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                                                                    Exhibit 10.7

                                                              As Amended through
                                                                 January 2, 2001

                               AMCOMP INCORPORATED

                             1996 STOCK OPTION PLAN

     1.   PURPOSE OF THE PLAN.

          This 1996 Stock Option Plan (the "Plan") is intended as an incentive,
to retain in the employ of and as consultants and advisors to AMCOMP
INCORPORATED, a Delaware corporation with its principal office at 701 U.S.
Highway 1, Suite 200, North Palm Beach, Florida 33408 (the "Company") and any
Subsidiary of the Company, within the meaning of Section 425(f) of the Internal
Revenue Code of 1986, as amended (the "Code"), persons of training, experience
and ability, to attract new employees, advisors and consultants whose services
are considered valuable, to encourage the sense of proprietorship and to
stimulate the active interest of such persons in the development and financial
success of the Company and its Subsidiaries.

          It is further intended that certain options granted pursuant to the
Plan shall constitute incentive stock options within the meaning of Section 422
of the Code (the "Incentive Options") while certain other options granted
pursuant to the Plan shall be nonqualified stock options (the "Nonqualified
Options"). Incentive Options and Nonqualified Options are hereinafter referred
to collectively as "Options."

     2.   ADMINISTRATION OF THE PLAN.

          The Board of Directors of the Company (the "Board") shall appoint and
maintain as administrator of the Plan a Committee (the "Committee") consisting
of at least two members of the Board. No person shall be eligible to serve on
the Committee unless he is then a "disinterested person," within the meaning of
Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). The members of the Committee shall serve at the pleasure of the Board.
The Committee, subject to Sections 3 and 5 hereof, shall have full power and
authority to designate recipients of Options, to determine the terms and
conditions of respective Option agreements (which need not be identical) and to
interpret the provisions and supervise the administration of the Plan. The
Committee shall have the authority, without limitation, to designate which
Options granted under the Plan shall be Incentive Options and which shall be
Nonqualified Options. To the extent that any Option does not qualify as an
Incentive Option, it shall constitute a separate Nonqualified Option.
Notwithstanding any provision in the Plan to the contrary, no Options may be
granted under the Plan to any member of the Committee during the term of his
membership on the Committee.

          Subject to the provisions of the Plan, the Committee shall interpret
the Plan and all Options granted under the Plan, shall make such rules as it
deems necessary for the proper administration of the Plan, shall make all other
determinations necessary or advisable for the administration of the Plan and
shall correct any defects or supply any omission or reconcile any

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inconsistency in the Plan or in any Options granted under the Plan in the manner
and to the extent that the Committee deems desirable to carry into effect the
Plan or any Options. The act or determination of a majority of the Committee
shall be the act or determination of the Committee and any decision reduced to
writing and signed by all of the members of the Committee shall be fully
effective as if it had been made by a majority at a meeting duly held. Subject
to the provisions of the Plan, any action taken or determination made by the
Committee pursuant to this and the other Sections of the Plan shall be
conclusive on all parties.

     3.   DESIGNATION OF OPTIONEES.

          The persons eligible for participation in the Plan as recipients of
Options (the "Optionees") shall include employees and officers of, and
consultants and advisors to, the Company or any Subsidiary; provided that
Incentive Options may only be granted to employees of the Company and the
Subsidiaries. In selecting Optionees, and in determining the number of shares to
be covered by each Option granted to Optionees, the Committee may consider the
office or position held by the Optionee or the Optionee's relationship to the
Company, the Optionee's degree of responsibility for and contribution to the
growth and success of the Company or any Subsidiary, the Optionee's length of
service, age, promotions, potential and any other factors that the Committee may
consider relevant. An Optionee who has been granted an Option hereunder may be
granted an additional Option or Options, if the Committee shall so determine.

     4.   STOCK RESERVED FOR THE PLAN.

          Subject to adjustment as provided in Section 7 hereof, a total of
1,575,000 shares of the Company's Common Stock, $.01 par value per share (the
"Stock"), shall be subject to the Plan. The shares of Stock subject to the Plan
shall consist of unissued shares or previously issued shares held by any
Subsidiary of the Company, and such amount of shares of Stock shall be and is
hereby reserved for such purpose. Any of such shares of Stock that may remain
unsold and that are not subject to outstanding Options at the termination of the
Plan shall cease to be reserved for the purposes of the Plan, but until
termination of the Plan the Company shall at all times reserve a sufficient
number of shares of Stock to meet the requirements of the Plan. Should any
Option expire or be cancelled prior to its exercise in full or should the number
of shares of Stock to be delivered upon the exercise in full of an Option be
reduced for any reason, the shares of Stock theretofore subject to such Option
may be subject to future Options under the Plan.

