Document:

<PAGE>

                                                                   Exhibit 10.37
                              EMPLOYMENT AGREEMENT

     This Employment Agreement (this "Agreement") is dated as of March 1, 2002,
between Nobel Learning Communities, Inc., a Delaware corporation ("Employer")
and Scott Clegg, an individual residing at 4633 Lambert Drive, Alexandria, VA
22311 ("Executive").

                                   Background

     Executive wishes to be employed as Vice Chairman/President/Chief Operating
Officer of Employer, and to be responsible for the functions and duties assigned
to this position, and Employer wishes to assure itself of the services of
Executive, and, upon the conditions hereinafter provided, Executive and Employer
are prepared to enter into this employment agreement.

                                      Terms

     Now, Therefore, in consideration of the premises and mutual covenants and
obligations hereinafter set forth, intending to be legally bound hereby, the
parties hereto agree as follows:

1.   Employment; Scope of Duties.

     1.1 Subject to and upon the terms and conditions set forth herein, Employer
hereby employs Executive in the capacity of Vice Chairman/President/Chief
Operating Officer, and Executive hereby accepts such employment and agrees to
render his services exclusively to Employer, its subsidiaries and affiliates
(collectively, the "Company"), in such capacity or similar capacity, and
faithfully, diligently and to the best of his ability. Executive will perform
those duties and responsibilities as may from time to time reasonably be
specified by Employer. Such duties and responsibilities will initially include,
without limitation, those duties set forth in Exhibit A attached hereto.
Executive will be responsible for the efficient performance of such duties and
responsibilities and will at all times operate within the goals, guidelines,
budgets, policies and procedures now or hereafter established by Employer.
Executive will report to the Chairman and Chief Executive Officer of Employer.

     1.2 Executive will devote his full business and professional time, energy
and skill exclusively to the service of the Company and to the promotion of its
interests in accordance with the duties and responsibilities assigned to him by
Employer hereunder and will not render services of a business, professional or
commercial nature to any other person or entity, whether for compensation or
otherwise; provided, however, that the foregoing shall not be construed as
preventing Executive from (a) making investments in other businesses or
enterprises which do not provide services which are in competition with those
provided by the Company, provided such investments do not require the provision
of other than incidental services by Executive to the operation or affairs of
such businesses or enterprises; or (b) serving on the board of community and
nonprofit organizations which do not provide services which are in competition
with those provided by the Company; provided further that, in the case of both
clauses (a) and (b), the provision thereof will not interfere with the
performance of Executive's duties hereunder. Upon request of Employer, if
Executive is duly elected or appointed, Executive shall serve, without
additional compensation, as an officer or a director of Employer and/or its
subsidiaries or affiliates; provided, however, that Executive shall

<PAGE>

have no obligation to accept election or appointment as an officer or a director
prior to Employer providing "director and officer" insurance coverage to
Executive.

2.   Term. The term of Executive's employment will commence on February 1, 2002
and end on February 1, 2005, unless and until terminated earlier pursuant to the
provisions of this Agreement (said period during which Executive is employed
full time pursuant to this Agreement is hereinafter referred to as the
"Employment Period").

3.   Compensation. As compensation and consideration for Executive's services
and responsibilities under this Agreement, Employer will pay Executive, and
Executive will accept, the compensation and benefits set forth in this Section
3.

     3.1 Base Salary. Employer shall pay to Executive a gross salary at the
annual rate of Two Hundred Thousand Dollars ($200,000) ("Base Salary"), payable
at such intervals as Employer pays the salaries of its executives generally
(currently every two weeks), but not less frequently than monthly.

     3.2 Bonuses. Executive shall be eligible for an annual bonus according to a
bonus plan to be established annually by Employer, in its sole discretion, such
plan to incorporate projects determined by Employer's Chief Executive Officer in
conjunction with Executive as part of Employer's annual business planning
process; provided that each bonus plan shall allow Executive to earn up to 100%
of Executive's Base Salary based on achievement of the Company's performance
versus its business plan; and provided further that Executive shall not
participate in a bonus plan for the period from the first day of the Employment
Period through June 30, 2002 unless discretionary bonuses are provided at the
discretion of the Company. Bonuses shall be calculated on a fiscal year basis,
and, except as set forth in the preceding proviso, shall be prorated for partial
years. The bonus with respect to any fiscal year shall be payable within 30 days
of the date that Employer receives from its auditors such auditor's report on
its financial statements for such fiscal year, and shall not be payable to
Executive, nor be deemed to have accrued, unless Executive is employed by
Employer on the date of scheduled payment or as otherwise expressly provided
within this Agreement.

     3.3 Stock Options. Employer will grant to Executive as of the date of his
offer letter the option (the "Option") to purchase 65,000 shares of Employer's
Common Stock. The grant with respect to 40,000 of such shares shall be pursuant
to and subject to the terms of Employer's standard form of Non-Qualified Stock
Option Agreement ("Stock Option Agreement") for grants under the Company's 1995
Stock Incentive Plan, a copy of which agreement is attached hereto as Exhibit B.
The grant with respect to the remaining 25,000 of such shares shall be pursuant
to and subject to the terms of a stock option agreement in substantially the
same form as the Stock Option Agreement, except that such shares will not be
issued under the 1995 Stock Incentive Plan and the agreement shall include
customary investment representations and provisions giving Executive the right,
after exercise of the Option, to require Employer to file a registration
statement covering the shares issued (or, in the alternative, if Form S-8 is
available, Employer will file a registration statement on such form prior to the
date the shares become exercisable). The Option shall be subject to a three-year
vesting schedule, with the Option becoming exercisable with respect to one-third
of the shares

                                        2

<PAGE>

subject to the Option on each of the first, second and third anniversary dates,
respectively, of the first day of the Employment Period if the conditions set
forth in the Stock Option Agreement have been satisfied. The exercise price
under the Option will equal the mean between the highest and lowest quoted
selling price of Employer's common stock on the NASDAQ National Market on the
first day of the Employment Period. In the future, Executive will be eligible
for grants of additional stock options based on performance at the sole
discretion of Employer's Board of Directors (or the Compensation Committee of
the Board of Directors).

     3.4 Car Allowance. Executive will be provided a $7,200 per year car
allowance to cover all car expenses, including gasoline (provided that, in the
case of trips to a destination which is 100 miles or more from Employer's
corporate headquarters, Executive will be reimbursed for the cost of gasoline
relating to the trip). Such car allowance shall be paid proportionately in each
pay period.

     3.5 Vacation. Executive will be entitled to four (4) weeks vacation per
year. All vacation periods requested must be approved by Employer's Chief
Executive Officer. Vacation is on a "use or lose" basis, which means that
carryover from year to year will not be permitted. Vacation balances will be
forfeited if not used by the applicable anniversary date of the first day of the
Employment Period.

     3.6 Sick Leave. Executive will receive sick days in accordance with
Employer's policies.

     3.7 Senior Executive Severance Plan. For so long as the "Nobel Learning
Communities, Inc. Senior Executive Severance Pay Plan," a copy of which is
attached hereto as Exhibit C (collectively with any successor plan thereto, the
"Executive Severance Pay Plan") shall be in effect, Executive shall be covered
thereby, upon execution and delivery to Employer of an acknowledgment, in
standard form, of his agreement to submit any disputes thereunder to
arbitration.

