Document:

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                                                                   EXHIBIT 10.42

[AUTOWEB.COM LOGO]

December 16, 1998

PRIVATE & CONFIDENTIAL

Mr. Dean DeBiase
1565 Kathryn Lane
Lake Forest, IL 60045

Dear Dean:

Autoweb.com, Inc. (the "Company") is pleased to offer you a position as
President and Chief Executive Officer of the Company and a position on its
Board of Directors, on the terms set forth in this letter agreement, effective
upon your acceptance by execution of a counterpart copy of this letter where
indicated below.

     1.   Reporting Duties and Responsibilities; Employment at Will; Board
Matters. In this position you will report to the Board of Directors of the
Company. This offer is for a full-time position, located at the offices of the
Company, except as reasonable travel to other locations may be necessary to
fulfill your responsibilities. Your employment with the Company is on an "at
will" basis, and either you or the Company may terminate your employment with
the Company at any time, for any or no reason. Upon your commencement of
employment as the Company's Chief Executive Officer, the Board of Directors will
elect you to fill a position on the Company's Board of Directors, and while you
remain the Chief Executive Officer of the Company, the Board of Directors will
continue to nominate you for a position on the Board of Directors of the
Company. Your full-time employment (at full pay and benefits) will begin on
January 1, 1999, although you will commence employment on a part-time basis
(without pay or benefits) upon execution of this letter agreement.

     2.   Salary and Vesting Continuation.

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          (a)  If the Company terminates your employment for any reason other
than Cause (as defined below), then the Company will (i) pay you a lump sum
payment in an amount equal to twelve (12) months of your then current salary,
and, if your termination occurs prior to December 31, 1999, you shall also be
entitled to the payment of the guaranteed bonus described below to the extent
it has not already been paid to you; (ii) allow you to continue to participate
in all pension, profit-sharing and any other retirement plans of the Company
that you are participating in at the time of your termination for the twelve
(12) month period following your termination, solely for the purpose of
permitting you to continue to vest in such plans; and (iii) allow you to
continue to participate in the Company's medical and other insurance plans for
the twelve (12) month period following your termination, at the Company's
expense. In exchange for the foregoing compensation, you agree for a period
equal to the lesser of one (1) year following your termination or the number of
months you were employed by the Company as of your termination not to (i) engage
or participate in any effort or act to solicit the Company's customers,
suppliers, employees or contractors to cease doing business or their employment
or association with the Company or (ii) engage as an individual proprietor,
partner, stockholder, officer, employee, director, joint venturer, lender or in
any capacity whatsoever (otherwise than as a holder of not more than one percent
(1%) of the total outstanding stock of a publicly held company) in any business
enterprise which offers products or services that directly compete with products
or services offered by the Company at the time of your termination or
resignation. "Business enterprise" for the purposes of the preceding sentence
shall refer only to the division, subsidiary or business unit that you are
engaged with, and you shall not be deemed to be in direct competition if the
business enterprise you are engaged with is not in direct competition with the
Company even though some other business enterprise that is affiliated with the
business enterprise you are engaged with may be in such competition. The Company
further agrees to pay any "parachute payment" excise tax which may be imposed on
you as a result of any payments under this paragraph.

          (b)  In the event of a Change of Control, seventy-five percent (75%)
of the greater of (i) the stock options to acquire Company securities granted
to you pursuant to this letter and (ii) the securities of the Company
(including stock options) that you hold as of the date of the Change of Control
that are unvested, will immediately vest on the date of the Change of Control.

          (c)  If during the first twelve (12) months following a Change of
Control, the Company (or the surviving company if the Company is not the
surviving company as a result of a merger or consolidation which is a Change of
Control) terminates your employment for any reason other than Cause or you
resign your employment with the Company as a consequence of a Constructive
Termination (as defined below), then any securities of the Company held by you
that are unvested as of the date of termination of your employment will
immediately vest.

          (d)  For purposes of this agreement, the following terms shall have
the following meanings:

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Mr. Dean DeBiase
December 16, 1998
Page 3

               (i) "Cause" shall mean (i) material and willful violation of any
federal or state law; (ii) conviction of any act of fraud with respect to the
Company; or (iii) conviction of a felony or a crime causing material harm to
the standing and reputation of the Company.