     5.   TERMS AND CONDITIONS OF OPTIONS.

          Options granted under the Plan shall be subject to the following
conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable:

          (a)   OPTION PRICE. The purchase price of each share of Stock
purchasable under an Incentive Option shall be determined by the Committee at
the time of grant, but shall not be less than 100% of the Fair Market Value (as
defined below) of such share of Stock on the date the Option is granted;
provided, however, that with respect to an Optionee who, at the time

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such Incentive Option is granted, owns (within the meaning of Section 424(d) of
the Code) more than 10% of the total combined voting power of all classes of
stock of the Company or of any Subsidiary, the purchase price per share of Stock
shall be at least 110% of the Fair Market Value per share of Stock on the date
of grant. The purchase price of each share of Stock purchasable under a
Nonqualified Option shall not be less than 80% of the Fair Market Value of such
share of Stock on the date the Option is granted. The exercise price for each
Option shall be subject to adjustment as provided in Section 7 below. Fair
Market Value means the closing price of publicly traded shares of Stock on the
principal national securities exchange on which shares of Stock are listed (if
the shares of Stock are so listed), or on the Nasdaq Stock Market (if the shares
of Stock are regularly quoted on the Nasdaq Stock Market), or, if not so listed
or regularly quoted, the mean between the closing bid and asked prices of
publicly traded shares of Stock in the over-the-counter market, or, if such bid
and asked prices shall not be available, as reported by any nationally
recognized quotation service. If shares of Stock are not publicly traded, Fair
Market Value shall be determined by the Committee in a manner consistent with
the provisions of the Code. Anything in this Section 5(a) to the contrary
notwithstanding, in no event shall the purchase price of a share of Stock be
less than the minimum price permitted under rules and policies of the national
securities exchange on which the shares of Stock are listed (if the shares of
Stock are so listed).

          (b)   OPTION TERM. The term of each Option shall be fixed by the
Committee, but no Option shall be exercisable more than 10 years after the date
such Option is granted; provided, however, that in the case of an Optionee who,
at the time and Incentive Option is granted, owns more than 10% of the total
combined voting power of all classes of stock of the Company or any Subsidiary,
then such Incentive Option shall not be exercisable with respect to any of the
shares subject to such Option later than the date that is five years after the
date of grant.

          (c)   EXERCISABILITY. Subject to Section 5(j) hereof, Options shall be
exercisable at such time or times and subject to such terms and conditions as
shall be determined by the Committee at the time of grant, provided, however,
that no Option shall be exercisable until at least six months have elapsed after
the date of grant of such Option.

          (d)   METHOD OF EXERCISE. Options to the extent then exercisable may
be exercised in whole or in part at any time during the option period, by giving
written notice to the Company specifying the number of shares of Stock to be
purchased, accompanied by payment in full of the purchase price, in cash, by
check or such other instrument as may be acceptable to the Committee. As
determined by the Committee, in its sole discretion, at or after grant, payment
in full or in part may also be made in the form of Stock owned by the Optionee
(based on the Fair Market Value of the Stock on the trading day before the
Option is exercised). An Optionee shall have the right to dividends and other
rights of a stockholder with respect to shares of Stock purchased upon exercise
of an Option after (i) the Optionee has given written notice of exercise and has
paid in full for such shares and (ii) becomes a stockholder of record with
respect thereto.

          (e)   NON-TRANSFERABILITY OF OPTIONS. Options are not transferable and
may be exercised solely by the Optionee during his lifetime or after his death
by the person or persons entitled thereto under his will or the laws of descent
and distribution; provided, however, that options may be transferred pursuant to
a qualified domestic relations order (as defined in the

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Code or Title I of the Employee Retirement Income Security Act, or the rules
promulgated thereunder.) Any attempt to transfer, assign, pledge or otherwise
dispose of, or to subject to execution, attachment or similar process, any
Option contrary to the provisions hereof shall be void and ineffective and shall
give no right to the purported transferee.

