Document:

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                                                                    EXHIBIT 10.4

                                   EXHIBIT A
                                   ---------

                                   PALM, INC.

                       1999 EMPLOYEE STOCK PURCHASE PLAN

                        FORM OF SUBSCRIPTION AGREEMENT

_____ Original Application                         Enrollment Date: ___________
_____ Change in Payroll Deduction Rate
_____ Change of Beneficiary(ies)

1.   ____________ hereby elects to participate in the Palm, Inc. Employee Stock
     Purchase Plan (the "Palm ESPP") and subscribes to purchase shares of the
     Company's Common Stock in accordance with this Subscription Agreement and
     the Palm ESPP.

2.   I hereby authorize payroll deductions from each paycheck in the amount of
     ____% of my Compensation on each payday (from 0 to 10%) during the Offering
     Period in accordance with the Palm ESPP. I understand that if the
     percentage of my Compensation deducted for purposes of the Palm ESPP and
     all other employee stock purchase plans in which I participate, including
     the 3Com Corporation 1984 Employee Stock Purchase Plan, exceeds 10% of my
     Compensation, then the percentage of my Compensation that is deducted under
     the Palm ESPP will be reduced so that my percentage deduction of
     Compensation under all such employee stock purchase plans does not exceed
     10% of my Compensation. (Please note that no fractional percentages are
     permitted.)

3.   I understand that said payroll deductions shall be accumulated for the
     purchase of shares of Common Stock at the applicable Purchase Price
     determined in accordance with the Palm ESPP. I understand that if I do not
     withdraw from an Offering Period, any accumulated payroll deductions will
     be used to automatically exercise my option.

4.   I have received a copy of the complete Palm ESPP. I understand that my
     participation in the Palm ESPP is in all respects subject to the terms of
     the Plan. I understand that my ability to exercise the option under this
     Subscription Agreement is subject to shareholder approval of the Palm ESPP.

5.   Shares purchased for me under the Palm ESPP should be issued in the name(s)
     of (Employee or Employee and Spouse only).

6.   I understand that if I dispose of any shares received by me pursuant to the
     Plan within 2 years after the Enrollment Date (the first day of the
     Offering Period during which I purchased such shares) or one year after the
     Exercise Date, I will be treated for federal income tax purposes as having
     received ordinary income at the time of such disposition in an amount equal
     to the excess of the fair market value of the shares at the time such
     shares were purchased by me

                                      -1-
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     over the price which I paid for the shares.  I hereby agree to notify the
                                                  ----------------------------
     Company in writing within 30 days after the date of any disposition of my
     -------------------------------------------------------------------------
     shares and I will make adequate provision for Federal, state or other tax
     -------------------------------------------------------------------------
     withholding obligations, if any, which arise upon the disposition of the
     ------------------------------------------------------------------------
     Common Stock.  The Company may, but will not be obligated to, withhold from
     ------------
     my compensation the amount necessary to meet any applicable withholding
     obligation including any withholding necessary to make available to the
     Company any tax deductions or benefits attributable to sale or early
     disposition of Common Stock by me. If I dispose of such shares at any time
     after the expiration of the 2-year and 1-year holding periods, I understand
     that I will be treated for federal income tax purposes as having received
     income only at the time of such disposition, and that such income will be
     taxed as ordinary income only to the extent of an amount equal to the
     lesser of (1) the excess of the fair market value of the shares at the time
     of such disposition over the purchase price which I paid for the shares, or
     (2) 15% of the fair market value of the shares on the first day of the
     Offering Period. The remainder of the gain, if any, recognized on such
     disposition will be taxed as capital gain.

7.   I hereby agree to be bound by the terms of the Palm ESPP.  The
     effectiveness of this Subscription Agreement is dependent upon my
     eligibility to participate in the Palm ESPP.