               (ii) "Change of Control" shall mean (i) the sale, lease,
conveyance or other disposition of all or substantially all of the Company's
assets as an entirety or substantially as an entirety to any person, entity or
group of persons acting in concert; (ii) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended)
becoming the "beneficial owner" (as defined in Rule 13(d)-3 under said Act),
directly or indirectly, of securities of the Company representing more than 50%
of the total voting power represented by the Company's then outstanding voting
securities; (iii) a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least 50% of the total
voting power represented by the voting securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation;
or (iv) the liquidation or winding up of the business of the Company.

               (iii) "Constructive Termination" shall mean that the Company,
without your prior written approval, has (i) materially reduced your title,
authority or responsibilities; (ii) reduced your salary or bonus plans; or
(iii) relocated your principal place of work by a distance of more than 50
miles.

You agree that the payments set forth in this offer letter, including paragraph
3 below, constitute all payments (except for accrued vacation and salary) that
you shall be entitled to in the event of any termination of employment.

     3.   Salary; Bonus; Benefits and Vacation; Relocation. Your base salary
will be $250,000 per year payable in accordance with the Company's customary
payroll practice as in effect from time to time. Unless your employment is
terminated by the Company for Cause prior to December 31, 1999, you will also
be paid a $100,000 bonus as follows: $50,000 on June 30, 1999 and $50,000 on
December 31, 1999. In no event will your annual base salary be reduced below
$250,000 during your employment by the Company. The Company agrees that it
shall establish bonus plans each fiscal year during your employment in which
you shall be entitled to participate and pursuant to which you shall have the
potential to earn at least $100,000 per fiscal year, subject to achieving any
performance objectives or satisfying other requirements under the bonus plans.
You will receive the Company's standard employee benefits package, and will be
subject to the Company's vacation policy, as such package and policy are in
effect from time to time; provided that (i) you will immediately be entitled to
three (3) weeks of paid vacation each year and (ii) you will be entitled to
immediate coverage under the Company's health, dental, disability and life
insurance plans commencing January 1, 1999. You will also be entitled to be
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Mr. Dean DeBiase
December 16, 1998
Page 4

reimbursed for up to $120,000 of reasonable documented commuting, interim
living, relocation and other miscellaneous expenses incurred by you and your
family in connection with traveling and relocating to the San Francisco Bay
area in connection with accepting employment with the Company.

      4.    Option and Stock Issuance.

            (a)   Option. Promptly following your commencement of employment
with the Company but in no event later than January 31, 1999, the Company will
issue you an option to purchase 923,210 shares of the Company's common stock at
an exercise price of $0.75 per share. This option will be an incentive stock
option to the maximum extent possible, will be immediately exercisable, and
will vest as follows: 25% will be vested upon grant and the balance will vest
on a pro rata monthly basis over three years commencing on the first
anniversary of the date of grant; provided that an additional 20% of the
original stock option grant will become vested upon the Company's initial
underwritten public offering of its securities. This option may be exercised by
you at any time up to ten (10) years following the date of grant of the option,
provided that following termination of your employment you may only exercise
the option to the extent it is vested.

      (b)   Stock. Until March 31, 1999, as long as you are an employee of the
Company you will have the option to purchase up to 263,774 shares of the
Company's Series D Preferred Stock at $3.55 per share. Your payment for this
stock may be in cash or, to the extent the Company's common stock is publicly
traded, with same day sale proceeds or pursuant to a net exercise of the
option. If the payment is in cash, it shall be in the amount of no less than
$250,000, with the balance, if any, to be financed by an interest free full
recourse promissory note secured by the stock. This note will be due and
payable on the third anniversary of the date of issuance of the stock.

      5.    Confidential Information. As an employee of the Company, you will
have access to certain Company confidential information and you may, during the
course of your employment, develop certain information or inventions that will
be the property of the Company. To protect the interest of the Company, you
will need to sign the Company's standard "Employee Inventions and
Confidentiality Agreement" in the form previously provided to you as a
condition of your employment. We wish to impress upon you that we do not wish
you to bring with you any confidential or proprietary material of any former
employer or to violate any other obligation to your former employers.