          (f)   TERMINATION BY DEATH. Unless otherwise determined by the
Committee at grant, if any Optionee's employment with or service to the Company
or any Subsidiary terminates by reason of death, the Option may thereafter be
exercised, to the extent then exercisable (or on such accelerated basis as the
Committee shall determine at or after grant), by the legal representative of the
estate or by the legatee of the Optionee under the will of the Optionee, for a
period of one year after the date of such death or until the expiration of the
stated term of such Option as provided under the Plan, whichever period is
shorter.

          (g)   TERMINATION BY REASON OF DISABILITY. Unless otherwise determined
by the Committee at grant, if any Optionee's employment with or service to the
Company or any Subsidiary terminates by reason of total and permanent
disability, any Option held by such Optionee may thereafter be exercised, to the
extent it was exercisable at the time of termination due to Disability (or on
such accelerated basis as the Committee shall determine at or after grant), but
may not be exercised after 30 days after the date of such termination of
employment or service or the expiration of the stated term of such Option,
whichever period is shorter; provided, however, that, if the Optionee dies
within such 30 day period, any unexercised Option held by such Optionee shall
thereafter be exercisable to the extent to which it was exercisable at the time
of death for a period of one year after the date of such death or for the stated
term of such Option, whichever period is shorter.

          (h)   TERMINATION BY REASON OF RETIREMENT. Unless otherwise determined
by the Committee at grant, if any Optionee's employment with or service to the
Company or any Subsidiary terminates by reason of Normal or Early Retirement (as
such terms are defined below), any Option held by such Optionee may thereafter
be exercised to the extent it was exercisable at the time of such Retirement (or
on such accelerated basis as the Committee shall determine at or after grant),
but may not be exercised after 30 days after the date of such termination of
employment or service or the expiration of the stated term of such Option,
whichever period is shorter; provided, however, that, if the Optionee dies
within such 30 day period, any unexercised Option held by such Optionee shall
thereafter be exercisable, to the extent to which it was exercisable at the time
of death, for a period of one year after the date of such death or for the
stated term of such Option, whichever period is shorter.

          For purposes of this paragraph (h), Normal Retirement shall mean
retirement from active employment with the Company or any Subsidiary on or after
the normal retirement date specified in the applicable Company or Subsidiary
pension plan or if no such pension plan, age 65. Early Retirement shall mean
retirement from active employment with the Company or any Subsidiary pursuant to
the early retirement provisions of the applicable Company or Subsidiary pension
plan or if no such pension plan, age 55.

          (i)   OTHER TERMINATION. Unless otherwise determined by the Committee
at grant, if any Optionee's employment with or service to the Company or any
Subsidiary terminates for any reason other than death, Disability or Normal or
Early Retirement, the Option

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shall thereupon terminate, except that the portion of any Option that was
exercisable on the date of such termination of employment may be exercised for
the lesser of 30 days after the date of termination or the balance of such
Option's term if the Optionee's employment or service with the Company or any
Subsidiary is terminated by the Company or such Subsidiary without cause (the
determination as to whether termination was for cause to be made by the
Committee). The transfer of an Optionee from the employ of the Company to a
Subsidiary, or vice versa, or from one Subsidiary to another, shall not be
deemed to constitute a termination of employment for purposes of the Plan.

          (j)   LIMIT ON VALUE OF INCENTIVE OPTION. The aggregate Fair Market
Value, determined as of the date the Incentive Option is granted, of Stock for
which Incentive Options are exercisable for the first time by any Optionee
during any calendar year under the Plan (and/or any other stock option plans of
the Company or any Subsidiary) shall not exceed $100,000.

          (k)   TRANSFER OF INCENTIVE OPTION SHARES. The stock option agreement
evidencing any Incentive Options granted under this Plan shall provide that if
the Optionee makes a disposition, within the meaning of Section 424(c) of the
Code and regulations promulgated thereunder, of any share or shares of Stock
issued to him upon exercise of an Incentive Option granted under the Plan within
the two-year period commencing on the day after the date of the grant of such
Incentive Option or within a one-year period commencing on the day after the
date of transfer of the share or shares to him pursuant to the exercise of such
Incentive Option, he shall, within 10 days after such disposition, notify the
Company thereof and immediately deliver to the Company any amount of federal
income tax withholding required by law.

     6.   TERM OF PLAN.

          No Option shall be granted pursuant to the Plan on or after June 23,
2006, but Options theretofore granted may extend beyond that date.

     7.   ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.

