Document:

<PAGE>
                                                                    EXHIBIT 4.13

                         [LERNOUT & HAUSPIE (TM) LOGO]

                                                 September 16, 2002

To:   All Directors and Officers of
      ScanSoft, Inc. ("Scansoft")

            Re: Lock-up Agreement

Dear Ladies and Gentlemen:

            Reference is made to that certain Agreement dated as of the date
hereof (the "Agreement"; capitalized terms used herein and not otherwise defined
shall have the meanings set forth in the Agreement) by and among ScanSoft,
Lernout & Hauspie Speech Products N.V., a corporation organized and existing
under the laws of the Kingdom of Belgium ("L&H NV"), and L&H Holdings USA, Inc.
a Delaware corporation that is a wholly-owned subsidiary of L&H NV ("L&H
Holdings" and, together with L&H NV, the "Sellers"). Pursuant to Section 5.08 of
the Agreement, ScanSoft agrees to cause certain of its officers and directors to
enter into this Lock-up Agreement (this "Lock-up Agreement"). The undersigned
acknowledges and agrees that as part of the consideration for the Sellers
entering into the Agreement, ScanSoft has agreed to cause certain of its
officers and directors, including the undersigned, to deliver this Lock-up
Agreement.

            By signing this Lock-up Agreement, the undersigned agrees, on behalf
of himself or herself and his or her beneficiaries or designees, to not (except
in connection with any offering pursuant to this Agreement), directly or
indirectly, take any action to sell, distribute, assign, pledge, hypothecate or
otherwise transfer or dispose of any securities of ScanSoft, until the earlier
of (A) the date upon which all of the Registrable Securities are disposed of by
the Sellers, the Baker Parties or BSF (on behalf of the Baker Parties), as the
case may be, and (B) January 1, 2004 (collectively, the "Lock-Up Period");
provided, however, that the foregoing prohibition shall not apply in the event
that, and only after, the undersigned is no longer serving as either an employee
or a director of (and has no intention of serving during the Lock-Up Period as
either an employee or a director of), as the case may be, ScanSoft.

            This Lock-up Agreement, the rights and obligations of the parties
hereunder, and any claim or controversy directly or indirectly based upon or
arising out of this Lock-up Agreement or the transactions contemplated hereby
(whether based on contract, tort, or any other
<PAGE>
theory), including all matters of construction, validity and performance, shall
in all respects be governed by and interpreted, construed and determined in
accordance with, the internal laws of the state of Delaware (without regard to
any conflicts of law provision that would require the application of the law of
any other jurisdiction).

            Any suit, action or proceeding seeking to enforce any provision of,
or based on any matter arising out of or in connection with, this Lock-up
Agreement or the transactions contemplated hereby shall be brought, at any time
prior to the closing of the U.S. Bankruptcy Case, in the U.S. Bankruptcy Court,
and thereafter shall be brought in the United States District Court for the
District of Massachusetts or any Massachusetts State court sitting in Suffolk
County, so long as one of such courts shall have subject matter jurisdiction
over such suit, action or proceeding, and that any cause of action arising out
of this Lock-up Agreement or the transactions contemplated hereby shall be
deemed to have arisen from a transaction of business in the Commonwealth of
Massachusetts, and each of the parties hereby irrevocably consents to the
jurisdiction of such courts (and of the appropriate appellate courts therefrom)
in any such suit, action or proceeding and irrevocably waives, to the fullest
extent permitted by law, any objection that it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding in any such court or
that any such suit, action or proceeding which is brought in any such court has
been brought in an inconvenient forum. Process in any such suit, action or
proceeding may be served on any of the undersigned anywhere in the world,
whether within or without the jurisdiction of any such court.

            Each of the parties hereto irrevocably and unconditionally waives,
to the fullest extent permitted by applicable law, any right that he, she or it
may have to trial by jury of any claim or cause of action, or in any legal
proceeding, directly or indirectly based upon or arising out of this Lock- up
Agreement or the transactions contemplated hereby (whether based on contract,
tort, or any other theory). The undersigned (a) certifies that no
representative, agent, or attorney of the Sellers has represented, expressly or
otherwise, that such Sellers would not, in the event of litigation, seek to
enforce the foregoing waiver and (b) acknowledges that it and the Sellers have
been induced to enter into this Lock-up Agreement by, among other things, the
mutual waivers and certifications in this paragraph.

