Document:

Amdocs Limited

                            2% Convertible Notes due
                                  June 1, 2008

                          Registration Rights Agreement
                          -----------------------------
                                                                  May 30, 2001
Goldman, Sachs & Co.,
85 Broad Street
New York, New York 10004

Ladies and Gentlemen:

     Amdocs Limited, a Guernsey Islands corporation (the "Company"), proposes to
issue and sell to the Purchaser (as defined  herein) upon the terms set forth in
the Purchase  Agreement (as defined herein) its 2% Convertible Notes due June 1,
2008 (the  "Securities").  As an  inducement  to the Purchaser to enter into the
Purchase  Agreement and in satisfaction of a condition to the obligations of the
Purchaser  thereunder,  the Company agrees with the Purchaser for the benefit of
Holders (as defined herein) from time to time of the Registrable  Securities (as
defined herein) as follows:

         1.     DEFINITIONS.

     (a)  Capitalized  terms  used  herein  without  definition  shall  have the
meanings ascribed to them in the Purchase Agreement.  As used in this Agreement,
the following defined terms shall have the following meanings:

     "Act" or "Securities  Act" means the United States  Securities Act of 1933,
as amended.

     "Affiliate" of any specified person means any other person which,  directly
or  indirectly,  is in control of, is controlled  by, or is under common control
with such specified person. For purposes of this definition, control of a person
means the power,  direct or  indirect,  to direct or cause the  direction of the
management and policies of such person whether by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.

     "Closing  Date" means the First Time of Delivery as defined in the Purchase
Agreement.

     "Commission" means the United States Securities and Exchange Commission, or
any other  federal  agency at the time  administering  the  Exchange  Act or the
Securities Act, whichever is the relevant statute for the particular purpose.

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     "Competitor" means any person that the board of directors of the Company in
its  judgment  determines  to be a  competitor  of  the  Company  or  any of its
subsidiaries.

     "DTC" means The Depository Trust Company.

     "Effectiveness  Period" has the meaning assigned thereto in Section 2(b)(i)
hereof.

     "Effective Time" means the date on which the Commission  declares the Shelf
Registration  Statement  effective or on which the Shelf Registration  Statement
otherwise becomes effective.

     "Electing  Holder" has the meaning  assigned  thereto in Section  3(a)(iii)
hereof.

     "Exchange Act" means the United States Securities  Exchange Act of 1934, as
amended.

     "Holder"  means,  any  person  that  is the  record  owner  of  Registrable
Securities  (and  includes  any person  that has a  beneficial  interest  in any
Registrable Security in book-entry form).

     "Indenture"  means the  Indenture,  dated as of May 30,  2001,  between the
Company and United States Trust Company of New York, as amended and supplemented
from time to time in accordance with its terms.

     "Managing  Underwriters"  means the investment banker or investment bankers
and manager or managers that shall administer an underwritten  offering, if any,
conducted pursuant to Section 6 hereof.

     "NASD  Rules"  means the Rules of the National  Association  of  Securities
Dealers, Inc., as amended from time to time.

     "Notice and  Questionnaire"  means a Notice of  Registration  Statement and
Selling  Securityholder  Questionnaire  substantially  in the form of  Exhibit A
hereto.

     "Ordinary Share" means the Company's ordinary shares, par value (pound)0.01
per share.

     The term "person" means an individual,  partnership,  corporation, trust or
unincorporated organization,  or a government or agency or political subdivision
thereof.

     "Prospectus"  means the  prospectus  (including,  without  limitation,  any
preliminary  prospectus,  any final prospectus and any prospectus that discloses
information  previously  omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Act) included in the
Shelf  Registration  Statement,  as amended or  supplemented  by any  prospectus
supplement  with  respect  to the terms of the  offering  of any  portion of the
Registrable  Securities covered by the Shelf  Registration  Statement and by all
other  amendments  and  supplements to such  prospectus,  including all material
incorporated  by reference in such  prospectus and all documents filed after the
date of such  prospectus by the Company under the Exchange Act and  incorporated
by reference therein.

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     "Purchase  Agreement"  means the  purchase  agreement,  dated as of May 24,
2001, between the Purchaser and the Company relating to the Securities.

     "Purchaser"  means  Goldman,  Sachs & Co.,  as  Purchaser  in the  Purchase
Agreement.

     "Registrable  Securities" means all or any portion of the Securities issued
from time to time under the Indenture in registered form and the Ordinary Shares
issuable upon conversion of such Securities;  provided, however, that a security
ceases to be a Registrable Security when it is no longer a Restricted Security.

     "Restricted  Security"  means any Security or Ordinary  Share issuable upon
conversion thereof except any such Security or Ordinary Share which (i) has been
effectively   registered   under  the  Securities  Act  and  sold  in  a  manner
contemplated by the Shelf Registration  Statement,  (ii) has been transferred in
compliance  with Rule 144 under the Securities  Act (or any successor  provision
thereto) or is  transferable  pursuant to paragraph (k) of such Rule 144 (or any
successor provision thereto),  (iii) has been sold in compliance with Regulation
S under the  Securities  Act (or any successor  thereto) and does not constitute
the unsold  allotment of a distributor  within the meaning of Regulation S under
the Securities Act, or (iv) has otherwise been transferred and a new Security or
Ordinary Share not subject to transfer restrictions under the Securities Act has
been delivered by or on behalf of the Company in accordance  with Section 3.5 of
the Indenture.

     "Rules and  Regulations"  means the published  rules and regulations of the
Commission  promulgated  under the  Securities  Act or the  Exchange  Act, as in
effect at any relevant time.

     "Seller Information" has the meaning assigned thereto in Section 5(a).

     "Shelf  Registration"  means a registration  effected pursuant to Section 2
hereof.

     "Shelf Registration Statement" means a "shelf" registration statement filed
under the  Securities Act providing for the  registration  of, and the sale on a
continuous or delayed basis by the Holders of, all of the Registrable Securities
pursuant to Rule 415 under the  Securities  Act and/or any similar rule that may
be adopted by the Commission, filed by the Company pursuant to the provisions of
Section 2 of this Agreement,  including the Prospectus  contained  therein,  any
amendments  and   supplements   to  such   registration   statement,   including
post-effective  amendments,  and all exhibits and all material  incorporated  by
reference in such registration statement.

     "Trust  Indenture  Act"  means  the  Trust  Indenture  Act of 1939,  or any
successor thereto, and the rules,  regulations and forms promulgated thereunder,
as the same shall be amended from time to time.

     The term "underwriter"  means any underwriter of Registrable  Securities in
connection with an offering thereof under a Shelf Registration Statement.

     (b) Wherever  there is a reference in this Agreement to a percentage of the
"principal  amount" of Registrable  Securities or to a percentage of Registrable
Securities,  Ordinary  Shares

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shall be treated as representing  the principal  amount of Securities  which was
surrendered  for  conversion  or  exchange  in order to receive  such  number of
Ordinary Shares.

         2.     SHELF REGISTRATION.

     (a) The Company shall, no later than 90 calendar days following the Closing
Date, file with the Commission a Shelf  Registration  Statement  relating to the
offer and sale of the Registrable Securities by the Holders from time to time in
accordance  with the  methods of  distribution  elected by such  Holders and set
forth in such  Shelf  Registration  Statement  and,  thereafter,  shall  use its
reasonable  efforts to cause such Shelf  Registration  Statement  to be declared
effective  under the Act no later than 180 calendar  days  following the Closing
Date;  provided,  however,  that the Company  may,  upon  written  notice to all
Holders, postpone having the Shelf Registration Statement declared effective for
a  reasonable  period  not to  exceed  90 days  if the  Company  in  good  faith
reasonably  believes  that it possesses  material  non-public  information,  the
disclosure of which would have a material  adverse effect on the Company and its
subsidiaries taken as a whole; provided,  further, however, that no Holder shall
be entitled to be named as a selling  securityholder  in the Shelf  Registration
Statement  or to use the  Prospectus  forming  a part  thereof  for  resales  of
Registrable Securities unless such Holder is an Electing Holder.

     (b) The Company shall use its reasonable efforts:

          (i) To keep the Shelf Registration Statement continuously effective in
     order to permit the Prospectus forming part thereof to be usable by Holders
     until the earliest of (1) the sale of all Registrable Securities registered
     under the Shelf  Registration  Statement;  (2) the expiration of the period
     referred  to in Rule  144(k)  of the Act with  respect  to all  Registrable
     Securities held by Persons that are not Affiliates of the Company;  and (3)
     two years from the date (the  "Effective  Date")  such  Shelf  Registration
     Statement is declared  effective  (such period being  referred to herein as
     the "Effectiveness Period");

          (ii) After the  Effective  Time of the Shelf  Registration  Statement,
     promptly upon the request of any Holder of Registrable  Securities  that is
     not then an Electing  Holder,  to take any action  reasonably  necessary to
     enable such Holder to use the Prospectus forming a part thereof for resales
     of  Registrable  Securities,  including,  without  limitation,  any  action
     necessary to identify such Holder as a selling  securityholder in the Shelf
     Registration   Statement;   provided,   however,   that   nothing  in  this
     subparagraph  shall  relieve  such  Holder  of the  obligation  to return a
     completed and signed Notice and  Questionnaire to the Company in accordance
     with Section 3(a)(ii) hereof; and

          (iii) If at any time the  Securities,  pursuant  to  Article 12 of the
     Indenture,  are convertible into securities other than Ordinary Shares, the
     Company shall,  or shall cause any successor  under the Indenture to, cause
     such securities to be included in the Shelf Registration Statement no later
     than the date on which the  Securities  may then be  convertible  into such
     securities.
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The Company shall be deemed not to have used its reasonable  efforts to keep the
Shelf  Registration  Statement  effective  during  the  requisite  period if the
Company voluntarily takes any action that would result in Holders of Registrable
Securities  covered  thereby  not  being  able to  offer  and  sell  any of such
Registrable Securities during that period, unless such action is (i) required by
applicable  law  and  the  Company   thereafter   promptly   complies  with  the
requirements of paragraph 3(j) below or (ii) permitted pursuant to Section 2(c).

     (c) The Company may suspend the use of the  Prospectus  for a period not to
exceed 30 days in any 90-day  period or an  aggregate of 90 days in any 12-month
period if the Board of Directors of the Company  shall have  determined  in good
faith that because of valid  business  reasons (not  including  avoidance of the
Company's  obligations  hereunder),  including the acquisition or divestiture of
assets,  pending  corporate  developments and similar events,  it is in the best
interests of the Company to suspend such use, and prior to  suspending  such use
the Company provides the Holders with written notice of such  suspension,  which
notice need not specify the nature of the event giving rise to such suspension.

     3.  REGISTRATION  PROCEDURES.  In  connection  with the Shelf  Registration
Statement, the following provisions shall apply:

     (a) (i) Not less  than 30  calendar  days  prior  to the  time the  Company
intends  in good  faith  to  have  the  Shelf  Registration  Statement  declared
effective, the Company shall mail the Notice and Questionnaire to the Holders of
Registrable  Securities.  No Holder  shall be  entitled to be named as a selling
securityholder in the Shelf Registration Statement as of the Effective Time, and
no Holder  shall be entitled to use the  Prospectus  forming a part  thereof for
resales of Registrable Securities at any time, unless such Holder has returned a
completed and signed Notice and Questionnaire to the Company by the deadline for
response set forth therein; provided, however, Holders of Registrable Securities
shall  have at least 28  calendar  days  from the date on which the  Notice  and
Questionnaire  is first mailed to such Holders to return a completed  and signed
Notice and Questionnaire to the Company.

          (ii) After the Effective Time of the Shelf Registration Statement, the
     Company  shall,  upon the request of any Holder of  Registrable  Securities
     that  is  not  then  an  Electing  Holder,   promptly  send  a  Notice  and
     Questionnaire to such Holder. The Company shall not be required to take any
     action  to name  such  Holder  as a  selling  securityholder  in the  Shelf
     Registration  Statement  or to enable  such  Holder  to use the  Prospectus
     forming a part  thereof for resales of  Registrable  Securities  until such
     Holder has returned a completed and signed Notice and  Questionnaire to the
     Company.

          (iii) The term "Electing  Holder" shall mean any Holder of Registrable
     Securities   that  has   returned  a  completed   and  signed   Notice  and
     Questionnaire to the Company in accordance with Section 3(a)(i) or 3(a)(ii)
     hereof.

     (b) The  Company  shall  furnish  to each  Electing  Holder,  prior  to the
Effective Time, a copy of the Shelf Registration  Statement initially filed with
the Commission,  and shall furnish to such Holders,  prior to the filing thereof
with the  Commission,  copies of each  amendment  thereto and each  amendment or
supplement,  if any,  to the  Prospectus  included  therein,  and

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shall use its  reasonable  efforts  to take into  account  and,  if  appropriate
reflect in each such  document,  at the Effective Time or when so filed with the
Commission,  as the  case  may be,  such  comments  as such  Holders  and  their
respective counsel reasonably may propose.

     (c) The Company shall promptly take such action as may be necessary so that
(i) each of the Shelf  Registration  Statement and any amendment thereto and the
Prospectus  forming part thereof and any  amendment or  supplement  thereto (and
each report or other  document  incorporated  therein by reference in each case)
complies in all material  respects with the  Securities Act and the Exchange Act
and the  respective  rules and  regulations  thereunder,  (ii) each of the Shelf
Registration  Statement  and any  amendment  thereto  does not,  when it becomes
effective,  contain an untrue  statement  of a material  fact or omit to state a
material fact required to be stated  therein or necessary to make the statements
therein not  misleading  and (iii) each of the  Prospectus  forming  part of the
Shelf  Registration   Statement,   and  any  amendment  or  supplement  to  such
Prospectus,  does not at any time  during the  Effectiveness  Period  include an
untrue  statement of a material fact or omit to state a material fact  necessary
in order to make the statements therein, in the light of the circumstances under
which  they were  made,  not  misleading;  provided  that the  Company  shall be
entitled to rely on any Seller Information;  provided, further, that the Company
is not required to prepare an amendment or supplement to the Shelf  Registration
Statement  or the  Prospectus  pursuant to this  Section  3(c) during any period
during which the use of the Prospectus may be suspended by the Company  pursuant
to Section 2(b) or 2(c).

     (d) The Company  shall  promptly  advise each  Electing  Holder,  and shall
confirm such advice in writing if so requested by any such Holder:

          (i) when a Shelf Registration  Statement and any amendment thereto has
     been filed with the Commission and when a Shelf  Registration  Statement or
     any  post-effective  amendment thereto has become  effective,  in each case
     making a public  announcement  thereof by release made to Reuters  Economic
     Services and Bloomberg Business News;

          (ii) of any request by the  Commission  after the  Effective  Time for
     amendments  or  supplements  to the  Shelf  Registration  Statement  or the
     Prospectus included therein or for additional information.

          (iii) of the issuance by the  Commission of any stop order  suspending
     the effectiveness of the Shelf Registration  Statement or the initiation of
     any proceedings for such purpose;

          (iv) of the receipt by the Company of any notification with respect to
     the suspension of the qualification of the securities included in the Shelf
     Registration  Statement for sale in any  jurisdiction  or the initiation of
     any proceeding for such purpose; and

          (v) of the  happening  of any event or the  existence  of any state of
     facts that  requires
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     the  making of any  changes  in the  Shelf  Registration  Statement  or the
     Prospectus   included  therein  so  that,  as  of  such  date,  such  Shelf
     Registration Statement and Prospectus do not contain an untrue statement of
     a material  fact and do not omit to state a material  fact  required  to be
     stated therein or necessary to make the statements  therein (in the case of
     the Prospectus,  in light of the circumstances  under which they were made)
     not misleading (which advice shall be accompanied by an instruction to such
     Holders to suspend the use of the  Prospectus  until the requisite  changes
     have been made).