          (a)   Subject to any required regulatory approval, new Options may be
substituted for Options granted under the Plan, or the Company's duties as to
Options outstanding under the Plan may be assumed, by a corporation other than
the Company, or by a parent or subsidiary of the Company or such corporation, in
connection with any merger, consolidation, acquisition, separation,
reorganization, liquidation or like occurrence in which the Company is involved.
Notwithstanding the foregoing or the provisions of Subsection 7(b) hereof, in
the event that such corporation, or parent or subsidiary of the Company or such
corporation, does not substitute new Options for, and substantially equivalent
to, the Options granted hereunder, or assume the Options granted hereunder, the
Options granted hereunder shall terminate and thereupon become null and void (i)
upon dissolution or liquidation of the Company, or similar occurrence, (ii) upon
any merger, consolidation, acquisition, separation, reorganization, or similar
occurrence, in which the Company will not be a surviving entity or (iii) upon a
transfer of substantially all of the assets of the Company or more than 80% of
the outstanding Stock; provided, however, that each Optionee shall have the
right immediately prior to or concurrently with such dissolution, liquidation,
merger, consolidation, acquisition,

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separation, reorganization or similar occurrence, to exercise any unexpired
Options granted hereunder whether or not then exercisable. If the exercise of
the foregoing right by the holder of an Incentive Option would be deemed to
result in a violation of the provisions of Subsection 5(j) of the Plan, then,
without further act on the part of the Committee or the option holder, such
Incentive Option shall be deemed a nonqualified Option to the extent necessary
to avoid any such violation.

          (b)   The existence of outstanding Options shall not affect in any way
the right or power of the Company or its stockholders to make or authorize any
or all adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business, or any merger or consolidation of
the Company, or any issuance of Stock or subscription rights thereto, or any
merger or consolidation of the Company, or any issuance of bonds, debentures,
preferred or prior preference stock ahead of or affecting the Stock or the
rights thereof, or the dissolution or liquidation of the Company, or any sale or
transfer of all or any part of its assets or business, or any other corporate
act or proceeding, whether of a similar character or otherwise; provided,
however, that if the outstanding Stock shall at any time be changed or exchanged
by declaration of a stock dividend, stock split, combination of shares or
recapitalization, the number and kind of Stock subject to the Plan or subject to
any Options theretofore granted, and the Option prices, shall be appropriately
and equitably adjusted so as to maintain the proportionate number of Stock
without changing the aggregate option price.

          (c)   Adjustments under this Section 7 shall be made by the Committee
whose determination as to what adjustments, if any, shall be made, and the
extent thereof, shall be final.

     8.   PURCHASE FOR INVESTMENT.

          Unless the Options and shares covered by the Plan have been registered
under the Securities Act of 1933, as amended (the "Securities Act"), or the
Company has determined that such registration is unnecessary, each person
exercising an Option under the Plan may be required by the Company to give a
representation in writing that he is acquiring the shares for his own account
for investment and not with a view to, or for sale in connection with, the
distribution of any part thereof.

     9.   TAXES.

          The Company may make such provisions as it may deem appropriate,
consistent with applicable law, in connection with any Options granted under the
Plan with respect to the withholding of any taxes or any other tax matters.

     10.  EFFECTIVE DATE OF PLAN.

          The Plan shall be effective on June 24, 1996; provided, however, that
the Plan shall subsequently be approved by majority vote of the Company's
shareholders in the manner contemplated by Rule 16b-3 of the Exchange Act not
later than June 23, 1997.

     11.  AMENDMENT AND TERMINATION.

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          The Board may amend, suspend, or terminate the Plan, except that no
amendment shall be made that would impair the rights of any Optionee under any
Option theretofore granted without his consent, and except that no amendment
shall be made which, without the approval of the shareholders of the Company in
the manner contemplated by Rule 16b-3 of the Exchange Act would:

          (a)   materially increase the number of shares that may be issued
under the Plan, except as is provided in Section 7;

          (b)   materially increase the benefits accruing to the Optionees under
the Plan;

          (c)   materially modify the requirements as to eligibility for
participation in the Plan;

          (d)   decrease the exercise price of an Incentive Option to less than
100% of the Fair Market Value per share of Stock on the date of grant thereof or
the exercise price of a Nonqualified Option to less than 80% of the Fair Market
Value per share of Stock on the date of grant thereof; or

          (e)   extend the term of any Option beyond that provided for in
Section 5(b).