            The undersigned acknowledges and agrees that the Sellers would be
damaged irreparably in the event any of the provisions of this Lock-up Agreement
are not performed in accordance with their specific terms or otherwise are
breached. Accordingly, the undersigned agrees that the Sellers shall be entitled
to an injunction or injunctions to prevent breaches of the provisions of this
Lock-up Agreement and to enforce specifically this Lock-up Agreement and the
terms and provisions hereof in any action instituted in the U.S. Bankruptcy
Court or any other court having jurisdiction pursuant to the terms of this
Agreement, in addition to any other remedy to which it may be entitled, at law
or in equity.

            This Lock-up Agreement may be executed in any number of
counterparts, and each such counterpart hereof shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.

                                       2
<PAGE>
            If the foregoing correctly sets forth our agreement with respect to
the matters set forth herein, please so indicate by signing two copies of this
Lock-up Agreement and returning one of such signed copies to us, whereupon this
Lock-up Agreement will constitute our binding agreement with respect to the
matters set forth herein.

                                     Sincerely,

                                     LERNOUT & HAUSPIE SPEECH PRODUCTS N.V.

                                     By:
                                        -----------------------------------
                                     Name:
                                     Title:

                                     L&H HOLDINGS USA, INC.

                                     By:
                                        -----------------------------------
                                     Name:
                                     Title:

Acknowledged and Agreed to:

SCANSOFT DIRECTOR OR OFFICER:

-----------------------------------
Name:
Title:

                                        3<PAGE>

                                                                   EXHIBIT 10.17

                                 SCANSOFT, INC.

                        1993 INCENTIVE STOCK OPTION PLAN
                  As amended by the Board effective June, 2000

      1.    PURPOSES OF THE PLAN. The purposes of this Stock Plan are to attract
and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees and Consultants of
the Company and its Subsidiaries and to promote the success of the Company's
business. Options granted under the Plan may be incentive stock options (as
defined under Section 422 of the Code) or non-statutory stock options, as
determined by the Administrator at the time of grant of an option and subject to
the applicable provisions of Section 422 of the Code, as amended, and the
regulations promulgated thereunder.

      2.    DEFINITIONS. As used herein, the following definitions shall apply:

            (a)   "ADMINISTRATOR" means the Board or any of its Committees
appointed pursuant to Section 4 of the Plan.

            (b)   "APPLICABLE LAWS" means the meaning set forth in Section 4(a)
below.

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

            (d)   "CODE" means the Internal Revenue Code of 1986, as amended.

            (e)   "COMMITTEE" means a Committee appointed by the Board of
Directors in accordance with Section 4 of the Plan.

            (f)   "COMMON STOCK" means the Common Stock of the Company.

            (g)   "COMPANY" means ScanSoft, Inc., a Delaware corporation.

            (h)   "CONSULTANT" means any person, including an advisor, who is
engaged by the Company or any Parent or Subsidiary to render services and is
compensated for such services, and any director of the Company whether
compensated for such services or not; provided that the term Consultant shall
not include directors who are not compensated for their services or are paid
only a director's fee by the Company.

            (i)   "CONTINUOUS STATUS AS AN EMPLOYEE OR CONSULTANT" means that
the employment or consulting relationship is not interrupted or terminated by
the Company, any Parent or Subsidiary. Continuous Status as an Employee or
Consultant shall not be considered interrupted in the case of: (i) any leave of
absence approved by the Board, including sick leave, military leave, or any
other personal leave; provided, however, that for purposes of Incentive Stock
Options, any such leave may not exceed ninety (90) days, unless reemployment
upon the expiration of such leave is guaranteed by contract (including certain
Company policies) or

                                      -1-

<PAGE>

statute; or (ii) transfers between locations of the Company or between the
Company, its Parent, its Subsidiaries or its successor.

            (j)   "EMPLOYEE" means any person, including officers and directors,
employed by the Company or any Parent or Subsidiary of the Company. The payment
of a director's fee by the Company shall not be sufficient to constitute
"employment" by the Company.

            (k)   "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

            (l)   "FAIR MARKET VALUE" means, as of any date, the value of Common
Stock determined as follows:

                  (i)   If the Common Stock is listed on any established stock
exchange or a national market system including without limitation the National
Market of the National Association of Securities Dealers, Inc. Automated
Quotation ("Nasdaq") System, its Fair Market Value shall be the closing sales
price for such stock (or the closing bid, if no sales were reported) as quoted
on such exchange or system for the market trading day on the time of
determination as reported in The Wall Street Journal or such other source as the
Administrator deems reliable;

                  (ii)  If the Common Stock is quoted on the Nasdaq System (but
not on the National Market thereof) or regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the high bid and low asked prices for the Common
Stock; or;

                  (iii) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by the
Administrator.

