Document:

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                                                               EXHIBIT 10.7

                              DEVELOPMENT AGREEMENT

THIS AGREEMENT, entered into and effective this 14th day of October, 1999
("Effective Date") is by and between GMX Resources Inc., (hereinafter referred
to as "GMX") and Tara Energy Services Limited, as managing partner of the Tara
Energy Partnerships (hereinafter referred to as "Tara") (sometimes collectively
referred to as the "Parties").

         WHEREAS, GMX is a corporation engaged in oil and gas exploration and
development activities and represents that it is the owner of certain oil and
gas properties as listed on the attached Exhibit "A" which are known to the
Parties as the Leases (the "Leases"), and

         WHEREAS, Tara desires to enter into a Development Agreement regarding
the hereinafter detailed program of work ("Work Program") to be conducted on the
Leases, this Agreement shall serve to set out the terms whereby said agreement
shall be made. Tara hereby represents that it has researched this investment.
Tara is a professional oil and gas entity engaged in oil and gas exploration and
development and as such is capable of properly evaluating same.

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

1.       The Parties shall in accordance with the terms of this Agreement and
         the joint operating agreement attached as Exhibit "C" to this Agreement
         (the "JOA") conduct the program of drilling and development of two
         wells on the Leases as set forth in detail on the attached Exhibit "B"
         ("the Wells"). The costs shown on Exhibit "B" are target AFE costs
         based on the Turnkey Bid of Patterson Drilling, for drilling to the
         required depths plus estimated third party and supervision costs. Tara
         will be liable for its share of the costs plus cost overruns, not to
         exceed in total 110% of the amounts shown in Exhibit "B". Overruns in
         excess of 10% of the total AFE cost will be submitted as a
         supplementary AFE for Tara's agreement before any such additional
         expenditure is undertaken. Tara's notification to the Operator as to
         whether its agrees to incur such additional cost, and (if it does so
         approve) its payments therefor will be timely in conformance with this
         Agreement and the JOA. The location of the Wells will be as agreed by
         the Parties.

2.       Tara shall be liable for 85% of the cost of the Work Program, on a cost
         basis described in Clause 1 above.

3.       In discharge of its share of the cost of the Work Program, subject to
         the conditions herein, Tara shall make (or cause to be made on its
         behalf) the following payments ("Advances") to GMX or its designated
         affiliate ("GMX"):
<TABLE>
                 <S>                        <C>
                  October 15, 1999            $792,900.00 in US$ AFE Costs
                                              $ 45,000.00 in US$ G&G Costs
                                              -----------
                                              $837,900.00 in US$ Total

</TABLE>

<PAGE>

4.       Upon payment by Tara of the aforesaid Advances, GMX shall assign to
         Tara (in the form of its U.S. affiliate Tara Energy Inc. as nominee for
         Tara) an 85% working interest limited to the forty (40) acres
         surrounding the "initial test wells" (the wells), and including the
         location or locations of any twin wells of the wells, in the lands
         described on Exhibit "A" attached hereto. Said assignment shall
         comprise full working interest and net revenue interest rights for each
         well and the forty (40) acres attributable to each well drilled
         hereunder, limited to the depths penetrated by each well. Should the
         Texas spacing units attributable to each well be greater than forty
         (40) acres, then in no event will Tara earn a working interest or net
         revenue interest for development purposes outside the forty (40) acres
         surrounding said wellbore. GMX agrees that no offset well(s) will be
         drilled closer than 1200 feet from the Tara wellbore(s) and in said
         forty (40) acre tracts without approval from Tara and with Tara's
         participation for its working interest share in accordance with the
         JOA. Said assignment shall be made effective as of the Effective Date
         and shall be subject to the JOA, which shall govern all operations on
         the leases.

5.       Payout:

         (A) The period from the Advance Date (being the date of Tara's first
         advance of funds to GMX in respect of the Work Program) until Tara's
         Payout Date (as defined in the Appendix A, below) is referred to here
         as "Payout Period." During the Payout Period Tara shall be entitled to
         its 85% working interest, share of net revenues from the wells funded
         by the Advances, provided that during the Payout Period, in addition to
         its 85% working interest share of such net revenues:

                  (i) Tara shall be entitled to increase its pre-Payout working
                  interest to 90% if Tara has not received 50% of payback of the
                  amount of the Advances before the date which is one year after
                  the Advance Date; and

                  (ii) Tara shall be entitled to increase its pre-Payout working
                  interest to 95% if Tara has not received 75% of payback of the
                  amount of the Advances before the date which is two years
                  after the Advance Date; and

                  (iii) Tara shall be entitled to increase its pre-Payout
                  working interest to 100% if the Payout Period exceeds three
                  years, from the expiry of such three years. In this case GMX
                  and Tara will consult as to the future of GMX's operatorship,
                  to apply the principle that a party not holding a current
                  working interest shall not be the operator.

