Document:

EXHIBIT 10.1

                          KRISPY KREME DOUGHNUTS, INC.

                            2000 STOCK INCENTIVE PLAN

                         (EFFECTIVE AS OF JULY 1, 2000)

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                                TABLE OF CONTENTS

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ARTICLE 1.  ESTABLISHMENT, PURPOSE, AND DURATION...............................................1
   1.1 Establishment of the Plan...............................................................1
   1.2 Purpose of the Plan.....................................................................1
   1.3 Duration of the Plan....................................................................1

ARTICLE 2.  DEFINITIONS........................................................................1

ARTICLE 3. ADMINISTRATION......................................................................5
   3.1 The Committee...........................................................................5
   3.2 Authority of the Committee..............................................................5
   3.3 Decisions Binding.......................................................................6
   3.4 Employees in Foreign Countries..........................................................6

ARTICLE 4. SHARES SUBJECT TO THE PLAN..........................................................6
   4.1 Number of Shares........................................................................6
   4.2 Other Plan Limits.......................................................................6
   4.3 Payment of Shares.......................................................................6
   4.4 Adjustments In Authorized Shares........................................................7

ARTICLE 5.  ELIGIBILITY AND PARTICIPATION......................................................7

ARTICLE 6.  STOCK OPTIONS......................................................................7
   6.1 Grant of Options........................................................................7
   6.2 Agreement...............................................................................8
   6.3 Option Price............................................................................8
   6.4 Duration of Options.....................................................................8
   6.5 Exercise of Options.....................................................................8
   6.6 Payment.................................................................................9
   6.7 Limited Transferability.................................................................9
   6.8 Shareholder Rights.....................................................................10

ARTICLE 7. STOCK APPRECIATION RIGHTS..........................................................10
   7.1 Grants of SARs.........................................................................10
   7.2 Duration of SARs.......................................................................10
   7.3 Exercise of SAR........................................................................10
   7.4 Determination of Payment of Cash and/or Common Stock Upon Exercise of SAR..............10
   7.5 Nontransferability.....................................................................11
   7.6 Shareholder Rights.....................................................................11

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ARTICLE 8.  RESTRICTED STOCK; STOCK AWARDS....................................................11
   8.1 Grants.................................................................................11
   8.2 Restricted Period; Lapse of Restrictions...............................................11
   8.3 Rights of Holder; Limitations Thereon..................................................12
   8.4 Delivery of Unrestricted Shares........................................................12
   8.5 Nonassignability of Restricted Stock...................................................13

ARTICLE 9.  PERFORMANCE UNIT AWARDS...........................................................13
   9.1 Award..................................................................................13
   9.2 Earning the Award......................................................................13
   9.4 Payment................................................................................13
   9.6 Shareholder Rights.....................................................................13

ARTICLE 10.  BENEFICIARY DESIGNATION..........................................................14

ARTICLE 11.  DEFERRALS........................................................................14

ARTICLE 12.  RIGHTS OF PARTICIPANTS...........................................................14
   12.1 Employment............................................................................14
   12.2 Participation.........................................................................14

ARTICLE 13.  CHANGE IN CONTROL................................................................15
   13.1 Definition............................................................................15

ARTICLE 14.  AMENDMENT, MODIFICATION AND TERMINATION..........................................16
   14.1 Amendment, Modification and Termination...............................................16
   14.2 Awards Previously Granted.............................................................16
   14.3 Compliance With Code Section 162(m)...................................................16

ARTICLE 15.  WITHHOLDING......................................................................17
   15.1 Tax Withholding.......................................................................17
   15.2 Share Withholding.....................................................................17

ARTICLE 16.  INDEMNIFICATION..................................................................17

ARTICLE 17.  SUCCESSORS.......................................................................18

ARTICLE 18.  LEGAL CONSTRUCTION...............................................................18
   18.1 Gender and Number.....................................................................18
   18.2 Severability..........................................................................18
   18.3 Requirements of Law...................................................................18
   18.4 Regulatory Approvals and Listing......................................................18
   18.5 Securities Law Compliance.............................................................18
   18.6 Governing Law.........................................................................19
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                          KRISPY KREME DOUGHNUTS, INC.

                            2000 Stock Incentive Plan

ARTICLE 1.  ESTABLISHMENT, PURPOSE, AND DURATION

         1.1   ESTABLISHMENT OF THE PLAN.  Krispy Kreme Doughnuts, Inc., a North
               -------------------------
Carolina  corporation  (hereinafter  referred  to  as  the  "Company"),   hereby
establishes a stock option and  incentive  award plan known as the "Krispy Kreme
Doughnuts,  Inc. 2000 Stock Incentive  Plan" (the "Plan"),  as set forth in this
document.  The Plan permits the grant of Incentive  Stock Options,  Nonqualified
Stock Options, Restricted Stock, Stock Awards, Performance Unit Awards and Stock
Appreciation Rights.

         The Plan shall become effective on July 1, 2000 (the "Effective Date"),
having been approved by the Board of Directors on June 6, 2000, and shall remain
in effect as provided in Section 1.3.

         1.2  PURPOSE  OF THE  PLAN.  The  purposes  of the Plan are to  promote
              ---------------------
greater stock ownership in the Company by Employees, Directors,  consultants, or
other persons who perform services for the Company and its Parent, Subsidiaries,
and affiliates (the "Participants"); to more closely link the personal interests
of  Participants  to  those  of  the  Company's  shareholders;  and  to  provide
flexibility  to the Company in its ability to  motivate,  attract and retain the
services of Participants  upon whose  judgment,  interest and special effort the
successful conduct of its operation largely depends.

         1.3  DURATION OF THE PLAN.  The Plan shall  commence  on the  Effective
              --------------------
Date, and shall remain in effect, subject to the right of the Board of Directors
to amend or terminate the Plan at any time pursuant to Article 14, until the day
prior to the tenth (10th) anniversary of the Effective Date.

ARTICLE 2.  DEFINITIONS

         Whenever used in the Plan, the following  terms shall have the meanings
set forth below:

         (a)      "Agreement"   means  an   agreement   entered   into  by  each
                   ---------
                  Participant  and the  Company,  setting  forth  the  terms and
                  provisions  applicable to Awards granted to Participants under
                  this Plan.

         (b)      "Award" means,  individually  or  collectively,  a grant under
                   -----
                  this  Plan of  Incentive  Stock  Options,  Nonqualified  Stock
                  Options,  Restricted  Stock,  Stock Awards,  Performance  Unit
                  Awards or Stock Appreciation Rights.

         (c)      "Beneficial  Owner" or "Beneficial  Ownership"  shall have the
                   ----------  -----      ----------  ---------
                  meaning  ascribed  to such term in Rule  13d-3 of the  General
                  Rules and Regulations under the Exchange Act.

         (d)      "Board" or "Board of Directors" means  the Board  of Directors
                   -----      ------------------
of the Company.

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         (e)      "Cause"   means: (i)  with  respect  to  the  Company  or  any
                   -----
                  Subsidiary  which  employs  the  Participant  or for which the
                  Participant primarily performs services, the commission by the
                  Participant of an act of fraud, embezzlement,  theft or proven
                  dishonesty,  or any other illegal act or practice  (whether or
                  not resulting in criminal  prosecution or conviction),  or any
                  act or practice which the Committee shall, in good faith, deem
                  to have  resulted  in the  Participant's  becoming  unbondable
                  under the Company's or the  Subsidiary's  fidelity bond;  (ii)
                  the willful engaging by the Participant in misconduct which is
                  deemed  by the  Committee,  in good  faith,  to be  materially
                  injurious  to the  Company or any  Subsidiary,  monetarily  or
                  otherwise;  or (iii) the  willful  and  continued  failure  or
                  habitual neglect by the Participant to perform his duties with
                  the Company or the Subsidiary substantially in accordance with
                  the  operating and  personnel  policies and  procedures of the
                  Company or the  Subsidiary  generally  applicable to all their
                  employees. For purposes of this Plan, no act or failure to act
                  by the Participant shall be deemed to be "willful" unless done
                  or omitted to be done by the Participant not in good faith and
                  without  reasonable  belief that the  Participant's  action or
                  omission  was in the best  interest of the Company  and/or the
                  Subsidiary.  Notwithstanding the foregoing, if the Participant
                  has entered into an employment agreement that is binding as of
                  the date of  employment  termination,  and if such  employment
                  agreement  defines  "Cause," then the definition of "Cause" in
                  such  agreement  shall apply to the  Participant in this Plan.
                  "Cause" under either (i), (ii) or (iii) shall be determined by
                  the Committee.

         (f)      "Code"  means  the  Internal Revenue Code  of 1986, as amended
                   ----
                  from time to time, or any successor act thereto.

         (g)      "Committee" means (i) the committee  appointed by the Board to
                  administer  the Plan with  respect  to grants  of  Awards,  as
                  specified  in  Article  3;  or  (ii)  in the  absence  of such
                  appointment, the Board itself.

         (h)      "Common Stock"  means the  common stock of the Company, no par
                   ------------
                  value per share.

         (i)      "Company" means Krispy Kreme Doughnuts, Inc., a North Carolina
                   -------
                  corporation,  or  any successor thereto as provided in Article
                  17.

         (j)      "Corresponding  SAR" means an SAR that is granted in  relation
                   ------------------
                  to a particular Option and that can be exercised only upon the
                  surrender to the Company,  unexercised, of that portion of the
                  Option to which the SAR relates.

         (k)      "Director" means any individual  who is a  member of the Board
                   --------
                  of Directors of the Company.

         (l)      "Disability"  shall have the meaning  ascribed to such term in
                   ---------
                  the   Company's   long-term   disability   plan  covering  the
                  Participant,  or in  the  absence  of  such  plan,  a  meaning
                  consistent with Section 22(e)(3) of the Code.

         (m)      "Employee"  means any  employee  of the Company or any Parent,
                   --------
                  Subsidiary, or affiliate of the Company. Directors who are not

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                  otherwise  employed by the Company or a Parent,  Subsidiary or
                  affiliate of the Company are not  considered  Employees  under
                  this Plan.

         (n)      "Effective Date" shall have the meaning ascribed to such  term
                   --------------
                   in Section 1.1.

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

         (p)      "Fair Market Value" shall be determined as follows:
                   -----------------

                  (i)      If, on the relevant  date, the Shares are traded on a
                           national  or regional  securities  exchange or on The
                           Nasdaq National Market System  ("Nasdaq") and closing
                           sale prices for the Shares are customarily quoted, on
                           the basis of the closing sale price on the  principal
                           securities  exchange  on which the Shares may then be
                           traded  or, if there is no such sale on the  relevant
                           date,  then on the last  previous day on which a sale
                           was reported;

                  (ii)     If, on the relevant  date,  the Shares are not listed
                           on any securities  exchange or traded on Nasdaq,  but
                           nevertheless  are  publicly  traded and  reported  on
                           Nasdaq  without  closing  sale  prices for the Shares
                           being  customarily  quoted,  on the basis of the mean
                           between the closing bid and asked  quotations in such
                           other over-the-counter  market as reported by Nasdaq;
                           but, if there are no bid and asked  quotations in the
                           over-the-counter market as reported by Nasdaq on that
                           date, then the mean between the closing bid and asked
                           quotations in the over-the-counter market as reported
                           by Nasdaq on the  immediately  preceding day such bid
                           and asked prices were quoted; and

                  (iii)    If, on the relevant date, the Shares are not publicly
                           traded as described  in (i) or (ii),  on the basis of
                           the good faith determination of the Committee.

         (q)      "Incentive  Stock Option" or "ISO" means an option to purchase
                   --------------------------------
                  Shares  granted  under  Article  6 which is  designated  as an
                  Incentive   Stock   Option  and  is   intended   to  meet  the
                  requirements of Section 422 of the Code.

         (r)      "Initial Value" means,  with respect to a  Corresponding  SAR,
                   -------------
                  the Option  Price per share of the  related  Option,  and with
                  respect to an SAR granted independently of an Option, the Fair
                  Market  Value  of one  share  of  Common  Stock on the date of
                  grant.

         (s)      "Insider" shall mean an Employee who is, on the relevant date,
                   -------
                  an officer or a director, or a beneficial owner of ten percent
                  (10%) or more of any class of the Company's equity  securities
                  that is registered  pursuant to Section 12 of the Exchange Act
                  or any successor provision, all as defined under Section 16 of
                  the Exchange Act.

         (t)      "Named  Executive  Officer" means a Participant who, as of the
                   -------------------------
                  date of vesting  and/or payout of an Award is one of the group
                  of  "covered   employees,"  as  defined  in  the   regulations
                  promulgated  under  Code  Section  162(m),  or  any  successor
                  statute.

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<PAGE>

         (u)      "Nonqualified  Stock  Option"  or  "NQSO"  means an  option to
                   ---------------------------------------
                  purchase  Shares  granted  under  Article  6, and which is not
                  intended or otherwise  fails to meet the  requirements of Code
                  Section 422.

         (v)      "Option" means  an  Incentive Stock  Option  or a Nonqualified
                   ------
                  Stock Option.

         (w)      "Option Price"  means  the  price  at  which  a  Share may  be
                   ------------
                  purchased   by  a  Participant  pursuant  to  an   Option,  as
                  determined by the Committee.

         (y)      "Parent"  means   a  "parent  corporation,"  whether  now   or
                  ------
                  hereafter existing as defined in Section 424(e) of the Code.

         (z)      "Participant" means an Employee, Director, consultant or other
                   -----------
                  person  who  performs  services  for the  Company or a Parent,
                  Subsidiary,  or affiliate of the Company, who has been granted
                  an Award under the Plan which is outstanding.

         (aa)     "Performance Unit Award" means an Award,  which, in accordance
                   ----------------------
                  with the terms of  Article 9 and the other  provisions  of the
                  Plan  and   subject  to  an   Agreement,   will   entitle  the
                  Participant,  or his estate or beneficiary in the event of the
                  Participant's  death,  to  receive  cash,  Common  Stock  or a
                  combination thereof.

