the Company shall furnish, at
            Executive's principal place of employment, an office, furnishings,
            secretary and such other facilities commensurate and suitable to his
            position and adequate for the performance of his duties hereunder.

3.    Term.

      (a)   Term of Employment. The term of this Agreement (the "Term") shall
            commence effective as of the date hereof (the "Commencement Date"),
            and shall continue until December 31, 2001, unless (i) extended by
            the mutual agreement of the Company and the Executive or (ii)
            extended or terminated as hereinafter provided.

      (b)   Termination of Employment by the Company for Cause. The Company may
            terminate Executive's employment if such termination is for "Cause"
            (as defined herein) and Cause is not cured by Executive within any
            available cure period provided below. For the purposes of this
            Agreement, "Cause" shall be defined as any of the following:

            (i)   any action or course of conduct by Executive which senior
                  executive management determines is materially detrimental to
                  the Company which is not cured within 15 days following
                  written notice thereof;

            (ii)  actions by Executive constituting fraud, embezzlement or
                  dishonesty as determined by the Company's Board of Directors
                  in its sole reasonable discretion;

            (iii) actions by Executive in intentionally furnishing materially
                  false, misleading, or omissive information to the Company's
                  Board of Directors that is materially detrimental to the
                  Company;

            (iv)  actions constituting a breach of the Sections 8 or 9 of this
                  Agreement which is materially detrimental to the Company;

            (v)   acts or omissions which constitute willful failure to follow
                  reasonable directives of the Company's Board of Directors,
                  which are consistent with Executive's job responsibilities and
                  performance which is not cured within 15 days following
                  written notice thereof.

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            Upon termination for Cause, Executive shall immediately cease to
            have any power of his position, but shall nevertheless be given a
            reasonable opportunity to access his office with the Company for the
            purpose of retrieving his personal goods and files.

      (c)   Termination Without Cause. The Company has the right to terminate
            this Agreement without Cause upon written notice, subject to payment
            by the Company of the Deferred Compensation described in Section
            4(c) herein. In such event, Executive shall cease to have any power
            of his office as of the effective date of the termination specified
            in such written notice.

      (d)   Termination by Executive. Executive may terminate this Agreement
            upon 30 days' written notice after the occurrence of a material
            default of this Agreement by the Company, which default is not cured
            within the 30- day notice period. Such notice shall set forth in
            reasonable detail the acts underlying the default. If Executive
            terminates this Agreement under this Section 3(d), Executive shall
            be entitled to the Deferred Compensation as described in Section
            4(c) herein.

      (e)   Termination by Executive Upon Change of Control. Executive may
            terminate this Agreement upon 30 days' written notice at any time
            within 6 months following the occurrence of a "Change of Control",
            but only prior to Executive's receiving a notice of termination by
            the Company for Cause. Upon such termination Executive shall be
            entitled to the Deferred Compensation described in Section 4(c)
            herein. Change of Control is defined for the purposes of this
            Agreement as any of the following acts:

            (i)   The acquisition by any person, entity or "group" within the
                  meaning of Section 13(d) or 14(d) of the Securities Exchange
                  Act of 1934, as amended (the "Exchange Act"), other than a
                  person, entity or "group" that includes Executive, of
                  beneficial ownership (within the meaning of Rule 13d-3
                  promulgated under the Exchange Act) of (A) prior to the
                  consummation of a Qualified Public Offering, more than 50% of
                  the combined voting power of the then outstanding voting
                  securities entitled to vote generally in the election of the
                  Board of Directors or (B) after the consummation of a
                  Qualified Public Offering, more than 40% of the combined
                  voting power of the then outstanding voting securities
                  entitled to vote generally in the election of the Board of
                  Directors; or

            (ii)  If the individuals who serve on the Board of Directors as of
                  the Commencement Date (the "Incumbent Board") cease for any
                  reason to constitute at least a majority of the Board of
                  Directors; provided, however, any person who becomes a
                  director subsequent to the Commencement Date, whose election
                  or nomination for election was approved by a vote of at least
                  a majority of the directors then constituting the Incumbent
                  Board, shall for purposes of this Agreement be considered a
                  member of the Incumbent Board; or

            (iii) Approval by the Company's equity holders of (A) a merger,
                  reorganization or consolidation whereby the Company's equity
                  holders immediately prior to such approval do not, immediately
                  after consummation of such reorganization, merger or
                  consolidation own more

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                  than 50% of the combined voting power of the surviving
                  entity's then outstanding voting securities entitled to vote
                  generally in the election of directors; or (B) liquidation or
                  dissolution of the Company; or (C) the sale of all or
                  substantially all of the assets of the Company.

      (f)   Termination by Executive for Good Reason. Executive may terminate
            this Agreement upon 30 days' written notice if (i) Executive's
            duties are materially diminished or altered in a manner contrary to
            Section 1 and 2 of this Agreement, (ii) Executive's title is altered
            in a material and adverse manner, (iii) Executive's reporting
            relationship is materially and adversely modified, (iv) Executive's
            Base Salary, as provided hereunder, is diminished, (v) the
            methodology for calculating Executive's Bonus Compensation, as
            provided hereunder, is adversely (from the Executive's point of
            view) altered or (vi) the Company shall relocate its executive
            offices more than 40 miles from their current location (collectively
            "Good Reason"). Upon such termination Executive shall be entitled to
            the Deferred Compensation described in Section 4(c) herein.

      (g)   Termination by Executive Without Good Reason. Executive may
            terminate this Agreement without Good Reason upon 30 days' written
            notice. Upon the termination date specified in such written notice
            (which date shall be not more than 30 days following the date of
            such notice) Executive shall cease to have any power of his office.

4.    Compensation.

      (a)   Base Salary.

            (i)   Executive shall receive a base salary as set forth on Schedule
                  4(a)i attached hereto.

            (ii)  Each January, commencing with January 2001, the Board of
                  Directors of the Company shall review Executive's performance
                  and the Board of Directors may in its sole discretion elect to
                  increase the salary then paid to Executive above the amount
                  set forth on Schedule 4(a)(i), however, there shall be
                  absolutely no obligation to do so.

      (b)   Bonus Compensation.

            (i)   The Executive shall receive as "Bonus Compensation" each year,
                  the amount calculated in accordance with Schedule 4(b)
                  attached hereto.

            (ii)  If at anytime hereafter, the Company shall adopt a bonus
                  program, an option program or any other form of equity
                  participation for senior executive officers of the Company,
                  the Executive shall be eligible to participate in such bonus
                  program, option program or other form of equity participation
                  in a manner and capacity commensurate with his position and
                  duties.

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      (c)   Deferred Compensation.

            (i)   When Due. Executive (or his estate as the case may be) shall
                  be entitled to the Deferred Compensation as calculated below,
                  the initial installment of which is to be paid within 30 days
                  after the event giving rise to the payout (except as provided
                  below) in the event that Executive's employment is terminated
                  for any of the following reasons herein: (A) death of
                  Executive; (B) termination by the Company without cause
                  pursuant to Section 3(c); (C) termination by Executive upon
                  default by the Company pursuant to Section 3(d); (D)
                  termination by Executive after a Change of Control pursuant to
                  Section 3(e); (E) termination by the Executive pursuant to
                  Section 3(f); (F) termination by the Company pursuant to
                  Section 3(h); or (G) termination by the Company pursuant to
                  Section 7(a).

