Document:

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                                                  [Warrant issued for conversion
                                                   of B to A Stock Shareholders]

THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SHARES ISSUABLE UPON
EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS AND NEITHER SUCH SECURITIES
NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE
TRANSFERRED, EXCEPT IN ACCORDANCE WITH SECTION 3(B) HEREOF.

                                 ECHOCATH, INC.

          Warrants for the Purchase of Shares of Class A Common Stock,
                             no par value per share

                       Expiration Date: September 8, 2004

No. BA ._______                                                 _______ Warrants

                  THIS CERTIFIES that, for value received, Shareholder, with an
address Shareholder's address (including any permitted transferee, the
"Holder"), is the registered holder of the number of warrants set forth above,
each of which represents the right to purchase one fully paid and nonassessable
share of the Class A common stock, no par value ("Common Stock"), of EchoCath,
Inc., a New Jersey corporation (the "Company"), at an initial exercise price
equal to $0.75 (Seventy-Five Cents) per share, subject to adjustment as provided
herein (the "Exercise Price"), upon the terms and conditions set forth herein,
at any time or from time to time before 5:00 P.M., Eastern Standard time on
September 8, 2004 (the "Exercise Period").

         This warrant certificate is one of a series of warrant certificates
evidencing warrants by the (collectively, including any warrants issued upon the
exercise or transfer of any such warrants in whole or in part, the "Warrants")
issued in connection with the conversion of shares of Class B Common Stock into
Class A Common Stock by the original Holder hereof. The Class B Common Stock
conversion was a condition precedent to an offering (the "Offering") by the
Company of units each full unit consisting of (i) a 6 1/2% convertible
promissory note in the principal amount of $25,000 (collectively, with all notes
included in the units, the "Notes"), and (ii) a warrant to purchase 33,333
shares of Common Stock, pursuant to a Confidential Information Memorandum, dated
March 17, 1999, as it may be amended or supplemented (the "Memorandum"). As used
herein, the term "this Warrant" shall mean and include this Warrant and any
Warrant or Warrants hereafter issued as a consequence of the exercise or
transfer of this Warrant in whole or in part.

                  The number of shares of Common Stock issuable upon exercise of
these Warrants (the "Warrant Shares") and the Exercise Price may be adjusted
from time to time as hereinafter set forth.

                  The Holder is entitled to registration rights with respect to
the Warrant Shares consistent with the registration rights granted to investors
in the Offering as described in the subscription agreement between the Company
and Investors in the Offering.

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         1. This Warrant may be exercised during the Exercise Period, as to the
full number of Warrant Shares underlying the Warrants evidenced by this warrant
certificate (or any lesser portion thereof in increments of 1000 Warrant Shares
or lesser number of Warrant Shares then remaining unexercised), by the surrender
of this Warrant (with the election at the end hereof duly executed) to the
Company, 4326 US Route 1, Monmouth Junction, New Jersey 08852, Attention: Mr.
Frank DeBernardis, or at such other place as is designated in writing by the
Company. Such executed election must be accompanied by payment in an amount
equal to the Exercise Price multiplied by the number of Warrant Shares for which
this Warrant is being exercised. Such payment may be made by certified or bank
cashier's check payable to the order of the Company.

         2. Upon each exercise of the Holder's rights to purchase Warrant
Shares, the Holder shall be deemed to be the holder of record of the Warrant
Shares issuable upon such exercise, notwithstanding that the transfer books of
the Company shall then be closed or certificates representing such Warrant
Shares shall not then have been actually delivered to the Holder. As soon as
practicable after each such exercise of this Warrant, the Company shall issue
and deliver to the Holder a certificate or certificates for the Warrant Shares
issuable upon such exercise, registered in the name of the Holder or its
designee. If this Warrant should be exercised in part only, the Company shall,
upon surrender of this Warrant for cancellation, execute and deliver a new
Warrant evidencing the right of the Holder to purchase the balance of the
Warrant Shares (or portions thereof) subject to purchase hereunder.

         3. (a) Any Warrants issued upon the transfer or exercise in part of
this Warrant shall be numbered and shall be registered in a Warrant Register as
they are issued. The Company shall be entitled to treat the registered holder of
any Warrant on the Warrant Register as the owner in fact thereof for all
purposes and shall not be bound to recognize any equitable or other claim to or
interest in such Warrant on the part of any other person, and shall not be
liable for any registration or transfer of Warrants which are registered or to
be registered in the name of a fiduciary or the nominee of a fiduciary unless
made with the actual knowledge that a fiduciary or nominee is committing a
breach of trust in requesting such registration or transfer, or with the
knowledge of such facts that its participation therein amounts to bad faith.
This Warrant shall be transferable only on the books of the Company upon
delivery thereof duly endorsed by the Holder or by his duly authorized attorney
or representative, or accompanied by proper evidence of succession, assignment,
or authority to transfer. In all cases of transfer by an attorney, executor,
administrator, guardian, or other legal representative, duly authenticated
evidence of his or its authority shall be produced. Upon any registration of
transfer, the Company shall deliver a new Warrant or Warrants to the person
entitled thereto. This Warrant may be exchanged, at the option of the Holder
thereof, for another Warrant, or other Warrants of different denominations, of
like tenor and representing in the aggregate the right to purchase a like number
of Warrant Shares (or portions thereof), upon surrender to the Company or its
duly authorized agent. Notwithstanding the foregoing, the Company shall have no
obligation to cause Warrants to be transferred on its books to any person if, in
the opinion of counsel to the Company, such transfer does not comply with the
provisions of the Act and the rules and regulations thereunder.

                                       2
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            (b) The Holder acknowledges that the Holder has been advised by the
Company that neither this Warrant nor the Warrant Shares have been registered
under the Act, that this Warrant is being or has been issued and the Warrant
Shares may be issued on the basis of the statutory exemption provided by Section
4(2) of the Act or Regulation D promulgated thereunder, or both, relating to
transactions by an issuer not involving any public offering, and that the
Company's reliance thereon is based in part upon the representations made by the
original Holder in the Subscription Agreement. The Holder acknowledges that he
has been informed by the Company of, or is otherwise familiar with, the nature
of the limitations imposed by the Act and the rules and regulations thereunder
on the transfer of securities. In particular, the Holder agrees that no sale,
assignment or transfer of this Warrant or the Warrant Shares issuable upon
exercise hereof shall be valid or effective, and the Company shall not be
required to give any effect to any such sale, assignment or transfer, unless (i)
the sale, assignment or transfer of this Warrant or such Warrant Shares is
registered under the Act, it being understood that neither this Warrant nor such
Warrant Shares are currently registered for sale and that the Company has no
obligation or intention to so register this Warrant or such Warrant Shares
except as specifically provided herein, or (ii) this Warrant or such Warrant
Shares are sold, assigned or transferred in accordance with all the requirements
and limitations of Rule 144 promulgated under the Act, it being understood that
Rule 144 is not available at the time of the original issuance of this Warrant
for the sale of this Warrant or such Warrant Shares and that there can be no
assurance that Rule 144 sales will be available at any subsequent time, or (iii)
the Company receiving an opinion of counsel satisfactory to it that such sale,
assignment, or transfer is otherwise exempt from registration under the Act.

         4. The Company shall at all times reserve and keep available out of its
authorized and unissued Common Stock, solely for the purpose of providing for
the exercise of the rights to purchase all Warrant Shares granted pursuant to
the Warrants, such number of shares of Common Stock as shall, from time to time,
be sufficient therefor. The Company covenants that all shares of Common Stock
issuable upon exercise of this Warrant, upon receipt by the Company of the full
purchase price therefor, shall be validly issued, fully paid, nonassessable, and
free of preemptive rights.

         5. (a) In case the Company shall at any time after the date the
Warrants were first issued (i) declare a dividend on the outstanding Common
Stock payable in shares of its capital stock, (ii) subdivide the outstanding
Common Stock, (iii) combine the outstanding Common Stock into a smaller number
of shares, or (iv) issue any shares of its capital stock by reclassification of
the Common Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing corporation),
then, in each case, the Exercise Price, and the number of Warrant Shares
issuable upon exercise of this Warrant, in effect at the time of the record date
for such dividend or of the effective date of such subdivision, combination, or
reclassification, shall be proportionately adjusted so that the Holder after
such time shall be entitled to receive the aggregate number and kind of shares
which, if such Warrant had been exercised immediately prior to such time, he
would have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination, or reclassification. Such adjustment
shall be made successively whenever any event listed above shall occur.

            (b) No adjustment in the Exercise Price shall be required if such
adjustment is less than $.10 (which amount will be proportionately adjusted in
the event of stock splits or the like); provided, however, that any adjustments
which by reason of this Section 5 are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 5 shall be made to the nearest cent or to the nearest
one-thousandth of a share, as the case may be.