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

         (cc)     "Plan"  means this  Krispy  Kreme  Doughnuts,  Inc. 2000 Stock
                   ----
                   Incentive Plan, including any amendments thereto.

         (dd)     "Retirement"  shall mean  retiring  from  employment  with the
                   ----------
                  Company or any Subsidiary on or after attaining age sixty five
                  (65),  or  pursuant to a policy or  agreement  approved by the
                  Board.

         (ee)     "Restricted  Stock"  means an Award of  Common  Stock  (or the
                   -----------------
                  right to  receive  a share  of  Common  Stock  in the  future)
                  granted  in  accordance  with the  terms of  Article 8 and the
                  other provisions of the Plan, and which is nontransferable and
                  subject to a substantial risk of forfeiture.  Shares of Common
                  Stock shall cease to be  Restricted  Stock when, in accordance
                  with the  terms  hereof  and the  applicable  Agreement,  they
                  become   transferable   and  free  of   substantial   risk  of
                  forfeiture.

         (ff)     "SAR"  means a stock  appreciation  right  that  entitles  the
                   ---
                  holder to receive,  with respect to each share of Common Stock
                  encompassed by the exercise of such SAR, the amount determined
                  by the Committee and specified in an Agreement. In the absence
                  of such specification, the holder shall be entitled to receive
                  in  cash,   with   respect  to  each  share  of  Common  Stock
                  encompassed  by the  exercise  of such SAR,  the excess of the
                  Fair  Market  Value on the date of  exercise  over the Initial
                  Value.  References to "SARs" include both  Corresponding  SARs
                  and SARs granted independently of Options,  unless the context
                  requires otherwise.

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<PAGE>

         (gg)     "Shares"  means  the  shares of  Common  Stock of the  Company
                   ------
                  (including   any  new,   additional  or  different   stock  or
                  securities  resulting  from the changes  described  in Section
                  4.3).

         (hh)     "Stock  Award" means a grant of Shares under Article 8 that is
                   ------------
                  not generally  subject to restrictions and pursuant to which a
                  certificate for the Shares is transferred to the Employee.

         (ii)     "Subsidiary"  means  (i) in the  case of an ISO,  any  company
                   ----------
                  during  any period in which it is a  "subsidiary  corporation"
                  (as that term is defined in Code Section 424(f)),  and (ii) in
                  the case of all other  Awards,  in addition  to a  "subsidiary
                  corporation"   as  defined  above,   a  partnership,   limited
                  liability company,  joint venture or other entity in which the
                  Company  controls  fifty  percent  (50%) or more of the voting
                  power or equity interests.

ARTICLE 3. ADMINISTRATION

         3.1  THE COMMITTEE.  The Plan shall be administered by the Compensation
              -------------
Committee of the Board (or a subcommittee thereof), or by any other committee or
subcommittee  appointed by the Board that is granted authority to administer the
Plan. The members of the Committee  shall be appointed from time to time by, and
shall serve at the discretion of, the Board of Directors.  In the absence of any
such appointment, the Plan shall be administered by the Board.

         3.2 AUTHORITY OF THE COMMITTEE.  Subject to the provisions of the Plan,
             --------------------------
the Committee shall have full and exclusive power to select the Participants who
shall participate in the Plan (who may change from year to year);  determine the
size and types of  Awards;  determine  the terms and  conditions  of Awards in a
manner consistent with the Plan (including  conditions on the  exercisability of
all or a part of an  Option or SAR,  restrictions  on  transferability,  vesting
provisions on Restricted  Stock or  Performance  Unit Awards and the duration of
the Awards);  construe and  interpret  the Plan and any  agreement or instrument
entered into under the Plan; establish, amend or waive rules and regulations for
the Plan's  administration;  and (subject to the provisions of Article 14) amend
the terms and conditions of any  outstanding  Award to the extent such terms and
conditions  are within the  discretion of the Committee as provided in the Plan,
including  accelerating  the  time  any  Option  or  SAR  may be  exercised  and
establishing  different  terms  and  conditions  relating  to the  effect of the
termination  of  employment  or other  services  to the  Company.  Further,  the
Committee  shall  make  all  other  determinations  which  may be  necessary  or
advisable in the  Committee's  opinion for the  administration  of the Plan. All
expenses of administering this Plan shall be borne by the Company.

         3.3  DECISIONS  BINDING.  All determinations  and decisions made by the
              ------------------
Committee  pursuant to the  provisions  of the Plan and all  related  orders and
resolutions of the Board shall be final,  conclusive and binding on all Persons,
including  the Company,  the  shareholders,  Participants  and their estates and
beneficiaries.

         3.4  EMPLOYEES  IN  FOREIGN  COUNTRIES.  The  Committee  shall have the
              ---------------------------------
authority to adopt such  modifications,  procedures,  appendices and subplans as
may be necessary or desirable to comply with  provisions  of the laws of foreign

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<PAGE>

countries  in which the  Company  or any  Subsidiary  may  operate to assure the
viability of the  benefits  from Awards  granted to  Employees  employed in such
countries and to meet the objectives of the Plan.

ARTICLE 4. SHARES SUBJECT TO THE PLAN

         4.1  NUMBER OF SHARES.  Subject to adjustments under Section 4.4 below,
              ----------------
the maximum  number of Shares that may be  delivered to  participants  and their
beneficiaries  under the Plan shall be equal to the sum of (i)  1,000,000;  (ii)
any Shares  available for future  awards under the  Company's  1998 Stock Option
Plan as of the  effective  date of this  Plan;  and  (iii) any  Shares  that are
represented  by awards  granted  under any prior plan of the Company,  which are
forfeited, expire or are canceled without the delivery of Shares or which result
in the  forfeiture  of Shares  back to the  Company.  In  addition,  any  Shares
delivered  under the Plan or any prior plan of the Company  which are  forfeited
back to the  Company  because  of the  failure to meet an award  contingency  or
condition  shall again be available for delivery  pursuant to new awards granted
under the Plan.  Any Shares covered by an award (or portion of an award) granted
under the Plan or any prior plan of the Company, which is forfeited or canceled,
expires or is settled  in cash,  including  the  settlement  of tax  withholding
obligations  using  Shares,  shall be  deemed  not to have  been  delivered  for
purposes of  determining  the maximum  number of Shares  available  for delivery
under the Plan. Likewise,  if any stock option is exercised by tendering Shares,
either actually or by attestation, to the Company as full or partial payment for
such exercise under this Plan or any prior plan of the Company,  only the number
of Shares  issued  net of the  Shares  tendered  shall be deemed  delivered  for
purposes of  determining  the maximum  number of Shares  available  for delivery
under the Plan.  Further,  Shares issued under the Plan through the  settlement,
assumption or substitution of outstanding  awards or obligations to grant future
awards as a condition of or in  connection  with the Company  acquiring  another
entity  shall not reduce the maximum  number of Shares  available  for  delivery
under the Plan.

         4.2  OTHER PLAN LIMITS.  Subject to adjustment  under  Section 4.4, the
              -----------------
following  additional maximums are imposed under the Plan. The maximum number of
Shares that may be issued in connection with ISOs shall be 750,000.  The maximum
number of Shares that may be issued in conjunction  with awards granted pursuant
to Articles 7-9 shall be 300,000.

         4.3  PAYMENT OF SHARES.  The  Committee  may,  in  addition to granting
              -----------------
Awards  under  Article 4, use Shares as the form of  payment  for  compensation,
grants  or  rights  earned  or  due  under  any  other   compensation  plans  or
arrangements  of the  Company,  including  those of any entity  acquired  by the
Company.  Such Shares  shall not count  against the  overall  limitation  on the
number of Shares that may be delivered under the Plan.

         4.4 ADJUSTMENTS IN AUTHORIZED SHARES. In the event of (i) any change in
             --------------------------------
corporate  capitalization,  such as a stock split, reverse stock split, or stock
dividend;  (ii) any corporate  transaction to which Code Section 424(a) applies,
or (iii) such other event which in the judgment of the Committee necessitates an
adjustment,  such  adjustment  shall be made in the  maximum  number and kind of
Shares which may be delivered  under the Plan as set forth in Section 4.1 above,
and in the number  and kind of and/or  price of Shares  subject  to  outstanding
Awards  granted  under  the  Plan or  prior  plan,  as may be  determined  to be
appropriate and equitable by the Committee,  in its sole discretion,  to prevent

                                       6
<PAGE>

dilution or enlargement of rights; provided,  however, that the number of Shares
subject to any Award shall always be a whole number and the Committee shall make
such  adjustments  as are necessary to insure Awards of whole Shares.  Except as
expressly provided herein, the issuance by the Company of Shares of stock of any
class, or securities  convertible  into Shares of stock of any class,  shall not
affect,  and no adjustment by reason  thereof shall be made with respect to, the
number or price of Shares subject to an outstanding Award.

ARTICLE 5.  ELIGIBILITY AND PARTICIPATION

         Any Director or Employee,  or any  independent  contractor,  adviser or
consultant to the Company or a Parent,  Subsidiary,  or affiliate of the Company
shall be  eligible  to  receive  an Award  under the Plan.  In  determining  the
individuals  to whom such an Award  shall be  granted  and the  number of Shares
which may be granted  pursuant  to that  Award,  the  Committee  shall take into
account  the  duties  of the  respective  individual,  his or  her  present  and
potential  contributions to the success of the Company or a Parent,  Subsidiary,
or affiliate of the Company,  and such other factors as the Committee shall deem
relevant in connection with accomplishing the purpose of the Plan.

ARTICLE 6.  STOCK OPTIONS

         6.1  GRANT OF OPTIONS. Subject to the terms and provisions of the Plan,
              ----------------
Options  may be  granted  to  Participants  at any time and from time to time as
shall be determined by the Committee.  The Committee  shall have sole discretion
in  determining  the  number  of  Shares  subject  to  Options  granted  to each
Participant.  An Option may be granted with or without a  Corresponding  SAR. No
Participant  may be granted ISOs (under the Plan and all other  incentive  stock
option  plans of the  Company  and any  Parent  or  Subsidiary)  which are first
exercisable  in any calendar  year for Common  Stock  having an  aggregate  Fair
Market Value  (determined  as of the date an Option is granted) that exceeds One
Hundred Thousand Dollars ($100,000).  The preceding annual limit shall not apply
to NQSOs.  The Committee may grant a  Participant  ISOs,  NQSOs or a combination
thereof,  and may vary such Awards  among  Participants.  The maximum  number of
Shares  subject  to  Options  which can be  granted  under the Plan  during  any
calendar year to any individual is 250,000 Shares;  provided,  however,  that to
the extent that the maximum  number of Shares is not granted to a Participant in
a calendar year, such amount may be carried over into subsequent years.

         6.2  AGREEMENT.  Each Option  grant shall be  evidenced by an Agreement
              ---------
that shall specify the Option Price,  the duration of the Option,  the number of
Shares to which the Option  pertains and such other  provisions as the Committee
shall determine. The Option Agreement shall further specify whether the Award is
intended  to be an  ISO  or an  NQSO.  Any  portion  of an  Option  that  is not
designated  as an ISO or otherwise  fails or is not qualified as an ISO (even if
designated  as an ISO) shall be a NQSO.  If the Option is granted in  connection
with a Corresponding  SAR, the Agreement shall also specify the terms that apply
to the exercise of the Option and  Corresponding  SAR. The Committee may provide
in the Option Agreement for transfer  restrictions,  repurchase rights,  vesting
requirements  and other  limitations on the Shares to be issued  pursuant to the
exercise of an Option.

         6.3  OPTION PRICE.  The Option Price shall not be less than one hundred
              ------------
percent  (100%) of the Fair  Market  Value of a Share on the date the  Option is
granted.  In no event,  however,  shall any  Participant  who owns  (within  the

                                       7
<PAGE>

meaning of Section 424(d) of the Code) stock of the Company possessing more than
ten percent (10%) of the total combined  voting power of all classes of stock of
the  Company be  eligible  to  receive  an ISO at an Option  Price less than one
hundred ten percent  (110%) of the Fair Market  Value of a Share on the date the
ISO is granted.  The Committee is authorized to issue  Options,  whether ISOs or
NQSOs,  at an Option  Price in excess of the Fair  Market  Value on the date the
Option is granted (the so-called  "Premium Price" Option) to encourage  superior
performance.

         6.4  DURATION OF OPTIONS.  Each Option shall expire at such time as the
              -------------------
Committee  shall  determine  at the time of grant;  provided,  however,  that no
Option shall be exercisable later than the tenth (10th)  anniversary date of its
grant; provided,  further,  however, that any ISO granted to any Participant who
at such time owns  (within the  meaning of Section  424(d) of the Code) stock of
the Company  possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the  Company,  shall not be  exercisable  later
than the fifth (5th) anniversary date of its grant.

         6.5  EXERCISE  OF  OPTIONS.  Options  granted  under the Plan  shall be
              ---------------------
exercisable at such times and be subject to such  restrictions and conditions as
the Committee shall in each instance approve,  including  conditions  related to
the employment of or provision of services by the  Participant  with the Company
or any Parent,  Subsidiary or other entity,  which need not be the same for each
grant or for each Participant.  Each Option shall be exercisable for such number
of Shares and at such time or times, including periodic installments,  as may be
determined by the Committee at the time of the grant.  The Committee may provide
in the  Agreement for  automatic  accelerated  vesting and other rights upon the
occurrence of a Change in Control (as defined in Section 13.1) of the Company or
upon the  occurrence  of other events as specified in the  Agreement.  Except as
otherwise provided in the Agreement and Article 13, the right to purchase Shares
that are exercisable in periodic  installments  shall be cumulative so that when
the right to purchase  any Shares has  accrued,  such Shares or any part thereof
may be purchased at any time  thereafter  until the expiration or termination of
the  Option.  The  exercise  or  partial  exercise  of  either  an Option or its
Corresponding  SAR shall result in the termination of the other to the extent of
the number of Shares with  respect to which the Option or  Corresponding  SAR is
exercised.

