Document:

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                                                                   Exhibit 10.16

                               SECURITY AGREEMENT

           HomeSeekers.com. Incorporated ("Debtor"), and William Tomerlin
("Secured Party") agree, effective as of the 22nd day of November, 2000, as
follows:

1.   Background and Purpose.

     1.1   Debtor has executed a promissory note payable to Secured Party in the
original principal amount of Two Hundred Fifty Thousand Dollars ($250,000) (the
"Note").

     1.2   To secure Debtor's obligations under the Note, and Debtor's
obligations under this Agreement, Debtor has agreed to grant to Secured Party
security interest as provided below.

     1.3   The parties desire to set forth more fully the terms of this
Agreement.

2.   Grant of Security Interest. To secure Debtor's Obligations (as defined in
Paragraph 3 below), Debtor grants to Secured Party a security interest in the
Collateral (as defined in Paragraph 4 below).

3.   Obligations. For purposes of this Agreement, "Obligations" means any and
all debts, obligations and liabilities of Debtor to Secured Party arising out
of, or relating in any way to the Note, and any obligations of Debtor to Secured
Party pursuant to this Agreement, whether or not existing or arising after the
date of this Agreement, voluntary or involuntary, jointly owned with others,
direct or indirect, or absolute or contingent, and whether or not from time to
time increased, decreased, extinguished, created, or incurred.

4.   Collateral. For purposes of this Agreement, "Collateral" means:

           a.    All accounts, accounts receivable, contract rights and general
intangibles, including, without limitation, all forms of payment, all present
and future incomes, rents, revenues, issues and profits, goodwill, license and
license rights, bailment or leasehold interests, whether as lessor or lessee,
all causes of action and recoveries for any loss in value of the real estate
of Debtor or items of property described in this Agreement, rights of and to
security agreements and other contracts or assignments providing security to
Debtor, book debts, credits, indemnities, warranties or guarantees payable to
Debtor upon loss or damage of property, invention, designs, design
registrations, trademarks, trade styles, trade name, know-how, powers,
privileges, logos, franchise rights, payments in kind, advertising and
promotional materials, trade secrets, patents, patent rights, copyrights,
patent applications, tax refunds, customer lists, business and accounting
records, including all ledger account cards, computer tapes and disks and other
computer information, in all cases whether now owned or hereafter created or
acquired by Debtor or in which Debtor may now have or may after the date of this
Agreement acquire an interest;

           b.    All inventory, including, without limitation, all goods held
for sale or lease, finished goods, merchandise, parts and supplies, of every
kind and description, whether now owned or acquired by Debtor after the date of
this Agreement, or in which Debtor may now have

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Security Agreement
November 22nd, 2000
Page -2-

or may after the date of this Agreement acquire an interest, including, without
limitation, inventory temporarily out of Debtor's custody or possession and any
returns or repossessions upon any sales or accounts;

           c.    All goods, including, without limitation, equipment, machinery,
materials, furniture, furnishings, engines, appliances, fixtures, tools, parts,
supplies, and vehicles of every kind and description, whether now owned or
acquired by Debtor after the date of this Agreement or delivered to the real
property of Debtor, or in which Debtor may now have or may after the date of
this Agreement acquire an interest, and all additions, accessions, replacements,
substitutions, and improvements to such goods and wherever located;

           d.    All documents, documents of title, deposits accounts,
negotiable and nonnegotiable instruments, shares, stocks, warrants, stock
options, bonds, debentures, securities, moneys, sources of money,
uncalled capital, letters of credit, investment property, and chattel
paper whether now owned or acquired after the date of this Agreement by Debtor;
and

           e.    All proceeds and products of any of the personal property
described above, in any form, including, without limitation, proceeds of any
insurance relating to such collateral or fire and builder's risk insurance and
unrenewed insurance premiums, proceeds constituting of any of the above types of
collateral, all awards made in eminent domain proceedings or purchased in lieu
of such eminent domain proceedings, and proceeds of any tort cause of action in
existence, now or after the date of this Agreement and all replacements,
substitutions, renewals, returns, additions, accessions, rents, royalties,
issues, documents of ownership, and receipts for any of the foregoing.

The term "Collateral" is subject to all licenses previously granted by Debtor
and to all pre-existing contractual obligations of Debtor.