8.   In the event of my death, I hereby designate the following as my
     beneficiary(ies) to receive all payments and shares due me under the Palm
     ESPP:

     NAME:  (Please print)     _________________________________________________
                               (First)             (Middle)       (Last)

     ________________________  _________________________________________________
     Relationship
                               _________________________________________________
                               (Address)

     Employee's Social
     Security Number:          _________________________________________________

     Employee's Address:       _________________________________________________

                               _________________________________________________

                               _________________________________________________

                                      -2-
<PAGE>

I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.

Dated:_____________        _____________________________________________________
                           Signature of Employee

                           _____________________________________________________
                           Spouse's Signature (If beneficiary other than spouse)

                                      -3-
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                                   EXHIBIT B
                                   ---------

                                   PALM, INC.

                   FORM OF 1999 EMPLOYEE STOCK PURCHASE PLAN

                              NOTICE OF WITHDRAWAL

     The undersigned participant in the Offering Period of the Palm, Inc.
Employee Stock Purchase Plan which began on ____________, ______ (the
"Enrollment Date") hereby notifies the Company that he or she hereby withdraws
from the Offering Period. He or she hereby directs the Company to pay to the
undersigned as promptly as practicable all the payroll deductions credited to
his or her account with respect to such Offering Period. The undersigned
understands and agrees that his or her option for such Offering Period will be
automatically terminated. The undersigned understands further that no further
payroll deductions will be made for the purchase of shares in the current
Offering Period and the undersigned shall be eligible to participate in
succeeding Offering Periods only by delivering to the Company a new Subscription
Agreement.

                                    Name and Address of Participant:

                                    ____________________________________________

                                    ____________________________________________

                                    ____________________________________________

                                    Signature:

                                    ____________________________________________

                                    Date: ______________________________________

                                      -4-<PAGE>

                                                                    EXHIBIT 10.5

                                   PALM, INC.

                           1999 DIRECTOR OPTION PLAN

     1.  Purposes of the Plan.  The purposes of this 1999 Director Option Plan
         --------------------
are to attract and retain the best available personnel for service as Outside
Directors (as defined herein) of the Company, to provide additional incentive to
the Outside Directors of the Company to serve as Directors, and to encourage
their continued service on the Board.

         All options granted hereunder shall be nonstatutory stock options.

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

         (a)  "Board" means the Board of Directors of the Company.
               -----

         (b)  "Change of Control" means the occurrence of any of the following
               -----------------
events:

               (i)   Any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing fifty percent (50%) or more of the total voting power
represented by the Company's then outstanding voting securities who is not
already such as of the Effective Date; or

               (ii)  The consummation of the sale or disposition by the Company
of all or substantially all the Company's assets; or

               (iii) The consummation of a merger or consolidation of the
Company with any other corporation, other than a merger or consolidation which
would result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining out-standing or by
being converted into voting securities of the surviving entity or its parent) at
least fifty percent (50%) of the total voting power represented by the voting
securities of the Company or such surviving entity or its parent outstanding
immediately after such merger or consolidation; or

               (iv)  A change in the composition of the Board occurring within a
two-year period, as a result of which fewer than a majority of the directors are
Incumbent Directors. "Incumbent Directors" shall mean directors who either (A)
are directors of the Company as of the Effective Date, or (B) are elected, or
nominated for election, to the Board with the affirmative votes of at least a
majority of those directors whose election or nomination was not in connection
with any transaction described in subsections (i), (ii), or (iii) above, or in
connection with an actual or threatened proxy contest relating to the election
of directors to the Company.

     Notwithstanding the foregoing, in no event shall either or both of the
following events constitute a Change of Control: (i) the initial public offering
of the Company's securities pursuant to

                                      -1-
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a registration statement filed under Section 12 of the Exchange Act or (ii) the
spin-off of the Company from 3Com pursuant to one or more transactions in which
3Com distributes eighty percent (80%) or more of its securities ownership of the
Company to the shareholders of 3Com.

         (c)  "Code" means the Internal Revenue Code of 1986, as amended.
               ----

         (d)  "Common Stock" means the common stock of the Company.
               ------------

         (e)  "Company" means Palm, Inc., a Delaware corporation.
               -------

         (f)  "Director" means a member of the Board.
               --------

         (g)  "Disability" means total and permanent disability as defined in
               ----------
Section 22(e)(3) of the Code.