         6.6  PAYMENT.  Options  shall be exercised by the delivery of a written
              -------
notice of  exercise  to the  Company,  setting  forth the number of Shares  with
respect to which the Option is to be exercised,  accompanied by full payment for
the Shares. The Option Price upon exercise of any Option shall be payable to the
Company in full,  either:  (a) in cash, (b) in cash  equivalent  approved by the
Committee,  (c) if approved by the Committee,  by tendering  previously acquired
Shares (or  delivering a  certification  of ownership of such Shares)  having an
aggregate  Fair Market  Value at the time of exercise  equal to the total Option
Price  (provided  that the Shares  which are  tendered  and which were  acquired
directly from the Company must have been held by the Participant for a period of
at least six months  unless  otherwise  provided  by the  Committee),  or (d) if
approved by the  Committee,  by a combination of (a), (b) and (c). The Committee
also may allow cashless  exercises as permitted  under Federal  Reserve  Board's
Regulation T, subject to applicable securities law restrictions, or by any other
means which the Committee  determines to be consistent  with the Plan's  purpose
and  applicable  law.  The Company  may, in its  discretion,  make a loan to the
Participant for purposes of permitting the Participant to exercise an Option and
to pay any withholding taxes in connection with the exercise of the Option. Such

                                       8
<PAGE>

loan shall be on such terms and  conditions as may be determined by the Company.
As soon as practicable  after receipt of a written  notification of exercise and
full payment, the Company shall deliver to the Participant, in the Participant's
name,  Share  certificates  in an  appropriate  amount  based upon the number of
Shares purchased under the Option(s),  and may place appropriate  legends on the
certificates representing such Shares.

         6.7  LIMITED   TRANSFERABILITY.   If  permitted  by  the  Committee,  a
              -------------------------
Participant may transfer an Option granted hereunder, including, but not limited
to, transfers to members of his or her Immediate  Family (as defined below),  to
one or more trusts for the benefit of such Immediate  Family members,  or to one
or more partnerships  where such Immediate Family members are the only partners,
if (i) the Participant does not receive any consideration in any form whatsoever
for such transfer,  (ii) such transfer is permitted  under  applicable tax laws,
and (iii) the  Participant is an Insider,  such transfer is permitted under Rule
16b-3 of the  Exchange  Act as in  effect  from  time to  time.  Any  Option  so
transferred shall continue to be subject to the same terms and conditions in the
hands of the transferee as were applicable to said Option  immediately  prior to
the transfer  thereof.  Any reference in any such Agreement to the employment by
or performance of services for the Company by the Participant  shall continue to
refer to the employment of, or performance by, the transferring Participant. For
purposes  hereof,   "Immediate  Family"  shall  mean  the  Participant  and  the
Participant's  spouse,  children and  grandchildren.  Any Option that is granted
pursuant to any Agreement that did not initially expressly allow the transfer of
said Option and that has not been  amended to  expressly  permit such  transfer,
shall not be transferable  by the Participant  other than by will or by the laws
of descent and  distribution  and such Option thus shall be  exercisable  in the
Participant's lifetime only by the Participant.

         6.8      SHAREHOLDER  RIGHTS.  No Participant  shall have any rights as
                  -------------------
a Shareholder with respect to Shares subject to his Option until the issuance of
such Shares to the Participant pursuant to the exercise of such Option.

ARTICLE 7. STOCK APPRECIATION RIGHTS

         7.1  GRANTS OF SARS. The Committee shall designate Participants to whom
              --------------
SARs are granted,  and will specify the number of Shares of Common Stock subject
to each grant. An SAR may be granted with or without a related Option.  All SARs
granted under this Plan shall be subject to an Agreement in accordance  with the
terms  of this  Plan.  A  payment  to the  Participant  upon the  exercise  of a
Corresponding  SAR may not be more than the  difference  between the Fair Market
Value of the  Shares  subject  to the  Option  on the date of grant and the Fair
Market Value of the Shares on the date of exercise of the Corresponding SAR. The
maximum  number of Shares  subject to SARs  which can be granted  under the Plan
during any calendar year to any individual is 250,000 Shares; provided, however,
that to the  extent  that the  maximum  number  of Shares  is not  granted  to a
Participant in a calendar year,  such amount may be carried over into subsequent
years.

         7.2  DURATION OF SARS. The duration of an SAR shall be set forth in the
              ----------------
Agreement  as  determined  by  the  Committee.  An  SAR  that  is  granted  as a
Corresponding  SAR  shall  have  the same  duration  as the  Option  to which it
relates.  An  SAR  shall  terminate  due  to the  Participant's  termination  of

                                       9
<PAGE>

employment  at the same time as the date  specified in Article 6 with respect to
Options,  regardless of whether the SAR was granted in connection with the grant
of an Option.

         7.3 EXERCISE OF SAR. An SAR may be exercised in whole at any time or in
             ---------------
part  from  time  to  time  and at  such  times  and  in  compliance  with  such
requirements  as the Committee  shall  determine as set forth in the  Agreement;
provided,  however,  that a  Corresponding  SAR that is related to an  Incentive
Stock  Option may be  exercised  only to the extent that the  related  Option is
exercisable and only when the Fair Market Value of the Shares exceeds the Option
Price of the related ISO. An SAR granted  under this Plan may be exercised  with
respect to any number of whole  Shares  less than the full  number of Shares for
which the SAR could be exercised.  A partial exercise of an SAR shall not affect
the right to exercise the SAR from time to time in accordance with this Plan and
the  applicable  Agreement  with respect to the remaining  Shares subject to the
SAR. The exercise of either an Option or  Corresponding  SAR shall result in the
termination  of the other to the extent of the number of Shares with  respect to
which the Option or its Corresponding SAR is exercised.

         7.4  DETERMINATION OF PAYMENT OF CASH AND/OR COMMON STOCK UPON EXERCISE
              ------------------------------------------------------------------
OF SAR. At the  Committee's  discretion,  the amount  payable as a result of the
------
exercise of an SAR may be settled in cash,  Common Stock,  or a  combination  of
cash and Common  Stock.  A fractional  Share shall not be  deliverable  upon the
exercise of an SAR, but a cash payment shall be made in lieu thereof.

         7.5  NONTRANSFERABILITY.  Each SAR  granted  under  the  Plan  shall be
              ------------------
nontransferable  except  by will or by the  laws of  descent  and  distribution.
During the lifetime of the  Participant to whom the SAR is granted,  the SAR may
be exercised only by the  Participant.  No right or interest of a Participant in
any SAR shall be liable for, or subject to any lien,  obligation or liability of
such Participant.  A Corresponding SAR shall be subject to the same restrictions
on transfer as the ISO to which it relates.  Notwithstanding  the foregoing,  if
the  Agreement  so  provides,  a  Participant  may transfer an SAR (other than a
Corresponding  SAR that relates to an  Incentive  Stock  Option)  under the same
rules and conditions as are set forth in Section 6.7.

         7.6   SHAREHOLDER RIGHTS.  No  Participant  shall have any  rights as a
               ------------------
Shareholder  with  respect  to  Shares subject  to an  SAR until the issuance of
Shares (if any) to the Participant pursuant to the exercise of such SAR.

ARTICLE 8.  RESTRICTED STOCK; STOCK AWARDS

         8.1 GRANTS. The Committee may from time to time in its discretion grant
             ------
Restricted  Stock and Stock Awards to Participants  and may determine the number
of Shares of Restricted Stock or Stock Awards to be granted. The Committee shall
determine the terms and conditions of, and the amount of payment,  if any, to be
made by the  Participant  for  such  Shares  or  Restricted  Stock.  A grant  of
Restricted Stock may, in addition to other  conditions,  require the Participant
to pay for such Shares of  Restricted  Stock,  but the Committee may establish a
price below Fair Market Value at which the  Participant  can purchase the Shares
of Restricted  Stock.  Each grant of  Restricted  Stock shall be evidenced by an
Agreement  containing terms and conditions not inconsistent with the Plan as the
Committee shall determine to be appropriate in its sole discretion.  The maximum

                                       10
<PAGE>

number of Shares of Restricted  Stock which can be granted under the Plan during
any calendar  year to any  individual,  if such grant is intended to comply with
Code Section 162(m), is 75,000 Shares.

         8.2 RESTRICTED  PERIOD;  LAPSE OF RESTRICTIONS.  At the time a grant of
             ------------------------------------------
Restricted  Stock is made, the Committee  shall establish a period or periods of
time (the  "Restricted  Period")  applicable  to such  grant  which,  unless the
Committee  otherwise  provides,  shall  not be  less  than  three  years  in the
aggregate.  Subject to the other provisions of this Article 8, at the end of the
Restricted  Period all  restrictions  shall lapse and the Restricted Stock shall
vest in the Participant.  At the time a grant is made, the Committee may, in its
discretion,  prescribe  conditions  for the  incremental  lapse of  restrictions
during the Restricted  Period and for the lapse or  termination of  restrictions
upon the  occurrence  of  other  conditions  in  addition  to or other  than the
expiration  of the  Restricted  Period with respect to all or any portion of the
Restricted Stock. Such conditions may, but need not, include the following:

                  (a)      The death,  Disability  or Retirement of the Employee
                           to whom Restricted Stock is granted, or

                  (b)      The occurrence of a Change in Control of the Company.

The Committee may also, in its  discretion,  shorten or terminate the Restricted
Period,  or waive any conditions  for the lapse or  termination of  restrictions
with respect to all or any portion of the Restricted Stock at any time after the
date the grant is made.

         8.3 RIGHTS OF HOLDER; LIMITATIONS THEREON.  Upon a grant of  Restricted
             -------------------------------------
Stock, a stock certificate (or  certificates)  representing the number of Shares
of  Restricted  Stock  granted  to  the  Participant  may be  registered  in the
Participant's  name and held in custody by the Company or a bank selected by the
Committee  for the  Participant's  account.  Following  such  registration,  the
Participant  shall have the rights and  privileges of a  Shareholder  as to such
Restricted Stock, including the right to receive dividends, if and when declared
by the Board of Directors,  and to vote such Restricted  Stock,  except that the
right to receive cash  dividends  shall be the right to receive  such  dividends
either in cash  currently or by payment in  Restricted  Stock,  as the Committee
shall  determine,  and except  further that,  the following  restrictions  shall
apply:

                  (a)      The Participant  shall not be entitled to delivery of
                           a certificate  until the expiration or termination of
                           the Restricted  Period for the Shares  represented by
                           such  certificate and the satisfaction of any and all
                           other conditions prescribed by the Committee;

                  (b)      None of the Shares of  Restricted  Stock may be sold,
                           transferred,    assigned,   pledged,   or   otherwise
                           encumbered  or  disposed  of  during  the  Restricted
                           Period  and  until  the  satisfaction  of any and all
                           other conditions prescribed by the Committee; and

                  (c)      In the  event  of the  forfeiture  of any  Shares  of
                           Restricted  Stock,  such  forfeited  Shares  shall be
                           transferred to the Company  without further action by
                           the Participant and shall, in accordance with Section

                                       11
<PAGE>

                           4.1,  again be available for grant under the Plan. If
                           the  Participant  paid any  amount  for the Shares of
                           Restricted  Stock  that are  forfeited,  the  Company
                           shall  pay the  Participant  the  lesser  of the Fair
                           Market  Value  of the  Shares  on the  date  they are
                           forfeited or the amount paid by the Participant.

         With respect to any Shares  received as a result of  adjustments  under
Section  4.4 hereof  and any  Shares  received  with  respect to cash  dividends
declared on Restricted  Stock,  the  Participant  shall have the same rights and
privileges,  and be subject to the same  restrictions,  as are set forth in this
Article 8.

         8.4 DELIVERY OF UNRESTRICTED SHARES. Upon the expiration or termination
             -------------------------------
of the Restricted Period for any Shares of Restricted Stock and the satisfaction
of any and all other  conditions  prescribed by the Committee,  the restrictions
applicable  to  such  Shares  of  Restricted  Stock  shall  lapse  and  a  stock
certificate  for the number of Shares of Restricted  Stock with respect to which
the restrictions  have lapsed shall be delivered,  free of all such restrictions
except any that may be imposed by law, a  Shareholders'  agreement  or any other
agreement,  to the holder of the  Restricted  Stock.  The  Company  shall not be
required to deliver any fractional Share but will pay, in lieu thereof, the Fair
Market  Value  (determined  as of the  date  the  restrictions  lapse)  of  such
fractional  Share to the holder  thereof.  Concurrently  with the  delivery of a
certificate for Restricted  Stock, the holder shall be required to pay an amount
necessary to satisfy any applicable federal, state and local tax requirements as
set out in Article 15 below.

         8.5 NONASSIGNABILITY OF RESTRICTED STOCK. Unless the Committee provides
             ------------------------------------
otherwise  in the  Agreement,  no  grant  of,  nor any  right or  interest  of a
Participant in or to, any Restricted Stock, or in any instrument  evidencing any
grant of  Restricted  Stock  under  the Plan,  may be  assigned,  encumbered  or
transferred  except, in the event of the death of a Participant,  by will or the
laws of descent and distribution.

ARTICLE 9.  PERFORMANCE UNIT AWARDS

         9.1 AWARD. The Committee may designate Participants to whom Performance
             -----
Unit Awards will be granted from time to time for no  consideration  and specify
the number of Shares of Common Stock covered by the Award. The maximum number of
Shares subject for Performance  Units which can be granted under the Plan during
any calendar  year to any  individual is 75,000 Shares (or the fair market value
thereof).

         9.2 EARNING THE AWARD. A Performance  Unit Award,  or portion  thereof,
             -----------------
will be earned,  and the Participant will be entitled to receive Common Stock, a
cash  payment  or a  combination  thereof,  only  upon  the  achievement  by the
Participant,  the  Company,  or a  Parent  or  Subsidiary  of  such  performance
objectives as the Committee,  in its discretion,  shall prescribe on the date of
grant.