            (ii)  Amount. The Deferred Compensation shall be the amount ("Base
                  Deferred Compensation") which is calculated as the Base Salary
                  payments Executive would have received had his employment
                  continued for the remaining term of this Agreement. In
                  addition to the Base Deferred Compensation, Executive shall be
                  entitled to the following (which, together with the Base
                  Deferred Compensation and the Bonus Deferred Compensation (as
                  defined below) shall be collectively called the "Deferred
                  Compensation") all of the benefits and personal perquisites
                  otherwise provided in this Agreement (including automobile
                  expenses) during that period of time which is the greater of
                  (X) the remaining term of this Agreement, or (Y) one year (the
                  "Deferral Period") and an amount equal to the pro rata portion
                  of the Bonus Compensation for the year in which executive's
                  employment is terminated determined on the basis of the number
                  of days elapsed in such year prior to such termination (the
                  "Bonus Deferred Compensation"). The Deferred Compensation
                  herein shall be deemed liquidated damages resulting from the
                  Company's termination of this Agreement and shall be
                  Executive's sole and exclusive remedy for any such
                  termination. Deferred Compensation shall not be diminished or
                  offset by reason of any earnings by Executive subsequent to
                  the date of termination.

(d)   Payment of Deferred Compensation. Except as provided below, the Deferred
      Compensation shall be paid in monthly installments over the 12 months
      following the event giving rise to a Deferred Compensation. If such
      termination is a result of the death of Executive, the initial Deferred
      Compensation shall be made within 15 days after the personal
      representative of Executive's estate notifies the Company that Letters of
      Administration have been filed in the probate proceeding. The Company
      shall have the option at all times during the term of this Agreement to
      maintain key man life insurance on Executive's life to cover the cost of
      any Deferred Compensation due to Executive. If such key man life insurance
      is maintained, and the Deferred Compensation is due as a result of
      Executive's death, the Deferred Compensation shall be paid 100% in cash
      upon Executive's death. The Bonus Deferred Compensation shall be paid in a
      single lump sum within 90 days of the end of the year in which Executive's
      employment is terminated.

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5.    Benefits.

      (a)   Executive shall be entitled to a minimum of 4 weeks paid vacation
            during the term of this Agreement. In addition, Executive shall be
            entitled to paid time off for the same holidays as other employees
            of the Company as established by the Board.

      (b)   Executive shall be entitled to reimbursement for all maintenance,
            insurance and gasoline expenses incidental to the use of one
            automobile when the Company becomes profitable.

      (c)   Executive shall be entitled to participate (in a manner and capacity
            commensurate with his position and duties), subject to eligibility
            and other terms generally established by the Board, in any employee
            benefit plan (including but not limited to life insurance plans,
            stock option plans, group hospitalization, health, dental care
            (which health insurance shall also cover Executive's dependents),
            profit sharing and pension, bonus and other benefit plans), as may
            be adopted or amended by the Company from time to time.

      (d)   The Company shall pay the premium on a "whole life" insurance policy
            on the life of Executive in the initial face amount of five times
            Base Salary during the term hereof. Executive shall have the right
            to designate the beneficiaries of such policies. The Company shall
            pay timely all premiums on such life insurance, and on demand
            provide Executive due proof of such payment. The insurance companies
            issuing such policies shall be authorized to give Executive, upon
            his request, any information regarding the status of any such
            policy. Any dividend declared upon such policy shall be applied to
            the premium.

      (e)   The Company shall pay all initial membership fees and monthly dues
            on behalf of Executive for Executive's membership in one business
            luncheon club, and one airline club; provided that the aggregate
            initial membership fees and the annual membership fees of such clubs
            in the aggregate do not exceed $2,000 and $1,000, respectively.
            Executive shall pay all expenses for such club use that is not
            otherwise reimbursable as a Company business expense.

      (f)   The Company will reimburse Executive for the cost of reasonable tax
            and financial preparation and planning, including services that may
            be requested by Executive from time to time pertaining to this
            Agreement.

      (g)   Executive shall receive any such additional benefits that any other
            executive officer may receive during the term of this Agreement at
            the reasonable discretion of the Board.

6.    Expenses.

The Company shall reimburse the Executive against appropriate vouchers or other
receipts for business expenses reasonably incurred by Executive in the
performance of Executive's duties pursuant to the terms hereof. Executive is
authorized to incur reasonable traveling and other expenses in connection with
the Company's business and in performance of his duties under this Agreement.
When engaging in business related air travel, the executive may fly first class
on domestic flights and business class on international flights. In addition,
upon the submission of

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appropriate vouchers or other receipts the Company shall reimburse Executive for
tolls and reasonable business car phone charges. Executive shall submit vouchers
or other receipts once per calendar month and shall be reimbursed by Company
within 30 days of submission.

7.    Disability.

      (a)   In the event of the death of the Executive during the Term, the
            Executive's employment hereunder shall automatically terminate. In
            the event that Executive shall become mentally or physically
            Disabled (as hereinafter defined) so as to be unable to fully
            perform his duties herein, Executive shall continue to receive his
            monthly salary for each of the first nine months or any part thereof
            of any continuous Disability, less any amounts received by him under
            any disability insurance paid for by the Company. If upon the
            expiration of nine months of continuous Disability, Executive
            remains incapacitated (hereinafter, "Permanent Disability"), the
            Company shall have the right to immediately terminate this
            Agreement. Such "Permanent Disability" shall be established by a
            written certification submitted by a medical doctor agreed to by the
            Executive and the Company. In the absence of agreement, the Company
            and the Executive shall each nominate a qualified medical doctor and
            these two doctors shall select a third qualified medical doctor,
            which third doctor shall make the determination as to total
            disability. After the termination of these time periods, Executive
            will receive disability insurance proceeds for the term of such
            disability.

      (b)   The Company shall reimburse Executive for the premiums of all
            insurance policies covering the long and short-term disability of
            Executive not to exceed $10,000 per annum (as adjusted for increases
            in the Consumer Price Index) during the term hereof.

      (c)   Disability for the purposes of this Agreement shall mean that the
            Executive is judged disabled pursuant to the Company's long-term
            disability policy.

8.    Non-Competition, Non-Solicitation and Non-Disparagement.

During the Term and for a period of two years thereafter, except if the Company
breaches its obligations to pay the Deferred Compensation pursuant to Section
4(c) hereof:

      (a)   Executive shall not, directly or indirectly, enter into or
            participate (whether as owner, partner, shareholder, officer,
            director, salesman, consultant, employee, principal or in any other
            relationship or capacity) in any business operating or providing
            services in the United States within any State in which the Company
            or its affiliates are operating or providing services as of the date
            of termination which is, or owns, manages or performs Internet
            billing services, including without limitation as principal or on
            behalf of others and the development or operation of any network to
            accomplish same (a "Competing Entity").

      (b)   Company and Executive understand and agree that the scope and
            duration of the covenants contained in this Section 8 are reasonable
            both in time and geographical area and are fairly necessary to
            protect the Company's legitimate business interests. Such covenants
            shall survive the termination of Executive's employment except as
            otherwise provided herein. The parties further agree that such
            covenants shall be regarded as divisible and shall be operative as
            to time

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            and geographical area to the extent that they may be made so and, if
            any part of such covenants is declared invalid or unenforceable, the
            validity and enforceability of the remainder shall not be affected.
            Executive hereby warrants to Company that Executive's compliance
            with each of the restrictive covenants set forth in this Agreement
            will not, upon the termination, of Executive's employment with the
            Company for any reason whatsoever, cause Executive to be unable to
            earn a living that is suitable and acceptable to Executive.

