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Exhibit 10.13    
  

        EMPLOYMENT AGREEMENT 

        THIS
AGREEMENT, made and entered into as of this 1st day of January, 2001, by and between DST Systems, Inc., a Delaware corporation ("DST") and Thomas A. McCullough, an individual
("Executive"). 

        WHEREAS,
Executive is now employed by DST, and DST and Executive desire for DST to continue to employ Executive on the terms and conditions set forth in this Agreement and to provide an
incentive to Executive to remain in the employ of DST hereafter, particularly in the event of any Change in Control of DST (as herein defined), thereby establishing and preserving continuity of
management of DST; 

        NOW,
THEREFORE, in consideration of the mutual covenants and agreements herein contained, it is agreed by and between DST and Executive as follows: 

        1.    EMPLOYMENT.    DST
hereby continues the employment of Executive as its Executive Vice President and Chief Operating Officer to serve from the date of this
Agreement until December 31, 2003, unless earlier terminated as provided herein (the "Employment Period"), and to have such duties, powers and responsibilities as may be prescribed by the
Certificate of Incorporation and By-Laws of DST, subject to the powers vested in the DST Board and in the stockholders of DST. Executive shall faithfully perform his duties under this Agreement to the
best of his ability and shall devote substantially all of his working time and efforts to the business and affairs of DST and its affiliates. 

        2.    COMPENSATION.

        (a)  BASE
COMPENSATION.    DST shall pay Executive as compensation for his services hereunder an annual base salary ("Base Salary") at the rate of $475,000, which
may be increased but not decreased during the term of this Agreement. 

        (b)  INCENTIVE
COMPENSATION. 

        (i)    Executive
shall be eligible for an annual incentive award ("Annual Incentive") for each year of his employment under this Agreement. Except as noted below, the Annual
Incentive shall be paid and otherwise be subject to the terms of the DST Systems, Inc. Officers Incentive Plan ("DST Annual Incentive Plan"), as may be amended, and any successor thereto.
Executive's Threshold, Target, and Maximum incentive award opportunity under the DST Annual Incentive Plan shall be the percentage of Executive's Base Salary as of the beginning of the year shown
below, subject to the terms of the DST Annual Incentive Plan: 

	Year
	 	Threshold
	 	Target
	 	Maximum
	 
	2001	 	65	%	130	%	195	%
	2002	 	70	%	140	%	210	%
	2003 and later	 	75	%	150	%	225	%

The
actual amount of any Annual Incentive will fluctuate with DST's performance. DST reserves the right to change, revoke or terminate the DST Annual Incentive Plan at any time; provided that
Executive's Threshold, Target and Maximum annual incentives will not be reduced below the percentages shown above. 

	(ii)
	Pursuant
to the terms of the DST Annual Incentive Plan, 50% of any Annual Incentive in excess of the Threshold annual incentive shall be paid in the
form of Equity. 

        3.    BENEFITS. 

        (a)  EQUITY
PLAN PARTICIPATION. 

        (1)  Executive
shall be entitled to participate in the DST Systems, Inc. 1995 Stock Option and Performance Plan ("Stock Option Plan") and its successors in accordance
with the terms 

 

thereof, at a level consistent with DST's practice regarding awards to senior executive officers. Awards under the Stock Option Plan are granted in the discretion of the DST Board or Compensation
Committee or other appropriate committee of the DST Board of Directors. It is understood that Executive will not be granted options prior to 2003, except for reload and matching options. 

        (2)  Effective
on the date of this Agreement, the restrictions on 11,870 shares of Executive's Restricted Stock shall lapse. Executive agrees to retain such shares throughout
the Employment Period and not to dispose of them except for the purpose of exercising DST stock options. 

        (3)  DST's
matching stock option program shall be extended beyond December 31, 2002, if necessary, to permit Executive to exercise all his options granted prior to
January 1, 2000. 

        (b)  INCENTIVE,
SAVINGS AND RETIREMENT PLANS.    In addition to Base Salary and an Annual Incentive, Executive shall be entitled to participate during his
employment hereunder in all incentive, savings and retirement plans, practices, policies and programs, whether or not qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended
(the "Code"), that are from time to time applicable to other senior executives of DST in accordance with their terms as in effect from time to time. 

        (c)  WELFARE
BENEFITS.    During the Employment Period, Executive and/or his family, as the case may be, shall be eligible for participation in and shall receive
all benefits under welfare benefit plans, practices, policies and programs provided by DST (including medical, prescription, dental, disability, salary continuance, employee life, group life,
dependent life, accidental death and travel accident insurance plans and programs) generally applicable to other senior executives of DST in accordance with their terms (including limitations on
eligibility) as in effect from time to time. DST reserves the right to change, revoke or terminate any welfare benefit plan, practice, policy or program at any time. 

        (d)  FRINGE
BENEFITS.    During the Employment Period, Executive shall be entitled to fringe benefits applicable to other senior executives of DST. 

        (e)  VACATION.    During
the Employment Period, Executive shall be entitled to paid vacation time in accordance with the DST's plans, practices, policies, and
programs, but in no event shall such vacation time be less than four weeks per calendar year. 

        (f)    EXPENSES.    During
the Employment Period, Executive shall be entitled to receive prompt reimbursement for all ordinary and necessary business expenses
incurred by Executive, upon the receipt by DST of an accounting in accordance with practices, policies and procedures of DST. 

        4.    TERMINATION.

        (a)  TERMINATION
BY EXECUTIVE.    Executive may terminate this Agreement and his employment hereunder by at least thirty (30) days advance written notice to DST,
except that in the event of any material breach of this Agreement by DST, Executive may terminate this Agreement and his employment hereunder immediately upon notice to DST. 

        (b)  DEATH
OR DISABILITY.    This Agreement and Executive's employment hereunder shall terminate automatically on the death or disability of Executive. For purposes
of this Agreement, Executive shall be deemed to be disabled if he is unable to engage in a significant portion of his normal duties for DST by reason of any physical or mental impairment which can be
expected to result in death or which has lasted or can be expected to last for a continuous period of not less than six (6) months. 

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        (c)  TERMINATION
BY DST FOR CAUSE.    DST may terminate this Agreement and Executive's employment "for cause" immediately upon notice to Executive. For purposes of
this Agreement, termination "for cause" shall mean termination based upon any one or more of the following: 

	(i)
	Any
material breach of this Agreement by Executive which is not, or cannot be, cured (in each case in the sole judgment of the DST Board) within thirty
(30) days after written notice of such breach to Executive;

	(ii)
	Executive's
dishonesty involving DST or any subsidiary of DST;

	(iii)
	Gross
negligence or willful misconduct in the performance of Executive's duties as determined in good faith by the DST Board;

	(iv)
	Willful
failure by Executive to follow reasonable instructions of the DST Board or any officer to whom Executive reports concerning the operations or
business of DST or any subsidiary of DST;

	(v)
	Executive's
fraud or criminal activity; or

	(vi)
	Embezzlement
or misappropriation by Executive. 

        (d)  TERMINATION
BY DST OTHER THAN FOR CAUSE. 