         The Committee may in determining  whether performance targets have been
met  adjust the  Company's  financial  results to exclude  the effect of unusual
charges or income items or other events,  including acquisitions or dispositions
of  businesses  or  assets,   restructurings,   reductions  in  force,  currency
fluctuations or changes in accounting, which are distortive of financial results
(either on a segment or  consolidated  basis).  In addition,  the Committee will

                                       12
<PAGE>

adjust its calculations to exclude the effect on financial results of changes in
the Code or other tax laws, or the regulations relating thereto.

         9.3 PAYMENT.  In the  discretion of the  Committee,  the amount payable
             -------
when a Performance  Unit Award is earned may be settled in cash, by the grant of
Common Stock or a  combination  of cash and Common  Stock.  The  aggregate  Fair
Market  Value of the Common  Stock  received  by the  Participant  pursuant to a
Performance Unit Award, together with any cash paid to the Participant, shall be
equal to the aggregate Fair Market Value, on the date the Performance  Units are
earned,  of the number of Shares of Common Stock equal to each  Performance Unit
earned. A fractional Share will not be deliverable when a Performance Unit Award
is earned, but a cash payment will be made in lieu thereof.

         9.5  SHAREHOLDER  RIGHTS.  No  Participant  shall have,  as a result of
              -------------------
receiving a Performance Unit Award, any rights as a Shareholder until and to the
extent that the Performance  Units are earned and Common Stock is transferred to
such Participant. If the Agreement so provides, a Participant may receive a cash
payment equal to the dividends  that would have been payable with respect to the
number of Shares of Common Stock  covered by the Award between (a) the date that
the  Performance  Units are  awarded  and (b) the date that a transfer of Common
Stock to the  Participant,  cash  settlement,  or  combination  thereof  is made
pursuant to the Performance  Unit Award. A Participant  may not sell,  transfer,
pledge, exchange,  hypothecate, or otherwise dispose of a Performance Unit Award
or the right to receive Common Stock  thereunder  other than by will or the laws
of descent and  distribution.  After a Performance Unit Award is earned and paid
in Common Stock,  a Participant  will have all the rights of a Shareholder  with
respect to the Common Stock so awarded;  provided that the  restrictions  of any
Shareholders'  agreement or other agreement  shall,  if applicable,  continue to
apply.

ARTICLE 10.  BENEFICIARY DESIGNATION

         To the extent  applicable,  each  Participant  under the Plan may, from
time  to  time,  name  any  beneficiary  or  beneficiaries  (who  may  be  named
contingently or  successively)  to whom any benefit under the Plan is to be paid
in  case  of his or her  death  before  he or she  receives  any or all of  such
benefit.  Each such designation shall revoke all prior  designations by the same
Participant, shall be in a form prescribed by the Company and shall be effective
only when filed by the  Participant,  in writing,  with the  Company  during the
Participant's  lifetime.  In the  absence  of  any  such  designation,  benefits
remaining unpaid at the  Participant's  death shall be paid to the Participant's
estate.  If  required,  the  spouse  of a  married  Participant  domiciled  in a
community  property  jurisdiction shall join in any designation of a beneficiary
or beneficiaries other than the spouse.

ARTICLE 11.  DEFERRALS

         The  Committee  may permit a  Participant  to defer to another  plan or
program such Participant's receipt of Shares or cash that would otherwise be due
to such  Participant  by virtue of any Award.  If any such deferral  election is
required or permitted,  the Committee shall, in its sole  discretion,  establish
rules and procedures for such payment deferrals.

                                       13
<PAGE>

ARTICLE 12.  RIGHTS OF PARTICIPANTS

         12.1  EMPLOYMENT.  Nothing in the Plan shall interfere with or limit in
               ----------
any way the right of the Company or a Parent,  Subsidiary,  or  affiliate of the
Company to terminate any Participant's employment by, or performance of services
for, the Company or any Parent,  Subsidiary,  or affiliate of the Company at any
time,  nor confer  upon any  Participant  any right to continue in the employ or
service of the Company or a Parent, Subsidiary, or affiliate of the Company. For
purposes  of the Plan,  transfer  of  employment  of a  Participant  between the
Company  and any one of its  affiliates  (or  between  affiliates)  shall not be
deemed a termination of employment.

         12.2  PARTICIPATION. No Employee shall have the right to be selected to
               -------------
receive an Award under this Plan, or, having been so selected, to be selected to
receive a future Award.

ARTICLE 13.  CHANGE IN CONTROL

         13.1     DEFINITION.  For purposes of the  Plan, a "Change  in Control"
                  ----------
means any of the following events:

                  (a)      The acquisition  (other than from the Company) by any
                           Person of Beneficial Ownership of fifty percent (50%)
                           or more of the combined voting power of the Company's
                           then   outstanding   voting   securities;   provided,
                           however,  that for  purposes  of this  Section  13.1,
                           Person  shall not  include any person who on the date
                           hereof owns 25% or more of the Company's  outstanding
                           securities,  and a Change  in  Control  shall  not be
                           deemed to occur solely because fifty percent (50%) or
                           more of the combined  voting  power of the  Company's
                           then  outstanding  securities  is  acquired  by (i) a
                           trustee or other fiduciary  holding  securities under
                           one or more employee  benefit plans maintained by the
                           Company  or any  of its  subsidiaries,  or  (ii)  any
                           corporation,   which,   immediately   prior  to  such
                           acquisition,  is owned  directly or indirectly by the
                           Shareholders of the Company in the same proportion as
                           their  ownership of stock in the Company  immediately
                           prior to such acquisition.

                  (b)      Approval  by  Shareholders  of the  Company  of (1) a
                           merger or consolidation  involving the Company if the
                           Shareholders of the Company,  immediately before such
                           merger or  consolidation  do not, as a result of such
                           merger or consolidation, own, directly or indirectly,
                           more than fifty percent (50%) of the combined  voting
                           power of the then  outstanding  voting  securities of
                           the   corporation   resulting  from  such  merger  or
                           consolidation in substantially the same proportion as
                           their  ownership of the combined  voting power of the
                           voting   securities   of  the   Company   outstanding
                           immediately  before such merger or consolidation,  or
                           (2) a  complete  liquidation  or  dissolution  of the
                           Company,  or (3) an  agreement  for the sale or other
                           disposition of all or substantially all of the assets
                           of the Company.

                                       14
<PAGE>

                  (c)      A change in the  composition  of the Board  such that
                           the  individuals  who,  as  of  the  Effective  Date,
                           constitute the Board (such Board shall be hereinafter
                           referred to as the  "Incumbent  Board") cease for any
                           reason  to  constitute  at  least a  majority  of the
                           Board;  provided,   however,  for  purposes  of  this
                           Section 13.1 that any individual who becomes a member
                           of the Board  subsequent to the Effective  Date whose
                           election, or nomination for election by the Company's
                           Shareholders,  was  approved  by a vote of at least a
                           majority of those  individuals who are members of the
                           Board  and who were  also  members  of the  Incumbent
                           Board (or deemed to be such pursuant to this proviso)
                           shall be considered as though such  individual were a
                           member  of  the  Incumbent  Board;   but,   provided,
                           further,  that  any  such  individual  whose  initial
                           assumption  of office occurs as a result of either an
                           actual or threatened  election contest (as such terms
                           are used in Rule 14a-11 of Regulation 14A promulgated
                           under the Exchange  Act,  including  any successor to
                           such   Rule),   or   other   actual   or   threatened
                           solicitation  of proxies or  consents by or on behalf
                           of a Person  other  than the  Board,  shall not be so
                           considered as a member of the Incumbent Board.

ARTICLE 14.  AMENDMENT, MODIFICATION AND TERMINATION

         14.1 AMENDMENT,  MODIFICATION  AND  TERMINATION.  The Board may, at any
              ------------------------------------------
time and from time to time, alter, amend, suspend or terminate the Plan in whole
or in part; provided,  that, unless approved by the holders of a majority of the
total  number of Shares of the  Company  represented  and voted at a meeting  at
which a  quorum  is  present,  no  amendment  shall  be made to the Plan if such
amendment would (a) materially modify the eligibility  requirements  provided in
Article 5; (b) increase  the total  number of Shares which may be granted  under
the Plan (except as provided in Section  4.4);  (c) extend the term of the Plan;
or (d) amend the Plan in any other  manner which the Board,  in its  discretion,
determines  should become effective only if approved by the Shareholders even if
such Shareholder approval is not expressly required by the Plan or by law.

         14.2  AWARDS   PREVIOUSLY   GRANTED.   No  termination,   amendment  or
              ------------------------------
modification  of the Plan shall  adversely  affect in any material way any Award
previously   granted  under  the  Plan,  without  the  written  consent  of  the
Participant holding such Award. The Committee shall, with the written consent of
the  Participant  holding  such  Award,  have the  authority  to  cancel  Awards
outstanding and grant replacement Awards therefor.

         14.3  COMPLIANCE  WITH  CODE  SECTION  162(m).  At all  times  when the
               --------------------------------------
Committee  determines  that  compliance  with Code Section 162(m) is required or
desired,  all Awards granted under this Plan to Named  Executive  Officers shall
comply with the requirements of Code Section 162(m).  In addition,  in the event
that changes are made to Code Section 162(m) to permit greater  flexibility with
respect to any Award or Awards under the Plan,  the  Committee  may,  subject to
this Article 14, make any adjustments it deem appropriate.

         The vesting of any Restricted Stock Award granted pursuant to Section 8
above may, and the payment of any Performance Unit granted pursuant to Section 9
above shall, be made only upon certification by the Committee of the attainment,
over a  performance  period  established  by the  Committee,  of any one or more

                                       15
<PAGE>

quantifiable  performance targets, which have been established by the Committee.
Such targets may be either  absolute or relative and shall be based on earnings,
earnings  per  share,  earnings  before  interest,  taxes and  depreciation  and
amortization,  growth in earnings  per share,  achievement  of annual  operating
profit plans,  operating  profit  margin,  return on equity  performance,  total
shareholder return, stock price, system-wide sales, customer satisfaction, store
income as a percentage of sales,  comparable  store sales growth,  number of new
store operating weeks, achievement of new store sales standards,  EBITDA, return
on assets, general administrative  expenses as a percentage of revenue, or aging
of accounts receivable.  The specific performance targets for each participating
executive  officer shall be  established  in writing by the Committee  within 90
days after the commencement of the fiscal year (or within such other time period
as may be required by Section 162(m) of the Internal  Revenue Code) to which the
performance target relates.  The performance target shall be established in such
a manner  that a third  party  having  knowledge  of the  relevant  facts  could
determine whether the performance goal has been met.

ARTICLE 15.  WITHHOLDING

         15.1 TAX WITHHOLDING. The Company shall have the power and the right to
              ---------------
deduct or withhold,  or require a Participant to remit to the Company, an amount
sufficient  to  satisfy   federal,   state  and  local  taxes   (including   the
Participant's  FICA  obligation)  required by law to be withheld with respect to
any taxable event arising in connection with an Award under this Plan.

         15.2 SHARE WITHHOLDING.  With respect to withholding  required upon the
              -----------------
exercise  of Options,  or upon any other  taxable  event  arising as a result of
Awards  granted  hereunder  which  are  to  be  paid  in  the  form  of  Shares,
Participants may elect, subject to the approval of the Committee, to satisfy the
withholding  requirement,  in whole or in part,  by having the Company  withhold
Shares having a Fair Market Value on the date the tax is to be determined  equal
to the minimum statutory total tax which could be imposed on the transaction. In
addition,  Participants may elect, subject to the approval of the Committee,  to
satisfy tax withholding  requirements by tendering  Common Stock to the Company.
All elections shall be irrevocable,  made in writing, signed by the Participant,
and elections by Insiders shall additionally  comply with all legal requirements
applicable to Share transactions by such Participants.

ARTICLE 16.  INDEMNIFICATION

         Each person who is or shall have been a member of the Committee, or the
Board,  shall be indemnified  and held harmless by the Company  against and from
any loss,  cost,  liability or expense  that may be imposed  upon or  reasonably
incurred by him or her in connection  with or resulting from any claim,  action,
suit or  proceeding  to which he or she may be a party or in which he or she may
be involved  by reason of any action  taken or failure to act under the Plan and
against and from any and all amounts paid by him or her in  settlement  thereof,
with  the  Company's  approval,  or  paid by him or her in  satisfaction  of any
judgment in any such action,  suit or proceeding against him or her, provided he
or she shall give the Company an opportunity,  at its own expense, to handle and
defend the same  before he or she  undertakes  to handle and defend it on his or
her own behalf. The foregoing right of  indemnification  shall be in addition to
any other rights of  indemnification to which such persons may be entitled under
the  Company's  Articles  of  Incorporation  or Bylaws,  as a matter of law,  or

                                       16
<PAGE>

otherwise, or any power that the Company may have to indemnify them or hold them
harmless.

ARTICLE 17.  SUCCESSORS

         All  obligations of the Company under the Plan,  with respect to Awards
granted hereunder, shall be binding on any successor to the Company, whether the
existence  of such  successor  is the result of a direct or  indirect  purchase,
merger,  consolidation or otherwise, of all or substantially all of the business
and/or assets of the Company.

ARTICLE 18.  LEGAL CONSTRUCTION

         18.1  GENDER  AND  NUMBER.  Except  where  otherwise  indicated  by the
               -------------------
context,  any masculine  term used herein shall also include the  feminine;  the
plural shall include the singular and the singular shall include the plural.

         18.2  SEVERABILITY.  If any provision of the Plan shall be held illegaL
               ------------
or invalid for any reason,  the  illegality or  invalidity  shall not affect the
remaining  parts of the Plan, and the Plan shall be construed and enforced as if
the illegal or invalid provision had not been included.

         18.3  REQUIREMENTS  OF LAW.  The granting of Awards and the issuance of
               --------------------
Shares  under  the Plan  shall be  subject  to all  applicable  laws,  rules and
regulations,  and to such  approvals  by any  governmental  agencies or national
securities exchanges as may be required.

