Document:

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                                                                   Exhibit 10.31

                                  ALTON PLAZA
                            SECOND AMENDMENT TO LEASE
                             (Expansion of Premises)

        THIS SECOND AMENDMENT TO LEASE (this "AMENDMENT") dated for reference
purposes only as of February 13, 2002, is entered into by and between ALTON
PLAZA PROPERTY, INC., a Delaware corporation ("LESSOR" or "LANDLORD"), and ISTA
PHARMACEUTICALS, INC., a Delaware corporation (formerly known as Advanced
Corneal Systems, Inc.) ("LESSEE" or "TENANT").

                                    RECITALS

        A. Lessor's predecessor in interest, Aetna Life Insurance Company, and
Lessee entered into that certain Lease Agreement dated September 13, 1996 (the
"ORIGINAL LEASE") for certain premises located at 15279 Alton Parkway, Suite
100, Irvine, California 92618 (the "EXISTING PREMISES"). The Existing Premises
contain approximately 13,448 square feet of rentable area. Landlord and Tenant
entered into that certain First Amendment to Lease dated as of June 27, 2001
(the "FIRST AMENDMENT"). The Original Lease as amended by the First Amendment is
hereinafter referred to as the "LEASE". The term of the Lease is currently
scheduled to expire on September 30, 2004.

        B. Landlord and Tenant presently desire to amend the Lease to, among
other things, provide for the expansion of the Existing Premises.

        NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:

        1. Definitions. Unless otherwise specifically set forth herein, all
capitalized terms used herein shall have the same meanings as set forth in the
Lease.

        2. Addition of the Expansion Premises. The increment of space located at
15273 Alton Plaza and labeled "EXPANSION PREMISES" on the attached Exhibit A-2
shall be added to the Existing Premises covered by the Lease on the date (the
"EXPANSION PREMISES COMMENCEMENT DATE") Landlord has Substantially Completed (as
defined in Section 4.2 below) the Tenant Improvements (as defined in Section 4.1
below) to be constructed in the Expansion Premises by Landlord pursuant to
Section 4 below, and shall remain a portion of the "Premises" (as defined below)
throughout the Lease term until the Expansion Premises Expiration Date (as
defined below). The Expansion Premises Commencement Date and the Expansion
Premises Expiration Date shall be confirmed in writing by the parties following
the occurrence of the Expansion Premises Commencement Date. Landlord and Tenant
agree that for the purpose of the Lease and this Amendment, the Expansion
Premises shall be deemed to contain approximately 5,238 square feet of space. As
of the Expansion Premises Commencement Date, the Basic Lease Information Page of
the Lease shall be modified to provide that the "Premises" consists of
approximately 18,686 square feet (the combined Existing Premises and Expansion
Premises shall hereinafter be referred to as the "PREMISES"). In addition, as of
the Expansion Premises Commencement Date, the provisions of the Lease

                                       1
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regarding Base Rent, Tenant's pro rata share of Operating Expenses, Tax
Expenses, Common Area Utility Costs, administrative expenses and Utility
Expenses, and the expiration of the term of the Lease, shall be modified, all as
more specifically set forth in this Amendment.

        3. Estimated Commencement Date. Landlord estimates that the Expansion
Premises Commencement Date will be May 1, 2002; provided, however, that the
foregoing is an estimate only, and in all events if Landlord cannot deliver
possession of the Expansion Premises to Tenant on or before the estimated
Expansion Premises Commencement Date, such delay shall not render this Amendment
void or voidable, or impose any liability upon Landlord for any loss or damage
resulting therefrom, or operate to extend the term of the Lease or amend
Tenant's obligations under the Lease (as amended by this Amendment). In no event
shall Landlord be liable to Tenant for any delay in Substantial Completion of
the Tenant Improvements caused or occasioned by strikes, lockout, labor
disputes, shortages of material or labor, fire or other casualty, acts of God or
any other cause beyond the reasonable control of Landlord (each, a "FORCE
MAJEURE EVENT"). Notwithstanding the foregoing, (i) in the event Substantial
Completion does not occur by June 15, 2002 (as such date may be extended by a
Tenant Delay or a Force Majeure Event(s), provided, however, that in no such
event shall such date be extended by more than thirty (30) days because of Force
Majeure Events) (the "RENT ABATEMENT DATE"), then Tenant shall receive one free
day of Base Rent for each day of delay after the Rent Abatement Date; and (ii)
in the event Substantial Completion does not occur by August 1, 2002 (as such
date may be extended by a Tenant Delay or a Force Majeure Event(s), provided,
however, that in no such event shall such date be extended by more than thirty
(30) days because of Force Majeure Events) (the "TRIGGER DATE"), Tenant may
terminate this Amendment upon written notice (the "TERMINATION NOTICE")
delivered to Landlord within five (5) business days after the Trigger Date
electing to terminate this Amendment effective on the date which is five (5)
business days after Landlord's receipt of the Termination Notice (the
"TERMINATION DATE"); provided, however, that if Tenant timely delivers such
Termination Notice, Landlord shall have the right to suspend the termination of
this Amendment for a period of twenty (20) days (thereby extending the
Termination Date for 20 days). In order to suspend the termination pursuant to
the foregoing, Landlord must deliver to Tenant, within five (5) business days
after receipt of Tenant's Termination Notice, notice of such suspension
("LANDLORD'S SUSPENSION NOTICE"). If Landlord delivers Landlord's Suspension
Notice, and, within that 20-day suspension period, Substantial Completion
occurs, Tenant's Termination Notice shall be of no further force or effect. If,
however, Substantial Completion does not occur within that 20-day suspension
period, this Amendment shall terminate at the end of the 20-day suspension
period and Landlord shall promptly return to Tenant any advance payment of rent
for the Expansion Premises and any other similar payment made by Tenant to
Landlord. If prior to the Termination Date, as such date may have been postponed
pursuant to this paragraph, Substantial Completion occurs, Tenant's Termination
Notice shall be of no further force or effect.

                                       2
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        4. Expansion Premises As-Is. Tenant shall accept the Expansion Premises
in their "as is" state and condition and Landlord shall have no obligation to
make or pay for any improvements or renovations in or to the Expansion Premises
or to otherwise prepare the Expansion Premises for Tenant's occupancy, except as
specifically provided in this Section 4.