     (e) The Company shall use its best efforts to prevent the issuance,  and if
issued to obtain the withdrawal,  of any order  suspending the  effectiveness of
the Shelf Registration Statement at the earliest possible time.

     (f) The Company shall furnish to each Electing Holder,  without charge,  at
least  one  copy of the  Shelf  Registration  Statement  and all  post-effective
amendments thereto,  including financial statements and schedules,  and, if such
Holder so requests in writing,  all reports,  other  documents and exhibits that
are filed with or incorporated by reference in the Shelf Registration Statement.

     (g) The Company shall,  during the  Effectiveness  Period,  deliver to each
Electing  Holder,  without charge,  as many copies of the Prospectus  (including
each preliminary  Prospectus)  included in the Shelf Registration  Statement and
any  amendment or  supplement  thereto as such  Electing  Holder may  reasonably
request;  and the Company  consents  (except during the continuance of any event
described in Section  3(d)(v) above or during any suspension  period pursuant to
Section  2(c)) to the use of the  Prospectus  and any  amendment  or  supplement
thereto by each of the Electing Holders in connection with the offering and sale
of the  Registrable  Securities  covered by the  Prospectus and any amendment or
supplement thereto during the Effectiveness Period.

     (h) Prior to any offering of Registrable  Securities  pursuant to the Shelf
Registration  Statement,  the Company shall (i) register or qualify or cooperate
with the Electing  Holders and their  respective  counsel in connection with the
registration or qualification of such Registrable  Securities for offer and sale
under the securities or "blue sky" laws of such jurisdictions  within the United
States  as  any  Electing  Holder  may  reasonably   request,   (ii)  keep  such
registrations  or  qualifications  in effect and comply  with such laws so as to
permit the continuance of offers and sales in such  jurisdictions for so long as
may be  necessary  to enable any  Electing  Holder or  underwriter,  if any,  to
complete  its  distribution  of  Registrable  Securities  pursuant  to the Shelf
Registration  Statement,  and (iii)  take any and all other  actions  reasonably
necessary or advisable to enable the disposition in such  jurisdictions  of such
Registrable Securities; provided, however, that in no event shall the Company be
obligated to (A) qualify as a foreign  corporation  or as a dealer in securities
in any  jurisdiction  where it would not otherwise be required to so qualify but
for this Section 3(h), (B) file any general consent to service of process in any
jurisdiction  where it is not as of the date  hereof so subject  or (C)  subject
itself to taxation in any jurisdiction  where it is not as of the date hereof so
subject.

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     (i) Unless any Registrable Securities shall be in book-entry only form, the
Company  shall  cooperate  with the Electing  Holders to  facilitate  the timely
preparation and delivery of certificates  representing Registrable Securities to
be sold pursuant to the Shelf Registration Statement, which certificates,  if so
required by any securities  exchange upon which any  Registrable  Securities are
listed,  shall  be  penned,   lithographed  or  engraved,  or  produced  by  any
combination of such methods,  on steel engraved borders,  and which certificates
shall be free of any restrictive legends and in such permitted denominations and
registered in such names as Electing  Holders may request in connection with the
sale of Registrable Securities pursuant to the Shelf Registration Statement.

     (j)  Subject  to Section  2(c),  upon the  occurrence  of any fact or event
contemplated by paragraph  3(d)(v) above,  the Company shall promptly  prepare a
post-effective  amendment to any Shelf Registration Statement or an amendment or
supplement  to the related  Prospectus  or file any other  required  document so
that,  as  thereafter  delivered to  purchasers  of the  Registrable  Securities
included  therein,  the  Prospectus  will not include an untrue  statement  of a
material  fact or  omit  to  state  any  material  fact  necessary  to make  the
statements  therein,  in the light of the  circumstances  under  which they were
made, not misleading; provided that the Company shall be entitled to rely on any
Seller  Information.  If  the  Company  notifies  the  Electing  Holders  of the
occurrence of any event  contemplated by paragraph  3(d)(v) above,  the Electing
Holder shall suspend the use of the  Prospectus  until the requisite  changes to
the Prospectus have been made.

     (k) Not later than the Effective Time of the Shelf Registration  Statement,
the Company shall provide a CUSIP number for the Registrable Securities that are
debt securities.

     (l) The Company  shall use its best  efforts to comply with all  applicable
Rules and Regulations, and to make generally available to its securityholders as
soon as  practicable,  but in any event not later than eighteen months after (i)
the effective date (as defined in Rule 158(c) under the  Securities  Act) of the
Shelf  Registration  Statement,  (ii) the effective date of each  post-effective
amendment to the Shelf Registration Statement, and (iii) the date of each filing
by the  Company  with the  Commission  of an Annual  Report on Form 20-F that is
incorporated  by  reference  in the Shelf  Registration  Statement,  an  earning
statement of the Company and its  subsidiaries  complying  with Section 11(a) of
the  Securities Act and the rules and  regulations of the Commission  thereunder
(including, at the option of the Company, Rule 158).

     (m) Not later than the Effective Time of the Shelf Registration  Statement,
the Company shall cause the Indenture to be qualified  under the Trust Indenture
Act; in connection with such qualification, the Company shall cooperate with the
Trustee  under the  Indenture  and the Holders (as defined in the  Indenture) to
effect such changes to the Indenture as may be required for such Indenture to be
so qualified in accordance  with the terms of the Trust  Indenture  Act; and the
Company shall execute, and shall use all reasonable efforts to cause the Trustee
to execute,  all  documents  that may be required to effect such changes and all
other forms and  documents  required to be filed with the  Commission  to enable
such Indenture to be so qualified in a timely manner. In the event that any such
amendment  or  modification  referred  to in  this  Section  3(m)  involves  the
appointment  of a new trustee under the  Indenture,  the

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Company  shall  appoint a new  trustee  thereunder  pursuant  to the  applicable
provisions of the Indenture.

     (n)  Subject  to Section  2(c),  in the event of an  underwritten  offering
conducted  pursuant  to  Section 6 hereof,  the  Company  shall,  if  requested,
promptly  include or  incorporate in a Prospectus  supplement or  post-effective
amendment to the Shelf  Registration  Statement such information as the Managing
Underwriters  reasonably  agree  should  be  included  therein  and to which the
Company does not reasonably  object and shall make all required  filings of such
Prospectus  supplement or post-effective  amendment as soon as practicable after
it is notified of the matters to be included or  incorporated in such Prospectus
supplement or post-effective amendment.

     (o) The Company shall enter into such  customary  agreements  (including an
underwriting  agreement  in  customary  form  in the  event  of an  underwritten
offering  conducted pursuant to Section 6 hereof) and take all other appropriate
action in order to expedite and facilitate the  registration  and disposition of
the  Registrable  Securities,  and in connection  therewith,  if an underwriting
agreement is entered into, cause the same to contain indemnification  provisions
and  procedures  substantially  identical to those set forth in Section 5 hereof
with respect to all parties to be indemnified pursuant to Section 5 hereof.

     (p) The Company shall:

          (i)(A)  make  reasonably  available  for  inspection  by any  Electing
     Holders that holds at least $1,000,000 worth of Registrable  Securities and
     is  not,  and  is  not  affiliated   with,  a  Competitor  of  the  Company
     (collectively,  the "Representatives") or any underwriter  participating in
     any  disposition  pursuant  to the Shelf  Registration  Statement,  and any
     attorney,  accountant  or other agent  retained by such Holders or any such
     underwriter all relevant financial and other records,  pertinent  corporate
     documents and properties of the Company and its subsidiaries, and (B) cause
     the  Company's  officers,   directors  and  employees  to  make  reasonably
     available all information  reasonably  requested by such Representatives or
     any such underwriter,  attorney, accountant or agent in connection with the
     Shelf Registration Statement, in each case, as is customary for similar due
     diligence examinations;  provided,  however, that all records,  information
     and documents that are designated in writing by the Company, in good faith,
     as confidential shall be kept confidential by such  Representatives and any
     such underwriter,  attorney, accountant or agent, unless such disclosure is
     made in  connection  with a court  proceeding  or required by law (provided
     that the  Company  is given  prior  written  notice  as soon as  reasonably
     practicable and such Representatives,  underwriter, attorney, accountant or
     agent cooperates with the Company, to the extent practicable, to limit such
     disclosure) or such records,  information or documents  become available to
     the public  generally  or  through a third  party  without an  accompanying
     obligation of confidentiality;  and provided further that, if the foregoing
     inspection  and  information  gathering  would in the Company's  reasonable
     judgment  otherwise  disrupt the Company's  conduct of its  business,  such
     inspection  and  information   gathering  shall,  to  the  greatest  extent
     possible, be coordinated on behalf of the Electing Holders and the

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     other parties entitled  thereto by one counsel  designated by and on behalf
     of Electing Holders and other parties;

          (ii) in connection with any underwritten  offering  conducted pursuant
     to  Section  6 hereof,  make such  representations  and  warranties  to the
     Holders  participating  in such  underwritten  offering and to the Managing
     Underwriters,  in form,  substance and scope as are customarily made by the
     Company to  underwriters  in primary  underwritten  offerings of equity and
     convertible debt securities and covering matters including, but not limited
     to, those set forth in the Purchase Agreement;

          (iii) in connection with any underwritten  offering conducted pursuant
     to Section 6 hereof,  obtain  opinions  of counsel  to the  Company  (which
     counsel and opinions (in form,  scope and  substance)  shall be  reasonably
     satisfactory to the Managing  Underwriters)  addressed to the underwriters,
     covering such matters as are customarily  covered in opinions  requested in
     primary  underwritten  offerings of equity and convertible  debt securities
     and such other matters as may be reasonably  requested by such underwriters
     (it being  agreed  that the  matters to be covered by such  opinions  shall
     include,  without  limitation,  as of the date of the opinion and as of the
     Effective  Time  of  the  Shelf  Registration   Statement  or  most  recent
     post-effective  amendment thereto, as the case may be, the absence from the
     Shelf  Registration  Statement and the Prospectus,  including the documents
     incorporated  by reference  therein,  of an untrue  statement of a material
     fact or the omission of a material  fact  required to be stated  therein or
     necessary to make the statements therein (in the case of the Prospectus, in
     light of the circumstances under which they were made) not misleading;

          (iv) in connection with any underwritten  offering  conducted pursuant
     to Section 6 hereof, obtain "cold comfort" letters and updates thereof from
     the independent public accountants of the Company (and, if necessary,  from
     the independent  public  accountants of any subsidiary of the Company or of
     any business  acquired by the Company for which  financial  statements  and
     financial  data  are,  or  are  required  to  be,  included  in  the  Shelf
     Registration Statement),  addressed to the underwriters,  in customary form
     and  covering  matters of the type  customarily  covered in "cold  comfort"
     letters in connection with primary underwritten offerings;

          (v) in connection with any underwritten offering conducted pursuant to
     Section  6  hereof,  deliver  such  documents  and  certificates  as may be
     reasonably  requested  by any Holders  participating  in such  underwritten
     offering  and  the  Managing  Underwriters,   if  any,  including,  without
     limitation,  certificates  to evidence  compliance with Section 3(j) hereof
     and with any conditions  contained in the  underwriting  agreement or other
     agreements entered into by the Company.

     (q) The  Company  will use its  reasonable  efforts  to cause the  Ordinary
Shares  issuable upon  conversion of the Securities to be listed on the New York
Stock  Exchange or other stock  exchange or trading system on which the Ordinary
Shares  primarily  trade  on or  prior  to  the  Effective  Time  of  the  Shelf
Registration Statement hereunder.

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<PAGE>

     (r) In the event that any  broker-dealer  registered under the Exchange Act
shall be an "affiliate" (as defined in Rule 2720(b)(1) of the NASD Rules (or any
successor provision thereto)) of the Company or has a "conflict of interest" (as
defined  in Rule  2720(b)(7)  of the  NASD  Rules  (or any  successor  provision
thereto)) and such broker-dealer shall underwrite, participate as a member of an
underwriting  syndicate or selling  group or assist in the  distribution  of any
Registrable Securities covered by the Shelf Registration Statement, whether as a
Holder of such Registrable Securities or as an underwriter, a placement or sales
agent or a broker or dealer in respect thereof, or otherwise,  the Company shall
assist such  broker-dealer in complying with the requirements of the NASD Rules,
including,   without  limitation,  by  (A)  engaging  a  "qualified  independent
underwriter" (as defined in Rule 2720(b)(15) of the NASD Rules (or any successor
provision  thereto))  to  participate  in the  preparation  of the  registration
statement relating to such Registrable  Securities,  to exercise usual standards
of due diligence in respect  thereto and to recommend the public  offering price
of such  Registrable  Securities,  (B) indemnifying  such qualified  independent
underwriter to the extent of the  indemnification  of  underwriters  provided in
Section 5 hereof,  and (C) providing such  information to such  broker-dealer as
may be required in order for such  broker-dealer to comply with the requirements
of the NASD Rules.

     (s) The Company  shall use its  reasonable  efforts to take all other steps
necessary  to effect  the  registration,  offering  and sale of the  Registrable
Securities covered by the Shelf Registration Statement contemplated hereby.

     4. REGISTRATION  EXPENSES.  Except as otherwise  provided in Section 3, the
Company  shall  bear all fees  and  expenses  incurred  in  connection  with the
performance of its  obligations  under Sections 2 and 3 hereof and shall bear or
reimburse the Electing  Holders for the reasonable fees and  disbursements  of a
single  counsel  selected  by a  plurality  of all  Electing  Holders who own an
aggregate  of not less than 25% of the  Registrable  Securities  covered  by the
Shelf  Registration   Statement  to  act  as  counsel  therefore  in  connection
therewith.  Each  Electing  Holder  shall  pay all  underwriting  discounts  and
commissions and transfer  taxes, if any,  relating to the sale or disposition of
such Electing Holder's Registrable Securities pursuant to the Shelf Registration
Statement.