5.   Representations and Warranties. As a material inducement to Secured Party
under this Agreement, Debtor represents and warrants that the following are and
shall remain true and correct, except as specifically set forth in a schedule of
exceptions attached to this Agreement:

     5.1   Title. Debtor is the owner of all right, title, and interest in the
Collateral free and clear of all liens, encumbrances, and security interests,
except the security interest created by this Agreement.

     5.2   Truth. All information that Debtor has provided to Secured Party
concerning the Collateral is true and correct.

     5.3   No Defenses. No defenses, offsets, claims or counterclaims exist
against Debtor that may be asserted against Secured Party in any proceeding to
enforce Secured Party's rights in the Collateral.

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Security Agreement
November 22nd, 2000
Page -3-

     5.4   No Conflict. The execution, delivery, and performance of this
Agreement by Debtor is not in violation of any applicable law or regulation or
contractual obligation of Debtor.

     5.5   First Priority Lien. The liens granted to Secured Party under this
Agreement will constitute a first priority lien on the Collateral upon the
timely filing of a UCC-1 Financing Statement.

     5.6   Due Authorization. Debtor has been duly authorized to execute and
deliver this Agreement, which is a valid and binding obligation by Debtor.

6.   Covenants of Debtor.

     6.1   Protection of Security Interest. Contemporaneously with the execution
of this Agreement, Debtor shall properly execute and deliver to Secured Party
UCC-1 Financing Statements to enable Secured Party to perfect Secured Party's
security interest in the Collateral. Debtor agrees also to execute, file, and
record such other statements, notices, and agreements, take such action and
obtain such certificates and documents, in accordance with all applicable laws,
statutes, and regulations as may be necessary or advisable to perfect, evidence,
and continue Secured Party's security interest in the Collateral.

     6.2   Transactions Involving Collateral. Debtor shall not, without the
prior written consent of Secured Party, (a) sell, offer to sell, or otherwise
transfer the Collateral except in the ordinary course of business, or to pledge,
mortgage, encumber, or otherwise permit the Collateral to be subject to any
lien, security interest, or charge, other than the security interest created by
this Agreement.

     6.3   Compliance with Laws. Debtor shall comply with all laws, statute, and
regulations pertaining to the Collateral.

     6.4   Taxes, Assessments, and Liens. Debtor shall pay when due all taxes,
assessments, and liens with regard to the Collateral.

7.   Authorized Action by Secured Party. Debtor irrevocably appoints Secured
Party as Debtor's attorney in fact to do any act that Debtor is obligated to do
pursuant to this Agreement to preserve or protect the Collateral and to
preserve, protect, or establish Secured Party's lien on the Collateral. Debtor
further irrevocably appoints Secured Party to exercise such rights and powers as
Debtor might exercise with respect to the Collateral following an Event of
Default, as defined below. These powers shall include without limitation the
right to (a) collect by legal proceedings or otherwise, and endorse, receive,
and receipt all dividends, interest, payments, proceeds and other sums and
property now or after the date of this Agreement payable on account of the
Collateral, (b) transfer the Collateral to Secured Party's own or Secured
Party's nominee's name and (c) make any compromise or settlement and take any
action Secured Party deems advisable with respect to the Collateral. Debtor
agrees to reimburse Secured Party on demand for any costs and expenses,
including without limitation attorney fees, which Secured

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Security Agreement
November 22/nd/, 2000
Page -4-

Party may incur while acting as Debtor's attorney in fact under this Agreement,
all of which costs and expenses are included in the Obligations secured by this
Agreement. Secured Party shall have no obligation to act pursuant to this
paragraph and shall not be required to make any presentment, demand, or protest,
or give any notice or take any action to preserve any rights against any other
person in connection with the Collateral.

8.      Defaults and Remedies.

        8.1    Event of Default.  Any of the following events or conditions
shall constitute an Event of Default by Debtor under this Agreement:

                a.     Default in payment of the obligations in accordance with
the terms of the Note;

                b.     Default in the performance of any Obligations or breach
of any agreement, representation, or warranty contained in this Agreement;

                c.     Any levy or proceeding against the Collateral or Debtor's
interest in the Collateral, except if Debtor is conducting appropriate
proceedings in good faith to contest the levy or proceeding; or

                d.     The filing of a petition by or against Debtor under the
provisions of the Bankruptcy Code.

