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                                                                    EXHIBIT 10.1

                             1992 Stock Option Plan

         The Company's 1992 Stock Option Plan was adopted by the Board of
Directors of the Company and approved by the Company's stockholders in February
1992. The Board of Directors subsequently adopted an amendment and restatement
of the Company's 1992 Stock Option Plan (as so amended and restated, the
"Existing Plan") in April 1995, and the Existing Plan was approved by the
Company's stockholders in June 1995. The Board of Directors has unanimously
approved an amendment and restatement to the Existing Plan (as so amended and
restated, the "Restated Plan"), subject to stockholder approval. The principal
changes that would result from the Restated Plan are: (i) an increase in the
aggregate number of shares of Common Stock of the Company available for the
exercise of options granted under the Plan from 500,000 to 750,000; and (ii) an
increase in the limit on the number of shares as to which options may be granted
to any grantee in any calendar year from 75,000 to 215,000.

         The summary of the Restated Plan that appears below is qualified in its
entirety by reference to the full text of the Restated Plan, the text of which
is set forth in its entirety in Exhibit A.

PURPOSE OF THE RESTATED PLAN

         The primary purpose of the Restated Plan is to encourage key employees
and directors of the Company and its subsidiaries to acquire and maintain stock
ownership, thereby strengthening their commitment to the success of the Company
and its subsidiaries and their desire to remain employed by, or a director of,
the Company and its subsidiaries. The Restated Plan is also intended to attract,
employ and retain key employees and directors and to provide such directors and
employees with additional incentive and reward opportunities designed to
encourage them to enhance the profitable growth of the Company and its
subsidiaries.

SHARES AVAILABLE UNDER THE RESTATED PLAN

         Under the Existing Plan, there are currently 500,000 shares of Common
Stock reserved for issuance on account of the exercise of non-qualified stock
options. Under the Restated Plan, the number of shares available for issuance is
increased to 750,000. If and to the extent an option expires or terminates for
any reason without having been exercised in full, the shares of the Company's
Common Stock associated with such option will become available for other options
under the Restated Plan. The Restated Plan provides that the stock option
committee of the Company's Board of Directors (the "Committee") may make
equitable adjustments to the aggregate number of shares of the Company's Common
Stock available pursuant to the Restated Plan, the limit on the number of shares
as to which options may be granted to any grantee in any calendar year, the
number of shares covered by an option and the exercise price of options to
reflect a stock dividend, stock split, reverse stock split, share combination,
recapitalization, merger, consolidation, asset spin-off, reorganization, or
similar event, of or by the Company.

         The Existing Plan currently provides that a maximum of 75,000 shares of
Common Stock may be subjected to options granted to any

<PAGE>

particular individual in any calendar year. Under the Restated Plan, the maximum
number of shares as to which options may be granted to any particular individual
in any calendar year is increased to 215,000.

INTERESTED PARTIES

         All of the Company's directors and executive officers have a potential
interest in the proposed Restated Plan in that they are eligible to receive
options under the Restated Plan. Effective February 3, 1997, in connection with
the approval of a new employment agreement with Mr. Michael Bayles, the
Company's President and Chief Operating Officer, by the Board of Directors (see
"Executive Officers' Compensation--Employment Agreements" below), the
Compensation Committee of the Board granted to Mr. Bayles an option to purchase
210,000 shares of Common Stock (representing approximately 8% of the
then-outstanding shares of Common Stock), subject to the approval of the
proposed Restated Plan by the Company's stockholders. As described in the table
below, the option becomes exercisable in three annual installments commencing on
February 3, 1998 at the exercise prices set forth below. As of April 29, 1997,
the closing price of the Common Stock on the NASDAQ National Market was $2-5/8.

<TABLE>
<CAPTION>
# of Shares              Date              Exercise
  Subject                First               Price
 to Option            Exercisable          Per Share
 ---------            -----------          ---------
<S>                   <C>                  <C>
   20,000                2/3/98             $ 2.75
   28,000                2/3/98             $ 7.50
   36,000                2/3/98             $10.00

   17,500                2/3/99             $ 2.75
   24,500                2/3/99             $ 7.50
   31,500                2/3/99             $10.00

   12,500                2/3/00             $ 2.75
   17,500                2/3/00             $ 7.50
   22,500                2/3/00             $10.00
</TABLE>

The option expires on February 3, 2007.