         18.4  REGULATORY  APPROVALS  AND  LISTING.  The  Company  shall  not be
               -----------------------------------
required to issue any  certificate  or  certificates  for Shares  under the Plan
prior to (i)  obtaining  any  approval  from any  governmental  agency which the
Company shall, in its discretion,  determine to be necessary or advisable,  (ii)
the admission of such Shares to listing on any national  securities  exchange or
Nasdaq on which the Company's Shares may be listed,  and (iii) the completion of
any  registration  or other  qualification  of such  Shares  under  any state or
federal law or ruling or regulation of any  governmental  body which the Company
shall, in its sole discretion, determine to be necessary or advisable.

         To the extent applicable, if required by the then-current Section 16 of
the  Exchange  Act,  any  "derivative  security"  or "equity  security"  offered
pursuant to the Plan to any Insider may not be sold or transferred  for at least
six (6)  months  after  the date of  grant  of such  Award.  The  terms  "equity
security" and "derivative  security" shall have the meanings ascribed to them in
the then-current Rule 16(a) under the Exchange Act.

         18.5 SECURITIES LAW COMPLIANCE. To the extent applicable,  with respect
              -------------------------
to  Insiders,  transactions  under  this Plan are  intended  to comply  with all
applicable conditions of Rule 16b-3 or its successors under the Exchange Act. To
the extent any  provisions  of the Plan or action by the  Committee  fails to so
comply,  it shall be deemed null and void,  to the extent  permitted  by law and
deemed advisable by the Committee.

                                       17
<PAGE>

         18.6  GOVERNING  LAW. To the extent not  preempted by Federal  law, the
               --------------
Plan, and  all agreements  hereunder,  shall be construed in accordance with and
governed by the laws of the State of North Carolina.

         AS APPROVED BY THE BOARD OF DIRECTORS OF KRISPY KREME  DOUGHNUTS,  INC.
ON JUNE 6, 2000.

         IN  WITNESS  WHEREOF,  this  document  is  executed  this 12th  day  of
July, 2000.

                                           KRISPY KREME DOUGHNUTS, INC.

ATTEST:                                    By:  /s/ Randy S. Casstevens
                                              ----------------------------------
(Corporate Seal)

 /s/ Stephen A. Johnson
-----------------------
Assistant Secretary

                                       18<PAGE>

                           THIRD AMENDED AND RESTATED
                          REGISTRATION RIGHTS AGREEMENT

This Agreement is made and entered into as of September 27, 2000 by and among
Adaytum Software, Inc., a Delaware corporation (the "COMPANY"), Ronald Howie,
John David "Guy" Haddleton, George Kunzle, Valerie Kunzle, Adrian Kunzle,
Robert E. Switz, Neal Bastick, Keri Jackson, as Trustee under the Alexandra
Kunzle Trust Agreement dated April 13, 2000 and Adrian Kunzle, as Trustee
under the Adrian Kunzle 2000 Grantor Retained Annuity Trust Agreement, dated
July 15, 2000 (collectively referred to as the "EXISTING STOCKHOLDERS") and
St. Paul Venture Capital IV, LLC, St. Paul Venture Capital V, LLC, St. Paul
Venture Capital Affiliates Fund I, LLC, H & Q Adaytum Investors, L.P.,
Hambrecht & Quist California, Hambrecht & Quist Employee Venture Fund, L.P.,
Hambrecht & Quist Employee Venture Fund, L.P. II, Hambrecht & Quist Employee
Venture Fund 2000, L.P., 3i Group plc, D & W Ventures I, LLC, Andersen
Consulting LLP, World Technologies Portfolio, a series of World Trust, Equity
Portfolio, a series of IDS Life Series Fund, Inc., AXP Strategy Aggressive
Fund, a series of AXP Strategy Series, Inc. and AXP Variable Portfolio -
Strategy Aggressive Fund, a series of AXP Variable Portfolio Investment
Series, Inc. (collectively referred to as the "INVESTORS").

                                    RECITALS:

A.       Certain of the Investors, the Company and the Existing Stockholders are
         currently parties to a Second Amended and Restated Registration Rights
         Agreement, dated as of June 12, 2000 (the "Existing Agreement"), and
         the parties thereto wish to amend and restate the Existing Agreement.

B.       The Company and World Technologies Portfolio, a series of World Trust,
         Equity Portfolio, a series of IDS Life Series Fund, Inc., AXP Strategy
         Aggressive Fund, a series of AXP Strategy Series, Inc. and AXP Variable
         Portfolio - Strategy Aggressive Fund, a series of AXP Variable
         Portfolio Investment Series, Inc. have entered into a Series E
         Preferred Stock Purchase Agreement, dated as of September 27, 2000 (the
         "PURCHASE AGREEMENT"), pursuant to which such Investors are purchasing
         shares of the Company's Series E Preferred (as defined herein).

C.       As a condition to the obligations of such Investors under the Purchase
         Agreement, the Company has agreed to grant registration rights on the
         terms and conditions set forth herein.

D.       Certain capitalized terms used herein have the meanings specified in
         Section 1 below or in the Purchase Agreement.

                                   AGREEMENT:

<PAGE>

         NOW THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows.

         SECTION 1. DEFINITIONS.

         As used in this Agreement, the following terms, not previously defined,
will have the meanings as set forth below:

         1.1 "AFFILIATE" means any Person which controls, is controlled by or is
under common control with any other Person or Persons. For the purposes of this
definition, "control" has the meaning specified as of the date of this Agreement
for that word in Rule 405 promulgated by the Commission under the Securities
Act. In addition to the foregoing, with respect to Andersen Consulting,
"AFFILIATE" also means any of the partnerships, firms, corporations, entities
and individuals, wherever located, which together are referred to as the
"Andersen Consulting Business Unit" of the Andersen Worldwide Organization
whether by virtue of their member firm interfirm agreements with Andersen
Worldwide Societe Cooperative (or any successor or assignee thereto acting to
coordinate the business of such entities) or by virtue of ownership, direct or
indirect, by such an entity or otherwise being under the control of or under
common control, directly or indirectly, with such an entity and which are
thereby deemed part of the Andersen Consulting Business Unit.

         1.2 "BOARD" means the Board of Directors of the Company.

         1.3 "COMMISSION" means the United States Securities and Exchange
Commission and any successor thereto.

         1.4 "COMMON STOCK" means the Company's common stock, $.01 par value per
share.

         1.5 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated from time to time thereunder.

         1.6 "HOLDER" means (a) a holder, as of the date of this Agreement, of
Series A Preferred, Series B Preferred, Series C Preferred, Series D Preferred,
Series E Preferred or the Warrant, (b) an Existing Stockholder and (c) any
subsequent legal or beneficial owner of Series A Preferred, Series B Preferred,
Series C Preferred, Series D Preferred, Series E Preferred, the Warrant or
Registrable Common who has become a party to this Agreement in accordance with
Section 10.8 below.

         1.7 "PERSON" means an individual, partnership, limited partnership,
corporation, business trust, limited liability company, an association, joint
stock company, a trust, unincorporated organization, joint venture or other
entity of whatever nature.

         1.8 "PREFERRED STOCK" means the Series A Preferred, the Series B
Preferred, the Series C Preferred, the Series D Preferred and the Series E
Preferred.

                                       2
<PAGE>

         1.9 "REGISTRABLE COMMON" means (a) any shares of Common Stock held by
any of the Existing Stockholders as of the date hereof, (b) any shares of Common
Stock which have been issued or are issuable upon the conversion of the
Preferred Stock, (c) any shares of Common Stock which have been issued or are
issuable upon exercise of the Warrant and (d) any shares of Common Stock issued
as a dividend, stock split, reclassification, recapitalization or other
distribution with respect to or in exchange for replacement of any of the
preceding; provided, however, that shares of Common Stock will no longer be
Registrable Common (i) when they have been registered under the Securities Act
and sold by the Holder thereof in accordance with such registration, (ii) when
they have been sold by the Holder pursuant to Rule 144 or (iii) the later of (A)
the two-year anniversary of the date hereof or (B) the date when registration
under the Securities Act would no longer be required for the immediate public
sale of all of such shares of Common Stock as a result of the provisions of Rule
144.

         1.10 "REGISTER," "REGISTERED" AND "REGISTRATION" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and the declaration or ordering of the
effectiveness of such registration statement.

         1.11 "RULE 144" means Rule 144 promulgated by the Commission under the
Securities Act, as such rule may be amended from time to time, or any successor
rule thereto.

         1.12 "SECURITIES ACT" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated from time to time thereunder.

         1.13 "SERIES A PREFERRED" means (a) up to 1,544,000 outstanding shares
of the Company's Series A Convertible Preferred Stock, $.01 par value per share,
and any shares of Series A Preferred issued in payment of a dividend upon any
share of Series A Preferred and (b) any Registrable Common issued as a dividend
or other distribution with respect to, or in replacement of, any Series A
Preferred.

         1.14 "SERIES B PREFERRED" means (a) up to 4,350,000 outstanding shares
of the Company's Series B Convertible Preferred Stock, $.01 par value per share,
and any shares of Series B Preferred issued in payment of a dividend upon any
share of Series B Preferred and (b) any Registrable Common issued as a dividend
or other distribution with respect to, or in replacement of, any Series B
Preferred.

         1.15 "SERIES C PREFERRED" means (a) up to 2,750,100 outstanding shares
of the Company's Series C Convertible Preferred Stock, $.01 par value per share,
and any shares of Series C Preferred issued in payment of a dividend upon any
share of Series C Preferred and (b) any Registrable Common issued as a dividend
or other distribution with respect to, or in replacement of, any Series C
Preferred.

         1.16 "SERIES D PREFERRED" means (a) up to 2,049,624 outstanding shares
of the Company's Series D Preferred Stock, $.01 par value per share, and any
shares of Series D Preferred issued in payment of a dividend upon any share of
Series D Preferred and (b) any Registrable Common issued as a dividend or other
distribution with respect to, or in replacement of, any Series D Preferred.

                                       3
<PAGE>

         1.17 "SERIES E PREFERRED" means (a) up to 1,594,896 outstanding shares
of the Company's Series E Preferred Stock, $.01 par value per share, and any
shares of Series E Preferred issued in payment of a dividend upon any share of
Series E Preferred and (b) any Registrable Common issued as a dividend or other
distribution with respect to, or in replacement of, any Series E Preferred.

         1.18 "WARRANT" means the warrant of the Company, dated as of June 12,
2000 and issued pursuant to the Warrant Issuance Agreement dated June 8, 2000
between the Company and Andersen Consulting LLP, representing the right to
purchase up to 1,365,188 shares of the Company's Common Stock (as such number
may be adjusted pursuant to the terms thereof).

         SECTION 2.        REGISTRATION RIGHTS.

         2.1      REQUIRED REGISTRATION.

                  2.1.1 If, at any time after the earlier of: (i) six (6) months
         after the Company's initial public offering or (ii) December 30, 2001,
         the Company receives a written request for registration under the
         Securities Act from the Investors holding in the aggregate at least
         twenty percent (20%) of the Registrable Common in the case of
         registrations on Form S-3 and at least fifty percent (50%) of the
         Registrable Common in the case of registrations not on Form S-3 (a
         "REGISTRATION REQUEST"):

                                    (a) the Company will promptly give written
                  notice to all other record Holders of Registrable Common that
                  such registration is to be effected ("REGISTRATION NOTICE");
                  and

                                    (b) subject to the limitations and
                  requirements set forth in this Section 2.1, the Company will
                  use its best efforts to prepare and file a registration
                  statement under the Securities Act on the appropriate form
                  covering the Registrable Common which is the subject of the
                  Registration Request and such additional Registrable Common
                  for which it has received written requests to register by such
                  other record Holders within forty-five (45) days after the
                  delivery of the Registration Notice, and will use its best
                  efforts to cause such registration statement to become
                  effective as soon as is practicable after such filing.

                  2.1.2 The Company will be obligated (a) to proceed with filing
         the registration statement only if the anticipated gross offering
         proceeds to the selling Holders is at least (i) $500,000, if the
         Company meets the requirements for using Form S-3, or (ii) $5,000,000,
         if the Company is required to use Form S-1 and the registration covers
         at least twenty percent (20%) of the Registrable Common, and (b) to
         prepare, file and cause to become effective (i) no more than two (2)
         registration statements on Form S-1 pursuant to Registration Requests
         made under this Section 2.1 and (ii) no more than two (2) registration
         statements on Form S-3 per year pursuant to Registration Requests made
         under this Section 2.1.

                                       4
<PAGE>

                  2.1.3 If the Company furnishes to such Holder(s) within thirty
         (30) days of a Registration Notice a certificate signed by the
         President of the Company stating that (i) the Company, pursuant to an
         action approved by the Board of Directors, has already a present plan
         to commence preparation of a Registration Statement and to file the
         same within ninety (90) days or (ii) in the good faith judgment of the
         Board of Directors of the Company, it would be seriously detrimental to
         the Company and its stockholders for such registration statement to be
         filed at such time, then the Company will have the right to defer such
         filing for a period ending not later than one hundred eighty (180) days
         from the delivery date of such Registration Notice. The Company may
         delay a request for registration under this subsection 2.1.3 not more
         than once in any two (2) year period.

                  2.1.4 To the extent covered by such registration statement,
         all shares of Preferred Stock will be converted into Common Stock and
         the Warrant (to the extent exercisable pursuant to the terms thereof)
         will be exercised for Common Stock or such Holder(s) will deliver a
         written commitment to the Company to convert such Preferred Stock into
         shares of Common Stock or exercise the Warrant, as the case may be,
         simultaneously with the effective date of such registration statement,
         but subject to the closing of such offering.

