Document:

<PAGE>
                                                                 EXHIBIT 10.29.1

                              FIRST AMENDMENT TO
                     REVOLVING CREDIT, TERM LOAN, CAPITAL
               EXPENDITURE LOAN, GUARANTY AND SECURITY AGREEMENT

Preamble.  THIS FIRST AMENDMENT TO REVOLVING CREDIT, TERM LOAN, CAPITAL
--------
EXPENDITURE LOAN, GUARANTY AND SECURITY AGREEMENT (hereinafter, together with
all schedules and exhibits hereto, and any supplements, additions, modifications
or amendments thereto made from time to time called the "First Amendment"),
                                                         ---------------
dated as of June 29, 2001 (the "First Amendment Date"), is made by and among HLM
                                --------------------
DESIGN, INC., a Delaware corporation, as borrower ("Borrower"); all those
                                                    --------
parties identified in the Credit Agreement (defined below) as the "Affiliate
Guarantors" (the "Affiliate Guarantors"); IBJ WHITEHALL BUSINESS CREDIT
                  --------------------
CORPORATION, a New York corporation (hereinafter, together with its successors
and permitted assigns, called "IBJW"), as sole Lender thereunder and as agent
                               ----
for all Lenders from time to time party thereto and any Issuer (IBJW, in such
capacity, the "Agent").
               -----

          The Borrower, and the Affiliate Guarantors (collectively, the
"Obligors"), and IBJW (the foregoing parties herein sometimes collectively
 --------
called the "Parties" and individually called a "Party") are parties to a certain
            -------                             -----
Revolving Credit, Term Loan, Capital Expenditure Loan, Guaranty and Security
Agreement, dated as of February 7, 2000 (which is, as amended pursuant to this
First Amendment, called herein the "Credit Agreement"), pursuant to which, among
                                    ----------------
other things, IBJW, as sole Lender, agreed to extend credit and other financial
accommodations to the Borrower.

          The Parties have agreed to modify and amend the Credit Agreement in
the manner, and subject to the terms and conditions, set forth hereinbelow in
order to reduce the amount of credit available for Revolving Advances, increase
the Term Loan, change the principal amortization of the Term Loan, cancel the
commitment to make Capital Expenditure Loans, and waive, for one time only, the
mandatory prepayment based on Excess Cash Flow.

          NOW, THEREFORE, in consideration of the foregoing premises, the mutual
covenants herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby mutually acknowledged, the Parties,
each intending to be legally bound, hereby agree as follows:

          SECTION 1.    Definitions.  Capitalized terms used in this First
                        -----------
Amendment and not defined herein are defined in the Credit Agreement.

          SECTION 2.    Amendments.  The Credit Agreement shall be amended as
                        ----------
follows:

          (a) Reduction in Maximum Revolving Advance Amount. The Maximum
              ---------------------------------------------
Revolving Advance Amount, defined in Section 1.1 of the Credit Agreement, shall
be reduced, effective on the First Amendment Date, from "Seventeen Million
Dollars ($17,000,000)" to "Twelve Million Five Hundred Thousand Dollars
($12,500,000)." In accordance with Section 2.8 of the Credit Agreement, any
Advances outstanding in excess of the reduced Maximum Revolving Advance Amount
on the First Amendment Date must be paid in full. Revolving Advances shall
continue to be evidenced by the existing Revolving Credit Note, executed on the
Closing Date, which shall be deemed amended accordingly to reflect the foregoing
terms.

                                       1
<PAGE>

          (b) Changes in Term Loan. The Term Loan, which has an unpaid principal
              --------------------
balance as of the First Amendment Date (but before giving effect to this First
Amendment) of $1,166,666.75, is hereby increased by an Advance equal to
$400,000, with the proceeds of such Advance to be disbursed to Borrower as a
reduction against outstanding Revolving Advances on the First Amendment Date.
The restated amount of the Term Loan shall be equal to $1,566,666.75, and be
repaid in level installments of $80,000 per month, due and payable on the last
day of each calendar month, beginning on July 31, 2001 (the installment due on
June 30, 2001 being kept at $55,555.55), provided that the final installment,
                                         --------
which may be more or less than $80,000, shall be due and payable on the last day
of the Term and be in that amount necessary to pay in full the now increased
Term Loan. The increased Term Loan, as so amended, shall continue to be
evidenced by the existing Term Note, executed on the Closing Date, which shall
be deemed amended accordingly to reflect the foregoing terms.

          (c) Cancellation of Capital Expenditure Line. From and after the First
              ----------------------------------------
Amendment Date, Capital Expenditure Loans shall no longer be made available to
Borrower pursuant to Section 2.5 of the Credit Agreement, and all existing
Capital Expenditure Loans (if any) shall be paid in full.

          (d) One-Time Waiver of Excess Cash Flow Prepayment. The mandatory
              ----------------------------------------------
prepayment event, based on Excess Cash Flow, relative to the Term Loan,
specified in Section 2.15(b) of the Credit Agreement, is hereby waived for the
payment due on April 30, 2001 (but all other, future such mandatory prepayment
events are hereby preserved).