         (h)  "Effective Date" means the effective date of this Plan as
               --------------
determined in accordance with Section 6.

         (i)  "Employee" means any person, including officers and Directors,
               --------
employed by the Company or any Parent or Subsidiary of the Company. The payment
of a Director's fee by the Company shall not be sufficient in and of itself to
constitute "employment" by the Company.

         (j)  "Exchange Act" means the Securities Exchange Act of 1934, as
               ------------
amended.

         (k)  "Fair Market Value" means, as of any date, the value of Common
               -----------------
Stock determined as follows:

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

              (ii)  If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value of
a Share of Common Stock shall be the mean between the high bid and low asked
prices for the Common Stock for the last market trading day prior to the time of
determination, as reported in The Wall Street Journal or such other source as
the Board deems reliable;

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

              (iv)  For purposes of Option grants made on the effective date of
the Company's initial public offering of Common Stock (the "IPO"), the Fair
Market Value shall be the initial price to the public as set forth in the final
prospectus included with the registration on Form S-1 filed with the Securities
and Exchange Commission for such offering.

                                      -2-
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         (l)  "Inside Director" means a Director who is an Employee.
               ---------------

         (m)  "Option" means a stock option granted pursuant to the Plan.
               ------

         (n)  "Optioned Stock" means the Common Stock subject to an Option.
               --------------

         (o)  "Optionee" means a Director who holds an Option.
               --------

         (p)  "Outside Director" means a Director who is not an Employee.
               ----------------

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

         (r)  "Plan" means this 1999 Director Option Plan.
               ----

         (s)  "Share" means a share of the Common Stock, as adjusted in
               -----
accordance with Section 10 of the Plan.

         (t)  "Subsidiary" means a "subsidiary corporation," whether now or
               ----------
hereafter existing, as defined in Section 424(f) of the Internal Revenue Code of
1986.

         (u)  "3Com" means 3Com Corporation, a Delaware corporation.
               ----

     3.  Stock Subject to the Plan.  Subject to the provisions of Section 10 of
         -------------------------
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is 500,000 Shares, plus an annual increase to be added on the
first day of the Company's fiscal year, beginning in 2001, equal to 500,000
Shares or a lesser amount determined by the Board (the "Pool").  The Shares may
be authorized, but unissued, or reacquired Common Stock.

          If an Option expires or becomes unexercisable without having been
exercised in full, the unpurchased Shares which were subject thereto shall
become available for future grant or sale under the Plan (unless the Plan has
terminated).  Shares that have actually been issued under the Plan shall not be
returned to the Plan and shall not become available for future distribution
under the Plan.

     4.  Administration and Grants of Options under the Plan.
         ---------------------------------------------------

         (a)  Procedure for Grants. All grants of Options to Outside Directors
              --------------------
under this Plan shall be automatic and nondiscretionary and shall be made
strictly in accordance with the following provisions:

              (i)  No person shall have any discretion to select which Outside
Directors shall be granted Options or to determine the number of Shares to be
covered by Options.

              (ii) Each Outside Director shall be automatically granted an
Option to purchase 40,000 Shares (the "First Option") on the date on which the
later of the following events occurs: (A) the Effective Date, or (B) the date on
which such person first becomes an Outside Director, whether through election by
the shareholders of the Company or appointment by the Board

                                      -3-
<PAGE>

to fill a vacancy; provided, however, that an Inside Director who ceases to be
an Inside Director but who remains a Director shall not receive a First Option.

              (iii) Each Outside Director shall be automatically granted an
Option to purchase 25,000 Shares (a "Subsequent Option") on the date of the
annual stockholder meeting in which the election for such Outside Director is to
be held, provided he or she is then an Outside Director and if as of such date,
he or she shall have served on the Board for at least the preceding six (6)
months.