        8.2     Remedies. Upon the occurrence of an Event of Default, Secured
Party:

                a.     Shall have and may exercise the right to sell or
otherwise dispose of all or a portion of the Collateral, and to apply the
proceeds of such sale or disposition in the order following to (i) the expenses
of selling or otherwise disposing of the Collateral and the reasonable
attorneys' fees and legal expenses incurred by the Secured Party; and (ii) the
satisfaction of the Obligations.

                b.     Shall have and may exercise all other rights and remedies
accorded to Secured Party by the Nevada Revised Statutes;

                c.     May declare all unperformed Obligations, in whole or in
party, of Debtor immediately due and payable without demand or notice; and

                d.     May require Debtor to take any and all action necessary
to make the Collateral available to Secured Party.

         8.3    Remedies Cumulative. All of Secured Party's rights and remedies,
whether evidenced by this Agreement or by any other writing, shall be cumulative
and may be exercised

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Security Agreement
November 22nd, 2000
Page-5-

singularly or concurrently. Election by Secured Party to pursue any remedy shall
not exclude pursuit of any other remedy.

9.   Waiver of Hearing. Debtor expressly waives any constitutional or other
right to a judicial hearing prior to the time Secured Party takes possession or
disposes of the Collateral upon an Event of Default as provided in Paragraph 8
above.

10.  Escrow. The parties may convey all or a portion of the Collateral to an
escrow officer mutually agreed-upon by the parties (the "Escrow Officer")
pursuant to mutually agreeable escrow instructions that require the Escrow
Officer to sell the portion of the Collateral conveyed into escrow and to use
the proceeds of such sale(s) to satisfy the Obligations.

11.  Additional Documentation; Cooperation. Each party shall, upon the request
of the other, execute, acknowledge, and deliver to the other any instrument that
may be required to accomplish the intent of this Agreement. Each party agrees to
cooperate to effectuate the intent of this Agreement and shall take all
appropriate action necessary or useful in doing so.

12.  Nonresponsibility of Secured Party. Secured Party is not responsible for
the preservation or exercise of any rights to, or granted by, any Collateral and
is not responsible for insuring any such Collateral or for the wear, destruction
(partial or total), or depreciation of Collateral in possession.

13.  Miscellaneous.

     13.1  Notices. All notices, requests, consents and other communications
which are required or permitted hereunder shall be in writing and shall be
delivered personally, sent by facsimile transmission, or mailed by certified or
registered mail, postage prepaid, return-receipt requested (in which case it
shall be deemed given three (3) business days after mailing) to the addresses
listed in the preamble of this Agreement.

     13.2  Entire Agreement. This Agreement, together with the Note contains the
entire understanding of the parties in respect of its subject matter and
supersedes all prior agreements and understandings (oral or written) between or
among the parties with respect to such subject matter.

     13.3  Assignment.  The rights and obligations of this Agreement shall bind
and insure to the benefit of the parties and their respective successors and
assigns.

     13.4  Counterparts; Facsimile.  This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument. Executed copies of this
Agreement of this Agreement may be delivered by facsimile, and delivery of
executed facsimile copies to the parties and their counsel shall be deemed to be
a delivery of a duplicate original and sufficient delivery to result in entry to
this Agreement by the transmitting party.

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Security Agreement
November 22nd, 2000
Page -6-

     13.5  Governing Law, Jurisdiction and Waiver of Venue. This Agreement shall
be governed by and construed in accordance with the laws of the State of Nevada
regardless of the fact that any of the parties hereto may be or may become a
resident of a different country, state, or jurisdiction. Any suit, action, or
proceeding arising out of, or with respect to, this Agreement shall be filed in
a court of competent jurisdiction within the County of Washoe, State of Nevada
or in the U.S. District Court for the District of Nevada, Northern Division. The
parties hereby consent to the personal jurisdiction of such courts within the
County of Washoe, State of Nevada and the U.S. District Court for the District
of Nevada, Northern Division. The parties hereby waive any objections to venue
in such courts with Washoe County, State of Nevada and the U.S. District Court
for the District of Nevada, Northern Division.