        4.1 Tenant Improvements. The space plan describing the improvements
which Tenant desires to be constructed in the Expansion Premises, attached
hereto as Exhibit G (the "SPACE PLAN"), has been approved by Tenant and
Landlord. The Space Plan, as may be revised by Tenant from time to time with
Landlord's written approval in accordance with the following provisions of this
Section 4, is hereinafter called the "FINAL PLAN", and the improvements to be
performed in accordance with the Final Plan are hereinafter called the "TENANT
IMPROVEMENTS". The Tenant Improvements shall not include trade fixtures,
equipment, furniture, furnishings, telephone equipment or other personal
property of Tenant. Landlord and Tenant shall cooperate with each other to
resolve any space planning or other issues that are raised by applicable local,
state or federal building codes during the planning, permit or construction
process, but any delays associated with such efforts to resolve such space
planning or other issues shall not be deemed a Tenant Delay (unless Tenant fails
to timely cooperate with Landlord with regard to such matters). Landlord hereby
approves Tenant's right to install its security system in the Expansion
Premises, provided Tenant complies with the provisions of the Lease applicable
to such installation.

        4.2 Construction. The Tenant Improvements shall be constructed in the
Expansion Premises, using Building standard finishes and specifications, by a
general contractor selected by Landlord ("LANDLORD'S CONTRACTOR"). Landlord
shall cause Landlord's Contractor to perform construction of the Tenant
Improvements in accordance with the Final Plan, in a good and workmanlike
manner. Landlord will bear all costs and expenses to perform the work shown on
the Final Plan, including the cost of all permits and other governmental
approvals, except as otherwise provided herein. "SUBSTANTIAL COMPLETION" of the
Tenant Improvements shall be deemed to have occurred on the date on which (i)
Landlord's architect certifies that the Tenant Improvements have been completed
pursuant to the Final Plan, subject only to the completion or correction of
Landlord's Punch List Items; (ii) a certificate of occupancy or temporary
certificate of occupancy (or its equivalent) for the Expansion Premises has been
issued by the governmental agency responsible for issuing such certificate in
the county in which the Expansion Premises are located; and (iii) Landlord has
delivered possession of the Expansion Premises to Tenant in the condition
required under this Amendment. Notwithstanding the foregoing, Landlord warrants
that for sixty (60) days following the Expansion Premises Commencement Date the
heat, air conditioning and ventilating ("HVAC") equipment, and the electrical
and plumbing systems serving the Expansion Premises are warranted to be in good
working order. Landlord shall repair any defective or malfunctioning component
of such systems of which Landlord has received written notice from Tenant
describing the failure or malfunction within thirty (30) days of the Expansion
Premises Commencement Date. "PUNCH LIST ITEMS" shall mean minor items of
incomplete or defective work or materials in the improvements called for in the
Final Plan, which do not materially impair Tenant's use of the Expansion
Premises for the conduct of Tenant's business therein. Notwithstanding anything
to the contrary in this Lease, in no event shall Tenant be obligated to remove,
during the term of the Lease or at the expiration or sooner termination of the
term of the Lease, any of the Tenant Improvements.

                                       3
<PAGE>

        4.3 Changes. If Tenant desires any change, addition or alteration in or
to the Final Plan ("CHANGE"), Tenant shall submit to Landlord for Landlord's
review and written approval, which approval Landlord shall not unreasonably
withhold, revised plans prepared by an architect incorporating the requested
Change and clearly identifying the same as such on the revised plans. If
Landlord approves any proposed Change, Landlord shall give Tenant the estimated
cost of the Change and the amount of time the Landlord estimates the Change will
delay Substantial Completion. Landlord will use reasonable care in preparing the
estimates, but they shall be estimates only and will not limit Tenant's
obligation to pay for the actual cost of the Change. Within two (2) business
days after receipt of such cost and delay estimates, Tenant shall notify
Landlord in writing whether Tenant approves the Change. If Tenant fails to
approve the Change within such two (2) business day period, construction of the
Tenant Improvements shall continue as provided in accordance with the Final Plan
as it existed prior to the requested Change. If Tenant approves the Change,
Landlord shall proceed with the Change. If the Change increases the cost of the
Tenant Improvements, then Tenant shall be liable for the additional cost, which
cost shall be payable within thirty (30) days of Landlord's written demand
therefor. If the Change causes a delay in Substantial Completion of the Tenant
Improvements, Tenant's obligation to pay rent for the Expansion Premises shall
be accelerated as provided in Section 4.4 below. Landlord shall not make any
material changes to the Final Plan without first obtaining Tenant's approval
thereof, which approval shall not be unreasonably withheld, conditioned or
delayed, and any such material changes without such approval shall be at
Landlord's sole cost and expense.

        4.4 Tenant Delays. Tenant shall be responsible for, and shall pay to
Landlord any and all costs and expenses incurred by Landlord in connection with
any delay in Substantial Completion and any increase in the cost of Tenant
Improvements caused by (i) any Changes requested by Tenant in the Tenant
Improvements shown on the Final Plan (including any cost or delay resulting from
proposed Changes that are not ultimately made), (ii) any failure by Tenant to
timely pay any amounts due from Tenant hereunder, including any additional costs
resulting from any Change (it being acknowledged that if Tenant fails to make or
otherwise delays making such payments, Landlord may stop work on the Tenant
Improvements rather than incur costs which Tenant is obligated to fund but has
not yet done so and any delay from such a work stoppage will be a Tenant Delay),
(iii) the inclusion in the Tenant Improvements of any so-called "long lead"
materials (such as fabrics, panellings, carpeting or other items that must be
imported or are of unusual character or limited availability) which Landlord has
informed Tenant, at the time Tenant selects such item(s), are long-lead items,
(iv) any delay by Tenant in responding to inquiries within the time provided in
this Amendment or, if not specified, within commercially reasonable time
periods, regarding the construction of the Tenant Improvements or in granting
Tenant's approval of materials or finishes for the Tenant Improvements, or (v)
any other delay requested or proximately caused by Tenant. Each of the foregoing
is referred to herein as a "TENANT DELAY". Landlord shall provide Tenant written
notice promptly following the occurrence of any Tenant Delay specifying
Landlord's good faith estimate of the duration thereof.

                                       4
<PAGE>

        5. Base Rent. To reflect the addition of the Expansion Premises to the
Lease, effective as of the Expansion Premises Commencement Date, and continuing
thereafter through the Expansion Premises Expiration Date (as defined below),
Tenant shall pay to Landlord Base Rent in advance on or before the first day of
each calendar month, for the Expansion Premises, as follows:

<TABLE>
<CAPTION>
               For the Period:                      Base Rent:
               --------------                       ---------
              <S>                                   <C>
               First Lease Year                     $6,809.40 per month
               Second Lease Year                    $7,071.30 per month
               Third Lease Year                     $7,333.20 per month

</TABLE>

Notwithstanding the foregoing, if Substantial Completion is delayed as a result
of a Tenant Delay, then the Expansion Premises Commencement Date shall be deemed
to be the date that Substantial Completion would have occurred but for any
Tenant Delay. The first "LEASE YEAR" shall be the period commencing on the
Expansion Premises Commencement Date (as such date may be accelerated pursuant
to the preceding sentence) and ending on the last day of the twelfth (12th) full
calendar month thereafter. Each twelve (12) calendar month period thereafter
shall constitute a "LEASE YEAR." The "EXPANSION PREMISES EXPIRATION DATE" shall
be the last day of the third Lease Year. Tenant shall continue to pay Base Rent
for the Existing Premises as set forth in the Lease.