     3.8 Other Benefits. Executive shall be entitled to participate in all group
health, group life insurance, short term disability, long term disability,
hospital, medical plans and retirement plans according to Employer's policies in
existence from time to time generally for executive management personnel (or as
may be decided by Employer if said items are discretionary with Employer). Such
plans currently include:

         (a) 75% payment by Employer of family medical insurance (currently
provided by CIGNA Healthcare plan (as the employee elects) (with dental coverage
available for an extra premium payable by Executive);

         (b) the Nobel Learning Communities 401(k) Savings Plan (in which
Executive will become eligible to participate upon the first open enrollment
period occurring after one year of service); provided that participation may be
limited by Federal laws relating to the participation level of lower wage
earners;

                                        3

<PAGE>

        (c) tuition reimbursement (the current features of which include the
requirement that courses be job-related and pre-approved, that reimbursement is
limited to a specified maximum amount and that a minimum grade be achieved as a
condition to reimbursement);

        (d) term life insurance equal to one (1) times Executive's Base Salary;

        (e) short-term disability insurance that extends coverage for a period
of 26 weeks at a rate of 65% of Executive's Base Salary with a maximum weekly
benefit of $325;

        (f) long-term disability insurance, as provided generally to other
senior executives of Employer; and

        (g) 100% educational scholarship at any Nobel school for any of the
Executive's children.

   3.9  Relocation Allowance. The Executive will receive from Employer a
relocation allowance of $35,000 (the "Relocation Allowance"). On the 18th day of
each month of the Employment Period, if Executive is employed by Employer on
such date, Employer will forgive 1/36 of the Relocation Allowance. If
Executive's employment hereunder is terminated due to a Change in Control and
Termination Event (as such terms are defined in Sections 1.2 and 2.2(b) of the
Executive Severance Pay Plan) (other than by reason of Section 2.2(b)(3) of the
definition of Termination Event) or by Employer other than pursuant to Sections
7.1(a), (b) or (c) hereof, such relocation allowance will be fully forgiven on
the date of termination.

   3.10 Adjustments to Compensation. Executive's compensation will be reviewed
annually each year on such date as is determined by Employer's Compensation
Committee, such review to be conducted by the Compensation Committee
consultation with the Chief Executive Officer. However, any adjustment shall be
in the sole discretion of Employer and nothing contained herein shall in any
manner obligate Employer to make any increase or provide any additional
compensation to Executive.

4. Reimbursement of Expenses. Executive shall be allowed reasonable business
expenses in connection with the performance of his duties hereunder upon
submission by Executive of vouchers or itemized statements thereof prepared in
compliance with such rules relating thereto as Employer may from time to time
adopt (which rules may include the requirement that the Executive receive
advance approval of such expenses) and as may be required in order to permit
such payments as proper deductions to Employer under the Internal Revenue Code
of 1986, as amended and the rules and regulations adopted pursuant thereto now
or hereafter in effect.

5. Facilities. Executive shall be entitled to an office appropriate to his
position and such secretarial services as are reasonably necessary to the
performance of his duties.

6. Photographs. Employer shall have the right to photograph Executive during the
course of Executive's employment or at such other times when not at work, by
camera, film, television, tape radio or other media, or record Executive in
formal or informal conversation, interview, training

                                        4

<PAGE>

sessions, etc., any of which may be in the format of a pre-planned program or in
a spontaneous interview. The foregoing may be used by the Company or its
advertising agency for commercial purpose, on labels, training films or other
media at Employer's sole discretion. Executive's image, its replica, in whole or
portions thereof, may be used, and Executive's name may be attributed thereto.
Executive may be photographed individually or in a group. Executive's
compensation fully stated herein, includes full and complete payment for all of
the above and Executive hereby waives any further compensation, royalties, etc.

7.   Termination.

     7.1  Early Termination of Employment Period. Notwithstanding Section 2, the
Employment Period shall sooner terminate upon the close of business on the
earliest to occur of the dates specified below:

          (a) the date of death of Executive;

          (b) the date upon which Employer shall have given Executive written
notice of the termination of his employment hereunder for "disability" (as
defined in Section 7.2);

          (c) the date upon which Employer shall have given to Executive written
notice of the termination of his employment for "cause" (as defined in Section
7.3); and

          (d) the date upon which Employer shall have given to Executive written
notice of the termination of his employment without cause.

     7.2  Definition of "Disability". For purposes of this Agreement, the term
"disability" shall mean that Executive cannot substantially perform his
"essential duties" (which shall include any travel requirements) with or without
reasonable accommodation and either (i) such situation persists for a period of
180 days in any 365 day period, or (ii) in the opinion of a Pennsylvania
licensed physician Executive is so disabled or incapacitated and he is unlikely
to be able substantially to perform his "essential duties" with or without
reasonable accommodation within 180 days. Determination of disability and the
date thereof shall be reasonably made by Employer, relying on certificates of
physicians, and Employer's decision shall be conclusive and binding, in the
absence of fraud. If Employer so requests, Executive will submit to an
examination by a Pennsylvania licensed physician with expertise or knowledge of
the type of disabling condition from which Executive allegedly suffers for the
purpose of verifying whether the provisions of this Section 7.2 are applicable.
If Executive refuses to cooperate in submitting to an examination as requested
by Employer, Executive shall immediately be deemed "disabled" for the purposes
of this Agreement. (Executive acknowledges that this Section 7.2 sets forth only
the condition for which Executive may be terminated for disability, and that
Employer is not required to pay (although it may pay) Executive for periods not
worked in excess of vacation and sick days utilized, except as may be required
by applicable law or to the extent that Executive receives benefits under
Employer's short term disability or long term disability policies.)

                                        5

<PAGE>

     7.3  Definition of "Cause". For purposes of this Agreement, the term
"cause" shall include, but not be limited to, any one of the following
conditions or any one of the following events:

          (a) Executive's habitual intoxication or drug addiction;

          (b) violation of Employer's policies with respect to harassment
(sexual or otherwise);

          (c) refusal or failure by Executive to perform such reasonable duties
as may reasonably be delegated or assigned to him, consistent with his position,
by Employer;

          (d) failure to devote his entire full week business to the duties of
the position as provided herein, except permitted vacation periods and/or
sickness leave;

          (e) continuing inattention or neglect by Executive of his duties
hereunder, which inattention is not the result of illness or accident;

          (f) willful or wanton misconduct or negligence by Executive in
connection with the performance of his duties;

          (g) the material breach by Executive of any provisions of this
Agreement (including, without limitation, Section 9);

          (h) the commission by Executive of a felony, participation in any
fraud or commission of any misdemeanor involving moral turpitude;

          (i) Executive's dishonesty detrimental to the best interest of the
Company; and

          (j) involvement in any matter which, in Employer's opinion, is
reasonably likely to cause prejudice or embarrassment to the Company's business.

provided, that, in the case of clauses (c), (d), (e), (f) or (g) of this Section
7.3, there shall not be "cause" unless Employer has first given Executive
written notice specifying in reasonable detail the circumstances on which
Employer believes there is "cause" for termination and Executive has failed to
remedy the same to Employer's reasonable satisfaction with fifteen (15) days
after the date of such notice, or unless the condition or event is not subject
to cure, or a substantially similar condition or event has been the subject of a
prior notice by Employer within the twelve (12) months preceding such notice.