     13.6  Attorneys' Fees.  If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to receive from the other its reasonable attorneys' fees, costs, and
necessary disbursements in addition to any other relief to which such party may
be entitled.

     13.7  Severability.  In case any provision of this Agreement shall, for any
reason, be held to be invalid, unenforceable, or illegal, such provision shall
be severed from this Agreement, and such invalidity, unenforceable or illegality
shall not affect any other provisions of this Agreement.

     13.8  Waiver. Secured Party shall not be deemed to have waived any rights
under this Agreement unless such waiver is in writing and signed by secured
Party. No delay or omission on the part of Secured Party in exercising any right
shall operate as a waiver of such right or any other right.

     IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement
to be duly executed and delivered as of the day and year first above written.

                                              SECURED PARTY

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

                                              HOMESEEKERS.COM, INCORPORATED, a
                                              Nevada corporation

                                              By: /s/ GREG COSTLEY
                                                 -------------------------------
                                                 Name: GREG COSTLEY
                                                      --------------------------
                                                 Title: CEO
                                                       -------------------------Exhibit 4.1

                             HERLEY INDUSTRIES, INC.
                             2000 Stock Option Plan
                             ----------------------

SECTION 1.  GENERAL PROVISIONS
            ------------------

1.1  Name and General Purpose
     ------------------------

     The name of this plan is the Herley Industries, Inc. 2000 Stock Option Plan
(hereinafter  called the  "Plan").  The Plan is intended  to be a  broadly-based
incentive plan which enables  Herley  Industries,  Inc. (the  "Company") and its
subsidiaries  and  affiliates to foster and promote the interests of the Company
by  attracting  and  retaining   directors,   officers  and  employees  of,  and
consultants  to, the Company who  contribute to the  Company's  success by their
ability, ingenuity and industry, to enable such directors,  officers,  employees
and  consultants  to  participate  in the  long-term  success  and growth of the
Company by giving  them a  proprietary  interest  in the  Company and to provide
incentive  compensation   opportunities  competitive  with  those  of  competing
corporations.

1.2  Definitions
     -----------

     a.   "Affiliate"  means any person or entity  controlled by or under common
          control  with the  Company,  by  virtue  of the  ownership  of  voting
          securities, by contract or otherwise.

     b.   "Board" means the Board of Directors of the Company.

     c.   "Change in Control"  means a change of control of the  Company,  or in
          any person directly or indirectly controlling the Company, which shall
          mean:

          (a) a  change  in  control  as  such  term  is  presently  defined  in
          Regulation  240.12b-(2) under the Securities  Exchange Act of 1934, as
          amended (the "Exchange Act"); or

          (b) if any "person"  (as such term is used in Section  13(d) and 14(d)
          of the Exchange Act) other than the Company or any "person" who on the
          date of this  Agreement  is a  director  or  officer  of the  Company,
          becomes the  "beneficial  owner" (as defined in Rule 13(d)-3 under the
          Exchange  Act)  directly or  indirectly,  of securities of the Company
          -representing  twenty percent (20%) or more of the voting power of the
          Company's then outstanding securities; or

          (c) if during any period of two (2) consecutive  years during the term
          of  this  Plan,  individuals  who  at the  beginning  of  such  period
          constitute the Board of Directors,  cease for any reason to constitute
          at least a majority thereof.

     d.   "Committee"  means the  Committee  referred  to in Section  1.3 of the
          Plan.

     e.   "Common  Stock" means shares of the Common  Stock,  par value $.10 per
          share, of the Company.

     f.   "Company" means Herley Industries, Inc., a corporation organized under
          the laws of the State of Delaware (or any successor corporation).

     g.   "Fair Market  Value" means the market price of the Common Stock on the
          National   Association  of  Securities  Dealers  Automated   Quotation
          ("NASDAQ")  system on the date of the  grant or on any  other  date on
          which the  Common  Stock is to be valued  hereunder.  If no sale shall

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          have been reported on the NASDAQ on such date, Fair Market Value shall
          be determined by the Committee.

     h.   "Non-Employee Director" shall have the meaning set forth in Rule 16(b)
          promulgated by the Securities and Exchange Commission ("Commission").

     i.   "Option" means any option to purchase  Common Stock under Section 2 of
          the Plan.

     j.   "Option Agreement" means the option agreement described in Section 2.4
          of the Plan.

     k.   "Participant" means any director,  officer,  employee or consultant of
          the  Company,  a  Subsidiary  or an  Affiliate  who is selected by the
          Committee to participate in the Plan.

     l.   "Subsidiary"  means any  corporation  in which the  Company  possesses
          directly or indirectly 50% or more of the combined voting power of all
          classes of stock of such corporation.

     m.   "Total  Disability"  means accidental  bodily injury or sickness which
          wholly and  continuously  disabled an optionee.  The Committee,  whose
          decisions  shall  be  final,  shall  make  a  determination  of  Total
          Disability.