     5. INDEMNIFICATION AND CONTRIBUTION.

     (a)   INDEMNIFICATION  BY  THE  COMPANY.   Upon  the  registration  of  the
Registrable Securities pursuant to Section 2 hereof, the Company shall indemnify
and hold harmless each Electing  Holder and each  underwriter,  selling agent or
other  securities  professional,  if any, which  facilitates  the disposition of
Registrable Securities,  and each of their respective officers and directors and
each person who controls such  Electing  Holder,  underwriter,  selling agent or
other securities professional within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act (each such person being sometimes referred
to  as  an  "Indemnified  Person")  against  any  losses,   claims,  damages  or
liabilities,  joint or  several,  to which  such  Indemnified  Person may become
subject under the Securities Act or otherwise,  insofar as such losses,  claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an  untrue  statement  or  alleged  untrue  statement  of a  material  fact
contained  in any Shelf  Registration  Statement  under  which such  Registrable
Securities  are to be registered  under the

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<PAGE>

Securities Act, or any Prospectus  contained therein or furnished by the Company
to any Indemnified  Person, or any amendment or supplement thereto, or arise out
of or are  based  upon the  omission  or  alleged  omission  to state  therein a
material fact required to be stated  therein or necessary to make the statements
therein  (in the case of the  Prospectus,  in light of the  circumstances  under
which they were made) not misleading, and the Company hereby agrees to reimburse
such Indemnified Person for any legal or other expenses  reasonably  incurred by
them in connection with  investigating  or defending any such action or claim as
such expenses are  incurred;  provided,  however,  that the Company shall not be
liable to any such  Indemnified  Person in any such case to the extent  that any
such loss,  claim,  damage or liability arises out of or is based upon an untrue
statement or alleged  untrue  statement or omission or alleged  omission made in
such Shelf Registration Statement or Prospectus,  or amendment or supplement, in
reliance  upon and in  conformity  with  written  information  furnished  to the
Company by any Holder,  underwriter  or selling agent  expressly for use therein
(the  "Seller  Information");  provided,  further,  that  in  a  disposition  of
Registrable  Securities  that  does  not  involve  (in  whole  or  in  part)  an
underwritten  offering conducted pursuant to Section 6 hereof, the Company shall
not be liable to any Electing Holder or any officer and director and each person
who controls such Electing Holder (an "Indemnified Electing Holder") pursuant to
the  foregoing to the extent that any such loss,  claim,  damage or liability of
such  Indemnified  Electing  Holder results from the fact that such  Indemnified
Electing Holder sold  Registrable  Securities to a person as to whom it shall be
established by conclusive evidence that there was not sent or given, at or prior
to the written confirmation of such a sale, a copy of the Prospectus  (excluding
documents  incorporated  by  reference)  or the  Prospectus  as then  amended or
supplemented  (excluding documents  incorporated by reference) in any case where
such  delivery is required by the Act, if the Company has  previously  furnished
copies thereof upon request therefor in sufficient  quantity to such Indemnified
Electing Holder and the loss,  claim,  damage,  or liability of such Indemnified
Electing Holder results from an untrue  statement or omission of a material fact
contained in the preliminary  prospectus which was identified in writing at such
time to  such  Indemnified  Electing  Holder  and  corrected  in the  Prospectus
(excluding any document  incorporated by reference) or in the Prospectus as then
amended or supplemented (excluding documents incorporated by reference) and such
correction would have prevented such loss, claim, damage or liability.

     (b) INDEMNIFICATION  BY THE HOLDERS AND ANY AGENTS AND UNDERWRITERS.  Each
Electing  Holder  agrees,  as a  consequence  of the  inclusion  of any of  such
Holder's Registrable Securities in such Shelf Registration  Statement,  and each
underwriter,  selling  agent or other  securities  professional,  if any,  which
facilitates  the  disposition  of  Registrable  Securities  shall  agree,  as  a
consequence  of  facilitating   such  disposition  of  Registrable   Securities,
severally and not jointly,  to (i) indemnify and hold harmless the Company,  its
directors,  officers who sign any Shelf Registration  Statement and each person,
if any, who controls the Company  within the meaning of either Section 15 of the
Securities  Act or Section 20 of the Exchange Act,  against any losses,  claims,
damages or  liabilities  to which the  Company or such other  persons may become
subject, under the Securities Act or otherwise,  insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an  untrue  statement  or  alleged  untrue  statement  of a  material  fact
contained in such Shelf Registration  Statement or Prospectus,  or any amendment
or  supplement,  or arise  out of or are  based  upon the  omission  or  alleged
omission  to state  therein a material  fact  required  to be stated  therein or
necessary to
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<PAGE>

make the statements therein not misleading, in each case to the extent, but only
to the  extent,  that such  untrue  statement  or alleged  untrue  statement  or
omission or alleged  omission was made in reliance upon and in  conformity  with
written  information  furnished  to the  Company  by such  Holder,  underwriter,
selling agent or other securities  professional  expressly for use therein,  and
(ii) reimburse the Company for any legal or other expenses  reasonably  incurred
by the Company in connection with  investigating or defending any such action or
claim as such expenses are incurred.

     (c) NOTICES OF CLAIMS,  ETC. Promptly after receipt by an indemnified party
under  subsection (a) or (b) above of notice of the  commencement of any action,
such  indemnified  party  shall,  if a claim in  respect  thereof  is to be made
against an  indemnifying  party under this  Section 5, notify such  indemnifying
party in writing of the commencement  thereof; but the omission so to notify the
indemnifying  party shall not relieve it from any liability which it may have to
any  indemnified  party  otherwise  than under this  Section 5. In case any such
action  shall be brought  against any  indemnified  party and it shall notify an
indemnifying party of the commencement thereof, such indemnifying party shall be
entitled to participate  therein and, to the extent that it shall wish,  jointly
with any other  indemnifying  party  similarly  notified,  to assume the defense
thereof,  with counsel  satisfactory to such  indemnified  party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party),  and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof,  such indemnifying party shall
not be liable  to such  indemnified  party  under  this  Section 5 for any legal
expenses  of other  counsel  or any other  expenses,  in each case  subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without the
written  consent of the indemnified  party,  effect the settlement or compromise
of, or consent to the entry of any  judgment  with  respect  to, any  pending or
threatened action or claim in respect of which  indemnification  or contribution
may be sought  hereunder  (whether or not the indemnified  party is an actual or
potential party to such action or claim) unless such  settlement,  compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability  arising  out of such  action  or claim  and (ii)  does not  include a
statement as to, or an admission of, fault,  culpability or a failure to act, by
or on behalf of any indemnified  party. No indemnifying  party shall be required
to  indemnify  an  indemnified  party  for any  amount  paid or  payable  in the
settlement of any action,  proceeding or investigation without the prior written
consent of such  indemnifying  party,  which consent  shall not be  unreasonably
withheld.

     (d) CONTRIBUTION.  If the indemnification provided for in this Section 5 is
unavailable  to or  insufficient  to hold  harmless an  indemnified  party under
subsection  (a) or (b)  above in  respect  of any  losses,  claims,  damages  or
liabilities  (or actions in respect  thereof)  referred  to  therein,  then each
indemnifying  party  shall  contribute  to the  amount  paid or  payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect  thereof) in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and the indemnified party in connection
with the statements or omissions which resulted in such losses,  claims, damages
or liabilities  (or actions in respect  thereof),  as well as any other relevant
equitable  considerations.  The relative  fault of such  indemnifying  party and
indemnified  party shall be  determined  by reference  to,  among other  things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged  omission to state a material  fact

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<PAGE>

relates  to  information   supplied  by  such  indemnifying  party  or  by  such
indemnified  party,  and the  parties'  relative  intent,  knowledge,  access to
information  and  opportunity  to correct or prevent such statement or omission.
The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were  determined by pro rata  allocation  (even if
the Electing  Holders or any  underwriters,  selling agents or other  securities
professionals  or all of them were treated as one entity for such purpose) or by
any other  method of  allocation  which does not take  account of the  equitable
considerations  referred to in this Section 5(d).  The amount paid or payable by
an indemnified party as a result of the losses,  claims,  damages or liabilities
(or actions in respect thereof) referred to above shall be deemed to include any
legal or other fees or expenses reasonably incurred by such indemnified party in
connection with  investigating  or defending any such action or claim. No person
guilty of fraudulent  misrepresentation  (within the meaning of Section 11(f) of
the Securities  Act) shall be entitled to  contribution  from any person who was
not guilty of such fraudulent misrepresentation. The obligations of the Electing
Holders and any underwriters,  selling agents or other securities  professionals
in this  Section  5(d) to  contribute  shall be  several  in  proportion  to the
percentage  of  principal  amount  of  Registrable   Securities   registered  or
underwritten, as the case may be, by them and not joint.

     (e) Notwithstanding any other provision of this Section 5, in no event will
any (i) Electing  Holder be required to undertake  liability to any person under
this Section 5 for any amounts in excess of the dollar amount of the proceeds to
be received by such Holder from the sale of such Holder's Registrable Securities
(after  deducting  any  fees,  discounts  and  commissions  applicable  thereto)
pursuant  to any Shelf  Registration  Statement  under  which  such  Registrable
Securities are to be registered  under the Securities Act and (ii)  underwriter,
selling  agent  or  other  securities  professional  be  required  to  undertake
liability  to any person  hereunder  for any amounts in excess of the  discount,
commission or other compensation  payable to such underwriter,  selling agent or
other  securities  professional  with  respect  to  the  Registrable  Securities
underwritten by it and distributed to the public.

     (f) The  obligations  of the  Company  under  this  Section  5 shall  be in
addition  to  any  liability  which  the  Company  may  otherwise  have  to  any
Indemnified  Person and the  obligations  of any  Indemnified  Person under this
Section 5 shall be in addition to any liability  which such  Indemnified  Person
may otherwise have to the Company.  The remedies  provided in this Section 5 are
not exclusive and shall not limit any rights or remedies  which may otherwise be
available to an indemnified party at law or in equity.

     6. UNDERWRITTEN OFFERING.  Any Holder of Registrable Securities who desires
to  do  so  may  sell  Registrable  Securities  (in  whole  or  in  part)  in an
underwritten  offering;  provided  that  (i) the  Electing  Holders  of at least
$167,000,000 in aggregate  principal amount of the Registrable  Securities shall
request such an offering and (ii) at least such  aggregate  principal  amount of
such  Registrable  Securities  shall be included in such offering;  and provided
further that the Company shall not be obligated to cooperate  with more than one
underwritten  offering during the Effectiveness  Period.  Upon receipt of such a
request, the Company shall provide all Holders of Registrable Securities written
notice of the request, which notice shall inform such Holders that they have the
opportunity to participate in the offering.  In any such underwritten  offering,
the  investment  banker or bankers and manager or managers that will  administer
the

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<PAGE>

offering will be selected by, and the underwriting arrangements with respect
thereto (including the size of the offering) will be approved by, the holders of
a majority  of the  Registrable  Securities  to be  included  in such  offering;
provided,  however,  that such investment  bankers and managers and underwriting
arrangements  must be  reasonably  satisfactory  to the  Company.  No Holder may
participate in any  underwritten  offering  contemplated  hereby unless (a) such
Holder agrees to sell such Holder's Registrable Securities to be included in the
underwritten offering in accordance with any approved underwriting arrangements,
(b) such Holder completes and executes all reasonable questionnaires,  powers of
attorney,  indemnities,  underwriting  agreements,  lock-up  letters  and  other
documents required under the terms of such approved  underwriting  arrangements,
and (c) if such Holder is not then an  Electing  Holder,  such Holder  returns a
completed and signed Notice and  Questionnaire to the Company in accordance with
Section  3(a)(ii)  hereof  within  a  reasonable  amount  of  time  before  such
underwritten  offering.  The Holders  participating in any underwritten offering
shall be responsible  for any  underwriting  discounts and  commissions and fees
and,  subject to Section 4 hereof,  expenses of their own  counsel.  The Company
shall pay all expenses  customarily borne by issuers,  including but not limited
to filing fees, the fees and disbursements of its counsel and independent public
accountants  and  any  printing   expenses  incurred  in  connection  with  such
underwritten  offering.  Notwithstanding  the  foregoing  or the  provisions  of
Section 3(n) hereof, upon receipt of a request from the Managing  Underwriter or
a  representative  of holders of a majority of the Registrable  Securities to be
included  in an  underwritten  offering  to  prepare  and file an  amendment  or
supplement to the Shelf Registration Statement and Prospectus in connection with
an underwritten offering, the Company may delay the filing of any such amendment
or  supplement  for up to 90 days if the Board of Directors of the Company shall
have  determined in good faith that the Company has a bona fide business  reason
for such delay.

        7.  LIQUIDATED DAMAGES.

     (a) Pursuant to Section 2(a) hereof,  the Company may, upon written  notice
to all the Holders,  postpone having the Shelf  Registration  Statement declared
effective for a reasonable period not to exceed 90 days if the Company possesses
material non-public  information,  the disclosure of which would have a material
adverse  effect  on  the  Company  and  its  subsidiaries   taken  as  a  whole.
Notwithstanding  any  such  postponement,  if (i) on or  prior  to the  90th day
following  the Closing Date, a Shelf  Registration  Statement has not been filed
with the  Commission  or (ii) on or prior to the 180th day following the Closing
Date,  such  Shelf  Registration  Statement  is not  declared  effective  by the
Commission  (each, a "Registration  Default"),  the Company shall be required to
pay  liquidated  damages  ("Liquidated  Damages"),  from and  including  the day
following such Registration  Default until such Shelf Registration  Statement is
either so filed or so filed and subsequently declared effective,  as applicable,
at a rate per annum equal to an additional one-quarter of one percent (0.25%) of
the principal  amount of Registrable  Securities,  to and including the 90th day
following such  Registration  Default and one-half of one percent (0.5%) thereof
from and after the 91st day following such Registration Default.

     (b) In the  event  that  the  Shelf  Registration  Statement  ceases  to be
effective (or the Holders of Registrable  Securities are otherwise  prevented or
restricted by the Company from effecting sales pursuant  thereto) (an "Effective
Failure")  for more than 30 days,  whether  or not

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<PAGE>

consecutive,  in any 90-day  period,  or 90 days,  whether  or not  consecutive,
during any 12-month period,  then the Company shall pay Liquidated  Damages at a
rate per annum equal to an  additional  one-half  of one  percent  (0.5%) of the
principal  amount of Registrable  Securities from the 31st day of the applicable
90-day period or the 91st day of the applicable 12-month period, as the case may
be,  that such  Shelf  Registration  Statement  ceases to be  effective  (or the
Holders of Registrable  Securities are otherwise  prevented or restricted by the
Company from effecting sales pursuant thereto) until the earlier of (i) the time
the Shelf  Registration  Statement  again  becomes  effective  or the Holders of
Registrable Securities are again able to make sales under the Shelf Registration
Statement or (2) the time the Effectiveness  Period expires.  For the purpose of
determining an Effective  Failure,  days on which the Company has been obligated
to pay Liquidated Damages in accordance with the foregoing in respect of a prior
Effective  Failure within the applicable  90-day or 12-month period, as the case
may be, shall not be included.

     (c) In the event the Company  fails to file a  post-effective  amendment to
the  Shelf  Registration  Statement,  or  the  post-effective  amendment  is not
declared effective,  within the periods required by Section 3, the Company shall
pay  Liquidated  Damages at a rate per annum equal to an additional  one-half of
one percent  (0.5%) from and  including  the date of such  Registration  Default
until such time as such Registration Default is cured.

     (d) Any amounts to be paid as  Liquidated  Damages  pursuant to  paragraphs
(a), (b) or (c) of this Section 7 shall be paid  semi-annually in arrears,  with
the first semi-annual payment due on the first Interest Payment Date (as defined
in the  Indenture),  as  applicable,  following  the  date of such  Registration
Default. Such Liquidated Damages will accrue (1) in respect of the Securities at
the  rates  set  forth  in  paragraphs  (a),  (b) or (c) of this  Section  7, as
applicable,  on the principal amount of the Securities and (2) in respect of the
Ordinary Shares issued upon conversion of the Securities, at the rates set forth
in paragraphs  (a), (b) or (c) of this Section 7, as applicable,  applied to the
Conversion Price (as defined in the Indenture) at that time.

     (e) Except as provided in Section 8(b) hereof,  the  Liquidated  Damages as
set forth in this Section 7 shall be the exclusive  monetary remedy available to
the Holders of Registrable Securities for such Registration Default or Effective
Failure.  In no event shall the Company be required to pay Liquidated Damages in
excess of the  applicable  maximum  amount of one-half of one percent (0.5%) set
forth above, regardless of whether one or multiple Registration Defaults exist.

        8.  MISCELLANEOUS.

         (a)  OTHER REGISTRATION RIGHTS. The Company may grant registration
rights that would permit any person that is a third party the right to
piggy-back on any Shelf Registration Statement, provided that if the Managing
Underwriter of any underwritten offering conducted pursuant to Section 6 hereof
notifies the Company and the Electing Holders that the total amount of
securities which the Electing Holders and the holders of such piggy-back rights
intend to include in any Shelf Registration Statement is so large as to
materially threaten the success of such offering (including the price at which
such securities can be sold), then the amount, number or kind of securities to
be offered for the account of holders of such piggy-back rights will be reduced
to the extent necessary to reduce the total amount of securities to be

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<PAGE>

included  in such  offering to the amount,  number and kind  recommended  by the
Managing  Underwriter  prior  to any  reduction  in the  amount  of  Registrable
Securities to be included in such Shelf Registration Statement.