        6. Modification of Tenant's Percentage Share. To reflect the addition of
the Expansion Premises to the Lease, effective as of the Expansion Premises
Commencement Date, the provisions of Article 6 of the Lease shall apply to the
Expansion Premises and Tenant's pro rata share shall be 2.43% with respect to
the Expansion Premises.

        7. Modified Provision. Effective as of the date hereof, Section 14 of
the Original Lease is hereby modified as follows:

        7.1 Deletion. The fourth, fifth, sixth and seventh grammatical sentences
of Section 14.A. of the Original Lease (Landlord's recapture right) are hereby
deleted in their entirety and shall be of no further force or effect.

        7.2 Addition. The following language is hereby added as Section 14.D. to
the Original Lease:

        "D. ASSIGNMENT TO AFFILIATES. Notwithstanding anything to the contrary
        in this Section 14, Lessee may assign this Lease or sublet the Premises
        or any portion thereof, without Lessor's consent, to any partnership,
        corporation or other entity which controls, is controlled by, or is
        under common control with Lessee or Lessee's parent (control being
        defined for such purposes as ownership of at least 50% of the equity
        interests in, or the power to direct the management of, the relevant
        entity) or to any partnership, corporation or other entity resulting
        from a merger or consolidation with Lessee or Lessee's parent, or to any
        person or entity which acquires substantially all the assets of Lessee
        as a going concern (collectively, an "Affiliate"), provided that (i)
        Lessor receives written notice of an assignment or subletting promptly
        after such assignment or

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        subletting, (ii) the Affiliate has a net worth at least equal to the net
        worth of Ista Pharmaceuticals, Inc. as of the date of the Second
        Amendment to Lease, (iii) the Affiliate remains an Affiliate for the
        duration of the subletting or the balance of the term in the event of an
        assignment, (iv) the Affiliate assumes (in the event of an assignment)
        in writing all of Lessee's obligations under this Lease, and (v) Lessor
        receives a fully executed copy of an assignment or sublease agreement
        between Lessee and the Affiliate."

        7.3 Casualty Damage. The following language is hereby added to Section
27 of the Original Lease:

               "D. If damage occurs to the Existing Premises and the damage
        cannot be repaired within 270 days from the date of such damage, Tenant
        may elect to terminate this Lease within fifteen (15) days after
        Landlord informs Tenant of the expected duration of the period of repair
        or restoration, as follows: (i) solely with respect to the portion of
        the Existing Premises so damaged, or (ii) if the entirety of the
        Existing Premises has been made untenantable by such damage, Tenant may
        terminate the Lease with respect to the entirety of the Premises. If
        damage occurs to the Expansion Premises and the damage cannot be
        repaired within 270 days from the date of such damage, Tenant may elect
        to terminate this Lease within fifteen (15) days after Landlord informs
        Tenant of the expected duration of the period of repair or restoration,
        as follows: (x) solely with respect to the portion of the Expansion
        Premises so damaged, or (y) if the entirety of the Expansion Premises
        has been made untenantable by such damage, Tenant may terminate the
        Lease solely with respect to the Expansion Premises.

        7.4 Condemnation. The following language is hereby added to Section 28
of the Original Lease:

        "If twenty-five percent (25%) or more of the Existing Premises is
        Condemned, Tenant may elect to terminate this Lease within fifteen (15)
        days after Landlord informs Tenant of the expected extent of such
        condemnation, as follows: (i) solely with respect to the portion of the
        Existing Premises so Condemned, or (ii) if the entirety of the Existing
        Premises has been made untenantable by such condemnation, Tenant may
        terminate the Lease with respect to the entirety of the Premises. If
        twenty-five percent (25%) or more of the Expansion Premises is
        Condemned, Tenant may elect to terminate this Lease within fifteen (15)
        days after Landlord informs Tenant of the expected extent of such
        condemnation, as follows: (x) solely with respect to the portion of the
        Expansion Premises so Condemned, or (y) if the entirety of the Expansion
        Premises has been made untenantable by such condemnation, Tenant may
        terminate the Lease solely with respect to the Expansion Premises.

                                       6
<PAGE>

        8. Temporary Premises. Notwithstanding anything to the contrary in this
Amendment, effective March 1, 2002, Landlord hereby leases to Tenant, and Tenant
hereby leases from Landlord, those certain premises in the Complex located at
15225 Alton Parkway, Suite 200, Irvine, California, containing approximately
4,671 square feet, as temporary premises (the "TEMPORARY PREMISES") for the
operation of Tenant's business. The Temporary Premises shall be leased to Tenant
in its "as is" condition under all the terms and conditions of the Lease,
including without limitation Sections 12 and 13, subject to the following:

        8.1 Base Rent. Base Rent for the Temporary Premises shall be $2,000.00
            per month, commencing March 1, 2002 and continuing through the end
            of the term for the Temporary Premises.

        8.2 Tenant's Proportionate Share. Tenant's proportionate share shall be
            0.93%.

        8.3 Alterations. Tenant shall not make any Alterations to the Temporary
            Premises, except that Tenant may install, at Tenant's sole cost and
            expense, its data and telecommunications wiring and cabling and its
            own security system (the "TEMPORARY PREMISES IMPROVEMENTS"), all in
            accordance with the provisions of the Lease. Upon execution of this
            Amendment by Landlord and Tenant, Landlord shall provide Tenant with
            access to the Temporary Premises for the sole purpose of installing
            the Temporary Premises Improvements; such early access shall be
            subject to all of the terms and conditions of the Lease, except for
            the payment of Base Rent for the Temporary Premises which shall not
            be payable until March 1, 2002 as provided in Section 8.1 above.

        8.4 Term for Temporary Premises. Tenant's lease of the Temporary
            Premises shall terminate on the date which is fifteen (15) calendar
            days following the Expansion Premises Commencement Date; provided,
            however, that if the Expansion Premises Commencement Date does not
            occur by September 1, 2002, on such date the lease of the Temporary
            Premises shall convert to a month-to-month tenancy, which may be
            terminated by either party upon not less than thirty (30) days prior
            written notice to the other party.