      6.    At-Will Employment. While we look forward to a long and profitable
relationship, should you decide to accept our offer, you will be an at-will
employee of the Company, which means the employment relationship can be
terminated by either of us for any reason at any time, with or without cause or
advance notice. Any statements of representations

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Mr. Dean DeBiase
December 16, 1998
Page 5

to the contrary (and, indeed, any statements contradicting any provision in
this letter) should be regarded by you as ineffective. Further, your
participation in any stock option or benefit program is not to be regarded as
assuring you of continuing employment for any particular period of time.

     7.   Authorization to Work. Because of Federal regulations adopted in the
Immigration Reform and Control Act of 1986, you will need to present
documentation demonstrating that you have authorization to work in the United
States. If you have any questions about this requirement, which applies to U.S.
citizens and non-U.S. citizens alike, please contact our human resources
department.

     8.   Term of Offer. This offer will remain open until December 17, 1998.
If you decide to accept our offer, and I hope that you will, please sign the
enclosed copy of this letter agreement in the space indicated and return it to
me. Upon your signature below, this will become our binding agreement with
respect to the subject matter of this letter, superseding in their entirety all
other or prior agreements by you with the Company as to the specific subjects
of this letter agreement, and will be binding upon and inure to the benefit of
our respective successors and assigns, and your heirs, administrators and
executors. This agreement may not be assigned by you. This agreement will be
governed by California law, and may only be amended in a writing signed by you
and the Company. In the event of any conflict between the terms of this letter
agreement and the relevant terms of relevant Company benefit plans, the terms
of this letter agreement shall control.

     We are excited to have you join us and look forward to working with you.

Sincerely,

Autoweb.com, Inc.

By /s/ PAYAM ZAMANI
  -------------------------------
   Payam Zamani, Co-Founder, President and CEO

Acknowledged, Accepted and Agreed:                Date:

/s/ DEAN DEBIASE                                  12/16/98
---------------------------------                 ----------------
Dean DeBiase
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To:    Dean DeBiase
From:  Autoweb.com, Inc.
Date:  March 30, 2001

Dear Dean,

     By your signature below, you hereby agree and acknowledge that this letter
will supersede and void that certain letter agreement dated January 3, 2001 in
its entirety, and will furthermore clarify and amend your original offer letter
of employment dated December 16, 1998 (the "Offer Letter").

     Paragraph 2(c) of the Offer Letter is hereby amended and restated in its
entirety to read as follows:

     "(c) If, during the first twelve (12) months following a Change of Control,
     the Company (or the surviving company if the Company is not the surviving
     company as a result of a merger or consolidation which is a Change of
     Control) terminates your employment for any reason other than Cause or you
     resign your employment with the Company as a consequence of a Constructive
     Termination (as defined below), then (i) any shares of stock of the Company
     and options to purchase shares of stock of the Company held by you, your
     family trust or the Dean A. DeBiase Jr. and Logan P. DeBiase Trust #1
     that are unvested as of the date of termination of your employment will
     immediately vest, (ii) you will receive the benefits and amounts referenced
     in subsection (a) of this paragraph above (including upon your resignation
     as a consequence of Constructive Termination), and (iii) in addition to any
     other amounts owed to you hereunder, you will be paid an amount equal to
     your annual incentive bonus for the most recently completed calendar year
     multiplied by a fraction, the numerator of which is the number of days in
     the current calendar year through your date of termination, and the
     denominator of which is 365, which amount shall not exceed 35% of your
     total then current annual salary."

The last sentence of Paragraph 4(a) is hereby amended and restated in its
entirety to read as follows:

     "Notwithstanding anything in any stock option agreement to the contrary,
     the option promised hereunder, or any successor option granted to you
     after a Change of Control, may be exercised by you at any time up to ten
     (10) years following the date of grant of the original option, provided
     that following termination of your employment you may only exercise the
     option to the extent it is vested."