            (m)   "INCENTIVE STOCK OPTION" means an Option intended to qualify
as an incentive stock option within the meaning of Section 422 of the Code, as
designated in the applicable option agreement.

            (n)   NAMED EXECUTIVE" shall mean any individual who, on the last
day of the Company's fiscal year, is the chief executive officer of the Company
(or is acting in such capacity) or among the four highest compensated officers
of the Company (other than the chief executive officer). Such officer status
shall be determined pursuant to the executive compensation disclosure rules
under the Exchange Act.

            (o)   "NONSTATUTORY STOCK OPTION" means an Option not intended to
qualify as an Incentive Stock Option, as designated in the applicable option
agreement.

            (p)   "OPTION" means a stock option granted pursuant to the Plan.

            (q)   "OPTIONED STOCK" means the Common Stock subject to an Option.

            (r)   "OPTIONEE" means an Employee or Consultant who receives an
Option.

                                      -2-

<PAGE>

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

            (t)   "PLAN" means this 1993 Incentive Stock Option Plan.

            (u)   "RULE 16B-3" means Rule 16b-3 promulgated under the Exchange
Act, as the same may be amended from time to time, or any successor provision.

            (u)   "SHARE" means a share of the Common Stock, as adjusted in
accordance with Section 14 below.

            (v)   "SUBSIDIARY" means a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 424(f) of the Code.

      3.    STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section 14
of the Plan, the maximum aggregate number of Shares which may be optioned and
sold under the Plan is 3,870,000 Shares. The Shares may be authorized, but
unissued, or reacquired Common Stock.

            If an Option should expire or become unexercisable for any reason
without having been exercised in full, the unpurchased Shares which were subject
thereto shall, unless the Plan shall have been terminated, become available for
future grant under the Plan.

      4.    ADMINISTRATION OF THE PLAN.

            (a)   COMPOSITION OF ADMINISTRATOR.

                  (i)   MULTIPLE ADMINISTRATIVE BODIES. If permitted by Rule
16b-3, and by the legal requirements relating to the administration of incentive
stock option plans, if any, of applicable securities laws and the Code
(collectively, the "Applicable Laws"), the Plan may (but need not) be
administered by different administrative bodies with respect to Directors,
Officers who are not directors and Employees who are neither Directors nor
Officers.

                  (ii)  ADMINISTRATION WITH RESPECT TO DIRECTORS AND OFFICERS.
With respect to grants of Options to Employees or Consultants who are also
Officers or Directors of the Company, the Plan shall be administered by (A) the
Board, if the Board may administer the Plan in compliance with Rule 16b-3 as it
applies to a plan intended to qualify thereunder as a discretionary plan and
Section 162(m) of the Code as it applies so as to qualify grants of Options to
Named Executives as performance-based compensation, or (B) a Committee
designated by the Board to administer the Plan, which Committee shall be
constituted in such a manner as to permit the Plan to comply with Rule 16b-3 as
it applies to a plan intended to qualify thereunder as a discretionary plan, to
qualify grants of Options to Named Executives as performance-based compensation
under Section 162(m) of the Code and otherwise so as to satisfy the Applicable
Laws.

                                      -3-

<PAGE>

                  (iii) ADMINISTRATION WITH RESPECT TO OTHER PERSONS. With
respect to grants of Options to Employees or Consultants who are neither
Directors nor Officers of the Company, the Plan shall be administered by (A) the
Board or (B) a Committee designated by the Board, which Committee shall be
constituted in such a manner as to satisfy the Applicable Laws.

                  (iv)  GENERAL. If a Committee has been appointed pursuant to
subsection (ii) or (iii) of this Section 4(a), such Committee shall continue to
serve in its designated capacity until otherwise directed by the Board. From
time to time the Board may increase the size of any Committee and appoint
additional members thereof, remove members (with or without cause) and appoint
new members in substitution therefor, fill vacancies (however caused) and remove
all members of a Committee and thereafter directly administer the Plan, all to
the extent permitted by the Applicable Laws and, in the case of a Committee
appointed under subsection (ii), to the extent permitted by Rule 16b-3 as it
applies to a plan intended to qualify thereunder as a discretionary plan, and to
the extent required under Section 162(m) of the Code to qualify grants of
Options to Named Executives as performance-based compensation.