        9. Real Estate Brokers. Tenant represents and warrants that it has
negotiated this Amendment directly with Zuvich Cannon & Associates ("TENANT'S
BROKER") and Legacy Partners ("LANDLORD'S BROKER") and has not authorized or
employed, or acted by implication to authorize or to employ, any other real
estate broker or salesman to act for Tenant in connection with this Amendment.
Tenant shall indemnify, defend and hold Landlord harmless from and against any
and all claims by any other real estate broker or salesman other than Landlord's
Broker for a commission, finder's fee or other compensation as a result of
Tenant's entering into this Amendment. Landlord shall pay a commission to
Tenant's Broker pursuant to a separate agreement.

                                       7
<PAGE>

        10. Parking. Effective as of the Expansion Premises Commencement Date,
in addition to the parking spaces currently allocated to Tenant under the Lease,
Tenant shall have use of seventeen (17) nonexclusive and undesignated parking
spaces, subject to the terms of the Lease.

        11. Signage. Subject to (i) compliance with Landlord's signage criteria
attached hereto as Exhibit H, (ii) compliance with all applicable rules,
regulations and laws, and (iii) the approval of any governmental authority with
jurisdiction over the building in which the Expansion Premises are located,
Tenant shall have the right to install building-side signage similar to that on
the Existing Premises and building door signage with respect to the Expansion
Premises.

        12. Expiration of Lease Term and Expansion Premises Termination Date.
The parties acknowledge that the term of the Lease with respect to the Existing
Premises is currently scheduled to expire on September 30, 2004 (the "EXISTING
PREMISES EXPIRATION DATE"), which date is prior to the Expansion Premises
Expiration Date. Accordingly, as of the Existing Premises Expiration Date, the
Lease shall terminate, in accordance with its terms, as to the Existing
Premises, and the Lease shall remain in full force and effect as to only the
Expansion Premises through the Expansion Premises Expiration Date, unless sooner
terminated in accordance with the Lease. The parties further acknowledge and
agree that, as of the Existing Premises Expiration Date: (i) the amount of Base
Rent that Tenant is obligated to pay under the Lease shall be reduced to the
then applicable monthly Base Rent amount for the Existing Premises as set forth
in Section 5 of this Amendment; and (ii) Tenant's percentage share of Operating
Expenses, Tax Expenses, Common Area Utility Costs, administrative expenses and
Utility Expenses shall be 2.43%.

        13. Authority. Tenant hereby covenants and warrants that (a) Tenant is
in good standing under the laws of the States of California and Delaware, (b)
Tenant has full corporate power and authority to enter into this Amendment and
to perform all Tenant's obligations under the Lease, as amended by this
Amendment, and (c) each person (and all of the persons if more than one signs)
signing this Amendment on behalf of Tenant is duly and validly authorized to do
so.

        14. No Offer. Submission of this instrument for examination and
signature by Tenant does not constitute an offer to lease or a reservation of or
option for lease, and this instrument is not effective as a lease amendment or
otherwise until executed and delivered by both Landlord and Tenant.

        15. Exhibits. Exhibits A-2, G and H attached hereto shall be
incorporated into the Lease, as amended hereby.

        16. Entire Agreement. This Amendment, together with the Lease,
constitutes the entire agreement between Landlord and Tenant regarding the Lease
and the subject matter contained herein and supersedes any and all prior and/or
contemporaneous oral or written negotiations, agreement or understandings.

                                       8
<PAGE>

        17. Incorporation. The Lease, as modified herein, remains in full force
and effect, and the parties hereby ratify the same. This Amendment shall be
binding upon the parties and their respective successors and assigns.

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

LANDLORD:                                   TENANT:

ALTON PLAZA PROPERTY, INC.,                 ISTA PHARMACEUTICALS, INC.,
a Delaware corporation                      a Delaware corporation

By:                                         By:
   -------------------------                   ---------------------------

Name:                                       Name:
     -----------------------                    --------------------------

Title:                                      Title:
     -----------------------                    --------------------------

                                            By:
                                               ---------------------------

                                            Name:
                                                 -------------------------

                                            Title:
                                                  ------------------------

                                       9
<PAGE>

                                   EXHIBIT A-2

                           PLAN OF EXPANSION PREMISES

                                     A-2-1

<PAGE>

                                    EXHIBIT G

                                   SPACE PLAN

                                      G-1

<PAGE>

                                    EXHIBIT H

                           LANDLORD'S SIGNAGE CRITERIA

                                      H-1<PAGE>
                                                                   EXHIBIT 10.16

                                   EXULT, INC.

                        2000 EMPLOYEE STOCK PURCHASE PLAN

      The following constitutes the provisions of the Exult, Inc. 2000 Employee
Stock Purchase Plan (the "PLAN").

1.    PURPOSE.

      The purpose of the Plan is to maintain competitive equity compensation
programs and to provide employees of Exult, Inc. (the "COMPANY") and its
subsidiaries with an opportunity and incentive to acquire a proprietary interest
in the Company through the purchase of the Company's Common Stock, thereby more
closely aligning the interests of the Company's employees and stockholders. It
is the intention of the Company to have the Plan qualify as an "Employee Stock
Purchase Plan" under Section 423 of the Internal Revenue Code of 1986, as
amended ("SECTION 423"). Accordingly, the provisions of the Plan shall be
construed to extend and limit participation consistent with the requirements of
Section 423.

2.    DEFINITIONS.

      Capitalized terms used in this Plan and not otherwise defined have the
meanings set forth below.

      "ADMINISTRATOR" means the Committee, or the Board if the Board asserts
administrative authority over the Plan pursuant to Section 12.

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

      "CHANGE IN CONTROL" means a change in ownership of the Company pursuant to
any of the following transactions:

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

            (ii) a stockholder-approved sale, transfer or other disposition of
      all or substantially all of the assets of the Company, other than in the
      ordinary course of business, or

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

      "CODE" means the Internal Revenue Code of 1986, as amended.
<PAGE>
      "COMMITTEE" means a committee of members of the Board meeting the
qualifications described in Section 12 and appointed by the Board to administer
the Plan.

      "COMMON STOCK" means the Common Stock of the Company.

      "COMPENSATION" means the total cash earnings of a participant. Total cash
earnings shall include (i) the regular base salary paid to a participant by one
or more Participating Companies during such individual's period of participation
in one or more Purchase Periods under the Plan plus (ii) all overtime payments,
bonuses, commissions, profit-sharing distributions or other incentive-type
payments received during such period. Such cash earnings shall be calculated
before deduction of (A) any income or employment tax withholdings or (B) any
contributions made by the participant to any Code Section 401(k) salary deferral
plan or any Code Section 125 cafeteria benefit program now or hereafter
established by the Company. However, cash earnings shall NOT include any
contributions made by the Company or any Subsidiary on the participant's behalf
to any employee benefit or welfare plan now or hereafter established (other than
Code Section 401(k) or Code Section 125 contributions deducted from such cash
earnings).