     7.4  Effect of Early Termination on Compensation.

          (a) Except as provided in Sections 7.4(b) and (c), if the Employment
Period is terminated as provided in Section 7.1 (including by reason of
Executive's death or disability), Executive shall be entitled to receive only
the compensation set forth in Section 3 accrued but unpaid

                                        6

<PAGE>

as of the date of termination and all benefits shall terminate as of such date
(except to the extent otherwise provided by law or under the terms of Employer's
benefit plans and policies then in effect).

         (b)   If, during the Employment Period, Employer terminates Executive's
employment pursuant to Section 7.1(d), Employer shall continue to pay Executive
the compensation provided for pursuant to Section 3.1 until the last day of the
Employment Period and provide the benefits referenced in Section 3.8 until the
last day of the Employment Period (or such earlier date as a comparable benefit
is being provided by a new employer), plus

               (i)   on each date that Executive would have been paid a bonus in
                     respect of bonus years occurring during the Employment
                     Period, Employer shall pay Executive the amount of the
                     bonus, if any, that Executive would have received had he
                     been employed by Employer for the full Employment Period,
                     and remained employed until such date following the end of
                     the Employment Period on which he would have had to have
                     been employed to receive a bonus for the last bonus year
                     covered by the Employment Period; offset by

               (ii)  the amount, if any, which is payable to Executive under the
                     Executive Severance Pay Plan.

If Executive violates any of the provisions of Section 10, the payments and
benefits by Employer pursuant to this Section 7.4(b) shall immediately cease,
and, in addition to any other rights which Employer may have to recover money
damages from Executive or obtain injunctive relief in respect of such violation,
Employer shall be entitled to recover from Executive all payments made pursuant
to this Section 7.4(b).

         (c)   Under no circumstances shall Executive be entitled to any
compensation (including, without limitation, any severance pay or termination
indemnity), except (i) as specifically set forth in this Section 7.4, or (ii) to
the extent otherwise provided by law or as may be expressly provided under the
terms of Employer's benefit plans and policies then in effect. Employer shall
pay any funds provided for in this Section 7.4 to Executive, his estate or legal
representative, as the case may be.

8.   Expiration of Employment Period. On expiration or termination of the
Employment Period, neither party shall be under any obligation to renew
Executive's employment with Employer and, unless otherwise agreed by both
parties in writing, any continued employment of Executive by Employer shall be
on an "at will" basis. Notwithstanding any of the foregoing to the contrary,
Executive's covenants under Section 10 shall continue so long as he is employed
by the Company and for any additional periods specified therein.

9.   Executive Representations. Executive represents and warrants to the Company
that he is not a party to or bound by any agreement, arrangement or
understanding, written or otherwise, which

                                        7

<PAGE>

prohibits or in any manner restricts his ability to enter into and fulfill his
obligations under this Agreement and/or to be employed by and serve Employer in
an executive capacity. Executive will indemnify and hold harmless the Company
from any claims, liabilities, damages, costs or expenses (including legal fees
and costs) resulting from third-party claims of any such conflict or breach.

10.  Certain Covenants of Executive.

     10.1  Intellectual Property. All rights in and to any and all inventions,
ideas, techniques, methods, developments, works, improvements and other forms of
intellectual property ("Intellectual Property"), whether or not patentable,
which Executive (either alone or in conjunction with others) conceives, makes,
obtains or reduces to product or commences so to do during his employment with
Employer are and shall be the property of Employer. The foregoing shall not
apply to Intellectual Property unrelated to any subject matter of actual or
potential concern or interest to the Company which are not conceived, made,
obtained or reduced to product in the course of Executive's employment or with
the use of the time, material or facilities of the Company. Executive will make
full and prompt disclosure to Employer of all Intellectual Property and, at
Employer's request and expense but without additional compensation to Executive
during his employment hereunder and with reasonable compensation thereafter,
will at any time or times execute and deliver such foreign and domestic patent,
trademark or copyright applications, assignments and other papers and take such
other action (including, without limitation, testifying in any legal
proceedings) as Employer considers necessary to vest, perfect, defend or
maintain Employer's rights in and to such Intellectual Property. The provisions
of this Section 10.1 shall survive the termination or expiration, for any
reason, of this Agreement.

     10.2  Nondisclosure of Confidential Information.

           (a) Executive shall not, during the period that Executive is employed
by, or provides consulting services to, the Company, or at any time thereafter,
unless authorized to do so in writing by Employer, directly or indirectly
disclose or permit to be known to, or used for the benefit of, any person,
corporation or other entity (outside of the employ of the Company), or himself,
any confidential information acquired by him during the course of or as an
incident to his employment or association with the Company, regardless of
whether pursuant to this Agreement. For the purposes of this Section 10.2, the
term "confidential information" shall include, but not be limited to, all trade
secrets, confidential or proprietary knowledge or information with respect to
the conduct or details of the Company's businesses including, but not limited
to, lists of customers or suppliers of the Company's businesses, pricing
strategies, business files and records, trade secrets, curriculum, processes,
costs, designs, marketing methods or any other financial, educational,
curricular or other information about the Company's businesses or curriculum not
in the public domain. The term "confidential information" shall not include any
information which (i) is generally available to the public as of the date
hereof, (ii) becomes generally available to the public after the date hereof,
provided that such public disclosure did not result, directly or indirectly,
from any act, omission or fault of Executive, or (iii) becomes available to
Executive after the date of expiration or termination of his employment or any
consultancy with the Company on a non-confidential basis from a source

                                        8

<PAGE>

other than the Company, or any of its agents, provided that such source is not
bound to the Company or its representatives by agreement, fiduciary duty or
otherwise not to disclose such information.

           (b) All confidential information described in Section 10.1 shall be
the exclusive property of Employer, and Executive shall use his best efforts to
prevent any publication or disclosure thereof. Upon termination of Executive's
employment with Employer, Executive shall return to Employer all documents,
records, reports, writings and other similar documents (whether in written,
electronic or other form) containing confidential information, including copies,
extracts or notations thereof, then in his possession or control.

           (c) All correspondence, memoranda, notes, records, reports, plans and
other papers and items delivered to Executive by Employer shall be the property
of Employer, and Executive will deliver all copies thereof to Employer on
expiration or termination of this Agreement or on earlier request.

     10.3  Nonsolicitation. During the period that Executive is employed by
Employer or provides consulting services to the Company and for an additional
period of two (2) years thereafter, Executive will not employ, or enter into any
consultancy arrangement with, any person who was on the Company's payroll on the
date of Executive's termination of employment or consultancy or one (1) year
prior to that date, take any action to solicit the employment of any such
person, or direct or encourage any person to take any such action.