          (i)  DST
may terminate this Agreement and Executive's employment other than for cause immediately upon notice to Executive, and in such event, DST shall provide severance
benefits to Executive in accordance with Paragraph 4(d)(ii) below. 

        (ii)  In
the event of termination of Executive's employment under Paragraph 4(d)(i), DST shall continue, for a period of twenty-four (24) months following such termination,
(A) to pay to Executive as severance pay a monthly amount equal to one-twelfth (1/12th) of the annual Base Salary referenced in Paragraph 2(a) above at the rate in effect immediately
prior to termination, and, (B) to reimburse Executive for the cost (including state and federal income taxes payable with respect to this reimbursement) of obtaining coverage comparable to the
health and life insurance provided pursuant to this Agreement, unless Executive is provided comparable coverage in connection with other employment. The foregoing obligations of DST shall continue
until the end of the said twenty-four (24) month period notwithstanding the death or disability of Executive during said period (except, in the event of death, the obligation to reimburse Executive
for the cost of life insurance shall not continue). After termination of employment, Executive shall not be entitled to accrue or receive benefits, except, prorated, with respect to the period of
Executive's employment in the year of termination, under the DST Annual Incentive Plan or similar plan with respect to the severance pay provided herein, notwithstanding that benefits under such plans
then are still generally available to executive employees of DST; contributions and benefits under such plans with respect to the year of termination shall be based solely upon compensation paid to
Executive for periods prior to termination. In the year of termination, Executive shall be entitled to participate in the DST Profit Sharing Plan and the DST Employee Stock Ownership Plan only if the
Executive meets all requirements of such plans for participation in such year. 

        5.    NON-DISCLOSURE.    During
the term of this Agreement and at all times after any termination of this Agreement, Executive shall not, either directly or
indirectly, use or disclose any DST trade secret,
except to the extent necessary for Executive to perform his duties for DST while an employee. For purposes of this Agreement, the term "DST trade secret" shall mean any information regarding the
business or activities of DST or any subsidiary or affiliate, including any formula, pattern, compilation, program, device, method, technique, process, customer list, technical information or other 

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confidential or proprietary information, that (a) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper
means by, other persons who can obtain economic value from its disclosure or use, and (b) is the subject of efforts of DST or its subsidiary or affiliate that are reasonable under the
circumstance to maintain its secrecy. In the event of any breach of this Paragraph 5 by Executive, DST shall be entitled to terminate any and all remaining severance benefits under Paragraph 4(d)(ii)
above and shall be entitled to pursue such other legal and equitable remedies as may be available. 

        6.    DUTIES
UPON TERMINATION; SURVIVAL. 

        (a)  DUTIES.    Upon
termination of this Agreement by DST or Executive for any reason, Executive shall immediately return to DST all DST trade secrets which exist
in tangible form and shall sign such written resignations from all positions as an officer, director or member of any committee or board of DST and all direct and indirect subsidiaries and affiliates
of DST as may be requested by DST and shall sign such other documents and papers relating to Executive's employment, benefits and benefit plans as DST may reasonably request. 

        (b)  SURVIVAL.    The
provisions of Paragraphs 5 and 6(a) of this Agreement shall survive any termination of this Agreement by DST or Executive, and the
provisions of Paragraph 4(d)(ii) shall survive any termination of this Agreement by DST under Paragraph 4(d)(i). 

        7.    CONTINUATION
OF EMPLOYMENT UPON CHANGE IN CONTROL. 

        (a)  CONTINUATION
OF EMPLOYMENT.    Subject to the terms and conditions of this Paragraph 7, in the event of a Change in Control of DST (as defined in Paragraph
7(d)) at any time during Executive's employment hereunder, Executive will remain in the employ of DST for a period of an additional three years from the date of such Change in Control of DST (the
"Control Change Date"). In the event of a Change in Control of DST, subject to the terms and conditions of this Paragraph 7, DST shall, for the three year period (the "Three-Year Period") immediately
following the Control Change Date, continue to employ Executive at not less than the executive capacity Executive held immediately prior to the Change in Control of DST. During the Three-Year Period,
DST shall continue to pay Executive salary on the same basis, at the same intervals, and at a rate not less than that, paid to Executive at the Control Change Date. 

        (b)  BENEFITS.    During
the Three-Year Period, Executive shall be entitled to participate, on the basis of his executive position, in each of the following plans
(together, the "Specified Benefits") in existence, and in accordance with the terms thereof, at the Control Change Date: 

          (i)  any
incentive compensation plan; 

        (ii)  any
benefit plan, and trust fund associated therewith, related to (A) life, health, dental, disability, or accidental death and dismemberment insurance,
(B) profit sharing, thrift or deferred savings (including deferred compensation, such as under Sec. 401(k) plans), (C) retirement or pension benefits, (D) ERISA excess benefits, and
(E) tax favored employee stock ownership (such as under ESOP, TRASOP, TCESO or PAYSOP programs); and 

        (iii)  any
other benefit plans hereafter made generally available to executives or Executive's level or to the employees of DST generally. 

In
addition, all outstanding options held by Executive under any stock option plan of DST or its affiliates shall become immediately exercisable on the Control Change Date. 

        (c)  PAYMENT.    With
respect to any plan or agreement under which Executive would be entitled at the Control Change Date to receive Specified Benefits as a general
obligation of DST which has not been separately funded (including specifically, but not limited to, those referred to under Paragraphs 7(b)(i) and 7(b)(ii)(D) above), Executive shall
receive within five (5) days after 

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such date full payment in cash (discounted to then present value on the basis of a rate of 7.5 percent per annum) of all amounts to which he is then entitled thereunder. 

        (d)  CHANGE
IN CONTROL OF DST.    For purposes of this Agreement, a "Change in Control of DST" shall be deemed to have occurred if (a) for any reason at any
time less than seventy-five percent (75%) of the members of the DST Board shall be individuals who were members of the DST Board on the date of this Agreement or individuals whose election, or
nomination for election by DST's stockholders, was approved by a vote of at least seventy-five percent (75%) of the members of the DST Board then still in office who were members of the DST Board on
the date of this Agreement, or (b) any "person" (as such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934 (the "Exchange Act")) shall have
become, according to a public announcement or filing, without the prior approval of the DST Board, the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of DST representing thirty percent (30%) (forty percent (40%) with respect to Paragraph 7(c) hereof) or more (calculated in accordance with Rule 13d-3) of the
combined voting power of DST's then outstanding voting securities (such "person" hereafter referred to as a "Major Stockholder"); or (c) the stockholders of DST shall have approved a merger,
consolidation or dissolution of DST or a sale, lease, exchange or disposition of all or substantially all of DST's assets,
unless any such merger, consolidation, dissolution, sale, lease, exchange or disposition shall have been approved by at least seventy-five percent (75%) of the members of the DST Board who were either
(i) members of the DST Board on the date of this Agreement or (ii) elected or nominated by at least seventy-five percent (75%) of the members of the DST Board then still in office who
were members of the DST Board on the date of this Agreement. 

