Document:

ex10-21

 

EXHIBIT 10.21

AGREEMENT AND GENERAL RELEASE

     THIS AGREEMENT AND GENERAL RELEASE (the “Agreement”) is made and entered
into on February 12, 2002 by and between Gregory S. Hero and American
Management Systems, Incorporated (“AMS”).

     WHEREAS, the parties have mutually agreed that Mr. Hero’s employment with
AMS will terminate; and

     WHEREAS, the parties agree that it is in their mutual interest to resolve
all matters between them on an amicable basis;

     NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements set forth in this Agreement, the sufficiency of which the parties
acknowledge, it is agreed as follows:

     1.     Mr. Hero’s last day as an AMS employee shall be February 28, 2002 (the
“Separation Date”).

     2.     In consideration for Mr. Hero’s promises in this Agreement, and in full
settlement of his claims, Mr. Hero shall be entitled to receive the following
from AMS:

     (a)  payment of any unpaid portion of his most recent base salary through
the Separation Date;

     (b)  a severance payment equal to $1,000,000. Seventy-five percent (75%)
of the severance payment shall be paid in a lump sum on March 16, 2002, or as
soon as practicable thereafter, provided that the revocation period set forth
in Section 10 of this Agreement has expired, and that Mr. Hero has complied
with the requirements of Sections 15 and 16 of this Agreement. The remaining
twenty-five percent (25%) of the severance payment shall be paid with interest
twelve (12) months after Mr. Hero executes this Agreement, provided that Mr.
Hero complies with the covenants set forth in Sections 15 and 16 of this
Agreement throughout the 12-month period. If Mr. Hero does not comply with the
requirements of Sections 15 and 16 of this Agreement at any time during the
12-month period, the remaining twenty-five percent (25%) of the severance
payment shall not be paid to Mr. Hero.

     (c)  an additional severance payment of $331,250, which includes an amount
equal to the $131,250 advance that Mr. Hero received in 2001, which he will be
permitted to retain as an additional severance payment rather than being
required to repay it to AMS, and the remaining

	 
	Accepted:
	 
	AMS: ____ Hero: ____

 

 

$200,000 of which will be paid on the Separation Date provided that the
revocation period in Section 10 of this Agreement has expired;

     (d)  reimbursement for any outstanding reasonable business expenses Mr.
Hero has incurred in performing his duties for AMS through the Separation Date;

     (e)  the right to elect continuation coverage of insurance benefits to the
extent required by law;

     (f)  full vesting of any unexercised stock options. Mr. Hero shall have
the continued right to exercise any stock options that are not forfeited for
the remainder of the terms of the options, or if earlier, for the maximum
period permitted under the AMS stock option plan under which the options were
granted.

     (g)  payment of any accrued but unused annual leave as of the Separation
Date;

     (h)  any other benefits, as required by the terms of the American
Management Systems, Inc. 401(k) Plan and the American Management Systems, Inc.
Simplified Employee Pension Plan.

     (i)  payment of amounts equal to any premiums for health insurance
continuation coverage under any AMS health plans that is elected by Mr. Hero or
his beneficiaries pursuant to Section 4980B of the Internal Revenue Code, at a
time or times mutually agreed to by the parties, but only so long as Mr. Hero
is not eligible for coverage under a health plan of another employer (whether
or not he elects to receive coverage under that plan).

The payments and other benefits referenced in Sections 2(a), (d), and (g)
hereof will be disbursed to Mr. Hero within thirty (30) days following the
receipt by AMS of this Agreement signed by Mr. Hero. All payments under this
Agreement shall be subject to all legally required withholdings and deductions.
Mr. Hero understands that AMS will not provide him any of such benefits if he
revokes his signature as allowed in Section 11 below.

     3.     AMS and Mr. Hero acknowledge that the Employment Agreement between AMS
and Mr. Hero dated January 1, 2000 is terminated, and that all rights and
obligations contained therein are terminated, effective as soon as this
Agreement becomes effective and enforceable.