     By your signature to this letter, you agree to forego severance or similar
benefits under any plan or policy of the Company now or hereafter in effect or
any agreement with the Company, other than the Offer Letter as clarified and
amended by this letter and other than COBRA benefits.
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                                       Sincerely,

                                       AUTOWEB.COM, INC.

                                       By: /s/ JEFFREY SCHWARTZ
                                           ----------------------------
                                           Jeffrey Schwartz
                                           Chief Executive Officer

By:    /s/ DEAN DEBIASE
       ---------------------------
       Dean DeBiase

Dated: 3/30/01
       ---------------------------<PAGE>   1
                                                                   EXHIBIT 10.43

                               AUTOWEB.COM, INC.
                         CHANGE OF CONTROL BENEFIT PLAN

SECTION 1: PURPOSES

      The purposes of the Plan are to assure the Company that it will have the
      continued dedication of, and the availability of objective advice and
      counsel from, key employees notwithstanding the possibility, threat or
      occurrence of a Change of Control and to provide Participants with
      compensation described herein in the event of their termination of
      employment with the Company under the circumstances described herein.

SECTION 2: DEFINITIONS

      "BASE SALARY" means the Participant's annual base salary rate immediately
      preceding a Change of Control and as it may thereafter be increased, but
      determined, for purposes of this Plan, without regard to any reduction
      thereto constituting Good Reason.

      "BOARD OF DIRECTORS" means the Board of Directors of the Company.

      "CAUSE" means the commission of an act of theft, embezzlement, fraud or
      dishonesty or a breach of fiduciary duty to the Company or an entity that
      controls, is controlled by, or is under common control with, the Company.

      "CHANGE OF CONTROL" means

      (A) The acquisition by any Person (as hereinafter defined) of Beneficial
          Ownership (as hereinafter defined) of 50% or more of either (x) the
          then outstanding Stock (the "Outstanding Company Stock") or (y) the
          combined voting power of the then outstanding voting securities of
          the Company entitled to vote generally in the election of directors
          (the "Outstanding Company Voting Securities"), provided that, for
          purposes of this subsection (A), the following acquisitions shall not
          constitute a Change of Control: (I) any acquisition directly from the
          Company, (II) any acquisition by the Company, (III) any acquisition
          by any employee benefit plan (or related trust) sponsored or
          maintained by the Company or any Person that controls, is controlled
          by or is under common control with, the Company or (IV) any
          acquisition by any Person pursuant to a transaction which complies
          with clauses (I), (II) and (III) of subsection (B) of this
          definition; or

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      (B) Consummation of a reorganization, merger or consolidation or sale,
          lease or other disposition of all or substantially all of the assets
          of the Company or the acquisition of assets or stock of another
          corporation (a "Business Combination"), in each case, unless,
          following such Business Combination, (I) the Persons who had
          Beneficial Ownership, respectively, of the Outstanding Company Stock
          and Outstanding Company Voting Securities immediately prior to such
          Business Combination have Beneficially Ownership immediately following
          the consummation of such Business Combination, directly or indirectly,
          of more than 50% of, respectively, the then outstanding common shares
          and the combined voting power of the then outstanding voting
          securities entitled to vote generally in the election of directors, as
          the case may be, of the corporation resulting or surviving from such
          Business Combination (including, without limitation, a corporation
          which as a result of such transaction owns the Company or all or
          substantially all of the Company's assets either directly or through
          one or more subsidiaries) in substantially the same proportions as
          their ownership immediately prior to such Business Combination of the
          Outstanding Company Stock and Outstanding Company Voting Securities,
          as the case may be, (II) no Person (excluding any entity resulting
          from such Business Combination or any employee benefit plan (or
          related trust) of the Company or such entity resulting from such
          Business Combination) has Beneficially Ownership, directly or
          indirectly, of 50% or more of, respectively, the then outstanding
          common shares of the entity resulting from such Business Combination
          or the combined voting power of the then outstanding voting securities
          of such entity, except to the extent that such ownership existed in
          respect of the Company prior to such Business Combination and (III) at
          least a majority of the members of the board of directors or similar
          body of the entity resulting from such Business Combination were
          members of the Incumbent Board at the time of the execution of the
          initial agreement, or of the action of the Board of Directors,
          providing for such Business Combination; or

      (C) Approval by the shareholders of the Company of a complete liquidation
          or dissolution of the Company.