     SECTION 3. Waiver of Claims. As a specific inducement to the other Parties
                ----------------
without which the Obligors acknowledge the other Parties would not enter into
this First Amendment, the Borrowers hereby waive any and all claims that it may
have against any other Party, as of the date hereof, arising out of or relating
to the Credit Agreement or any Other Document whether sounding in contract,
tort, or any other basis.

     SECTION 4. Conditions of Effectiveness. This First Amendment shall become
                ---------------------------
effective when, and only when, the Agent shall have received the following, each
in form and substance satisfactory to the Agent, at which time the amendments
set forth in Section 2 above shall become effective, retroactive to the Closing
Date:

          (a) a duly executed original counterparts of this First Amendment;

          (b) a certificate of the Secretary (or Assistant Secretary) of
Borrower, attaching and certifying copies of its bylaws and of the resolutions
of its board of directors or its members, as the case may be, authorizing the
execution, delivery and performance of this First Amendment and the Other
Documents to which it is a party and certifying the name, title and true
signature of each officer of such entities executing this First Amendment and
the Other Documents;

     SECTION 5.    Miscellaneous.
                   -------------

          5.1   Reference to Credit Agreement. Upon the effectiveness of this
                -----------------------------
First Amendment, each reference in the Credit Agreement to "this Credit
Agreement" and each reference in the Other Documents to the Credit Agreement,
shall mean and be a reference to the Credit Agreement as amended hereby.

                                       2
<PAGE>

          5.2   Effect on Other Documents. Except as specifically amended above,
                -------------------------
all terms of the Credit Agreement and all Other Documents shall remain in full
force and effect and are hereby ratified and confirmed.

          5.3   No Waiver. The execution, delivery and effectiveness of this
                ---------
First Amendment shall not operate as a waiver of any right, power, or remedy of
Lenders or the Agents under any of the Other Documents, nor constitute a waiver
of any provision of any of the Other Documents.

          5.4   Costs, Expenses and Taxes. The Borrowers agrees to pay on demand
                -------------------------
all costs and expenses of IBJW in connection with the preparation, reproduction,
execution, and delivery of this First Amendment and the other instruments and
documents to be delivered hereunder, including the reasonable fees and out-of-
pocket expenses of counsel for IBJW with respect hereto.

          5.5   No Novation. Nothing contained herein intended, or shall be
                -----------
construed, to constitute a novation to the Credit Agreement or any Other
Document.

          5.6   Governing Law. This First Amendment shall be governed by and
                -------------
construed in accordance with the laws of the State of New York, without giving
affect to conflict of law provisions.

          5.7   Counterparts. This First Amendment may be executed in
                ------------
counterparts. Each counterpart shall bind the Party or Parties executing same.
All counterparts, taken together, shall constitute one and the same agreement.

                         [SIGNATURES ON FOLLOWING PAGE]

                                       3
<PAGE>

          IN WITNESS WHEREOF, the Parties have caused this First Amendment to be
duly executed, under seal, by their respective authorized officers as of the day
and year first above written.

                              IBJ WHITEHALL BUSINESS CREDIT CORPORATION, as
                              Lender and as Agent
                              (SEAL)

                              By:   /s/ Joseph J. Zautra
                                 -----------------------------
                              Name:     Joseph J. Zautra
                                   ---------------------------
                              Title: Vice President
                                    --------------------------

                              HLM DESIGN, INC., as Borrower and Borrowing Agent

                              By:   /s/ Vernon B. Brannon
                                 -----------------------------
                              Name:     Vernon B. Brannon
                                   ---------------------------
                              Title: Chief Operating Officer
                                    --------------------------

                              JPJ ARCHITECTS, INC., as Affiliate Guarantor

                              By:   /s/ Vernon B. Brannon
                                 -----------------------------
                              Name:     Vernon B. Brannon
                                   ---------------------------
                              Title: Chief Operating Officer
                                    --------------------------

                              HLM DESIGN USA, INC., as Affiliate Guarantor

                              By:   /s/ Vernon B. Brannon
                                 -----------------------------
                              Name:     Vernon B. Brannon
                                   ---------------------------
                              Title: Chief Operating Officer
                                    --------------------------

                                       4
<PAGE>

                              HLM DESIGN ARCHITECTURE ENGINEERING AND PLANNING,
                              P.C., as Affiliate Guarantor

                              By:   /s/ Vernon B. Brannon
                                 -----------------------------
                              Name:     Vernon B. Brannon
                                   ---------------------------
                              Title: Chief Operating Officer
                                    --------------------------

                              HLM DESIGN OF NORTHAMERICA, INC., as Affiliate
                              Guarantor

                              By:   /s/ Vernon B. Brannon
                                 -----------------------------
                              Name:     Vernon B. Brannon
                                   ---------------------------
                              Title: Chief Operating Officer
                                    --------------------------