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            (c) In any case in which this Section 5 shall require that an
adjustment in the Exercise Price be made effective as of a record date for a
specified event, the Company may elect to defer, until the occurrence of such
event, issuing to the Holder, if the Holder exercised this Warrant after such
record date, the shares of Common Stock, if any, issuable upon such exercise
over and above the shares of Common Stock, if any, issuable upon such exercise
on the basis of the Exercise Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to the Holder a due bill or other
appropriate instrument evidencing the Holder's right to receive such additional
shares upon the occurrence of the event requiring such adjustment.

            (d) Whenever there shall be an adjustment as provided in this
Section 5, the Company shall promptly cause written notice thereof to be sent by
certified or registered mail, postage prepaid, to the Holder, at its address as
it shall appear in the Warrant Register, which notice shall be accompanied by an
officer's certificate setting forth the number of Warrant Shares purchasable
upon the exercise of this Warrant and the Exercise Price after such adjustment
and setting forth a brief statement of the facts requiring such adjustment and
the computation thereof, which officer's certificate shall be conclusive
evidence of the correctness of any such adjustment absent manifest error.

            (e) The Company shall not be required to issue fractions of shares
of Common Stock or other capital stock of the Company upon the exercise of this
Warrant. If any fraction of a share would be issuable on the exercise of this
Warrant (or specified portions thereof), the Company shall purchase such
fraction for an amount in cash equal to the same fraction of the market price of
such share of Common Stock on the date of exercise of this Warrant, as
determined in good faith by the Company's Board of Directors.

         6. (a) In case of any consolidation with or merger of the Company with
or into another corporation (other than a merger or consolidation in which the
Company is the surviving or continuing corporation), or in case of any sale,
lease, or conveyance to another corporation of the property and assets of any
nature of the Company as an entirety or substantially as an entirety, such
successor, leasing, or purchasing corporation, as the case may be, shall (i)
execute with the Holder an agreement providing that the Holder shall have the
right thereafter to receive upon exercise, of this Warrant solely the kind and
amount of shares of stock and other securities, property, cash, or any
combination thereof receivable upon such consolidation, merger, sale, lease, or
conveyance by a holder of the number of shares of Common Stock for which this
Warrant might have been exercised immediately prior to such consolidation,
merger, sale, lease, or conveyance, and (ii) make effective provision in its
certificate of incorporation or otherwise, if necessary, to effect such
agreement. Such agreement shall provide for adjustments which shall be as nearly
equivalent as practicable to the adjustments in Section 5 above.

                                       4
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            (b) Notwithstanding anything to the contrary herein contained, in
the event of a transaction contemplated by Section 6(a) in which the surviving,
continuing, successor, or purchasing corporation demands that all outstanding
convertible notes and warrants be extinguished prior to the closing date of the
contemplated transaction, the Company shall give prior notice (the "Merger
Notice") thereof to the Holders advising them of such transaction. The Holders
shall have ten days after the date of the Merger Notice to elect to (i) exercise
the Warrants in the manner provided herein or (ii) receive from the surviving,
continuing, successor, or purchasing corporation the same consideration
receivable by a holder of the number of shares of Common Stock for which this
Warrant might have been exercised immediately prior to such consolidation,
merger, sale, or purchase reduced by such amount of the consideration as has a
market value equal to the Exercise Price, as determined by the board of
directors of the Company, whose determination shall be conclusive absent
manifest error. If any Holder fails to timely notify the Company of its
election, the Holder shall be deemed for all purposes to have elected the option
set forth in (ii) above. Any amounts receivable by a Holder who has elected the
option set forth in (ii) above shall be payable at the same time as amounts
payable to stockholders in connection with any such transaction.

            (c) The above provisions of this Section 6 shall similarly apply to
successive reclassifications and changes of shares of Common Stock and to
successive consolidations, mergers, sales, leases, or conveyances.

         7. In case at any time the Company shall propose to:

            (a) pay any dividend or make any distribution on shares of Common
Stock in shares of Common Stock or make any other distribution (other than
regularly scheduled cash dividends which are not in a greater amount per share
than the most recent such cash dividend) to all holders of Common Stock; or

            (b) issue any rights, warrants, or other securities to all holders
of Common Stock entitling them to purchase any additional shares of Common Stock
or any other rights, warrants, or other securities; or

            (c) effect any reclassification or change of outstanding shares of
Common Stock, or any consolidation, merger, sale, lease, or conveyance of
property, described in Section 6; or

            (d) effect any liquidation, dissolution, or winding-up of the
Company;

then, and in any one or more of such cases, the Company shall give written
notice thereof, by certified or registered mail, postage prepaid, to the Holder
at the Holder's address as it shall appear in the Warrant Register, mailed at
least 10 days prior to (i) the date as of which the holders of record of shares
of Common Stock to be entitled to receive any such dividend, distribution,
rights, warrants, or other securities are to be determined, (ii) the date on
which any such reclassification, change of outstanding shares of Common Stock,
consolidation, merger, sale, lease, conveyance of property, liquidation,
dissolution, or winding-up is expected to become effective, and the date as of
which it is expected that holders of record of shares of Common Stock shall be
entitled to exchange their shares for securities or other property, if any,
deliverable upon such reclassification, change of outstanding shares,
consolidation, merger, sale, lease, conveyance of property, liquidation,
dissolution, or winding-up, or (iii) the date of such action which would require
an adjustment to the Exercise Price.

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         8. The issuance of any shares or other securities upon the exercise of
this Warrant, and the delivery of certificates or other instruments representing
such shares or other securities, shall be made without charge to the Holder for
any tax or other charge in respect of such issuance. The Company shall not,
however, be required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of any certificate in a name other
than that of the Holder and the Company shall not be required to issue or
deliver any such certificate unless and until the person or persons requesting
the issue thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.

         9. The Warrant Shares issued upon exercise of the Warrants shall be
subject to a stop transfer order and the certificate or certificates evidencing
such Warrant Shares shall bear the following legend:

         "The securities represented by this certificate have not been
         registered under the Securities Act of 1933, as amended (the "Act"), or
         any state securities laws and neither such securities nor any interest
         therein may be offered, sold, pledged, assigned or otherwise
         transferred unless (1) a registration statement with respect thereto is
         effective under the Act and any applicable state securities laws, or
         (2) the Company receives an opinion of counsel to the holder of such
         securities, which counsel and opinion are reasonably satisfactory to
         the Company, that such securities may be offered, sold, pledged,
         assigned or transferred in the manner contemplated without an effective
         registration statement under the Act or applicable state securities
         laws."

         10. Upon receipt of evidence satisfactory to the Company of the loss,
theft, destruction, or mutilation of any Warrant (and upon surrender of any
Warrant if mutilated), and upon reimbursement of the Company's reasonable
incidental expenses and indemnity reasonably satisfactory to the Company, the
Company shall execute and deliver to the Holder thereof a new Warrant of like
date, tenor, and denomination.

         11. The Holder of any Warrant shall not have solely on account of such
status, any rights of a stockholder of the Company, either at law or in equity,
or to any notice of meetings of stockholders or of any other proceedings of the
Company, except as provided in this Warrant.

         12. This Warrant has been negotiated and consummated in the State of
New Jersey and shall be construed in accordance with the laws of the State of
New Jersey applicable to contracts made and performed within such State, without
regard to principles governing conflicts of law.

         13. Each of the Company and the Holder of this Warrant, irrevocably
consents to the jurisdiction of the courts of the State of New Jersey and of any
federal court located in such State in connection with any action or proceeding
arising out of or relating to this Warrant, any document or instrument delivered
pursuant to, in connection with or simultaneously with this Warrant, or a breach
of this Warrant or any such document or instrument. In any such action or
proceeding, the Company waives personal service of any summons, complaint or
other process and agrees that service thereof may be made in accordance with
Section 1 hereof.

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         14. Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be mailed by certified mail, return
receipt requested, or by Federal Express, Express Mail or similar overnight
delivery or courier service or delivered (in person or by telecopy, telex or
similar telecommunications equipment) against receipt to the party to whom it is
to be given, (i) if to the Company, at 4326 US Route 1, Monmouth Junction, New
Jersey 08852, Attention: Mr. Frank DeBernardis, President, (ii) if to the
Holder, at its address set forth on the first page hereof, or (iii) in either
case, to such other address as the party shall have furnished in writing in
accordance with the provisions of this Section 1. Notice to the estate of any
party shall be sufficient if addressed to the party as provided in this Section
1. Any notice or other communication given by certified mail shall be deemed
given at the time of certification thereof, except for a notice changing a
party's address which shall be deemed given at the time of receipt thereof. Any
notice given by other means permitted by this Section 1 shall be deemed given at
the time of receipt thereof.

         15. No course of dealing and no delay or omission on the part of the
Holder in exercising any right or remedy shall operate as a waiver thereof or
otherwise prejudice the Holder's rights, powers or remedies. No right, power or
remedy conferred by this Warrant upon the Holder shall be exclusive of any other
right, power or remedy referred to herein or now or hereafter available at law,
in equity, by statute or otherwise, and all such remedies may be exercised
singly or concurrently.

         16. Neither this Warrant nor any term hereof may be changed, waived,
discharged or terminated orally but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought.