          Notwithstanding the foregoing provisions of this definition, unless
          otherwise determined by the Board of Directors, for purposes of
          determining a Participant's rights under the Plan, no Change of
          Control shall be deemed to have occurred if (x) the Participant is a
          member of a group that first announces a proposal which, if
          successful, would result in a Change of Control and which proposal
          (including any modifications thereof) is ultimately successful, or (y)
          such Participant acquires a two percent (2%) or more equity interest
          in the entity

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          which ultimately acquires the Company pursuant to the transaction
          described in (x).

          For purposes of this definition, "Person" means an individual,
          partnership, joint venture corporation, trust, unincorporated
          organization, government (or agency or political subdivision thereof),
          group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
          Exchange Act) or any other entity, and "Beneficial Ownership" means
          beneficial ownership within the meaning of Rule 13d-3 promulgated
          under the Exchange Act.

          "COMMITTEE" means the Board of Directors or such committee as may be
          appointed by the Board of Directors for purposes of this Plan;
          provided that, upon a Change of Control, Committee means the Committee
          as constituted immediately prior to the Change of Control with such
          changes in the membership thereof as may be approved from time to time
          following the Change of Control by a majority of the members of such
          Committee as constituted at the applicable time; and provided further
          that the Company shall have no right to appoint members to or remove
          members from the Committee following, or otherwise in connection with,
          a Change of Control.

          "COMPANY" means the Autoweb.com, Inc. and its successors and shall
          include any wholly owned subsidiaries of the Company, except where the
          context indicates otherwise.

          "DATE OF TERMINATION" means the date of actual receipt of a Notice of
          Termination, or if later, the date specified therein.

          "DISABILITY" means disability under the Company's long-term disability
          plan applicable to the Participant as in effect from time to time or,
          in the absence of such a plan, the Participant's inability to render,
          for a period of six consecutive months, services hereunder by reason
          of permanent disability, as determined by the written medical opinion
          of an independent medical physician mutually acceptable to the
          Participant and the Company. If the Participant and the Company cannot
          agree as to such an independent medical physician, each shall appoint
          one medical physician and those two physicians shall appoint a third
          physician who shall make such determination.

          "EMPLOYEE" means an employee of the Company.

          "GOOD REASON" means and shall be deemed to exist if, upon or following
          a Change of Control and without the prior express written consent of
          the Participant, (i) the Participant suffers a reduction in duties,
          responsibilities or effective authority associated with his title and
          position or is assigned any duties or responsibilities inconsistent in
          any material respect therewith; (ii) the

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      Participant's compensation or benefits is decreased; or (iii) the
      Participant's office is relocated to a location more than fifty (50) miles
      from its location as of the Change of Control. Any good faith
      determination of Good Reason made by the Participant shall be conclusive.
      The determination of the amount of any compensation and benefits or other
      payments to be paid or provided to or in respect of the Participant
      hereunder shall be determined without regard to any reduction therein
      constituting Good Reason.

      "INCENTIVE COMPENSATION" means the Company bonuses paid quarterly based
      upon company and individual performance. Incentive Compensation does not
      include commissions for purposes of this Plan. Incentive Compensation
      shall not exceed thirty-five percent (35%) of the Participant's Base
      Salary.

      "NOTICE OF TERMINATION" means Notice of Termination as defined in Section
      4.4.

      "OFFER LETTER OF EMPLOYMENT" means the original offer of employment letter
      sent to the Employee setting out the terms and conditions of his or her
      employment.

      "PARTICIPANT" means an Employee designated from time to time by the
      Committee to participate in the Plan.

     "SEVERANCE MULTIPLE" means the multiple [from .25 to 1.0] established by
      the Committee as the Participant's Severance Multiple from purposes of the
      Plan.

      "VESTED ACCELERATION PERCENTAGE" means the percentage established by the
      Committee as the Participant's Vested Acceleration Percentage for purposes
      of the Plan.