        (e)  TERMINATION
AFTER CONTROL CHANGE DATE.    Notwithstanding any other provision of this Paragraph 7, at any time after the Control Change Date, DST may, through
its Board, terminate the employment of Executive (the "Termination"), but within five (5) days of the Termination it shall pay to Executive his full Base Salary through the Termination, to the
extent not theretofore paid, plus a lump sum amount (the "Special Severance Payment") equal to the product (discounted to then present value on the basis of a rate of 7.5% per annum) of his annual
Base Salary specified in Paragraph 7(a) hereof multiplied by the number of years and any portion thereof remaining in the Three-Year Period (or if the balance of the Three-Year Period after
Termination is less than one year, for one year, [hereinafter called the "Extended Period"]). Specified Benefits to which Executive was entitled immediately prior to Termination shall
continue until the end of the Three-Year Period (or the Extended Period, if applicable); provided that: (a) if any plan pursuant to which Specified Benefits are provided immediately prior to
Termination would not permit continued participation by Executive after Termination, then DST shall pay to Executive within five (5) days after Termination a lump sum payment equal to the
amount of Specified Benefits Executive would have received if Executive had been fully vested and a continuing participant in such plan to the end of the Three-Year Period of the Extended Period, if
applicable; (b) if Executive obtains new employment following Termination, then following any waiting period applicable to participation in any plan of the new employer, Executive shall
continue to be entitled to receive benefits pursuant to this sentence only to the extent such benefits would exceed those available to Executive under comparable plans of the Executive's new employer
(but Executive shall not be required to repay any amounts then already received by him), and (c).with respect to Annual Incentives under the DST Annual Incentive Plan Executive shall receive the
Target incentive award. 

        (f)    RESIGNATION
AFTER CONTROL CHANGE DATE.    In the event of a Change in Control of DST, thereafter, upon good reason (as defined below) Executive may, at any
time during the Three-Year Period or the Extended Period, in his sole discretion, on not less than thirty (30) days' written notice to the Secretary of DST and effective at the end of such notice
period, 

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resign his employment with DST (the "Resignation"). Within five (5) days of such a Resignation, DST shall pay to Executive his full Base Salary through the effective date of such Resignation,
to the extent not theretofore paid, plus a lump sum amount equal to the Special Severance Payment (computed as provided in the first sentence of Paragraph 7(e), except that for purposes of such
computation all references to "Termination" shall be deemed to be references to "Resignation"). Upon Resignation of Executive, Specified Benefits to which Executive was entitled immediately prior to
Resignation shall continue on the same terms and conditions as provided in Paragraph 7(e) in the case of Termination (including equivalent payments provided for therein). For purposes of this
Agreement, Executive shall have "good reason" if there occurs without his consent (a) a reduction in the character of the duties assigned to Executive or in Executive's level of work
responsibility or conditions; (b) a reduction in Executive's Base Salary as in effect immediately prior to the Control Change Date or as the same may have been increased thereafter;
(c) a failure by DST or its successor to (i) continue any of the plans of the type referred to in Paragraph 7(b) which shall have been in effect at the Control Change Date
(including those providing for Specified Benefits) or to continue Executive as a participant in any of
such plans on at least the basis in effect immediately prior to the Control Change Date; or (ii) provide other plans under which at least equivalent compensation and benefits are available and
in which Executive continues to participate on a basis at least equivalent to his participation in the DST plans in effect immediately prior to the Control Change Date; or (iii) to make the payment
required under Paragraph 7(c); (d) the relocation of the principal executive offices of DST or its successor to a location outside the metropolitan area of Kansas City, Missouri or requiring
Executive to be based anywhere other than DST's principal executive office, except for required travel on DST's business to an extent substantially consistent with Executive's obligations immediately
prior to the Control Change Date; or (e) any breach by DST of this Agreement to the extent not previously specified. 

        (g)  TERMINATION
FOR CAUSE AFTER CONTROL CHANGE DATE.    Notwithstanding any other provision of this Paragraph 7, at any time after the Control Change Date,
Executive may be terminated by DST "for cause" without notice and without any payment hereunder only if such termination is for an act of dishonesty by Executive constituting felony under the laws of
the State of Missouri which resulted or was intended to result in gain or personal enrichment of Executive at DST's expense. 

        (h)  MITIGATION
AND EXPENSES. 

          (i)  OTHER
EMPLOYMENT.    After the Control Change Date. Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by
seeking other employment or otherwise and except as expressly set forth herein no such other employment, if obtained, or compensation or benefits payable in connection therewith shall reduce any
amounts or benefits to which Executive is entitled hereunder. 

        (ii)  EXPENSES.    If
any dispute should arise under this Agreement after the Control Change Date involving an effort by Executive to protect, enforce or secure
rights or benefits claimed by Executive hereunder, DST shall pay (promptly upon demand by Executive accompanied by reasonable evidence of incurrence) all reasonable expenses (including attorneys'
fees) incurred by Executive in connection with such dispute, without regard to whether Executive prevails in such dispute except that Executive shall repay DST any amounts so received if a court
having jurisdiction shall make a final, nonappealable determination that Executive acted frivolously or in bad faith by such dispute. To assure Executive that adequate funds will be made available to
discharge DST's obligations set forth in the preceding sentence, DST has established a trust and upon the occurrence of a Change in Control of DST shall promptly deliver to the trustee of such trust
to hold in accordance with the terms and conditions thereof that sum which the DST Board shall have determined is reasonably sufficient for such purpose. 

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        (i)    SUCCESSORS
IN INTEREST.    The rights and obligations of Executive and DST under this Paragraph 7 shall inure to the benefit of and be binding in each and
every respect upon the direct and indirect successors and assigns of DST and Executive, regardless of the manner in which such
successors or assigns shall succeed to the interest of DST or Executive hereunder, and this Paragraph 7 shall not be terminated by the voluntary of involuntary dissolution of DST or any merger or
consolidation or acquisition involving DST, or upon any transfer of all or substantially all of DST's assets, or terminated otherwise than in accordance with its terms. In the event of any such merger
or consolidation or transfer of assets, the provisions of this Paragraph 7 shall be binding upon and shall inure to the benefit of the surviving corporation or the corporation or other person to which
such assets shall be transferred. 

        (j)    PREVAILING
PROVISIONS.    On and after the Control Change Date, the provisions of this Paragraph 7 shall control and take precedence over any other provisions
of this Agreement which are in conflict with or address the same or a similar subject matter as the provisions of this Paragraph 7. 

        8.    NON-SOLICITATION
AND NON-COMPETITION. 

        (a)  Executive
covenants and agrees that, during his employment hereunder and during the three-year period immediately following any termination of that employment, other
than a resignation for good reason as provided in Paragraph 7(f), Executive will not: 

          (i)  directly
or indirectly employ or seek to employ any person employed at that time by DST or any of its subsidiaries or joint ventures or otherwise encourage or entice
any such person to leave such employment. 

        (ii)  become
employed by, enter into a consulting arrangement with or otherwise agree to perform personal services for a Competitor (as defined below); 

        (iii)  acquire
an ownership interest in a Competitor, other than not more than a 2% equity interest in a publicly-traded Competitor; or 

        (iv)  solicit
any customers or vendors of DST or any of its subsidiaries on behalf of or for the benefit of a Competitor. 