     4.     The parties agree that AMS’s promises in Sections 2 are in full, final
and complete settlement of all claims Mr. Hero may have against AMS, its
affiliates, past and present officers, directors, employees, agents, successors
and assigns, and exceed those to which Mr. Hero would be entitled absent his
promises in this Agreement.

     5.     Nothing in this Agreement shall be construed as an admission of
liability by AMS, its affiliates, or its past and present officers, directors,
employees or agents, and AMS specifically disclaims liability to or wrongful
treatment of Mr. Hero on the part of itself, its affiliates, and its past and
present officers, directors, employees and agents.

     6.     Mr. Hero represents that he has not filed any complaints or charges
against AMS

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with the U.S. Department of Labor, the Equal Employment Opportunity
Commission, or with any other federal, state or local agency or court, and
covenants that he will not seek to recover on any claim released in this
Agreement. To the extent permitted by law, Mr. Hero promises that he will not
voluntarily assist any third party in pursuing any legal claim against AMS, and
he will immediately notify AMS if he is asked to provide such assistance.

     7.     Mr. Hero agrees to cooperate fully with AMS and its counsel in the
defense or prosecution of any claims or actions (including litigation,
investigation or governmental proceeding) that relate to events or occurrences
that transpired while he was employed by AMS.
Such cooperation shall include appearing from time to time at the offices
of AMS or AMS’s counsel for conferences and interviews, making himself
available to testify on behalf of AMS, and in general providing the officers of
AMS and its counsel with the full benefit of his knowledge with respect to any
such matter. AMS agrees to make reasonable efforts to schedule any cooperation
at such times as will not unreasonably interfere with Mr. Hero’s employment or
other business activities, and to reimburse Mr. Hero for his reasonable
out-of-pocket costs and expenses that are required to provide such cooperation.

     8.     Mr. Hero covenants not to sue, and fully and forever releases and
discharges AMS, its parents, subsidiaries, affiliates, divisions, successors
and assigns, together with its past and present shareholders, directors,
officers, employees, and agents (collectively, the “Releasees”) from any and
all claims, debts, liens, liabilities, demands, obligations, acts, agreements,
causes of action, suits, costs and expenses (including attorneys’ fees),
damages (whether pecuniary, actual, compensatory, punitive or exemplary) or
liabilities of any nature or kind whatsoever in tort, contract, or by federal,
state or local statute, regulation or order, law or equity or otherwise,
whether now known or unknown; provided, however, that nothing in this Agreement
shall either waive any rights or claims of Mr. Hero that arise after Mr. Hero
signs this Agreement or impair or preclude Mr. Hero’s right to take action to
enforce the terms of this Agreement. This release includes but is not limited
to claims arising under federal, state or local laws prohibiting employment
discrimination, including but not limited to Title VII of the Civil Rights Act
of 1964, as amended, the Age Discrimination in Employment Act, as amended, or
the Americans with Disabilities Act; claims under the Worker Adjustment and
Retraining Notification Act; claims for attorneys’ fees or costs; workers’
compensation claims; any and all claims regarding any claimed employment
contract, whether written, oral, implied or otherwise; claims relating to AMS’s
right to terminate its employees; claims for salary, payments in lieu of
extended leave, incentive payments or any other remuneration, or any other
claims under federal, state, or local statute, regulation or ordinance, common
law, or any other law whatsoever. AMS acknowledges that, as of the Separation
Date, it is unaware of any acts or omissions by Mr. Hero that would cause AMS
to file a claim against him. AMS acknowledges that Mr. Hero’s right under
AMS’s articles of incorporation and by-laws to indemnification for liabilities
and expenses arising out of his service as an officer or employee of AMS
continues after his termination of employment.

     9.     Mr. Hero agrees that he will not make any negative or disparaging
statements about AMS, provided, however, that Mr. Hero may testify truthfully
in a legal proceeding pursuant to compulsory legal process. Mr. Hero shall
direct all reference inquiries to William M. Purdy or Alfred T. Mockett, who
shall provide a reference substantially in the form attached

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hereto as Attachment A.