     10.4  Restrictive Covenant. During the period that Executive is employed by
Employer or provides consulting services to the Company and for an additional
period of two (2) years thereafter, Executive shall not, directly or indirectly,
operate, manage, own, control, be employed by, provide consulting services to,
or in any way be connected with or be concerned with or be interested in (i) any
pre-school, private school, child care center or program or day camp of any
type, (ii) any for profit or nonprofit business which provides educational
services of the nature provided by the Company, in each case, where services are
provided within 25 miles of any place where the Company now or hereafter offers
or plans to offer services; provided however, that nothing contained in this
Section 10.4 shall prohibit Executive from owning in the aggregate less than 2%
of the publicly traded stock of any company.

     10.5  Survival. The provisions of this Section 10 shall survive the
expiration or termination, for any reason, of the Employment Period and of this
Agreement, and shall continue, in the case of Sections 10.1 and 10.2, without
termination, and, in the case of Sections 10.3 and 10.4, for the period
contemplated therein (including any extended period as provided in Section
10.6).

                                        9

<PAGE>

     10.6 Remedies. Executive acknowledges that if he breaches his promises set
forth in this Section 10, the Company will suffer irreparable damages, the
amount of which will be impossible to ascertain and which cannot be reasonably
or adequately compensated in an action of law. Accordingly, notwithstanding
Section 11, in addition to all other remedies under this Agreement, the Company
shall be entitled as a matter of right to injunctive relief, including specific
performance, with respect to any such breach or violation, in any court of
competent jurisdiction; provided, however, that nothing herein shall be deemed
to constitute consent by Executive to an ex parte proceeding. The remedies
granted to the Company in this Agreement are cumulative and are in addition to
remedies otherwise available to the Company at law or in equity. If the Company
is obliged to resort to the courts for the enforcement of a covenant of
Executive contained in Sections 10.3 or 10.4, such covenant shall be extended
for a period of time equal to the period of such breach, which extended period
will commence on the later to occur of (i) the date on which the original
(unextended) term of such covenant is scheduled to terminate, or (ii) the date
of the final court order (without further right of appeal) enforcing such
covenant. To the extent that any statutes providing for discovery in any action
to enforce any of the covenants or obligations of this Section 10.4 delay the
time in which any party may initially propound, request or serve any discovery,
the parties waive such provisions of such statues. Executive will not seek, and
hereby waives any requirement for, the securing of posting of a bond or proving
actual damages in connection with the Company's seeking or obtaining any
injunctive or equitable relief in connection with Executive's covenants or other
obligations under this Section 10. If, despite the foregoing waivers, a court
would nonetheless require the posting of a bond, the parties agree that a bond
in the amount of $5,000 would be a fair and reasonable amount, particularly in
light of the difficulty in quantifying what the actual loss caused by an
injunction would be. Executive consents to in personam jurisdiction and venue in
each of the United States District Court for the Eastern District of
Pennsylvania and the Court of Common Pleas of Delaware County, Pennsylvania, and
waives the right to contest in personam jurisdiction and venue in such courts.

11.  Arbitration of Certain Disputes. Any and all controversies or claims
arising out of or relating to this Agreement, or the breach thereof, or any
other claim by Executive against the Company arising from the employment of
Executive or the termination of Executive's employment, including without
limitation, claims alleging violation of Title VII of the Civil Rights Act of
1964, 42 U.S.C. (S)(S)2000e, et seq., the Age Discrimination in Employment Act,
29 U.S.C. (S)621, et seq., the Americans with Disabilities Act, 42 U.S.C.
(S)12101 et seq., the Family and Medical Leave Act, 29 U.S.C. (S)2601, et seq.,
any statutes of any state, and any contract or any principle of state or federal
common law, shall be settled by arbitration administered by the American
Arbitration Association under its Employment Dispute Resolution Rules. Judgment
on the award rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereof. The procedure established by this Section 11 shall be the
exclusive method for resolution of such disputes. Copies of the American
Arbitration Association Employment Discrimination Resolution Rules are available
through Employer's Human Resources Department and may be obtained upon request.
Any request or demand for arbitration of any dispute covered by this Section 11
shall be filed with the American Arbitration Association no later than 300 days
after the event which gave rise to the claim. Notwithstanding the foregoing, the
Company may seek injunctive relief in any court of law in connection with an
alleged violation of any provision of Section 10, as provided in Section 10.6.

<PAGE>

12.  Miscellaneous

     12.1 Binding Effect. This Agreement shall be binding upon Executive, his
personal representative or representatives and testate or intestate distributees
and upon Employer and its successors and assigns; provided that this Agreement
shall be assignable by Employer to an affiliate or any person, firm or entity
which may become a successor in interest to Employer in the business presently
operated by it or which may acquire all or substantially all of Employer's
assets or a majority of Employer's voting capital stock. The term "affiliate"
used in this Agreement shall mean any entity that directly or indirectly through
one or more intermediaries, controls or is controlled by or is under common
control with Employer, or is a successor of Employer. This Agreement is a
personal services contract and may not be assigned by Executive.

     12.2 Survival of Certain Provisions. It is expressly understood by the
parties to this Agreement that certain provisions, rights, and obligations
pursuant to this Agreement are expressly meant to survive the expiration or
termination of the Employment Period and this Agreement and shall be given full
effect pursuant to their terms.

     12.3 Notices. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be delivered by hand or be sent by
certified mail or overnight courier addressed to Executive at his address set
forth in the first paragraph of this Agreement or to Employer at Nobel Learning
Communities, Inc., 1615 West Chester Pike, West Chester, PA 19382-7956, Attn.
Vice Chairman/President and Chief Operation Officer, with a copy to Nobel
Learning Communities, at the same address, Attn: General Counsel, or to such
other address as either of such parties may designate in a written notice served
upon the other party in the manner provided herein. Any such notice shall become
effective upon being mailed or, in the case of delivery by hand or overnight
courier, upon receipt.

     12.4 Governing Law. This Agreement is made and delivered in the
Commonwealth of Pennsylvania and shall be construed and enforced in accordance
with the laws of the Commonwealth of Pennsylvania, without giving effect to
principles of conflicts of law.

     12.5 Prevailing Party. Should any party default in performance of any of
the terms and conditions of this Agreement which results in a claim for damages,
specific performance or other remedy, the prevailing party in such action suit
shall be entitled to its reasonable attorneys' fees and costs and court or
arbitration costs from the nonprevailing party. For the purposes of this Section
12.5, in any action with respect to the enforcement of a covenant set forth in
Section 10, the Company shall be deemed to have prevailed if any such covenant
is enforced in part, even if the applicable court exercises its discretion to
limit or reduce the duration or scope thereof or enforces only certain of such
covenants.

     12.6 Entire Agreement; Modifications. This instrument contains the entire
agreement of the parties relating to the subject matter hereof, and there are no
agreements, representations or warranties not herein set forth. This Agreement
supersedes any prior written or oral agreement or understanding relating to the
subject matter hereof. No modification of this Agreement shall be valid unless
in writing and signed by the parties hereto. A waiver of the breach of any term
or

<PAGE>

condition of this Agreement shall not be deemed to constitute a waiver of any
subsequent breach of the same or any other term or condition.