                              SOTA SOFTWARE SYSTEMS, INC., as Affiliate
                              Guarantor

                              By:   /s/ Vernon B. Brannon
                                 -----------------------------
                              Name:     Vernon B. Brannon
                                   ---------------------------
                              Title: Chief Operating Officer
                                    --------------------------

                                       5<PAGE>

                                                                   EXHIBIT 10.34

                                HLM DESIGN, INC.
                          EMPLOYEE STOCK PURCHASE PLAN

               (AS AMENDED AND RESTATED AS OF NOVEMBER 22, 2000)
<PAGE>
                               HLM DESIGN, INC.
                          EMPLOYEE STOCK PURCHASE PLAN

               (As Amended and Restated as of November 22, 2000)

                               TABLE OF CONTENTS
                                                                            Page
                                                                            ----

ARTICLE I PURPOSE; DEFINITIONS; CONSTRUCTION.............................     1
     1.1    Purpose of Plan..............................................     1
     1.2    Definitions..................................................     1
            (a)  "Account"...............................................     1
            (b)  "Base Pay"..............................................     1
            (c)  "Board of Directors"....................................     1
            (d)  "Business Day"..........................................     1
            (e)  "Cause".................................................     1
            (f)  "Code"..................................................     1
            (g)  "Committee".............................................     2
            (h)  "Company"...............................................     2
            (i)  "Company Stock".........................................     2
            (j)  "Contributions".........................................     2
            (l)  "Employee"..............................................     2
            (m)  "Employer"..............................................     2
            (n)  "Exercise Date".........................................     2
            (o)  "Grant Date"............................................     2
            (p)  "Option"................................................     2
            (q)  "Participant"...........................................     2
            (r)  "Plan"..................................................     2
     1.3    Construction.................................................     3

ARTICLE II ADMINISTRATION................................................     3
     2.1    Appointment and Procedures of Committee......................     3
     2.2    Authority of Committee.......................................     3

ARTICLE III PARTICIPATION................................................     3
     3.1    Eligibility to Participate...................................     3
     3.2    Restrictions on Participation................................     4
     3.3    Leave of Absence.............................................     4

ARTICLE IV CONTRIBUTIONS.................................................     4
     4.1    Payroll Deductions...........................................     4
     4.2    Contributions to Accounts....................................     4
     4.3    Leave of Absence.............................................     5
     4.4    Withdrawal of Contributions from Plan........................     5
     4.5    Termination of Employment....................................     5

<PAGE>

ARTICLE V OPTIONS........................................................     5
     5.1    Company Stock Available for Options..........................     5
     5.2    Granting of Options..........................................     5
     5.3    Option Price.................................................     6
     5.4    Option Period................................................     6
     5.5    Exercise of Options..........................................     6
            (a)  Automatic Exercise......................................     6
            (b)  Nontransferability of Options...........................     7
            (c)  Effect of Termination of Employment.....................     7
                 (i)    Termination of Employment Related to Cause.......     7
                 (ii)   Termination of Employment Due to Death...........     7
                 (iii)  Other Termination of Employment..................     7
            (d)  Leave of Absence........................................     8
            (e)  Delivery of Stock Certificates..........................     8
            (f)  Acceleration of Exercisability of Options
                 Upon Occurrence of Certain Events.......................     8
            (g)  Registration, Listing and Qualification of
                 Shares of Stock.........................................     8

ARTICLE VI MISCELLANEOUS.................................................     9
     6.1    Adjustments Upon Changes in Capitalization...................     9
     6.2    Approval of Shareholders.....................................     9
     6.3    Amendment, Suspension and Termination........................     9
     6.4    Intent to Comply With Code Section 423.......................     9
     6.5    Equal Rights and Privileges..................................     9
     6.6    Use of Funds.................................................    10
     6.7    Withholding..................................................    10
     6.8    Effect of Plan...............................................    10
     6.9    No Employment Rights.........................................    10
     6.10   Governing Law................................................    10
     6.11   Other Actions................................................    10

                                      ii
<PAGE>

                                HLM DESIGN, INC.
                          EMPLOYEE STOCK PURCHASE PLAN

               (AS AMENDED AND RESTATED AS OF NOVEMBER 22, 2000)

                                   ARTICLE I

                       PURPOSE; DEFINITIONS; CONSTRUCTION

     1.1  Purpose of Plan.  The purpose of the Plan, which shall be known as
          ---------------
the HLM Design, Inc. Employee Stock Purchase Plan (the "Plan"), is to provide
employees of HLM Design, Inc. (the "Company") and its participating subsidiaries
an opportunity to acquire a proprietary interest in the Company through the
purchase of the Common Stock, $.001 par value per share, of the Company. This
Plan is intended to qualify as an "employee stock purchase plan" within the
meaning of Section 423 of the Internal Revenue Code of 1986, as amended (the
"Code").

     2.2  Definitions.  Throughout this Plan, the following terms shall have the
          -----------
meanings indicated:

          (a)  "Account" shall mean a memorandum account maintained to record
each Participant's Contributions pending purchase of Company Stock.