            (c)   POWERS OF THE ADMINISTRATOR. Subject to the provisions of the
Plan and in the case of a Committee, the specific duties delegated by the Board
to such Committee, and subject to the approval of any relevant authorities,
including the approval, if required, of any stock exchange upon which the Common
Stock is listed, the Administrator shall have the authority, in its discretion:

                  (i)   to determine the Fair Market Value of the Common Stock,
in accordance with Section 2(k) of the Plan;

                  (ii)  to select the Consultants and Employees to whom Options
 may from time to time be granted hereunder;

                  (iii) to determine whether and to what extent Options are
 granted hereunder;

                  (iv)  to determine the number of Shares to be covered by each
such award granted hereunder;

                  (v)   to approve forms of agreement for use under the Plan;

                  (vi)  to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any award granted hereunder;

                  (vii) to determine whether and under what circumstances an
Option may be settled in cash under subsection 9(f) instead of Common Stock; and

            (d)   EFFECT OF ADMINISTRATOR'S DECISION. All decisions,
determinations and interpretations of the Administrator shall be final and
binding on all Optionees and any other holders of any Options.

                                      -4-

<PAGE>

      5.    ELIGIBILITY.

            (a)   Nonstatutory Stock Options may be granted to Employees and
Consultants. Incentive Stock Options may be granted only to Employees. An
Employee or Consultant who has been granted an Option may, if otherwise
eligible, be granted additional Options.

            (b)   Each Option shall be designated in the written option
agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.
However, notwithstanding such designations, to the extent that the aggregate
Fair Market Value of the Shares with respect to which Options designated as
Incentive Stock Options are exercisable for the first time by any Optionee
during any calendar year (under all plans of the Company or any Parent or
Subsidiary) exceeds $100,000, such excess Options shall be treated as
Nonstatutory Stock Options.

            (c)   For purposes of Section 5(b), Incentive Stock Options shall be
taken into account in the order in which they were granted, and the Fair Market
Value of the Shares shall be determined as of the time the Option with respect
to such Shares is granted.

            (d)   The Plan shall not confer upon any Optionee any right with
respect to continuation of employment or consulting relationship with the
Company, nor shall it interfere in any way with his or her right or the
Company's right to terminate his or her employment or consulting relationship at
any time, with or without cause and with or without notice.

      6.    TERM OF PLAN. The Plan shall become effective upon the earlier to
occur of its adoption by the Board of Directors or its approval by the
stockholders of the Company as described in Section 20 of the Plan. It shall
continue in effect for a term of ten (10) years unless sooner terminated under
Section 16 of the Plan.

      7.    TERM OF OPTION. The term of each Option shall be the term stated in
the Option Agreement; provided, however, that the term shall be no more than ten
(10) years from the date of grant thereof. However, in the case of an Incentive
Stock Option granted to an Optionee who, at the time the Option is granted, owns
stock representing more than ten percent (10%) of the voting power of all
classes of stock of the Company or any Parent or Subsidiary, the term of the
Option shall be five (5) years from the date of grant thereof or such shorter
term as may be provided in the Option Agreement.

      8.    LIMITATION ON GRANTS TO EMPLOYEES.

      (a)   Subject to adjustment as provided in this Plan, the maximum number
            of Shares which may be subject to options granted to any one
            Employee under this Plan for any fiscal year of the Company shall be
            500,000.

      (b)   The exercise price of any Option outstanding or to be granted in the
            future under the Plan shall not be reduced or cancelled and
            re-granted at a lower exercise price

                                      -5-

<PAGE>

            (including pursuant to any "6 month and 1 day" cancellation and
            re-grant scheme), regardless of whether or not the cancelled Options
            are put back into the available pool for grant; replace underwater
            options with restricted stock in an exchange, buy-back or other
            scheme; or replace any options with new options having a lower
            exercise price or accelerated vesting schedule in an exchange,
            buy-back or other scheme.

      9.    OPTION EXERCISE PRICE AND CONSIDERATION.

            (a)   EXERCISE PRICE. The per share exercise price for the Shares to
be issued pursuant to exercise of an Option shall be such price as is determined
by the Board, but shall be subject to the following:

                  (i)   In the case of an Incentive Stock Option

                        (A)   granted to an Employee who, at the time of the
grant of such Incentive Stock Option, owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the Company or any
Parent or Subsidiary, the per Share exercise price shall be no less than 110% of
the Fair Market Value per Share on the date of grant.