     (b) SPECIFIC  PERFORMANCE.  The parties hereto acknowledge that there would
be no  adequate  remedy  at law if  the  Company  fails  to  perform  any of its
obligations  hereunder  and that the Purchaser and the Holders from time to time
may be irreparably  harmed by any such failure,  and accordingly  agree that the
Purchaser and such Holders, in addition to any other remedy to which they may be
entitled at law or in equity and without limiting the remedies  available to the
Electing  Holders under Section 7 hereof,  shall be entitled to compel  specific
performance  of the  obligations of the Company under this  Registration  Rights
Agreement  in  accordance  with the terms and  conditions  of this  Registration
Rights Agreement,  in any court of the United States or any State thereof having
jurisdiction.

     (c) AMENDMENTS AND WAIVERS.  This  Agreement,  including this Section 8(c),
may be amended, and waivers or consents to departures from the provisions hereof
may be given, only by a written  instrument duly executed by the Company and the
holders of a majority in aggregate  principal  amount of Registrable  Securities
then outstanding.  Each Holder of Registrable Securities outstanding at the time
of any such  amendment,  waiver or consent or  thereafter  shall be bound by any
amendment,  waiver or consent effected pursuant to this Section 8(c), whether or
not any notice, writing or marking indicating such amendment,  waiver or consent
appears on the Registrable Securities or is delivered to such Holder.

     (d) NOTICES. All notices and other communications provided for or permitted
hereunder shall be given as provided in the Indenture.

     (e)  PARTIES IN  INTEREST.  The parties to this  Agreement  intend that all
Holders of Registrable  Securities  shall be entitled to receive the benefits of
this  Agreement  and that any  Electing  Holder  shall be bound by the terms and
provisions  of this  Agreement  by reason of such  election  with respect to the
Registrable Securities which are included in a Shelf Registration Statement. All
the terms and provisions of this Agreement shall be binding upon, shall inure to
the benefit of and shall be enforceable by the respective successors and assigns
of the  parties  hereto  and any  Holder  from  time to time of the  Registrable
Securities  to the  aforesaid  extent.  In the event that any  transferee of any
Holder of Registrable  Securities shall acquire Registrable  Securities,  in any
manner, whether by gift, bequest, purchase,  operation of law or otherwise, such
transferee shall, without any further writing or action of any kind, be entitled
to receive the benefits of and, if an Electing Holder, be conclusively deemed to
have  agreed to be bound by and to perform  all of the terms and  provisions  of
this Agreement to the aforesaid extent.

     (f)  COUNTERPARTS.  This  Agreement  may  be  executed  in  any  number  of
counterparts and by the parties hereto in separate  counterparts,  each of which
when so  executed  shall be  deemed  to be an  original  and all of which  taken
together shall constitute one and the same agreement.

     (g)  HEADINGS.  The  headings  in this  agreement  are for  convenience  of
reference only and shall not limit or otherwise affect the meaning hereof.

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<PAGE>

     (h)  GOVERNING  LAW. This  Agreement  shall be governed by and construed in
accordance with the laws of the State of New York.

     (i)  SEVERABILITY.  In the  event  that  any one or more of the  provisions
contained  herein,  or the  application  thereof in any  circumstances,  is held
invalid,  illegal or unenforceable in any respect for any reason,  the validity,
legality and  enforceability of any such provision in every other respect and of
the  remaining  provisions  hereof  shall not be in any way impaired or affected
thereby,  it being intended that all of the rights and privileges of the parties
hereto shall be enforceable to the fullest extent permitted by law.

     (j) SURVIVAL.  The  respective  indemnities,  agreements,  representations,
warranties  and other  provisions  set forth in this  Agreement or made pursuant
hereto shall remain in full force and effect,  regardless  of any  investigation
(or  any  statement  as to the  results  thereof)  made by or on  behalf  of any
Electing Holder,  any director,  officer or partner of such Holder, any agent or
underwriter,  any director, officer or partner of such agent or underwriter,  or
any controlling  person of any of the foregoing,  and shall survive the transfer
and registration of the Registrable Securities of such Holder.

     (k)  SUBMISSION  TO  JURISDICTION;  APPOINTMENT  OF AGENT  FOR  SERVICE  OF
PROCESS.  The Company  irrevocably  (i) agrees  that any legal  suit,  action or
proceeding  against  it  arising  out of or based  upon  this  Agreement  or the
transactions contemplated hereby may be instituted in any state or federal court
located in the Borough of Manhattan, The City of New York, New York (each a "New
York Court"),  (ii) waives,  to the fullest extent it may effectively do so, any
objection  which it may now or hereafter have to the laying of venue of any such
proceeding and (iii) submits to the exclusive jurisdiction of such courts in any
such suit, action or proceeding.  The Company has appointed Amdocs,  Inc. as its
authorized agent (the "Authorized Agent") upon whom process may be served in any
such  action  arising  out of or based  on this  Agreement  or the  transactions
contemplated  hereby which may be  instituted  in any New York Court,  expressly
consents to the  jurisdiction  of any such court in respect of any such  action,
and waives any other requirements of or objections to personal jurisdiction with
respect thereto.  Such appointment shall be irrevocable.  The Company represents
and  warrants  that the  Authorized  Agent has  agreed to act as such  agent for
service of process and agrees to take any and all action,  including  the filing
of any and all documents and instruments, that may be necessary to continue such
appointment  in full force and effect as aforesaid.  Service of process upon the
Authorized  Agent and written  notice of such  service to the  Company  shall be
deemed, in every respect, effective service of process upon the Company.

     (l)  JUDGMENT CURRENCY. In respect of any judgment or order given
or made for any amount due hereunder that is expressed and paid in a currency
(the "judgment currency") other than United States dollars, the Company will
indemnify the awardee of the judgment (the "Awardee") against any loss incurred
by the Awardee as a result of any variation as between (i) the rate of exchange
at which the United States dollar amount is converted into the judgment currency
for the purpose of such judgment or order and (ii) the rate of exchange at which
the Awardee is able to purchase United States dollars with the amount of the
judgment currency actually received by the Awardee. The foregoing indemnity
shall constitute a separate and independent obligation of the Company and shall
continue in full force and effect

18
<PAGE>

notwithstanding  any such  judgment  or order as  aforesaid.  The term  "rate of
exchange" shall include any premiums and costs of exchange payable in connection
with the purchase of or conversion into United States dollars.

19
<PAGE>

     Please  confirm  that the  foregoing  correctly  sets  forth the  agreement
between the Company and you.

                                           Very truly yours,

                                           Amdocs Limited

                                           By: .................................
                                               Name:
                                               Title:

Accepted as of the date hereof:

Goldman, Sachs & Co.

By:   ....................................

20
<PAGE>
                                                                       Exhibit A

                                 Amdocs Limited

                         INSTRUCTION TO DTC PARTICIPANTS

                                (Date of Mailing)

                     URGENT - IMMEDIATE ATTENTION REQUESTED

                          DEADLINE FOR RESPONSE: [DATE]

     The  Depository   Trust  Company  ("DTC")  has  identified  you  as  a  DTC
Participant  through  which  beneficial  interests  in the Amdocs  Limited  (the
"Company") 2% Convertible Notes due June 1, 2008 (the "Securities") are held.

     The  Company is in the  process of  registering  the  Securities  under the
Securities Act of 1933 for resale by the beneficial owners thereof.  In order to
have their Securities included in the registration statement,  beneficial owners
must  complete  and return the enclosed  Notice of  Registration  Statement  and
Selling Securityholder Questionnaire.

     It is important that beneficial owners of the Securities  receive a copy of
the  enclosed  materials  as  soon as  possible  as  their  rights  to have  the
Securities  included in the  registration  statement depend upon their returning
the Notice and  Questionnaire by [Deadline for response].  Please forward a copy
of the enclosed  documents to each beneficial  owner that holds interests in the
Securities  through you. If you require more copies of the enclosed materials or
have any questions  pertaining to this matter,  please contact  Thomas  O'Brien,
Amdocs, Inc., 1390 Timberlake Manor Parkway,  Chesterfield,  Missouri 63017, ph.
_________.

21
<PAGE>

                                 Amdocs Limited

                        Notice of Registration Statement
                                       and
                      Selling Securityholder Questionnaire

                                     (Date)

     Reference  is  hereby  made  to  the  Registration  Rights  Agreement  (the
"Registration  Rights Agreement") between Amdocs Limited (the "Company") and the
Purchaser named therein.  Pursuant to the  Registration  Rights  Agreement,  the
Company has filed with the United States Securities and Exchange Commission (the
"Commission")  a  registration  statement  on Form F-3 (the "Shelf  Registration
Statement") for the registration and resale under Rule 415 of the Securities Act
of 1933, as amended (the  "Securities  Act"),  of the  Company's 2%  Convertible
Notes due June 1, 2008 (the  "Securities")  and the ordinary  shares,  par value
(pound)0.01 per share (the "Ordinary Shares"), issuable upon conversion thereof.
A copy of the Registration  Rights Agreement is attached hereto. All capitalized
terms not otherwise  defined herein shall have the meanings  ascribed thereto in
the Registration Rights Agreement.

     Each  beneficial  owner of  Registrable  Securities  (as defined  below) is
entitled to have the Registrable Securities beneficially owned by it included in
the  Shelf  Registration  Statement.  In  order to have  Registrable  Securities
included  in the Shelf  Registration  Statement,  this  Notice  of  Registration
Statement and Selling Securityholder  Questionnaire ("Notice and Questionnaire")
must be  completed,  executed  and  delivered  to the  Company's  counsel at the
address  set forth  herein for  receipt ON OR BEFORE  [DEADLINE  FOR  RESPONSE].
Beneficial  owners of Registrable  Securities  who do not complete,  execute and
return  this  Notice  and  Questionnaire  by such  date (i) will not be named as
selling securityholders in the Shelf Registration Statement and (ii) may not use
the Prospectus forming a part thereof for resales of Registrable Securities.

     Certain   legal   consequences   arise  from  being   named  as  a  selling
securityholder  in the Shelf  Registration  Statement  and  related  Prospectus.
Accordingly, holders and beneficial owners of Registrable Securities are advised
to consult their own securities law counsel  regarding the consequences of being
named or not being named as a selling  securityholder in the Shelf  Registration
Statement and related Prospectus.

22
<PAGE>

     The term  "Registrable  Securities" is defined in the  Registration  Rights
Agreement to mean all or any portion of the Securities  issued from time to time
under the Indenture in  registered  form and the Ordinary  Shares  issuable upon
conversion of such Securities; provided, however, that a security ceases to be a
Registrable Security when it is no longer a Restricted Security.

     The term  "Restricted  Security"  is  defined  in the  Registration  Rights
Agreement  to mean any  Security  or Ordinary  Share  issuable  upon  conversion
thereof  except  any  such  Security  or  Ordinary  Share  which  (i)  has  been
effectively   registered   under  the  Securities  Act  and  sold  in  a  manner
contemplated by the Shelf Registration  Statement,  (ii) has been transferred in
compliance  with Rule 144 under the Securities  Act (or any successor  provision
thereto) or is  transferable  pursuant to paragraph (k) of such Rule 144 (or any
successor provision thereto),  (iii) has been sold in compliance with Regulation
S under the  Securities  Act (or any successor  thereto) and does not constitute
the unsold  allotment of a distributor  within the meaning of Regulation S under
the Securities Act, or (iv) has otherwise been transferred and a new Security or
Ordinary Share not subject to transfer restrictions under the Securities Act has
been delivered by or on behalf of the Company in accordance  with Section 3.5 of
the Indenture.

                                    ELECTION

     The  undersigned  holder  (the  "Selling  Securityholder")  of  Registrable
Securities  hereby  elects to include in the Shelf  Registration  Statement  the
Registrable  Securities  beneficially  owned by it and listed below in Item (3).
The undersigned, by signing and returning this Notice and Questionnaire,  agrees
to be bound  with  respect  to such  Registrable  Securities  by the  terms  and
conditions  of  this  Notice  and  Questionnaire  and  the  Registration  Rights
Agreement,  including, without limitation,  Section 5 of the Registration Rights
Agreement,  as if the undersigned Selling  Securityholder were an original party
thereto.

     Upon any sale of Registrable  Securities pursuant to the Shelf Registration
Statement, the Selling Securityholder will be required to deliver to the Company
and Trustee the Notice of  Transfer  set forth in Appendix A to the  Prospectus.
This Notice of Transfer is set forth as Exhibit A to the  Offering  Circular and
as Exhibit B to the Registration Rights Agreement.

     The Selling Securityholder hereby provides the following information to the
Company and  represents  and  warrants  that such  information  is accurate  and
complete:

23
<PAGE>

                                  QUESTIONNAIRE

(1)  (a)  Full Legal Name of Selling Securityholder:
          ----------------------------------------------------------------------
     (b)  Full Legal Name of Registered Holder (if not the same as in (a) above)
          of Registrable Securities Listed in Item (3) below:

          ----------------------------------------------------------------------
     (c)  Full Legal Name of DTC  Participant (if applicable and if not the same
          as (b) above) Through Which Registrable  Securities Listed in Item (3)
          below are Held:

(2)       Address for Notices to Selling Securityholder:

                               ---------------------------------------
                               ---------------------------------------
          Telephone:           ---------------------------------------
          Fax:                 ---------------------------------------
          Contact Person:      ---------------------------------------

(3)       Beneficial Ownership of Securities:

          Except as set forth below in this Item (3), the  undersigned  does not
          beneficially  own  any  Securities  or  Ordinary  Shares  issued  upon
          conversion of any Securities.

     (a)  Principal  amount  of  Registrable   Securities  (as  defined  in  the
          Registration Rights Agreement) beneficially owned:--------------------

          CUSIP      No(s).      of      such      Registrable       Securities:
          ----------------------------------------------------------------------

          Number of  Ordinary  Shares (if any) issued  upon  conversion  of such
          Registrable Securities:-----------------------------------------------

     (b)  Principal  amount of  Securities  other  than  Registrable  Securities
          beneficially owned:---------------------------------------------------

          CUSIP No(s). of such other Securities:--------------------------------

          Number of  Ordinary  Shares (if any) issued  upon  conversion  of such
          other Securities:-----------------------------------------------------

     (c)  Principal  amount of  Registrable  Securities  which  the  undersigned
          wishes  to  be   included   in  the  Shelf   Registration   Statement:
          ----------------------------------------------------------------------
          CUSIP  No(s).  of such  Registrable  Securities  to be included in the
          Shelf Registration Statement: ----------------------------------------

          Number  of  Ordinary   Shares  (if  any)  issued  upon  conversion  of
          Registrable   Securities  which  are  to  be  included  in  the  Shelf
          Registration Statement:-----------------------------------------------

(4)        Beneficial Ownership of Other Securities of the Company:

24
<PAGE>

          Except as set forth below in this Item (4),  the  undersigned  Selling
          Securityholder  is not  the  beneficial  or  registered  owner  of any
          Ordinary Shares or any other securities of the Company, other than the
          Securities and Ordinary Shares listed above in Item (3).

          State any exceptions here:

(5)       Relationships with the Company:

          Except as set forth below, neither the Selling  Securityholder nor any
          of its affiliates, officers, directors or principal equity holders (5%
          or more) has held any position or office or has had any other material
          relationship  with the Company  (or its  predecessors  or  affiliates)
          during the past three years.