1.3  Administration of the Plan
     --------------------------

     The Plan shall be administered  by the Board or by the Committee  appointed
by the Board consisting of two or more members of the Board all of whom shall be
Non-Employee  Directors.  The Committee shall serve at the pleasure of the Board
and shall have such powers as the Board may, from time to time, confer upon it.

  Subject to this Section 1.3, the Committee shall have sole and complete
authority to adopt, alter, amend or revoke such administrative rules, guidelines
and practices governing the operation of the Plan as it shall, from time to
time, deem advisable, and to interpret the terms and provisions of the Plan.

     The Committee  shall keep minutes of its meetings and of action taken by it
without a meeting.  A majority of the Committee shall  constitute a quorum,  and
the acts of a majority of the  members  present at any meeting at which a quorum
is present,  or acts  approved in writing by all of the members of the Committee
without a meeting, shall constitute the acts of the Committee.

1.4  Eligibility
     -----------

     Stock  Options may be granted  only to  directors,  officers,  employees or
consultants  of the Company or a Subsidiary  or  Affiliate.  All  employees  are
eligible  to  receive  Stock  Options  under the Plan.  Any  person who has been
granted any Option may, if he is otherwise  eligible,  be granted an  additional
Option or Options.

1.5  Shares
     ------

     The aggregate  number of shares reserved for issuance  pursuant to the Plan
shall be 1,000,000  shares of Common Stock,  or the number and kind of shares of
stock or other securities which shall be substituted for such shares or to which
such shares shall be adjusted as provided in Section 1.6.

     Such number of shares may be set aside out of the  authorized  but unissued
shares of Common Stock or out of issued shares of Common Stock  acquired for and
held in the Treasury of the Company, not reserved for any other purpose.  Shares
subject to, but not sold or issued under, any Option terminating or expiring for
any reason  prior to its  exercise in full will again be  available  for Options
thereafter granted during the balance of the term of the Plan.

                                       2
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1.6  Adjustments Due to Stock Splits, Mergers, Consolidation, Etc.
     ------------------------------------------------------------

     If, at any time,  the  Company  shall  take any  action,  whether  by stock
dividend,  stock split,  combination of shares or otherwise,  which results in a
proportionate  increase  or  decrease  in the  number of shares of Common  Stock
theretofore issued and outstanding,  the number of shares which are reserved for
issuance  under the Plan and the  number  of shares  which,  at such  time,  are
subject to Options shall, to the extent deemed appropriate by the Committee,  be
increased or  decreased  in the same  proportion,  provided,  however,  that the
Company shall not be obligated to issue fractional shares.

     Likewise,  in the event of any change in the  outstanding  shares of Common
Stock by reason of any recapitalization, merger, consolidation,  reorganization,
combination or exchange of shares or other corporate change, the Committee shall
make such substitution or adjustments, if any, as it deems to be appropriate, as
to the number or kind of shares of Common  Stock or other  securities  which are
reserved  for  issuance  under  the  Plan  and the  number  of  shares  or other
securities which, at such time are subject to Options.

     In the  event  of a  Change  in  Control,  at the  option  of the  Board or
Committee,  (a) all  Options  outstanding  on the date of such Change in Control
shall become  immediately  and fully  exercisable,  and (b) an optionee  will be
permitted to surrender for cancellation within sixty (60) days after such Change
in Control any Option or portion of an Option  which was  granted  more than six
(6) months prior to the date of such surrender, to the extent not yet exercised,
and to receive a cash payment in an amount  equal to the excess,  if any, of the
Fair  Market  Value (on the date of  surrender)  of the  shares of Common  Stock
subject  to the  Option  or  portion  thereof  surrendered,  over the  aggregate
purchase price for such Shares under the Option.