          The Committee may amend the terms of any Option theretofore granted,
prospectively or retroactively, but no such amendment shall impair the rights of
any Optionee without his consent. The Committee may also substitute new Options
for previously granted Options, including options granted under other plans
applicable to the participant and previously granted Options having higher
option prices, upon such terms as the Committee may deem appropriate.

     12.  GOVERNMENT REGULATIONS.

          The Plan, and the grant and exercise of Options hereunder, and the
obligation of the Company to sell and deliver shares under such Options, shall
be subject to all applicable laws, rules and regulations, and to such approvals
by any governmental agencies or national securities exchanges as may be
required.

     13.  GENERAL PROVISIONS.

          (a)   CERTIFICATES. All certificates for shares of Stock delivered
under the Plan shall be subject to such stop transfer orders and other
restrictions as the Committee may deem advisable under the rules, regulations
and other requirements of the Securities and Exchange Commission, or other
securities commission having jurisdiction, any applicable Federal or state
securities law, any stock exchange upon which the Stock is then listed and the
Committee may cause a legend or legends to be placed on any such certificates to
make appropriate reference to such restrictions.

          (b)   EMPLOYMENT MATTERS. The adoption of the Plan shall not confer
upon any Optionee of the Company or any Subsidiary, any right to continued
employment or, in the case of an Optionee who is a director, continued service
as a director, with the Company or a

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Subsidiary, as the case may be, nor shall it interfere in any way with the right
of the Company or any Subsidiary to terminate the employment of any of its
employees, the service of any of its directors or the retention of any of its
consultants or advisors at any time.

          (c)   LIMITATION OF LIABILITY. No member of the Board or the
Committee, or any officer or employee of the Company acting on behalf of the
Board or the Committee, shall be personally liable for any action,
determination, or interpretation taken or made in good faith with respect to the
Plan, and all members of the Board or the Committee and each and any officer or
employee of the Company acting on their behalf shall, to the extent permitted by
law, be fully indemnified and protected by the Company in respect of any such
action, determination or interpretation.

          (d)   REGISTRATION OF STOCK. Notwithstanding any other provision in
the Plan, no Option may be exercised unless and until the Stock to be issued
upon the exercise thereof has been registered under the Securities Act and
applicable state securities laws, or are, in the opinion of counsel to the
Company, exempt from such registration in the United States or exempt from the
prospectus and registration requirements under applicable provincial
legislation. The Company shall not be under any obligation to register under
applicable federal or state securities laws any Stock to be issued upon the
exercise of an Option granted hereunder, or to comply with an appropriate
exemption from registration under such laws or the laws of any province in order
to permit the exercise of an Option and the issuance and sale of the Stock
subject to such Option however, the Company may in its sole discretion register
such Stock at such time as the Company shall determine. If the Company chooses
to comply with such an exemption from registration, the Stock issued under the
Plan may, at the direction of the Committee, bear an appropriate restrictive
legend restricting the transfer or pledge of the Stock represented thereby, and
the Committee may also give appropriate stop transfer instructions to the
Company's transfer agents.

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                                                                    Exhibit 10.8

                                                              AS AMENDED THROUGH
                                                                  APRIL 18, 1997

                               AMCOMP INCORPORATED

                          DIRECTORS' STOCK OPTION PLAN

                                    ARTICLE I

                                     PURPOSE

          The purpose of the Directors' Stock Option Plan of AmComp Incorporated
(the "Plan") is to secure for AmComp Incorporated and its stockholders the
benefits arising from stock ownership by its Directors. The Plan will provide a
means whereby such Directors may purchase shares of the common stock, $.01 par
value, of AmComp Incorporated pursuant to options granted in accordance with the
Plan.

                                   ARTICLE II

                                   DEFINITIONS

          The following capitalized terms used in the Plan shall have the
respective meanings set forth in this Article:

          2.1  "Board" shall mean the Board of Directors of AmComp Incorporated.

          2.2  "Code" shall mean the Internal Revenue Code of 1986, as amended.

          2.3  "Company" shall mean AmComp Incorporated.

          2.4  "Director" shall mean any person who is a member of the Board of
Directors of the Company.

          2.5  "Director Affiliates" shall mean firms or corporations by which
an Eligible Director is employed or for which an Eligible Director performs
substantial service, as well as officers, directors, employees and affiliates of
such firms and corporations.

          2.6  "Eligible Director" shall mean any Director who is not a full or
part-time Employee of the Company.

          2.7  "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

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          2.8  "Exercise Price" shall mean the price per Share at which an
Option may be exercised.