                        (B)   granted to any other Employee, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant.

                  (ii)  In the case of a Nonstatutory Stock Option, the per
Share exercise price shall not be no less than 100% of the Fair Market Value per
Share on the date of grant.

            (b)   PERMISSIBLE CONSIDERATION. The consideration to be paid for
the Shares to be issued upon exercise of an Option, including the method of
payment, shall be determined by the Administrator (and, in the case of an
Incentive Stock Option, shall be determined at the time of grant) and may
consist entirely of (1) cash, (2) check, (3) promissory note, (4) other Shares
which (x) in the case of Shares acquired upon exercise of an Option either have
been owned by the Optionee for more than six months on the date of surrender or
were not acquired, directly or indirectly, from the Company, and (y) have a Fair
Market Value on the date of surrender equal to the aggregate exercise price of
the Shares as to which said Option shall be exercised, (5) delivery of a
properly executed exercise notice together with such other documentation as the
Administrator and the broker, if applicable, shall require to effect an exercise
of the Option and delivery to the Company of the sale or loan proceeds required
to pay the exercise price, or (6) any combination of the foregoing methods of
payment. In making its determination as to the type of consideration to accept,
the Board shall consider if acceptance of such consideration may be reasonably
expected to benefit the Company.

      10.   EXERCISE OF OPTION.

            (a)   PROCEDURE FOR EXERCISE; RIGHTS AS A STOCKHOLDER. Any Option
granted hereunder shall be exercisable at such times and under such conditions
as determined by the

                                      -6-

<PAGE>

Board, including performance criteria with respect to the Company and/or the
Optionee, and as shall be permissible under the terms of the Plan.

                  An Option may not be exercised for a fraction of a Share.

                  An Option shall be deemed to be exercised when written notice
of such exercise has been given to the Company in accordance with the terms of
the Option by the person entitled to exercise the Option and full payment for
the Shares with respect to which the Option is exercised has been received by
the Company. Full payment may, as authorized by the Board, consist of any
consideration and method of payment allowable under Section 8(b) of the Plan.
Until the issuance (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a stockholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such stock certificate promptly upon exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 14 of the Plan.

                  Exercise of an Option in any manner shall result in a decrease
in the number of Shares which thereafter may be available, both for purposes of
the Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.

            (b)   TERMINATION OF EMPLOYMENT. In the event of termination of an
Optionee's Continuous Status as an Employee or Consultant with the Company, such
Optionee may, but only within such period of time as is determined by the
Administrator, exercise his or her Option to the extent that Optionee was
entitled to exercise it at the date of such termination. To the extent that
Optionee was not entitled to exercise the Option at the date of such
termination, or if Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate.

            (c)   DISABILITY OF OPTIONEE. Notwithstanding the provisions of
Section 9(b) above, in the event of termination of an Optionee's Continuous
Status as an Employee or Consultant as a result of his total and permanent
disability (as defined in Section 22(e)(3) of the Code), Optionee may, but only
within twelve (12) months from the date of such termination (but in no event
later than the expiration date of the term of such Option as set forth in the
Option Agreement), exercise the Option to the extent otherwise entitled to
exercise it at the date of such termination. To the extent that Optionee was not
entitled to exercise the Option at the date of termination, or if Optionee does
not exercise such Option to the extent so entitled within the time specified
herein, the Option shall terminate.

            (d)   DEATH OF OPTIONEE. In the event of termination of an
Optionee's Continuous Status as an Employee or Consultant as a result of the
death of an Optionee, the Option may be exercised, at any time within twelve
(12) months following the date of death (but in no event later than the
expiration date of the term of such Option as set forth in the Option
Agreement), by the Optionee's estate or by a person who acquired the right to
exercise the Option

                                      -7-

<PAGE>

by bequest or inheritance, but only to the extent the Optionee was entitled to
exercise the Option at the date of death. To the extent that Optionee was not
entitled to exercise the Option at the date of death, or if Optionee does not
exercise such Option to the extent so entitled within the time specified herein,
the Option shall terminate.

            (e)   BUYOUT PROVISIONS. The Administrator may at any time offer to
buy out for a payment in cash or Shares, an Option previously granted, based on
such terms and conditions as the Administrator shall establish and communicate
to the Optionee at the time that such offer is made.