          (b)  "Base Pay" shall mean the Participant's regular base salary
(excluding overtime pay, bonuses, shift premiums, commissions, fringe benefits,
other special payments and imputed income) determined without reduction for
Contributions made under this Plan or contributions to any Code Section 401(k)
or Section 125 Plan. The Committee may establish additional rules for
determining a Participant's Base Pay for purposes of this Plan.

          (c)  "Board of Directors" shall mean the Board of Directors of the
Company.

          (d)  "Business Day" shall mean any day other than a Saturday, Sunday
or holiday.

          (e)  "Cause" shall mean any act, action or series of acts or actions
or any omission, omissions or series of omissions which, in the opinion of the
Committee, result in, or which have the effect of resulting in, (i) the
commission of a crime by the Participant involving moral turpitude, which crime
has a material adverse impact on the Employer, (ii) gross negligence or willful
misconduct which is continuous and results in material damage to the Employer,
or (iii) the continuous, willful failure of the person in question to follow the
reasonable directives of the Employer.

          (f)  "Code" shall mean the Internal Revenue Code of 1986, as amended,
any successor revenue laws of the United States, and the rules and regulations
promulgated thereunder.

<PAGE>

          (g)  "Committee" shall mean the committee of directors of the Company
appointed by the Board of Directors in accordance with Section 2.1 to administer
this Plan, or in the event that no such committee exists or is appointed,
"Committee" shall mean the Board of Directors.

          (h)  "Company" shall mean HLM Design, Inc., a company organized and
existing under the laws of the State of Delaware.

          (i)  "Company Stock" shall mean the Common Stock, $.001 par value per
share, of the Company.

          (j)  "Contributions" shall mean the after-tax payroll deductions
contributed to the Plan by Participants pursuant to Article IV.

          (k)  "Effective Date" shall mean the date of the closing of the
Company's initial public offering.

          (l)  "Employee" shall mean any person employed by the Employer who (i)
is employed on a full-time or part-time basis, (ii) is regularly scheduled to
work more than twenty hours per week, and (iii) is customarily employed more
than five months in any calendar year. Independent contractors and outside
directors shall not be included in the definition of Employee for purposes of
this Plan.

          (m)  "Employer" shall mean the Company and any of its present or
future subsidiaries (within the meaning of Section 424(f) of the Code) which the
Committee may designate from time to time as participating Employers under this
Plan.

          (n)  "Exercise Date" shall mean the last Business Day of March, June,
September and December on which the principal trading market for Company Stock
is open for trading, plus any other interim dates during the year which the
Committee designates as Exercise Dates.

          (o)  "Grant Date" shall mean (i) the date initial grants are made
pursuant to this Plan, which date shall be as soon as administratively
practicable following the Effective Date, and (ii) on or about each January 1
thereafter.

          (p)  "Option" shall mean an option to purchase shares of Company Stock
granted by the Committee to a Participant pursuant to this Plan.

          (q)  "Participant" shall mean an eligible Employee electing to
participate in this Plan.

          (r)  "Plan" shall mean this HLM Design, Inc. Employee Stock Purchase
Plan, as amended and restated as of November 22, 2000 and as subsequently
amended from time to time.

                                       2
<PAGE>

     1.2  Construction.  The masculine gender, where appearing in the Plan,
          ------------
shall be deemed to include the feminine gender, unless the context clearly
indicates to the contrary. The words "hereof," "herein," "hereunder" and other
similar compounds of the word "here" shall mean and refer to the entire Plan and
not to any particular provision or Section.

                                  ARTICLE II

                                 ADMINISTRATION

     2.1  Appointment and Procedures of Committee.  The Plan shall be
          ---------------------------------------
administered by the Committee as appointed from time to time by the Board of
Directors. The Committee shall consist of not fewer than two members of the
Board of Directors. Each Committee member shall be a "non-employee director"
within the meaning of Rule 16b-3 promulgated under the Securities Exchange Act
of 1934, as amended. No member of the Board of Directors who serves on the
Committee shall be eligible to participate in the Plan. The Committee shall hold
its meetings at such times and places as it may determine. A majority of its
members shall constitute a quorum. All determinations of the Committee shall be
made by a majority of its members. Any decision or determination reduced to
writing and signed by all members shall be as effective as if it had been made
by a majority vote at a meeting duly called and held. The Committee may appoint
a secretary (who need not be a member of the Committee).

     2.2  Authority of Committee.  The Committee, subject to the terms of the
          ----------------------
Plan, shall have plenary authority in its discretion to interpret and construe
the Plan (including, without limitation, any of its terms which are uncertain,
doubtful or disputed); to decide all questions of Employee eligibility
hereunder; to determine the amount, manner and timing of all Options and
purchases of Company Stock hereunder; to establish, amend and rescind rules and
regulations pertaining to the administration of the Plan; and to make
determinations and interpretations and take such other administrative actions as
it deems necessary or advisable for the administration of this Plan. The express
grant in the Plan of any specific power to the Committee shall not be construed
as limiting any power or authority of the Committee. No member of the Committee
shall be liable for any act, determination or omission with respect to his
service on the Committee, if he acts in good faith and in a manner he reasonably
believes to be in or not opposed to the best interest of the Employer. All
expenses of administering this Plan shall be borne by the Employer.