              (iv)  Notwithstanding the provisions of subsections (ii) and (iii)
hereof, any exercise of an Option granted before the Company has obtained
shareholder approval of the Plan in accordance with Section 16 hereof shall be
conditioned upon obtaining such shareholder approval of the Plan in accordance
with Section 16 hereof.

              (v)   The terms of a First Option granted hereunder shall be as
follows:

                   (A)  the term of the First Option shall be ten (10) years.

                   (B)  the First Option shall be exercisable only while the
Outside Director remains a Director of the Company, except as set forth in
Sections 8 and 10 hereof.

                   (C)  the exercise price per Share shall be 100% of the Fair
Market Value per Share on the date of grant of the First Option.

                   (D)  subject to Section 10 hereof, the First Option shall
become exercisable in three (3) successive equal annual installments on each of
the first three (3) anniversaries of its date of grant, provided that the
Optionee continues to serve as a Director on such dates. Notwithstanding the
foregoing, a First Option granted to an Outside Director who commenced service
with the Company before the effective date of the Company's initial public
offering of equity securities shall vest in three (3) successive equal annual
installments on each of the first three (3) anniversaries of such Outside
Director's commencement of service with the Company.

              (vi)  The terms of a Subsequent Option granted hereunder shall be
as follows:

                   (A)  the term of the Subsequent Option shall be ten (10)
years.

                   (B)  the Subsequent Option shall be exercisable only while
the Outside Director remains a Director of the Company, except as set forth in
Sections 8 and 10 hereof.

                   (C)  the exercise price per Share shall be 100% of the Fair
Market Value per Share on the date of grant of the Subsequent Option.

                   (D)  subject to Section 10 hereof, the Subsequent Option
shall become exercisable as to 100% percent of the Shares subject to the
Subsequent Option on the first anniversary of its date of grant, provided that
the Optionee continues to serve as a Director on such date.

                                      -4-
<PAGE>

              (vii)  In the event that any Option granted under the Plan would
cause the number of Shares subject to outstanding Options plus the number of
Shares previously purchased under Options to exceed the Pool, then the remaining
Shares available for Option grant shall be granted under Options to the Outside
Directors on a pro rata basis. No further grants shall be made until such time,
if any, as additional Shares become available for grant under the Plan through
action of the Board or the shareholders to increase the number of Shares which
may be issued under the Plan or through cancellation or expiration of Options
previously granted hereunder.

     5.  Eligibility.  Options may be granted only to Outside Directors. All
         -----------
Options shall be automatically granted in accordance with the terms set forth in
Section 4 hereof.

         The Plan shall not confer upon any Optionee any right with respect to
continuation of service as a Director or nomination to serve as a Director, nor
shall it interfere in any way with any rights which the Director or the Company
may have to terminate the Director's relationship with the Company at any time.

     6.  Term of Plan.  The Plan shall become effective upon the IPO.  It shall
         ------------
continue in effect for a term of ten (10) years unless sooner terminated under
Section 11 of the Plan.

     7.  Form of Consideration.  The consideration to be paid for the Shares
         ---------------------
to be issued upon exercise of an Option, including the method of payment, shall
consist of (i) cash, (ii) check, (iii) other shares which (x) in the case of
Shares acquired upon exercise of an option, have been owned by the Optionee for
more than six (6) months on the date of surrender, and (y) have a Fair Market
Value on the date of surrender equal to the aggregate exercise price of the
Shares as to which said Option shall be exercised, (iv) consideration received
by the Company under a cashless exercise program implemented by the Company in
connection with the Plan, or (v) any combination of the foregoing methods of
payment.

     8.  Exercise of Option.
         ------------------

         (a)  Procedure for Exercise; Rights as a Shareholder. Any Option
              -----------------------------------------------
granted hereunder shall be exercisable at such times as are set forth in Section
4 hereof; provided, however, that no Options shall be exercisable until
shareholder approval of the Plan in accordance with Section 16 hereof has been
obtained.