      11.   WITHHOLDING TAXES. As a condition to the exercise of Options granted
hereunder, the Optionee shall make such arrangements as the Administrator may
require for the satisfaction of any federal, state, local or foreign withholding
tax obligations that may arise in connection with the exercise, receipt or
vesting of such Option. The Company shall not be required to issue any Shares
under the Plan until such obligations are satisfied

      12.   STOCK WITHHOLDING TO SATISFY WITHHOLDING TAX OBLIGATIONS. At the
discretion of the Administrator, Optionees may satisfy withholding obligations
as provided in this paragraph. When an Optionee incurs tax liability in
connection with an Option which tax liability is subject to tax withholding
under applicable tax laws, and the Optionee is obligated to pay the Company an
amount required to be withheld under applicable tax laws, the Optionee may
satisfy the withholding tax obligation by one or some combination of the
following methods: (a) by cash payment, or (b) out of Optionee's current
compensation, (c) if permitted by the Administrator, in its discretion, by
surrendering to the Company Shares that (i) in the case of Shares previously
acquired from the Company, have been owned by the Optionee for more than six
months on the date of surrender, and (ii) have a fair market value on the date
of surrender equal to or less than Optionee's marginal tax rate times the
ordinary income recognized, or (d) by electing to have the Company withhold from
the Shares to be issued upon exercise of the Option that number of Shares having
a fair market value equal to the amount required to be withheld. For this
purpose, the fair market value of the Shares to be withheld shall be determined
on the date that the amount of tax to be withheld is to be determined (the "Tax
Date").

                  All elections by an Optionee to have Shares withheld to
satisfy tax withholding obligations shall be made in writing in a form
acceptable to the Administrator and shall be subject to the following
restrictions:

            (a)   the election must be made on or prior to the applicable Tax
Date;

            (b)   once made, the election shall be irrevocable as to the
particular Shares of the Option as to which the election is made; and

            (c)   all elections shall be subject to the consent or disapproval
of the Administrator.

                                      -8-

<PAGE>

                  In the event the election to have Shares withheld is made by
an Optionee and the Tax Date is deferred under Section 83 of the Code because no
election is filed under Section 83(b) of the Code, the Optionee shall receive
the full number of Shares with respect to which the Option is exercised but such
Optionee shall be unconditionally obligated to tender back to the Company the
proper number of Shares on the Tax Date.

      13.   NON-TRANSFERABILITY OF OPTIONS. Options may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee.

      14.   ADJUSTMENTS UPON CHANGES IN CAPITALIZATION; CORPORATE TRANSACTIONS.

            (a)   CHANGES IN CAPITALIZATION. Subject to any required action by
the stockholders of the Company, the number of Shares covered by each
outstanding Option, and the number of Shares which have been authorized for
issuance under the Plan but as to which no Options have yet been granted or
which have been returned to the Plan upon cancellation or expiration of an
Option, the maximum number of Shares for which Options may be granted to any
Employee under Section 8 of the Plan and the price per Share covered by each
such outstanding Option, shall be proportionately adjusted for any increase or
decrease in the number of issued Shares resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification of the Common
Stock, or any other increase or decrease in the number of issued Shares effected
without receipt of consideration by the Company; provided, however, that
conversion of any convertible securities of the Company shall not be deemed to
have been "effected without receipt of consideration." Such adjustment shall be
made by the Board, whose determination in that respect shall be final, binding
and conclusive. Except as expressly provided herein, no issuance by the Company
of shares of stock of any class, or securities convertible into shares of stock
of any class, shall affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of Shares subject to an Option.

            (b)   CORPORATE TRANSACTIONS. In the event of the proposed
dissolution or liquidation of the Company, the Option will terminate immediately
prior to the consummation of such proposed action, unless otherwise provided by
the Administrator. The Administrator may, in the exercise of its sole discretion
in such instances, declare that any Option shall terminate as of a date fixed by
the Administrator and give each Optionee the right to exercise his or her Option
as to all or any part of the Optioned Stock, including Shares as to which the
Option would not otherwise be exercisable. In the event of a proposed sale of
all or substantially all of the assets of the Company, or the merger of the
Company with or into another corporation, the Option shall be assumed or an
equivalent option shall be substituted by such successor corporation or a parent
or subsidiary of such successor corporation, unless the Administrator
determines, in the exercise of its sole discretion and in lieu of such
assumption or substitution, that the Optionee shall have the right to exercise
the Option as to some or all of the Optioned Stock, including Shares as to which
the Option would not otherwise be exercisable. If the Administrator makes an
Option exercisable in lieu of assumption or substitution in the event of a
merger or sale of assets, the Administrator shall notify the Optionee that the
Option shall be

                                      -9-

<PAGE>

exercisable for a period of thirty (30) days from the date of such notice, and
the Option will terminate upon the expiration of such period.