     10.     Mr. Hero acknowledges that he has been given at least twenty-one (21)
days to consider this Agreement and that he has seven (7) days from the date he
executes this Agreement in which to revoke it and that this Agreement will not
be effective or enforceable nor the payments and other benefits set forth in
Sections 2 provided until after the seven (7)-day revocation period ends. Mr.
Hero’s signature below, on a date before the expiration of the twenty-one
(21)-day review period, shows that he has waived the right to wait twenty-one
(21) days before accepting and signing this Release.

     11.     Revocation can be made by delivery of a written notice of revocation
to Allyson Malone, Employee Relations Manager, American Management Systems,
Inc., 4035 Legato Road, Fairfax, VA 22030, by midnight on or before the
seventh calendar day after Mr. Hero signs the Agreement.

     12.     Mr. Hero acknowledges that he has consulted with an attorney of his
choice with regard to this Agreement. Mr. Hero hereby acknowledges that he
understands the significance of this Agreement, and represents that the terms
of this Agreement are fully understood and voluntarily accepted by him.

     13.     AMS and Mr. Hero agree that, until the Agreement is publicly disclosed
as part of AMS’s filings with the U.S. Securities and Exchange Commission on or
before April 1, 2002, or in AMS’s proxy statement to its shareholders, they
will treat the terms and existence of this Agreement as confidential and will
not discuss the Agreement or the negotiations and communications leading to
this Agreement, with anyone other than: (i) their counsel or tax advisor, as
necessary to seek their professional advice, (ii) as determined by AMS in good
faith to be required by law or by the rules and regulations of Nasdaq or any
stock exchange on which AMS’s stock may be traded, or (iii) in AMS’s case,
members of AMS’s Board of Directors and those persons necessary to implement
the provisions contained in this Agreement.

     14.     This Agreement shall be binding on AMS and Mr. Hero and upon their
respective heirs, administrators, representatives, executors, successors and
assigns, and shall run to the benefit of the Releasees and each of them and to
their respective heirs, administrators, representatives, executors, successors
and assigns.

     15.     Mr. Hero acknowledges that all confidential information regarding the
business of AMS and its subsidiaries and affiliates is the exclusive property
of AMS. Upon or before execution of this Agreement, Mr. Hero shall return to
AMS all copies of any material involving such confidential information to AMS,
and Mr. Hero agrees that he will not, directly or indirectly, divulge or use
such information, whether or not such information is in written or other
tangible form. Mr. Hero also shall return to AMS, upon or before execution of
this Agreement any other items in his possession, custody or control that are
the property of AMS. Mr. Hero understands that he remains bound by the terms
of the American Management Systems, Incorporated Intellectual Property Rights
Agreement, the AMS Employee Confidentiality Agreement, the AMS Guide for
Ethical Business Conduct after the Separation Date. This paragraph is intended
to cover confidential information of AMS that relates to the business of

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AMS that has not otherwise been made public and shall not apply to
employee responses that may be required by proper governmental or judicial
inquiry. No breach of this Section shall be deemed to have occurred unless AMS
provides written notice to Mr. Hero of the breach within 90 days after AMS
becomes aware of it.

     16.     For a period of 12 months from the Separation Date, Mr. Hero shall not
directly (a) employ or solicit for employment, or assist in any way in
solicitation for employment, any person employed by AMS or any of its
affiliates then or at any time within the preceding 12 months; or (b) solicit,
or assist in any way in the solicitation of business from any of AMS’s or its
affiliates’ clients or prospective clients, either for the Mr. Hero’s own
benefit or the benefit of anyone other than AMS, unless the business being
solicited is not competitive with the services or products provided by AMS or
its affiliates. Clause (b) of this Section 16(b) shall not apply unless the
business being solicited is in a line of business in which AMS was already
engaged or already had under active consideration while Mr. Hero was employed
by AMS or is a natural extension of such a line business with a client that was
an existing client of AMS during that time.