                  2.1.5 If the Holders submitting the Registration Request (the
         "INITIATING HOLDERS") intend to distribute the Registrable Common
         covered by such request by means of an underwriting, the Registration
         Request will so indicate and the Company will include such information
         in the Registration Notice. The Company will select the underwriter,
         with the approval of a majority in interest of the Initiating Holders,
         which approval will not be unreasonably withheld. Notwithstanding any
         other provision of this Section 2, if the managing underwriter advises
         the Initiating Holders in writing that marketing factors require
         reducing the number of shares to be underwritten, then the number of
         shares of Registrable Common included in the underwriting will be
         reduced pro rata among all participating Holders in proportion (as
         nearly as practicable) to the amount of Registrable Common to be
         included in such underwriting owned by each participating Holder;
         provided, however, that such reduction will be made only if all other
         securities to be included already have been entirely excluded from the
         underwriting unless the holders of at least 50% of the Registrable
         Common consent to the inclusion of such other securities; provided
         further, however, that in the event shares of Registrable Common of the
         Existing Stockholders are included in the shares to be underwritten,
         the other participating Holders will subordinate their registration
         rights under this Section 2.1 and, accordingly, reduce the number of
         shares of Registrable Common included in the underwriting to permit the
         Existing Stockholders first to sell up to ten percent (10%) of their
         respective shares of Registrable Common, and after the Existing
         Stockholders are allowed to include up to 10% of their respective
         shares in the underwriting, all Holders (including Existing
         Stockholders) are entitled to a pro rata inclusion of their shares in
         the underwriting.

                  2.1.6 In the event that the Holders of a majority of the
         Registrable Common for which registration has been requested pursuant
         to this Section 2.1 determine for any

                                       5
<PAGE>

         reason not to proceed with a registration at any time before a
         registration statement has been declared effective by the Commission,
         and such registration statement, if theretofore filed with the
         Commission, is withdrawn with respect to the Registrable Common covered
         thereby, and, unless the withdrawal is based on a materially adverse
         change in the condition, business or prospects of the Company from that
         known to the Holders at the time of their Registration Request, the
         participating Holders of such Registrable Common agree to bear their
         own expenses incurred in connection therewith and to reimburse the
         Company for the expenses incurred by it attributable to the filing of
         such registration statement, and, if such participating Holders in fact
         so reimburse the Company, then the Holders of such Registrable Common
         will not be deemed to have exercised their right to require the Company
         to register Registrable Common pursuant to this Section 2.1 (it being
         understood that if such withdrawal is based upon such material adverse
         change, the Holders of such Registrable Common will not be deemed to
         have exercised their right to require the Company to register
         Registrable Common pursuant to this Section 2.1).

                  2.1.7 If, at the time a Registration Request is received by
         the Company, the Company has already determined to proceed with the
         actual preparation and filing of a registration statement under the
         Securities Act in connection with the Company's proposed offer and sale
         for cash of its securities, the Registration Request will be deemed to
         have been given pursuant to Section 2.2 rather than this Section 2.1,
         and the rights and obligations of the Holders and the Company with
         respect to the Registration Request will be governed by Section 2.2
         hereof.

         2.2      INCIDENTAL REGISTRATION.

                  2.2.1 Each time the Company determines to proceed with the
         actual preparation and filing of a registration statement under the
         Securities Act (excluding a registration on Form S-4 or S-8 (or similar
         special purpose forms promulgated after the date hereof)) in connection
         with the proposed offer and sale for cash of any of its securities by
         it or any of its security holders (other than in response to a
         Registration Request, registration on a form that does not permit the
         inclusion of shares by the Company's security holders or the Company's
         initial public offering (if and only if no security holders of the
         Company other than George Kunzle, Valene Kunzle and Ronald Howie are
         permitted to include securities in the initial public offering)), the
         Company will give written notice of its determination to all record
         Holders of Registrable Common (a "PARTICIPATION NOTICE"). Upon the
         written request of a record Holder of any Registrable Common given
         within thirty (30) days after receipt of a Participation Notice, the
         Company will, except as herein provided, cause all such Registrable
         Common for which the record Holders have requested registration to be
         included in such registration statement, provided that all applicable
         shares of Preferred Stock will be converted into Common Stock or the
         Warrant (to the extent exercisable pursuant to the terms thereof) will
         be exercised for Common Stock in such registration statement, or such
         Holder(s) will deliver a written commitment to the Company to convert
         such Preferred Stock into shares of Common Stock or exercise the
         Warrant, as the case may be, simultaneously with the effective date of
         such registration

                                       6
<PAGE>

         statement but subject to the closing of such offering, all to the
         extent requisite to permit the sale or other disposition by the
         prospective seller or sellers of the Registrable Common to be so
         registered. If any registration pursuant to this Section 2.2 is
         underwritten in whole or in part, the Company may require that the
         Registrable Common requested for inclusion pursuant to this Section 2.2
         be included in the underwriting on the same terms and conditions as the
         securities otherwise being sold through the underwriters.

                  2.2.2 Nothing contained in this Agreement will prevent the
         Company from, at any time, abandoning or delaying any such registration
         initiated by it. If the Company determines not to proceed with a
         registration after the registration statement has been filed with the
         Commission and the Company's decision not to proceed is primarily based
         upon the anticipated public offering price of the securities to be sold
         by the Company, the Company will promptly complete the registration for
         the benefit of those participating Holders who agree to proceed with a
         public offering of their securities and who agree to bear all expenses
         incurred by the Company as the result of such registration arising
         after the Company has decided not to proceed.

                  2.2.3 If in the good faith judgment of the managing
         underwriter of a public offering under this Section 2.2, the inclusion
         of all of the Registrable Common of the Holders originally covered by a
         request for registration would interfere with the successful marketing
         of the shares of Common Stock offered by the Company, the number of
         shares of Registrable Common of the Holders otherwise to be included in
         the underwritten public offering may be reduced pro rata (by number of
         shares) among the participating Holders requesting such registration;
         provided, however, that after any such required reduction, the
         Registrable Common to be included in such offering shall constitute at
         least 25% of the total number of shares to be included in such
         offering; provided, further, that, not in limitation of the immediately
         preceding proviso, in the event shares of Registrable Common of the
         Existing Stockholders are included in the shares to be underwritten,
         the other participating Holders will subordinate their registration
         rights under this Section 2.2 vis-a-vis the Existing Stockholders and,
         accordingly, reduce the number of shares of Registrable Common included
         in the underwriting to permit the Existing Stockholders first to sell
         up to ten percent (10%) of their respective shares of Registrable
         Common and after the Existing Stockholders are allowed to include up to
         10% of their respective shares in the underwriting, all Holders
         (including Existing Stockholders) are entitled to a pro rata inclusion
         of their shares in the underwriting.

         2.3 UNDERWRITING. The right of any Holder to include shares of
Registrable Common in any underwritten registration pursuant to this Agreement
will be conditioned upon such Holder's participation in such underwriting and
the inclusion of such Holder's Registrable Common in the underwriting. The
Holders proposing to distribute their securities through such underwriting will
(together with the Company, which will also undertake to do so) enter into an
underwriting agreement with the underwriter or underwriters selected containing
customary

                                       7
<PAGE>

representations, covenants and indemnification provisions, provided that any
representations and warranties from the Holders will be limited to matters of
title to the securities sold.

         SECTION 3. REGISTRATION PROCEDURES. When the Company is required by the
terms of this Agreement to effect the registration of Registrable Common under
the Securities Act, the Company will do the following:

         3.1 FILING. Prepare and file with the Commission a registration
statement with respect to such securities, and use its best efforts to cause
such registration statement to become and remain effective for such period as
may be reasonably necessary to effect the sale of such securities, but not to
exceed the lesser of (i) six (6) months or (ii) until the distribution described
in the registration statement has been completed.

         3.2 PERIOD OF EFFECTIVENESS. Prepare and file with the Commission such
amendments to such registration statement and supplements to the prospectus
contained therein as may be necessary to keep such registration statement
effective for the period described in Section 3.1.

         3.3 COPIES. Furnish to the Holders participating in such registration
and, if applicable, to the underwriters of the securities being registered such
reasonable number of copies of the registration statement, preliminary
prospectus, final prospectus and such other documents as such Holders and, if
applicable, such underwriters may reasonably request in order to facilitate the
public offering of such securities.

         3.4 BLUE SKY. Use its best efforts to register or qualify the
securities covered by such registration statement under such state securities or
blue sky laws of such jurisdictions as such participating Holders may reasonably
request in writing within twenty (20) days following the original filing of such
registration statement, except that the Company will not for any purpose be
required to execute a general consent to service of process or to qualify to do
business as a foreign corporation in any jurisdiction wherein it is not so
qualified.

         3.5 NOTIFICATION. Notify the Holders participating in such
registration, promptly after it receives notice thereof, of the time when such
registration statement has become effective or a supplement to any prospectus
forming a part of such registration statement has been filed.

         3.6 AMENDMENT NOTICE. Notify the Holders participating in such
registration promptly of any request by the Commission for the amending or
supplementing of such registration statement or prospectus or for additional
information.

         3.7 AMENDMENT. Prepare and file with the Commission, promptly upon the
request of any Holders participating in such registration, any amendments or
supplements to such registration statement or prospectus which, in the opinion
of counsel for such Holders (and concurred in by counsel for the Company), is
required under the Securities Act in connection with the distribution of the
Registrable Common by such Holders.

         3.8 UPDATE. Prepare and promptly file with the Commission and promptly
notify the Holders participating in such registration of the filing of such
amendment or supplement to such

                                       8
<PAGE>

registration statement or prospectus as may be necessary to correct any
statements or omissions if, at the time when a prospectus relating to such
securities is required to be delivered under the Securities Act, any event has
occurred as the result of which any such prospectus or any other prospectus as
then in effect would include an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in light of
the circumstances in which they were made, not misleading.

         3.9 STOP ORDERS. Advise the Holders participating in such registration,
promptly after it receives notice or obtains knowledge thereof, of the issuance
of any stop order by the Commission suspending the effectiveness of such
registration statement or the initiation or threatening of any proceeding for
that purpose and promptly use its best efforts to prevent the issuance of any
stop order or to obtain its withdrawal if such stop order should be issued.

         3.10 COMPLIANCE ISSUES. Not file any amendment or supplement to such
registration statement or prospectus to which a majority in interest of the
Holders participating in such registration have reasonably objected on the
grounds that such amendment or supplement does not comply in all material
respects with the requirements of the Securities Act, after having been
furnished with a copy thereof at least two (2) business days prior to the filing
thereof, unless in the opinion of counsel for the Company the filing of such
amendment or supplement is reasonably necessary to protect the Company from any
liabilities under any applicable federal or state law and such filing will not
violate applicable law.

         3.11 OPINION OF COUNSEL, CONFLICT LETTER. At the request of any Holder
participating in such registration, furnish: (i) an opinion, dated as of the
closing date of the offering, of the counsel representing the Company for the
purposes of such registration, addressed to the underwriters, if any, and to any
Holder making such request; and (ii) letters, dated as of the effective date of
the registration statement and as of the closing date of the offering, from the
independent certified public accountants of the Company, addressed to the
underwriters, if any, and to any Holder making such request, in each case in
form and substance as is customary in an underwritten public offering.

         SECTION 4. EXPENSES. With respect to each registration requested
pursuant to Section 2.1 hereof (except as otherwise provided in such Section)
and with respect to each inclusion of Registrable Common in a registration
statement pursuant to Section 2.2 hereof (except as otherwise provided in such
Section), the Company will bear the following fees, costs and expenses: all
registration, filing and NASD fees, printing expenses, fees and disbursements of
counsel and accountants for the Company, fees and disbursements of counsel for
the underwriter or underwriters of such securities (if the Company and/or
selling Holders are required to bear such fees and disbursements), fees and
disbursements of one special counsel for the selling Holders, all internal
Company expenses, all legal fees and disbursements and other expenses of
complying with state securities or blue sky laws of any jurisdictions in which
the securities to be offered are to be registered or qualified, and the premiums
and other costs of policies of insurance against liability (if any) arising out
of such public offering. Fees and disbursements of counsel (other than the one
special counsel referenced above) and accountants for the selling Holders,
underwriting discounts and commissions and transfer taxes relating to the

                                       9

<PAGE>

shares included in the offering by the selling Holders, and any other expenses
incurred by the selling Holders not expressly included above, will be borne by
the selling Holders.

         SECTION 5. INDEMNIFICATION. In the event that any Registrable Common is
included in a registration statement under Section 2.1 or 2.2 hereof:

         5.1 INDEMNIFICATION BY COMPANY. To the fullest extent permitted by law,
the Company will indemnify and hold harmless each Holder which has Registrable
Common included in a registration statement pursuant to the provisions hereof,
its directors and officers, and any underwriter (as defined in the Securities
Act) for such Holder and each Person, if any, who controls such Holder or such
underwriter within the meaning of the Securities Act, from and against, and will
reimburse such Holder and each such underwriter and controlling Person with
respect to, any and all loss, damage and liability (collectively, "LOSSES") to
which such Holder or any such underwriter or controlling Person may become
subject under the Securities Act, state securities laws or otherwise, and the
Company will pay to each such Holder, underwriter or controlling person any
legal or other costs or expenses reasonably incurred by such person in
connection with investigating or defending any such Loss, insofar as such Losses
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in such registration statement, any prospectus
contained therein or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading; provided,
however, that the Company will not be liable in any such case to the extent that
any such Loss arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission so made in conformity with
information furnished by such Holder, such underwriter or such controlling
Person in writing specifically for use in the preparation thereof; provided
further, however, that the indemnity agreement in this Section 5.1 will not
apply to amounts paid in settlement of any such Loss if such settlement is
effected without the consent of the Company, which consent will not be
unreasonably withheld, and that the foregoing indemnity obligation with respect
to any preliminary prospectus or final prospectus (if such final prospectus has
been amended or supplemented and such amendments or supplements have been
furnished to such Holder prior to the written confirmation of the sale involved)
will not inure to the benefit of any Holder on account of any Loss whatsoever
arising from the sale of Registrable Common by such Holder to any person if (A)
a copy of the final prospectus (as amended or supplemented if such amendments or
supplements have been furnished to such Holder prior to the written confirmation
of the sale involved) has not been sent or given by or on behalf of such Holder
to such person, if required by law, with or prior to the written confirmation of
the sale involved, and (B) the untrue statement or alleged untrue statement or
omission or alleged omission of a material fact contained in such preliminary
prospectus or final prospectus from which such Loss arose was corrected in the
final prospectus (as amended or supplemented if such amendments or supplements
thereto have been furnished as aforesaid).