          2.9  "Fair Market Value" shall mean the closing sales price of a Share
on the principal national securities exchange on which the Shares are listed (if
the Shares are so listed) on the Grant Date or on the preceding date on which
such Shares are traded if no Shares were traded on such Grant Date. If the
Shares are not listed on a national securities exchange, Fair Market Value shall
mean the closing price of a Share as quoted on Nasdaq (if the Shares are quoted
on Nasdaq) on the Grant Date or on the preceding date on which such Shares are
traded if no Shares were traded on such Grant Date. If the Shares are not so
listed or quoted, Fair Market Value shall be deemed to be the average of the
high bid and asked prices of the Shares in the over-the-counter market on the
Grant Date, or the next preceding date on which the last prices were recorded,
as reported by the National Quotation Bureau. If the Shares are not publicly
traded, Fair Market Value shall be determined by the Board in a manner
consistent with the provisions of the Code.

          2.10 "Grant Date" shall mean the Initial Grant Date and any Subsequent
Grant Date.

          2.11 "Initial Grant Date" shall mean with respect to each Eligible
Director the date such Eligible Director is first elected as a member of the
Board, or if an Eligible Director is a member of the Board on the date the Plan
is approved by the Board, the date of such approval.

          2.12 "Nasdaq" shall mean the National Market or the SmallCap Market of
the National Association of Securities Dealers Automated Quotation System,
whichever is applicable.

          2.13 "Option" shall mean an Option to purchase Shares granted pursuant
to the Plan.

          2.14 "Option Agreement" shall mean the written agreement described in
Article VI herein.

          2.15 "Permanent Disability" shall mean the condition of an Eligible
Director who is unable to participate as a member of the Board by reason of any
medically determined physical or mental impairment that can be expected to
result in death or that can be expected to last for a continuous period of not
less than 12 months.

          2.16 "Purchase Price" shall be the Exercise Price multiplied by the
number of whole Shares with respect to which an Option may be exercised.

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          2.17 "Securities Act" shall mean the Securities Act of 1933, as
amended.

          2.18 "Shares" shall mean shares of common stock, $.01 par value, of
the Company.

          2.19 "Subsequent Grant Date" shall mean any Grant Date other than the
Initial Grant Date.

          2.20 "Subsidiaries" shall have the meaning provided in Section 424(f)
of the Code.

                                   ARTICLE III

                                 ADMINISTRATION

          3.1  GENERAL. This Plan shall be administered by the Board in
accordance with the express provisions of this Plan.

          3.2  POWERS OF THE BOARD. The Board shall have full and complete
authority to adopt such rules and regulations and to make all such other
determinations not inconsistent with the Plan as may be necessary for the
administration of the Plan.

                                   ARTICLE IV

                             SHARES SUBJECT TO PLAN

          Subject to adjustment in accordance with Article VIII, an aggregate of
200,000 Shares is reserved for issuance under this Plan. Shares sold under this
Plan may be either authorized but unissued Shares or reacquired Shares. If an
Option, or any portion thereof, shall expire or terminate for any reason without
having been exercised in full, the unpurchased Shares covered by such Option
shall be available for future grants of Options.

                                    ARTICLE V

                                     GRANTS

          5.1  INITIAL GRANTS. On the Initial Grant Date, each Eligible Director
shall be granted an option to purchase 15,000 Shares. If an Eligible Director
was granted an option on the date the Board approved the Plan, then such grant
is subject to stockholder approval of the Plan.

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          5.2  SUBSEQUENT GRANTS. To the extent that Shares remain available for
the grant of Options under the Plan, on January 1 of each year commencing
January 1, 1998, each Eligible Director shall be granted an Option to purchase
3,000 Shares.

          5.3  DISCRETIONARY GRANTS. The Board shall have the authority to grant
options additional to those representing Initial Grants or Subsequent Grants to
Eligible Directors.

          5.4  ADJUSTMENT OF GRANTS. The number of Shares set forth in Section
5.1 and 5.2 as to which Options shall be granted shall be subject to adjustment
as provided in Section 8.1 hereof.

          5.5  COMPLIANCE WITH RULE 16B-3. The Company intends that the Plan
meet the requirements of Rule 16b-3 ("Rule 16b-3") promulgated under the
Exchange Act and that transactions of the type specified in subparagraphs (c) to
(f) inclusive of Rule 16b-3 by officers and directors of the Company pursuant to
the Plan be exempt from the operation of Section 16(b) of the Exchange Act. In
all cases, the terms, provisions, conditions and limitations of the Plan shall
be construed and interpreted consistent with the Company's intent as stated in
this Section 5.4.