GRANTS

         Under the Existing Plan, as of February 3, 1997, authority existed to
grant options with respect to an additional 181,250 shares of Common Stock
(subject to adjustment as discussed above). Effective on February 3, 1997, the
Board of Directors granted to Mr. Bayles an option to purchase 210,000 shares of
Common Stock, subject to stockholder approval of the Restated Plan. No other
option grants have been made since February 3, 1997. Therefore, after giving
effect to the increase in the number of shares of Common Stock available for
exercise of options granted under the Restated Plan from 500,000 to 750,000, the
Committee would have authority to grant options with respect to an additional
221,250 shares of Common Stock (subject to adjustment as discussed above).

<PAGE>

ADMINISTRATION OF THE RESTATED PLAN

         The Committee, which consists of at least two members of the Board of
Directors of the Company, administers and interprets the Restated Plan.

         Subject to the terms of the Restated Plan, the Committee has the
authority: (i) to grant options; (ii) to determine when options may be granted,
the option price and the individuals to whom options shall be granted; (iii) to
interpret the Restated Plan and to make all determinations necessary or
advisable for the administration of the Restated Plan; (iv) to prescribe, amend,
and rescind rules relating to, and consistent with, the Restated Plan; (v) to
determine the terms and provisions of the written agreements by which all
options shall be granted and, with the consent of the grantee, to modify any
such option agreement at any time; (vi) to accelerate the exercisability of,and
to accelerate or waive any or all of the restrictions and conditions applicable
to, any option; (vii) to make adjustments or modifications to options to
grantees employed outside the United States; and (viii) to impose such
additional conditions, restrictions, and limitations upon the grant, exercise or
retention of options as the Committee may deem appropriate.

ELIGIBLE PARTICIPANTS IN THE RESTATED PLAN

         Options may be granted to any employee or director of the Company or
any of its subsidiaries. To date, a total of 44 employees and 3 directors have
been granted options under the Existing Plan.

TERMS OF OPTIONS

         The exercise price of each non-qualified stock option granted under the
Restated Plan must at least equal 80% of the fair market value of the underlying
shares of Common Stock on the date of grant, and the maximum term of such an
option may not exceed 10 years.

         No option granted under the Restated Plan is transferable by the holder
other than by will or the laws of descent and distribution, and each option is
exercisable during the lifetime of the holder only by such holder. The Restated
Plan provides that any option granted under the Restated Plan terminates (i) on
the date of grantee's termination of employment with the Company or any
subsidiary for Cause (as defined) or (ii) 30 days after a grantee's termination
of employment with the Company or any subsidiary other than by reason of Cause;
provided that the Committee has discretion to extend the exercisability of
options after a grantee's termination of employment (other than by reason of
Cause) beyond 30 days to any longer period up to the full remaining term of the
option.

         The exercise price of any option granted under the Restated Plan may be
paid in cash or with shares of Common Stock valued at their fair market value on
the date they are tendered. The Restated Plan terminates on February 28, 2002,
unless earlier terminated by the Board of Directors. The Restated Plan permits
the Committee to grant substitute options for any canceled options granted under
the Restated Plan. If the Committee cancels any option, and a new option is

<PAGE>

substituted therefor, then the Committee may, in its discretion, determine the
terms and conditions of such new option subject to the express provisions of the
Restated Plan relating to new option grants.

         The Restated Plan provides that each option granted is exercisable in
one or more installments commencing not less then six months after the grant
date unless otherwise determined by the Committee and that the Committee, in its
sole discretion, has the authority to accelerate the exercisability of
outstanding options. The Restated Plan also provides for the automatic
acceleration of the exercisability of all outstanding options (regardless of
when granted) in the event of a Change of Control of the Company. For this
purpose, a "Change of Control" would include certain acquisitions or holdings of
beneficial ownership of 40% or more of the outstanding Common Stock; certain
changes in the composition of a majority of the Board of Directors; and
stockholder approval of certain extraordinary corporate transactions, including
mergers involving the Company which result in less than 60% of the surviving
entity being owned by the stockholders of the Company.