      "EFFECTIVE DATE" has the meaning specified in Section 14.

      "EMPLOYEE" means any individual employed by the Company or any other
Participating Company on a basis under which he or she is expected to work for
more than 20 hours per week or more than five calendar months per year for
earnings considered wages under Code Section 3401 (a). For purposes of the Plan,
the employment relationship shall be treated as continuing while the individual
is on sick leave or other leave of absence approved by the employer, except that
when the period of leave exceeds 90 days and the individual's right to
reemployment is not guaranteed either by statute or by contract, the employment
relationship will be deemed to have terminated on the 91st day of such leave.

      "ENROLLMENT DATE" means the first day of each Purchase Period, i.e. each
January 1 and July 1 for the duration of the Plan.

      "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

      "EXERCISE DATE" means the last day of each Purchase Period, i.e. June 30
and December 31, as applicable for the duration of the Plan.

      "FAIR MARKET VALUE" of the Common Stock as of the date of any
determination thereof means the value of Common Stock determined as follows:

            (i) If the Common Stock is listed on any established stock exchange
      or trades on the Nasdaq National Market, its Fair Market Value shall be
      the most recent closing sales price for such stock (or the closing bid, if
      no sales were reported), as quoted on such exchange or system (or the
      exchange or system with the greatest volume of trading in the Common
      Stock) as of the date of such determination as reported in the Wall Street
      Journal or such other source as the Administrator deems reliable; or

            (ii) If the Common Stock is quoted on the Nasdaq Stock Market (but
      not on the Nasdaq National Market) or is regularly quoted by a recognized
      securities dealer but selling prices are not reported, its Fair Market
      Value shall be the mean between the high and low asked prices for the
      Common Stock on the date of such determination (or, if

                                       2
<PAGE>
      such date is not a Trading Day, then on the next preceding Trading Day),
      as reported in the Wall Street Journal or such other source as the
      Administrator deems reliable; or

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

      "OPTION" means the option granted to each participant pursuant to Section
4 upon enrollment in the Plan.

      "PARTICIPATING COMPANIES"" mean the Company and such Subsidiaries as may
be authorized from time to time by the Administrator to allow their Employees to
participate in the Plan.

      "PERIODIC EXERCISE LIMIT" has the meaning set forth in Section 4(a).

      "PLAN ACCOUNT" means an account maintained by the Company for each
participant in the Plan, to which are added the payroll deductions made for such
participant pursuant to Section 5 and from which are deducted amounts paid for
the purchase of shares upon exercise of such participant's Options pursuant to
Section 6.

      "PURCHASE PERIOD" means each period of January 1 to June 30 and July 1 to
December 31 during the term of the Plan. The Administrator shall have the power
to change the duration of Purchase Periods without stockholder approval if such
change is announced at least fifteen (15) days prior to the scheduled beginning
of the first Purchase Period to be affected.

      "PURCHASE PRICE" on any Exercise Date means an amount equal to 85% of the
lower of (i) the Fair Market Value of a share of Common Stock on that Exercise
Date or (ii) the Fair Market Value of a share of Common Stock on the Enrollment
Date for the Purchase Period ending on that Exercise Date.

      "RESERVES" means the number of shares of Common Stock covered by each
Option that have not yet been exercised and the number of shares of Common Stock
that have been authorized for issuance under the Plan, but not yet placed under
Option.

      "STOCK PLAN MANAGER" means the person and/or entity designated by the
Company from time to time to accept notices, process subscriptions, terminations
and changes, and perform other tasks related to administration of the Plan.

      "SUBSIDIARY" has the meaning as set forth under ss. 424(f) of the Code.

      "TRADING DAY" means a day on which national stock exchanges and the Nasdaq
National Market (or other market or exchange upon which the Common Stock
principally trades) is open for trading.

3.    PURCHASE PERIODS AND PARTICIPATION.

      The Plan shall be implemented through a series of consecutive Purchase
Periods. An Employee may enroll in the Plan by delivering an enrollment form in
the form of Exhibit A hereto to the Stock Plan Manager. Each enrollment form
shall take effect, and the Employee submitting the enrollment form shall be a
Plan participant, as of the next

                                       3
<PAGE>
Enrollment Date occurring at least ten days after the filing of such enrollment
form with the Stock Plan Manager. An enrollment form in effect for a Plan
participant (as such enrollment form may be changed pursuant to Section 5) shall
continue in effect for all Purchase Periods beginning with the effectiveness of
the enrollment form if the participant remains an Employee and has not withdrawn
pursuant to Section 7.

4.    OPTIONS.

      (a) Grants. On the Enrollment Date for each Purchase Period, each Employee
enrolled in such Purchase Period shall be granted an Option to purchase on the
Exercise Date at the end of that Purchase Period (at the applicable Purchase
Price) up to that number of shares of Common Stock determined by dividing
$12,500 by the Fair Market Value of a share of Common Stock as of the opening of
business on the Enrollment Date (such number of shares being the "PERIODIC
EXERCISE LIMIT"). Each Option shall expire immediately after the Exercise Date
at the end of that Purchase Period for which the Option was granted.

      (b) Grant Limitations. Any provisions of the Plan to the contrary
notwithstanding, no participant shall be granted an Option under the Plan:

            (i) if, immediately after the grant, such participant (or any other
      person whose stock would be attributed to such Employee pursuant to
      Section 424(d) of the Code) would own stock and/or hold outstanding
      options to purchase stock possessing five percent (5%) or more of the
      total combined voting power or value of all classes of stock of the
      Company or of any Subsidiary; or

            (ii) which permits such participant's rights to purchase stock under
      all employee stock purchase plans of the Company and its Subsidiaries to
      accrue at a rate that exceeds Twenty-Five Thousand Dollars ($25,000) worth
      of stock (determined at the Fair Market Value of the shares at the time
      such Options are granted) in any calendar year.

      (c) No Rights in Respect of Underlying Stock. The participant will have no
interest or voting right in shares covered by an Option until such Option has
been exercised.

5.    PAYROLL DEDUCTIONS.

      (a) Participant Designations. The enrollment form applicable to a Purchase
Period shall designate payroll deductions to be made on an after-tax basis on
each payday during the Purchase Period as a whole number percentage not
exceeding ten percent (10%) of such Employee's Compensation for the pay period
corresponding to such payday.