        (b)  For
purposes of this Paragraph, "Competitor" means, unless the DST Board determines otherwise, any person, entity or organization that sells goods or services in the
geographic area described below, which goods or services are the same or similar to (or may be used as a substitute for) those sold by a business that (i) is being conducted by DST or any
subsidiary or joint venture of DST in the geographic area at the time in question and (ii) was being conducted by DST or any subsidiary or joint venture of DST in the geographic area on the
date of Executive's termination of employment. 

        (c)  The
"geographic area" referred to in this Paragraph 8 shall mean the United States and any other country in which DST or any subsidiary or joint venture of DST has, at
the termination of Executive's employment, offices or operations which accounted for 1% or more of the annual revenues of DST or any of its subsidiaries or joint ventures during the time in question. 

        (d)  Executive
acknowledges that monetary damages will not be an adequate remedy for DST in the event of a breach of this Paragraph 8, and that it would be impossible for DST
to measure damages in the event of such a breach. Therefore, Executive agrees that, in addition to other rights that DST may have, DST is entitled to an injunction preventing Executive from any such
breach. 

        (e)  If
the DST Board (excluding Executive, if Executive is a member of the DST Board) by majority vote, determines in good faith that Executive has breached any of the
covenants in this 

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Paragraph 8, then DST shall have no further obligations to pay any amounts or provide any benefits under this Agreement. 

        9.    GROSS-UP
PAYMENT.    If at any time or from time to time, it shall be determined by DST's independent auditors that any payment or other benefit to Executive
pursuant to this Agreement or otherwise ("Potential Parachute Payment") is or will become subject to the excise tax imposed by Section 4999 of the Code or any similar tax ("Excise Taxes"), then DST
shall, subject to the limitations below, pay or cause to be paid a tax gross-up payment ("Gross-Up Payment") with respect to all such Excise Taxes and other taxes on the Gross-Up Payment. The Gross-Up
Payment shall be an amount equal to the product of (a) the amount of the Excise Taxes multiplied by (b) a fraction (the "Gross-Up Multiple"), the numerator or which is one (1.0), and the
denominator of which is one (1.0) minus the lesser of (i) the sum, expressed as a decimal fraction, of the effective marginal rates of any taxes and any Excise Taxes applicable to the Gross-Up
Payment or (ii) .80, it being intended that the Gross-Up Multiple shall in no event exceed five (5.0). If different rates of tax are applicable to various portions of a Gross-Up Payment, the
weighted average of such rates shall be used. 

        (a)  To
the extent possible, any payments or other benefits to Executive pursuant to this Agreement shall be allocated as consideration for Executive's entry into the
covenants made by him in Paragraph 8(a). 

        (b)  Notwithstanding
any other provisions of this Paragraph 9, if the aggregate After-Tax Amount ( as defined below) of the Potential Parachute Payments and Gross-Up Payment
that, but for this limitation, would be payable to Executive, does not exceed 120% of After-Tax Floor Amount (as defined below), then no Gross-Up Payment shall be made to Executive and the aggregate
amount of Potential Parachute Payments payable to Executive shall be reduced (but not below the Floor Amount) to the largest amount which would both (i) not cause any Excise Tax to be payable
by Executive and (ii) not cause any Potential Parachute Payments to become nondeductible by DST by reason of Section 280G
of the Code (or any successor provision). For purposes of the preceding sentence, Executive shall be deemed to be subject to the highest effective after-tax marginal rate of taxes. 

        For
purposes of this Agreement: 

          (i)  "After-Tax
Amount" means the portion of a specified amount that would remain after payment of all taxes paid or payable by Executive in respect of such specified
amount; and 

        (ii)  "Floor
Amount" means the greatest pre-tax amount of Potential Parachute Payments that could be paid to Executive without causing Executive to become liable for any
Excise Taxes in connection therewith; and 

        (iii)  "After-Tax
Floor Amount" means the After-Tax Amount of the Floor Amount. 

        (c)  If
for any reason DST's independent auditors later determine that the amount of Excise Taxes payable by Executive is greater than the amount initially determined
pursuant to the above provisions of this Paragraph 9, then DST shall, subject to Paragraphs 9(d) and 9(e) pay Executive, within thirty (30) days of such determination, or pay to the IRS
as required by applicable law, an amount (which shall also be deemed a Gross-Up Payment) equal to the product of (a) the sum of (i) such additional Excise Taxes and (ii) any
interest, penalties, expenses or other costs incurred by Executive as a result of having taken a position in accordance with a determination made pursuant to Paragraph 9(d) multiplied by
(b) the Gross-Up Multiple. 

        (d)  Executive
shall immediately notify DST in writing (an "Executive's Notice") of any claim by the IRS or other taxing authority (an "IRS Claim") that, if successful, would
require the payment by Executive of Excise Taxes in respect of Potential Parachute Payments in an amount in excess of the amount of such Excise Taxes determined in accordance with Paragraph 9.
Executive's 

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Notice shall fully inform DST of all particulars of the IRS Claim and the date on which such IRS Claim is due to be paid (the "IRS Claim Deadline"). 

        DST
shall direct the Executive as to whether to pay all or part of the IRS Claim or to contest the IRS Claim or to pursue a claim for a refund (a "Refund Claim") of all or any portion of
such Excise Taxes, other taxes, interest or penalties as may be specified by DST in a written notice to Executive. If DST directs Executive to pay all or part of the IRS Claim, the amount of such
payment shall also be deemed a Gross-Up Payment, which DST shall pay to the Executive or the IRS, as appropriate. The Executive shall cooperate fully with DST in good faith to contest such IRS Claim
or pursue such
Refund Claim (including appeals) and shall permit DST to participate in any proceedings relating to such IRS Claim or Refund Claim. 

        DST
shall control all proceedings in connection with such IRS Claim or Refund Claim (as applicable) and in its discretion may cause Executive to pursue or forego any and all
administrative appeals, proceedings, hearings and conferences with the Internal Revenue Service or other taxing authority. 

        DST
shall pay directly all legal, accounting and other costs and expenses (including additional interest and penalties) incurred by DST or Executive in connection with any IRS Claim or
Refund Claim, as applicable, and shall indemnify Executive, on an after-tax basis, for any Excise Tax or income tax, including related interest and penalties, imposed as a result of such payment of
costs or expenses. 

        (e)  If
Executive receives any refund with respect to Excise Taxes, Executive shall (subject to DST's complying with any applicable requirements of Paragraph 9(d)) promptly
pay DST the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). Any contest of a denial of refund shall be controlled by Paragraph 9(d). 

        10.  NOTICE.    Notices
and all other communications to either party pursuant to this Agreement shall be in writing and shall be deemed to have been given when
personally delivered, delivered by telecopy or deposited in the United States mail by certified or registered mail, postage prepaid, addressed, in the case of DST, to DST, 333 West 11th Street, Kansas
City, Missouri 64105, Attention: Secretary, or, in the case of the Executive, to him at 301 West 123rd Terrace, Kansas City, Missouri 64145, or to such other address as a party shall designate by
notice to the other party. 