                                  ARTICLE III

                                 PARTICIPATION

     3.1  Eligibility to Participate.  Subject to the restrictions of Section
          --------------------------
3.2 below, any Employee employed on the Effective Date shall be eligible to
participate in this Plan as of the initial Grant Date under the Plan (provided
that the Employee is still employed on such Grant Date). Each other Employee
shall be eligible to participate in the Plan as of the Grant Date coincident
with or next following his date of employment with the Employer (provided that
the Employee is still employed on such Grant Date).

                                       3
<PAGE>

     3.2  Restrictions on Participation.  Notwithstanding the foregoing Section
          -----------------------------
3.1, no Employee shall be eligible to participate in the Plan if such Employee
owns or holds options to purchase (or upon participation in this Plan would own
or hold options to purchase) stock possessing an aggregate of 5% or more of the
total combined voting power or value of all classes of stock of the Company or
any Subsidiary (as determined in accordance with the rules of Section 424(d) of
the Code relating to attribution of stock ownership).

     3.3  Leave of Absence.  For purposes of participation in the Plan, an
          ----------------
Employee on a leave of absence shall be deemed to continue to be an Employee for
the first ninety days of such leave of absence and such Employee's employment
shall be deemed to have terminated at the close of business on the ninetieth day
of such leave of absence unless such Employee shall have returned to regular
full-time or part-time employment prior to the close of business on such
ninetieth day (unless reemployment is guaranteed by statute or contract).
Termination by the Company of any Employee's leave of absence, other than
termination of such leave of absence on return to regular full-time or part-time
employment, shall terminate an Employee's employment for all purposes of the
Plan.

                                  ARTICLE IV

                                 CONTRIBUTIONS

     4.1  Payroll Deductions.  By written election, made and filed with the
          ------------------
Committee pursuant to the Committee's rules and procedures, a Participant may
elect to designate a whole percentage between one percent and ten percent (or
such higher or lower percentage as may be allowed by the Committee's rules and
procedures) of his Base Pay to be deferred by payroll deduction as a
Contribution to the Plan. Payroll deductions shall commence as soon as
administratively practicable following the filing of such written election with
the Committee. The Committee in its discretion may develop additional rules and
procedures regarding payroll deduction elections.

     A Participant may change or revoke his payroll deduction amount by filing,
on such forms and in accordance with such rules and procedures as the Committee
in its discretion may prescribe, a revised written election with the Company.
Such modification or revocation shall take effect as soon as administratively
practicable after the Company's receipt of such revised election.
Notwithstanding the foregoing, a Participant may change his payroll deduction
election only once each calendar quarter, or as otherwise specifically allowed
by the Plan's administrative rules and procedures.  If payroll deductions are
discontinued, payroll deductions may not be resumed by the Participant until the
payroll period which begins on or after the next Exercise Date, or as otherwise
specifically allowed by the Plan's administrative rules and procedures.  Under
no circumstances may a Participant's payroll deduction election be made,
modified or revoked retroactively.

     4.2  Contributions to Accounts.  A memorandum Account shall be established
          -------------------------
by the Committee for each Participant for the purpose of accounting for
Contributions. Contributions shall be credited to Accounts as soon as
administratively practicable following payroll withholding. Amounts credited to
Accounts will not accrue interest.

                                       4
<PAGE>

     4.3  Leave of Absence.  If a Participant is on a leave of absence, such
          ----------------
Participant shall have the right, subject to Section 3.3, to elect to (a)
withdraw from the Plan and receive a distribution of the balance in his Account
pursuant to Section 4.4, (b) discontinue Contributions to the Plan but remain a
Participant in the Plan, or (c) remain a Participant in the Plan during such
leave of absence, authorizing deductions to be made from payments by the Company
to the Participant during such leave of absence.

     4.4  Withdrawal of Contributions from Plan.  Prior to an Exercise Date, a
          -------------------------------------
Participant may elect to withdraw the Contributions then credited to his Account
by filing written notice thereof with the Committee on such forms and in
accordance with such procedures as the Committee may prescribe. Such election
must be made at least ten Business Days prior to an Exercise Date in order for
such Contributions to be withdrawn prior to such Exercise Date. The
Participant's Contributions shall be distributed to him as soon as
administratively practicable after the Committee's receipt of his notice of
withdrawal and no further payroll deductions shall be made from his Base Pay.

     4.5  Termination of Employment.  Upon termination of a Participant's
          -------------------------
employment for any reason, such Participant may no longer make Contributions to
the Plan or be granted Options under the Plan. A Participant's right, if any, to
exercise any unexpired Option he holds as of his termination of employment shall
be determined in accordance with Section 5.5(c).