Dated: As of September 8, 1999

                                          ECHOCATH, INC.

                                          By:   ________________________________
                                                Frank DeBernardis
                                                President

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                               FORM OF ASSIGNMENT

(To be executed by the registered holder if such holder desires to transfer the
attached Warrant.)

                  FOR VALUE RECEIVED, ___________________ hereby sells, assigns,
and transfers unto _____________________________ ______________ Warrants, each
Warrant conveys the right to purchase one (1) share of Class A Common Stock, no
par value, of EchoCath, Inc. (the "Company"), together with all right, title,
and interest therein, and does hereby irrevocably constitute and appoint
_____________________________ attorney to transfer such Warrant on the books of
the Company, with full power of substitution.

Dated:___________________

                                             Signature:_____________________

                                     NOTICE

                  The signature on the foregoing Assignment must correspond to
the name as written upon the face of this Warrant in every particular, without
alteration or enlargement or any change whatsoever.

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         To:  EchoCath, Inc.
         4326 US Route 1
         Monmouth Junction, New Jersey 08852

                              ELECTION TO EXERCISE

                  The undersigned hereby exercises his or its rights to purchase
______ Warrant Shares covered by the within Warrant certificate and tenders
payment herewith in the amount of $_____________ in accordance with the terms
thereof, and requests that certificates for such securities be issued in the
name of, and delivered to:

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________
     (Print Name, Address and Social Security or Tax Identification Number)

and, if such number of Warrant Shares shall not be all the Warrant Shares
covered by the within Warrant, that a new Warrant for the balance of the Warrant
Shares covered by the within Warrant be registered in the name of, and delivered
to, the undersigned at the address stated below.

Dated: ________________                       Name:__________________________
                                                            (Print)

Address:_____________________________________________________________________

                                                   __________________________
                                                          (Signature)

                                       9<PAGE>

                         2000 Performance Incentive Plan
                            Of U.S. Interactive, Inc.

1.       PURPOSE.

The purposes of the 2000 Performance Incentive Plan (the "Plan") of U.S.
Interactive, Inc. (the "Company") are to advance the interests of the Company
and its shareholders by strengthening the ability of the Company to attract,
retain and reward employees, to motivate employees to achieve business
objectives established to promote the long-term growth, profitability and
success of the Company, and to encourage ownership of the Common Stock of the
Company by participating employees. The Plan authorizes performance-based stock
and cash incentive compensation in the form of stock options, stock appreciation
rights, restricted stock, performance grants and awards, and other stock-based
grants and awards. Officers of the Company and members of the Board of Directors
are not permitted to participate in this Plan.

2.       DEFINITIONS.

For the purposes of the Plan, the following terms shall have the following
meanings:

(a) "ADJUSTED NET INCOME" means, with respect to any calendar or other fiscal
year of the Company, the amount reported as "Net Income" in the audited
Consolidated Income Statement of the Company and Subsidiaries for such year (as
set forth in the Company's Annual Report to Shareholders for such year),
adjusted to exclude any of the following items: (i) extraordinary items (as
described in Accounting Principles Board Opinion No. 30); (ii) gains or losses
on the disposition of discontinued operations; (iii) the cumulative effects of
changes in accounting principles; (iv) the writedown of any asset; and (v)
charges for restructuring and rationalization programs.

(b) "ANNUAL NET INCOME PER SHARE" means, with respect to any calendar or other
fiscal year of the Company in respect of which a determination thereof is being
or to be made, the Adjusted Net Income for such year divided by the average
number of shares of Common Stock outstanding during such year.

(c) "AWARD" means any payment or settlement in respect of a grant made pursuant
to the Plan, whether in the form of shares of Common Stock or in cash, or in any
combination thereof.

(d) "BOARD OF DIRECTORS" means the Board of Directors of the Company.

(e) "CAUSE", unless otherwise determined by the Committee, means (i) a
Participant's action or failure to act which (a) would materially adversely
affect the reputation, operations or financial condition of the Company or any
of its Subsidiaries; (ii) a willful failure by the Participant to perform such
Participant's duties, except as a result of the Disability or death of the
Participant; or (iii) a Participant's theft, embezzlement, perpetration of
fraud, or misappropriation of any tangible or intangible assets or property of
the Company or any of its Subsidiaries or attempted theft, embezzlement,
perpetration of fraud, or misappropriation of any tangible or intangible assets
or property of the Company or any of its Subsidiaries. In addition, and without
limiting any of the foregoing, "Cause" for purposes of this Plan shall also mean
"Cause" as that term is defined in a Participant's employment agreement, if any,
with the Company or a Subsidiary.

(f) "CODE" means the Internal Revenue Code of 1986, as amended and in effect
from time to time, or any successor statute thereto, together with the published
rulings, regulations and interpretations duly promulgated thereunder.
<PAGE>

(g) "COMMITTEE" means the committee of the Board of Directors established and
constituted as provided in Section 5 of the Plan.

(h) "COMMON STOCK" means the common stock, $.001 par value, of the Company, or
any security issued by the Company in substitution or exchange therefore or in
lieu thereof.

(i) "COMMON STOCK EQUIVALENT" means a Unit (or fraction thereof, if authorized
by the Committee) substantially equivalent to a hypothetical share of Common
Stock, credited to a Participant and having a value at any time equal to the
Fair Market Value of a share of Common Stock (or such fraction thereof) at such
time.

(j) "COMPANY" means U.S. Interactive, Inc. a Delaware corporation, or any
successor corporation.

(k) "COVERED EMPLOYEE" means any person who is a "covered employee" within the
meaning of Section 162(m) of the Code.

(l) "CUMULATIVE NET INCOME" means, in respect of any Performance Period, the
aggregate cumulative amount of the Adjusted Net Income for the calendar or other
fiscal years of the Company during such Performance Period

(m) "CUMULATIVE NET INCOME PER SHARE" means, in respect of any Performance
Period, the aggregate cumulative amount of the Annual Net Income Per Share for
the calendar or other fiscal years of the Company during such Performance
Period.

(n) "DISABILITY" shall mean permanent and total disability, as defined in
Section 22(e) of the Code.

(o) "DIVIDEND EQUIVALENT" means, in respect of a Common Stock Equivalent and
with respect to each dividend payment date for the Common Stock, an amount equal
to the cash dividend on one share of Common Stock payable on such dividend
payment date.

(p) "EMPLOYEE" means any individual who is on the active payroll of the Company
or a Subsidiary at the relevant time, but excluding any officer of the Company
and any member of the Board of Directors.

(q) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended and in
effect from time to time, including all rules and regulations promulgated
thereunder.

(r) "FAIR MARKET VALUE" means, in respect of any date on or as of which a
determination thereof is being or to be made, the average of the high and low
per share sale prices of the Common Stock reported on the exchange on which such
shares are traded on such date (if the grant date is not a business trading day,
the determination shall be made based upon the relevant data for the next
preceding trading day), or, if the Common Stock was not traded on such date, the
average of the highest bid and the lowest ask per share price reported for such
date on the exchange on which such shares of Common Stock are traded. If the
Common Stock is not traded on an exchange, the Fair Market Value shall be that
determined by the Committee in good faith based on such factors as the members
thereof, in the exercise of their business judgment, consider relevant.
<PAGE>

(s) "INCENTIVE STOCK OPTION" means any option to purchase shares of Common Stock
granted pursuant to the provisions of Section 6 of the Plan that is intended to
be and is specifically designated as an "incentive stock option" within the
meaning of Section 422 of the Code; provided, however, no option shall be an
incentive stock option unless approval by the stockholders of the Company is
obtained within twelve (12) months after the effective date of this Plan.

(t) "NON-QUALIFIED STOCK OPTION" means any option to purchase shares of Common
Stock granted pursuant to the provisions of Section 6 of the Plan that is not an
Incentive Stock Option.

(u) "OPTION AGREEMENT" has the meaning ascribed thereto in Section 6(a) of the
Plan.

(v) "PARTICIPANT" means any Employee of the Company or a Subsidiary who receives
a grant or Award under the Plan.

(w) "PERFORMANCE GRANT" means a grant made pursuant to Section 9 of the Plan,
the Award of which is contingent on the achievement of specific Performance
Goals during a Performance Period, determined using a specific Performance
Measure, all as specified in the grant agreement relating thereto.

(x) "PERFORMANCE GOALS" mean, with respect to any applicable grant made pursuant
to the Plan, the one or more targets, goals or levels of attainment required to
be achieved in terms of the specified Performance Measure during the specified
Performance Period, all as set forth in the related grant agreement.

(y) "PERFORMANCE MEASURE" means, with respect to any applicable grant made
pursuant to the Plan, one or more of the criteria identified at Section 9(c) of
the Plan selected by the Committee for the purpose of establishing, and
measuring attainment of, Performance Goals for a Performance Period in respect
of such grant, as provided in the related grant agreement.