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

              An Option shall be deemed to be exercised when written notice of
such exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may consist of any consideration and method of payment
allowable under Section 7 of the Plan. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the stock certificate evidencing such Shares, no right
to vote or receive dividends or any other rights as a shareholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option.
A share certificate for the number of Shares so acquired shall be issued to the

                                      -5-
<PAGE>

Optionee as soon as practicable after exercise of the Option. No adjustment
shall be made for a dividend or other right for which the record date is prior
to the date the stock certificate is issued, except as provided in Section 10 of
the Plan.

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

          (b) Termination of Continuous Status as a Director.  Subject to
              ----------------------------------------------
Section 10 hereof, in the event an Optionee's status as a Director terminates
(other than upon the Optionee's death or Disability), the Optionee may exercise
his or her Option, but only within three (3) months following the date of such
termination, and only to the extent that the Optionee was entitled to exercise
it on the date of such termination (but in no event later than the expiration of
its ten (10) year term). To the extent that the Optionee was not entitled to
exercise an Option on the date of such termination, and to the extent that the
Optionee does not exercise such Option (to the extent otherwise so entitled)
within the time specified herein, the Option shall terminate.

          (c) Disability of Optionee.  In the event Optionee's status as a
              ----------------------
Director terminates as a result of Disability, the Optionee may exercise his or
her Option, but only within twelve (12) months following the date of such
termination, and only to the extent that the Optionee was entitled to exercise
it on the date of such termination (but in no event later than the expiration of
its ten (10) year term). To the extent that the Optionee was not entitled to
exercise an Option on the date of termination, or if he or she does not exercise
such Option (to the extent otherwise so entitled) within the time specified
herein, the Option shall terminate.

         (d)  Death of Optionee.  In the event of an Optionee's death, each of
              -----------------
the Optionee's outstanding Options shall accelerate and become immediately
vested and exercisable with respect to one hundred percent (100%) of the Shares
then subject to each such Option. Each such Option may be exercised by the
Optionee's designated beneficiary, provided such beneficiary has been designated
prior to Optionee's death in a form acceptable by the Board. If no such
beneficiary has been designated by the Optionee, then each such Option may be
exercised by the personal representative of the Optionee's estate or by the
person or persons to whom the Option is transferred pursuant to the Optionee's
will or in accordance with the laws of descent and distribution. The Option may
be exercised in whole or in part by the Optionee's designated beneficiary,
estate or the person or persons who acquire the right to exercise the Option,
but only within twelve (12) months following the date of death (but in no event
later than the expiration of its ten (10) year term). To the extent the Option
is not exercised within the time specified herein, the Option shall terminate.

     9.  Non-Transferability of Options.  The Option may not be sold, pledged,
         ------------------------------
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee.

                                      -6-
<PAGE>

     10.  Adjustments Upon Changes in Capitalization, Dissolution, Merger or
          ------------------------------------------------------------------
Asset Sale.
----------

          (a)  Changes in Capitalization.  Subject to any required action by the
               -------------------------
shareholders of the Company, the number of Shares which have been authorized for
issuance under the Plan, including Shares as to which no Options have yet been
granted or which have been returned to the Plan upon cancellation or expiration
of an Option, the number of Shares that may be added annually to the Shares
reserved under the Plan (pursuant to Section 3(i)), the number of Shares covered
by each outstanding Option, as well as the price per Share covered by each such
outstanding Option, and the number of Shares issuable pursuant to the automatic
grant provisions of Section 4 hereof shall be proportionately adjusted for any
increase or decrease in the number of issued Shares resulting from a stock
split, reverse stock split, stock dividend, combination or reclassification of
the Common Stock, or any other increase or decrease in the number of issued
Shares effected without receipt of consideration by the Company; provided,
however, that conversion of any convertible securities of the Company shall not
be deemed to have been "effected without receipt of consideration." Except as
expressly provided herein, no issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of Shares subject to an Option.

         (b)  Dissolution or Liquidation.  In the event of the proposed
              --------------------------
dissolution or liquidation of the Company, to the extent that an Option has not
been previously exercised, it shall terminate immediately prior to the
consummation of such proposed action.