     17.     Any dispute or controversy arising under or in connection with this
Agreement shall, if AMS or Mr. Hero so elects, be settled by arbitration, in
accordance with the Commercial Arbitration Rules procedures of the American
Arbitration Association. Arbitration shall occur before a single arbitrator,
provided, however, that if the parties cannot agree on the selection of such
arbitrator within 30 days after the matter is referred to arbitration, each
party shall select one arbitrator and those arbitrators shall jointly designate
a third arbitrator to comprise a panel of three arbitrators. The decision of
the arbitrator shall be rendered in writing, shall be final, and may be entered
as a judgment in any court in the Commonwealth of Virginia. AMS and Mr. Hero
each irrevocably consent to the jurisdiction of the federal and state courts
located in Virginia for this purpose. The arbitrator shall be authorized to
allocate the costs of arbitration between the parties. Notwithstanding the
foregoing, AMS, in its sole discretion, may bring an action in any court of
competent jurisdiction to seek injunctive relief in order to avoid irreparable
harm and such other relief as AMS shall elect to enforce Mr. Hero’s covenants
in Sections 15 and 16 hereof.

     18.     AMS shall pay all of Mr. Hero’s legal fees and expenses that he incurs
directly in connection with the negotiation of this Agreement, up to a maximum
limit of $15,000.

     19.     This Agreement sets forth the entire agreement between Mr. Hero and
AMS, and fully supersedes any and all prior agreements or understandings
between them regarding its subject matter; provided, however, that nothing in
this Agreement is intended to or shall be construed to modify, impair or
terminate any obligation of Mr. Hero pursuant to any agreement with regard to
the protection of AMS’s confidential information, intellectual property rights,
or client or employee relationships, that by its terms continues after Mr.
Hero’s separation from AMS’s employment. This Agreement may only be modified
by written agreement signed by both parties. Mr. Hero acknowledges that he has
not relied upon any statement or representation, written or oral, by any AMS
Releasee that is not set forth or referenced in this Agreement.

     20.     This Agreement shall be governed in all respects by Virginia law,
without regard

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to its conflict of laws principles.

PLEASE READ CAREFULLY. THIS

AGREEMENT AND GENERAL RELEASE INCLUDES A

RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.

	 	 	 	 	 
	Dated:	 	
February 12, 2002

	 	/s/Gregory S. Hero

Gregory S. Hero
	 
	 	 	 	 	AMERICAN MANAGEMENT SYSTEMS,
INCORPORATED
	 
	Dated:	 	
February 12, 2002

	 	/s/William M. Purdy

William M. Purdy

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ATTACHMENT A

To Whom It May Concern:

     I am writing in reference to Gregory S. Hero, whose employment with AMS
terminated on February 28, 2002.

     Greg Hero spent over nine years with AMS, working in Europe as well as the
U.S., both in the financial services industry as well as the telecom
industries. He most recently was EVP and General Manager of our worldwide
Telco practice. In addition, he had been active in many firm-wide initiatives,
such as the Ethics Committee as well as the Diversity Initiative. Over the
years, he was an invaluable member of our management team.

     Greg’s decision to leave was a personal one, and we can not comment as to
the reasons. I do know that he was planning to spend some quality time with
his family and that he was planning to work on a Habitat for Humanity house in
Charleston, South Carolina.

     We wish Greg the best in all of his future endeavors.

	 
	Sincerely,ex10-22

 

EXHIBIT 10.22

AMERICAN MANAGEMENT SYSTEMS, INCORPORATED

STOCK OPTION PLAN FOR EMPLOYEES

(As Amended Effective as of February 22, 2002)

Section 1. Purpose

     The purpose of this Stock Option Plan for Employees of American Management
Systems (the “Company”) is to reward valued employees with grants of stock
options, thereby giving them a stake in the Company’s success.

Section 2. Definitions

     (a)  “Affiliate” means (i) any entity that directly or indirectly, is
controlled by, or controls or is under common control with, the Company, and
(ii) any entity in which the Company has a significant equity interest, in
either case as determined by the Board.

     (b)  “Board” means the Board of Directors of the Company.

     (c)  “Code” means the Internal Revenue Code of 1986, as amended.

     (d)  “Committee” means the Stock Option/Award Committee, a committee
consisting of at least two members of the Board.

     (e)  “Common Stock” means the $0.01 par value common stock of the Company.