          State any exceptions here:

(6)       Plan of Distribution:

          Except as set forth  below,  the  undersigned  Selling  Securityholder
          intends to distribute the Registrable  Securities listed above in Item
          (3) only as follows (if at all):  Such  Registrable  Securities may be
          sold  from  time  to  time   directly  by  the   undersigned   Selling
          Securityholder or, alternatively, through underwriters, broker-dealers
          or  agents.  Such  Registrable  Securities  may be sold in one or more
          transactions at fixed prices,  at prevailing market prices at the time
          of sale,  at  varying  prices  determined  at the time of sale,  or at
          negotiated prices.  Such sales may be effected in transactions  (which
          may  involve  crosses  or  block  transactions)  (i) on  any  national
          securities  exchange  or  quotation  service on which the  Registrable
          Securities  may be listed  or quoted at the time of sale,  (ii) in the
          over-the-counter  market, (iii) in transactions otherwise than on such
          exchanges  or  services  or in the  over-the-counter  market,  or (iv)
          through  the  writing  of  options.  In  connection  with sales of the
          Registrable  Securities or otherwise,  the Selling  Securityholder may
          enter into hedging transactions with broker-dealers, which may in turn
          engage in short sales of the  Registrable  Securities in the course of
          hedging the positions they assume. The Selling Securityholder may also
          sell Registrable  Securities short and deliver Registrable  Securities
          to close  out such  short  positions,  or loan or  pledge  Registrable
          Securities to broker-dealers that in turn may sell such securities.

          State any exceptions here:

     Note: In no event may such  method(s) of  distribution  take the form of an
underwritten offering of the Registrable  Securities without the prior agreement
of the Company.

     By  signing  below,  the  Selling   Securityholder   acknowledges  that  it
understands its obligation to comply,  and agrees that it will comply,  with the
provisions  of the  Exchange  Act  and the  rules  and  regulations  thereunder,
particularly Regulation M.

25
<PAGE>

     In the event that the Selling  Securityholder  transfers all or any portion
of the Registrable  Securities  listed in Item (3) above after the date on which
such information is provided to the Company, the Selling  Securityholder  agrees
to notify  the  transferee(s)  at the time of the  transfer  of its  rights  and
obligations  under this Notice and  Questionnaire  and the  Registration  Rights
Agreement.

     By signing below, the Selling Securityholder  consents to the disclosure of
the information  contained  herein in its answers to Items (1) through (6) above
and the inclusion of such  information in the Shelf  Registration  Statement and
related Prospectus. The Selling Securityholder understands that such information
will be relied upon by the Company in  connection  with the  preparation  of the
Shelf Registration Statement and related Prospectus.

     In accordance with the Selling  Securityholder's  obligation  under Section
3(a) of the Registration  Rights Agreement to provide such information as may be
required by law for inclusion in the Shelf Registration  Statement,  the Selling
Securityholder  agrees to  promptly  notify the Company of any  inaccuracies  or
changes in the  information  provided  herein which may occur  subsequent to the
date  hereof at any time  while  the Shelf  Registration  Statement  remains  in
effect. All notices hereunder and pursuant to the Registration  Rights Agreement
shall be made in writing,  by  hand-delivery,  first-class  mail, or air courier
guaranteeing overnight delivery as follows:

     (i) To the Company:

                                c/o Amdocs, Inc.

                                1390 Timberlake Manor Parkway

                                Chesterfield, Missouri 63017

                                Attn:  Thomas O'Brien

           (ii) With a copy to:

                                -------------------------

                                -------------------------

                                -------------------------

                                -------------------------

                                -------------------------

     Once  this   Notice  and   Questionnaire   is   executed   by  the  Selling
Securityholder and received by the Company's  counsel,  the terms of this Notice
and  Questionnaire,  and the  representations  and warranties  contained herein,
shall be binding on, shall inure to the benefit of and shall be  enforceable  by
the respective successors,  heirs, personal representatives,  and assigns of the
Company  and  the  Selling  Securityholder  (with  respect  to  the  Registrable
Securities  beneficially owned by such Selling Securityholder and listed in Item
(3) above).  This Agreement shall be governed in all respects by the laws of the
State of New York.

26
<PAGE>

     IN WITNESS WHEREOF,  the  undersigned,  by authority duly given, has caused
this Notice and  Questionnaire  to be executed and delivered either in person or
by its duly authorized agent.

Dated:  ----------------------------

      Selling Securityholder
      (Print/type full legal name of beneficial owner of Registrable Securities)

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

PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR RECEIPT ON
OR BEFORE [DEADLINE FOR RESPONSE] TO THE COMPANY AT:

                                    Amdocs, Inc.

                                    1390 Timberlake Manor Parkway

                                    Chesterfield, Missouri 63017

                                    Attn:  Thomas O'Brien

27
<PAGE>
                                                                       Exhibit B

              NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT

United States Trust Company of New York
Amdocs Limited
c/o United States Trust Company of New York
114 West 47th Street, 25th Floor
New York, New York 10036-1532

Attention:  Corporate Trust Administration

                  Re:      Amdocs Limited (the "Company")
                           2% Convertible Notes due June 1, 2008 (the "Notes")

Dear Sirs:

                  Please be advised that ----------------------- has transferred
$----------- aggregate principal amount of the above-referenced Notes pursuant
to an effective Registration Statement on Form [F-3] (File No. 333-----) filed
by the Company.

                  We hereby certify that the prospectus delivery requirements,
if any, of the Securities Act of 1933, as amended, have been satisfied and that
the above-named beneficial owner of the Notes is named as a "Selling Holder" in
the Prospectus dated [date], or in supplements thereto, and that the aggregate
principal amount of the Notes transferred are the Notes listed in such
Prospectus opposite such owner's name.

Dated:

                                                Very truly yours,

                                                ------------------------
                                                (Name)

                                  By:           ------------------------
                                                (Authorized Signature)

28Prepared by MERRILL CORPORATION

Exhibit 4.1  

 POLYCOM, INC. 1996 STOCK INCENTIVE PLAN

(AS AMENDED THROUGH MARCH 28, 2001)  

    The
following constitute the provisions of the 1996 Stock Incentive Plan (herein called the "Plan") of Polycom, Inc. (herein called the "Corporation"). 

ARTICLE ONE

GENERAL PROVISIONS  

	I.
	PURPOSE
OF THE PLAN 

    This
1996 Stock Incentive Plan is intended to promote the interests of Polycom, Inc., a Delaware corporation, by providing eligible persons with the opportunity to acquire a
proprietary interest, or otherwise increase their proprietary interest, in the Corporation as an incentive for them to remain in the service of the Corporation. 

    Capitalized
terms shall have the meanings assigned to such terms in the attached Appendix. 

	II.
	STRUCTURE
OF THE PLAN 

    A.  The
Plan shall be divided into three (3) separate equity programs: 

    (i)  the
Discretionary Option Grant Program under which eligible persons may, at the discretion of the Plan Administrator, be granted options to purchase shares of
Common Stock, 

    (ii) the
Stock Issuance Program under which eligible persons may, at the discretion of the Plan Administrator, be issued shares of Common Stock directly, either through
the immediate purchase of such shares or as a bonus for services rendered the Corporation (or any Parent or Subsidiary), and 

    (iii) the
Automatic Option Grant Program under which Eligible Directors shall automatically receive option grants at periodic intervals to purchase shares of Common
Stock. 

    B.  The
Discretionary Option Grant and Stock Issuance Programs became effective immediately upon the Plan Effective Date, and the Automatic Option Grant Program became
effective upon the Underwriting Date. 

    C.  The
provisions of Articles One and Five shall apply to all equity programs under the Plan and shall accordingly govern the interests of all persons under the Plan. 

	III.
	ADMINISTRATION
OF THE PLAN 

    A.  Prior
to the Section 12(g) Registration Date, the Discretionary Option Grant and Stock Issuance Programs were administered by the Board. Beginning with the
Section 12(g) Registration Date, the Primary Committee shall have sole and exclusive authority to administer the Discretionary Option Grant and Stock Issuance Programs with respect to
Section 16 Insiders. 

    B.  Administration
of the Discretionary Option Grant and Stock Issuance Programs with respect to all other persons eligible to participate in those programs may, at the
Board's discretion, be vested in the Primary Committee or a Secondary Committee, or the Board may retain the power to administer those programs with respect to all such persons. The members of the
Secondary Committee may be Board members who are also Employees. 

    C.  Members
of the Primary Committee or any Secondary Committee shall serve for such period of time as the Board may determine and may be removed by the Board at any
time. The Board may also at any time terminate the functions of any Secondary Committee and reassume all powers and authority previously delegated to such committee. 

 

    D.  Each Plan Administrator shall, within the scope of its administrative functions under the Plan, have full power and authority to establish such rules and
regulations as it may deem appropriate for proper administration of the Discretionary Option Grant and Stock Issuance Programs and to make such determinations under, and issue such interpretations of,
the provisions of such programs and any outstanding options or stock issuances thereunder as it may deem necessary or advisable. Decisions of the Plan Administrator within the scope of its
administrative functions under the Plan shall be final and binding on all parties who have an interest in the Discretionary Option Grant or Stock Issuance Program under its jurisdiction or any stock
option or stock issuance thereunder. 

    E.  Service
on the Primary Committee or the Secondary Committee shall constitute service as a Board member, and members of each such committee shall accordingly be
entitled to full indemnification and reimbursement as Board members for their service on such committee. No member of the Primary Committee or the Secondary Committee shall be liable for any act or
omission made in good faith with respect to the Plan or any option grants or stock issuances under the Plan. 

    F.  Administration
of the Automatic Option Grant Program shall be self-executing in accordance with the terms of that program, and no Plan Administrator
shall exercise any discretionary functions with respect to option grants made thereunder. 

	IV.
	ELIGIBILITY

    A.  The
persons eligible to participate in the Discretionary Option Grant and Stock Issuance Programs are as follows: 

    1.  Employees, 

    2.  non-employee
members of the Board or the board of directors of any Parent or Subsidiary, and 

    3.  consultants
and other independent advisors who provide services to the Corporation (or any Parent or Subsidiary). 

    B.  Each
Plan Administrator shall, within the scope of its administrative jurisdiction under the Plan, have full authority (subject to the provisions of the Plan) to
determine, (i) with respect to the option grants under the Discretionary Option Grant Program, which eligible persons are to receive option grants, the time or times when such option grants are
to be made, the number of shares to be covered by each such grant, the status of the granted option as either an Incentive Option or a Non-Statutory Option, the time or times at which each
option is to become exercisable, the vesting schedule (if any) applicable to the option shares and the maximum term for which the option is to remain outstanding and (ii) with respect to stock
issuances under the Stock Issuance Program, which eligible persons are to receive stock issuances, the time or times when such issuances are to be made, the number of shares to be issued to each
Participant, the vesting schedule (if any) applicable to the issued shares and the consideration to be paid for such shares. 

    C.  The
Plan Administrator shall have the absolute discretion either to grant options in accordance with the Discretionary Option Grant Program or to effect stock
issuances in accordance with the Stock Issuance Program. 

    D.  The
individuals eligible to participate in the Automatic Option Grant Program shall be limited to (i) those individuals serving as non-employee
Board members on the Underwriting Date, (ii) those individuals who first become non-employee Board members after the Underwriting Date, whether through appointment by the Board or
election by the Corporation's stockholders, and (iii) those individuals who continue to serve as non-employee Board members through one or more Annual Stockholders Meetings held
after the Underwriting Date. A non-employee Board member shall not be eligible to receive an initial option grant under the Automatic Option Grant Program on the Underwriting Date if such
individual has previously been in the employ of the Corporation (or any 

2

 

Parent or Subsidiary) or has otherwise received a prior stock option grant from the Corporation. A non-employee Board member who first joins the Board after the Underwriting Date shall not
be eligible to receive an initial option grant under the Automatic Option Grant Program if such individual has previously been in the employ of the Corporation (or any Parent or Subsidiary).
Non-employee Board members who have previously been in the employ of the Corporation (or any Parent or Subsidiary) or who have previously received a stock option grant from the Corporation
shall, however, be eligible to receive one or more annual option grants under the Automatic Option Grant Program over their period of continued Board service. 

	V.
	STOCK
SUBJECT TO THE PLAN 

    A.  The
stock issuable under the Plan shall be shares of authorized but unissued or reacquired Common Stock, including shares repurchased by the Corporation on the open
market. The maximum number of shares of Common Stock which may be issued over the term of the Plan shall not exceed approximately 17,250,000 shares. 

    B.  No
one person participating in the Plan may receive options, separately exercisable stock appreciation rights and direct stock issuances for more than 600,000
shares of Common Stock in the aggregate per calendar year, beginning with the 1996 calendar year. 

    C.  Shares
of Common Stock subject to outstanding options shall be available for subsequent issuance under the Plan to the extent (i) the options (including any
options incorporated from the Predecessor Plan) expire or terminate for any reason prior to exercise in full or (ii) the options are canceled in accordance with the cancellation-regrant
provisions of Article Two. In addition, any unvested shares issued under the Plan and subsequently repurchased by the Corporation, at the option exercise or direct issue price paid per share, pursuant
to the Corporation's repurchase rights under the Plan shall be added back to the number of shares of Common Stock reserved for issuance under the Plan and shall accordingly be available for reissuance
through one or more subsequent option grants or direct stock issuances under the Plan. However, should the exercise price of an option under the Plan (including any option incorporated from the
Predecessor Plan) be paid with shares of Common Stock or should shares of Common Stock otherwise issuable under the Plan be withheld by the Corporation in satisfaction of the withholding taxes
incurred in connection with the exercise of an option or the vesting of a stock issuance under the Plan, then the number of shares of Common Stock available for issuance under the Plan shall be
reduced by the gross number of shares for which the option is exercised or which vest under the stock issuance, and not by the net number of shares of Common Stock issued to the holder of such option
or stock issuance. 

    D.  Should
any change be made to the Common Stock by reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares or other
change affecting the outstanding Common Stock as a class without the Corporation's receipt of consideration, appropriate adjustments shall be made to (i) the maximum number and/or class of
securities issuable under the Plan, (ii) the maximum number and/or class of securities for which any one person may be granted options, separately exercisable stock appreciation rights and
direct stock issuances per calendar year, (iii) the number and/or class of securities for which automatic option grants are to be made subsequently per Eligible Director under the Automatic
Option Grant Program and (iv) the number and/or class of securities and the exercise price per share in effect under each outstanding option (including any option incorporated from the
Predecessor Plan) in order to prevent the dilution or enlargement of benefits thereunder. The adjustments determined by the Plan Administrator shall be final, binding and conclusive. 

3

 
ARTICLE TWO

DISCRETIONARY OPTION GRANT PROGRAM  

	I.
	OPTION
TERMS 

    Each
option shall be evidenced by one or more documents in the form approved by the Plan Administrator; provided, however, that each such document shall comply with the terms
specified below. Each document evidencing an Incentive Option shall, in addition, be subject to the provisions of the Plan applicable to such options. 

    A.  EXERCISE
PRICE. 

	1.
	The
exercise price per share shall be fixed by the Plan Administrator but shall not be less than one hundred percent (100%) of the Fair Market Value per share of Common Stock on the
option grant date.