(z) "PERFORMANCE PERIOD" means, with respect to any applicable grant made
pursuant to the Plan, the one or more periods of time, which may be of varying
and overlapping durations, as the Committee may select during which the
attainment of one or more Performance Goals will be measured to determine
whether, and the extent to which, a Participant is entitled to receive payment
of an Award pursuant to such grant.

(aa) "PLAN" means this 2000 Performance Incentive Plan of the Company, as set
forth herein and as hereafter amended from time to time in accordance with the
terms hereof.

(bb) "RESTRICTED STOCK" means shares of Common Stock issued pursuant to a
Restricted Stock Grant under Section 8 of the Plan so long as such shares remain
subject to the restrictions and conditions specified in the grant agreement
pursuant to which such Restricted Stock Grant is made.
<PAGE>

(cc) "RESTRICTED STOCK GRANT" means a grant made pursuant to the provisions of
Section 8 of the Plan.

(dd) "STOCK APPRECIATION RIGHT" means a grant in the form of a right to benefit
from the appreciation of the Common Stock made pursuant to Section 7 of the
Plan.

(ee) "STOCK OPTION" means and includes any Non-Qualified Stock Option and any
Incentive Stock Option granted pursuant to Section 6 of the Plan.

(ff) "SUBSIDIARY" means any corporation or entity in which the Company directly
or indirectly owns or controls 50% or more of the equity securities issued by
such corporation or entity having the power to vote for the election of
directors.

(gg) "UNIT" means a bookkeeping entry used by the Company to record and account
for the grant, settlement or, if applicable, deferral of an Award until such
time as such Award is paid, cancelled, forfeited or terminated, as the case may
be, which, except as otherwise specified by the Committee, shall be equal to one
Common Stock Equivalent.

3.       EFFECTIVE DATE; TERM.

(a) EFFECTIVE DATE. The Plan shall be effective upon approval by the Board of
Directors.

(b) TERM. The Plan shall remain in effect until December 31, 2019, unless sooner
terminated by the Board of Directors. Termination of the Plan shall not affect
grants and Awards then outstanding.

4.       SHARES OF COMMON STOCK SUBJECT TO PLAN.

(a) MAXIMUM NUMBER OF SHARES AVAILABLE FOR ISSUANCE UNDER THE PLAN. The maximum
aggregate number of shares of Common Stock which may be issued pursuant to the
Plan, subject to adjustment as provided in Section 4(b) of the Plan, shall be
four million, plus (i) any shares of Common Stock issued under the Plan that are
forfeited back to the Company or are cancelled, and (ii) any shares of Common
Stock that are tendered, whether by physical delivery or by attestation, to the
Company by a Participant as full or partial payment of the exercise price of any
Stock Option granted pursuant to the Plan, in connection with the payment or
settlement of any other grant or Award made pursuant to the Plan, or in payment
of any applicable withholding for federal, state, city, local or foreign income,
payroll or other taxes incurred in connection with the exercise of any Stock
Option or Stock Appreciation Right granted under the Plan or the receipt or
settlement of any other grant or Award under the Plan. The shares of Common
Stock which may be issued under the Plan may be authorized and unissued shares
or issued shares which have been reacquired by the Company. No fractional share
of the Common Stock shall be issued under the Plan. Awards of fractional shares
of the Common Stock, if any, shall be settled in cash.
<PAGE>

(b) ADJUSTMENTS UPON CHANGES IN CAPITAL STRUCTURE. In the event of any change in
the capital structure, capitalization or Common Stock of the Company such as a
stock dividend, stock split, recapitalization, merger, consolidation, split-up,
combination or exchange of shares or other form of reorganization, or any other
change affecting the Common Stock, such proportionate adjustments, if any, as
the Board of Directors in its discretion may deem appropriate to reflect such
change shall be made with respect to: (i) the maximum number of shares of Common
Stock which may be (1) issued pursuant to the Plan, (2) the subject of any type
of grant or Award under the Plan, and (3) granted, Awarded or issued to any
Participant pursuant to any provision of the Plan; (ii) the number of shares of
Common Stock subject to any outstanding Stock Option, Stock Appreciation Right
or other grant or Award made to any Participant under the Plan; (iii) the per
share exercise price in respect of any outstanding Stock Options and Stock
Appreciation Rights; (iv) the number of shares of Common Stock and the number of
Units or the value of such Units, as the case may be, which are the subject of
grants and Awards then outstanding under the Plan; and (v) any other term or
condition of any grant affected by any such change.

5.       ADMINISTRATION.

(a) THE COMMITTEE. The Plan shall be administered by the Committee to be
appointed from time to time by the Board of Directors and, except as provided
herein, comprised of not less than two of the then members of the Board of
Directors who qualify as "non-employee directors" within the meaning of Rule
16b-3 promulgated under the Exchange Act and as "outside directors" within the
meaning of Section 162(m) of the Code. Members of the Committee shall serve at
the pleasure of the Board of Directors. The Board of Directors may from time to
time remove members from, or add members to, the Committee. A majority of the
members of the Committee shall constitute a quorum for the transaction of
business and the acts of a majority of the members present at any meeting at
which a quorum is present shall be the acts of the Committee. Any one or more
members of the Committee may participate in a meeting by conference telephone or
similar means where all persons participating in the meeting can hear and speak
to each other, which participation shall constitute presence in person at such
meeting. Action approved in writing by a majority of the members of the
Committee then serving shall be fully as effective as if the action had been
taken by unanimous vote at a meeting duly called and held. The Company shall
make grants and effect Awards under the Plan in accordance with the terms and
conditions specified by the Committee, which terms and conditions shall be set
forth in grant agreements and/or other instruments in such forms as the
Committee shall approve.
<PAGE>

(b) COMMITTEE POWERS. The Committee shall have full power and authority to
operate and administer the Plan in accordance with its terms. The powers of the
Committee include, but are not limited to, the power to: (i) select Participants
from among the Employees of the Company and Subsidiaries; (ii) establish the
types of, and the terms and conditions of, all grants and Awards made under the
Plan, subject to any applicable limitations set forth in, and consistent with
the express terms of, the Plan; (iii) make grants and pay or otherwise effect
Awards subject to, and consistent with, the express provisions of the Plan; (iv)
establish Performance Goals, Performance Measures and Performance Periods,
subject to, and consistent with, the express provisions of the Plan; (v) reduce
the amount of any grant or Award; (vi) prescribe the form or forms of grant
agreements and other instruments evidencing grants and Awards under the Plan;
(vii) pay and to defer payment of Awards on such terms and conditions, not
inconsistent with the express terms of the Plan, as the Committee shall
determine; (viii) direct the Company to make conversions, accruals and payments
pursuant to the Plan; (ix) construe and interpret the Plan and make any
determination of fact incident to the operation of the Plan; (x) promulgate,
amend and rescind rules and regulations relating to the implementation,
operation and administration of the Plan; (xi) adopt such modifications,
procedures and subplans as may be necessary or appropriate to comply with the
laws of other countries with respect to Participants or prospective Participants
employed in such other countries; (xii) delegate to other persons the
responsibility for performing administrative or ministerial acts in furtherance
of the Plan; (xiii) engage the services of persons and firms, including banks,
consultants and insurance companies, in furtherance of the Plan's activities;
and (xiv) make all other determinations and take all other actions as the
Committee may deem necessary or advisable for the administration and operation
of the Plan. In making these determinations, the Committee shall take into
account any limitations on the issuance of grants and Awards that may exist as a
result of agreements entered into by the Company.

(c) COMMITTEE's DECISIONS FINAL. Any determination, decision or action of the
Committee in connection with the construction, interpretation, administration or
application of the Plan, and of any grant agreement, shall be final, conclusive
and binding upon all participants, and all persons claiming through
Participants, affected thereby.

(d) ADMINISTRATIVE ACCOUNTS. For the purpose of accounting for Awards deferred
as to payment, the Company shall establish bookkeeping accounts expressed in
Units bearing the name of each Participant receiving such Awards. Each account
shall be unfunded, unless otherwise determined by the Committee in accordance
with Section 15(d) of the Plan.

(e) CERTIFICATIONS. In respect of each grant under the Plan to a Covered
Employee which the Committee intends to be "performance based compensation"
under Section 162(m) of the Code, the provisions of the Plan and the related
grant agreement shall be construed to confirm such intent, and to conform to the
requirements of Section 162(m) of the Code, and the Committee shall certify in
writing (which writing may include approved minutes of a meeting of the
Committee) that the applicable Performance Goal(s), determined using the
Performance Measure specified in the related grant agreement, was attained
during the relevant Performance Period at a level that equaled or exceeded the
level required for the payment of such Award in the amount proposed to be paid
and that such Award does not exceed any applicable Plan limitation.
<PAGE>

6.       STOCK OPTIONS.

(a) IN GENERAL. Options to purchase shares of Common Stock may be granted under
the Plan and may be Incentive Stock Options or Non-Qualified Stock Options. All
Stock Options shall be subject to the terms and conditions of this Section 6 and
shall contain such additional terms and conditions, not inconsistent with the
express provisions of the Plan, as the Committee shall determine. Each Option
granted hereunder to a Participant shall be embodied in a written option
agreement ("Option Agreement"), signed by the Participant and by a duly
authorized officer of the Company. Stock Options may be granted in addition to,
or in tandem with or independent of Stock Appreciation Rights or other grants
and Awards under the Plan. The Committee may grant Stock Options that provide
for the automatic grant of a replacement Stock Option if payment of the exercise
price and/or any related withholding taxes is made by tendering (whether by
physical delivery or by attestation) shares of Common Stock or by having shares
of Common Stock withheld by the Company. The replacement Stock Option would
cover the number of shares of Common Stock tendered or withheld, would have a
per share exercise price equal to at least 100% of the Fair Market Value of a
share of Common Stock on the date of the exercise of the original Stock Option,
and would have such other terms and conditions as may be specified by the
Committee and set forth in the related grant agreement.