                                   ARTICLE V

                                    OPTIONS

     5.1  Company Stock Available for Options.  There shall be available for
          -----------------------------------
Options under the Plan an aggregate maximum of 57,594 shares of Company Stock,
subject to any adjustments which may be made pursuant to Section 6.1 of the Plan
in connection with changes in capitalization of the Company. Shares of Company
Stock used for purposes of the Plan may be either authorized and unissued
shares, or previously issued shares held in the treasury of the Company, or
both. Shares of Company Stock covered by Options which have expired prior to
exercise shall be available for further Options granted hereunder.

     5.2  Granting of Options.  The Plan shall be implemented by annual
          -------------------
offerings of approximately twelve months duration (except for the initial
offering or as otherwise provided in Section 5.4). Prior to each Grant Date, the
Committee shall designate an aggregate number of whole shares of Company Stock
that shall be allocated under the Options granted on such Grant Date, subject to
the maximum limitation of Section 5.1 above and any adjustments thereto pursuant
to Section 6.1. The aggregate number of shares of Company Stock so designated by
the Committee shall be allocated among the Participants receiving Options as of
the Grant Date in the proportion that each Participant's Base Pay bears to the
total Base Pay of all such Participants; provided, that fractional shares shall
be rounded down to the nearest whole share. Thus, as of each Grant Date, each
eligible Participant shall be deemed to have been granted an Option under the
Plan to purchase that number of whole shares of Company Stock that equals: (a)
the aggregate number of shares of Company Stock designated by the Committee to
be allocated under Options granted as of such Grant Date, multiplied by (b) a
fraction, the numerator of which shall be the Base Pay of the Participant and
the denominator of which shall

                                       5
<PAGE>

be the total Base Pay of all of the eligible Participants. Notwithstanding the
foregoing, no Participant may be granted an Option which permits his rights to
purchase stock under this Plan and all other employee stock purchase plans of
the Company or Employer to accrue at a rate which exceeds $25,000 of the fair
market value of such stock (determined at the time such Option is granted) for
each calendar year in which such Option is outstanding at any time.

     5.3  Option Price.  The purchase price at which shares of Company Stock may
          ------------
be acquired pursuant to the exercise of all or any portion of an Option granted
under this Plan shall be eighty-five percent of the lesser of (a) the fair
market value per share of the Company Stock on the applicable Grant Date, and
(b) the fair market value per share of the Company Stock on the applicable
Exercise Date. For purposes of this Section 5.3, the fair market value per share
of Company Stock shall be the closing price on the last Business Day prior to
the date of reference, or in the event that no sales take place on such date,
the average of the closing high bid and low asked prices, in either case on the
principal national securities exchange on which the Company Stock is listed or
admitted to trading, or if the Company Stock is not listed or admitted to
trading on any national securities exchange, the last sale price reported on the
National Market System of the National Association of Securities Dealers
Automated Quotation system ("NASDAQ") on such date, or the average of the
closing high bid and low asked prices of the Company Stock in the over-the-
counter market reported on NASDAQ on such date, as furnished to the Committee by
any New York Stock Exchange member selected from time to time by the Committee
for such purposes. If there is no bid or asked price reported on any such date,
the market value shall be determined by the Committee in accordance with the
regulations promulgated under Section 2031 of the Code, or by any other
appropriate method selected by the Committee.

     5.4  Option Period.  Each Option granted to a Participant under the Plan
          -------------
shall expire on the earliest of (a) the last Exercise Date of the calendar year
in which the Option was granted, (b) the Participant's (or, in the case of the
Participant's death, his estate's) voluntary withdrawal from the Plan following
termination of employment, (c) the date of the Participant's termination of
employment related to Cause, or (d) the Exercise Date immediately following the
Participant's termination of employment for any reason unrelated to Cause. In no
event will the duration of an Option period exceed twenty-seven months (or such
other applicable period permitted under Section 423(b)(7) of the Code) from the
date on which such Option is granted.

     5.5  Exercise of Options.
          -------------------

          (a)  Automatic Exercise.  Any Option granted to a Participant shall be
               ------------------
exercised automatically on each Exercise Date during the calendar year of the
Option's Grant Date in whole or in part such that the Participant's accumulated
Contributions as of such Exercise Date shall be applied to the purchase of the
maximum number of whole shares of Company Stock that his Contributions will
allow at the applicable Option price (determined in accordance with Section
5.3), limited to the number of shares subject to such Option. In the event that
the number of shares of Company Stock that may be purchased by all Participants
in the Plan exceeds the number of shares then available for issuance under the
Plan, the Committee shall make a pro rata allocation of the available shares in
as uniform a manner as it determines to be practicable and equitable. Any
remaining Contributions in the Participant's Account amounting to less than the
Option price of a whole share of Company Stock shall be carried forward and

                                       6
<PAGE>

applied on the next Exercise Date; provided that, Contributions remaining after
the last Exercise Date of the calendar year may be distributed to the
Participant at his election.