      (c)   Executive understands and agrees that, due to the highly competitive
            nature of the Company's industry, the breach of any covenants set
            out in this Section 8 will cause irreparable injury to the Company
            for which it will have no adequate remedy at law. Therefore, the
            Company shall be entitled, in addition to such other remedies as it
            may have hereunder, to a temporary restraining order and to
            preliminary and permanent injunctive relief in state or federal
            court for any breach or threatened breach of Section 8. Nothing
            herein, however, shall be construed as prohibiting the Company from
            pursuing any other remedies available to it for such breach or
            threatened breach, including the recovery of damages from Executive,

      (d)   Executive shall not, without the prior written consent of the
            Company, directly or indirectly, (i) solicit, request, cause or
            induce any person who is at the time, or 12 months prior thereto had
            been, an employee of or a consultant of the Company to leave the
            employ of or terminate such person's relationship with the Company
            or (ii) employ, hire, engage or be associated with, or endeavor to
            entice away from the Company any such person, or any customer of the
            Company or its affiliates or (iii) attempt to limit or interfere
            with any business agreement or relationship existing between the
            Company and/or its affiliates with a third party.

      (e)   Executive shall not disparage the business reputation of the Company
            (or its management team) or take any actions that are harmful to the
            Company's goodwill with its customers, content providers, bandwidth
            or other network infrastructure providers, vendors, employees, the
            media or the public. Executive recognizes that such actions would
            cause irreparable harm for which there is no adequate remedy at law
            and that the Company may seek in state or federal court, and is
            entitled to a temporary restraining order and to preliminary and
            permanent injunctive relief in state or federal court to stop any
            such conduct or statements for any breach or threatened breach of
            this Section 8(e) during the term of this Agreement and for a period
            of two years thereafter.

      (f)   Company spends considerable amounts of time, money and effort in
            developing and maintaining good will in its industry. Executive
            agrees the covenants contained within this Section 8: (i) are
            reasonable and necessary in all respects to protect the goodwill,
            trade secrets, confidential information, and business interests of
            Company; (ii) are not oppressive to Executive; and (iii) do not
            impose any greater restraint on Executive than is reasonably
            necessary to protect the goodwill, trade secrets, confidential
            information and legitimate business interests of Company.

      (g)   Executive acknowledges and agrees that promises made by the Company
            in this Agreement such as (i) the establishment of a term of
            employment (rather than employment at will) and (ii) the commitment
            to provide severance compensation

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            in the event of the termination of Executive's employment for
            reasons other than Cause (subject to certain requirements on the
            part of Executive), constitute one form of consideration for
            Executive's agreement to and compliance with the restrictive
            covenants in this Agreement. Executive acknowledges and agrees that
            Company's agreement to provide Executive with access to Company's
            confidential and proprietary information is a separate form of
            consideration supporting the restrictive covenants in this
            Agreement. Executive acknowledges and agrees that the Company's
            agreement to permit the use of the Company's goodwill with the
            Company's customers, investors and content providers is a separate
            form of consideration supporting the restrictive covenants in this
            Agreement. Executive acknowledges and agrees that the Company's
            commitment to providing Executive with unique skill development and
            training is a separate form of consideration supporting the
            restrictive covenants in this Agreement.

9.    Non-Disclosure of Confidential Information.

      (a)   The Executive acknowledges that as a result of Executive's
            employment by the Company, the Executive, both during and after the
            Term, will obtain secret and confidential information concerning the
            business of the Company and its affiliates, including, without
            limitation, financial information, trade secrets, information
            concerning the operations, sales, personnel, suppliers, customers,
            costs, profits and pricing policies, "know how" and certain business
            methodologies (the "Confidential Information").

      (b)   During the Term and thereafter, the Executive shall exercise all due
            and diligent precautions to protect the integrity of the customer
            lists, mailing lists and sources thereof, statistical data and
            compilations, agreements, contracts, manuals, memoranda, notes,
            records, reports or other documents and any and all other materials
            embodying any Confidential Information (the "Confidential
            Materials") and, upon the Company's request in writing, Executive
            shall immediately return to the Company all such Confidential
            Materials (and copies thereof) then in Executive's possession or
            control.

      (c)   Executive shall not at any time, either during the Term of this
            Agreement or thereafter, divulge to any person or entity any
            Confidential Information or deliver or permit any person or entity
            to obtain any Confidential Materials except (i) when required in the
            course of performing Executive's duties hereunder, (ii) with the
            Company's express written consent, (iii) where required to be
            disclosed by court order, subpoena or other government process or
            (iv) the Executive shall have no responsibility for the divulgence
            of any information which is in the public domain. If the Executive
            shall be required to make disclosure pursuant to the provisions of
            clause (iii) of the preceding sentence, the Executive promptly, but
            in no event more than 48 hours after learning of such subpoena,
            court order or other governmental process, shall notify, by personal
            delivery or by electronic means, confirmed by mail, the Company and,
            at the Company's expense, Executive shall (x) take all reasonably
            necessary steps required by the Company to defend against the
            enforcement of such subpoena, court order or other government
            process and (y) permit the Company to intervene and participate with
            counsel of its choice in any proceeding relating to the enforcement
            thereof.

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      (d)   Upon termination of Executive's employment with the Company, the
            Executive shall promptly deliver to the Company all Confidential
            Materials relating to the Company and its affiliates, which
            Executive may then possess or have under Executive's control;
            provided, however, that Executive shall be entitled to retain copies
            of such documents reasonably necessary to document Executive's
            financial relationship (both past and future) with the Company.

      (e)   The Executive acknowledges that (i) any breach of the provisions of
            these Sections 8 and 9 may cause substantial and irreparable harm to
            the Company for which the Company would have no adequate remedy at
            law and (ii) the provisions of this Agreement are reasonable and
            necessary for the protection of the business of the Company and its
            affiliates.

10.   Remedies.

      (a)   If Executive commits a breach, or threatens to commit a breach, of
            any of the provisions of Sections 8 or 9, the Company shall have the
            right and remedy:

            (i)   to have the provisions of this Agreement specifically enforced
                  by any court having equity jurisdiction or through arbitration
                  as provided herein; and

            (ii)  to require Executive to account for and to pay over the
                  Company all damages suffered by the Company (including
                  consequential and incidental damages) as the result of any
                  transactions constituting a breach of any of the provisions of
                  Sections 8 and 9, and Executive hereby agrees to account for
                  and pay over such damages to the Company;

      (b)   The Executive acknowledges that the services being rendered
            hereunder to the Company are of a special, unique and extraordinary
            character and that any such breach or threatened breach may cause
            substantial and irreparable injury to the Company and that money
            damages will not provide an adequate remedy to the Company. In any
            equitable proceeding to enforce the provisions hereof, the Company
            shall not have to prove irreparable harm. (However, in a suit for
            damages Company shall be required to prove the amount of damages
            actually sustained.)

      (c)   Each of the rights and remedies enumerated in Section 10 (a) shall
            be independent of the other, and shall be severally enforceable, and
            such rights and remedies shall be in addition to, and not in lieu of
            any other rights and remedies available to the Company under law or
            equity.

      (d)   If any provision of Section 8 or 9 is held to be unenforceable
            because of the scope, duration or area of its applicability, the
            court making such determination shall have the power to modify such
            scope, duration, or area, or all of them, and such provision or
            provisions shall then be enforceable in such modified form.

      (e)   The Company and Executive agree that any dispute or controversy
            arising between any of the parties to this Agreement, or any person
            or entity in privity therewith, out of the transactions effected and
            relationships created in connection herewith, including any dispute
            or controversy involving the formation, terms or

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            construction of this Agreement, regardless of kind or character,
            will be resolved through binding arbitration held in Bexar County,
            Texas. The only disputes not subject to mandatory, binding
            arbitration are requests for injunctive relief. With respect to the
            arbitration of any dispute or controversy, each party understands
            that:

            (i)   arbitration is final and binding on the parties;

            (ii)  each party is waiving its right to seek certain remedies in
                  court, including to right to a jury trial;

            (iii) discovery in arbitration is different and more limited than
                  discovery in litigation; and

            (iv)  an arbitrator's award need not include factual findings or
                  legal reasoning, and any party's right to appeal or to seek
                  modification of a ruling by the arbitrator is strictly
                  limited.