      15.   TIME OF GRANTING OPTIONS. The date of grant of an Option shall, for
all purposes, be the date on which the Administrator makes the determination
granting such Option, or such other date as is determined by the Board. Notice
of the determination shall be given to each Employee or Consultant to whom an
Option is so granted within a reasonable time after the date of such grant.

      16.   AMENDMENT AND TERMINATION OF THE PLAN.

            (a)   AMENDMENT AND TERMINATION. The Board may amend or terminate
the Plan from time to time in such respects as the Board may deem advisable;
provided that, the following revisions or amendments shall require approval of
the stockholders of the Company in the manner described in Section 20 of the
Plan:

                  (i) any increase in the number of Shares subject to the Plan,
            other than an adjustment under Section 14 of the Plan;

                  (ii) any change in the designation of the class of persons
            eligible to be granted Options;

                  (iii) any change in the limitation on grants to employees as
            described in Section 8 of the Plan or other changes which would
            require stockholder approval to qualify options granted hereunder as
            performance-based compensation under Section 162(m) of the Code; or

                  (iv) any revision or amendment requiring stockholder approval
            in order to preserve the qualification of the Plan under Rule 16b-3.

            (b)   STOCKHOLDER APPROVAL. If any amendment requiring stockholder
approval under Section 16(a) of the Plan is made subsequent to the first
registration of any class of equity securities by the Company under Section 12
of the Exchange Act, such stockholder approval shall be solicited as described
in Section 20 of the Plan.

            (c)   EFFECT OF AMENDMENT OR TERMINATION. Any such amendment or
termination of the Plan shall not affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the Optionee and
the Board, which agreement must be in writing and signed by the Optionee and the
Company.

      17.   CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations

                                      -10-

<PAGE>

promulgated thereunder, and the requirements of any stock exchange upon which
the Shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.

            As a condition to the exercise of an Option, the Company may require
the person exercising such Option to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned relevant provisions of law.

      18.   RESERVATION OF SHARES. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan. The inability of the Company
to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.

      19.   AGREEMENTS. Options shall be evidenced by written agreements in such
form as the Board shall approve from time to time.

      20.   STOCKHOLDER APPROVAL.

            (a)   Continuance of the Plan shall be subject to approval by the
stockholders of the Company within twelve (12) months before or after the date
the Plan is adopted. Such stockholder approval shall be obtained in the manner
and to the degree required under applicable federal and state law and the rules
of any stock exchange upon which the Shares are listed.

            (b)   In the event that the Company registers any class of equity
securities pursuant to Section 12 of the Exchange Act, any required approval of
the stockholders of the Company obtained after such registration shall be
solicited substantially in accordance with Section 14(a) of the Exchange Act and
the rules and regulations promulgated thereunder.

            (c)   If any required approval by the stockholders of the Plan
itself or of any amendment thereto is solicited at any time otherwise than in
the manner described in Section 20(b) hereof, then the Company shall, at or
prior to the first annual meeting of stockholders held subsequent to the later
of (1) the first registration of any class of equity securities of the Company
under Section 12 of the Exchange Act or (2) the granting of an Option hereunder
to an officer or director after such registration, do the following:

                  (i)   furnish in writing to the holders entitled to vote for
the Plan substantially the same information that would be required (if proxies
to be voted with respect to approval or disapproval of the Plan or amendment
were then being solicited) by the rules and regulations in effect under Section
14(a) of the Exchange Act at the time such information is furnished; and

                                      -11-

<PAGE>

                  (ii)  file with, or mail for filing to, the Securities and
Exchange Commission four copies of the written information referred to in
subsection (i) hereof not later than the date on which such information is first
sent or given to stockholders.

      21.   INFORMATION TO OPTIONEES. The Company shall provide to each
Optionee, during the period for which such Optionee has one or more Options
outstanding, copies of all annual reports and other information which are
provided to all stockholders of the Company.

                                      -12-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00044-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00044-of-00352.parquet"}]]