MODIFICATIONS OF THE RESTATED PLAN

         The Board of Directors of the Company is authorized to amend or modify
the Restated Plan without the approval of the stockholders of the Company,
except as such stockholder approval may be required under the listing
requirements of any national securities exchange or national market system on
which any of the Company's equity securities are listed.

FEDERAL INCOME TAX IMPLICATIONS OF THE RESTATED PLAN

         The following discussion summarizes certain federal income tax
consequences of participation in the Restated Plan based on the law in effect on
April 28, 1997. This summary of certain federal income tax consequences of
participation in the Restated Plan does not cover ederal employment tax or other
federal tax consequences that may be associated with the Restated Plan, nor does
it cover state, local or non-U.S. taxes.

         Stock Options. All of the options granted under the Restated Plan are
non-qualified stock options for Federal income tax purposes. Accordingly, an
optionee will not realize income upon the grant of such an option; however, in
any year in which an optionee exercises a part or all of such option, the
excess, if any, of the fair market value of the shares at the date of exercise
over the option price will be taxed as compensation at ordinary income tax
rates, and the Company will be entitled to a tax deduction for a like amount in
the same year.

         Withholding. The Company is required to withhold income taxes with
respect to income received upon the exercise of a non-qualified stock option.
With the approval of the Committee and subject to conditions specified in the
Restated Plan, the grantee can elect to have the Company retain, upon option
exercise, shares sufficient to satisfy such grantee's tax obligations with
respect to the option exercise.

<PAGE>

         The Company's Federal income tax deduction as discussed above is
subject to the limitations of Section 162(m) of the Internal Revenue Code. In
general, Internal Revenue Code Section 162(m), subject to certain exceptions,
denies the Company a deduction for compensation payable to its Chief Executive
Officer and its other four highest-paid executive officers named in the
Company's proxy statement, if any, to the extent that such compensation
(including taxable "spread" realized upon the exercise of non-qualified stock
options) exceeds $1 million in any taxable year. For this purposes "spread"
means the excess of the market value of the Common Stock on the date the option
is exercised over the exercise price of the option. Option spread generally does
not count as compensation for the purpose of determining whether an executive
officer has received compensation in excess of $1 million in a year if (i) the
option plan has been approved by holders of a majority of the shares voted with
respect thereto, (ii) the plan limits the number of shares as to which options
may be granted in a specific period to any individual; and (iii) the amount of
compensation an individual could receive from the option is based solely on an
increase in the value of stock after the date the options are granted. Although
the Compensation Committee has no present intention to do so, the Restated Plan
permits the grant of an option with an exercise price less than 100% of the
market value of the Common Stock on the date of grant. The spread on such an
option would count as compensation for purposes of the $1 million limit.
Moreover, a portion of spread in connection with the exercise of an option the
exercisability of which has been accelerated in connection with a change of
control may not be deductible by the Company and may result in the optionee
becoming subject to a 20% excise tax on a portion of the spread.<PAGE>

                                                                   EXHIBIT 10.16

                                  M-WAVE, INC.
                            2003 STOCK INCENTIVE PLAN
                            -------------------------
                  (As Adopted Effective as of November 3, 2003)

<PAGE>

                                  M-WAVE, INC.
                            2003 STOCK INCENTIVE PLAN
                            -------------------------
                  (As Adopted Effective as of November 3, 2003)

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                PAGE
<S>                                                                                                             <C>