      (b) Plan Account Balances. The Company shall make payroll deductions as
specified in each participant's enrollment form on each payday during the
Purchase Period and add such payroll deductions to such participant's Plan
Account. A participant may not make any additional payments into such Plan
Account. No interest will accrue on any payroll deductions. All payroll
deductions received or held by the Company under the Plan may be used by the
Company for any corporate purpose, and the Company shall not be obligated to
segregate such payroll deductions.

                                       4
<PAGE>
      (c) Participant Changes. A participant may discontinue his or her
participation in the Plan as provided in Section 7. A participant may increase
or decrease his or her rate of payroll deductions by filing with the Stock Plan
Manager a new enrollment form authorizing the change. Such change shall become
effective as of the Enrollment Date for the first Purchase Period beginning at
least ten days after the filing of the new enrollment form with the Stock Plan
Manager.

      (d) Decreases. Notwithstanding the foregoing, to the extent necessary to
comply with Section 423(b)(8) of the Code and Section 4(b) herein, a
participant's payroll deductions may be decreased to 0% at such time during any
Purchase Period that is scheduled to end during a calendar year (the "CURRENT
PURCHASE PERIOD") when the aggregate of all payroll deductions previously used
to purchase stock under the Plan in a prior Purchase Period which ended during
that calendar year plus all payroll deductions accumulated with respect to the
Current Purchase Period equal $21,250. Payroll deductions shall recommence at
the rate provided in such participant's enrollment form at the beginning of the
first Purchase Period that is scheduled to end in the following calendar year,
unless terminated by the participant as provided in Section 7.

      (e) Tax Obligations. At the time of each exercise of a participant's
Option, and at the time any Common Stock issued under the Plan to a participant
is disposed of, the participant must adequately provide for the Company's
federal, state, or other tax withholding obligations, if any, that arise upon
the exercise of the Option or the disposition of the Common Stock. At any time,
the Company may, but will not be obligated to, withhold from the participant's
compensation the amount necessary for the Company to meet applicable withholding
obligations, including any withholding required to make available to the Company
any tax deductions or benefit attributable to sale or early disposition of
Common Stock by the Employee.

      (f) Statements of Account. The Company shall maintain each participant's
Plan Account and shall give each Plan participant a statement of account at
least annually. Such statements will set forth the amounts of payroll
deductions, the Purchase Price, the number of shares purchased and the remaining
cash balance, if any, for the period covered.

6.    EXERCISE OF OPTIONS.

      (a) Automatic Exercise on Exercise Dates. Unless a participant withdraws
as provided in Section 7, his or her Option for a Purchase Period will be
exercised automatically on the Exercise Date at the end of that Purchase Period
for the maximum number of shares of Common Stock, including fractional shares,
that can then be purchased at the applicable Purchase Price with the payroll
deductions (including deductions from a payday coincident with the Exercise
Date) accumulated in such participant's Plan Account and not yet applied to the
purchase of shares under the Plan, subject to the Periodic Exercise Limit.
During a participant's lifetime, a participant's Options to purchase shares
hereunder are exercisable only by the participant.

      (b) Delivery of Shares. As promptly as practicable after each Exercise
Date on which a purchase of shares occurs, the Company shall arrange the
issuance of the shares purchased on behalf of each Participant whose Option is
exercised at that time. The Company may deliver a stock certificate for the
purchased shares or arrange a book entry transfer representing the shares,
provided that the Company may in its discretion hold fractional shares for the
accounts of the participants pending aggregation to whole shares.

                                       5
<PAGE>
Shares purchased under the Plan may be issued to the participant or the
participant and his or her spouse or a trust designated by the participant in
which the employee and his or her spouse are the sole trustees and
beneficiaries.

      (c) Compliance with Law. Shares shall not be issued with respect to an
Option unless the exercise of such Option and the issuance and delivery of such
shares pursuant thereto comply with all applicable provisions of law, domestic
or foreign, including, without limitation, the Securities Act of 1933, as
amended, the Exchange Act, the rules and regulations promulgated thereunder, and
the requirements of any stock exchange or market system upon which the shares
may then be listed or traded, 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 participant for whom an
Option is exercised 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
applicable provisions of law. Shares issued upon purchase under the Plan may be
subject to such transfer restrictions and stop-transfer instructions as the
Administrator deems appropriate.

      (d) Excess Plan Account Balances. If, due to application of the Periodic
Exercise Limit, there remains in a participant's Plan Account immediately
following exercise of such participant's Option on an Exercise Date any cash
accumulated prior to such Exercise Date and not applied to the purchase of
shares under the Plan, such cash shall promptly be returned to the participant.

7.    VOLUNTARY WITHDRAWAL; TERMINATION OF EMPLOYMENT.

      (a) Voluntary Withdrawal. A participant may withdraw from a Purchase
Period, at any time on or before the fifth business day before the Exercise Date
for that Purchase Period, by giving written notice to the Stock Plan Manager in
the form of Exhibit B hereto or in such other form and according to the
procedures specified by the Stock Plan Manager from time to time. Such
withdrawal shall be effective five business days after receipt by the Stock Plan
Manager of notice thereof. On or promptly following the effective date of any
withdrawal, all (but not less than all) of the withdrawing participant's payroll
deductions added to his or her Plan Account and not yet applied to the purchase
of shares under the Plan will be paid to such participant, and on the effective
date of such withdrawal such participant's Option for the Purchase Period will
be automatically terminated, and no further payroll deductions for the purchase
of shares will be made during the Purchase Period. If a participant withdraws
from a Purchase Period, payroll deductions will not resume at the beginning of
any succeeding Purchase Period unless the participant delivers to the Company a
new enrollment form with respect thereto.

      (b) Termination of Employment. Promptly after a participant's ceasing to
be an Employee for any reason the payroll deductions added to such participant's
Plan Account and not yet applied to the purchase of shares under the Plan will
be returned to such participant or, in the case of his or her death, to the
person or persons entitled thereto under Section 9, and such participant's
Option will be automatically terminated, provided that, if the Company does not
learn of such death more than five (5) business days prior to an Exercise Date,
payroll deductions added to such participant's Plan account may be applied to
the purchase of shares under the Plan on such Exercise Date.

                                       6
<PAGE>
8.    TRANSFERABILITY.

      Neither payroll deductions added to a participant's Plan Account nor any
rights with regard to the exercise of an Option or to receive shares under the
Plan may be assigned, transferred, pledged or otherwise disposed of by the
participant in any way other than by will, the laws of descent and distribution
or as provided in Section 9 hereof. Any such attempt at assignment, transfer,
pledge or other disposition shall be without effect, except that the
Administrator may treat such act as an election to withdraw from a Purchase
Period in accordance with Section 7.