     12.7 Severability; Savings Clause. If any term or provision of this
Agreement or the application thereof to any person or circumstance shall, to any
extent, be held invalid or unenforceable by a court of competent jurisdiction,
the remainder of this Agreement or the application of any such term or provision
to persons or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, and each term and provision of
this Agreement shall be valid and enforceable to the fullest extent permitted by
law. If any of the provisions contained in this Agreement shall for any reason
be held to be excessively broad as to duration, scope, activity or subject, it
shall be construed by limiting and reducing it, so as to be valid and
enforceable to the extent compatible with the applicable law or the
determination by a court of competent jurisdiction.

     12.8 Attorney Review. Executive acknowledges that this Agreement will have
important legal consequences and imposes significant requirement on Executive,
including, without limitation, the obligation to refrain from certain activities
after the expiration or termination of his employment or consultancy with
Employer. Accordingly, Executive acknowledges that Employer has recommended that
he retain legal counsel to review this Agreement and that he has been provided
with adequate time to obtain such review.

     IN WITNESS WHEREOF, the undersigned have executed this Agreement the date
and year first written above.

                                      Nobel Learning Communities, Inc.

                                      By: /s/A. J. Clegg
                                          ----------------------
                                          A. J. Clegg
                                          Chairman and Chief Executive Officer

                                      Executive:

                                          /s/ Scott Clegg
                                          ----------------------
                                          Scott CleggEXHIBIT 4.12

                               UNILAB CORPORATION

               Amended & Restated 2000 Executive Stock Option Plan

              1. Purpose. The purpose of this Amended and Restated 2000
Executive Stock Option Plan (the "Plan") is to advance the interests of UNILAB
CORPORATION, a Delaware corporation (the "Company"), by affording certain
officers, directors, consultants and key employees of the Company and its
subsidiaries an ownership interest in the Company and thus to stimulate in such
persons increased personal interest in the success and future growth of the
Company.

              2. Definitions.

              "Acceptance Date" shall have the meaning ascribed to such term in
the Merger Agreement.

              "Acquiring Person" shall mean, with reference to the transactions
referred to in Section 12(a), (i) the continuing or surviving entity of a
consolidation or merger with the Company in connection with which the Common
Stock is changed into or exchanged for stock or other securities of any other
Person or cash or any other property, (ii) the transferee of all or
substantially all of the assets of the Company, (iii) the parent entity of any
corporation consolidating with or merging into the Company in a consolidation or
merger in connection with which the Common Stock is changed into or exchanged
for stock or other securities of any other Person or cash or any other property
if the Company becomes a subsidiary of such entity and the parent entity of any
entity acquiring all or substantially all of the assets of the Company, or (iv)
in the case of a capital reorganization or reclassification or in any case in
which the Company is a surviving corporation in a merger not described in clause
(i) or (iii) above, the Company.

              "Average Closing Price" shall mean the average Fair Market Value
of the Common Stock over the consecutive trading days within any six-month
period commencing on or after the effectiveness of the Company's initial public
offering of its shares of Common Stock.

              "Board" shall mean the Board of Directors of the Company.

              "Business Day" shall mean any day other than a Saturday or a
Sunday or a day on which commercial banking institutions in the City of New York
are

<PAGE>

authorized by law to be closed. Any reference herein to "days" (unless Business
Days are specified) shall mean calendar days.

              "Cause" shall have the meaning set forth in the Option agreement.

              "Class A Option" shall mean an option to purchase a number of
shares of Common Stock, as specified in an option agreement, identified as a
"Class A Option," which shall be subject to the exercise and termination
provisions set forth in Section 8(a) hereof and, if applicable, in such Option
agreement.

              "Class B Option" shall mean an option to purchase a number of
shares of Common Stock, as specified in an option agreement, identified as a
"Class B Option," which shall be subject to the exercise and termination
provisions set forth in Section 8(b) hereof and, if applicable, in such Option
agreement.

              "Class C1 Option" shall mean an option to purchase a number of
shares of Common Stock, as specified in an option agreement, identified as a
"Class C1 Option," which shall be subject to the exercise and termination
provisions set forth in Section 8(c) hereof and, if applicable, in such Option
agreement.

              "Class C2 Option" shall mean an option to purchase a number of
shares of Common Stock, as specified in an option agreement, identified as a
"Class C2 Option," which shall be subject to the exercise and termination
provisions set forth in Section 8(d) hereof and, if applicable, in such Option
agreement.

              "Class C3 Option" shall mean an option to purchase a number of
shares of Common Stock, as specified in an option agreement, identified as a
"Class C3 Option," which shall be subject to the exercise and termination
provisions set forth in Section 8(e) hereof and, if applicable, in such Option
agreement.

              "Closing Date" shall mean November 23, 1999 the closing date of
the Agreement and Plan of Merger, dated as of May 24, 1999, as amended July 8,
1999, July 30, 1999 and August 10, 1999 between the Company, and UC ACQUISITION
SUB, INC., a Delaware corporation and a direct wholly owned subsidiary of Kelso
Investment Associates, VI L.P., a Delaware limited partnership, and KEP VI LLC,
a Delaware limited liability company.

              "Common Stock" shall mean the Common Stock, par value $.01 per
share, of the Company, such term to include any stock into which such Common

                                        2
<PAGE>

Stock shall, after the date hereof, have been changed or any stock resulting
from any reclassification of such Common Stock.

              "Company" shall have the meaning ascribed to such term in Section
1 hereof.

              "Committee" shall mean the committee appointed by the Board to
administer and to perform the functions set forth herein. If no Committee is
appointed by the Board, the Board shall be the Committee.

              "Disability" shall have the meaning set forth in the Option
agreement.

              "Eligible Person" shall have the meaning ascribed to such term in
Section 5 hereof.

              "Exercise Notice" shall have the meaning ascribed to such term in
Section 8(a) hereof.

              "Fair Market Value" of a share of Common Stock on any date shall
be the fair market value of such Stock as determined by the Committee in its
sole discretion; provided that (A) if the Common Stock is admitted to trading on
a national securities exchange, Fair Market Value on any date shall be the last
sale price reported for the Common Stock on such exchange on such date or, if
none, the next earlier date on which a sale was reported, (B) if the Common
Stock is admitted to quotation on the NASDAQ Stock Market or other comparable
quotation system, Fair Market Value on any date shall be the last sale price
reported for the Common Stock on such system on such date or, if none, the next
earlier date on which a sale was reported, or (C) if the Common Stock is
admitted to quotation on a system other than the NASDAQ Stock Market or other
comparable quotation system, Fair Market Value on any date shall be the average
of the highest bid and lowest asked prices of the Common Stock on such system on
such date.

              "Good Reason" shall have the meaning set forth in the Option
agreement.

              "Holder" shall mean a Person to whom an Option is granted pursuant
to the Plan.

                                        3
<PAGE>

              "Kelso" shall mean Kelso & Company L.P.

              "KEP VI" shall mean KEP VI, LLC, a Delaware limited liability
company.