SECTION 3: PARTICIPATION

      Participants shall be selected by the Committee from among those Employees
      who, in the opinion of the Committee, are in a position to make
      significant contributions to the success of the Company. The Company shall
      advise each Identified Employee of the option to participate in the Plan
      by a letter setting forth (i) the benefits to which the Participant may
      become entitled under the Plan, (ii) the Participant's Severance Multiple
      and Vesting Acceleration Percentage and (iii) such other terms, provisions
      and conditions not inconsistent with the Plan as shall be determined by
      the Committee. A Participant shall cease to be a Participant in the Plan
      upon the earlier of (i) termination of employment with the Company;
      provided that a Participant who terminates employment prior to termination
      of the Plan shall remain a Participant until

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<PAGE>   5
        receipt of all the payments, if any, to which the Participant is
        entitled under the terms hereof, and (ii) termination of the Plan.
        Participation in the Plan is voluntary and shall have no effect on the
        terms and conditions of Participants original Offer Letter of Employment
        unless there is a Change of Control as defined under this Plan.

SECTION 4: BENEFITS

        4.1     TERMINATION WITHOUT CAUSE OR TERMINATION FOR GOOD REASON.

                If, within one year following a Change of Control, the Company
                terminates the Participant's employment without Cause, other
                than due to death or Disability, or if the Participant effects a
                termination for Good Reason, any vesting, service or performance
                requirements under any outstanding stock option or restricted
                stock awards or any other equity-based awards shall be deemed
                fully satisfied as of the Date of Termination.

                In addition, the Participant shall be paid a cash lump sum
                within thirty (30) days of the Date of Termination equal to the
                aggregate of:

                        (A)     Any unpaid Base Salary through the Date of
                                Termination;

                        (B)     An amount equal to the product of the annual
                                incentive paid or payable to the Participant
                                under the Company's annual incentive plan for
                                the most recently completed fiscal year,
                                including any portion thereof which has been
                                earned but deferred, and a fraction, the
                                numerator of which is the number of days in the
                                current fiscal year through the Date of
                                Termination, and the denominator of which is
                                365;

                        (C)     Any amount equal to the product of the
                                Participant's Severance Multiple and the
                                Participant's Base Salary; and

                        (D)     Any accrued vacation pay and reimbursement for
                                expenses incurred but not paid prior to such
                                Date of Termination.

        4.2     VESTING OF EQUITY-BASED AWARDS. Any vesting, service or
                performance requirements under any outstanding stock option or
                restricted stock awards or any other equity-based awards shall
                be deemed satisfied as of the Change of Control to the extent of
                the Participant's Vesting Acceleration Percentage.

                                                                               5

<PAGE>   6
        4.3     DEEMED DATE OF TERMINATION. Anything in this Plan to the
                contrary notwithstanding, if a Change of Control occurs, and if
                the Participant's employment with the Company is terminated by
                the Company prior to the date on which the Change of Control
                occurs, and it is reasonably demonstrated by the Participant
                that such termination of employment (i) was at the request of a
                third party who has taken steps reasonably calculated to effect
                a Change of Control or (II) otherwise arose in connection with
                or anticipation of a Change of Control, then for all purposes of
                this Plan, the Participant's Date of Termination shall be deemed
                to have occurred following such Change of Control.

        4.4     NOTICE OF TERMINATION.

                Any termination of the Participant's employment with the Company
                (other than due to death) following a Change of Control shall be
                communicated by a notice of termination to the Participant or to
                the Company, as the case may be, given in accordance with this
                Plan (the "Notice of Termination"). The Notice of Termination
                shall set forth in reasonable detail the facts and circumstances
                claimed to provide a basis for termination of the Participant's
                employment and, if the Date of Termination is other than the
                date of actual receipt of such notice, specify the date on which
                the Participant's employment is to be terminated (which date
                shall not be earlier than the date on which such notice is
                actually received).

SECTION 5. ENFORCEMENT OF AGREEMENT; DEFENSE OF ACTIONS.