1. Effective Date and Purpose.................................................................................    1

2. Plan Administration........................................................................................    1

3. Shares Available...........................................................................................    1

4. Eligibility for Awards.....................................................................................    2

5. Awards Generally...........................................................................................    2

6. Stock Awards...............................................................................................    2

7. Stock Unit Awards..........................................................................................    2

8. Stock Options..............................................................................................    3

9. Exercise of Stock Options..................................................................................    3

10. Stock Appreciation Rights.................................................................................    4

11. Change of Control.........................................................................................    4

12. Non-transferability of Awards.............................................................................    5

13. Tax Withholding...........................................................................................    5

14. No Rights as a Stockholder................................................................................    5

15. No  Employment Rights.....................................................................................    5

16. Securities Law Matters....................................................................................    5

17. Governing Law.............................................................................................    6

18. Term, Amendment, and Termination of Plan..................................................................    6
</TABLE>

<PAGE>

                             INDEX OF DEFINED TERMS

<TABLE>
<CAPTION>
                                                                                                                PAGE
<S>                                                                                                             <C>
1934 Act......................................................................................................    4
Affiliate.....................................................................................................    1
Board.........................................................................................................    1
Change of Control.............................................................................................    4
Code..........................................................................................................    1
Committee.....................................................................................................    1
Company.......................................................................................................    1
Effective Date................................................................................................    1
Eligible Person...............................................................................................    2
Fair Market Value.............................................................................................    3
Grantee.......................................................................................................    2
Incentive Stock Option........................................................................................    3
Incumbent Board...............................................................................................    4
ISO...........................................................................................................    3
NASDAQ........................................................................................................    3
NASDAQ/NMS....................................................................................................    3
Nonstatutory Stock Option.....................................................................................    3
NSO...........................................................................................................    3
Plan..........................................................................................................    1
qualified performance-based compensation......................................................................    2
Stock.........................................................................................................    1
Stock Appreciation Right......................................................................................    4
Stock Award...................................................................................................    2
Stock Unit Award..............................................................................................    2
Voting Power..................................................................................................    4
</TABLE>

                                       2

<PAGE>

                                  M-WAVE, INC.
                            2003 STOCK INCENTIVE PLAN
                            -------------------------
                  (As Adopted Effective as of November 3, 2003)

         1. EFFECTIVE DATE AND PURPOSE. M-Wave, Inc., a Delaware corporation
(the "COMPANY"), has established this M-Wave, Inc. 2003 Stock Incentive Plan
(the "PLAN"), effective as of November 3, 2003 (the "EFFECTIVE DATE"), subject
to the approval of the holders of a majority of the interests in voting stock of
the Company present or represented and entitled to vote at the Company's 2003
annual meeting of stockholders. The purpose of the Plan is to promote the
long-term financial performance of the Company by attracting, retaining, and
motivating highly-qualified employees, directors, and consultants of the Company
and its Affiliates (as defined below) through opportunities for equity-based
incentive compensation and for ownership of stock in the Company. For purposes
of the Plan, an "AFFILIATE" of the Company means (a) a subsidiary corporation as
defined in Section 424(f) of the Internal Revenue Code of 1986, as amended (the
"CODE"), with respect to the Company; and (b) any other entity in which the
Company, directly or indirectly, has an equity interest that the Committee
designates as an Affiliate of the Company for this purpose.

         2. PLAN ADMINISTRATION. The Plan shall be administered by the
Compensation Committee of the Board of Directors of the Company (the "BOARD") or
such other committee of two or more individuals as may be designated from time
to time by the Board to administer the Plan (the "COMMITTEE"). In addition to
those rights, duties, and powers vested in the Committee by other provisions of
the Plan, the Committee shall have full power and authority to:

         (a)      interpret the provisions of the Plan;

         (b)      adopt, amend, and rescind rules and regulations for the
                  administration of the Plan; and

         (c)      make any other determination deemed by it to be necessary or
                  desirable for the administration of the Plan.

Any determination by the Committee under the Plan shall be final and conclusive
on all persons affected. No member of the Committee shall be liable for any
action or determination made in good faith with respect to the Plan or any Award
(as described in paragraph 5 below).