         (c)  Merger or Asset Sale.  In the event of a merger of the Company
              --------------------
with or into another corporation or the sale of substantially all of the assets
of the Company, outstanding Options may be assumed or equivalent options may be
substituted by the successor corporation or a Parent or Subsidiary thereof (the
"Successor Corporation"). If an Option is assumed or substituted for, the Option
or equivalent option shall continue to be exercisable as provided in Section 4
hereof for so long as the Optionee serves as a Director or a director of the
Successor Corporation. Thereafter, the Option or option shall remain exercisable
in accordance with Sections 8(b) through (d) above. If the Successor Corporation
does not assume an outstanding Option or substitute for it an equivalent option,
the Option shall become fully vested and exercisable, including as to Shares for
which it would not otherwise be exercisable. In such event the Board shall
notify the Optionee that the Option shall be fully exercisable for a period of
thirty (30) days from the date of such notice, and upon the expiration of such
period the Option shall terminate.

              For the purposes of this Section 10(c), an Option shall be
considered assumed if, following the merger or sale of assets, the Option
confers the right to purchase or receive, for each Share of Optioned Stock
subject to the Option immediately prior to the merger or sale of assets, the
consideration (whether stock, cash, or other securities or property) received in
the merger or sale of assets by holders of Common Stock for each Share held on
the effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding Shares). If such consideration received in the merger or sale of
assets is not solely common stock of the successor corporation or its Parent,
the Administrator may, with the consent of the successor corporation, provide
for the consideration to be received upon the exercise of the Option, for each
Share of Optioned Stock subject to the Option, to be solely common stock of

                                      -7-
<PAGE>

the successor corporation or its Parent equal in fair market value to the per
share consideration received by holders of Common Stock in the merger or sale of
assets.

              Notwithstanding the foregoing, in the event of a Change of
Control, each outstanding Option shall accelerate and become vested and
exercisable immediately prior to such Change of Control with respect to one
hundred percent (100%) of the Shares then subject to each such Option. Each such
outstanding Option shall terminate immediately following the Change of Control.

     11.  Amendment and Termination of the Plan.
          -------------------------------------

          (a)  Amendment and Termination.  The Board may at any time amend,
               -------------------------
alter, suspend, or discontinue the Plan, but no amendment, alteration,
suspension, or discontinuation shall be made which would impair the rights of
any Optionee under any grant theretofore made, without his or her consent. In
addition, to the extent necessary and desirable to comply with any applicable
law, regulation or stock exchange rule, the Company shall obtain shareholder
approval of any Plan amendment in such a manner and to such a degree as
required.

          (b)  Effect of Amendment or Termination.  Any such amendment or
              ----------------------------------
termination of the Plan shall not affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated.

     12.  Time of Granting Options.  The date of grant of an Option shall, for
          ------------------------
all purposes, be the date determined in accordance with Section 4 hereof.

     13.  Conditions Upon Issuance of Shares.  Shares shall not be issued
          ----------------------------------
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, state securities laws, and the requirements of any stock exchange
upon which the Shares may then be listed, and shall be further subject to the
approval of counsel for the Company with respect to such compliance.

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

          Inability of the Company to obtain authority from any regulatory body
having jurisdiction, which authority is deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall relieve
the Company of any liability in respect of the failure to issue or sell such
Shares as to which such requisite authority shall not have been obtained.

                                      -8-
<PAGE>

     14.  Reservation of Shares.  The Company, during the term of this Plan,
          ---------------------
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

     15.  Option Agreement.  Options shall be evidenced by written option
          ----------------
agreements in such form as the Board shall approve.

     16.  Shareholder Approval.  The Plan shall be subject to approval by the
          --------------------
shareholders of the Company within twelve (12) months after the date the Plan is
adopted.  Such shareholder approval shall be obtained in the degree and manner
required under applicable state and federal law and any stock exchange rules.

                                      -9-

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