     (f)  “Company” means American Management Systems, Incorporated.

     (g)  “Employee” means any individual performing services as an employee for
the Company or any current Affiliate (including an entity that becomes an
Affiliate after the adoption of the Plan).

     (h)  “Exercise Price” means the price that is required to be paid to
exercise an Option and receive the shares that are subject to the Option.

     (i)  “Fair Market Value” means the closing bid price of the Common Stock
quoted over the National Association of Securities Dealers Automated Quotation
System (“NASDAQ”) in the national market on the date of grant of the Option or
if there is no trade on such date, the closing bid price on the last preceding
date upon which such Common Stock was traded. Notwithstanding the foregoing,
in no event shall Fair Market Value be less than the par value per share of the
Common Stock.

     (j)  “Option” means a right granted under the Plan to an Employee that
entitles the Employee to purchase from the Company a stated number of shares of
Common Stock in exchange for the payment of the Exercise Price. Options
granted under the Plan do not, and are not intended to, qualify as “incentive
stock options” under Section 422 of the Code.

     (k)  “Option Agreement” means an agreement evidencing an Option between the
Company and the Optionee.

     (l)  “Optionee” means an Employee to whom an Option has been granted that
has not been fully exercised.

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     (m)  “Plan” means this Stock Option Plan for Employees.

Section 3. Administration

     The Plan shall be implemented and administered by the Board. The Board
shall have the authority and discretion to adopt and revise such rules and
regulations as it shall deem necessary for the administration of the Plan, and
to determine, consistent with the provisions of the Plan, the Employees to be
granted Options, the times at which Options shall be granted, the Exercise
Price of the shares subject to each Option, the number of shares subject to
each Option, the vesting schedule of Options or whether the Options shall be
immediately vested, the times when Options shall terminate, whether the
Exercise Price of Options shall be paid in cash or stock, and all other terms
of Options. The Board also shall have the authority to amend or cancel
previously-granted Options; provided, however, that no such amendment or
cancellation shall be effective without the consent of the Optionee if it would
adversely affect the Optionee, or to the extent permitted by Section 7(f); and
provided, further, that no amendment will be made that decreases the Exercise
Price of a previously-granted Option.

     The Board may delegate its authority under this Section 3 to the Committee
with respect to grants to new Employees and grants of Options with respect to
less than 25,000 shares of Common Stock, in which case all references in the
Plan to the Board in connection with the administration of the Plan shall be
read as references to the Committee. Acts of a majority of the members of the
Committee at a meeting at which a quorum is present, or acts approved in
writing by a majority of the members of the Committee, shall be the valid acts
of the Committee. The Committee’s actions, including any interpretation or
construction of any provisions of the Plan or any Option granted hereunder,
shall be final, conclusive and binding unless otherwise determined by the
Committee at its next regularly scheduled meeting.

Section 4. Eligibility; Participation; Special Limitations

     All Employees, other than “officers” of the Company as defined for
purposes of Sections 16(a) and 16(b) of the Securities Exchange Act of 1934 and
“covered employees” within the meaning of Section 162(m) of the Code, of the
Company shall be eligible to be granted Options. Nothing contained in the
Plan, or in any Option, shall confer upon any Employee the right to continued
employment, or shall interfere in any way with the right of the Company or a
Affiliate to terminate the employment of such Employee at any time.

Section 5. Basis of Grant

     Options shall be granted to such Employees as the Board may determine from time to time.

Section 6. Number of Shares and Options

     Shares subject to Options may be authorized and unissued shares or shares
previously acquired or to be acquired by the Company and held in treasury. The
number of shares that may be delivered pursuant to Options granted under the
Plan is 1,000,000 shares, subject to adjustment in accordance with Section
7(f). To the extent that any shares of Common Stock that are subject to an
Option are (i) not delivered because the Option is forfeited, cancelled or
surrendered without consideration, or settled in cash, or (ii) withheld
pursuant to Section 7(c) or 9 to pay the Exercise Price or satisfy the
Employee’s tax obligations, such shares shall not be deemed to have been
delivered for this purpose. The maximum number of shares which may be subject
to Options granted to any single Employee during any two (2) consecutive
calendar years shall be 500,000 shares, subject to adjustment in accordance
with Section 7(f).