(b) ELIGIBILITY AND LIMITATIONS. Any Employee of the Company or a Subsidiary may
be granted Stock Options. The Committee shall determine, in its discretion, the
Employees to whom Stock Options will be granted, the timing of such grants, and
the number of shares of Common Stock subject to each Stock Option granted;
provided, that (i) the maximum aggregate number of shares of Common Stock which
may be issued and delivered upon the exercise of Non-Qualified Stock Options
granted under the Plan shall be four million, (ii) the maximum aggregate number
of shares of Common Stock which may be issued and delivered upon the exercise of
Incentive Stock Options shall be four million, (iii) the maximum number of
shares of Common Stock in respect of which Stock Options may be granted to any
Employee during any calendar year shall be 400,000, and (iv) in respect of
Incentive Stock Options, the aggregate Fair Market Value (determined as of the
date the Incentive Stock Option is granted) of the shares of Common Stock with
respect to which an Incentive Stock Option becomes exercisable for the first
time by a Participant during any calendar year shall not exceed $100,000, or
such other limit as may be required by the Code, except that, if authorized by
the Committee and provided for in the related grant agreement, any portion of
any Incentive Stock Option that cannot be exercised as such because of this
limitation may be converted into and exercised as a Non-Qualified Stock Option.
In no event shall any Stock Option or Stock Appreciation Right be granted to a
Participant in exchange for the Participant's agreement to the cancellation of
one or more Stock Options or Stock Appreciation Rights then held by such
Participant if the exercise price of the new grant is lower than the exercise
price of the grant to be cancelled and in no event shall any Stock Option or
Stock Appreciation Right be amended to reduce the option price, except as
contemplated by Section 4(b) of the Plan.
<PAGE>

(c) OPTION EXERCISE PRICE. The per share exercise price of each Stock Option
granted under the Plan shall be determined by the Committee prior to or at the
time of grant, but in no event shall the per share exercise price of any Stock
Option be less than 100% of the Fair Market Value of the Common Stock on the
date of the grant of such Stock Option. The exercise price of an Incentive Stock
Option issued to any Employee owning more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company shall be 110% of
the Fair Market Value of the Common Stock on the date of the grant of such Stock
Option.

(d) OPTION TERM. The term of each Stock Option shall be fixed by the Committee;
except that in no event shall the term of any Incentive Stock Option exceed ten
years after the date such Incentive Stock Option is granted, or five years in
the case of an Employee owning more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company. Any Option granted more
than 10 years from the effective date of the Plan will be a Non-Qualified Stock
Option.

(e) EXERCISABILITY. A Stock Option shall be exercisable at such time or times
and subject to such terms and conditions as shall be determined by the Committee
at the date of grant; provided, however, that no Stock Option shall be
exercisable during the first six months after the date such Stock Option is
granted. Unless the Committee specifies otherwise in the Option Agreement, every
Option granted pursuant to this Plan will vest and become exercisable with
respect to 25% of the Common Stock issuable upon exercise thereof (rounded to
the nearest whole share; rounded up in the event of a half-share) on each of the
first, second and third anniversaries of the date of grant and the remainder
shall vest on the fourth anniversary of the date of grant.

(f) EARLY EXPIRATION UPON TERMINATION OF EMPLOYMENT. Except as otherwise
provided in the applicable Option Agreement, upon termination of a Participant's
employment with the Company or its Subsidiaries for death, Disability or
termination without Cause by the Company or a Subsidiary, all Options or
portions thereof held by such Participant that are not vested and exercisable on
the date of such termination shall expire and be forfeited as of such date and
all vested Options held by such Participant shall expire to the extent not
theretofore exercised at the end of third month (one year if termination is
caused by Participant's death or Disability) following the date of such
termination. Upon voluntary termination of a Participant's employment or
termination for Cause of a Participant's employment by the Company or a
Subsidiary, all unexercised Options, whether or not vested, shall terminate
immediately upon the earlier to occur of the date the Participant receives
notice of the termination or the actual date of termination.
<PAGE>

(g) METHOD OF EXERCISE. A Stock Option may be exercised, in whole or in part, by
giving written notice of exercise to the Company specifying the number of shares
of Common Stock to be purchased. Such notice shall be accompanied by payment in
full of the purchase price, plus any required withholding taxes, in cash or, if
permitted by the terms of the related grant agreement or otherwise approved in
advance by the Committee, in shares of Common Stock already owned by the
Participant valued at the Fair Market Value of the Common Stock on the date of
exercise. The Committee may also permit Participants, either on a selective or
aggregate basis, to simultaneously exercise Stock Options and sell the shares of
Common Stock thereby acquired pursuant to a brokerage or similar arrangement
approved in advance by the Committee and to use the proceeds from such sale to
pay the exercise price and withholding taxes.

7.       STOCK APPRECIATION RIGHTS.

(a) IN GENERAL. Stock Appreciation Rights in respect of shares of Common Stock
may be granted under the Plan alone, in tandem with, in addition to or
independent of a Stock Option or other grant or Award under the Plan. A Stock
Appreciation Right entitles a Participant to receive an amount equal to the
excess of the Fair Market Value of a share of Common Stock on the date of
exercise over the Fair Market Value of a share of Common Stock on the date of
grant of the Stock Appreciation Right, or such other higher price as may be set
by the Committee, multiplied by the number of shares of Common Stock with
respect to which the Stock Appreciation Right shall have been exercised.

(b) ELIGIBILITY AND LIMITATIONS. Any Employee of the Company or a Subsidiary
selected by the Committee may be granted Stock Appreciation Rights. The
Committee shall determine, in its discretion, the Employees to whom Stock
Appreciation Rights will be granted, the timing of such grants and the number of
shares of Common Stock in respect of which each Stock Appreciation Right is
granted; provided that (i) the maximum aggregate number of shares of Common
Stock in respect of which Stock Appreciation Rights may be granted shall be one
million, (ii) the maximum aggregate number of shares of Common Stock which may
be issued and delivered in payment or settlement of Stock Appreciation Rights
shall be 500,000, and (iii) the maximum number of shares of Common Stock in
respect of which Stock Appreciation Rights may be granted to any Employee during
any calendar year shall be 100,000. (c) EXERCISABILITY; EXERCISE; FORM OF
PAYMENT. A Stock Appreciation Right may be exercised by a participant at such
time or times and in such manner as shall be authorized by the Committee and set
forth in the related grant agreement, except that in no event shall a Stock
Appreciation Right be exercisable within the first six months after the date of
grant. The Committee may provide that a Stock Appreciation Right shall be
automatically exercised on one or more specified dates. No Stock Appreciation
Right may be exercised unless the holder thereof is at the time of exercise an
Employee and has been continuously an Employee since the date the Stock
Appreciation Right was granted, except that the Committee may permit the
exercise of any Stock Appreciation Right for any period following the
Participant's termination of employment not in excess of ninety (90) days on
such terms and conditions as it shall deem appropriate and specify in the
related grant agreement. A Stock Appreciation Right may be exercised, in whole
or in part, by giving the Company a written notice specifying the number of
shares of Common Stock in respect of which the Stock Appreciation Right is to be
exercised. Stock Appreciation Rights may be paid upon exercise in cash, in
shares of Common Stock, or in any combination of cash and shares of Common Stock
as determined by the Committee.
<PAGE>

8.       RESTRICTED STOCK GRANTS AND AWARDS.

(a) IN GENERAL. A Restricted Stock Grant is the issuance of shares of Common
Stock in the name of an Employee, which issuance is subject to such terms and
conditions as the Committee shall deem appropriate, including, without
limitation, restrictions on the sale, assignment, transfer or other disposition
of such shares and the requirement that the Employee forfeit such shares back to
the Company (i) upon termination of employment for specified reasons within a
specified period of time, or (ii) if any specified Performance Goals are not
achieved during a specified Performance Period, or (iii) if such other
conditions as the Committee may specify are not satisfied.