          (b)  Nontransferability of Options.  During a Participant's lifetime,
               -----------------------------
Options held by such Participant shall be exercisable only by that Participant.
No Option shall be transferable other than by will or by the laws of descent and
distribution.

          (c)  Effect of Termination of Employment.
               -----------------------------------

               (i)   Termination of Employment Related to Cause. Upon
                     ------------------------------------------
termination of a Participant's employment related to Cause, the Participant's
participation in the Plan also shall terminate. Any unexpired Option he holds
will expire as of the date of his termination of employment. Remaining
contributions credited to his Account shall be distributed to the Participant as
soon as administratively practicable following termination of employment.

               (ii)  Termination of Employment Due to Death.  In the event of
                     --------------------------------------
the death of the Participant while employed, or during the period following his
termination of employment for any reason unrelated to Cause but prior to the
next Exercise Date, the Participant's estate shall have the right to elect by
written notice to the Committee prior to the earlier of the expiration of sixty
days commencing with the date of the Participant's death and the Exercise Date
next following the date of the Participant's death:

                     (A)  To withdraw all of the Contributions credited to the
Participant's Account under the Plan, or

                     (B)  To have exercised any unexercised Option held by the
Participant as of the date of his death for the purchase of Company Stock on the
Exercise Date next following the date of the Participant's death in accordance
with Section 5.5(a), but only to the extent such Option was exercisable on the
date of the Participant's death, with any remaining Contributions credited to
the Participant's Account being distributed to the Participant's estate as soon
as administratively practicable after such Exercise Date.

In the event that no such written election is timely and properly received by
the Committee, all Contributions credited to the Participant's Account shall be
distributed to the Participant's estate.  In no event shall any Option be
exercisable beyond the applicable exercise period specified in Section 5.4 of
the Plan.

               (iii) Other Termination of Employment.  Upon termination of a
                     -------------------------------
Participant's employment for any reason unrelated to Cause or his death, the
Participant may at his election:

                     (A)  Withdraw from the Plan pursuant to Section 4.4 and
request the return of the remaining Contributions then credited to his Account,
or

                     (B)  Continue participation in the Plan until the Exercise
Date next following his date of termination of employment for the limited
purpose of allowing any unexpired Option he holds as of his termination of
employment to be exercised automatically in

                                       7
<PAGE>

accordance with Section 5.5(a) on the Exercise Date next following his
termination of employment, but only to the extent such Option was exercisable on
the date of the Participant's termination of employment, with any remaining
Contributions credited to the Participant's Account being distributed to the
Participant as soon as administratively practicable after such Exercise Date.

          (d)  Leave of Absence.  A Participant on a leave of absence shall,
               ----------------
subject to the election made by such Participant pursuant to Section 4.3,
continue to be a Participant in the Plan so long as such Participant is on
continuous leave of absence. A Participant who has been on leave of absence for
more than ninety days and who therefore is not an Employee for purposes of the
Plan (unless the right to reemployment is guaranteed by statute or contract)
shall not be entitled to participate in any offering commencing on any Grant
Date following the ninetieth day of such leave of absence. Notwithstanding the
foregoing and any other provisions of the Plan, unless a Participant on a leave
of absence returns to eligible regular full-time or part-time employment with
the Employer at the earlier of (i) the termination of such leave of absence, or
(ii) the ninety-first day of such leave of absence, such Participant's
employment shall be deemed to have terminated for purposes of the Plan on
whichever of such dates first occurs (unless the Participant's right to
reemployment is guaranteed by statute or contract).

          (e)  Delivery of Stock Certificates.  Upon a Participant's written
               ------------------------------
request, the Company or the Committee will deliver to the Participant a
certificate or certificates evidencing shares of Company Stock purchased under
this Plan.

          (f)  Acceleration of Exercisability of Options Upon Occurrence of
               ------------------------------------------------------------
Certain Events.  In connection with any merger or consolidation in which the
--------------
Company is not the surviving corporation and which results in the holders of the
outstanding voting securities of the Company (determined immediately prior to
such merger or consolidation) owning less than a majority of the outstanding
voting securities of the surviving corporation (determined immediately following
such merger or consolidation), or any sale or transfer by the Company of all or
substantially all of its assets or any tender offer or exchange offer for or the
acquisition, directly or indirectly, by any person or group of all or a majority
of the then-outstanding voting securities of the Company, all outstanding
Options under the Plan shall become exercisable in full, notwithstanding any
other provision of the Plan or of any outstanding Options granted hereunder, on
and after (i) the fifteenth day prior to the effective date of such merger,
consolidation, sale, transfer or acquisition or (ii) the date of commencement of
such tender offer or exchange offer, as the case may be. Notwithstanding the
foregoing, in no event shall any Option be exercisable beyond the applicable
exercise period of such Option specified in Section 5.4.