         3. SHARES AVAILABLE. The number of shares of common stock, par value of
$.005, of the Company ("STOCK") for which Awards may be granted under the Plan
shall not exceed, at any date, 650,000 shares. The number of shares of Stock for
which Awards may be granted to any one Grantee in any calendar year shall not
exceed 500,000. If all or any portion of an Award is forfeited or expires or
terminates without the issuance of shares of Stock or payment of the cash
equivalent of shares of Stock, then the number of shares of Stock for which that
Award (or that portion of the Award) was granted shall again be available for
Awards under the Plan. The number of shares of Stock for which Awards may be
granted under the Plan shall be increased by the number of shares of Stock that
are tendered to pay the exercise price of an Award or that are applied to
satisfy a Grantee's tax withholding obligations. The Stock delivered pursuant to
the Plan shall be authorized but unissued shares of Stock or issued shares of
Stock held by the

                                       1

<PAGE>

Company as treasury stock (including shares purchased by the Company in the open
market). In the event of a merger, consolidation, reorganization,
recapitalization, stock dividend, stock split or other similar change in the
corporate structure or capitalization of the Company that affects the
outstanding shares of Stock, appropriate adjustment, as reasonably determined in
good faith by the Committee, shall be made with respect to the number and kinds
of shares (or other securities) which may thereafter be subject to Awards
granted under the Plan, to the affected provisions of the Plan, and to the
outstanding Awards under the Plan.

         4. ELIGIBILITY FOR AWARDS. The Committee may, in its discretion, grant,
from time to time, one or more Awards to any common law employee, director, or
consultant of the Company or of one of its Affiliates (an "ELIGIBLE PERSON"). In
selecting the individuals to whom Awards may be granted, the Committee shall
take into consideration such factors as it deems relevant in promoting the
purposes of the Plan. Notwithstanding any other provision of the Plan, with
respect to a director who is not a common law employee of the Company or one of
its Affiliates, the grant of an Award and the provisions of the written
agreement evidencing the Award shall be determined and approved by the Board.

         5. AWARDS GENERALLY. Awards under the Plan may be Stock Awards, Stock
Unit Awards, Incentive Stock Options, Nonstatutory Stock Options, and Stock
Appreciation Rights, each as described in the following provisions of the Plan.
Each Award shall be evidenced by an agreement, in written or electronic form,
between the Company and the Eligible Person receiving the Award (the "GRANTEE").
The provisions of each Award shall be determined by the Committee, subject to
the provisions of the Plan, and need not be the same as any other Award. The
term of any Award shall not be more than 10 years from its date of grant (5
years in the case of an Incentive Stock Option granted to an individual who
owns, on the date that the option is granted, more than 10 percent of the total
combined voting power of all classes of stock of the Company, any parent
corporation of the Company, or any subsidiary corporation of the Company within
the meaning of Section 422(b)(6) of the Code). The Committee may, in its
discretion, design any Award to meet the requirements for "QUALIFIED
PERFORMANCE-BASED COMPENSATION" under Section 162(m) of the Code. The Committee
may, in its discretion, accelerate the exercisability or vesting of any Award at
any time and for any reason, whether or not expressly permitted by the
provisions of the Award Agreement.

         6. STOCK AWARDS. The Committee may, at any time, award shares of Stock
to an Eligible Person (a "STOCK AWARD"). Each Stock Award Agreement shall
contain such provisions as the Committee determines are necessary or desirable
(which provisions need not be the same in each Stock Award Agreement),
including, without limitation, vesting requirements and restrictions on resale
or other disposition of, and repurchase rights on, shares of Stock awarded;
provided, however, that such provisions shall be consistent with the provisions
of the Plan.

         7. STOCK UNIT AWARDS. The Committee may, at any time, award the right
to receive shares of Stock in the future or their cash equivalent to an Eligible
Person (a "STOCK UNIT AWARD"). Each Stock Unit Award Agreement shall contain
such provisions as the Committee determines are necessary or desirable (which
provisions need not be the same in each Stock Unit Award Agreement), including,
without limitation, vesting requirements and restrictions on resale or other
disposition of, and repurchase rights on, shares of Stock issued pursuant to the
Award; provided, however, that such provisions shall be consistent with the
provisions of the Plan.