(b) ELIGIBILITY AND LIMITATIONS. Any Employee of the Company or a Subsidiary
selected by the Committee may receive a Restricted Stock Grant. The Committee,
in its sole discretion, shall determine whether a Restricted Stock Grant shall
be made, the Employee to receive the Restricted Stock Grant, and the conditions
and restrictions imposed on the Restricted Stock Grant. The maximum number of
shares of Common Stock which may be issued as Restricted Stock under the Plan
shall be one million. The maximum number of shares of Common Stock which may be
issued to any Employee as Restricted Stock during any calendar year shall not
exceed 50,000. The maximum amount any Employee may receive as a Restricted Stock
Grant in any calendar year shall not exceed $500,000, determined using the Fair
Market Value of such Restricted Stock Grant as at the date of the grant thereof.

(c) RESTRICTION PERIOD. Restricted Stock Grants shall provide that in order for
a Participant to receive shares of Common Stock free of restrictions, the
Participant must remain in the employment of the Company or its Subsidiaries,
subject to such exceptions as the Committee shall deem appropriate and specify
in the related grant agreement, for a period of not less than four years
commencing on the date of the grant and ending on such later date or dates as
the Committee may designate at the time of the grant (the "Restriction Period").
The Committee, in its sole discretion, may provide for the lapse of restrictions
in installments during the Restriction Period. The Committee may also establish
one or more Performance Goals that are required to be achieved during one or
more Performance Periods within the Restriction Period as a condition to the
lapse of the restrictions. (d) RESTRICTIONS. The following restrictions and
conditions shall apply to each Restricted Stock Grant during the Restriction
Period: (i) the Participant shall not be entitled to delivery of the shares of
the Common Stock; (ii) the Participant may not sell, assign, transfer, pledge,
hypothecate, encumber or otherwise dispose of or realize on the shares of Common
Stock subject to the Restricted Stock Grant; and (iii) the shares of the Common
Stock issued as Restricted Stock shall be forfeited to the Company if the
Participant for any reason ceases to be an Employee prior to the end of the
Restriction Period, except due to circumstances specified in the related grant
agreement or otherwise approved by the Committee. The Committee may in, its sole
discretion, include such other restrictions and conditions as it may deem
appropriate.
<PAGE>

(e) PAYMENT. Upon expiration of the Restriction Period and if all conditions
have been satisfied and any applicable Performance Goals attained, the shares of
the Restricted Stock will be made available to the Participant, subject to
satisfaction of applicable withholding tax requirements, free of all
restrictions except as may be required to comply with federal and state
securities laws, as determined by the Committee in its sole discretion;
provided, that the Committee may, in its discretion, require (i) that the
Restricted Stock be retained by the Company, and (ii) that the Participant
receive a cash payment in lieu of unrestricted shares of Common Stock.

(f) RIGHTS AS A SHAREHOLDER. A Participant shall have, with respect to shares of
Restricted Stock, all of the rights of a shareholder of the Company, including
the right to vote the shares and receive any cash dividends paid thereon. Stock
dividends distributed with respect to shares of Restricted Stock shall be
treated as additional shares under the Restricted Stock Grant and shall be
subject to the restrictions and other terms and conditions set forth therein.

9.       PERFORMANCE GRANTS AND AWARDS.

(a) ELIGIBILITY AND TERMS. The Committee may grant Employees of the Company and
its Subsidiaries the prospective contingent right, expressed in Units, to
receive payments of shares of Common Stock, cash or any combination thereof,
with each Unit equivalent in value to one share of Common Stock, or equivalent
to such other value or monetary amount as may be designated or established by
the Committee ("Performance Grants"), based upon Company performance over a
specified Performance Period. The Committee shall, in its sole discretion,
determine the Employees eligible to receive Performance Grants. At the time each
Performance Grant is made, the Committee shall establish the Performance Period,
the Performance Measure and the targets to be attained relative to such
Performance Measure (the "Performance Goals") in respect of such Performance
Grant. The number of shares of Common Stock and/or the amount of cash earned and
payable in settlement of a Performance Grant shall be determined at the end of
the Performance Period (a "Performance Award").

(b) LIMITATIONS ON GRANTS AND AWARDS. The maximum number of shares of Common
Stock which may be issued pursuant to Performance Grants shall be 500,000. The
maximum number of shares which may be the subject of Performance Grants made to
any Participant in respect of any Performance Period or during any calendar year
shall be 50,000. The maximum amount any Participant may receive during any
calendar year as Performance Awards pursuant to Performance Grants shall not
exceed $1 million, determined using the Fair Market Value of such Performance
Awards as of the last day of the applicable Performance Period or Periods or as
of the date or dates of the payment thereof, whichever is higher.
<PAGE>

(c) PERFORMANCE GOALS, PERFORMANCE MEASURES AND PERFORMANCE PERIODS. Each
Performance Grant shall provide that, in order for a Participant to receive an
Award of all or a portion of the Units subject to such Performance Grant, the
Company must achieve certain Performance Goals over a designated Performance
Period having a minimum duration of one year, with attainment of the Performance
Goals determined using a specific Performance Measure. The Performance Goals and
Performance Period shall be established by the Committee in its sole discretion.
The Committee shall establish a Performance Measure for each Performance Period
for determining the portion of the Performance Grant which will be earned or
forfeited based on the extent to which the Performance Goals are achieved or
exceeded. In setting Performance Goals, the Committee may use a Performance
Measure based on any one, or on any combination, of the following Company
performance factors as the Committee deems appropriate: (i) Cumulative Net
Income Per Share; (ii) Cumulative Net Income; (iii) return on sales; (iv) total
shareholder return; (v) return on assets; (vi) economic value added; (vii) cash
flow, (viii) return on equity; and (ix) cumulative operating income (which shall
equal consolidated sales minus cost of goods sold and selling, administrative
and general expense). Performance Goals may include minimum, maximum and target
levels of performance, with the size of Performance Award based on the level
attained. Once established by the Committee and specified in the grant
agreement, and if and to the extent provided in or required by the grant
agreement, the Performance Goals and the Performance Measure in respect of any
Performance Grant (or any Restricted Stock Grant or Stock-Based Grant that
requires the attainment of Performance Goals as a condition to the Award) shall
not be changed. The Committee may, in its discretion, eliminate or reduce (but
not increase) the amount of any Performance Award (or Restricted Stock or
Stock-Based Award) that otherwise would be payable to a Participant upon
attainment of the Performance Goal(s).

(d) FORM OF GRANTS. Performance Grants may be made on such terms and conditions
not inconsistent with the Plan, and in such form or forms, as the Committee may
from time to time approve. Performance Grants may be made alone, in addition to
in tandem with, or independent of other grants and Awards under the Plan.
Subject to the terms of the Plan, the Committee shall, in its discretion,
determine the number of Units subject to each Performance Grant made to a
Participant and the Committee may impose different terms and conditions on any
particular Performance Grant made to any Participant. The Performance Goals, the
Performance Period or Periods, and the Performance Measure applicable to a
Performance Grant shall be set forth in the relevant grant agreement. (e)
PAYMENT OF AWARDS. Each Participant shall be entitled to receive payment in an
amount equal to the aggregate Fair Market Value (if the Unit is equivalent to a
share of Common Stock), or such other value as the Committee shall specify, of
the Units earned in respect of such Performance Award. Payment in settlement of
a Performance Award may be made in shares of Common Stock, in cash, or in any
combination of Common Stock and cash, and at such time or times, as the
Committee, in its discretion, shall determine.
<PAGE>

10.      OTHER STOCK-BASED GRANTS AND AWARDS.

(a) IN GENERAL. The Committee may make other grants and Awards pursuant to which
Common Stock is, or in the future may be, acquired by Participants, and other
grants and Awards to Participants denominated in Common Stock Equivalents or
other Units ("Stock-Based Grants"). Such Stock-Based Grants may be granted alone
or in addition to, in tandem with, or independent of any other grant made or
Award effected under the Plan.

(b) ELIGIBILITY AND TERMS. The Committee may make Stock-Based Grants to
Employees of the Company and its Subsidiaries. Subject to the provisions of the
Plan, the Committee shall have authority to determine the Employees to whom, and
the time or times at which, Stock-Based Grants will be made, the number of
shares of Common Stock, if any, to be subject to or covered by each Stock-Based
Grant, and any and all other terms and conditions of each Stock-Based Grant.

(c) LIMITATIONS. The aggregate number of shares of Common Stock Issued to
Participants pursuant to Stock-Based Grants made and Awards effected pursuant to
this Section 10 shall not exceed 500,000. No Participant shall receive more than
50,000 shares of Common Stock in settlement of Stock-Based Awards during any
calendar year. The maximum amount any Participant may receive in Stock-Based
Awards during any calendar year shall not exceed $1 million, determined using
the Fair Market Value of any shares of Common Stock delivered in payment of the
Stock-Based Awards on the date or dates of the payment thereof.

(d) FORM OF GRANTS; PAYMENT OF AWARDS. Stock-Based Grants may be made in such
form or forms and on such terms and conditions, including the attainment of
specific Performance Goals, as the Committee, in its discretion, shall approve.
Payment of Stock-Based Awards may be made in cash, in shares of Common Stock, or
in any combination of cash and shares of Common Stock, and at such time or
times, as the Committee shall determine.