1.7  Non-Alienation of Benefits
     --------------------------

     Except as herein  specifically  provided,  no right or unpaid benefit under
the Plan shall be subject to  alienation,  assignment,  pledge or charge and any
attempt to  alienate,  assign,  pledge or charge the same shall be void.  If any
Participant  or other person  entitled to benefits  hereunder  should attempt to
alienate,  assign,  pledge or charge any benefit  hereunder,  then such  benefit
shall, in the discretion of the Committee, cease.

1.8  Withholding or Deduction for Taxes
     ----------------------------------

     If, at any time,  the Company or any  Subsidiary  or Affiliate is required,
under applicable laws and regulations, to withhold, or to make any deduction for
any taxes, or take any other action in connection with any Option exercise,  the
Participant  shall be  required  to pay to the  Company  or such  Subsidiary  or
Affiliate, the amount of any taxes required to be withheld, or, in lieu thereof,
at the option of the Company,  the Company or such  Subsidiary  or Affiliate may
accept a  sufficient  number  of shares  of  Common  Stock to cover  the  amount
required to be withheld.

1.9  Administrative Expenses
     -----------------------

  The entire expense of administering the Plan shall be borne by the Company.

1.10 General Conditions
     ------------------

     a.   The Board or the Committee may, from time to time,  amend,  suspend or
          terminate  any or all of the  provisions of the Plan,  provided  that,
          without the Participant's  approval, no change may be made which would
          alter or impair any right theretofore granted to any Participant.

     b.   With the consent of the Participant  affected  thereby,  the Committee
          may  amend  or  modify  any  outstanding  Option  in  any  manner  not
          inconsistent   with  the  terms  of  the  Plan,   including,   without
          limitation,  and  irrespective  of the  provisions  of Section  2.3(c)

                                       3
<PAGE>

          below,  to accelerate  the date or dates as of which an installment of
          an Option becomes exercisable;  provided, that the Committee shall not
          have the right to reprice any outstanding Options.

     c.   Nothing  contained  in the Plan  shall  prohibit  the  Company  or any
          Subsidiary or Affiliate from establishing  other additional  incentive
          compensation  arrangements  for  employees  of  the  Company  or  such
          Subsidiary or Affiliate.

     d.   Nothing in the Plan shall be deemed to limit, in any way, the right of
          the  Company  or  any   Subsidiary   or   Affiliate   to  terminate  a
          Participant's   employment  or  service  with  the  Company  (or  such
          Subsidiary or Affiliate) at any time.

     e.   Any decision or action taken by the Board or the Committee arising out
          of  or  in   connection   with   the   construction,   administration,
          interpretation  and effect of the Plan shall be conclusive and binding
          upon all  Participants  and any person  claiming  under or through any
          Participant.

     f.   No member of the Board or of the Committee shall be liable for any act
          or action,  whether of  commission  or  omission,  (i) by such  member
          except in  circumstances  involving  actual bad faith, nor (ii) by any
          other member or by any officer, agent or employee.

1.11 Compliance with Applicable Law
     ------------------------------

     Notwithstanding  any other  provision of the Plan, the Company shall not be
obligated to issue any shares of Common Stock,  or grant any Option with respect
thereto,  unless it is advised by  counsel  of its  selection  that it may do so
without  violation of the  applicable  Federal and State laws  pertaining to the
issuance of  securities  and the Company  may require any stock  certificate  so
issued to bear a legend, may give its transfer agent  instructions  limiting the
transfer  thereof,  and may  take  such  other  steps,  as in its  judgment  are
reasonably required to prevent any such violation.

1.12 Effective Dates
     ---------------

     The Plan was  adopted by the Board on  September  7,  2000.  The Plan shall
terminate on September 6, 2010.

Section 2.  OPTION GRANTS
            -------------

2.1  Authority of Committee
     ----------------------

     Subject to the  provisions of the Plan,  the Committee  shall have the sole
and complete  authority to determine (i) the  Participants to whom Options shall
be granted;  (ii) the number of shares to be covered by each  Option;  and (iii)
the  conditions  and  limitations,  if any,  in  addition  to those set forth in
Sections 2 and 3 hereof,  applicable  to the  exercise  of an Option,  including
without limitation,  the nature and duration of the restrictions,  if any, to be
imposed upon the sale or other  disposition of shares  acquired upon exercise of
an Option.