Each party to this Agreement will submit any dispute or controversy to
arbitration before the American Arbitration Association ("AAA") within five days
after receiving a written request to do so from the other party. If any party
fails to submit a dispute or controversy to arbitration as requested, then the
requesting party may commence the arbitration proceeding. The Federal
Arbitration Act will govern the proceeding and all issues raised by this
Agreement to be arbitrated. Each party to this Agreement will be bound by the
determination of any arbitrator or arbitration panel empanelled by the AAA to
adjudicate the dispute. Judgment on any arbitration award may be entered in any
court of competent jurisdiction.

Any party to this Agreement may bring an action including a summary or expedited
proceeding, to counsel arbitration of any such dispute or controversy in a court
of competent jurisdiction and, further, may seek provisional or ancillary
remedies, including temporary or injunctive relief in connection with such
dispute or controversy in a court of competent jurisdiction, provided that the
dispute or controversy is ultimately resolved through binding arbitration
conducted in accordance with the terms and conditions of Section 10(e). If any
party institutes legal proceedings in an effort to resist arbitration and is
unsuccessful in doing so, the prevailing party is entitled to recover, from the
losing party, its legal fees and out-of-pocket expenses incurred in connection
with the defense of such legal proceedings.

11.   Indemnification.

      (a)   To the full extent allowed by law, the Company shall hold harmless
            and indemnify the Executive, his executors, administrators or
            assigns, against any and all judgments, penalties (including excise
            and similar taxes), fines, settlements and reasonable expenses
            (including attorneys' fees) actually incurred by the Executive (net
            of any related insurance proceeds or other amounts received by the
            Executive or paid by or on behalf of the Company on the Executive's
            behalf in compensation of such judgments, penalties, fines,
            settlements or expenses) in connection with any threatened, actual
            or completed action, suit or proceeding, whether civil, criminal,
            arbitral, administrative or investigative, or any appeal in such
            action, suit or proceeding, to which the Executive was, is or is
            threatened to be made a named defendant or respondent (a
            "Proceeding"), because such person is or was a director or officer
            of the

<PAGE>

            Company, or is or was serving at the request of the Company as a
            director, officer, partner, venturer, proprietor, trustee, employee,
            agent or similar functionary (an "Affiliate Executive") of another
            corporation, partnership, joint venture, sole proprietorship, trust,
            employee benefit plan or other enterprise (each, a "Company
            Affiliate"). Upon authorization of indemnification of the Executive
            by the Board of Directors in accordance with the applicable
            provisions of the Nevada General Corporation Law (the "NGCL"), the
            Executive shall be presumed to be entitled to such indemnification
            under this Agreement upon submission of a Claim (as hereinafter
            defined). Thereafter, the Company shall have the burden of proof to
            overcome the presumption that the Executive is so entitled. Such
            presumption shall only be overcome by a judgment or other final
            adjudication, after all appeals and all time for appeals have
            expired ("Final Determination"), adverse to the Executive
            establishing that such indemnification is not permitted hereunder or
            by law. An actual determination by the Company (including its Board
            of Directors, legal counsel, or its stockholders) that the Executive
            has not met the applicable standard of conduct for indemnification
            shall not be a defense to the action or create a presumption that
            the Executive has not met the applicable standard of conduct. The
            purchase, establishment or maintenance of any Indemnification
            Arrangement shall not in any way diminish, restrict, limit or affect
            the rights and obligations of the Company or of the Executive under
            this Agreement except as expressly provided herein, and the
            execution and delivery of this Agreement by the Company and the
            Executive shall not in any way diminish, restrict, limit or affect
            the Executive's right to indemnification from the Company or any
            other party or parties under any other indemnification arrangement,
            the Certificate of Incorporation or Bylaws of the Company, or the
            NGCL.

      (b)   Subject only to the provisions of this Section 11(b), as long as the
            Executive shall continue to serve as a director and/or officer of
            the Company (or shall continue at the request of the Company to
            serve as an Affiliate Executive) and, thereafter, as long as the
            Executive shall be subject to any possible Proceeding by reason of
            the fact that the Executive was or is a director and/or officer of
            the Company (or served in any of said other capacities), the Company
            shall, unless no such policies are available in any market, purchase
            and maintain in effect for the benefit of the Executive one or more
            valid, binding and enforceable policies (the "Insurance Policies")
            of directors' and officers' liability insurance ("D&O Insurance")
            providing adequate liability coverage for the Executive's acts as a
            director and/or officer of the Company or as an Affiliate Executive.
            The Company shall promptly notify the Executive of any lapse,
            amendment or failure to renew said policy or policies or any
            provision thereof relating to the extent or nature of coverage
            provided thereunder. In the event the Company does not purchase and
            maintain in effect said policy or policies of D&O Insurance pursuant
            to the provisions of this Section 11(b), the Company shall, to the
            full extent permitted by law, in addition to and not in limitation
            of the other rights granted the Executive under this Agreement, hold
            harmless and indemnify the Executive to the full extent of coverage
            which would otherwise have been provided for the benefit of the
            Executive pursuant to the Insurance Policies.

      (c)   The Executive shall have the right to receive from the Company on
            demand, or at his option to have the Company pay promptly on his
            behalf, in advance of a Final Determination of a Proceeding all
            expenses payable by the Company

<PAGE>

            pursuant to the terms of this Agreement as corresponding amounts are
            expended or incurred by the Executive in connection with such
            Proceeding or otherwise expended or incurred by the Executive (such
            amounts so expended or incurred being referred to as "Advanced
            Amounts"). In making any claim for payment by the Company of any
            expenses, including any Advanced Amount, pursuant to this Agreement,
            the Executive shall submit to the Company a written request for
            payment (a "Claim"), which includes a schedule setting forth in
            reasonable detail the dollar amount expended (or incurred or
            expected to be expended or incurred). Each item on such schedule
            shall be supported by the bill, agreement or other documentation
            relating thereto, a copy of which shall be appended to the schedule
            as an exhibit.

            Where the Executive is requesting Advanced Amounts, the Executive
            must also provide (i) written affirmation of such Executive's good
            faith belief that he has met the standard of conduct required by law
            for indemnification, and (ii) a written undertaking to repay such
            Advanced Amounts if a Final Determination is made that the Executive
            is not entitled to indemnification hereunder.

      (d)   The Company shall not be liable under this Agreement to make any
            payment in connection with any claim made against the Executive for
            an accounting of profits made from the purchase or sale by the
            Executive of securities of the Company within the meaning of Section
            16(b) of the Exchange Act or similar provisions of any state
            statutory law or common law.

      (e)   All agreements and obligations of the Company contained herein shall
            continue during the period the Executive is a director and/or
            officer of the Company (or is serving at the request of the Company
            as an Affiliate Executive) and shall continue thereafter so long as
            the Executive shall be subject to any possible Proceeding by reason
            of the fact that the Executive was a director or officer of the
            Company or was serving as such an Affiliate Executive.

      (f)   Promptly after receipt by the Executive of notice of the
            commencement of any Proceeding, the Executive shall, if a claim in
            respect thereof is to be made against the Company under this
            Agreement, notify the Company of the commencement thereof, but
            failure to so notify the Company will not relieve the Company from
            any liability which it may have to the Executive. With respect to
            any such Proceeding:

            (i)   The Company shall be entitled to participate therein at its
                  own expense;

            (ii)  Except with prior written consent of the Executive, the
                  Company shall not be entitled to assume the defense of any
                  Proceeding; and

            (iii) The Company shall not settle any Proceeding in any manner
                  which would impose any penalty or limitation on the Executive
                  without the Executive's prior written consent. The Executive
                  shall not settle any Proceeding with respect to which the
                  Executive has received indemnified amounts or Advanced Amounts
                  without the Company's prior written consent, nor will the
                  Executive unreasonably withhold consent to any proposed
                  settlement.