        11.  AMENDMENT.    No
provision of this Agreement may be amended, modified, waived or discharged unless such amendment, waiver, modification or discharge is agreed
to in a writing signed by Executive and the Executive Vice President of DST. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition
or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar of dissimilar provisions or conditions at the time or at any prior or subsequent time. 

        12.  SUCCESSORS
AND ASSIGNS; ASSIGNMENT BY EXECUTIVE PROHIBITED.    The rights and obligations of DST under this Agreement shall inure to the benefit of and shall
be binding upon the successors and assigns of DST. Except as provided in Paragraph 7(j), neither this Agreement nor any of the payments or benefits hereunder may be pledged, assigned or transferred by
Executive either in whole or in part in any manner, without the prior written consent of DST. 

        13.  SEVERABILITY.    The
invalidity or unenforceability of any particular provision of this Agreement shall not affect the other provisions hereof, and this
Agreement shall be construed in all respects as if such invalid or unenforeceable provisions were omitted. 

        14.  CONTROLLING
LAW AND JURISDICTION.    The validity, interpretation and performance of this Agreement shall be subject to and construed under the laws of the
State of Missouri, without regard to principles of conflicts of law. 

9

 

        15.  ENTIRE
AGREEMENT.    This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all other
prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof, except this Agreement does not supersede any Officer Indemnification
Agreement between DST and Executive. 

        IN
WITNESS WHEREOF, the parties have executed this Amendment as of the day and year first above written. 

	

 	
 	

DST SYSTEMS, INC.
	

 	
 	

By:	

/s/ Thomas A. McDonnell
 Thomas A. McDonnell, President
	

 	
 	

/s/ Thomas A. McCullough
 Thomas A. McCullough

10

QuickLinks

Exhibit 10.13<Page>

                                  EXHIBIT 10.5

                             1995 STOCK OPTION PLAN
                                       OF
                                 INTRUSION INC.
                            AS AMENDED APRIL 26, 2001

                                    SECTION 1
                            ESTABLISHMENT AND PURPOSE
                            -------------------------

     This Plan is established (i) to offer selected Employees of the Company or
its Subsidiaries an equity ownership interest in the financial success of the
Company, (ii) to provide the Company an opportunity to attract and retain the
best available personnel for positions of substantial responsibility, and (iii)
to encourage equity participation in the Company by selected Employees. This
Plan provides for the grant by the Company of Options to purchase Shares.
Options granted under this Plan may include nonstatutory options as well as ISOs
intended to qualify under section 422 of the Code.

                                    SECTION 2
                                   DEFINITIONS
                                   -----------

      The following definitions shall be applicable to the terms used in this
Plan:

      (a) "BOARD OF DIRECTORS" shall mean the board of directors of the Company,
as duly elected from time to time.

      (b) "CHANGE IN CONTROL" shall mean to have occurred at such time as either
(i) any "person," as such term is used in section 14(d) of the Exchange Act,
other than the Company, a wholly-owned Subsidiary of the Company or any employee
benefit plan of the Company, or its Subsidiaries, is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act (or any successor
rule)), directly or indirectly, of fifty percent (50%) or more of the combined
voting power of the Company's Stock, or (ii) individuals who constitute the
Board of the Directors on the effective date (as provided in SECTION 11 hereof)
of this Plan (the "Incumbent Board") cease for any reason to constitute at least
a majority thereof, provided that any person becoming a director subsequent to
the date hereof whose election or nomination for election by the Company's
shareholders was approved by a vote of at least three quarters of the directors
comprising the Incumbent Board (either by a specific vote or by approval of the
proxy statement of the Company in which such person is named as a nominee for
director without objection to such nomination) shall be, for purposes of this
clause (ii) considered as though such person was a member of the Incumbent
Board.

      (c) "CODE" shall mean the Internal Revenue Code of 1986, as amended, and
as interpreted by the rules and regulations promulgated thereunder.

      (d) "COMMITTEE" shall mean a committee appointed by the Board of Directors
in accordance with Section 3 of this Plan to implement, interpret and administer
the Plan.

      (e)  "COMPANY" shall mean Intrusion Inc., a Delaware corporation.

      (f) "DATE OR GRANT" shall mean the date on which the Committee grants an
Option to an Optionee.

      (g) "DISINTERESTED DIRECTOR" shall mean a member of the Board of Directors
who is not, during the one year prior to service as an administrator under this
Plan (as described in SECTION 3 of this Plan) granted an Option pursuant to the
terms of this Plan (or any other plan of the Company or any of its Subsidiaries)
except (i) participation in a formula plan meeting the conditions of Rule
16b-3(c)(2)(ii) under the Exchange Act, (ii) participation in an ongoing
securities acquisition plan meeting the conditions in Rule 16b-3(d)(2)(i) under
the Exchange Act, (iii) an election to receive an annual retainer fee in either
cash or an equivalent amount of securities of the Company, or partly in cash and
partly in securities, or (iv) that participation in this Plan shall not
disqualify a director for the purpose of administering another plan that does
not permit participation by the Board of Directors;

                                       1

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provided, that the scope of the exceptions in this paragraph shall automatically
be reduced or expanded to the extent that Rule 16b-3 under the Exchange Act is
amended to reduce or expand the scope of the exceptions thereunder.

      (h) "EMPLOYEE" shall mean each individual who performs services for the
Company or its Subsidiaries, provided the relationship between such individual
and the Company or its Subsidiaries is the legal relationship of employer and
employee. This definition of "Employee" is subject to the definition set forth
in section 3401(c) of the Code.

      (i) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, and as interpreted by the rules and regulations promulgated thereunder.

       (j) "EXERCISE PRICE" shall mean the amount for which one or more Shares
may be purchased upon exercise of an Option, as specified by the Committee in
the applicable Stock Option Agreement. In no event shall the Exercise Price be
less than the par value per Share.

       (k) "FAIR MARKET VALUE" shall mean (1) if the Stock of the Company is
listed upon an established stock exchange or exchanges, the highest closing
price of the Stock on such stock exchange or exchanges on the day in question
or, if no sale of the Stock of the Company shall have been made on any stock
exchange on such day, on the next preceding day on which there was a sale of the
Stock, (2) if the Stock of the Company is not listed upon an established stock
exchange, the mean between dealer "bid" and "ask" prices of the Stock in the New
York over-the-counter market on the day in question, as reported by the National
Association of Securities Dealers, Inc., and (3) if there is no public market
for the Stock of the Company, such amount as the Board of Directors and the
Committee, in their sole discretion, after taking all relevant facts into
consideration, shall determine.

      (l) "ISO" shall mean a stock option which meets the requirements of
section 422(b) of the Code.

      (m) "NONSTATUTORY OPTION" shall mean any Option granted by the Committee
that does not meet the requirements of sections 421 through 424 of the Code, as
amended.

      (n) "OPTION" shall mean either an ISO or Nonstatutory Option, as the
context requires.

      (o) "OPTIONEE" shall mean an individual who has been granted an Option.