	2.
	The
exercise price shall become immediately due upon exercise of the option and shall, subject to the provisions of Section I of Article Five and the documents evidencing the
option, be payable in one or more of the forms specified below: 

    (i)  cash
or check made payable to the Corporation, 

    (ii) shares
of Common Stock held for the requisite period necessary to avoid a charge to the Corporation's earnings for financial reporting purposes and valued at Fair
Market Value on the Exercise Date, or 

    (iii) to
the extent the option is exercised for vested shares, through a special sale and remittance procedure pursuant to which the Optionee shall concurrently provide
irrevocable written instructions to (a) a Corporation-designated brokerage firm to effect the immediate sale of the purchased shares and remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate exercise price payable for the purchased shares plus all applicable Federal, state and local income and employment taxes
required to be withheld by the Corporation by reason of such exercise and (b) the Corporation to deliver the certificates for the purchased shares directly to such brokerage firm in order to
complete the sale transaction. 

    Except
to the extent such sale and remittance procedure is utilized, payment of the exercise price for the purchased shares must be made on the Exercise Date. 

    B.  EXERCISE
AND TERM OF OPTIONS. Each option shall be exercisable at such time or times, during such period and for such number of shares as shall be determined by the
Plan Administrator and set forth in the documents evidencing the option. However, no option shall have a term in excess of seven (7) years measured from the option grant date. 

    C.  EFFECT
OF TERMINATION OF SERVICE. 

    1.  The
following provisions shall govern the exercise of any options held by the Optionee at the time of cessation of Service or death: 

    (i)  Any
option outstanding at the time of the Optionee's cessation of Service for any reason shall remain exercisable for such period of time thereafter as shall be
determined by the Plan Administrator and set forth in the documents evidencing the option, but no such option shall be exercisable after the expiration of the option term. 

    (ii) Any
option exercisable in whole or in part by the Optionee at the time of death may be exercised subsequently by the personal representative of the Optionee's
estate or by the 

4

 

person or persons to whom the option is transferred pursuant to the Optionee's will or in accordance with the laws of descent and distribution. 

    (iii) During
the applicable post-Service exercise period, the option may not be exercised in the aggregate for more than the number of vested shares for
which the option is exercisable on the date of the Optionee's cessation of Service. Upon the expiration of the applicable exercise period or (if earlier) upon the expiration of the option term, the
option shall terminate and cease to be outstanding for any vested shares for which the option has not been exercised. However, the option shall, immediately upon the Optionee's cessation of Service,
terminate and cease to be outstanding to the extent the option is not otherwise at that time exercisable for vested shares. 

    (iv) Should
the Optionee's Service be terminated for Misconduct, then all outstanding options held by the Optionee shall terminate immediately and cease to be
outstanding. 

    2.  The
Plan Administrator shall have the discretion, exercisable either at the time an option is granted or at any time while the option remains outstanding, to: 

    (i)  extend
the period of time for which the option is to remain exercisable following the Optionee's cessation of Service from the period otherwise in effect for that
option to such greater period of time as the Plan Administrator shall deem appropriate, but in no event beyond the expiration date of the option term, and/or 

    (ii) permit
the option to be exercised, during the applicable post-Service exercise period, not only with respect to the number of vested shares of Common
Stock for which such option is exercisable at the time of the Optionee's cessation of Service but also with respect to one or more additional installments in which the Optionee would have vested under
the option had the Optionee continued in Service. 

    D.  STOCKHOLDER
RIGHTS. The holder of an option shall have no stockholder rights with respect to the shares subject to the option until such person shall have exercised
the option, paid the exercise price and become a holder of record of the purchased shares. 

    E.  REPURCHASE
RIGHTS. The Plan Administrator shall have the discretion to grant options which are exercisable for unvested shares of Common Stock. Should the Optionee
cease Service while holding such unvested shares, the Corporation shall have the right to repurchase, at the exercise price paid per share, any or all of those unvested shares. The terms upon which
such repurchase right shall be exercisable (including the period and procedure for exercise and the appropriate vesting schedule for the purchased shares) shall be established by the Plan
Administrator and set forth in the document evidencing such repurchase right. 

    F.  LIMITED
TRANSFERABILITY OF OPTIONS. During the lifetime of the Optionee, Incentive Options shall be exercisable only by the Optionee and shall not be assignable or
transferable other than by will or by the laws of descent and distribution following the Optionee's death. However, Non-Statutory Options may, in connection with the Optionee's estate
plan, be assigned in whole or in part during the Optionee's lifetime to one or more members of the Optionee's immediate family or to a trust established exclusively for one or more such family
members; provided, however, that unless the Plan Administrator determines otherwise in a stock option agreement, Non-Statutory Options provided to Optionees employed by the Company's
European subsidiaries are not so transferable. The assigned portion may only be exercised by the person or persons who acquire a proprietary interest in the option pursuant to the assignment. The
terms applicable to the assigned portion shall be the same as those in effect for the option immediately prior to such assignment and shall be set forth in such documents issued to the assignee as the
Plan Administrator may deem appropriate. 

	II.
	INCENTIVE
OPTIONS 

5

 

    The
terms specified below shall be applicable to all Incentive Options. Except as modified by the provisions of this Section II, all the provisions of Articles One, Two and
Five shall be applicable to Incentive Options. Options which are specifically designated as Non-Statutory Options when issued under the Plan shall NOT be subject to the terms of this
Section II. 

    A.  ELIGIBILITY.
Incentive Options may only be granted to Employees. 

    B.  DOLLAR
LIMITATION. The aggregate Fair Market Value of the shares of Common Stock (determined as of the respective date or dates of grant) for which one or more
options granted to any Employee under the Plan (or any other option plan of the Corporation or any Parent or Subsidiary) may for the first time become exercisable as Incentive Options during any one
(1) calendar year shall not exceed the sum of One Hundred Thousand Dollars ($100,000). To the extent the Employee holds two (2) or more such options which become exercisable for the
first time in the same calendar year, the foregoing limitation on the exercisability of such options as Incentive Options shall be applied on the basis of the order in which such options are granted. 

    C.  10%
STOCKHOLDER. If any Employee to whom an Incentive Option is granted is a 10% Stockholder, then the exercise price per share shall not be less than one hundred
ten percent (110%) of the Fair Market Value per share of Common Stock on the option grant date, and the option term shall not exceed five (5) years measured from the option grant date. 

	III.
	CORPORATE
TRANSACTION/CHANGE IN CONTROL 

    A.  In
the event of any Corporate Transaction, each outstanding option shall automatically accelerate so that each such option shall, immediately prior to the effective
date of the Corporate Transaction, become fully exercisable with respect to the total number of shares of Common Stock at the time subject to such option and may be exercised for any or all of those
shares as fully-vested shares of Common Stock. However, an outstanding option shall not so accelerate if and to the extent: (i) such option is, in connection with the Corporate Transaction, to
be assumed by the successor corporation (or parent thereof) or (ii) such option is to be replaced with a cash incentive program of the successor corporation which preserves the spread existing
on the unvested option shares at the time of the Corporate Transaction and provides for subsequent payout in accordance with the same vesting schedule applicable to such option. 

    B.  All
outstanding repurchase rights shall also terminate automatically, and the shares of Common Stock subject to those terminated rights shall immediately vest in
full, in the event of any Corporate
Transaction, except to the extent those repurchase rights are to be assigned to the successor corporation (or parent thereof) in connection with such Corporate Transaction. 

    C.  The
Plan Administrator shall have the discretion, exercisable either at the time the option is granted or at any time while the option remains outstanding, to
provide for the automatic acceleration of one or more outstanding options (and the automatic termination of one or more outstanding repurchase rights with the immediate vesting of the shares of Common
Stock subject to those rights) upon the occurrence of a Corporate Transaction, whether or not those options are to be assumed (or those repurchase rights are to be assigned) in the Corporate
Transaction. 

    D.  Immediately
following the consummation of the Corporate Transaction, all outstanding options shall terminate and cease to be outstanding, except to the extent
assumed by the successor corporation (or parent thereof). 

    E.  Each
option which is assumed in connection with a Corporate Transaction shall be appropriately adjusted, immediately after such Corporate Transaction, to apply to
the number and class of securities which would have been issuable to the Optionee in consummation of such Corporate Transaction had the option been exercised immediately prior to such Corporate
Transaction. Appropriate adjustments shall also be made to (i) the number and class of securities available for 

6

 

issuance under the Plan following the consummation of such Corporate Transaction, (ii) the exercise price payable per share under each outstanding option, provided the aggregate exercise price
payable for such securities shall remain the same and (iii) the maximum number and/or class of securities for which any one person may be granted stock options, separately exercisable stock
appreciation rights and direct stock issuances under the Plan per calendar year. 

    F.  The
Plan Administrator shall have full power and authority to grant options under the Discretionary Option Grant Program which will automatically accelerate in
whole or in part should the Optionee's Service subsequently terminate by reason of an Involuntary Termination within a designated period (not to exceed twelve (12) months) following the
effective date of any Corporate Transaction in which those options are assumed or replaced and do not otherwise accelerate. Any options so accelerated shall remain exercisable for fully-vested shares
until the EARLIER of (i) the expiration of the option term or (ii) the expiration of the one (1)-year period measured from the effective date of the Involuntary Termination.
In addition, the Plan Administrator may provide that one or more of the Corporation's outstanding repurchase rights with respect to shares held by the Optionee at the time of such Involuntary
Termination shall immediately terminate in whole or in part, and the shares subject to those terminated rights shall accordingly vest. 

    G.  The
Plan Administrator shall have full power and authority to grant options under the Discretionary Option Grant Program which will automatically accelerate in
whole or in part should the Optionee's Service subsequently terminate by reason of an Involuntary Termination within a designated period (not to exceed twelve (12) months) following the
effective date of any Change in Control. Each option so accelerated shall remain exercisable for fully-vested shares until the EARLIER of (i) the expiration of the option term or
(ii) the expiration of the one (1)-year period measured from the effective date of the Involuntary Termination. In addition, the Plan Administrator may provide that one or more of
the Corporation's outstanding repurchase rights with respect to shares held by the Optionee at the time of such Involuntary Termination shall immediately terminate in whole or in part, and the shares
subject to those terminated rights shall accordingly vest. 

    H.  The
portion of any Incentive Option accelerated in connection with a Corporate Transaction or Change in Control shall remain exercisable as an Incentive Option only
to the extent the applicable One Hundred Thousand Dollar ($100,000) limitation is not exceeded. To the extent such dollar limitation is exceeded, the accelerated portion of such option shall be
exercisable as a Non-Statutory Option under the Federal tax laws. 

    I.  The
grant of options under the Discretionary Option Grant Program shall in no way affect the right of the Corporation to adjust, reclassify, reorganize or otherwise
change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets. 

	IV.
	CANCELLATION
AND REGRANT OF OPTIONS 

    The
Plan Administrator shall have the authority to effect, at any time, and from time to time, with the consent of the affected option holders the cancellation of any or all
outstanding options under the Discretionary Option Grant Program (including outstanding options incorporated from the Predecessor Plan) and to grant in substitution new options covering the same or
different number of shares of Common Stock but with an exercise price per share based on the Fair Market Value per share of Common Stock on the new grant date. However, any repricing of stock options,
effected either by reducing the exercise price of outstanding options or canceling outstanding options and granting replacement options with a lower exercise price, shall require the approval of the
holders of a majority of the Corporation's voting shares, with the sole exception of that certain exchange offer to be commenced as soon as is reasonably practicable following May 17, 2001,
pursuant to which holders of options to purchase a maximum of 6,500,000 shares of the Corporation's Common Stock, shall be offered the opportunity to elect to cancel such options (the "Cancelled
Options"), in exchange for the 

7

 

grant of replacement options to purchase 0.85 shares of the Corporation's Common Stock for each share under the Cancelled Options (the "Replacement Options"), with such Replacement Options to be
granted no less than six months and one day following the cancellation of the Cancelled Options, at a price equal to the fair market value of the Corporation's Common Stock on such date of grant. Each
Replacement Option will have a term equal to the lesser of (i) the remaining term of the Cancelled
Option, or (ii) seven (7) years. The vesting commencement date and vesting schedule for each Replacement Option will be the same as for the Cancelled Option which it replaces, subject to
adjustment for any shares previously exercised. Executive Officers and Directors of the Corporation shall not participate in this exchange offer, and this exchange offer will be structured so that the
Corporation avoids incurring financial accounting charges. 

	V.
	STOCK
APPRECIATION RIGHTS 

    A.  The
Plan Administrator shall have full power and authority to grant to selected Optionees tandem stock appreciation rights and/or limited stock appreciation rights. 

    B.  The
following terms shall govern the grant and exercise of tandem stock appreciation rights: 

    (i)  One
or more Optionees may be granted the right, exercisable upon such terms as the Plan Administrator may establish, to elect between the exercise of the
underlying option for shares of Common Stock and the surrender of that option in exchange for a distribution from the Corporation in an amount equal to the excess of (a) the Fair Market Value
(on the option surrender date) of the number of shares in which the Optionee is at the time vested under the surrendered option (or surrendered portion thereof) over (b) the aggregate exercise
price payable for such shares. 

    (ii) No
such option surrender shall be effective unless it is approved by the Plan Administrator. If the surrender is so approved, then the distribution to which the
Optionee shall be entitled may be made in shares of Common Stock valued at Fair Market Value on the option surrender date, in cash, or partly in shares and partly in cash, as the Plan Administrator
shall in its sole discretion deem appropriate. 

    (iii) If
the surrender of an option is rejected by the Plan Administrator, then the Optionee shall retain whatever rights the Optionee had under the surrendered option
(or surrendered portion thereof) on the option surrender date and may exercise such rights at any time prior to the LATER of (a) five (5) business days after the receipt of the rejection
notice or (b) the last day on which the option is otherwise exercisable in accordance with the terms of the documents evidencing such option, but in no event may such rights be exercised more
than ten (10) years after the option grant date. 

    C.  The
following terms shall govern the grant and exercise of limited stock appreciation rights: 

    (i)  One
or more Section 16 Insiders may be granted limited stock appreciation rights with respect to their outstanding options. 

    (ii) Upon
the occurrence of a Hostile Take-Over, each individual holding one or more options with such a limited stock appreciation right shall have the
unconditional right (exercisable for a thirty (30)-day period following such Hostile Take-Over) to surrender each such option to the Corporation, to the extent the option is at
the time exercisable for vested shares of Common Stock. In return for the surrendered option, the Optionee shall receive a cash distribution from the Corporation in an amount equal to the excess of
(A) the Take-Over Price of the shares of Common Stock which are at the time vested under each surrendered option (or surrendered portion thereof) over (B) the aggregate
exercise price payable for such shares. Such cash distribution shall be paid within five (5) days following the option surrender date. 

8

 

    (iii) The Plan Administrator shall pre-approve, at the time the limited stock appreciation right is granted, the subsequent exercise of that right in
accordance with the terms of the grant and the provisions of this Section V.C. No additional approval of the Plan Administrator or the Board shall be required at the time of the actual option
surrender and cash distribution. 

    (iv) The
balance of the option (if any) shall continue in full force and effect in accordance with the documents evidencing such option. 

ARTICLE THREE

STOCK ISSUANCE PROGRAM  

	I.
	STOCK
ISSUANCE TERMS 

    Shares
of Common Stock may be issued under the Stock Issuance Program through direct and immediate issuances without any intervening option grants. Each such stock issuance shall be
evidenced by a Stock Issuance Agreement which complies with the terms specified below. 

    A.  PURCHASE
PRICE. 

    1.  The
purchase price per share shall be fixed by the Plan Administrator, but shall not be less than one hundred percent (100%) of the Fair Market Value per share of
Common Stock on the issuance date. 

    2.  Subject
to the provisions of Section I of Article Five, shares of Common Stock may be issued under the Stock Issuance Program for any of the following items
of consideration which the Plan Administrator may deem appropriate in each individual instance: 

    (i)  cash
or check made payable to the Corporation, or 

    (ii) past
services rendered to the Corporation (or any Parent or Subsidiary). 