     Stock Options granted under the Plan shall be non-qualified stock options.

     The Committee shall have the authority to grant Options.

2.2  Option Exercise Price
     ---------------------

     The exercise  price set forth in the Option  Agreement at the time of grant
shall not be less than the Fair  Market  Value of the  Common  Stock at the time
that the Option is granted.

                                       4
<PAGE>

  The purchase price is to be paid in full in cash, certified or bank cashier's
check or, at the option of the Company, Common Stock valued at its Fair Market
Value on the date of exercise, or a combination thereof, when the Option is
exercised and stock certificates will be delivered only against such payment.

2.3  Option Grants
     -------------

     Each Option will be subject to the following provisions:

     a.   Term of Option

          An Option  will be for a term of not more than ten years from the date
          of grant.

     b.   Exercise

          (i)  By an Employee:
               --------------

               Unless  otherwise  provided  by the  Committee  and except in the
               manner described below upon the death of the optionee,  an Option
               may be exercised only in installments as follows:  up to one-half
               of the subject  shares on and after the first  anniversary of the
               date of grant,  up to all of the subject  shares on and after the
               second such  anniversary  of the date of the grant of such Option
               but in no  event  later  than the  expiration  of the term of the
               Option.

               An Option shall be  exercisable  during the  optionee's  lifetime
               only by the optionee and shall not be exercisable by the optionee
               unless,  at all times  since the date of grant and at the time of
               exercise,  such optionee is an employee of or providing  services
               to the  Company,  any parent  corporation  of the  Company or any
               Subsidiary or Affiliate,  except that,  upon  termination  of all
               such  employment  or provision of services  (other than by death,
               Total Disability, or by Total Disability followed by death in the
               circumstances  provided  below),  the  optionee  may  exercise an
               Option at any time within three months thereafter but only to the
               extent   such  Option  is   exercisable   on  the  date  of  such
               termination.

               Upon termination of all such employment by Total Disability,  the
               optionee  may  exercise  such Options at any time within one year
               thereafter,  but only to the extent such Option is exercisable on
               the date of such termination.

               In the event of the death of an optionee (i) while an employee of
               or providing  services to the Company,  any parent corporation of
               the Company or any Subsidiary or Affiliate,  or (ii) within three
               months after  termination of all such  employment or provision of
               services  (other than for Total  Disability)  or (iii) within one
               year after termination on account of Total Disability of all such
               employment or provision of services,  such  optionee's  estate or
               any person who  acquires  the right to  exercise  such  option by
               bequest or  inheritance or by reason of the death of the optionee
               may exercise such optionee's Option at any time within the period
               of three years from the date of death. In the case of clauses (i)
               and (iii) above, such Option shall be exercisable in full for all
               the remaining shares covered  thereby,  but in the case of clause
               (ii) such Option shall be  exercisable  only to the extent it was
               exercisable  on the date of such  termination  of  employment  or
               service.

          (ii) By Persons other than Employees:
               -------------------------------

               If the  optionee  is not an employee of the Company or the parent
               corporation  of the Company or any  Subsidiary or Affiliate,  the

                                       5
<PAGE>

               vesting of such optionee's right to exercise his Options shall be
               established  and  determined  by  the  Committee  in  the  Option
               Agreement covering the Options granted to such optionee.

               Notwithstanding the foregoing  provisions  regarding the exercise
               of an  Option  in the event of  death,  Total  Disability,  other
               termination  of employment or provision of services or otherwise,
               in no event  shall an Option be  exercisable  in whole or in part
               after the termination date provided in the Option Agreement.

               c.   Transferability
                    ---------------

                    An Option  granted under the Plan shall not be  transferable
                    otherwise  than  by  will  or by the  laws  of  descent  and
                    distribution, except as may be permitted by the Board or the
                    Committee.

2.4  Agreements
     ----------

     In  consideration  of any Options granted to a Participant  under the Plan,
each such  Participant  shall  enter into an Option  Agreement  with the Company
providing,  consistent  with the  Plan,  such  terms as the  Committee  may deem
advisable.

                                       6

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