11.      WITHHOLDING.

The Committee may, in its discretion, and subject to its prior approval in the
case of any Participant required to file reports pursuant to Section 16(a) of
the Exchange Act, at any time a distribution is made under the Plan, whether in
cash or in shares, or at the time any Option is exercised, withhold from such
distribution or shares issuable upon the exercise of an Option, any amount
necessary to satisfy federal, foreign, state and local withholding requirements
with respect to such distribution or exercise of such Option. Such withholding
may be satisfied at the Committee's option either by cash or withholding of
shares. To the extent that any such withholding requirements are not satisfied,
each Participant shall pay to the Company any federal, foreign, state or local
taxes of any kind required by law to be withheld with respect to a distribution
under the Plan.
<PAGE>

12.      DEFERRALS.

The Committee may, whether at the time of grant or at anytime thereafter prior
to payment or settlement, require a Participant to defer, or permit (subject to
such conditions as the Committee may from time to time establish) a Participant
to elect to defer, receipt of all or any portion of any payment of cash or
shares of Common Stock that would otherwise be due to such Participant in
payment or settlement of any Award under the Plan, other than Incentive Stock
Options. If any such deferral is required by the Committee (or is elected by the
Participant with the permission of the Committee), the Committee shall establish
rules and procedures for such payment deferrals. The Committee may provide for
the payment or crediting of interest, at such rate or rates as it shall in its
discretion deem appropriate, on such deferred amounts credited in cash and the
payment or crediting of dividend equivalents in respect of deferred amounts
credited in Common Stock Equivalents. Deferred amounts may be paid in a lump sum
or in installments in the matter and to the extent permitted, and in accordance
with rules and procedures established, by the Committee.

13.      NON-TRANSFERABILITY OF GRANTS AND AWARDS.

No grant or Award under the Plan, and no right or interest therein, shall be (i)
assignable, alienable or transferable by a Participant, except by will or the
laws of descent and distribution, or (ii) subject to any obligation, or the lien
or claims of any creditor, of any Participant, or (iii) subject to any lien,
encumbrance or claim of any party made in respect of or through any Participant,
however arising. During the lifetime of a Participant, Stock Options and Stock
Appreciation Rights are exercisable only by, and shares of Common Stock issued
upon the exercise of Stock Options and Stock Appreciation Rights or in
settlement of other Awards will be issued only to, and other payments in
settlement of any Award will be payable only to, the Participant or his or her
legal representative. The Committee may, in its sole discretion, authorize
written designations of beneficiaries and authorize Participants to designate
beneficiaries with the authority to exercise Stock Options and Stock
Appreciation Rights granted to a Participant in the event of his or her death.
Notwithstanding the foregoing, the Committee may, in its sole discretion and on
and subject to such terms and conditions as it shall deem appropriate, which
terms and conditions shall be set forth in the related grant agreement: and (ii)
provide for the transferability of a particular grant or Award pursuant to a
qualified domestic relations order. All other transfers and any retransfer by
any permitted transferee are prohibited and any such purported transfer shall be
null and void. Each Stock Option or Stock Appreciation Right which becomes the
subject of permitted transfer (and the Participant to whom it was granted by the
Company) shall continue to be subject to the same terms and conditions as were
in effect immediately prior to such permitted transfer. The Participant shall
remain responsible to the Company for the payment of all withholding taxes
incurred as a result of any exercise of such Stock Option or Stock Appreciation
Right. In no event shall any permitted transfer of a Stock Option or Stock
Appreciation Right create any right in any party in respect of any Stock Option,
Stock Appreciation Right or other grant or Award, other than the rights of the
qualified transferee in respect of such Stock Option or Stock Appreciation Right
specified in the related grant agreement.
<PAGE>

14.      CHANGE IN CONTROL.

(a) EFFECT ON GRANTS. In the event of a Change in Control (as defined below) of
the Company, the Board of Directors, in its sole discretion, may provide for
accelerated exercise and/or vesting of Stock Options, Stock Appreciation Rights
and Restricted Stock Grants, for removal of transfer restrictions, and/or that
Performance Grants and other Stock-Based Grants shall be deemed to have been
fully earned, at the maximum amount of the award opportunity specified in the
grant agreement, as of the date of the Change in Control.

(b) CHANGE IN CONTROL DEFINED. A "Change in Control" of the Company shall occur
when: (i) any Acquiring Person (other than the Company, any Subsidiary, any
employee benefit plan of the Company or of any Subsidiary, or any person or
entity organized, appointed or established by the Company or a Subsidiary for or
pursuant to the terms of any such plans), alone, or together with its Affiliates
and Associates, shall become the beneficial owner of twenty-five percent (25%)
or more of the shares of Common Stock then outstanding (except pursuant to an
offer for all outstanding shares of Common Stock at a price and upon such terms
and conditions as a majority of the Continuing Directors determines to be in the
best interest of the Company and its shareholders); or (ii) the shareholders of
the Company approve a definitive agreement for a merger or consolidation
involving the Company which would result in the Common Stock outstanding
immediately prior to such merger or consolidation continuing to represent
(whether by remaining outstanding or by being converted into voting securities
of the surviving entity) less than fifty percent of the combined voting power of
the Company and such other entity outstanding immediately after such merger or
consolidation; or (iii) the shareholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or other
disposition of all or substantially all of the assets of the Company; or (iv)
the Continuing Directors no longer constitute a majority of the Board of
Directors. "Acquiring Person" means any person (any individual, firm,
corporation or other entity) who or which, together with all its Affiliates and
Associates, shall be the beneficial owner of a substantial block of Common
Stock. "Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 under the Exchange Act. "Continuing Director" means
any individual who is a member of the Board of Directors, while such individual
is a member of the Board of Directors, who is not an Acquiring Person, or an
Affiliate or Associate of an Acquiring Person, or a representative or nominee of
an Acquiring Person or of any such Affiliate or Associate, and was a member of
the Board of Directors prior to the occurrence of a Change in Control, and any
successor of a Continuing Director, while such successor is a member of the
Board of Directors, who is not an Acquiring Person, or an Affiliate or Associate
of an Acquiring Person, or representative or nominee of an Acquiring Person or
of any such Affiliate or Associate, and is recommended or elected to succeed the
Continuing Director by a majority of the Continuing Directors.
<PAGE>

15.      AMENDMENT, SUSPENSION AND TERMINATION.

The Board or the Committee may suspend or terminate the Plan or any portion
thereof at any time and may amend it from time to time in such respects as the
Board or the Committee may deem advisable; provided, however, that no such
amendment shall be made without stockholder approval to the extent such approval
is required by law, agreement or the rules of any exchange upon which the Common
Stock is listed, and no such amendment, suspension or termination shall impair
the rights of Participants under outstanding Options without the consent of the
Participants affected thereby, except as otherwise provided herein.

<PAGE>

                                          This document constitutes part
                                          of a prospectus covering securities
                                          that have been registered under
                                          the Securities Act of 1933.

            AGREEMENT EVIDENCING A GRANT OF AN INCENTIVE STOCK OPTION
                  AND NON-QUALIFIED STOCK OPTION UNDER THE 2000
              PERFORMANCE INCENTIVE PLAN OF U.S. INTERACTIVE, INC.

         Agreement (this "Agreement") made as of [GrantDate] (the "Grant Date"),
between U.S. Interactive, Inc. (the "Company"), and
[FirstName] [LastName]("Grantee").

         1. Grant of Option. Pursuant to the 2000 Performance Incentive Plan of
the Company (the "Plan"), the Company hereby grants to Grantee, as of the Grant
Date, an incentive stock option to the extent all or any portion of this Option
qualifies as an "incentive stock option" under Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code") and to the extent that all or any
portion of this Option does not so qualify as an "incentive stock option" under
the Code, a non-qualified stock option (together, the "Option"), to purchase an
aggregate of [Noofshares] shares (the "Option Shares") of the Common Stock of
the Company (the "Common Stock") at a price of $[Price] per share of Common
Stock, subject to adjustment and the other terms and conditions set forth herein
and in the Plan. No option will qualify as an incentive stock option unless the
stockholders of the Company approve the Plan within twelve (12) months after
adoption of the Plan by the Board.

         2. Grantee Bound by Plan. Enclosed is a copy of the Plan which is
incorporated herein by reference and made a part hereof. The Plan shall govern
all aspects of this Agreement except as otherwise specifically stated herein.
Grantee hereby acknowledges receipt of a copy of the Plan and agrees to be bound
by all the terms and provisions thereof. Unless otherwise defined herein,
capitalized terms used but not defined herein shall have the meanings ascribed
to them in the Plan. The Plan should be carefully examined before any decision
is made to exercise this Option. In accordance with the terms of the Plan,
except as expressly set forth in this Agreement, both vested and unvested
options are subject to expiration and forfeiture upon termination of the
Grantee's employment with the Company or a Subsidiary, death or disability. The
date on which the expiration and forfeiture will occur is set forth more fully
in the Plan.