                                       2

<PAGE>

         8. STOCK OPTIONS. The Committee may, at any time, award an option to
purchase shares of Stock to an Eligible Person. The option may be an option to
purchase Stock that is intended to qualify as an incentive stock option under
Section 422 of the Code (an "INCENTIVE STOCK OPTION" OR "ISO") or an option to
purchase shares of Stock that is not an Incentive Stock Option (a "NONSTATUTORY
STOCK OPTION" OR "NSO"). Each ISO and NSO Award Agreement shall contain such
provisions as the Committee determines are necessary or desirable (which
provisions need not be the same in each option agreement), including, without
limitation, vesting requirements, exercise prices, and restrictions on resale or
other disposition of, and repurchase rights on, shares of Stock acquired on
exercise of the option; provided, however, that such provisions shall be
consistent with the provisions of the Plan. The exercise price for each share of
Stock under a Nonstatutory Stock Option shall be at least 80 percent of the Fair
Market Value, as defined below, of a share of Stock on the date that the option
is granted. The exercise price for each share of Stock under an Incentive Stock
Option shall be at least 100 percent of the Fair Market Value of a share of
Stock on the date that the option is granted (110 percent, in the case of a
Grantee who owns more than 10 percent of the total combined voting power of all
classes of stock of the Company, any parent corporation of the Company, or any
subsidiary corporation of the Company within the meaning of Section 422(b)(6) of
the Code).

For purposes of the Plan, the "FAIR MARKET VALUE" of a share of Stock means, as
of any date:

         (a)      if listed on a national securities exchange or authorized for
                  quotation on the National Association of Securities Dealers
                  Inc.'s NASDAQ National Market ("NASDAQ/NMS"), the regular
                  session closing price of a share on such exchange or
                  NASDAQ/NMS, as the case may be, or if no such reported sale of
                  a share has occurred on that date, on the next preceding date
                  on which there was such a reported sale, or

         (b)      if not listed for trading on a national securities exchange
                  and not authorized for quotation on NASDAQ/NMS, the average of
                  the closing bid and asked prices as reported by the National
                  Association of Securities Dealers Automated Quotation System
                  ("NASDAQ"), Pink Sheets LLC, NASD Bulletin Board, or similar
                  organization, or, if no such prices shall have been so
                  reported for that date, on the next preceding date for which
                  such prices were so reported, or

         (c)      if not listed for trading on a national securities exchange
                  and not authorized for quotation on NASDAQ/NMS or NASDAQ, Pink
                  Sheets LLC, NASD Bulletin Board, or similar organization, the
                  fair market value of a share as determined in good faith by
                  the Committee.

         9. EXERCISE OF STOCK OPTIONS. A Grantee may exercise an ISO or NSO by
delivering to the Company, or its designee, a written notice which specifies the
number of full shares of Stock being purchased, accompanied by payment of the
full aggregate amount of the exercise price for all shares being purchased, and
by satisfying such other requirements as may be prescribed in the Stock Option
Award Agreement. Payment of the exercise price shall be made in cash (including
checks, money orders, or electronic funds transfer) or, if permitted by the
Committee: (a) in shares of Stock with an aggregate Fair Market Value on the
date of exercise equal to the exercise price; (b) retention by the Company of
shares that would otherwise be issued upon exercise; or (c) a combination of the
foregoing.

                                       3

<PAGE>

         10. STOCK APPRECIATION RIGHTS. The Committee may, at any time, award an
option to receive, in any combination of cash and shares of Stock with an
aggregate Fair Market Value equal to the excess, if any, of the aggregate Fair
Market Value of a specified number of shares of Stock on the date of exercise
over at least 80 percent of the aggregate Fair Market Value of that number of
shares of Stock on the date that the option was granted (a "STOCK APPRECIATION
RIGHT"). A Stock Appreciation Right may be, but need not be, granted in tandem
with another Award, so that a condition of exercise of all or any portion one of
the Awards granted in tandem is the surrender of all or the appropriate portion
of the other Award. Each Stock Appreciation Right Award Agreement shall contain
such provisions as the Committee determines are necessary or desirable (which
provisions need not be the same in each Stock Appreciation Right Award
Agreement), including, without limitation, vesting requirements, exercise
prices, and form of payment; provided, however, that such provisions shall be
consistent with the provisions of the Plan.