                If the Participant determines that it is necessary or desirable
                for him to retain legal counsel or incur other costs and
                expenses in connection with either enforcing part or all of his
                rights under this Plan or defending against any allegations by
                the Company of breach of this Plan by him, the Participant shall
                be entitled to recover from the Company, as incurred by him,
                reasonably attorneys' fees, costs and expenses in connection
                with such enforcement or defense plus in each case interest on
                any delayed payment at the Applicable Federal Rate provided for
                in Section 7872(f)(2)(A) of the Internal Revenue Code of 1986,
                as amended. The Company shall make such payments to the
                Participant promptly following submission to the Company of
                appropriate documentation evidencing the incurrence of such
                attorney's fees, costs, and expenses. The Participant's rights
                to payments under this Section shall not be affected by the
                final outcome of any dispute with the Company; provided however,
                that to the extent that the court shall determine that under the
                circumstances recovery

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                by the Participant of all or a part of any such fees and costs
                and expenses would be unjust or inappropriate, the Participant
                shall not be entitled to such recovery.

SECTION 6: ADMINISTRATION

        6.1     IN GENERAL. The Committee will have full and complete authority,
                in its sole and absolute discretion, (i) to exercise all of the
                powers granted to it under the Plan, (ii) to construe, interpret
                and implement the Plan and any related document, (iii) to
                prescribe, amend and rescind rules relating to the Plan, (iv) to
                make all determinations necessary or advisable in administering
                the Plan, and (v) to correct any defect, supply any omission and
                reconcile any inconsistency in the Plan.

        6.2     DETERMINATIONS. The actions and determinations of the Committee
                or others to whom authority is delegated under the Plan on all
                matters relating to the Plan and any Awards will be final and
                conclusive.

        6.3     APPOINTMENT OF EXPERTS. The Committee may appoint such
                accountants, counsel, and other experts, as it deems necessary
                or desirable in connection with the administration of the Plan.

        6.4     DELEGATION. The Committee may delegate to Employees the
                authority to execute and deliver such instruments and documents,
                to do all such acts and things, and to take all such other steps
                deemed necessary, advisable or convenient for the effective
                administration of the Plan in accordance with its terms and
                purposes.

        6.5     BOOKS AND RECORDS. The Committee and others to whom the
                Committee has delegated such duties shall keep a record of all
                their proceedings and actions and shall maintain all such books
                of accounts, records and other data as shall be necessary for
                the proper administration of the Plan.

        6.6     PAYMENT OF EXPENSES. The Company shall pay all reasonable
                expenses of administering the Plan, including, but not limited
                to, the payment of professional and expert fees.

        6.7     CLAIMS PROCEDURE. The Committee shall establish claims
                procedures for Plan benefits. Such Claims procedures as a
                minimum shall consist of the following:

                (i)     The Committee or its delegates shall notify Participants
                        of their right to claim benefits under the claims
                        procedures, shall make forms available for filing of
                        such claims, and

<PAGE>   8
                        shall provide the name of the person or persons with
                        whom such claims should be filed.

                (ii)    The Committee or its delegates shall establish
                        procedures for action upon claims initially made and the
                        communication of a decision to the claimant promptly
                        and, in any event, not later than 90 days after the date
                        of the claim, unless special circumstances require an
                        extension of time for processing the claim. If an
                        extension is required, notice of the extension shall be
                        furnished to the claimant prior to the end of the
                        initial 90-day period, which notice shall indicate the
                        reasons for the extension and the expected decision
                        date. The extensions shall not exceed 90 days. The claim
                        may be deemed by the claimant to have been denied for
                        purposes of further review described below in the event
                        a decision is not furnished to the claimant within the
                        period described in the preceding three sentences. Every
                        claim for benefits which is denied shall be denied by
                        written notice setting forth, in a manner calculated to
                        be understood by the claimant, the specific reason or
                        reasons for the denial, a specific reference to any
                        provisions of the Plan on which denial is based, a
                        description of any additional material or information
                        necessary for the claimant to perfect his claim with an
                        explanation of why such material or information is
                        necessary, and an explanation of the procedure for
                        further review of the denial of the claim under this
                        Plan.

                (iii)   The Committee shall establish a procedure for review of
                        claim denials, such review to be undertaken by the
                        Committee. The review given after denial of any claim
                        shall be a full and fair review with the claimant or the
                        claimant's duly authorized representative having 60 days
                        after receipt of denial of the claim to request such
                        review, having the right to review all pertinent
                        documents and having the right to submit issues and
                        comments in writing.