      (p) "PERMANENT AND TOTAL DISABILITY" shall mean that an individual is
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than twelve (12) months. An individual shall not be considered to
suffer from Permanent and Total Disability unless such individual furnishes
proof of the existence thereof in such form and manner, and at such times, as
the Committee may reasonably require.

      (q) "PLAN" shall mean this 1995 Stock Option Plan of Intrusion Inc., as
amended from time to time.

      (r) "SECURITIES ACT" shall mean the Securities Act of 1933, as amended,
and as interpreted by the rules and regulations promulgated thereunder.

      (s) "SHARE" shall mean one share of Stock, as adjusted in accordance
with SECTION 8 of this Plan (if applicable).

      (t) "STOCK" shall mean the common stock, $.01 par value, of the Company.

      (u) "STOCK OPTION AGREEMENT" shall mean the agreement executed between the
Company and an Optionee that contains the terms, conditions and restrictions
pertaining to the granting of an Option.

      (v) "SUBSIDIARY" shall mean any corporation as to which fifty percent
(50%) or more of the outstanding voting stock or shares shall now or hereafter
be owned or controlled, directly by a person, any Subsidiary of such person, or
any Subsidiary of such Subsidiary.

                                       2

<Page>

      (w) "TEN-PERCENT STOCKHOLDER" shall mean a person who owns more than ten
percent (10%) of the total combined voting power of all classes of outstanding
stock of the Company or any Subsidiary at the date of grant of an Option, taking
into account the attribution rules set forth in section 424 of the Code, as
amended. For purposes of this definition, the term "outstanding stock" shall
include all stock actually issued and outstanding immediately after the grant of
an Option to an Optionee. The term "outstanding stock" shall not include
reacquired shares or shares authorized for issuance under outstanding Options
held by the Optionee or by any other person.

     Whenever appropriate, words used in the Plan in the singular may mean the
plural, the plural may mean the singular, and the masculine may mean the
feminine.

                                    SECTION 3
                                 ADMINISTRATION
                                 --------------

      (a) GENERAL ADMINISTRATION. This Plan shall be administered by the
Committee, which shall consist of at least two persons, each of whom shall be a
Disinterested Director who meets the requirements of an "outside director," as
defined in Prop. Treas. Reg. Section 1.162-27(e)(3); provided, however, that a
director who is a Disinterested Director will be treated as meeting the
requirements of an "outside director" until the first meeting of stockholders at
which directors are to be elected that occurs after January 1, 1996. The members
of the Committee shall be appointed by the Board of Directors for such terms as
the Board of Directors may determine. The Board of Directors may from time to
time remove members from, or add members to, the Committee. Vacancies on the
Committee, however caused, may be filled by the Board of Directors.

      (b) COMMITTEE PROCEDURES. The Board of Directors shall designate one of
the members of the Committee as chairman. The Committee may hold meetings at
such times and places as it shall determine. The acts of a majority of the
Committee members present at meetings at which a quorum exists, or acts reduced
to or approved in writing by a majority of all Committee members, shall be valid
acts of the Committee. A majority of the Committee shall constitute a quorum.

      (c) AUTHORITY OF COMMITTEE. This Plan shall be administered by, or under
the direction of, the Committee constituted in such a manner as to comply at all
times with Rule 16b-3 (or any successor rule) under the Exchange Act. The
Committee shall administer this Plan so as to comply at all times with the
Exchange Act and, subject to the Code, shall otherwise have absolute and final
authority to interpret this Plan and to make all determinations specified in or
permitted by this Plan or deemed necessary or desirable for its administration
or for the conduct of the Committee's business, including without limitation the
authority to take the following actions:

               (i) To interpret this Plan and to apply its provisions;

              (ii) To adopt, amend or rescind rules, procedures and forms
      relating to this Plan;

             (iii) To authorize any person to execute, on behalf of the Company,
      any instrument required to carry out the purposes of this Plan;

              (iv) To determine when Options are to be granted under this Plan;

               (v) To select the Optionees;

              (vi) To determine the number of Shares to be made subject to each
      Option;

             (vii) To prescribe the terms, conditions and restrictions of each
      Option, including without limitation the Exercise Price and the
      determination whether an Option is to be classified as an ISO or a
      Nonstatutory Option;

            (viii) To amend any outstanding Stock Option Agreement, subject to
      applicable legal restrictions and, where appropriate, the consent of the
      Optionee who entered into such agreement;

                                       3

<Page>
              (ix) To establish procedures so that an Optionee may obtain a loan
     through a registered broker- dealer under the rules and regulations of the
     Federal Reserve Board, for the purpose of exercising an Option;

               (x) To establish procedures for an Optionee (1) to have withheld
     from the total number of Shares to be acquired upon the exercise of an
     Option that number of Shares having a Fair Market Value, which, together
     with such cash as shall be paid in respect of fractional shares, shall
     equal the Exercise Price, and (2) to exercise a portion of an Option by
     delivering that number of Shares already owned by an Optionee having a Fair
     Market Value which shall equal the partial Exercise Price and to deliver
     the Shares thus acquired by such Optionee in payment of Shares to be
     received pursuant to the exercise of additional portions of the Option, the
     effect of which shall be that an Optionee can in sequence utilize such
     newly acquired shares in payment of the Exercise Price of the entire
     Option, together with such cash as shall be paid in respect of fractional
     shares;

              (xi) To establish procedures whereby a number of Shares may be
     withheld from the total number of Shares to be issued upon exercise of an
     Option, to meet the obligation of withholding for federal and state income
     and other taxes, if any, incurred by the Optionee upon such exercise; and

             (xii) To take any other actions deemed necessary or advisable for
      the administration of this Plan.

     All interpretations and determinations of the Committee made with respect
to the granting of Options shall be final, conclusive, and binding on all
interested parties. The Committee may make grants of Options on an individual or
group basis. No member of the Committee shall be liable for any action that is
taken or is omitted to be taken if such action or omission is taken in good
faith with respect to this Plan or grant of any Option.

                                    SECTION 4
                                   ELIGIBILITY
                                   -----------

     The Committee shall select certain Employees of the Company or its
Subsidiaries to participate in this Plan; provided, however, that any
Disinterested Directors who are serving as administrators of this Plan shall not
be eligible for any Options nor shall any other person be eligible for any
Options if the granting of a Option to such person would destroy the
satisfaction by this Plan of the general exemptive conditions of Rule 16b-3
under the Exchange Act.

                                    SECTION 5
                             SHARES SUBJECT TO PLAN
                             ----------------------

      (a) BASIC LIMITATION. Shares offered under this Plan may be authorized but
unissued Shares or Shares that have been reacquired by the Company. The
aggregate number of Shares that are reserved and available for issuance under
this Plan shall be three million, three hundred thousand (3,300,000) Shares,
subject to adjustment pursuant to SECTION 8 of this Plan. The Committee shall
not issue more Shares than are available for issuance under this Plan. The
number of Shares that are subject to unexercised Options at any time under this
Plan shall not exceed the number of Shares that remain available for issuance
under this Plan. The Company, during the term of this Plan, shall at all times
reserve and keep available sufficient Shares to satisfy the requirements of this
Plan.