<PAGE>

12.   Notice.

Any notice required hereunder shall (a) be delivered by hand or (b) sent by
registered or certified mail addressed to the other party hereto at its address
set forth above for Company and on Item 1 of the Schedule for Executive or at
such other address as notice thereof shall have been given in accordance with
the provisions of this Section 12. Any such notice shall become effective (i) if
mailed, on the date indicated on the receipt or if not accepted, the date
indicated that delivery was attempted, and (ii) in the case of delivery by hand,
upon delivery or attempted delivery as shown on the records of the deliveries.

13.   Entire Agreement; Amendments.

This Agreement supersedes any prior agreements or understandings, oral or
written, between the parties hereto and represents their entire understanding
and agreement with respect to the subject matter hereof. This Agreement can be
amended, supplemented or changed, and any provision hereof can be waived, only
by written instrument making specific reference to this Agreement which is
executed by both parties to this Agreement. Any waiver of any breach of this
Agreement shall not be construed to be a continuing waiver or consent to any
subsequent breach by any party hereto.

14.   Severability.

In the event of the invalidity or unenforceability of any one or more provisions
of this Agreement, such illegality or unenforceability shall not affect the
validity or enforceability of the other provisions hereof and such other
provisions shall be deemed to remain in full force and effect.

15.   Assignment; Binding Effect.

This Agreement is not assignable by Executive or the Company without the prior
written consent of the other party. This Agreement shall be binding upon and
shall inure to the benefit of the Executive and the Company and their successors
and assigns. It is agreed that in the event of the termination under this
Agreement for any reason, except as expressly provided in this Agreement, all
salary and benefits shall cease as of the date of termination provided that all
accrued salary, bonus and expenses shall be paid to Executive or Executive's
successors, assigns, estate or legal representative as the case may be.

16.   Section Headings.

The Section headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this Agreement.

17.   Governing Law; Venue.

This Agreement shall be construed and governed in accordance with the laws of
the State of Texas. The parties hereto agree that any actions or proceedings
instituted to enforce rights hereunder shall be initiated in Bexar County,
Texas.

18.   Execution in Counterparts.

This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but all of which together shall constitute
one and the same instruments.

<PAGE>

19.   Section 280G Protection.

The Company shall make a cash payment to the Executive at the time set forth
below equal to the amount of excise taxes (i.e., the "excise tax gross
payments") which Executive would be required to pay pursuant to Section 4999 of
the Internal Revenue Code of 1986, as amended ("Code"), as a result of any
payments (or any other transfer or deemed transfer of property including any
acceleration of stock options or similar instruments) made by or on behalf of
the Company or any successor thereto resulting in an "excess parachute payment"
within the meaning of Section 280G(b) of the Code. In addition to the foregoing,
the cash payment due to the Executive under this Section 19 shall be increased
by the aggregate of the amount of federal, state and local income and excise
taxes for which the Executive will be liable on account of the cash payments to
be made under this Section 19, such that the Executive will receive the excise
tax gross-up payment net of all income and excise taxes. The computation of this
payment shall be determined, at the expense of the Company, by an independent
accounting, actuarial or consulting firm selected by the Company. Payment of the
cash amount set forth above shall be made at such time as the Company shall
determine, in its sole discretion, but in no event later than the date five
business days before the due date, without regard to any extension, for filing
the Executive's federal income tax return for the calendar year which includes
the date as of which the aforementioned "excess parachute payments" are
determined. In the event that the Executive is ultimately assessed with excise
taxes under Section 4999 of the Code as a result of payments made by the Company
or any successor thereto which exceed the amount of excise taxes used in
computing the Executive's payment under this Section 19, the Company or its
successor shall indemnify the Executive for such additional excise taxes plus
any additional excise taxes, income taxes, interest and penalties resulting from
the additional excise taxes and the indemnity hereunder. This provision will
only apply after the Company achieves profitability.

<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
on the day and year first above written.

"Company"

billserv.com, Inc.

By:
-------------------------------------
Name:
Title: Chief Executive Officer

"Executive"

-----------------------------------------
Name:

<PAGE>

                                   SCHEDULE 1
                               EMPLOYMENT CONTRACT

1.    Executive:  Terri A. Hunter

2.    Position:   Senior Vice President and Chief Financial Officer

3.    Duties:     Management, operations and administration as appropriate for
                  the Senior Vice President and Chief Financial Officer.

                                SCHEDULE 4(a)(i)

                  $120,000 per annum

                                  SCHEDULE 4(b)

      BONUS: Not to exceed 40% of the then-current annual salary, as authorized
      by the Board of Directors.<PAGE>

                                                                    EXHIBIT 10.1

                          FLAG TELECOM HOLDINGS LIMITED
                              AMENDED AND RESTATED
                            LONG-TERM INCENTIVE PLAN

      1. PURPOSE. The purpose of this Long-Term Incentive Plan (the "Plan") of
FLAG Telecom Holdings Limited, a Bermuda company (the "Company"), is to advance
the interests of the Company and its stockholders by providing a means to
attract, retain and reward officers and employees of and consultants of and
service providers to the Company and its subsidiaries and to enable such persons
to acquire or increase a proprietary interest in the Company, thereby promoting
a closer identity of interests between such persons and the Company's
stockholders.

      2. DEFINITIONS. The definitions of awards under the Plan, including
Options, SARs, Restricted Stock, Deferred Stock, Stock granted as a bonus or in
lieu of other awards, Dividend Equivalents and Other Stock-Based Awards are set
forth in Section 6 of the Plan. Such awards, together with any other right or
interest granted to a Participant under the Plan, are termed "Awards." For
purposes of the Plan, the following additional terms shall be defined as set
forth below:

      (a) "Award Agreement" means any written agreement, contract, certificate,
notice or other instrument or document evidencing an Award.

      (b) "Beneficiary" shall mean 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, if there is no
designated Beneficiary or surviving designated Beneficiary, then the person,
persons, trust or trusts entitled by will or the laws of descent and
distribution to receive such benefits.

      (c)   "Board" means the Board of Directors of the Company.

      (d) "Cause" means, with respect to a Participant, any of the following by
such Participant: (i) material breach of any of such Participant's covenants or
obligations under any applicable employment agreement or non-compete agreement;
(ii) continued failure after written notice from the Company or any applicable
subsidiary to perform job responsibilities with full-time and good-faith efforts
or to follow the reasonable instructions of such Participant's superiors; (iii)
commission of a crime constituting a felony (or its equivalent) under the laws
of any jurisdiction in which the Company or any applicable subsidiary conducts
its business or other crime involving moral turpitude; or (iv) material
violation of any material law or regulation (including, without limitation, the
Foreign Corrupt Practices Act or any similar non-U.S. statute) or any policy or
code of conduct adopted by the Company or engaging in any other form of
misconduct which, if it were made public, could reasonably be expected to
adversely affect the business reputation or affairs of the Company.
Notwithstanding the foregoing, if any Participant is party to an employment or
consulting agreement governing the terms of his employment or consultancy with
the Company or any of its subsidiaries, and such agreement includes a definition
of cause, then for purposes hereof, cause shall have the meaning ascribed
thereto in such agreement.

                                       1
<PAGE>

      (e) "Code" means the United States Internal Revenue Code of 1986, as
amended from time to time. References to any provision of the Code shall be
deemed to include regulations thereunder and successor provisions and
regulations thereto.

      (f) "Committee" means the committee appointed by the Board to administer
the Plan, or if no committee is appointed, the Board.