                                   ARTICLE VI

                                 TERMS OF OPTION

          Each Option shall be evidenced by a written Option Agreement executed
by the Company and the Eligible Director that shall specify the Grant Date, the
number of Shares subject to the Option, the Exercise Price and shall also
include or incorporate by reference the substance of all of the following
provisions and such other provisions consistent with this Plan as the Board may
determine.

          6.1  TERM. The term of each Option shall be five years from the Grant
Date thereof, subject to earlier termination in accordance with Articles VI and
IX.

          6.2  RESTRICTION ON EXERCISE. Options shall be exercisable at such
time or times and subject to such terms and conditions as shall be determined by
the Board at grant, provided, however, that in the case of the Eligible
Director's death or Permanent Disability, the Options held by him will become
immediately exercisable, unless a longer vesting period is otherwise determined
by the Board at grant. The Board may waive any installment exercise provision at
any time in whole or in part based on performance and/or such other factors as
the Board may determine in its sole discretion, provided, however, that no

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Option will be exercisable until stockholder approval of the Plan shall have
been obtained.

          6.3  EXERCISE PRICE. The Exercise Price for each Share subject to an
Option shall be the Fair Market Value of the Share as determined in accordance
with Section 2.8.

          6.4  MANNER OF EXERCISE. An Option shall be exercised in accordance
with its terms, by delivery of a written notice of exercise to the Company and
payment of the full purchase price of the Shares being purchased. An Eligible
Director may exercise an Option with respect to all or less than all of the
Shares for which the Option may then be exercised, but a Director must exercise
the Option in full Shares.

          6.5  PAYMENT. The Purchase Price of Shares purchased pursuant to an
Option or portion thereof, may be paid:

               (a)  in United States Dollars, in cash or by check, bank draft or
money order payable to the Company;

               (b)  at the discretion of the Board by delivery of Shares already
owned by an Eligible Director with an aggregate Fair Market Value on the date of
exercise equal to the Purchase Price; and

               (c)  through the written election of the Eligible Director to
have Shares withheld by the Company from the Shares otherwise to be received,
with such withheld Shares having an aggregate Fair Market Value on the date of
exercise equal to the Purchase Price.

          6.6  TRANSFERABILITY. No Option shall be transferable otherwise than
by will or the laws of descent and distribution, and an Option shall be
exercisable during the Eligible Director's lifetime only by the Eligible
Director, his guardian or legal representative; provided, however, that Options
may be transferred in whole or in part to Director Affiliates, and provided,
further, that Options may be transferred pursuant to a qualified domestic
relations order (as defined in the Code or Title I of the Employee Retirement
Income Security Act, or the rules promulgated thereunder).

          6.7  TERMINATION OF MEMBERSHIP ON THE BOARD. If an Eligible Director's
membership on the Board terminates for any reason other than cause, including
the death of an Eligible Director, an Option held on the date of termination may
be exercised in whole or in part at any time within one year after the date of
such termination (but in no event after the term of the Option expires) and
shall thereafter terminate. If an

                                       -5-
<Page>

Eligible Director's membership on the Board is terminated for cause, which
determination shall be made by the Board, Options held by him shall terminate
concurrently with termination of membership.

          6.8  COMPLIANCE WITH RULE 16B-3. The terms for the grant of Options to
an Eligible Director may only be changed if permitted under Rule 16b-3 under the
Exchange Act.

                                   ARTICLE VII

                        GOVERNMENT AND OTHER REGULATIONS

          7.1  DELIVERY OF SHARES. The obligation of the Company to issue or
transfer and deliver Shares for exercised Options under the Plan shall be
subject to all applicable laws, regulations, rules, orders and approvals that
shall then be in effect.

          7.2  HOLDING OF STOCK AFTER EXERCISE OF OPTION. The Option Agreement
shall provide that the Eligible Director, by accepting such Option, represents
and agrees, for the Eligible Director and his permitted transferees hereunder
that none of the Shares purchased upon exercise of the Option shall be acquired
with a view to any sale, transfer or distribution of the Shares in violation of
the Securities Act and the person exercising an Option shall furnish evidence
satisfactory to that Company to that effect, including an indemnification of the
Company in the event of any violation of the Securities Act by such person.
Notwithstanding the foregoing, the Company in its sole discretion may register
under the Securities Act the Shares issuable upon exercise of the Options under
the Plan.