         5.2 INDEMNIFICATION BY HOLDERS. Each Holder which has Registrable
Common included in a registration statement pursuant to the provisions hereof
will severally, but not jointly, indemnify and hold harmless the Company, its
directors and officers, each Person, if any,

                                       10
<PAGE>

who controls the Company within the meaning of the Securities Act, any other
Holder selling securities pursuant to such registration statement, any
controlling Person of any such selling Holder, any underwriter and any
controlling Person of any such underwriter (each, an "INDEMNITEE") from and
against, and will reimburse any Indemnitee with respect to, any and all Losses
to which such Indemnitee may become subject under the Securities Act, state
securities laws or otherwise, and such Holder will pay to each Indemnitee any
legal or other costs or expenses reasonably incurred by such Indemnitee in
connection with investigating or defending any such Loss, insofar as such Losses
are caused by any untrue or alleged untrue statement of any material fact
contained in such registration statement, any prospectus contained therein or
any amendment or supplement thereto, or arise out of or are based upon the
omission or the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was so made in reliance upon and in
conformity with written information furnished by such Holder specifically for
use in the preparation thereof; provided, however, that the indemnity agreement
in this Section 5.2 will not apply to amounts paid in settlement of any such
Loss if such settlement is effected without the consent of the indemnifying
Holder, which consent will not be unreasonably withheld, and that the foregoing
indemnity obligation with respect to any preliminary prospectus or final
prospectus (if such final prospectus has been amended or supplemented and such
amendments or supplements have been furnished to such Indemnitee prior to the
written confirmation of the sale involved) will not inure to the benefit of any
Indemnitee on account of any Loss whatsoever arising from the sale of any
Registrable Common by the Holder to any person if (A) a copy of the final
prospectus (as amended or supplemented if such amendments or supplements have
been furnished to such Indemnitee prior to the written confirmation of the sale
involved) has not been sent or given by or on behalf of such Indemnitee to such
person, if required by law, with or prior to the written confirmation of the
sale involved, and (B) the untrue statement or alleged untrue statement or
omission or alleged omission of a material fact contained in such preliminary
prospectus or final prospectus from which such Loss arose was corrected in the
final prospectus (as amended or supplemented if such amendments or supplements
thereto have been furnished as aforesaid); provided further, however, that the
obligations of each Holder under this Section 5.2 will be limited to an amount
equal to the net proceeds to such Holder from the sale of Registrable Common as
contemplated herein, unless such claim, loss, damage, liability or action
resulted from such Holder's fraudulent misconduct.

         5.3 INDEMNIFICATION PROCEDURES. Promptly after receipt by a party
entitled to indemnification pursuant to this Section 5 (each, an "INDEMNIFIED
PARTY") of notice of the commencement of any action involving the subject matter
of the foregoing indemnity provisions such Indemnified Party will, if a claim is
to be made against the party obligated to provide indemnification pursuant to
this section (each, an "INDEMNIFYING PARTY"), promptly notify the Indemnifying
Party of the commencement thereof; but the omission to provide such notice will
not relieve the Indemnifying Party from any liability hereunder, except to the
extent that the delay in giving, or failing to give, such notice has a material
adverse effect upon the ability of the Indemnifying Party to defend against the
claim. In case such action is brought against an Indemnified Party, the
Indemnifying Party will have the right to participate in and, at the

                                       11
<PAGE>

Indemnifying Party's option, to assume the defense thereof, singly or jointly
with any other Indemnifying Party similarly notified, with counsel reasonably
satisfactory to the Indemnified Party; provided, however, that if the defendants
in any action include both the Indemnified Party and the Indemnifying Party and
the Indemnified Party reasonably concludes that there may be legal defenses
available to any Indemnified Parties that are different from or additional to
those available to the Indemnifying Party, or if there is a conflict of interest
which would prevent counsel for the Indemnifying Party from also representing
the Indemnified Party, the Indemnified Party will have the right to select
counsel to participate in the defense of such action on behalf of such
Indemnified Party at the expense of the Indemnifying Party; provided further,
however, that the Indemnifying Party will be responsible for the expense of only
one such special counsel (and one local counsel if necessary for jurisdictional
purposes) selected jointly by the Indemnified Parties, if there is more than one
Indemnified Party. After notice from an Indemnifying Party to any Indemnified
Party of such Indemnifying Party's election to assume the defense of the action,
the Indemnifying Party will not be liable to such Indemnified Party pursuant to
this Section 5 for any legal or other expense subsequently incurred by such
Indemnified Party in connection with the defense thereof other than reasonable
costs of investigation, unless (i) the Indemnified Party has employed counsel in
accordance with the proviso of the preceding sentence or (ii) the Indemnifying
Party has not employed counsel reasonably satisfactory to the Indemnified Party
to represent the Indemnified Party within a reasonable time after the notice of
the commencement of the action, or (iii) the Indemnifying Party has authorized
the employment of counsel for the Indemnified Party at the expense of the
Indemnifying Party.

         5.4 CONTRIBUTION. If the indemnification provided for in this Section 5
is for any reason held to be unavailable to or otherwise insufficient to hold
harmless an Indemnified Party in respect of any Losses, then as between the
Company and the Selling Holders, each Indemnifying Party shall contribute to the
aggregate amount paid or payable by such Indemnified Party, as incurred, as a
result of any Losses, (i) in such proportion as is appropriate to reflect the
relative fault of the Company, on the one hand, and the Selling Holders, on the
other hand, in connection with any untrue statement or alleged untrue statement
of any material fact contained in such registration statement, any prospectus
contained therein or any amendment or supplement thereto, or arising out of or
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading. As between
the Company and the Selling Holders, on the one hand, and any underwriter(s) and
any controlling Person of any such underwriters, on the other hand, each
Indemnifying Party shall contribute to the aggregate amount paid or payable by
such Indemnifying Party as incurred, as a result of any Losses, (x) in such
proportion as is appropriate to reflect the relative benefits received from the
offering of Registrable Common included in a registration statement pursuant to
the terms of this Agreement or (y) if the allocation provided by clause (x)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (x) above, but
also the relative fault of the Company and the Selling Holders, on the one hand,
and the underwriter(s) and any controlling person of any such underwriter, on
the other hand, in connection with any untrue statement or alleged untrue
statement of any material fact contained in such registration statement, any
prospectus contained therein or any amendment or supplement

                                       12
<PAGE>

thereto, or arising out of or based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances in which they were made,
not misleading. As used in this Section 5.4, the relative benefits received by
an Indemnifying Party in connection with the offering of Registrable Common
pursuant to the terms of this Agreement shall be deemed to be the same
respective proportions as the total net proceeds from the offering of the
Registrable Common pursuant to the terms of this Agreement (before deducting
expenses) received by the Company and the Selling Holders (should any one of
them be the Indemnifying Party), and any compensation paid to the underwriter(s)
(should the underwriter(s) be the Indemnifying Party); provided further, that
the obligations of each party under this Section 5.4 will be limited to an
amount equal to the net proceeds to such party from the sale of Registrable
Common as contemplated herein, unless such claim, loss, damage, liability or
action resulted from such Party's fraudulent misconduct.

         The amount paid or payable by a party as a result of the Losses
referred to above shall be deemed to include, subject to the limitations set
forth in Section 5.3, any legal or other fees or expenses reasonably incurred by
such party in connection with investigating or defending any action or claim.
The provisions set forth in Section 5.3 with respect to notice of commencement
of any action shall apply if a claim for contribution is to be made under this
Section 5.4; PROVIDED, HOWEVER, that no additional notice shall be required with
respect to any action for which notice has been given under Section 5.3 hereof
for purposes of indemnification.

         The Company and the Holders agree that it would not be just and
equitable if contribution pursuant to this Section 5.4 were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in this Section 5.4.

         No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 5.4, each officer and employee of a Holder and each person, if any,
who controls a Holder within the meaning of the Securities Act and the Exchange
Act shall have the same rights to contribution as such Holder, and each director
of the Company, each officer of the Company who signed the registration
statement and each person, if any, who controls the Company within the meaning
of the Securities Act and the Exchange Act shall have the same rights to
contribution as the Company.

         SECTION 6. EXCEPTIONS TO AND TERMINATION OF AGREEMENT. The Company will
not be obligated to effect a registration (i) during the ninety (90) day period
commencing with the closing date of the Company's initial public offering or
(ii) if the Company delivers to the Holders within thirty (30) days of any
Registration Request notice of the Company's intent to file a registration
statement with respect to such initial public offering within ninety (90) days
and so files within such period. This Agreement, and the registration rights set
forth herein, will terminate as to any Holder on the date on which such Holder
no longer owns any shares of Registrable Common subject to this Agreement.

                                       13
<PAGE>

         SECTION 7. COOPERATION. Any Holder whose Registrable Common is to be
included in a Registration Statement either filed pursuant to a demand or as
part of a Company registration agrees to cooperate with all reasonable requests
by the Company necessary to effectuate the purposes of this Agreement, including
by timely providing the Company with all information necessary to prepare and
file a registration statement.

         SECTION 8. "MARKET STAND-OFF" AGREEMENT. Each Holder hereby agrees
that, following the effective date of a registration statement covering the sale
of the Company's securities under the Securities Act, for the period of time and
to the extent reasonably requested by the underwriter(s) and the Company, such
Holder will not sell, offer to sell, contract to sell (including, without
limitation, any short sale), grant any option to purchase or otherwise transfer
or dispose of any securities of the Company held, directly or indirectly, by
such Holder immediately prior to the Company's initial public offering, except
for securities covered by the registration statement and transfers to donees or
Affiliates who agree to be similarly bound; provided, however, that (i) the
executive officers and directors of the Company, as well as any holder of at
least five percent (5%) of the Company's Preferred Stock or Common Stock and all
other holders of registration rights, have agreed to be bound by substantially
the same terms and conditions, (ii) such agreement may be required only in
connection with the Company's initial public offering and any public offering
made within two (2) years thereafter, (iii) the time period requested for such
market stand-off will not exceed one hundred eighty (180) days in connection
with an initial public offering and ninety (90) days for any other public
offering within the aforementioned two (2) year period and (iv) the restriction
will not apply to a registration relating solely to employee, consultant or
advisor benefit plans on Form S-1 or Form S-8 (or similar special purpose form
promulgated after the date hereof) or a registration relating solely to a
transaction pursuant to Rule 145 promulgated under the Securities Act on Form
S-4 (or similar forms promulgated after the date hereof). The Company may impose
stop-transfer instructions during such stand-off period with respect to the
securities of each Holder subject to this restriction if necessary to enforce
such restrictions. The Company shall not request a market stand-off provision
which is more restrictive than what the underwriter(s) deem reasonable and
necessary.

         SECTION 9. LIMITATIONS ON ADDITIONAL REGISTRATION RIGHTS. From and
after the date of this Agreement, unless holders of at least a majority of the
Registrable Common have consented, the Company will not enter into any agreement
granting any security holder or prospective security holder of any securities of
the Company registration rights with respect to such securities or otherwise
register securities of such security holder or prospective security holder,
except that the Company may enter into agreements granting new registration
rights which are subordinate to the registration rights granted to the Holders
herein.

         SECTION 10. MISCELLANEOUS.

         10.1 WAIVERS, AMENDMENTS AND APPROVALS. In each case in which the
approval of the Holders is required by the terms of this Agreement, such
requirement will be satisfied by a vote or the written action of Holders of at
least a majority of the Registrable Common held by all of the Holders, unless a
higher percentage is specifically required by the terms of this Agreement.

                                       14
<PAGE>

Any term or provision of this Agreement requiring performance by or binding upon
the Company or the Holders may be amended, and the observance of any term of
this Agreement may be waived (either generally or in a particular instance and
either retroactively or prospectively), only by a writing signed by the Company
and the Holders of at least a majority of the Registrable Common held by all of
the Holders. Any amendment or waiver effected in accordance with this Section
will be binding upon all of the Holders (including permitted assigns pursuant to
Section 10.8 hereof). The waiver by a party of any breach hereof or default in
payment of any amount due hereunder or default in the performance hereof will
not be deemed to constitute a waiver of any other default or succeeding breach
or default. Written notice of any such waiver, consent or agreement of
amendment, modification or supplement will be given to the record Holders who
did not give written consent thereto.

         10.2 NOTICES. All notices, requests, consents and other communications
required or permitted hereunder will be in writing and will be delivered either
by (i) personal delivery, (ii) registered or certified airmail, postage prepaid
or (iii) facsimile, as follows

                  10.2.1   to a Holder, addressed to such Holder at the
address(es) set forth on SCHEDULE 1

                  10.2.2   to the Company, to:

                           Adaytum Software, Inc.
                           2051 Killebrew Drive, Suite 400
                           Minneapolis, MN  55425

and such notices and other communications will for all purposes of this
Agreement be treated as being effective or having been given (x) on the date of
personal delivery, (y) the fifth day after the date of deposit with the U. S. or
relevant postal service, if delivered by airmail, or (z) upon electronic
confirmation of receipt, if delivered by facsimile. Any party may change its
address for such communications by giving notice thereof to the other parties in
conformity with this Section.

         10.3 DELAYS OR OMISSIONS. Except as expressly provided herein, no delay
or omission to exercise any right, power or remedy accruing to any party under
this Agreement will impair any such right, power or remedy of such party nor
will it be construed to be a waiver of any such breach or default, or an
acquiescence thereto, or of a similar breach or default thereafter occurring;
nor will any waiver of any single breach or default be deemed a waiver of any
other breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of any party hereto of
any breach or default under the Agreement, or any waiver on the part of any
party of any provisions or conditions of this Agreement must be in writing and
will be effective only to the extent specifically set forth in such writing.

         10.4 OTHER REMEDIES. Any and all remedies herein expressly conferred
upon a party will be deemed cumulative with, and not exclusive of, any other
remedy conferred hereby or by

                                       15
<PAGE>

law on such party, and the exercise of any one remedy will not preclude the
exercise of any other.