      (b) INDIVIDUAL LIMITATION. Notwithstanding anything herein to the
contrary, no Employee may be granted an Option, which in combination with
other Options to such Employee under the Plan (regardless of whether such
other Options have been exercised or cancelled), aggregates more then 50,000
Shares in any one.year period.

      (c) ADDITIONAL SHARES. In the event any outstanding Option for any reason
expires, is cancelled or otherwise terminates, the Shares allocable to the
unexercised portion of such Option shall again be available for issuance under
this Plan.

                                       4
<Page>

                                   SECTION 6
                         TERMS AND CONDITIONS OF OPTIONS
                         -------------------------------

       (a) TERM OF OPTION. The term of each Option shall be ten (10) years from
the Date of Grant or such shorter term as may be determined by the Committee;
provided, however, in the case of an ISO granted to a Ten-Percent Stockholder,
the term of such ISO shall be five (5) years from the Date of Grant or such
shorter time as may be determined by the Committee.

      (b) EXERCISE PRICE AND METHOD OR PAYMENT.
          (i)  EXERCISE PRICE. The Exercise Price shall be such price as is
determined by the Committee in its sole discretion and set forth in the Stock
Option Agreement; PROVIDED, HOWEVER; that the Exercise Price of an ISO shall not
be less than 100% of the Fair Market Value of the Shares subject to such option
on the Date of Grant (or 110% in the case of an Option granted to an Optionee
who is a Ten-Percent Stockholder on the Date of Grant).

          (ii) PAYMENT OF SHARES. Payment for the Shares upon exercise of an
Option shall be made in cash, by certified check, or by any other method of
payment as may be permitted under applicable law and approved by the Committee.

      (c) EXERCISE OF OPTION.
          (i) PROCEDURE FOR EXERCISE; RIGHTS OF SHAREHOLDER. Any Option granted
hereunder shall be exercisable at such times under such conditions as shall be
determined by the Committee, including without limitation, performance criteria
with respect to the Company or the Optionee, and in accordance with the terms of
this Plan; provided, however, that in no event shall an Option be exercisable in
whole or in part prior to one year from the Date of Grant or after the
expiration of ten years from the Date of Grant.

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

      An Option shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the Stock
Option Agreement by the Optionee entitled to exercise the Option and full
payment for the Shares with respect to which the Option is exercised has been
received by the Company. Full payment may, as authorized by the Committee,
consist of any form of consideration and method of payment allowable under
SECTION 6(b)(ii) of this Plan. Upon the receipt of notice of exercise and full
payment for the Shares, the Shares shall be deemed to have been issued and the
Optionee shall be entitled to receive such Shares and shall be a stockholder
with respect to such Shares, and the Shares shall be considered fully paid and
nonassessable. No adjustment will be made for a dividend or other right for
which the record date is prior to the date on which the stock certificate is
issued, except as provided in SECTION 8 of this Plan.

      Each exercise of an Option shall reduce, by an equal number, the total
 number of Shares that may thereafter be purchased under such Option.

          (ii) TERMINATION OF STATUS AS AN EMPLOYEE. Except as provided in
SUBSECTIONS 6(c)(iii) and 6(c)(iv) below, an Optionee holding an outstanding
Option who ceases to be an Employee of the Company for any reason may exercise
the Option to the extent that the Optionee was entitled to exercise it on such
date, but only until the earlier of the date (i) the Option held by the Optionee
expires, or (ii) ninety (90) days after the date such Optionee ceases to be an
Employee, unless the Committee further extends such period in its sole
discretion. To the extent that the Optionee was not entitled to exercise an
Option on such date, or if the Optionee does not exercise it within the time
specified herein, such Option shall terminate. The Committee shall have the
authority to determine the date an Optionee ceases to be an Employee, and must
provide to the Optionee such determination within fifteen (15) days. Leaves of
absence approved by the Committee which conform to the policies of the Company
shall not be considered termination of employment if the employer-employee
relationship as defined under the Code otherwise continues to exist.

          (iii) PERMANENT AND TOTAL DISABILITY. Notwithstanding the provisions
of SECTION 6(c)(ii) above, in the event an Optionee is unable to continue to
perform services for the Company or any of its Subsidiaries as a result of such
Optionee's Permanent and Total Disability (and, for ISOs, at the time such
Permanent and Total Disability begins, the Optionee was an Employee and had been
an Employee since the Date of Grant), such Optionee may

                                       5

<Page>

exercise an outstanding Option in whole or in part notwithstanding that such
Option may not be fully exercisable, but only until the earlier of the date (i)
the Option held by the Optionee expires, or (ii) twelve (12) months from the
date of termination of services due to such Permanent and Total Disability. To
the extent the Optionee does not exercise the Option within the time specified
herein, such Option shall terminate.

          (iv) DEATH OF AN OPTIONEE. Notwithstanding the provisions of SECTION
6(c)(ii) above, upon the death of an Optionee, any outstanding Option held by an
Optionee shall terminate and be of no further effect; provided, however, that if
at the time of death, the Optionee was an Employee (and, for ISOs, at the ime of
death, the Optionee was an Employee and had been an Employee since the Date of
Grant), the Option may be exercised in whole or in part by the Optionee's estate
or by a person who acquired the right to exercise the Option by bequest or
inheritance, notwithstanding that such Option may not have been fully
exercisable on the date of the Optionee's death, but only until the earlier of
the date (i) the Option held by the Optionee expires, or (ii) twelve (12) months
from the date of the Optionee's death. To the extent the Option is not entitled
to be exercised on such date or if the Option is not exercised within the time
specified herein, such Option shall terminate.

      (d) NON-TRANSFERABILITY OF OPTIONS. Any Option granted under this Plan may
not be sold, pledged, assigned, hypothecated, transferred or disposed of in any
manner other than by will or by the laws of descent and distribution or pursuant
to a qualified domestic relations order as defined by the Code or Title I of the
Employee Retirement Income Security Act of 1974, as amended, or the rules
thereunder, and is nonassignable by operation of law or subject to execution,
attachment or similar process. Any Option granted under this Plan can only be
exercised during the Optionee's lifetime by such Optionee. Any attempted sale,
pledge, assignment, hypothecation or other transfer of the Option contrary to
the provisions hereof and the levy of any execution, attachment or similar
process upon the Option shall be null and void and without force or effect. No
transfer of the Option by will or by the laws of descent and distribution shall
be effective to bind the Company unless the Company shall have been furnished
written notice thereof and an authenticated copy of the will and/or such other
evidence as the Committee may deem necessary to establish the validity of the
transfer and the acceptance by the transferee or transferees of the terms and
conditions of the Option. The terms of any Option transferred by will or by the
laws of descent and distribution shall be binding upon the executors,
administrators, heirs and successors of the Optionee.

      (e) TIME OF GRANTING OPTIONS. Any Option granted hereunder shall be deemed
to be granted on the Date of Grant. Written notice of the Committee's
determination to grant an Option to an Employee, evidenced by a Stock Option
Agreement, dated as of the Date of Grant, shall be given to such Employee within
a reasonable time after the Date of Grant. Any ISO granted hereunder must be
granted within ten years from the earlier of the date this Plan in adopted or
the date this Plan in approved by the stockholders of the Company.