                                  ARTICLE VIII

                                   ADJUSTMENTS

          8.1  PROPORTIONATE ADJUSTMENTS. If the outstanding Shares are
increased, decreased, changed into or exchanged into a different number or kind
of Shares or securities of the Company through reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split or other
similar transaction, an appropriate and proportionate adjustment shall be made
to the maximum number and kind of Shares as to which Options may be granted
under this Plan. A corresponding adjustment changing the number or kind of
Shares allocated to unexercised Options or portions thereof, which shall have
been granted prior to any such change, shall likewise be made. Any such
adjustment in the outstanding Options shall be made without change in the
Purchase Price applicable to the unexercised portion of the Option

                                       -6-
<Page>

with a corresponding adjustment in the Exercise Price of the Shares covered by
the Option. Notwithstanding the foregoing, there shall be no adjustment for the
issuance of Shares on conversion of notes, preferred stock or exercise of
warrants or Shares issued by the Board for such consideration as the Board deems
appropriate.

          8.2  DISSOLUTION OR LIQUIDATION. Upon the dissolution or liquidation
of the Company, or upon a reorganization, merger or consolidation of the Company
with one or more corporations as a result of which the Company is not the
surviving corporation, or upon a sale of substantially all of the property or
more than 80% of the then outstanding Shares of the Company to another
corporation, the Company shall give to each Eligible Director at the time of
adoption of the plan for liquidation, dissolution, merger or sale either (a) a
reasonable time thereafter within which to exercise the Option prior to the
effective date of such liquidation or dissolution, merger or sale, or (b) the
right to exercise the Option as to an equivalent number of Shares of stock of
the corporation succeeding the Company or acquiring its business by reason of
such liquidation, dissolution, merger, consolidation or reorganization.

                                   ARTICLE IX

                        AMENDMENT OR TERMINATION OF PLAN

          9.1  AMENDMENTS. The Board may at any time amend or revise the terms
of the Plan, provided no such amendment or revision shall, unless appropriate
stockholder approval of such amendment or revision is obtained:

               (a)  increase the maximum number of Shares that may be sold
pursuant to Options granted under the Plan, except as permitted under the
provisions of Article VIII;

               (b)  change the minimum Exercise Price set forth in Article VI;

               (c)  increase the maximum term of Options provided for in Article
VI; or

               (d)  permit the granting of Options to anyone other than as
provided in Article V.

          9.2  TERMINATION. The Board at any time may suspend or terminate this
Plan. This Plan, unless sooner terminated, shall terminate on the tenth
anniversary of its adoption by the Board. Termination of the Plan shall not
affect Options previously

                                       -7-
<Page>

granted thereunder. No Option may be granted under this Plan while this Plan is
suspended or after it is terminated.

          9.3  CONSENT OF HOLDER. No amendment, suspension or termination of the
Plan shall, without the consent of the holder of an outstanding Option, alter or
impair any rights or obligations under such Option.

                                    ARTICLE X

                            MISCELLANEOUS PROVISIONS

          10.1 PRIVILEGE OF STOCK OWNERSHIP. No Eligible Director entitled to
exercise any Option granted under the Plan shall have any of the rights or
privileges of a stockholder of the Company with respect to any Shares issuable
upon exercise of an Option until certificates representing the Shares shall have
been issued and delivered.

          10.2 PLAN EXPENSES. Any expenses incurred in the administration of the
Plan shall be borne by the Company.

          10.3 USE OF PROCEEDS. Payments received from an Eligible Director upon
the exercise of Options shall be used for general corporate purposes of the
Company.

          10.4 GOVERNING LAW. The Plan has been adopted under the laws of the
State of Delaware. The Plan and all Options which may be granted hereunder and
all matters related thereto, shall be governed by and construed and enforceable
in accordance with the laws of the State of Delaware as it then exists.

                                   ARTICLE XI

                              STOCKHOLDER APPROVAL

          This Plan is subject to approval, at a duly held stockholders' meeting
within 12 months after the date the Board approves this Plan, by the affirmative
vote of holders of a majority of the voting Shares of the Company represented in
person or by proxy and entitled to vote at the meeting. Options may be granted,
but not exercised, before such stockholder approval is obtained. If the
stockholders fail to approve the Plan within the required time period, any
Options granted under this Plan shall be void, and no additional Options may
thereafter be granted.

                                       -8-

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