    B.  VESTING
PROVISIONS. 

    1.  Shares
of Common Stock issued under the Stock Issuance Program may, in the discretion of the Plan Administrator, be fully and immediately vested upon issuance or
may vest in one or more installments over the Participant's period of Service or upon attainment of specified performance objectives. The elements of the vesting schedule applicable to any unvested
shares of Common Stock issued under the Stock Issuance Program, namely: 

    (i)  the
Service period to be completed by the Participant or the performance objectives to be attained, 

    (ii) the
number of installments in which the shares are to vest, 

    (iii) the
interval or intervals (if any) which are to lapse between installments, and 

    (iv) the
effect which death, Permanent Disability or other event designated by the Plan Administrator is to have upon the vesting schedule, shall be determined by the
Plan Administrator and incorporated into the Stock Issuance Agreement. 

    2.  Any
new, substituted or additional securities or other property including money paid other than as a regular cash dividend) which the Participant may have the right
to receive with respect to the Participant's unvested shares of Common Stock by reason of any stock dividend, stock split, recapitalization, combination of shares, exchange of shares or other change
affecting the outstanding Common Stock as a class without the Corporation's receipt of consideration shall be issued subject to
(i) the same vesting requirements applicable to the Participant's unvested shares of Common Stock and (ii) such escrow arrangements as the Plan Administrator shall deem appropriate. 

9

 

    3.  The Participant shall have full stockholder rights with respect to any shares of Common Stock issued to the Participant under the Stock Issuance Program, whether or
not the Participant's interest in those shares is vested. Accordingly, the Participant shall have the right to vote such shares and to receive any regular cash dividends paid on such shares. 

    4.  Should
the Participant cease to remain in Service while holding one or more unvested shares of Common Stock issued under the Stock Issuance Program or should the
performance objectives not be attained with respect to one or more such unvested shares of Common Stock, then those shares shall be immediately surrendered to the Corporation for cancellation, and the
Participant shall have no further stockholder rights with respect to those shares. To the extent the surrendered shares were previously issued to the Participant for consideration paid in cash or cash
equivalent (including the Participant's purchase-money indebtedness), the Corporation shall repay to the Participant the cash consideration paid for the surrendered shares and shall cancel the unpaid
principal balance of any outstanding purchase-money note of the Participant attributable to the surrendered shares. 

    5.  The
Plan Administrator may in its discretion waive the surrender and cancellation of one or more unvested shares of Common Stock (or other assets attributable
thereto) which would otherwise occur upon the cessation of the Participant's Service or the non-attainment of the performance objectives applicable to those shares. Such waiver shall
result in the immediate vesting of the Participant's interest in the shares of Common Stock as to which the waiver applies. Such waiver may be effected at any time, whether before or after the
Participant's cessation of Service or the attainment or non-attainment of the applicable performance objectives. 

	II.
	CORPORATE
TRANSACTION/CHANGE IN CONTROL 

    A.  All
of the Corporation's outstanding repurchase/cancellation rights under the Stock Issuance Program shall terminate automatically, and all the shares of Common
Stock subject to those terminated rights shall immediately vest in full, in the event of any Corporate Transaction, except to the extent those repurchase/cancellation rights are to be assigned to the
successor corporation (or parent thereof) in connection with such Corporate Transaction. 

    B.  The
Plan Administrator shall have the discretionary authority, exercisable either at the time the unvested shares are issued or any time while the Corporation's
repurchase/cancellation rights remain outstanding under the Stock Issuance Program, to provide that those rights shall automatically
terminate in whole or in part, and the shares of Common Stock subject to those terminated rights shall immediately vest, in the event the Participant's Service should subsequently terminate by reason
of an Involuntary Termination within a designated period (not to exceed twelve (12) months) following the effective date of any Corporate Transaction in which those repurchase/cancellation
rights are assigned to the successor corporation (or parent thereof). 

    C.  The
Plan Administrator shall have the discretionary authority, exercisable either at the time the unvested shares are issued or any time while the Corporation's
repurchase/cancellation rights remain outstanding under the Stock Issuance Program, to provide that those rights shall automatically terminate in whole or in part, and the shares of Common Stock
subject to those terminated rights shall immediately vest, in the event the Participant's Service should subsequently terminate by reason of an Involuntary Termination within a designated period (not
to exceed twelve (12) months) following the effective date of any Change in Control. 

	III.
	SHARE
ESCROW/LEGENDS 

    Unvested
shares may, in the Plan Administrator's discretion, be held in escrow by the Corporation until the Participant's interest in such shares vests or may be issued directly to
the Participant with restrictive legends on the certificates evidencing those unvested shares. 

10

 
ARTICLE FOUR

AUTOMATIC OPTION GRANT PROGRAM  

	I.
	OPTION
TERMS 

    A.  GRANT
DATES. Option grants shall be made on the dates specified below: 

    1.  On
the date of each Annual Stockholders Meeting held after October 26, 1999, each non-employee member of the Board who is to continue to serve on
the Board (an "Eligible Director"), whether or not that Eligible Director is standing for re-election to the Board at that particular Annual Meeting, shall automatically be granted a
Non-Statutory Option to purchase an amount equal to 30,000 shares of
Common Stock. There shall be no limit on the number of such option grants any one Eligible Director may receive over his or her period of Board service, and Eligible Directors who have previously been
in the employ of the Corporation (or any Parent or Subsidiary) or who have otherwise received a stock option grant from the Corporation shall be eligible to receive such option grants over their
period of continued Board service. Each individual serving as a non-employee Board member shall, upon the date such individual joins the Board of Directors, be automatically granted on
such date a non-statutory option to purchase 30,000 shares if joining between January 27, 1999 and May 17, 2001 or 60,000 shares if joining on or after May 17, 2001 (a
"Primary Grant"), provided such individual (i) had not previously been in the employ of the Corporation (or any parent or Subsidiary) and (ii) had not otherwise received a prior stock
option grant from the Corporation. 

    2.  Each
Eligible Director on October 26, 1999 shall automatically be granted a Non-Statutory Option to purchase a number of shares of Common Stock
equal to (x) 30,000 minus (y) the number of shares of Common Stock Options granted to such individual since the prior Annual Stockholders Meeting and including the grant at such meeting
(the "Interim Option"). 

    3.  Each
individual serving as a non-employee Board member on the Underwriting Date and each Eligible Director elected to the Board prior to
January 26, 1999 was automatically granted, on such date, a Non-Statutory Option to purchase 40,000 shares of Common Stock (an "Initial Grant"), provided such individual
(i) had not previously been in the employ of the Corporation (or any Parent or Subsidiary) and (ii) had not otherwise received a prior stock option grant from the Corporation, except
that prior to the 1998 Annual Meeting such Initial grant was for 32,000 shares instead of 40,000. On every Annual Shareholder Meeting after the Underwriting Date but on or prior to January 26,
1999, each Eligible Director was granted a Non-Statutory Option for 10,000 shares of Common Stock, provided such individual was an Eligible Director for at least six (6) months,
except that prior to the 1998 Annual Meeting, such option was to purchase 8,000 shares, not 10,000. After January 26, 1999 and prior to October 26, 1999, Eligible Directors were granted
a Non-Statutory Option to purchase 7,500 shares of Common Stock on the date of each Annual Shareholders Meeting and grants of Non-Statutory Options to purchase 7,500 shares of
Common Stock on the next three (3) three (3) month anniversaries following each applicable Annual Shareholders Meeting. The automatic annual grant of 30,000 shares of Common Stock is
intended to replace these previous automatic quarterly grants. 

    B.  EXERCISE
PRICE. 

    1.  The
exercise price per share for any option grant under this Article Four shall be equal to one hundred percent (100%) of the Fair Market Value per share of Common
Stock on the option grant date. 

    2.  The
exercise price shall be payable in one or more of the alternative forms authorized under the Discretionary Option Grant Program. Except to the extent the sale
and remittance 

11

 

procedure specified thereunder is utilized, payment of the exercise price for the purchased shares must be made on the Exercise Date. 

    C.  OPTION
TERM. Each option granted on or after May 17, 2001 shall have a term of seven (7) years measured from the grant date. Each option granted
between October 26, 1999 and May 17, 2001 shall have a term of five (5) years measured from the grant date. The Interim Option shall have a term of five (5) years from the
date of the 1999 Annual Stockholders Meeting. Each option granted on or after January 26, 1999 and on or before October 26, 1999 shall have a term of two (2) years measured from
the option grant date. Each option granted prior to January 26, 1999 shall have a term of ten (10) years from its date of grant. 

    D.  EXERCISE
AND VESTING OF OPTIONS. Automatic option grants made on the date of each Annual Stockholders Meeting held on or after May 17, 2001 shall vest and
become exercisable in a series of four (4) successive equal annual installments over the Optionee's period of continued service as a Board member, with the first such installment to vest upon
the Optionee's completion of one (1) year of Board service measured from the option grant date. Automatic option grants made on the date of each Annual Stockholders Meeting held on or after
October 26, 1999 and prior to May 17, 2001 shall vest and become exercisable on the first anniversary of their grant date, provided the Optionee remains a Board member on such date. Each
Interim Option shall vest and become exercisable on the first anniversary of the 1999 Annual Shareholders Meeting, provided the Optionee remains a Board member on such date. Each option granted on or
after January 26, 1999 and on or before October 26, 1999 shall be fully vested and immediately exercisable on the option grant date for any or all of the option shares. Any shares
purchased under an option granted prior to January 26, 1999 shall be subject to repurchase by the Corporation, at the exercise price paid per share, upon the Optionee's cessation of Board
service prior to vesting in those shares. Each Initial Grant and each Primary Grant shall vest, and the Corporation's repurchase right shall lapse, in a series of four (4) successive equal
annual installments over the Optionee's period of continued service as a Board member, with the first such installment to vest upon the Optionee's completion of one (1) year of Board service
measured from the option grant date. With respect to annual share grants made prior to January 26, 1999, such options shall vest, and the Corporation's repurchase right shall lapse, in two
(2) successive equal annual installments over the Optionee's period of continued service as a Board member, with the first such installment to vest upon the Optionee's completion of one
(1) year of Board service measured from the option grant date. 

    E.  EFFECT
OF TERMINATION OF BOARD SERVICE. The following provisions shall govern the exercise of any options held by the Optionee at the time the Optionee ceases to
serve as a Board member: 

    (i)  The
Optionee (or, in the event of Optionee's death, the personal representative of the Optionee's estate or the person or persons to whom the option is transferred
pursuant to the Optionee's will or in accordance with the laws of descent and distribution) shall have a twelve (12)-month period following the date of such cessation of Board service in which to
exercise each such option; provided, however, in no event shall the option be exercised later than the option term provided in such option. 

    (ii) During
the twelve (12)-month exercise period, the option may not be exercised in the aggregate for more than the number of vested shares of Common Stock for which
the option is exercisable at the time of the Optionee's cessation of Board service. 

    (iii) Should
the Optionee cease to serve as a Board member by reason of death or Permanent Disability, then all shares at the time subject to the option shall
immediately vest so that such option may, during the twelve (12)-month exercise period following such cessation of Board service, be exercised for all or any portion of those shares as fully-vested
shares of Common Stock. 

12

 

    (iv) In no event shall the option remain exercisable after the expiration of the option term. Upon the expiration of the twelve (12)-month exercise period or (if
earlier) upon the expiration of the option term, the option shall terminate and cease to be outstanding for any vested shares for which the option has not been exercised. However, the option shall,
immediately upon the Optionee's cessation of Board service for any reason other than death or Permanent Disability, terminate and cease to be outstanding to the extent the option is not otherwise at
that time exercisable for vested shares. 

	II.
	CORPORATE
TRANSACTION/CHANGE IN CONTROL/HOSTILE TAKE-OVER 

    A.  In
the event of any Corporate Transaction, the shares of Common Stock at the time subject to each outstanding option but not otherwise vested shall automatically
vest in full so that each such option shall, immediately prior to the effective date of the Corporate Transaction, become fully exercisable for all of the shares of Common Stock at the time subject to
such option and may be exercised for all or any portion of those shares as fully-vested shares of Common Stock. Immediately following the consummation of the Corporate Transaction, each automatic
option grant shall terminate and cease to be outstanding, except to the extent assumed by the successor corporation (or parent thereof). 

    B.  In
connection with any Change in Control, the shares of Common Stock at the time subject to each outstanding option but not otherwise vested shall automatically
vest in full so that each such option shall, immediately prior to the effective date of the Change in Control, become fully exercisable for all of the shares of Common Stock at the time subject to
such option and may be exercised for all or any portion of those shares as fully-vested shares of Common Stock. Each such option shall remain exercisable for such fully-vested option shares until the
expiration or sooner termination of the option term or the surrender of the option in connection with a Hostile Take-Over. 

    C.  Upon
the occurrence of a Hostile Take-Over, the Optionee shall have a thirty (30)-day period in which to surrender to the Corporation each
automatic option held by him or her. The Optionee shall in return be entitled to a cash distribution from the Corporation in an amount equal to the excess of (i) the Take-Over Price
of the shares of Common Stock at the time subject to the surrendered option (whether or not the Optionee is otherwise at the time vested in those shares) over (ii) the aggregate exercise price
payable for such shares. Such cash distribution shall be paid within five (5) days following the surrender of the option to the Corporation. 

    D.  Each
option which is assumed in connection with a Corporate Transaction shall be appropriately adjusted, immediately after such Corporate Transaction, to apply to
the number and class of securities which would have been issuable to the Optionee in consummation of such Corporate Transaction had the option been exercised immediately prior to such Corporate
Transaction. Appropriate adjustments shall also be made to the exercise price payable per share under each outstanding option, provided the aggregate exercise price payable for such securities shall
remain the same. 

    E.  The
grant of options under the Automatic Option Grant Program shall in no way affect the right of the Corporation to adjust, reclassify, reorganize or otherwise
change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets. 

	III.
	REMAINING
TERMS 

    The
remaining terms of each option granted under the Automatic Option Grant Program shall be the same as the terms in effect for option grants made under the Discretionary Option
Grant Program. 

13

 
ARTICLE FIVE

MISCELLANEOUS  

	I.
	FINANCING

    A.  The
Plan Administrator may permit any Optionee or Participant to pay the option exercise price under the Discretionary Option Grant Program or the purchase price of
shares issued under the Stock
Issuance Program by delivering a promissory note payable in one or more installments. The terms of any such promissory note (including the interest rate and the terms of repayment) shall be
established by the Plan Administrator in its sole discretion. Promissory notes may be authorized with or without security or collateral. In all events, the maximum credit available to the Optionee or
Participant may not exceed the sum of (i) the aggregate option exercise price or purchase price payable for the purchased shares plus (ii) any Federal, state and local income and
employment tax liability incurred by the Optionee or the Participant in connection with the option exercise or share purchase. 

    B.  The
Plan Administrator may, in its discretion, determine that one or more such promissory notes shall be subject to forgiveness by the Corporation in whole or in
part upon such terms as the Plan Administrator may deem appropriate. 

	II.
	TAX
WITHHOLDING 

    A.  The
Corporation's obligation to deliver shares of Common Stock upon the exercise of stock options or stock appreciation rights or upon the issuance or vesting of
such shares under the Plan shall be subject to the satisfaction of all applicable Federal, state and local income and employment tax withholding requirements. 