              "Merger Agreement" shall mean the Agreement and Plan of Merger
among Quest Diagnostics Incorporated, [Merger Sub, Inc.,] and the Company dated
April 1, 2002.

              "Named Consultant" shall have the meaning ascribed to such term in
Section 8(a) hereof.

              "Options" shall mean, collectively, Class A Options, Class B
Options, Class C1 Options, Class C2 Options, Class C3 Options and Rolled
Options.

              "Option Price" shall mean the price per share for which shares of
Common Stock may be purchased pursuant to an Option, as set forth in the
applicable Option agreement.

              "Other Securities" shall mean any stock (other than Common Stock)
and other securities of the Company or any other Person (corporate or otherwise)
which the Holders of the Options at any time shall be entitled to receive, or
shall have received, upon the exercise of the Options, in lieu of or in addition
to Common Stock, or which at any time shall be issuable or shall have been
issued in exchange for or in replacement of Common Stock or Other Securities.

              "Permitted Transferee" of a Holder shall mean the Company and (A)
the spouses, family members, heirs, executors, administrators, testamentary
trustees or legatees or beneficiaries of the Holder, (B) any trust, the
beneficiaries of which, or a corporation or partnership, the stockholders or
general and limited partners of which, include only the Holder or the spouse or
family members of the Holder and (C) any other Person approved by the Committee;
provided that each such transferor has obtained the prior written consent of the
Company; provided further that the transfer to any such person is in compliance
with all applicable federal, state and foreign securities laws.

                                        4

<PAGE>

              "Person" shall mean a corporation, an association, a partnership,
an organization, a business, an individual, a government or political
subdivision thereof or a governmental agency.

              "Plan" shall have the meaning ascribed to such term in Section 1
hereof.

              "Prior Plan" shall mean the Company's 1996 Stock Option and
Performance Incentive Plan, as amended.

              "Retirement" shall have the meaning set forth in the Option
agreement.

              "Rolled Option" shall mean an Option to purchase shares of Common
Stock previously granted under the Prior Plan that has been assumed by and made
subject to terms of the Plan.

              3. Options Available for Grant Pursuant to the Plan. The Options
available for grant pursuant to the Plan shall in no case exceed, in the
aggregate, the following quantities:

              (a) in the case of Class A Options, options to purchase 1,643,854
shares of Common Stock;

              (b) in the case of Class B Options, options to purchase 193,258
shares of Common Stock;

              (c) in the case of C1 Options, options to purchase 807,877 shares
of Common Stock;

              (d) in the case of C2 Options, options to purchase 628,348 shares
of Common Stock; and

              (e) in the case of C3 Options, options to purchase 520,171 shares
of Common Stock.

              Notwithstanding the foregoing, the Company may from time to time
reallocate the number of Options available for grant among the classes of
Options (other than Rolled Options) available under this Plan.

                                        5

<PAGE>

              4. Reservation of Shares. The Company has reserved (subject to
adjustment as provided in Section 11 hereof), solely for issuance and delivery
upon exercise of the Options pursuant to this Plan, 3,793,508 shares of Common
Stock. All shares of Common Stock (or Other Securities) issuable upon exercise
of any Options shall be duly authorized and, when issued upon such exercise,
shall be validly issued and, in the case of shares, fully paid and nonassessable
with no liability on the part of the Holders thereof.

              5. Eligibility. Options may be granted to executive officers,
directors, consultants or key employees of the Company or any of its
subsidiaries, from time to time, as determined by the Committee (each, an
"Eligible Person"). In determining (i) who shall be an Eligible Person or (ii)
grants under the Plan, the Committee shall take into account such factors as it
shall deem relevant in connection with accomplishing the purposes of the Plan.

              6. No Right to Employment or Continued Service. Nothing in the
Plan or in any Option shall confer any right on any Eligible Person to continue
in the employ or service of the Company or any of its subsidiaries or shall
interfere in any way with the right of the stockholders of the Company or any of
its subsidiaries to terminate such Eligible Person's employment or service at
any time.

              7. Administration of the Plan. The Plan shall be administered by
the Committee. The Committee shall have full power to construe and interpret the
Plan, to establish rules for its administration and to grant Options to Eligible
Persons, in each case in accordance with the provisions of the Plan. In
addition, the Committee may delegate such of its duties under the Plan as may
be deemed by the Committee to be clerical or ministerial to such delegates as
the Committee deems appropriate. All actions taken and decisions made by the
Committee pursuant to the Plan shall be binding and conclusive on all persons
interested in the Plan.

              8. Exercisability of Options.

              (a) Class A Options.

                  (i) Unless otherwise determined by the Committee, all
     outstanding Class A Options heretofore granted that are not vested and
     exercisable shall be fully vested and exercisable as of the Acceptance
     Date.

                  (ii) In the event that a Holder's employment or service with
     the Company or any of its subsidiaries is terminated for any reason other
     than

                                        6

<PAGE>

     by the Company or any of its subsidiaries for Cause, any portion of any
     Class A Option held by such Holder, that has become exercisable will remain
     exercisable; provided, however, that any such Option shall expire on the
     90th day after termination of employment or service of the Holder. Any
     unexercisable portion of any Class A Option held by a Holder shall expire
     immediately prior to a Holder's termination of service or employment.

                  (iii) Notwithstanding anything to the contrary herein, in the
     event that the employment or service of a Holder with the Company or any of
     its subsidiaries is terminated by the Company or any of its subsidiaries
     for Cause, each Class A Option held by such Holder shall expire immediately
     prior to such termination.

              (b) Class B Options.

                  (i) Except with respect to Class B Options held by the
     consultant identified in Schedule A hereto (the "Identified Consultant"),
     all outstanding Class B Options heretofore granted that are not vested and
     exercisable shall be fully vested and exercisable as of the Acceptance
     Date.

                  (ii) In the event that a Holder's employment or service with
     the Company or any of its subsidiaries is terminated for any reason other
     than by the Company or any of its subsidiaries for Cause, any portion of
     any Class B Option held by such Holder, that has become exercisable will
     remain exercisable; provided, however, that any such Option shall expire on
     the 90th day after termination of employment or service of the Holder and
     any portion of a Class B Option held by such Holder that was not
     exercisable as of the date of termination of employment or service shall
     expire immediately prior to such termination.

                  (iii) Notwithstanding anything to the contrary herein, in the
     event that the employment or service of a Holder with the Company or any of
     its subsidiaries is terminated by the Company or any of its subsidiaries
     for Cause, each Class B Option held by such Holder shall expire immediately
     prior to such termination.

              (c) Class C1 Options. All outstanding Class C1 Options heretofore
granted are fully vested and exercisable.

                                        7

<PAGE>

              (d) Class C2 Options. All outstanding Class C2 Options heretofore
granted are fully vested and exercisable.

              (e) Class C3 Options. All Class C3 Options heretofore granted,
except for the options listed on Schedule A attached hereto, shall be fully
vested and exercisable as of the Acceptance Date. With respect to those Class C3
Options that are not vested pursuant to the foregoing sentence, subject to
Section 4.04(a) of the Merger Agreement, if (1) the Average Closing Price
exceeds $27.88, (2) the Fair Market Value exceeds $23.70 on the last trading day
in the period during which the Average Closing Price was calculated, and (3) the
Holder is a director, officer or employee of the Company or any of its
subsidiaries on the date on which the conditions set forth in clauses (1) and
(2) of this Section 8(e) are satisfied, then all such outstanding Class C3
Options shall become vested and exercisable.