      (g) "Fair Market Value" means with respect to Stock, Awards, or other
property, the fair market value of such Stock, Awards, or other property
determined by such methods or procedures as shall be established from time to
time by the Committee, provided, however, that (i) if the Stock is listed on an
established securities exchange or quoted in an interdealer quotation system,
the Fair Market Value of such Stock on a given date shall be based upon the last
sales price or, if unavailable, the average of the closing bid and asked prices
per share of the Stock on such date (or, if there was no trading or quotation in
the Stock on such date, on the next preceding date on which there was trading or
quotation) as provided by one of such organizations, and (ii) the Fair Market
Value of Stock on the date on which shares of Stock are first issued and sold
pursuant to a registration statement filed with and declared effective by the
United States Securities and Exchange Commission shall be the public offering
price of the shares so issued and sold, as set forth in the first final
prospectus used in such offering. Notwithstanding the foregoing, the
determination of Fair Market Value shall be made in compliance with the
requirements of applicable laws (including laws that afford favorable tax
treatment to Participants).

      (h) "ISO" means any Option intended to be and designated as an incentive
stock option within the meaning of Section 422 of the Code.

      (i) "Participant" means a person who, at a time when eligible under
Section 5 hereof, has been granted an Award under the Plan.

      (j) "Stock" means the Ordinary Share capital, par value $.0006 per share,
of the Company and such other securities as may be substituted for Stock or such
other securities pursuant to Section 4.

      3.    ADMINISTRATION.

      (a)   AUTHORITY OF THE COMMITTEE. The Plan shall be administered by the
            Committee. The Committee shall have full and final authority to take
            the following actions, in each case subject to and consistent with
            the provisions of the Plan:

            (i)   to select persons to whom Awards may be granted;

            (ii)  to  determine  the type or types of Awards to be  granted  to
      each such person;

                                       2
<PAGE>

            (iii) to determine the number of Awards to be granted, the number of
      shares of Stock to which an Award will relate, the terms and conditions of
      any Award granted under the Plan (including, but not limited to, any
      exercise price, grant price or purchase price, any restriction or
      condition, any schedule for lapse of restrictions or conditions relating
      to transferability or forfeiture, exercisability or settlement of an
      Award, and waivers or accelerations thereof, performance conditions
      relating to an Award, based in each case on such considerations as the
      Committee shall determine), and all other matters to be determined in
      connection with an Award;

            (iv) to determine whether, to what extent and under what
      circumstances an Award may be settled, or the exercise price of an Award
      may be paid, in cash, Stock, other Awards, or other property, or an Award
      may be canceled, forfeited, or surrendered;

            (v) to determine whether, to what extent and under what
      circumstances cash, Stock, other Awards or other property payable with
      respect to an Award will be deferred either automatically, at the election
      of the Committee or at the election of the Participant;

            (vi) to determine the rights and restrictions, if any, to which
      Stock received upon exercise or settlement of an Award shall be subject
      (including lock-ups, rights of first refusal, call rights and "drag-along"
      rights), and may condition the delivery of such Stock upon the execution
      by the Participant of any agreement (including a stockholders agreement)
      providing for such restrictions;

            (vii) to  prescribe  the form of each Award  Agreement,  which need
      not be identical for each Participant;

            (viii) to adopt, amend, suspend, waive and rescind such rules and
      regulations and appoint such agents as the Committee may deem necessary or
      advisable to administer the Plan;

            (ix) to correct any defect or supply any omission or reconcile any
      inconsistency in the Plan and to construe and interpret the Plan and any
      Award, rules and regulations, Award Agreement or other instrument
      hereunder; and

            (x) to make all other decisions and determinations as may be
      required under the terms of the Plan or as the Committee may deem
      necessary or advisable for the administration of the Plan

      Other provisions of the Plan notwithstanding, the Board may perform any
function of the Committee under the Plan. In any case in which the Board is
performing a function of the Committee under the Plan, each reference to the
Committee herein shall be deemed to refer to the Board.

      (b) MANNER OF EXERCISE OF COMMITTEE AUTHORITY. Any action of the Committee
with respect to the Plan shall be final, conclusive and binding on all persons,
including the Company, subsidiaries of the Company, Participants, any person
claiming any rights under the Plan from or

                                       3
<PAGE>

through any Participant and stockholders, except to the extent the Committee may
subsequently modify, or take further action not consistent with, its prior
action. If not specified in the Plan, the time at which the Committee must or
may make any determination shall be determined by the Committee, and any such
determination may thereafter by modified by the Committee (subject to Section
8(e)). 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 Company or any subsidiary of the Company the authority, subject to such
terms as the Committee shall determine, to perform such functions as the
Committee may determine, to the extent permitted under applicable law.

      (c) LIMITATION OF LIABILITY. Each member of the Committee shall be
entitled to, in good faith, rely or act upon any report or other information
furnished to him by any officer or other employee of the Company or any
subsidiary, the Company's independent certified public accountants or any
executive compensation consultant, legal counsel or other professional retained
by the Company to assist in the administration of the Plan. No member of the
Committee, nor any officer or employee of the Company acting on behalf of the
Committee, shall be personally liable for any action, determination or
interpretation taken or made in good faith with respect to the Plan, and all
members of the Committee and any officer or employee of the Company acting on
its behalf shall, to the extent permitted by law, be fully indemnified and
protected by the Company with respect to any such action, determination or
interpretation.

      4.    STOCK SUBJECT TO PLAN.

      (a) AMOUNT OF STOCK RESERVED. The total number of shares of Stock that may
be delivered pursuant to the exercise or settlement of all Awards shall not
exceed 9,263,791; PROVIDED, HOWEVER, that shares subject to Awards shall not be
deemed delivered if such Awards are forfeited, expire or otherwise terminate
without delivery of shares to the Participant. If an Award valued by reference
to Stock may only be settled in cash, the number of shares to which such Award
relates shall be deemed to be Stock subject to such Award for purposes of this
Section 4(a). Any shares of Stock delivered pursuant to an Award may consist, in
whole or in part, of authorized and unissued shares, treasury shares or shares
acquired in the market for a Participant's account.

      (b) ADJUSTMENTS. In the event that the Committee shall determine that any
recapitalization, forward or reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase or exchange of Stock or other
securities, Stock dividend or other special, large and non-recurring dividend or
distribution (whether in the form of cash, securities or other property),
liquidation, dissolution, or other similar corporate transaction or event,
affects the Stock such that an adjustment is appropriate in order to prevent
dilution or enlargement of the rights of Participants 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 reserved and available for Awards
under Section 4(a), (ii) the number and kind of shares of outstanding Restricted
Stock or other outstanding Award in connection with which shares have been
issued, (iii) the number and kind of shares that may be issued in respect of
other outstanding Awards and (iv) the exercise price, grant price or purchase
price relating to any Award (or, if deemed appropriate, the

                                       4
<PAGE>

Committee may make provision for a cash payment with respect to any outstanding
Award). In addition, the Committee is authorized to make adjustments in the
terms and conditions of, and the criteria included in, Awards (including,
without limitation, cancellation of unexercised or outstanding Awards, or
substitution of Awards using stock of a successor or other entity) in
recognition of unusual or nonrecurring events (including, without limitation,
events described in the preceding sentence) affecting the Company or any
subsidiary or the financial statements of the Company or any subsidiary, or in
response to changes in applicable laws, regulations, or accounting principles.

      5. ELIGIBILITY. Persons who are officers or employees of the Company and
its subsidiaries, and persons who provide consulting or other services to the
Company or its subsidiaries deemed by the Committee to be of substantial value
to the Company, are eligible to be granted Awards under the Plan; PROVIDED,
HOWEVER, that no person who is not an employee of the Company or its
subsidiaries shall be eligible to be granted Awards under the Plan if such
eligibility would result in a violation of applicable law or require the Company
to comply with burdensome securities registration requirements. In addition,
persons who have been offered employment by the Company or any of its
subsidiaries, and persons employed by an entity that the Committee reasonably
expects to become a subsidiary of the Company, are eligible to be granted an
Award under the Plan; PROVIDED, HOWEVER, that such Award shall be canceled if
such person fails to commence such employment, or such entity fails to become a
subsidiary, and no payment of value may be made in connection with such Award
until such person has commenced such employment or until such entity becomes a
subsidiary.