                (iv)    The Committee shall establish a procedure for issuance
                        of a decision by it not later that 60 days after receipt
                        of a request for a review of a claim denial by a
                        claimant unless special circumstances exist, such as the
                        need to hold a hearing or require a longer period of
                        time, in which case a decision shall be rendered as soon
                        as possible but not later that 120 days after receipt of
                        the claimant's request for review. The decision on
                        review shall be in writing and shall include

<PAGE>   9
                specific reasons for the decision written in a manner calculated
                to be understood by the claimant with specific reference to any
                provisions of this Plan on which the decision is based.

SECTION 7: MISCELLANEOUS

        7.1     NONASSIGNABILITY. A Participant's rights under this Plan shall
                not be assignable or transferable (including pursuant to a
                pledge or security interest) other than by will or by laws of
                descent and distribution.

        7.2     WITHHOLDING TAXES. Whenever payments under the Plan are to be
                made, the Company shall withhold therefrom an amount sufficient
                to satisfy any applicable governmental withholding tax
                requirements related thereto.

        7.3     AMENDMENT OR TERMINATION OF THE PLAN. The Plan may be amended or
                terminated by the Board of Directors in any respect provided
                that no such action shall be taken, or if taken shall be
                effective, on or after a Change of Control, that would impair
                the rights of a Participant without such Participant's consent;
                and provided further that, prior to a Change of Control, no
                amendment that would impair the rights of a Participant shall be
                effective if it is reasonably demonstrated by the Participant
                that such amendment (i) was at the request of a third party who
                has taken steps reasonably calculated to effect a Change of
                Control, or (ii) otherwise arose in connection with or
                anticipation of a Change of Control.

        7.4     OTHER PAYMENTS OR AWARDS. Nothing contained in the Plan will be
                deemed in any way to limit or restrict the Company from making
                any award or payment to any person under any other plan,
                arrangement or understanding, whether now existing or hereafter
                in effect.

        7.5     PAYMENTS TO OTHER PERSONS. If payments are legally required to
                be made to any person other than the person to whom any amount
                is payable under the Plan, such payments will be made
                accordingly. Any such payment will be a complete discharge of
                the liability of the Company under the Plan.

        7.6     UNFUNDED PLAN. Nothing in this Plan will require the Company to
                purchase assets or place assets in a trust or other entity to
                which contributions are made or otherwise to segregate any
                assets for the purpose of satisfying any obligations under the
                Plan. Participants will have no rights under the Plan other than
                as unsecured general creditors of the Company.

<PAGE>   10
        7.7     LIMITS OF LIABILITY. Neither the Company nor any other person
                participating in any determination of any question under the
                Plan, or in the interpretation, administration or application of
                the Plan, will have any liability to any party for any action
                taken or not taken in good faith under the Plan.

        7.8     NO RIGHT OF EMPLOYMENT. Nothing in this Plan will be construed
                as creating any contract of employment or conferring upon any
                Employee or Participant any right to continue in the employ or
                other service of the Company or limit in any way the right of
                the Company to change such person's compensation or other
                benefits or to terminate the employment or other service of such
                person with or without Cause.

        7.9     SECTION HEADINGS. The section headings contained herein are for
                convenience only, and in the event of any conflict, the text of
                the Plan, rather than the section headings, will control.

        7.10    INVALIDITY. If any term or provision contained herein is to any
                extent invalid or unenforceable, such term or provision shall be
                reformed so that it is valid, and such invalidity or
                unenforceability will not affect any other provision or part
                thereof.

        7.11    APPLICABLE LAW. The Plan will be governed by the laws of the
                State of California, as determined without regard to the
                conflict of law principles thereof.

        7.12    EFFECTIVE DATE. The Plan shall be effective as of December 1,
                2000 (the "Effective Date"), and shall continue in effect for
                the term of three years; provided that, in the event of a Change
                of Control during such period, the term of the Plan shall
                automatically be extended until all amounts to which
                Participants are or may become entitled hereunder have been
                paid.

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