              (f) Notwithstanding anything to the contrary herein, the Committee
may accelerate the exercisability or delay or postpone the expiration of any
outstanding Class C1 Options, Class C2 Options or Class C3 Options at such time
and under such circumstances as the Committee, in its sole discretion, deems
appropriate.

              (g) In the event that the Holder's employment or service with the
Company or any of its subsidiaries is terminated for any reason other than by
the Company or any of its subsidiaries for Cause, any portion of a Class C1
Option, Class C2 Option or Class C3 Option held by such Holder that is vested
and exercisable will remain exercisable; provided, however, that any such Class
C1 Option, Class C2 Option or Class C3 Option shall expire on the 90th day after
termination of employment or service of the Holder. Any unvested portion of a
Class C1 Option, Class C2 Option or Class C3 Option shall expire immediately
prior to a Holder's termination of service or employment.

              (h) Notwithstanding anything to the contrary herein, in the event
that the employment or service of a Holder with the Company or any of its
subsidiaries is terminated by the Company or any of its subsidiaries for Cause,
each Class C1 Option, Class C2 Option and Class C3 Option held by such Holder
shall expire immediately prior to such termination.

              (i) Rolled Options. Rolled Options are Options which have been, by
Board action, assumed by and made subject to the terms of the Plan and the
Option Agreement applicable to such Rolled Options. Rolled Options shall be
fully

                                        8

<PAGE>

vested and exercisable from the date that such Option is assumed by and made
subject to the terms of the Plan and the applicable Option award agreement.

              9. Manner of Exercise.

              (a) Each Option shall further state the terms and conditions of
the Option (including the conditions to exercisability thereof) and the Option
Price. An Option may be exercised, subject to this Section 9, for any or all
whole number of shares which have become purchasable under such Option. To the
extent necessary upon the exercise of an Option, the Company shall round each
fractional share issuable upon such exercise up to the next whole number.

              (b) Subject to the terms and conditions set forth in this Plan
(including the conditions to exercisability thereof), an Option may be exercised
by the Holder during normal business hours on any Business Day, by surrender of
the Option to the Company at its principal office, accompanied by a
subscription, in cash or by certified or official bank check payable to the
order of the Company, in the amount obtained by multiplying (x) the number of
shares of Common Stock designated in such subscription (up to the amount of
shares which such Holder is entitled to receive at such time upon exercise of
the Option) by (y) the Option Price. A Holder may elect to pay all or a portion
of the aggregate subscription price by tendering shares of Common Stock with a
Fair Market Value equal to aggregate subscription price; provided, however, that
such Holder must have owned such tendered shares of Common Stock continuously
through such exercise date for a period of a least six months. In addition, each
Option may be exercised in accordance with Section 4.04 of the Merger Agreement.

              (c) Each exercise of an Option shall be deemed to have been
effected immediately prior to the close of business on the Business Day on which
an Option shall have been surrendered to the Company, and at such time the
Person or Persons in whose name or names any certificate or certificates for
shares of Common Stock (or Other Securities) shall be issuable upon such
exercise shall be deemed to have become the Holder or Holders of record thereof.

              (d) The Company at its expense shall deliver to the relevant
Holder (or as such Holder may direct pursuant to the Option) a certificate or
certificates representing shares of the Common Stock so purchased as soon as
reasonably practicable, but in any event within five Business Days, after
receipt of such notice.

                                        9

<PAGE>

              (e) In the event that such exercise is in part only, the Company
shall deliver a new Option of the same class and tenor, calling in the aggregate
on the face thereof for the number of shares of Common Stock equal to the number
of such shares which such Holder would be entitled to receive at such time upon
exercise of this Option, after giving effect to such recent exercise.

              (f) Notwithstanding anything to the contrary in the Plan, in no
event may any Option be exercised prior to the time at which the Option becomes
exercisable (as set forth in the Option) or after the expiration of such Option,
and each Option shall terminate upon the terms set forth in Sections 8 and 10
hereof.

              10. Expiration of Options. Notwithstanding the provisions of
Section 8 above, the Options will expire no later than the end of the tenth
anniversary of the Closing Date. Any outstanding unexercised Option, or portion
thereof, shall be forfeited, whether or not exercisable, upon the expiration of
such Option.

              11. Adjustment of Number of Shares of Common Stock Issuable Upon
Exercise. The number and kind of shares of Common Stock purchasable upon the
exercise of Options, and the numbers set forth in Section 8, shall be subject to
adjustment from time to time as follows:

              (a) Stock Dividends; Stock Splits; Reverse Stock Splits. In case
the Company shall (i) pay a dividend or make any other distribution with respect
to its Common Stock in shares of its capital stock, (ii) subdivide its
outstanding Common Stock, or (iii) combine its outstanding Common Stock into a
smaller number of shares, the number of shares of Common Stock issuable upon
exercise of the Options immediately prior to the record date for such dividend
or distribution or the effective date of such subdivision or combination shall
be adjusted so that the Holder of the Options shall thereafter be entitled to
receive the kind and number of shares of Common Stock or Other Securities of the
Company that such Holder would have owned or have been entitled to receive after
the happening of any of the events described above, had such Options been
exercised immediately prior to the happening of such event or any record date
with respect thereto. An adjustment made pursuant to this Section 11 shall
become effective immediately after the effective date of such event retroactive
to the record date, if any, for such event.

              (b) No Adjustment for Dividends; No Adjustment of Option Price.
Except as otherwise provided in this Section 11, no adjustment in respect of any
ordinary (or except as the Board may expressly determine otherwise to be
equitable, extraordinary) dividends declared and paid on Common Stock, or on any

                                       10

<PAGE>

other capital stock of the Company, shall be made during the term of an Option
or upon the exercise of an Option. Notwithstanding anything to the contrary
contained in this Plan, in the event of any adjustments to Options pursuant to
this Section 11, adjustments shall be made solely to the number and kind of
securities purchasable upon the exercise of Options and no adjustments shall be
made to the Option Price.

              (c) Other Adjustments. In the event that at any time, as a result
of an adjustment made pursuant to this Section 11, the registered Holders shall
become entitled to receive any securities of the Company other than shares of
Common Stock, thereafter the number of such Other Securities so receivable upon
exercise of the Options shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the shares of Common Stock contained in this Section 11.

              (d) Notice of Adjustment. Whenever the number of shares of Common
Stock purchasable upon the exercise of an Option is adjusted, as herein
provided, the Company shall give notice to each Holder of such adjustment or
adjustments.