         11. CHANGE OF CONTROL. If a Change of Control (as defined below)
occurs, then, except as the Committee (as constituted immediately prior to the
Change of Control) shall determine, on the date of the Change of Control all
Awards that are then outstanding shall become fully exercisable and fully vested
and all restrictions on such Awards shall lapse. For purposes of the Plan, a
"CHANGE OF CONTROL" means any one or more of the following:

         (a)      the acquisition or holding by any person, entity, or group
                  (within the meaning of Section 13(d)(3) or 14(d)(2) of the
                  Securities Exchange Act of 1934 (the "1934 ACT"), other than
                  by the Company, any Affiliate of the Company, any employee
                  benefit plan (or any related trust) of the Company or of any
                  Affiliate of the Company, or Mr. Joseph A. Turek, of
                  beneficial ownership (within the meaning of Rule 13d-3
                  promulgated under 1934 Act) of 40 percent or more of either
                  the then-outstanding Stock or the combined voting power of the
                  Company's then-outstanding voting securities entitled to vote
                  generally in the election of directors ("VOTING POWER");
                  except that no such person, entity or group shall be deemed to
                  own beneficially any securities held by the Company, any
                  Affiliate of the Company, or any employee benefit plan (or any
                  related trust) of the Company or of any Affiliate of the
                  Company; provided, however, that no Change of Control shall be
                  deemed to have occurred solely by reason of any such
                  acquisition by a corporation with respect to which, after such
                  acquisition, more than 60 percent of both the then-outstanding
                  common shares and the Voting Power of such corporation are
                  then-beneficially owned, directly or indirectly, by the
                  persons who were the beneficial owners of the Stock and voting
                  securities of the Company immediately before such acquisition
                  in substantially the same proportions as their respective
                  ownership, immediately before such acquisition, of the
                  then-outstanding Stock or the Voting Power of the Company, as
                  the case may be; or

         (b)      individuals who, as of the Effective Date, constitute the
                  Board (the "INCUMBENT BOARD") cease for any reason to
                  constitute at least a majority of the Board; provided that any
                  individual who becomes a director after the Effective Date
                  whose election or nomination for election by the Company's
                  stockholders was approved by at least a majority of the
                  then-serving members of the Incumbent Board (other than an
                  election or nomination of an individual whose initial
                  assumption of office is in connection with an actual or
                  threatened election contest

                                       4

<PAGE>

                  relating to the election of the directors of the Company (as
                  such terms are used in Rule 14a-11 under the 1934 Act)) shall
                  be deemed to be members of the Incumbent Board; or

         (c)      approval by the stockholders of the Company of (i) a merger,
                  reorganization or consolidation with respect to which persons
                  who were the respective beneficial owners of the Stock and
                  Voting Power of the Company immediately before such merger,
                  reorganization or consolidation do not, immediately
                  thereafter, beneficially own, directly or indirectly, more
                  than 60 percent of, respectively, the then-outstanding common
                  shares and the Voting Power of the corporation resulting from
                  such merger, reorganization or consolidation, (ii) a
                  liquidation or dissolution of the Company, or (iii) the sale
                  or other disposition of all or substantially all of the assets
                  of the Company.

         12. NON-TRANSFERABILITY OF AWARDS. Awards granted under the Plan may
not be transferred except by will or the laws of descent and distribution, and
may be exercised during the Grantee's lifetime only by the Grantee; provided,
however, that the Committee may, in its discretion, permit a Grantee to transfer
an Award, other than an ISO: (a) to family members; (b) to custodianships under
the Uniform Transfers to Minors Act or any similar statute; (c) to trusts for
the benefit of the Grantee and family members; (d) to family partnerships; and
(e) upon termination or dissolution of such custodianship, trust, or family
partnership, to the person or persons who, in accordance with the terms of such
custodianship, trust, or partnership, are entitled to receive the transferred
options.