      (f) MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS. Within the limitations
of this Plan, the Committee may modify, extend or renew outstanding Options or
may accept the cancellation of outstanding Options (to the extent not previously
exercised) for the granting of new Options in substitution therefor. The
foregoing notwithstanding, no modification of an Option shall, without the
consent of the Optionee, alter or impair the Optionee's rights or obligations
under such Option.

      (g) RESTRICTIONS ON TRANSFER OF SHARES. Any Shares issued upon exercise of
an Option shall be subject to such rights of repurchase and other transfer
restrictions as the Committee may determine in its sole discretion. Such
restrictions shall be set forth in the applicable Stock Option Agreement.

      (h) SPECIAL LIMITATION ON ISOS. To the extent that the aggregate Fair
Market Value (determined on the Date of Grant) of the Shares with respect to
which ISOs are exercisable for the first time by an individual during any
calendar year under this Plan, and under all other plans maintained by the
Company, exceeds $100,000, such Options shall be treated as Options that are not
ISOs.

                                       6

<Page>

                                   SECTION 7
                               ISSUANCE OF SHARES
                               ------------------

      As a condition to the issuance or transfer of any Shares issued under this
Plan, the Company may require an opinion of counsel, satisfactory to the
Company, to the effect that such transfer will not be in violation of the
Securities Act, or any other applicable securities laws, rules or regulations,
or that such Shares have been registered under federal and all applicable state
securities laws. The Company may refrain from delivering or transferring Shares
issued under this Plan until the Committee has determined that the Optionee has
tendered to the Company any and all applicable federal, state or local tax owed
by the Optionee as the result of the receipt of a Option, the exercise of an
Option or the disposition of any Shares issued under this Plan, in the event
that the Company reasonably determines that it might have a legal liability to
satisfy such tax. The Company shall not be liable to any person or entity for
damages due to any delay in the delivery or issuance of any stock certificate
evidencing any Shares for any reason whatsoever.

                                    SECTION 8
              CAPITALIZATION ADJUSTMENTS; MERGER; CHANGE IN CONTROL
              -----------------------------------------------------

      (a) ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. Subject to any required
action by the stockholders of the Company, the number of Shares covered by each
outstanding Option, the aggregate number of Shares that have been authorized for
issuance under this Plan, and the Exercise Price of any outstanding Option,
shall be proportionately adjusted for any increase or decrease in the number of
issued Shares resulting from a stock split, payment of a stock dividend with
respect to the Stock, recapitalization, combination or reclassification of the
Stock, or any other increase or decrease in the number of issued Shares effected
without receipt of consideration by the Company. Such adjustment shall be made
by the Committee in its sole discretion, which adjustment shall be final,
binding and conclusive. Except as expressly provided herein, no issuance by the
Company of shares of stock of any class shall affect, and no adjustment by
reason thereof shall be made with respect to, the number or price of Shares
subject to an Option.

      (b) DISSOLUTION, LIQUIDATION, SALE OF ASSETS OR MERGER. In the event of
the proposed dissolution or liquidation of the Company, or a proposed sale of
all or substantially all of the assets of the Company, or the proposed merger of
the Company with or into another corporation, any Options shall terminate
immediately prior to the consummation of such proposed action, unless otherwise
provided by the Committee; provided, however, that the Committee may, in the
exercise of its sole discretion, in such instances declare that any Option shall
terminate as of a date fixed by the Committee and give each Optionee the right
to exercise the Optionee's Option as to all or any part of the Shares covered by
such Option, including Shares as to which the Option would not otherwise be
exercisable.

      (c) CHANGE IN CONTROL. Notwithstanding SECTION 8(b), in the event there
occurs a Change in Control, the Committee may at its discretion permit the
Optionees to exercise any outstanding Option held by such Optionee in whole or
in part notwithstanding that such Option may not be fully exercisable.

                                    SECTION 9
                              NO EMPLOYMENT RIGHTS
                              --------------------

     No provision of this Plan or under any Stock Option Agreement shall be
construed to give any individual any right to remain an Employee of, or provide
services to, the Company or any of its Subsidiaries or to affect the right of
the Company or any subsidiary, as applicable, to terminate any individual's
service at any time, with or without cause.

                                   SECTION 10
                              SHAREHOLDER APPROVAL
                              --------------------

      (a) IN GENERAL. If this Plan is adopted by action of the Board of
Directors prior to approval by the Company's stockholders, the Board of
Directors, to continue and implement this Plan, shall submit this Plan to the
stockholders of the Company for their approval. This Plan shall not become
effective until such approval has been obtained.

                                       7

<Page>

       (b) AMENDMENTS. With respect to any amendment to this Plan adopted by the
Committee that is required to be approved by the Company's stockholders pursuant
to the terms of SECTION 11 of this Plan, such approval shall be obtained within
twelve (12) months after the date such amendment is adopted by the Committee;
provided, that such amendment shall not become effective until such approval has
been obtained.

      (c) SOLICITATION OF APPROVAL. The approval by the Company's stockholders
of this Plan, and their approval of any subsequent amendment to this Plan
requiring their approval, shall be solicited (I) substantially in accordance
with section 14(a) of the Exchange Act, or (ii) after the Company has furnished
in writing to the stockholders entitled to vote substantially the same
information concerning this Plan as that which would be required by the rules
and regulations then in effect under section 14(a) of the Exchange Act.

                                   SECTION 11
                TERM OF PLAN; EFFECT OF AMENDMENT OR TERMINATION
                ------------------------------------------------

      (a) TERM OF PLAN. This Plan shall become effective upon its adoption by
the Board of Directors and will be subject to the approval by the stockholders
of the Company in accordance with SECTION 10 above. This Plan shall continue in
effect for a term of ten (10) years unless sooner terminated under this SECTION
11.
      (b) AMENDMENT AND TERMINATION. The Committee in its sole discretion may
terminate this Plan at any time. The Committee may amend this Plan at any time
in such respects as the Committee may deem advisable; provided, that the
following amendments shall require approval of the holders of a majority of the
outstanding Shares entitled to vote:

          (i) Any change in the aggregate number of Shares that may be issued
under this Plan, other than in connection with an adjustment under SECTION 8 of
this Plan;

          (ii) Any change in the designation of the individuals eligible to be
granted Options; or

          (iii) Any change in this Plan that would materially increase the
benefits accruing to individuals under this Plan.

      (c) EFFECT OF TERMINATION. In the event this Plan is terminated, no Shares
shall be issued under this Plan, except upon exercise of an Option granted prior
to such termination. The termination of this Plan, or any amendment hereof,
shall not affect any Shares previously issued to an Optionee or any Option
previously granted under this Plan.

                                   SECTION 12
                                  GOVERNING LAW
                                  -------------

     This plan and any and all Stock Option Agreements executed in connection
with this Plan shall be governed by and construed in accordance with the laws of
the State of Delaware, without regard to conflict of laws principles.

                                       8

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