      6.    SPECIFIC TERMS OF AWARDS.

      (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 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 or
service of the Participant.

      (b) OPTIONS. The Committee is authorized to grant options to purchase
Stock (including "reload" options automatically granted to offset specified
exercises of Options) on the following terms and conditions ("Options"):

            (i)   EXERCISE  PRICE.  The  exercise  price  per  share  of  Stock
      purchasable under an Option shall be determined by the Committee.

            (ii) TIME AND METHOD OF EXERCISE. The Committee shall determine the
      time or times at which an Option may be exercised in whole or in part, the
      methods by which the 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 Company plans or other property
      (including notes or other contractual obligations of Participants to make
      payment on a deferred basis, such as through "cashless exercise"
      arrangements, to the extent permitted by applicable law), and the methods
      by which Stock will be delivered or deemed to be delivered to
      Participants.

                                       5
<PAGE>

            (iii) TERMINATION OF EMPLOYMENT. The Committee shall determine the
      period, if any, during which Options shall be exercisable following a
      Participant's termination of employment with the Company and its
      subsidiaries. For this purpose, any sale of a subsidiary of the Company
      pursuant to which it ceases to be a subsidiary of the Company shall be
      deemed to be a termination of employment by any Participant employed by
      such subsidiary. Unless otherwise determined by the Committee, (i) during
      any period that an Option is exercisable following termination of
      employment, it shall be exercisable only to the extent it was exercisable
      upon such termination of employment, and (ii) if such termination of
      employment is for Cause, all Options held by the Participant shall
      immediately terminate.

            (iv) SALE OF THE COMPANY. All Options outstanding under the Plan
      (including ISOs) shall terminate upon the consummation of any transaction
      whereby the Company (or any successor to the Company or substantially all
      of its business) becomes a wholly-owned subsidiary of any corporation,
      unless such other corporation shall continue or assume the Plan as it
      relates to Options then outstanding (in which case such other corporation
      shall be treated as the Company for all purposes hereunder, and, pursuant
      to Section 4(b), the Committee of such other corporation shall make
      appropriate adjustment in the number and kind of shares of Stock subject
      thereto and the exercise price per share thereof to reflect consummation
      of such transaction). If the Plan is not to be so assumed, the Company
      shall notify the Participant of consummation of such transaction at least
      ten days in advance thereof.

            (v) OPTIONS PROVIDING FAVORABLE TAX TREATMENT. The Committee may
      grant Options that may afford a Participant with favorable treatment under
      the tax laws applicable to such Participant, including, but not limited to
      ISOs (as set forth in Section 6(c)).

      (c) ISOS. The Committee is authorized to grant ISOs under the Plan to a
person who is a natural person employed by the Company or a subsidiary thereof
(including employees who are also directors and including persons expected to
become employees, in which case such Option shall be effective as of the date
such person is first treated as an employee for payroll purposes) and who at the
time of grant of the Option is or reasonably expects to be subject to United
States income taxation. The terms of any ISO granted under the Plan shall comply
in all respects with the provisions of Section 422 of the Code, including but
not limited to the requirement that no ISO shall be granted with an exercise
price less than 100% (110% for an individual described in Section 422(b)(6) of
the Code) of the Fair Market Value of a share of Stock on the date of grant and
granted no more than ten years after the effective date of the Plan. Anything in
the Plan to the contrary notwithstanding, no term of the Plan relating to ISOs
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 Section 422 of the Code, unless requested by the affected Participant.
If Stock acquired by exercise of an ISO is sold or otherwise disposed of within
two years after the date of grant of the ISO or within one year after the
transfer of such Stock to the Participant, the holder of the Stock immediately
prior to the disposition shall promptly notify the Company in writing of the
date and terms of the disposition

                                       6
<PAGE>

and shall provide such other information regarding the disposition as the
Company may reasonably require in order to secure any deduction then available
against the Company's or any other corporation's taxable income. Each Option
granted as an ISO shall be designated as such in the Award Agreement relating to
such Option.

      (d)   STOCK  APPRECIATION  RIGHTS.  The  Committee is authorized to grant
stock appreciation rights on the following terms and conditions ("SARs"):

            (i) RIGHT TO PAYMENT. An 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 share of Stock on the date of exercise (or,
      if the Committee shall so determine in the case of any such right other
      than one related to an ISO, the Fair Market Value of one share at any time
      during a specified period before or after the date of exercise), over (B)
      the grant price of the SAR as determined by the Committee as of the date
      of grant of the SAR, which, except as provided in Section 7(a), shall be
      not less than the Fair Market Value of one share of Stock on the date of
      grant.

            (ii) OTHER TERMS. The Committee shall determine the time or times at
      which an SAR may be exercised in whole or in part, the method of exercise,
      method of settlement, form of consideration payable in settlement, method
      by which Stock will be delivered or deemed to be delivered to
      Participants, whether or not an SAR shall be in tandem with any other
      Award, and any other terms and conditions of any SAR.

      (e) RESTRICTED STOCK. The Committee is authorized to grant Stock that is
subject to restrictions based on continued employment on the following terms and
conditions ("Restricted Stock"):

            (i) GRANT AND RESTRICTIONS. Restricted Stock shall be subject to
      such restrictions on transferability and other restrictions, if any, as
      the Committee may impose, which restrictions may lapse separately or in
      combination at such times, under such circumstances, in such installments,
      or otherwise, as the Committee may determine. 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 stockholder including, without limitation, the
      right to vote Restricted Stock or the right to receive dividends thereon.

            (ii) FORFEITURE. Except as otherwise determined by the Committee,
      upon termination of employment or service (as determined under criteria
      established by the Committee) during the applicable restriction period,
      Restricted Stock that is at that time subject to restrictions shall be
      forfeited and reacquired by the Company; PROVIDED, HOWEVER, 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 will be waived in whole or in part
      in the event of termination resulting from specified causes.

                                       7
<PAGE>

            (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, such certificates may bear an appropriate legend
      referring to the terms, conditions, and restrictions applicable to such
      Restricted Stock, the Company may retain physical possession of the
      certificate, and the Participant shall have delivered a stock power to the
      Company, endorsed in blank, relating to the Restricted Stock.

            (iv) DIVIDENDS. Dividends paid on Restricted Stock shall be either
      paid 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
      the payment of such dividends shall be deferred and/or the amount or value
      thereof automatically reinvested in additional Restricted Stock, other
      Awards, or other investment vehicles, as the Committee shall determine or
      permit the Participant to elect. 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, unless otherwise determined by the
      Committee.

      (f) DEFERRED STOCK. The Committee is authorized to grant units
representing the right to receive Stock at a future date subject to the
following terms and conditions ("Deferred Stock"):

            (i) AWARD AND RESTRICTIONS. Delivery of Stock will occur upon
      expiration of the deferral period specified for an Award of Deferred Stock
      by the Committee (or, if permitted by the Committee, as elected by the
      Participant). In addition, Deferred Stock shall be subject to such
      restrictions as the Committee may impose, if any, which restrictions may
      lapse at the expiration of the deferral period or at earlier specified
      times, separately or in combination, in installments or otherwise, as the
      Committee may determine.

            (ii) FORFEITURE. Except as otherwise determined by the Committee,
      upon termination of employment or service (as determined under criteria
      established by the Committee) during the applicable deferral period or
      portion thereof to which forfeiture conditions apply (as provided in the
      Award Agreement evidencing the Deferred Stock), all Deferred Stock that is
      at that time subject to such forfeiture conditions shall be forfeited;
      PROVIDED, HOWEVER, 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 Deferred Stock will be
      waived in whole or in part in the event of termination resulting from
      specified causes.