         3. Exercise of Option. Subject to the earlier expiration or termination
of the Option as provided herein or in the Plan, the Option with respect to any
Option Shares may be exercised upon such shares becoming vested, although no
Option may be exercised within 6 months of the date of this Agreement, by
written notice to the Company at any time and from time to time thereafter.
Except as otherwise provided expressly in this Agreement, such Option shall not
be exercisable for more than the number of shares which are then vested. Subject
to all of the foregoing, this Option shall vest with respect to 100% of the
Option Shares over a four (4) year period, with 25% of the Option Shares
(rounded to the nearest whole share) vesting on each of the first, second and
third anniversaries of the Grant Date; and the remainder shall vest on the
fourth anniversary of the Grant Date.

         This Option shall not be exercisable in any event after the tenth
anniversary (fifth anniversary in the case of a 10% stockholder) of the Grant
Date. This Option may not be exercised for a fraction of a share of Common
Stock. Unvested Options are subject to cancellation as provided in the Plan.

         4. Conditions to Exercise. This Option may not be exercised by Grantee
unless the following conditions are met:

                  (a) legal counsel for the Company must be satisfied at the
time of exercise that the issuance of Option Shares upon exercise will be in
compliance with the Securities Act of 1933, as amended (the "Securities Act")
and applicable United States federal, state and local laws and foreign laws; and

                  (b) Grantee must pay at the time of exercise the full purchase
price for the shares of Common Stock being acquired hereunder (i) in cash or by
certified check or (ii) by delivery of shares of Common Stock already owned by
the Grantee valued at the Fair Market Value of the Common Stock on the date of
exercise, or (iii) by "cashless exercise" as provided in the Plan or (iv)
through a combination thereof. In the case of the exercise of a Non-Qualified
Stock Option or a cashless exercise, the Grantee must also remit the appropriate
withholding taxes due upon exercise, in cash or in such other manner approved by
the Committee. Please refer to the Plan for a complete description of method of
delivery of Option Shares pursuant to this Section 4(b).

<PAGE>

                  (c) The Grantee is employed by the Company or one of its
Subsidiaries, except as otherwise provided in the Plan.

                  (d) The Grantee (and any permitted transferee) shall have
fully complied with such further conditions to exercise as the Committee, in its
sole discretion, shall deem necessary or desirable to fully comply with all
federal and applicable state securities and tax laws relating to the exercise of
the Option.

         5. Transferability. Except as otherwise provided below, this Option may
not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed
of by Grantee, except by will or the laws of descent and distribution (in which
case, such transferee shall succeed to the rights and obligations of Grantee
hereunder) and is exercisable during Grantee's lifetime only by Grantee. If
Grantee or anyone claiming under or through Grantee attempts to violate this
Section 5, such attempted violation shall be null and void and without effect,
and the Company's obligation hereunder shall terminate. If at the time of
Grantee's death this Option has not been fully exercised, Grantee's estate or
any person who acquires the right to exercise this Option by bequest or
inheritance or by reason of Grantee's death may, at any time within one year
after the date of Grantee's death (but in no event after the expiration of ten
years from the Grant Date), exercise this Option with respect to the number of
shares, determined under Section 3 above, as to which Grantee could have
exercised the Option at the time of Grantee's death. The applicable requirements
of Section 4 above must be satisfied in full at the time of such exercise. If
this Option is a Non-Qualified Option, it may be assigned, in whole or in part
to Grantee's spouse, children or grandchildren, or a trust for the exclusive
benefit of one or more of such persons, provided that (i) such assignment is
made as a gift or under a domestic relations order in settlement of marital
property rights and in each case, without any consideration, and (ii) that the
transferee acknowledges and agrees in writing that (y) if the transferor is a
director or officer of the Company, any shares acquired upon exercise of any
such Option may be subject to restriction on resale under Rule 144 under the
Securities Exchange Act of 1934, and (z) that any certificates representing such
shares shall be prominently marked with a legend to that effect. The Grantee,
upon any such permitted transfer, shall remain responsible to the Company for
the payment of all withholding taxes incurred as a result of any exercise of any
such Option. Any Option transferred hereunder by the Grantee shall continue to
be governed by and subject to the terms and conditions of this Agreement and may
not be subsequently transferred except by will or the laws of descent and
distribution.
<PAGE>

         6. Administration. Any action taken or decision made by the Board or
the Committee or its delegates arising out of or in connection with the
construction, administration, interpretation or effect of the Plan or this
Agreement shall lie within its sole and absolute discretion, as the case may be,
and shall be final, conclusive and binding on Grantee and all persons claiming
under or through Grantee. By accepting this grant or other benefit under the
Plan, Grantee and each person claiming under or through Grantee shall be
conclusively deemed to have indicated acceptance and ratification of, and
consent to, any action taken under the Plan by the Board or the Committee or its
delegates.

         7. No Rights as Stockholder. Unless and until a certificate or
certificates representing such shares of Common Stock shall have been issued to
Grantee (or any person acting under Section 5 above), Grantee shall not be or
have any of the rights or privileges of a stockholder of the Company with
respect to shares of Common Stock acquirable upon exercise of the Option.

         8. Disqualifying Disposition of Shares. In the event that Grantee
exercises an Incentive Stock Option, and subsequently agrees to sell or dispose
of the Option Shares acquired upon exercise before either (i) the expiration of
two (2) years from the Grant Date, or (ii) the expiration of one (1) year from
the date of exercise, the Grantee must notify the Company of such disposition
and the terms thereof and, if required by law, make arrangements to pay the
Company in cash the amount of any withholding taxes due upon such disposition,
as determined by the Company, and the transfer of such shares on the Company's
records shall be conditioned on the payment of any such taxes.

         9. Investment Representation. Grantee hereby acknowledges that the
shares of Common Stock which Grantee may acquire by exercising the Option shall
be acquired for investment without a view to distribution, within the meaning of
the Securities Act, and shall not be sold, transferred, assigned, pledged or
hypothecated in the absence of an effective registration statement for the
shares of Common Stock under the Securities Act and applicable state securities
laws or an applicable exemption from the registration requirements of the Act
and any applicable state securities laws. Grantee also agrees that the shares of
Common Stock which Grantee may acquire by exercising the Option will not be sold
or otherwise disposed of in any manner which would constitute a violation of any
applicable securities laws, whether federal or state.

         10. Listing and Registration of Common Stock. The Company, in its
discretion, may postpone the issuance and/or delivery of shares of Common Stock
upon any exercise of the Option until completion of such stock exchange listing,
or registration, or other qualification of such shares under any state and/or
federal law, rule or regulation as the Company may reasonably in good faith
consider appropriate.
<PAGE>

         11. Notices. Any notice hereunder to the Company shall be addressed to
the Company, Attention: Corporate Secretary, and any notice hereunder to Grantee
shall be addressed to Grantee at Grantee's last address on the records of the
Company, subject to the right of either party to designate at any time hereafter
in writing some other address. Any notice shall be deemed to have been duly
given when delivered personally, one day following dispatch if sent by
nationally recognized overnight courier, fees prepaid, or three days following
mailing if sent by registered mail, return receipt requested, postage prepaid
and addressed as set forth above.

         12. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of any successors to the Company and all persons lawfully claiming
under Grantee.

         13. Governing Law. The validity, construction, interpretation,
administration and effect of the Plan, and of its rules and regulations, and
rights relating to the Plan and to this Agreement, shall be governed by the
substantive laws, but not the choice of law rules, of the state of incorporation
of the Company at the time of the determination.

         14.      Grantee Acknowledgments.

         GRANTEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO
THE OPTION IS EARNED ONLY BY CONTINUING EMPLOYMENT AT THE WILL OF THE COMPANY
(NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING
SHARES HEREUNDER). GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS
AGREEMENT, NOR IN THE PLAN WHICH IS INCORPORATED HEREIN BY REFERENCE, SHALL
CONFER UPON GRANTEE ANY RIGHT WITH RESPECT TO CONTINUATION OF EMPLOYMENT BY THE
COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH HIS RIGHT OR THE COMPANY'S RIGHT
TO TERMINATE OR MODIFY HIS EMPLOYMENT AT ANY TIME, WITH OR WITHOUT CAUSE.

         Grantee acknowledges receipt of a copy of the Plan and represents that
he is familiar with the terms and provisions thereof, and hereby accepts this
Option subject to all of the terms and provisions thereof except as otherwise
specifically stated in this Option Agreement. Grantee has reviewed the Plan and
this Option Agreement in their entirety, has had an opportunity to obtain the
advice of counsel prior to executing this Option Agreement and fully understands
all provisions of this Option Agreement. Grantee hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the Board upon
any questions arising under the Plan.

<PAGE>

         IN WITNESS WHEREOF, the Company and Grantee have executed this
Agreement as of the date first above written.

                                        U.S. INTERACTIVE, INC.

                                        By:
                                        Name:    ________________________
                                        Title:   ________________________

                                        GRANTEE

                                        Grantee's Signature

                                        ------------------------------
                                        Name of Grantee (Print)

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