9.    DESIGNATION OF BENEFICIARY.

      A participant may file a written designation of a beneficiary who is to
receive any cash from the participant's Plan Account in the event of such
participant's death and any shares purchased for the participant upon exercise
of his or her Option but not yet issued. If a participant is married and the
designated beneficiary is not the spouse, spousal consent may be required for
such designation to be effective. A designation of beneficiary may be changed by
a participant at any time by written notice to the Stock Plan Manager. In the
event of the death of a participant and in the absence of a beneficiary validly
designated under the Plan who is living at the time of such participant's death,
the Company shall deliver such shares and/or cash to the executor or
administrator of the estate of the participant, or if no such executor or
administrator has been appointed (to the knowledge of the Company), the Company,
in its discretion, may deliver such shares and/or cash to the spouse or to any
one or more dependents or relatives of the participant, or if no spouse,
dependent or relative is known to the Company, then to such other person as the
Company may designate.

10.   STOCK.

      The maximum number of shares of the Company's Common Stock that shall be
made available for sale under the Plan and any other employee stock purchase
plans maintained by the Company from time to time shall be 2,000,000 shares,
subject to adjustment upon changes in capitalization of the Company as provided
in Section 11. Any sales of shares of the Company's Common Stock under other
employee stock purchase plans maintained by the Company from time to time will
reduce, on a share-for-share basis, the number of shares remaining available for
sale under this Plan. If on a given Enrollment Date or Exercise Date the number
of shares with respect to which Options are to be granted or exercised exceeds
the number of shares then available under the Plan, the Administrator shall make
a pro rata allocation of the shares remaining available for purchase in as
uniform a manner as shall be practicable and as it shall determine to be
equitable. Shares of Common Stock subject to unexercised Options that expire,
terminate or are cancelled will again become available for the grant of further
Options under the Plan.

11.   ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, MERGER OR ASSET
      SALE.

      (a) Changes in Capitalization. Subject to any required action by the
stockholders of the Company, the Reserves as well as the Purchase Price,
Periodic Exercise Limit, and other characteristics of the Options, shall be
appropriately and proportionately adjusted for any increase or decrease or
exchange in the issued shares of Common Stock resulting from a stock split,
reverse stock split, stock dividend, combination or reclassification of the
Common Stock, exchange or any other increase or decrease in the number of shares
of Common Stock effected without receipt of consideration by the

                                       7
<PAGE>
Company; provided, however, that conversion of any convertible securities of the
Company shall not be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the Administrator, whose
determination in that respect shall be final, binding and conclusive. Except as
expressly provided herein, no issue 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 of Common Stock subject to an Option. The
Administrator may, if it so determines in the exercise of its sole discretion,
provide for adjusting the Reserves, as well as the Purchase Price, Periodic
Exercise Limit, and other characteristics of the Options, in the event the
Company effects one or more reorganizations, recapitalizations, rights offerings
or other increases or reductions of shares of its outstanding Common Stock.

      (b) Dissolution or Liquidation. In the event of the proposed dissolution
or liquidation of the Company, all pending Purchase Periods will terminate
immediately prior to the consummation of such proposed action, unless otherwise
provided by the Administrator, and all Plan Account balances will be paid to
participants as appropriate consistent with applicable law.

      (c) Change in Control. Each outstanding Option shall automatically be
exercised, immediately prior to any Change in Control, by applying the payroll
deductions of each participant for the Purchase Period in which such Change in
Control occurs to the purchase of whole shares of Common Stock at a purchase
price per share equal to eighty-five percent (85%) of the lower of (i) the Fair
Market Value per share of Common Stock on the Enrollment Date of the Purchase
Period in which such Change in Control occurs or (ii) the Fair Market Value per
share of Common Stock immediately prior to such Change in Control. However, the
applicable Periodic Exercise Limit per participant shall continue to apply to
any such purchase.

      The Company shall use its best efforts to provide at least ten (10) days'
prior written notice of the occurrence of any Change in Control, and the
participants shall, following the receipt of such notice, have the right to
withdraw from the Purchase Period prior to the Change in Control.

12.   ADMINISTRATION.

      The Plan shall be administered by the Committee, which shall have the
authority to construe, interpret and apply the terms of the Plan and any
agreements defining the rights and obligations of the Company and participants
under the Plan, to prescribe, amend, and rescind rules and regulations relating
to the Plan, to determine eligibility and to adjudicate all disputed claims
filed under the Plan, and to make all other determinations necessary or
advisable for the administration of the Plan. The Administrator may, in its
discretion, delegate ministerial responsibilities under the Plan to the Company.
Every finding, decision and determination made by the Committee shall, to the
full extent permitted by law, be final and binding upon all parties. Any action
of the Committee shall be taken pursuant to a majority vote or by the unanimous
written consent of its members. The Committee shall be constituted so as to
comply with or preserve the qualifications of the Plan under Section 423, and
any other applicable law or regulation, as appropriate. The Board may from time
to time in its discretion exercise any responsibilities or authority allocated
to the Committee under the Plan. No member of the Committee or any designee
thereof will be liable for any action or determination made in good faith with
respect to the Plan or any transaction arising under the Plan.

                                       8
<PAGE>
13.   AMENDMENT OR TERMINATION.

      (a) Administrator's Discretion. The Administrator may, at any time and for
any reason, terminate or amend the Plan. Except as provided in Section 11, no
such termination can affect Options previously granted, provided that a Purchase
Period may be terminated by the Administrator on or before its Exercise Date if
the Administrator determines that such termination is in the best interests of
the Company and its stockholders. Except as provided herein, no amendment may
make any change in any Option theretofore granted that adversely affects the
rights of any participant. To the extent necessary to comply with and qualify
under Section 423 and any successor rule or provision and any other applicable
law or regulation, the Administrator shall obtain stockholder approval of
amendments to the Plan in such a manner and to such a degree as required.

      (b) Administrative Modifications. Without stockholder consent (except as
specifically required by applicable law or regulation) and without regard to
whether any participant rights may be considered to have been "adversely
affected," the Administrator shall be entitled to amend the Plan to the extent
necessary to comply with and qualify under Section 423 and any successor rule or
provision and any other applicable law or regulation, change the Purchase
Periods, impose, increase or reduce any requirement that shares of Common Stock
purchased upon exercise of Options be held prior to transfer, change the
frequency and/or number of permitted changes in payroll deductions during
Purchase Periods, establish the exchange ratio applicable to amounts withheld in
a currency other than U.S. dollars, permit payroll withholding in excess of the
amount designated by a participant to adjust for delays or mistakes in the
processing of properly completed withholding elections, establish reasonable
waiting and adjustment periods and/or accounting and crediting procedures to
ensure that amounts applied toward the purchase of Common Stock for each
participant properly correspond with amounts withheld from the participant's
Compensation, and establish such other limitations or procedures as the
Administrator determines in its sole discretion to be advisable and which are
consistent with the Plan.