      (g) BONUS STOCK AND AWARDS IN LIEU OF CASH OBLIGATIONS. The Committee is
authorized to grant Stock as a bonus, or to grant Stock or other Awards in lieu
of Company obligations to pay cash under other plans or compensatory
arrangements.

                                       8
<PAGE>

      (h) DIVIDEND EQUIVALENTS. The Committee is authorized to grant Awards
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 ("Dividend Equivalents"). 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.

      (i) OTHER STOCK-BASED AWARDS. The Committee is authorized, subject to
limitations under applicable law, to grant 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 and factors that may influence the
value of 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
Company 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 ("Other Stock Based Awards"). The
Committee shall determine the terms and conditions of such Awards. Stock issued
pursuant to an Award in the nature of a purchase right granted under this
Section 6(i) 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 be granted
pursuant to this Section 6(i).

      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 for any other Award granted
under the Plan or any award granted under any other plan of the Company, any
subsidiary or any business entity to be acquired by the Company or a subsidiary,
or any other right of a Participant to receive payment from the Company or any
subsidiary. Awards granted in addition to or in tandem with other Awards or
awards may be granted either as of the same time as or a different time from the
grant of such other Awards or awards.

      (b) TERM OF AWARDS. The term of each Award shall be for such period as may
be determined by the Committee; PROVIDED, HOWEVER, that in no event shall the
term of any ISO or an SAR granted in tandem therewith exceed a period of ten
years from the date of its grant (or such shorter period as may be applicable
under Section 422 of the Code), and in no event shall an Option that is granted
to a resident of the United Kingdom have a term that exceeds seven years from
the date of its grant.

      (c) FORM OF PAYMENT UNDER AWARDS. Subject to the terms of the Plan and any
applicable Award Agreement, payments to be made by the Company or a subsidiary
upon the grant, exercise or settlement of an Award may be made in such forms as
the Committee shall

                                       9
<PAGE>

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. Such 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 in respect of
installment or deferred payments denominated in Stock.

      (d) LOAN PROVISIONS. With the consent of the Committee, and subject at all
times to, and only to the extent, if any, permitted under and in accordance
with, laws and regulations and other binding obligations or provisions
applicable to the Company, the Company may make, guarantee or arrange for a loan
or loans to a Participant with respect to the exercise of any Option or other
payment in connection with any Award, including the payment by a Participant of
any or all federal, state or local income or other taxes due in connection with
any Award. Subject to such limitations, the Committee shall have full authority
to decide whether to make a loan or loans hereunder and to determine the amount,
terms and provisions of any such loan or loans, including the interest rate to
be charged in respect of any such loan or loans, whether the loan or loans are
to be with or without recourse against the borrower, the terms on which the loan
is to be repaid and conditions, if any, under which the loan or loans may be
forgiven.

      8.  GENERAL PROVISIONS.

      (a) COMPLIANCE WITH LAWS AND OBLIGATIONS. The Company shall not be
obligated to issue or deliver Stock in connection with any Award or take any
other action under the Plan in a transaction subject to the requirements of any
applicable securities law, any requirement under any listing agreement between
the Company and any securities exchange or automated quotation system or any
other law, regulation or contractual obligation of the Company until the Company
is satisfied that such laws, regulations, and other obligations of the Company
have been complied with in full. Certificates representing shares of Stock
issued under the Plan will be subject to such stop-transfer orders and other
restrictions as may be applicable under such laws, regulations and other
obligations of the Company, including any requirement that a legend or legends
be placed thereon.

      (b) LIMITATIONS ON TRANSFERABILITY. Awards and other rights under the Plan
will not be transferable by a Participant except by will or the laws of descent
and distribution or to a Beneficiary in the event of the Participant's death,
shall not be pledged, mortgaged, hypothecated or otherwise encumbered, or
otherwise subject to the claims of creditors, and, in the case of ISOs and SARs
in tandem therewith, shall be exercisable during the lifetime of a Participant
only by such Participant or his guardian or legal representative; PROVIDED,
HOWEVER, that if permitted by applicable law, such Awards and other rights
(other than ISOs and SARs in tandem therewith) may be transferred to one or more
transferees during the lifetime of the Participant to the extent and on such
terms as then may be permitted by the Committee.

      (c) NO RIGHT TO CONTINUED EMPLOYMENT OR SERVICE. Neither the Plan nor any
action taken hereunder shall be construed as giving any employee or other person
the right to be retained in the employ or service of the Company or any of its
subsidiaries, nor shall it interfere

                                       10
<PAGE>

in any way with the right of the Company or any of its subsidiaries to terminate
any employee's employment or other person's service at any time.

      (d) TAXES. The Company and any subsidiary is authorized to withhold from
any Award granted or to be settled, any delivery of Stock in connection with an
Award, any other payment relating to an Award 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 Company 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 Participant's tax obligations.

      (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 stockholders or Participants, except that
any such action shall be subject to the approval of the Company's stockholders
at or before the next annual meeting of stockholders for which the record date
is after such Board action if such stockholder 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 stockholders for approval; PROVIDED, HOWEVER, that,
without the consent of an affected Participant, no such action may materially
impair the rights of such Participant under any Award theretofore granted to him
(as such rights are set forth in the Plan and the Award Agreement). 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; PROVIDED, HOWEVER, that, without the consent of an affected
Participant, no such action may materially impair the rights of such Participant
under such Award (as such rights are set forth in the Plan and the Award
Agreement). The Board or the Committee shall also have the authority to
establish separate sub-plans under the Plan with respect to Participants
resident in a particular jurisdiction (the terms of which shall not be
inconsistent with those of the Plan) if necessary or desirable to comply with
the applicable laws of such jurisdiction.

                                       11
<PAGE>

      (f) NO RIGHTS TO AWARDS; NO STOCKHOLDER RIGHTS. The grant of an Award to a
Participant shall not confer upon such Participant the right to receive an
additional Award, and there is no obligation for uniformity of treatment of
Participants and employees. No Award shall confer on any Participant any of the
rights of a stockholder of the Company unless and until Stock is duly issued or
transferred and delivered to the Participant in accordance with the terms of the
Award or, in the case of an Option, the Option is duly exercised.

      (g) UNFUNDED STATUS OF AWARDS; CREATION OF TRUSTS. The Plan is intended to
constitute an "unfunded" plan for incentive and deferred compensation. With
respect to any payments not yet made to a Participant 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 Company;
PROVIDED, HOWEVER, that the Committee may authorize the creation of trusts or
make other arrangements to meet the Company's obligations under the Plan to
deliver cash, Stock, other Awards, or other property pursuant to any Award,
which trusts or other arrangements shall be consistent with the "unfunded"
status of the Plan unless the Committee otherwise determines with the consent of
each affected Participant.

      (h) NONEXCLUSIVITY OF THE PLAN. Neither the adoption of the Plan by the
Board nor its submission to the stockholders of the Company for approval shall
be construed as creating any limitations on the power of the Board to adopt such
other compensatory arrangements as it may deem desirable, including, without
limitation, the granting of stock options otherwise than under the Plan, and
such arrangements may be either applicable generally or only in specific cases.

      (i) NO FRACTIONAL SHARES. 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 relating to the Plan and any Award Agreement shall be
determined in accordance with the laws of Bermuda, without giving effect to
principles of conflicts of laws, and applicable federal law.

      (k) EFFECTIVE DATE; PLAN TERMINATION. The Plan shall become effective as
of the date of its adoption by the Board and approval of the Company's
stockholders, and shall continue in effect until terminated by the Board.

                                       12

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