              12. Purchase Rights Upon Merger, Consolidation, etc. In the event
of any consolidation of the Company with or merger of the Company with or into
another corporation or in case of any sale, transfer or lease to another entity
of all or substantially all the assets of the Company, the Company may, without
the consent of the Holder, unless stated otherwise in the Holder's Option
agreement, cancel any outstanding Option (whether vested or unvested) held by
the Holder and make a cash payment to the Holder in consideration for such
cancellation of such amount the Committee, in its sole discretion, deems
appropriate (which amount shall not be less than the difference between the
aggregate Fair Market of the shares of Common Stock subject to the Option and
the aggregate Option Price). To the extent that the Company does not cancel
Options as described in this Section 12, the Acquiring Person shall execute an
agreement under which the Acquiring Person shall assume each Option and each
such assumed Option shall continue to vest and become exercisable in accordance
with its terms (adjusted, in the discretion of the Board, to reflect the effect
of such transaction) and shall thereafter become exercisable, subject to the
conditions and other terms of such Options, for the number and/or kind of
capital stock, securities and/or other property into which the Common Stock
subject to the Option would have been changed or exchanged had the Option been
exercised in full prior to such transaction, provided that, if necessary, the
provisions of the Option shall be appropriately adjusted so as to be applicable,
as nearly as may reasonably be, to any shares of capital stock, securities
and/or other property thereafter

                                       11
<PAGE>

issuable or deliverable upon exercise of the Option. The Company shall deliver
to each Holder, notice of the execution of any such agreement (including a copy
thereof). Such agreement shall provide for adjustments, which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Section
12. The provisions of this Section 12 shall similarly apply to successive
consolidations, mergers, sales, transfers or leases. The Acquiring Person shall
mail to Holders a notice describing any supplemental Option Agreement. In the
event that this Section 12 shall be applicable, the provisions of Section 11(a)
shall not be applicable.

              13. Registration and Transfer of Options, etc.

              (a) Option Register; Ownership of Options. The Company will keep
at its principal office a register in which the Company will provide for the
registration of Options and the registration of transfers of Options. The
Company may treat the Person in whose name any Option is registered on such
register as the owner thereof for all other purposes, and the Company shall not
be affected by any notice to the contrary, except that, if and when any Option
is accompanied by an instrument of assignment in a form acceptable to the
Company, the Company may (but shall not be obligated to) treat the bearer
thereof as the owner of such Option for all purposes. Subject to Section 13
hereof, an Option, if properly assigned, may be exercised by a new Holder
without a new Option first having been issued.

              (b) Transfer and Exchange of Options. Upon surrender of any Option
for registration of transfer or for exchange to the Company at its principal
office, the Company at its expense will execute and deliver in exchange therefor
a new Option or Options of the same class and tenor, in the name of such Holder
or as such Holder (upon payment by such holder of any applicable transfer taxes)
may direct, calling in the aggregate on the face or faces thereof for the number
of shares of Common Stock called for on the face or faces of the Option or
Options so surrendered.

              (c) Replacement of Options. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Option and, in the case of any such loss, theft or destruction of any Option,
upon delivery of an indemnity bond in such reasonable amount as the Company may
determine (or, at the sole option of the Company, of an indemnity agreement
reasonably satisfactory to the Company), or, in the case of any such mutilation,
upon the surrender of such Option for cancellation to the Company at its
principal office, the Company at its

                                       12

<PAGE>

expense will execute and deliver, in lieu thereof, a new Option of the same
class and tenor.

              14. Rights as Option Holders of Shares. Neither the Holder of an
Option nor any Permitted Transferees shall have any rights as a stockholder of
the Company (including, without limitation, any right to vote or to receive
dividends or to consent or to receive notice as a stockholder in respect of any
meeting of stock holders for the election of directors of the Company or any
other matter, or any right whatsoever as a stockholder of the Company (except
for those notices and other matters expressly set forth under the Plan or in the
Option)). An Option does not impose any obligation on a Holder or any of its
Permitted Transferees to purchase any securities or impose any liabilities on a
Holder as a stockholder of the Company, whether such obligation or liabilities
are asserted by the Company or by creditors of the Company.

              15. Withholding. The Company shall have the right to require a
Holder or other person entitled to receive shares of Common Stock upon the
exercise of Options under the Plan to pay to the Company, as a condition to
receiving such shares, the minimum amount which the Company is or will be
required to withhold with respect to the issuance of such shares in order for
the Company to pay taxes or to claim an income tax deduction with respect to the
issuance of such shares. In lieu of such payment, the Company may retain, at the
discretion of the Board, a sufficient number of such shares (valued at the Fair
Market Value thereof) to cover the minimum statutorily required tax withholding.
A Holder, however, may elect to pay to the Company all or a portion of the total
amount the Company is required to with hold by tendering shares of Common Stock
with a Fair Market Value equal to the minimum statutory amount the Company is
required to withhold; provided, however, that such Holder must have owned such
tendered shares of Common Stock continuously through the date of issuance (or
lapse) for a period of a least six months. The Company shall be permitted to
take the steps outlined in Section 4.04 of the Merger Agreement.

              16. Liability. The Company, and not the Board, the Committee or
any member of the Board or Committee, shall be liable for any and all claims
made against the Company, the Board or the Committee in connection with the Plan
or any Option.

              17. Legal Requirements. (a) The Company shall be responsible and
shall pay for any transfer, revenue or documentary stamps with respect to shares
of Common Stock issued upon the exercise of Options granted under the Plan
(other

                                       13

<PAGE>

than any transfer tax applicable to a transfer to a Permitted Transferee which
shall be payable by a Holder).

              (b) The Company shall not be required to issue a certificate or
certificates for shares upon the exercise of any Option if such issuance would
result in a violation of any federal or state securities or other laws. The
Company agrees to use its reasonable efforts to clear the legal impediment as
soon as possible.

              18. Amendment and Termination of the Plan. The Board may at any
time and from time to time alter, amend, suspend, or terminate the Plan and the
Options in whole or in part; provided, however, that no such action shall
adversely affect the right of any Holder with respect to an Option without such
Holder's consent.

              19. Nonqualified Stock Options. Options granted under the Plan
shall be treated as nonqualified stock options under the Internal Revenue Code
of 1986, as amended.

              20. Effective Date. The provisions of this Amended and Restated
2000 Executive Stock Option Plan shall take effect upon its adoption by the
Board. As of the date of such adoption, any outstanding Class B Options that
were previously granted to employees of the Company or any of its subsidiaries
shall automatically be converted into such number of Class C1 Options, Class C2
Options and Class C3 Options as shall be determined by the Committee and
reflected in each affected employee's Option Agreement.

              21. Interpretations. Except as otherwise expressly provided in the
Plan, the following rules of interpretation apply to the Plan and each Option:
(i) the singular includes the plural and the plural includes the singular; (ii)
"include" and "including" are not limiting and "or" is not exclusive; (iii) a
reference to any agreement or other contract includes permitted supplements and
amendments; (iv) a reference to a law includes any amendment or modification to
such law and any rules or regulations issued thereunder; and (v) a reference to
any person, corporation or other entity includes its permitted successors and
assigns.

              22. GOVERNING LAW. THE PLAN AND ANY AND ALL OPTIONS AND OPTION
AWARD AGREEMENTS SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE
RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF DELAWARE,
WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.

                                       14

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00047-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00047-of-00352.parquet"}]]