Section 7. Terms and Conditions of Options

     (a)  Option Agreements. Each Option shall be evidenced by an Option
Agreement. Option Agreements (which need not be identical) shall designate the
number of shares and the Exercise Price of the Options to which they pertain,
shall set forth the expiration date of the Option, shall set forth the vesting
schedule of the Options or state that the Options are vested immediately, and
shall include all other terms and conditions of the Options that are not
included in the Plan. Option Agreements shall be in writing, dated as of the
date the Option is

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granted, and shall be executed on behalf of the Company by such officers
as the Board shall authorize. Option Agreements generally shall be in such
form and contain such additional provisions as the Board shall prescribe, but
in no event shall they contain provisions inconsistent with the provisions of
the Plan.

     (b)  Vesting and Exercise of Options. Options shall vest either
immediately or periodically pursuant to a schedule selected by the Board at the
same time the Option is granted, provided that the maximum vesting period shall
be ten (10) years. Optionees may exercise at any time or from time to time all
of any portion of an Option, but only to the extent that the Option is vested
at that time.

     (c)  Exercise Price. The price at which all Options may be exercised shall
be no less than the Fair Market Value of the Common Stock on the date of grant.
Payment of the Exercise Price may be (i) in cash, (ii) by delivery to the
Company of (x) irrevocable instructions to deliver to a broker the stock
certificates representing the shares for which the Option is being exercised,
and (y) irrevocable instructions to the broker to sell such shares and promptly
deliver to the Company the portion of the proceeds equal to the Exercise Price,
or in the sole discretion of the Board, (iii) by delivery to the Company
(either directly or by attestation) of shares of Common Stock already held by
the Participant, or, (iv) partly in cash and partly by exchange of such Common
Stock, or (v) in any other form of valid consideration permitted by the
Committee in its discretion, provided that for purposes of clauses (iii) and
(iv) the value of such Common Stock shall be the Fair Market Value on the date
of exercise, and further provided that such Common Stock shall have been held
by the Optionee for a period of at least six (6) months prior to the date of
exercise. The Board may permit deferred payment of all or any part of the
Exercise Price of the shares purchased pursuant to the Plan, provided the par
value of the shares must be paid in cash.

     (d)  Suspension or Termination of Options. All Options shall expire, and
all rights granted under Option Agreements shall become null and void, on the
date specified in the Option Agreement, which date shall be no later than ten
(10) years after the Options are granted.

     (e)  Non-Transferability of Options. Options are not transferable by the
Optionee otherwise than by will or the laws of descent and distribution, or
pursuant to a domestic relations order. Except as permitted by the preceding
sentence, no Option nor any right granted under an Option Agreement shall be
transferred, assigned, pledged, hypothecated or disposed of in any other way
(whether by operation of law or otherwise), or be subject to execution,
attachment or similar process, and each Option shall be exercisable during the
Optionee’s lifetime only by the Optionee. Upon any attempt to transfer,
assign, pledge, hypothecate or otherwise dispose of such Options or of such
other rights contrary to the provisions hereof, or to subject such Options or
such other rights to execution, attachment or similar process, such Options and
such other rights shall immediately terminate and become null and void.

     (f)  Adjustment Provisions. Except as otherwise provided in this
subsection (f), in the event of changes in the Common Stock by reason of any
stock split, combination of shares, stock dividend, reclassification, merger,
consolidation, reorganization, recapitalization or similar adjustment, or by
reason of the dissolution or liquidation of the Company, appropriate
adjustments may be made in (i) the aggregate number of or class of shares
available under the Plan, and (ii) the number, class and Exercise Price of
shares remaining subject to all outstanding Options. Whether any adjustment or
modification is to be made as a result of the occurrence of any of the events
specified in this section, and the extent thereof, shall be determined by the
Board, whose determination shall be binding and conclusive. Existence of the
Plan or of Option Agreements pursuant to the Plan shall in no way impair the
right of the Company or its stockholders to make or effect any adjustments,
recapitalizations, reorganizations or other changes in the Company’s capital
structure or its business, or any merger, consolidation, dissolution or
liquidation of the Company, or any issue of bonds, debentures, preferred or
prior preference stock ahead of or affecting the Common Stock of the Company,
or any grant of Options on its stock not pursuant to the Plan.