          (g)  Registration, Listing and Qualification of Shares of Stock.  Each
               ----------------------------------------------------------
Option shall be subject to the requirement that if at any time the Board of
Directors shall determine that the registration, listing or qualification of
shares of Company Stock covered thereby upon any securities exchange or under
any federal or state law, or the consent or approval of any governmental
regulatory body, is necessary or desirable as a condition of, or in connection
with, the granting of such Option or the purchase of shares of Company Stock
thereunder, no such Option may be exercised unless and until such registration,
listing, qualification, consent or approval shall have been effected or obtained
free of any conditions not acceptable to the Board

                                       8
<PAGE>

of Directors. The Employer may require that any person exercising an Option
shall make such representations and agreements and furnish such information as
it deems appropriate to assure compliance with the foregoing or any other
applicable legal requirement.

                                  ARTICLE VI

                                 MISCELLANEOUS

     6.1  Adjustments Upon Changes in Capitalization.  In the event of a
          ------------------------------------------
reorganization, stock split, stock dividend, combination of shares, merger,
consolidation, rights offering or any other change in the corporate structure of
shares of the Company, corresponding adjustments shall be made to the number and
kind of shares of Company Stock available for issuance under this Plan and the
number and kind of shares of Company Stock and option price thereof covered by
outstanding Options under this Plan. Any adjustments made pursuant to this
Section 6.1 remain subject to the limitations of Section 423 of the Code
(including its $25,000 annual limitation).

     6.2  Approval of Shareholders.  Within twelve months before or after the
          ------------------------
Plan is adopted by the Board of Directors, this Plan must be approved by a
majority of the votes cast thereon by the stockholders of the Company at a
meeting of stockholders duly called and held for such purpose or by unanimous
written consent of such stockholders, and no Option granted hereunder shall be
exercisable prior to such approval.

     6.3  Amendment, Suspension and Termination.  The Board of Directors may at
          -------------------------------------
any time amend, suspend or terminate this Plan; provided, however, that the
Board of Directors shall not increase the maximum number of shares of Company
Stock for which Options may be granted under the Plan, except as provided in
Section 6.1, without obtaining approval of the stockholders in the manner
described in Section 6.2. The Plan will continue until terminated by the Board
of Directors or until all of the shares of Company Stock reserved for issuance
under the Plan have been issued, whichever first occurs. No amendment,
suspension or termination of the Plan may, without the consent of the
Participants then holding Options to purchase Company Stock, adversely affect
the rights of such Participants under such Options.

     6.4  Intent to Comply With Code Section 423.  It is intended that this Plan
          --------------------------------------
qualify as an "employee stock purchase plan" under Section 423 of the Code. The
provisions of this Plan shall be construed so as to extend and limit
participation in a manner consistent with the requirements of that Section of
the Code. In the event of an inconsistency between the Plan and Section 423 of
the Code, the Plan shall be interpreted in a manner which complies with the
requirements of Section 423 of the Code and the regulations thereunder, without
further act or amendment by the Company or the Board of Directors unless
otherwise required pursuant to Section 6.3 of this Plan.

     6.5  Equal Rights and Privileges.  All participants granted Options under
          ---------------------------
this Plan shall have equal rights and privileges within the meaning of Section
423(b)(5) of the Code and the regulations thereunder.

                                       9
<PAGE>

     6.6  Use of Funds.  All Contributions received and held by the Employer
          ------------
under this Plan may be used by the Employer for any corporate purpose and the
Employer shall not be obligated to segregate such Contributions.

     6.7  Withholding.  It shall be a condition to the obligation of the Company
          -----------
to issue shares of Company Stock upon exercise of an Option that the Participant
(or his estate pursuant to Section 5.5(c)(ii)) pay to the Company, upon its
demand, through payroll withholding, cash payment or other means acceptable to
the Company, such amount as may be requested by the Company for the purpose of
satisfying taxes, including taxes owed by the Participant due to the disposition
of Company Stock by the Participant prior to the expiration of the holding
periods described in Section 423(a) of the Code.

     6.8  Effect of Plan.  This Plan shall be binding upon each Participant and
          --------------
his successors, including, without limitation, such Participant's estate and the
executors, administrators or trustees thereof, heirs and legatees, and any
receiver, trustee in bankruptcy or representative of creditors of such
Participant.

     6.9  No Employment Rights.  Nothing in this Plan or in any Option granted
          --------------------
pursuant to the Plan shall be construed as a contract of employment between the
Employer and any employee, or as a right of any employee to continue in the
employ of the Employer, or as a limitation of the right of the Employer to
discharge any of its employees, with or without cause.

     6.10  Governing Law.  This Plan and all rights and obligations hereunder
           -------------
shall be construed in accordance with and governed by the laws of the State of
North Carolina, except to the extent such laws are preempted by the laws of the
United States.

     6.11  Other Actions.  Nothing contained in the Plan shall be construed to
           -------------
limit the authority of the Company to exercise its corporate rights and powers,
including, but not by way of limitation, the right of the Company to grant or
assume options for proper corporate purposes other than under the Plan with
respect to any employee or other person, firm, corporation or association.

                                       10

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