14.   TERM OF PLAN.

      The Plan shall become effective on July 1, 2000 (the "EFFECTIVE DATE"),
provided that the Plan has been approved by the stockholders of the Company
before such date. After becoming effective, the Plan shall continue in effect
for a term of twenty (20) years unless sooner terminated pursuant to the terms
of the Plan.

15.   MISCELLANEOUS.

      (a) Notices. All notices or other communications by a participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.

      (b) Other Participating Companies. The Administrator may from time to time
in its discretion allow the Employees of one or more Subsidiaries to participate
in the Plan upon the same terms and conditions, and subject to the same
limitations and restrictions, as the Employees of the Company who are at the
time participating in the Plan.

      (c) No Employment Rights. The Plan does not, directly or indirectly,
create any right for the benefit of an employee or class of employees to
purchase any shares under the Plan, or create in any employee or class of
employees any right with respect to

                                       9
<PAGE>
continuation of employment by the Company, and it shall not be deemed to
interfere in any way with the Company's right to terminate, or otherwise modify,
an employee's employment at any time.

      (d) Applicable Law. The laws of the State of California shall govern all
matters relating to the Plan, except to the extent (if any) superseded by the
laws of the United States.

      (e) Headings. Headings used herein are for convenience of reference only
and do not affect the meaning or interpretation of the Plan.

                                       10
<PAGE>
                                    EXHIBIT A

                                   EXULT, INC.
                          EMPLOYEE STOCK PURCHASE PLAN
                                 ENROLLMENT FORM

_____ Original Application

_____ Change in Payroll Deduction Rate

_____ Change of Beneficiary/Beneficiaries

By signing this Enrollment Form for the Exult, Inc. Employee Stock Purchase
Plan, I agree to the following statements, terms and conditions:

1.    I elect to participate in the Exult, Inc. Employee Stock Purchase Plan
      (and in successive purchase periods under the Plan), and subscribe to
      purchase shares of common stock of Exult, Inc. in accordance with the
      terms of this Enrollment Form and the Plan.

2.    I have specified a percentage below and I authorize Exult to deduct that
      percentage of my Compensation from each of my paychecks on an after-tax
      basis. I understand that these deductions will continue as long as I am a
      participant in the Plan.

3.    I understand that Exult will accumulate my payroll deductions and that if
      I do not withdraw from the Plan on or before the fifth business day before
      the exercise date for a purchase period, Exult will automatically use my
      accumulated payroll deductions to purchase shares of Exult, Inc. common
      stock on the last day of that purchase period.

4.    I understand a copy of the complete Plan is available to me on the Exult
      internal website and agree to be bound by its terms. I understand that my
      participation in the Plan is in all respects subject to my eligibility and
      other terms of the Plan. I also understand that, in case of any
      inconsistency between this Enrollment Form and the Plan, the Plan shall
      govern.

TO SUBSCRIBE, PLEASE COMPLETE ALL OF THE FOLLOWING:

- Circle the applicable Enrollment Date:        January 1         July 1
     (This form must be received by Exult Employee Benefits at least 10 days
     before the date you circle. Follow instructions at the end of the next
     page. )

- Percentage amount of my Compensation to be deducted from each paycheck:
     (Circle one - must be a whole percentage, not to exceed 10%.)

                        0  1  2  3  4  5  6  7  8  9  10

- Shares purchased for me under the plan are to be issued in the following name:

-------------------------------------------
(Note: Shares may be issued only in the name(s) of the employee or the employee
and his or her spouse or any trust in which the employee and his or her spouse
are the sole trustees and beneficiaries.)

I UNDERSTAND THAT THIS ENROLLMENT FORM SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE PURCHASE PERIODS UNLESS TERMINATED BY ME.

---------------------------------    ----------------------------      ---------
Employee's Signature                 Printed Name                      Date

                                       1
<PAGE>
                             BENEFICIARY DESIGNATION

         In the event of my death, I hereby designate the following as my
beneficiary/beneficiaries to receive (in proportion to the percentages listed
below) all payments and shares due me under the Plan. (If necessary, use
additional sheets to add beneficiaries.):

                  Beneficiary name: (Please print):

                  ______________________________________________________________
                         (First)        (Middle)                (Last)

                  Beneficiary Address

                  ______________________________________________________________

                  ______________________________________________________________

                  Relationship:  _________________      Percentage: ________%

                  Beneficiary name: (Please print)

                  ______________________________________________________________
                         (First)        (Middle)                (Last)

                  Beneficiary Address

                  ______________________________________________________________

                  ______________________________________________________________

                  Relationship:  _________________      Percentage: ________%

_________________________________________       ________________________________
Employee's Signature                            Date

________________________________________________________________________________
Employee's Name Printed                        Employee's Social Security Number

_______________________________________
Spouse's Signature (if you've listed a beneficiary or beneficiaries other than
your spouse

Employee's Address:
                                ________________________________________

                                ________________________________________

FAX THIS ENROLLMENT FORM (PAGE 1 AND PAGE 2) TO THE EXULT EMPLOYEE BENEFITS
DEPARTMENT: (281) 298-0564

RETAIN THIS ORIGINAL COPY AND YOUR FAX CONFIRMATION FOR YOUR RECORDS.

                                       2
<PAGE>
                                    EXHIBIT B

                          EMPLOYEE STOCK PURCHASE PLAN

                                 WITHDRAWAL FORM

Instructions: Complete and fax to Employee Benefits (281) 298-0564, retain this
form and your fax transmittal for your records.

      I hereby elect to withdraw from the Purchase Period. I understand that:

      -     Employee Benefits must receive this form at least five or more
            business days before the purchase date (January 1 or July 1) in
            order to withdraw during the current purchase period.

      -     My withdrawal from participation will be effective five business
            days after receipt of this form by Employee Benefits.

      -     On or following the effective date of withdrawal from participation,
            all payroll deductions for the purchase period will be refunded to
            me as soon as administratively possible through the normal payroll
            process. No further payroll deductions will be taken to purchase
            shares during the purchase period.

      -     I must submit a new enrollment form to begin participation again and
            the form must be received at least 10 days prior to a succeeding
            purchase period.

_________________________________________      _________________________________
Employee's Signature                           Employee's Social Security Number

_________________________________________      _________________________________
Employee's Signature                           Date

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