         13. TAX WITHHOLDING. On or before the date that an amount becomes
subject to tax with respect to an Award under the Plan, the Grantee shall pay to
the Company or make arrangements acceptable to the Committee to satisfy any
federal, state, or local tax withholding obligation of the Company and its
Affiliates with respect to that amount. The Committee may, in its discretion,
permit a Grantee to satisfy a tax withholding obligation with shares of Stock,
including Stock that is being acquired pursuant to the Award. The Company's
obligations under the Plan and any Award to a Grantee shall be conditioned on
satisfaction of any tax withholding obligation and the Company and its
Affiliates shall be entitled, to the extent permitted by law, to satisfy the tax
withholding obligation by deduction from any payment due to the Grantee.

         14. NO RIGHTS AS A STOCKHOLDER. A Grantee shall not have any right as a
stockholder of the Company with respect to the shares of Stock that may be
deliverable with respect to that Award until such shares have been delivered to
the Grantee.

         15. NO EMPLOYMENT RIGHTS. The Plan does not constitute a contract of
employment. Eligibility to receive, or receipt of, an Award under the Plan does
not give any individual the right to become or remain in the employ or service
of the Company or its Affiliates and does not limit in any way the right of the
Company and its Affiliates to change the duties or responsibilities of that
individual.

         16. SECURITIES LAW MATTERS.

         (a)      To the extent the Committee deems necessary in order to comply
                  with the Securities Act of 1933, the Committee may require a
                  written investment intent

                                       5

<PAGE>

                  representation by the Grantee and may require that a
                  restrictive legend be affixed to certificates for shares of
                  Stock.

         (b)      If the Committee deems it necessary to comply with any
                  applicable securities law or the requirements of any stock
                  exchange upon which the shares of Stock may be listed, the
                  Committee may impose any restriction on shares of Stock
                  acquired pursuant to an Award under this Plan as it may deem
                  advisable. All certificates for shares of Stock delivered
                  pursuant to an Award under this Plan shall be subject to such
                  stop transfer orders and other restrictions as the Committee
                  may deem advisable under the rules, regulations, and other
                  requirements of the Securities Exchange Commission, any stock
                  exchange upon which the Stock is then listed, or any
                  applicable securities law. The Committee may cause a legend or
                  legends to be put on any such certificate to make appropriate
                  reference to such restrictions.

         (c)      If based upon the advice of counsel for the Company, the
                  Committee determines that the issuance and delivery of shares
                  of Stock pursuant to any Award would cause the Company to
                  violate (i) federal or state securities law; or (ii) the
                  listing requirements of any national securities exchange or
                  quotation system on which any of the Company's equity
                  securities are listed or quoted, then the Committee may
                  postpone any such issuance and delivery, but the Company shall
                  use all reasonable efforts to cause such issuance and delivery
                  to comply with all such provisions at the earliest practicable
                  date.

         17. GOVERNING LAW. The Plan and Awards granted under the Plan shall be
governed by and construed in accordance with the laws and court decisions of the
State of Delaware, without giving effect to principles of conflict of laws.

         18. TERM, AMENDMENT, AND TERMINATION OF PLAN. The Plan shall terminate
on the tenth anniversary of the Effective Date, unless terminated earlier by the
Board. Awards may not be granted under the Plan after the termination date of
the Plan. The Board may amend or terminate the Plan at any time, except that,
without the approval of the stockholders of the Company, the Board may not amend
the Plan to:

         (a)      increase the number of shares of Stock for which Awards may be
                  granted under the Plan;

         (b)      extend the termination date of the Plan beyond the tenth
                  anniversary of the Effective Date;

         (c)      reduce the minimum exercise price of Options, as described in
                  paragraph 8 above; or

         (d)      extend the permitted maximum term of an Award.

No amendment or termination of the Plan shall be effective without the approval
of the stockholders of the Company, if such approval is required to comply with
any applicable law or stock exchange rule. Amendment or termination of the Plan
shall not affect the validity or terms of any Award previously granted under the
Plan in any manner that is adverse to the Grantee of the Award without the
consent of the Grantee.

                                       6

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