    B.  The
Plan Administrator may, in its discretion, provide any or all holders of Non-Statutory Options or unvested shares of Common Stock under the Plan
(other than the options granted or the shares issued under the Automatic Option Grant Program) with the right to use shares of Common Stock in satisfaction of all or part of the Taxes incurred by such
holders in connection with the exercise of their options or the vesting of their shares. Such right may be provided to any such holder in either or both of the following formats: 

    (i)  STOCK
WITHHOLDING: The election to have the Corporation withhold, from the shares of Common Stock otherwise issuable upon the exercise of such
Non-Statutory Option or the vesting of such shares, a portion of those shares with an aggregate Fair Market Value equal to the percentage of the Taxes (not to exceed one hundred percent
(100%)) designated by the holder. 

    (ii) STOCK
DELIVERY: The election to deliver to the Corporation, at the time the Non-Statutory Option is exercised or the shares vest, one or more shares of
Common Stock previously acquired by such holder (other than in connection with the option exercise or share vesting triggering the Taxes) with an aggregate Fair Market Value equal to the percentage of
the Taxes (not to exceed one hundred percent (100%)) designated by the holder. 

	III.
	EFFECTIVE
DATE AND TERM OF THE PLAN 

    A.  The
Plan became effective with respect to the Discretionary Option Grant and the Stock Issuance Programs immediately upon the Plan Effective Date. The Automatic
Option Grant Program under the Plan became effective on the Underwriting Date. Options may be granted under the Discretionary Option Grant Program at any time on or after the Plan Effective Date. In
addition, the initial option grants under the Automatic Option Grant Program were made on the Underwriting Date to each Eligible Director at that time. 

    B.  The
Plan shall serve as the successor to the Predecessor Plan, and no further option grants or direct stock issuances shall be made under the Predecessor Plan after
the Plan Effective Date. All 

14

 

options outstanding under the Predecessor Plan as of such date shall be incorporated into the Plan at that time and shall be treated as outstanding options under the Plan. 

    However,
each outstanding option so incorporated shall continue to be governed solely by the terms of the documents evidencing such option, and no provision of the Plan shall be
deemed to affect or otherwise modify the rights or obligations of the holders of such incorporated options with respect to their acquisition of shares of Common Stock. 

    C.  One
or more provisions of the Plan, including (without limitation) the option/vesting acceleration provisions of Article Two relating to Corporate Transactions and
Changes in Control, may, in the Plan Administrator's discretion, be extended to one or more options incorporated from the Predecessor Plan which do not otherwise contain such provisions. 

    D.  The
Plan shall terminate upon the earliest of (i) December 31, 2005, (ii) the date on which all shares available for issuance under the Plan
shall have been issued pursuant to the exercise of the options or the issuance of shares (whether vested or unvested) under the Plan or (iii) the termination of all outstanding options in
connection with a Corporate Transaction. Upon such Plan termination, all outstanding stock options and unvested stock issuances shall continue to have force and effect in accordance with the
provisions of the documents evidencing such options or issuances. 

	IV.
	AMENDMENT
OF THE PLAN 

    A.  The
Board shall have complete and exclusive power and authority to amend or modify the Plan in any or all respects. However, no such amendment or modification shall
adversely affect any rights and obligations with respect to options, stock appreciation rights or unvested stock issuances at the time outstanding under the Plan unless the Optionee or the Participant
consents to such amendment or
modification. In addition, certain amendments may require stockholder approval pursuant to applicable laws or regulations. 

    B.  Options
to purchase shares of Common Stock may be granted under the Discretionary Option Grant Program and shares of Common Stock may be issued under the Stock
Issuance Program that are in each instance in excess of the number of shares then available for issuance under the Plan, provided any excess shares actually issued under those programs are held in
escrow until there is obtained stockholder approval of an amendment sufficiently increasing the number of shares of Common Stock available for issuance under the Plan. If such stockholder approval is
not obtained within twelve (12) months after the date the first such excess grants or issuances are made, then (i) any unexercised options granted on the basis of such excess shares
shall terminate and cease to be outstanding and (ii) the Corporation shall promptly refund to the Optionees and the Participants the exercise or purchase price paid for any excess shares issued
under the Plan and held in escrow, together with interest (at the applicable Short-Term Federal Rate) for the period the shares were held in escrow, and such shares shall thereupon be
automatically canceled and cease to be outstanding. 

	V.
	USE
OF PROCEEDS 

    Any
cash proceeds received by the Corporation from the sale of shares of Common Stock under the Plan shall be used for general corporate purposes. 

	VI.
	REGULATORY
APPROVALS 

    A.  The
implementation of the Plan, the granting of any option or stock appreciation right under the Plan and the issuance of any shares of Common Stock (i) upon
the exercise of any option or stock appreciation right or (ii) under the Stock Issuance Program shall be subject to the Corporation's procurement of all approvals and permits required by
regulatory authorities having jurisdiction over the Plan, the options and stock appreciation rights granted under it and the shares of Common Stock issued pursuant to it. 

15

 

    B.  No shares of Common Stock or other assets shall be issued or delivered under the Plan unless and until there shall have been compliance with all applicable
requirements of Federal and state securities laws, including the filing and effectiveness of the Form S-8 registration statement for the shares of Common Stock issuable under the
Plan, and all applicable listing requirements of any stock exchange (or the Nasdaq National Market, if applicable) on which Common Stock is then listed for trading. 

	VII.
	NO
EMPLOYMENT/SERVICE RIGHTS 

    Nothing
in the Plan shall confer upon the Optionee or the Participant any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in
any way the rights of the Corporation (or any Parent or Subsidiary employing or retaining such person) or of the Optionee or the Participant, which rights are hereby expressly reserved by each, to
terminate such person's Service at any time for any reason, with or without cause. 

16

 
APPENDIX  

    The following definitions shall be in effect under the Plan: 

    A.  AUTOMATIC
OPTION GRANT PROGRAM shall mean the automatic option grant program in effect under the Plan. 

    B.  BOARD
shall mean the Corporation's Board of Directors. 

    C.  CHANGE
IN CONTROL shall mean a change in ownership or control of the Corporation effected through either of the following transactions: 

    (i)  the
acquisition, directly or indirectly, by any person or related group of persons (other than the Corporation or a person that directly or indirectly controls, is
controlled by, or is under common control with, the Corporation), of beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing more than fifty
percent (50%) of the total combined voting power of the Corporation's outstanding securities pursuant to a tender or exchange offer made directly to the Corporation's stockholders, or 

    (ii) a
change in the composition of the Board over a period of thirty-six (36) consecutive months or less such that a majority of the Board members
ceases, by reason of one or more contested elections for Board membership, to be comprised of individuals who either (A) have been Board members continuously since the beginning of such period
or (B) have been elected or nominated for election as
Board members during such period by at least a majority of the Board members described in clause (A) who were still in office at the time the Board approved such election or nomination. 

    D.  CODE
shall mean the Internal Revenue Code of 1986, as amended. 

    E.  COMMON
STOCK shall mean the Corporation's common stock. 

    F.  CORPORATE
TRANSACTION shall mean either of the following stockholder-approved transactions to which the Corporation is a party: 

    (i)  a
merger or consolidation in which securities possessing more than fifty percent (50%) of the total combined voting power of the Corporation's outstanding
securities are transferred to a person or persons different from the persons holding those securities immediately prior to such transaction; or 

    (ii) the
sale, transfer or other disposition of all or substantially all of the Corporation's assets in complete liquidation or dissolution of the Corporation. 

    G.  CORPORATION
shall mean Polycom, Inc., a Delaware corporation, and any corporate successor to all or substantially all of the assets or voting stock of
Polycom, Inc. which shall by appropriate action adopt the Plan. 

    H.  DISCRETIONARY
OPTION GRANT PROGRAM shall mean the discretionary option grant program in effect under the Plan. 

    I.  ELIGIBLE
DIRECTOR shall mean a non-employee Board member eligible to participate in the Automatic Option Grant Program in accordance with the
eligibility provisions of Article One. 

    J.  EMPLOYEE
shall mean an individual who is in the employ of the Corporation (or any Parent or Subsidiary), subject to the control and direction of the employer entity
as to both the work to be performed and the manner and method of performance. 

    K.  EXERCISE
DATE shall mean the date on which the Corporation shall have received written notice of the option exercise. 

17

 

    L.  FAIR MARKET VALUE per share of Common Stock on any relevant date shall be determined in accordance with the following provisions: 

    (i)  If
the Common Stock is at the time traded on the Nasdaq National Market, then the Fair Market Value shall be the closing selling price per share of Common Stock on
the date in question, as such price is reported by the National Association of Securities Dealers on the Nasdaq National Market or any successor system. If there is no closing selling price for the
Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists. 

    (ii) If
the Common Stock is at the time listed on any Stock Exchange, then the Fair Market Value shall be the closing selling price per share of Common Stock on the
date in question on the Stock Exchange determined by the Plan Administrator to be the primary market for the Common Stock, as such price is officially quoted in the composite tape of transactions on
such exchange. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which
such quotation exists. 

    (iii) For
purposes of any option grants made on the Underwriting Date, the Fair Market Value shall be deemed to be equal to the price per share at which the Common
Stock is to be sold in the initial public offering pursuant to the Underwriting Agreement. 

    (iv) For
purposes of any option grants made prior to the Underwriting Date, the Fair Market Value shall be determined by the Plan Administrator, taking into account
such factors as it deems appropriate. 

    M. HOSTILE
TAKE-OVER shall mean a change in ownership of the Corporation effected through the direct or indirect acquisition by any person or related group
of persons (other than the Corporation or a person that directly or indirectly controls, is controlled by, or is under common control with, the Corporation) of beneficial ownership (within the meaning
of Rule 13d-3 of the 1934 Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Corporation's outstanding securities pursuant to a
tender or exchange offer made directly to the Corporation's stockholders which the Board does not recommend such stockholders to accept. 

    N.  INCENTIVE
OPTION shall mean an option which satisfies the requirements of Code Section 422. 

    O.  INVOLUNTARY
TERMINATION shall mean the termination of the Service of any individual which occurs by reason of: 

    (i)  such
individual's involuntary dismissal or discharge by the Corporation for reasons other than Misconduct, or 

    (ii) such
individual's voluntary resignation following (A) a change in his or her position with the Corporation which materially reduces his or her level of
responsibility, (B) a reduction in his or her level of compensation (including base salary, fringe benefits and participation in corporate-performance based bonus or incentive programs) by more
than fifteen percent (15%) or (C) a relocation of such individual's place of employment by more than fifty (50) miles, provided and only if such change, reduction or relocation is
effected by the Corporation without the individual's consent. 

    P.  MISCONDUCT
shall mean the commission of any act of fraud, embezzlement or dishonesty by the Optionee or Participant, any unauthorized use or disclosure by such
person of confidential information or trade secrets of the Corporation (or any Parent or Subsidiary), or any other intentional misconduct by such person adversely affecting the business or affairs of
the Corporation (or any Parent or Subsidiary) in a material manner. The foregoing definition shall not be deemed to be inclusive of all 

18

 

the acts or omissions which the Corporation (or any Parent or Subsidiary) may consider as grounds for the dismissal or discharge of any Optionee, Participant or other person in the Service of the
Corporation (or any Parent or Subsidiary). 

    Q.  1934
ACT shall mean the Securities Exchange Act of 1934, as amended. 

    R.  NON-STATUTORY
OPTION shall mean an option not intended to satisfy the requirements of Code Section 422. 

    S.  OPTIONEE
shall mean any person to whom an option is granted under the Discretionary Option Grant or Automatic Option Grant Program. 

    T.  PARENT
shall mean any corporation (other than the Corporation) in an unbroken chain of corporations ending with the Corporation, provided each corporation in the
unbroken chain (other than the Corporation) owns, at the time of the determination, stock possessing fifty percent (50%) or more
of the total combined voting power of all classes of stock in one of the other corporations in such chain. 

    U.  PARTICIPANT
shall mean any person who is issued shares of Common Stock under the Stock Issuance Program. 

    V.  PERMANENT
DISABILITY OR PERMANENTLY DISABLED shall mean the inability of the Optionee or the Participant to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment expected to result in death or to be of continuous duration of twelve (12) months or more. However, solely for the purposes of the
Automatic Option Grant Program, Permanent Disability or Permanently Disabled shall mean the inability of the non-employee Board member to perform his or her usual duties as a Board member
by reason of any medically determinable physical or mental impairment expected to result in death or to be of continuous duration of twelve (12) months or more. 

    W.  PLAN
shall mean the Corporation's 1996 Stock Incentive Plan, as set forth in this document. 

    X.  PLAN
ADMINISTRATOR shall mean the particular entity, whether the Board, the Primary Committee or the Secondary Committee, which is authorized to administer the
Discretionary Option Grant and Stock Issuance Programs with respect to one or more classes of eligible persons, to the extent such entity is carrying out its administrative functions under those
programs with respect to the persons under its jurisdiction. 

    Y.  PLAN
EFFECTIVE DATE shall mean March 5, 1996, the date on which the Plan was adopted by the Board. 

    Z.  PREDECESSOR
PLAN shall mean the Corporation's existing 1991 Stock Option Plan. 

    AA. PRIMARY
COMMITTEE shall mean the committee of two (2) or more non-employee Board members appointed by the Board to administer the Discretionary
Option Grant and Stock Issuance Programs with respect to Section 16 Insiders. 

    AB. SECONDARY
COMMITTEE shall mean a committee of at least one (1) Board member appointed by the Board to administer the Discretionary Option Grant and Stock
Issuance Programs with respect to eligible persons other than Section 16 Insiders. 

    AC. SECTION
12(g) REGISTRATION DATE shall mean the date on which the Common Stock was first registered under Section 12(g) of the 1934 Act. 

    AD. SECTION
16 INSIDER shall mean an officer or director of the Corporation subject to the short-swing profit liabilities of Section 16 of the 1934 Act. 

19

 

    AE. SERVICE shall mean the provision of services to the Corporation (or any Parent or Subsidiary) by a person in the capacity of an Employee, a non-employee
member of the board of directors or a consultant or independent advisor, except to the extent otherwise specifically provided in the documents evidencing the option grant or stock issuance. 

    AF. STOCK
EXCHANGE shall mean either the American Stock Exchange or the New York Stock Exchange. 

    AG. STOCK
ISSUANCE AGREEMENT shall mean the agreement entered into by the Corporation and the Participant at the time of issuance of shares of Common Stock under the
Stock Issuance Program. 

    AH. STOCK
ISSUANCE PROGRAM shall mean the stock issuance program in effect under the Plan. 

    AI. SUBSIDIARY
shall mean any corporation (other than the Corporation) in an unbroken chain of corporations beginning with the Corporation, provided each corporation
(other than the last corporation) in the unbroken chain owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain. 

    AJ. TAKE-OVER
PRICE shall mean the GREATER of (i) the Fair Market Value per share of Common Stock on the date the option is surrendered to the
Corporation in connection with a Hostile Take-Over or (ii) the highest reported price per share of Common Stock paid by the tender offeror in effecting such Hostile
Take-Over. However, if the surrendered option is an Incentive Option, the Take-Over Price shall not exceed the clause (i) price per share. 

    AK. TAXES
shall mean the Federal, state and local income and employment tax liabilities incurred by the holder of Non-Statutory Options or unvested shares
of Common Stock in connection with the exercise of those options or the vesting of those shares. 

    AL. 10%
STOCKHOLDER shall mean the owner of stock (as determined under Code Section 424(d)) possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Corporation (or any Parent or Subsidiary). 

    AM. UNDERWRITING
AGREEMENT shall mean the agreement between the Corporation and the underwriter or underwriters managing the initial public offering of the Common
Stock. 

    AN. UNDERWRITING
DATE shall mean April 29, 1996, the date on which the Underwriting Agreement was executed and priced in connection with an initial public
offering of the Common Stock. 

20

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