Section 8. Rights as a Shareholder

     Optionees shall not have any of the rights and privileges of shareholders
of the Company in respect of any of the shares subject to any Option unless and
until a certificate, if any, representing such shares shall have been issued
and delivered.

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Section 9. Withholding

     To the extent required by applicable federal, state, local or foreign law,
an Optionee shall make arrangements satisfactory to the Company for the
satisfaction of any withholding tax obligations that arise by reason of an
Option exercise. The Company shall not be required to issue shares until such
obligations are satisfied. The Board may permit these obligations to be
satisfied by having the Company withhold a portion of the shares of Common
Stock that otherwise would be issued upon exercise of the Option, or to the
extent permitted, by permitting the Optionee to tender shares owned by the
Optionee.

Section 10. Successors

     The provisions of the Plan shall be binding upon, and inure to the benefit
of, all successors of any Optionee, including, without limitation, his estate
and the executors, administrators or trustees thereof, his heirs and legatees,
and any receiver, trustee in bankruptcy or representative of creditors of such
Optionee.

Section 11. Termination and Amendment of the Plan

     The Plan shall remain in effect until terminated by the Board. The Board
shall have complete power and authority at any time to terminate the Plan or to
make such modification or amendment thereof as it deems advisable and may from
time to time suspend, discontinue or abandon the Plan, provided that no such
action by the Board shall adversely affect any right or obligation with respect
to any grant theretofore made.

Section 12. Indemnification

     No member of the Board shall be liable for any action or determination
made in good faith with respect to the Plan or any Option granted under it. In
addition to such other rights of indemnification as they may have as directors
or otherwise, the members of the Board shall be indemnified by the Company
against the reasonable expenses, including attorneys’ fees actually and
necessarily incurred in connection with the defense of any action, suit or
proceeding, or in connection with any appeal therein, to which they or any of
them may be a party by reason of any action taken or failure to act under or in
connection with the Plan, Option Agreements or any Option, and against all
amounts paid by them in settlement thereof (provided such settlement is
approved by legal counsel selected by the Company) or paid by them in
satisfaction of a judgment in any such action, suit or proceeding, except in
relation to matters as to which it shall be adjudged in such action, suit or
proceeding that such member is liable for negligence or misconduct in the
performance of his duties; provided that within sixty (60) days after
institution of any such action, suit or proceeding a member shall in writing
offer the Company the opportunity, at its own expense, to defend the same.

Section 13. Merger of the Company

     Unless the surviving company assumes the Options or substitutes other
options having substantially equivalent value, if the Company shall (i) merge
or consolidate with another corporation under circumstances where the Company
is not the surviving corporation, (ii) sell all, or substantially all of its
assets, or (iii) liquidate or dissolve, then each Option shall terminate on the
date and immediately prior to the time such merger, consolidation, sale,
liquidation or dissolution becomes effective or is consummated, provided that
the Optionee shall have the right immediately prior to the effectiveness or
consummation of such merger, consolidation, sale, liquidation or dissolution,
to exercise any or all of the vested portion of the Option, unless such Option
has otherwise expired or been terminated pursuant to its terms or the terms
hereof. In the event of such merger, consolidation, sale, liquidation or
dissolution, any portion of an outstanding Option which would have vested
within one year after the date on which such merger, consolidation, sale,
liquidation or dissolution becomes effective or is consummated shall vest
immediately prior to the effectiveness or consummation of such merger,
consolidation, sale, liquidation or dissolution and shall be part of the vested
portion of the Option which the Optionee may exercise.

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Section 14. Approval of Plan; Effective Date

     The plan was adopted by the Board on July 27, 2001, and was effective as
of January 1, 2001. The plan was amended by the Board on February 22, 2002.

5

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