         10.5 ATTORNEYS' FEES. Should suit be brought to enforce or interpret
any part of this Agreement, the prevailing party will be entitled to recover, as
an element of the costs of suit and not as damages, reasonable attorneys' fees
to be fixed by the court (including, without limitation, costs, expenses and
fees on any appeal). The prevailing party will be the party entitled to recover
its costs of suit, regardless of whether such suit proceeds to final judgment. A
party not entitled to recover its costs will not be entitled to recover
attorneys' fees. No sum for attorneys' fees will be counted in calculating the
amount of a judgment for purposes of determining if a party is entitled to
recover costs or attorneys' fees.

         10.6 ENTIRE AGREEMENT. This Agreement, the schedules hereto, the
documents referenced herein and the exhibits thereto, constitute the entire
understanding and agreement of the parties hereto with respect to the subject
matter hereof and thereof and supersede all prior and contemporaneous agreements
or understandings, inducements or conditions, express or implied, written or
oral, between the parties with respect hereto and thereto, including, without
limitation, the Existing Agreement. The express terms hereof control and
supersede any course of performance or usage of the trade inconsistent with any
of the terms hereof.

         10.7 SEVERABILITY. Should any one or more of the provisions of this
Agreement or of any agreement entered into pursuant to this Agreement be
determined to be illegal or unenforceable, all other provisions of this
Agreement and of each other agreement entered into pursuant to this Agreement
will be given effect separately from the provision or provisions determined to
be illegal or unenforceable and will not be affected thereby.

         10.8 SUCCESSORS AND ASSIGNS. The terms and conditions of this Agreement
will inure to the benefit of and be binding upon and be enforceable by the
respective heirs, successors and assigns of the parties hereto; provided,
however, that the rights of a Holder hereunder may be assigned only (i) to a
partner or retired partner of the assigning Holder, if such assigning Holder is
a partnership, (ii) to any Affiliate of the assigning Holder, (iii) to any
family member of, or any trust for the benefit of a family member of the
assigning Holder or (iv) concurrent with the sale or transfer to such assignee
of at least 80,000 shares of Registrable Common (subject to adjustment for any
stock dividend, stock split, subdivision, combination or other recapitalization
of the Company) then held by the assigning Holder; provided, however, that the
Company is, within a reasonable time after such transfer, furnished with written
notice of the name and address of the assignee and the securities with respect
to which such registration rights are being assigned and such transferee agrees
in writing to be bound by and subject to the terms and conditions of this
Agreement. Any Holder making an assignment in connection with the sale or
transfer of only a portion of its shares will retain its rights under this
Agreement for the shares not sold or transferred. Nothing in this Agreement,
express or implied, is intended to confer upon any party, other than the parties
hereto or their permitted successors and assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement. Notwithstanding any provision contained
elsewhere in this Agreement, upon the transfer of shares by any of the parties
hereto, no claims or causes of action

                                       16
<PAGE>

arising out of or related to this Agreement existing as of the transfer date
will be transferred by such party to any heir, successor, assign or permitted
transferee, provided that the transfer of shares will not be deemed a waiver by
the transferring party of any such claim or cause of action.

         10.9 GOVERNING LAW. This Agreement will be governed by and construed
under the laws of the State of Minnesota, without regard to the conflict of laws
principles thereof.

         10.10 COUNTERPARTS. This Agreement may be executed concurrently in two
or more counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.

                                       17
<PAGE>

                  IN WITNESS WHEREOF, this Agreement is hereby executed as of
the date first written above.

COMPANY:                            ADAYTUM SOFTWARE, INC.

                                    By:  /s/ J. D. G. Haddleton
                                        ---------------------------------------
                                    Its:
                                        ---------------------------------------

EXISTING SHAREHOLDERS:                /s/ Ronald Howie
                                    -------------------------------------------
                                    Ronald Howie

                                      /s/ J. D. G. Haddleton
                                    -------------------------------------------
                                    John David "Guy" Haddleton

                                      /s/  George Kunzle
                                    -------------------------------------------
                                    George Kunzle

                                      /s/ Valerie Kunzle
                                    -------------------------------------------
                                    Valerie Kunzle

                                      /s/ Adrian Kunzle
                                    -------------------------------------------
                                    Adrian Kunzle

                                      /s/ Robert E. Switz
                                    -------------------------------------------
                                    Robert E. Switz

                                      /s/ Neal Bastick
                                    -------------------------------------------
                                    Neal Bastick

                                      /s/ Keri Jackson
                                    -------------------------------------------
                                    Keri Jackson, as Trustee under the Alexandra
                                    Kunzle Trust Agreement dated April 13, 2000

               (SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT)
<PAGE>

                                    /s/ Adrian Kunzle
                                    -------------------------------------------
                                    Adrian Kunzle, as Trustee under the Adrian
                                    Kunzle 2000 Grantor Retained Annuity Trust
                                    Agreement, dated July 15, 2000

               (SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT)

<PAGE>

INVESTORS:                          ST. PAUL VENTURE CAPITAL IV, LLC

                                    By:  /s/ Michael B. Gorman
                                    -------------------------------------------
                                          Its:  General Partner

                                    ST. PAUL VENTURE CAPITAL V, LLC

                                    By:  /s/ Michael B. Gorman
                                    -------------------------------------------
                                          Its:  General Partner

                                    ST. PAUL VENTURE CAPITAL
                                    AFFILIATES FUND I, LLC

                                    By:   St. Paul Venture Capital, Inc.
                                    -------------------------------------------
                                      Its:  Manager

                                    By:  /s/ Michael B. Gorman
                                    -------------------------------------------
                                          Its:   Executive Vice President

                                    H & Q ADAYTUM INVESTORS, L.P.

                                    By:  /s/ Thomas Szymoniak
                                    -------------------------------------------
                                          Its:  Vice President
                                                Hambrecht & Quist Management
                                                Corp.

                                    HAMBRECHT & QUIST CALIFORNIA

                                    By: /s/ Thomas Szymoniak
                                    -------------------------------------------
                                          Its:  Attorney-in-Fact

               (SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT)
<PAGE>

                                    HAMBRECHT & QUIST EMPLOYEE VENTURE
                                      FUND, L.P. II
                                    BY:      H&Q VENTURE MANAGEMENT L.L.C
                                        ITS:  GENERAL PARTNER

                                    By:  /s/ Thomas Szymoniak
                                    -------------------------------------------
                                          Its:  Attorney-in-Fact

                                    HAMBRECHT & QUIST EMPLOYEE VENTURE
                                      FUND, L.P.
                                    BY:      H&Q VENTURE MANAGEMENT L.L.C
                                      ITS:   GENERAL PARTNER

                                    By:  /s/ Thomas Szymoniak
                                    -------------------------------------------
                                          Its:  Attorney-in-Fact

                                    HAMBRECHT & QUIST EMPLOYEE VENTURE
                                      FUND 2000, L.P.

                                    BY:  H&Q VENTURE MANAGEMENT L.L.C.
                                         ITS GENERAL PARTNER

                                    By:  /s/ Thomas Szymoniak
                                    -------------------------------------------
                                          Its:  Attorney-in-Fact

                                    3i GROUP PLC

                                    By:  /s/ Michael Reid
                                    -------------------------------------------
                                          Its:
                                               --------------------------------

               (SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT)
<PAGE>

                                    D & W VENTURES I, LLC

                                    By:  /s/ William H. Hippee, Jr.
                                    -------------------------------------------
                                          Its:  Manager

                                    ANDERSEN CONSULTING LLP

                                    By:  /s/ C. Scott Killips
                                    -------------------------------------------
                                          Its:  Partner

                                    WORLD TECHNOLOGIES PORTFOLIO,
                                    A SERIES OF WORLD TRUST

                                    By:  /s/ Frederick C. Quirsfeld
                                    -------------------------------------------
                                          Its:  Vice President, World Trust

                                    EQUITY PORTFOLIO, A SERIES OF IDS LIFE
                                    SERIES FUND, INC.

                                    By:  /s/ Frederick C. Quirsfeld
                                    -------------------------------------------
                                          Its:  Vice President, IDS Life Series
                                                Fund, Inc.

                                    AXP STRATEGY AGGRESSIVE FUND,
                                    A SERIES OF AXP STRATEGY SERIES, INC.

                                    By:  /s/ Frederick C. Quirsfeld
                                    -------------------------------------------
                                          Its:  Vice President, AXP Strategy
                                                Series, Inc.

                                    AXP VARIABLE PORTFOLIO - STRATEGY
                                    AGGRESSIVE FUND, A SERIES  OF  AXP
                                    PORTFOLIO INVESTMENT SERIES, INC.

                                    By:  /s/ Frederick C. Quirsfeld
                                    -------------------------------------------
                                          Its:  Vice President, AXP Variable
                                                Portfolio Investment
                                                Series, Inc.

               (SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT)
<PAGE>

                                   SCHEDULE 1
                                 LIST OF HOLDERS

St. Paul Venture Capital IV, LLC
c/o St. Paul Venture Capital, Inc.
10400 Viking Drive, Suite 550
Eden Prairie, MN   55344
Attn:    Michael Gorman

St. Paul Venture Capital V, LLC
c/o St. Paul Venture Capital, Inc.
10400 Viking Drive, Suite 550
Eden Prairie, MN   55344
Attn:    Michael Gorman

St. Paul Venture Capital Affiliate Fund I, LLC
c/o St. Paul Venture Capital, Inc.
10400 Viking Drive, Suite 550
Eden Prairie, MN   55344
Attn:    Michael Gorman

H & Q Adaytum Holders, LP
c/o Hambrecht & Quist
1 Bush Street
San Francisco, CA 94104
Attn:    Virginia Hull

Hambrecht & Quist California
c/o Hambrecht & Quist
1 Bush Street
San Francisco, CA 94104
Attn:    Virginia Hull

Hambrecht & Quist Employee Venture Fund, L.P.
c/o Hambrecht & Quist
1 Bush Street
San Francisco, CA 94104
Attn:    Virginia Hull

Hambrecht & Quist Employee Venture Fund, L.P. II
c/o Hambrecht & Quist
1 Bush Street
San Francisco, CA 94104
Attn:    Virginia Hull

<PAGE>

Hambrecht & Quist Employee Venture Fund 2000, L.P.
c/o Hambrecht & Quist
1 Bush Street
San Francisco, CA 94104
Attn:    Virginia Hull

3i Group plc
40 Queen Square
Bristol BS1 4LE
England
Attn:    Michael Robinson

D & W Ventures I, LLC
220 South Sixth Street
Minneapolis, MN 55402
Attn:    William H. Hippee, Jr.

Andersen Consulting LLP
One Market
Spear Street Tower
38th Floor
San Francisco, CA 94105
Attn:    C. Scott Killips

WITH COPIES (WHICH SHALL NOT CONSTITUTE EFFECTIVE NOTICE) TO:

         Andersen Consulting LLP
         1661 Page Mill Road
         Palo Alto, CA 94304
         Attn:  General Counsel

         Andersen Consulting LLP
         100 South Wacker Drive, Suite 600
         Chicago, Illinois 60606
         Attn:  Carlisle Kirkpatrick

<PAGE>

World Technologies Portfolio, a series ofWorld Trust
25671 AXP Financial Center
Minneapolis, Minnesota  55474
Attn:  John Everhart

with a copy to:

         World Technologies Portfolio, a series ofWorld Trust
         200 AXP Financial Center
         Minneapolis, Minnesota  55474
         Attn:  Terese Wilke

Equity Portfolio, a series of IDS Life Series Fund, Inc.
25671 AXP Financial Center
Minneapolis, Minnesota  55474
Attn:  John Everhart

with a copy to:

         Equity Portfolio, a series of IDS Life Series Fund, Inc.
         200 AXP Financial Center
         Minneapolis, Minnesota  55474
         Attn:  Terese Wilke

AXP Strategy Aggressive Fund, a series of AXP Strategy Series, Inc.
25671 AXP Financial Center
Minneapolis, Minnesota  55474
Attn:  John Everhart

with a copy to:

         AXP Strategy Aggressive Fund, a series of AXP Strategy Series, Inc.
         200 AXP Financial Center
         Minneapolis, Minnesota  55474
         Attn:  Terese Wilke

AXP Variable Portfolio - Strategy Aggressive Fund,
 a series of AXP Variable Portfolio Investment Series, Inc.
25671 AXP Financial Center
Minneapolis, Minnesota  55474
Attn:  John Everhart

with a copy to:

         AXP Variable Portfolio - Strategy Aggressive Fund,

<PAGE>

         a series of AXP Variable Portfolio Investment Series, Inc.
         200 AXP Financial Center
         Minneapolis, Minnesota  55474
         Attn:  Terese Wilke

John David "Guy" Haddleton
740 Mississippi River Boulevard
Apartment 22E
St. Paul, MN  55116-1069

George Kunzle
Suffolk Cottage
School Lane
Denmead
Waterlooville
Hants,  P07 6L6
ENGLAND

Valerie Kunzle
c/o George Kunzle
Suffolk Cottage
School Lane
Denmead
Waterlooville
Hants,  P07 6L6
ENGLAND

Adrian Kunzle
2200 Delaware Ave.
Wilmington, DE  19806

Keri Jackson, as Trustee
under the Alexandra Kunzle
Trust Agreement dated
April 13, 2000
2200 Delaware Avenue
Wilmington, DE 19806

Adrian Kunzle, as Trustee
under the Adrian Kunzle 2000
Grantor Retained Annuity Trust
Agreement dated July 15, 2000
2200 Delaware Avenue
Wilmington, Delaware 19806

<PAGE>

Ronald Howie
Holmhill
9 Greenfield Avenue
Alloway
Ayrshire KA7 4NW
ENGLAND

Robert E. Switz
5930 Boulder Ridge Lane
Shorewood, Minnesota

Neal Bastick
Schepenenstraat 23
4902 B2 Oosterhout
The Netherlands

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