         Increases in Tara's pre-Payout working interest as described above will
         take effect as from the first day of the next following month.

         (B) At Tara's Payout Date, GMX shall be entitled to a reversionary
         interest, such that Tara shall retain an after-payout working interest
         ("APO Interest") in accordance with the following formula:

                  The APO Interest shall be equal to 0.9% (zero point nine
                  percent) for every month of the Payout Period during the first
                  nine months of the Payout Period, and 2.7% (two point seven
                  percent) per month thereafter, until the end of the Payout
                  Period. (For example, if it takes 12 months for Tara's
                  investment to pay out, Tara will retain 9 months x 0.9% plus 3
                  months x 2.7% = 16.2% in total after payout and GMX will have
                  the remainder).

6.       Tara shall be entitled to its full working interest share of production
         revenues and Tara shall continue to hold the relevant working interests
         on a conventional basis, GMX being entitled to a reversion at Tara's
         Payout, as described above, and subject to the JOA. Tara shall be
         entitled

                                        2
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         (subject to the other terms of this Development Agreement) to assign,
         charge or otherwise dispose of any or all of its interests without
         being subject to pre-emption or other preferential rights.

7.       It is hereby agreed and understood that GMX shall diligently and
         prudently conduct the Work Program as soon as reasonably possible,
         having regard to operational circumstances and results encountered. If
         the actual results of any significant part of the Work Program are
         materially different from those contemplated by the Parties at the date
         hereof, the Parties shall consult in good faith to assess whether the
         Work Program should be modified so as to improve the prospective
         economic performance of the Leases, and shall seek to agree such
         modification for such purpose. In the event that the interim results
         indicate that the prospective oil or gas volumes producible from future
         wells are likely to be less than 80% of those proved reserves figures
         estimated by Sproule (attached as exhibit D) and Associates for Tara,
         the Work Program shall be amended to remove such future wells
         therefrom, unless the Parties otherwise agree. For the avoidance of
         doubt, any amendment of the Work Program in accordance with this Clause
         shall constitute an amendment of the AFE shown in Exhibit "B" for the
         purposes of both this Agreement and the JOA.

8.       In the event that the work program is curtailed (I.E. SPUDDING OR
         COMPLETION) any unspent funds from the Advance shall be refunded to
         Tara. In the event of any conflict between this Clause and the JOA, the
         provisions of this Clause shall prevail. GMX (as Operator) agrees that
         it will commence operations on the Leases under this Development
         Agreement and agrees to diligently proceed with said operations in a
         workmanlike manner until all operations in respect of the Work Program
         have been completed. Periodic reports at not less than monthly
         intervals, and more frequently during active operations, shall be made
         to Tara and GMX, as Operator will be available to review the work done
         at the request of Tara.

9.       The Parties agree that Tara has no responsibility to MW Oil Investment
         Company, Inc. for any fees in respect of this Agreement.

10.      References in this Agreement to "Tara" shall, where they refer to the
         holding of real property, be taken as references to holdings by Tara
         Energy Inc., which is a wholly-owned subsidiary of Tara Energy Services
         Ltd., managing partner of the Tara Energy Partnerships. Tara Energy
         Inc., which is a Delaware corporation, holds lease interests on behalf
         of the Partnerships.

11.      Conditions:

         11.1 Tara shall be under no obligation to participate in any well which
         is not classed as PUD at the time of drilling. In the event that any
         well proposed to be drilled pursuant to this Agreement ceases for any
         reason to have PUD status, GMX shall have the opportunity of providing
         a substitute location, which shall be accepted if satisfactory to Tara
         and providing it has PUD status.

         11.2 The Wells must be drilled within three months of the Advance Date,
         otherwise unspent funds shall be refunded to Tara.

12. Covenants and Warranties of GMX:

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         12.1 GMX states that neither the execution and delivery of this
         Agreement or the consummation of the transactions contemplated herein
         will constitute any material breach or default under any contract or
         agreement to which GMX is a party.

         12.2 GMX states that there are no liens, claims, suits, actions or
         other proceedings that are currently pending before any court or
         governmental agency as of the date of this Agreement to which GMX is a
         party and which might result in material impairment or loss of GMX's
         title to any part of the lands described in Exhibit "A" or that might
         materially hinder or impede the operation of the leases thereon. GMX
         shall promptly notify Tara of any such proceeding following the date of
         this Agreement with respect to which GMX receives actual notice.

         12.3 GMX states that there are no bankruptcy, reorganization or
         arrangement Proceedings pending, or being contemplated by or threatened
         against GMX.

         12.4 GMX states that there is no liens or encumbrances burdening its
         interest in the Leases.

         12.5 GMX states that it is not aware of any environmental hazardous
         wastes on the Leases and that to the best knowledge of its knowledge
         and belief it is fully in compliance with local, state and federal laws
         in relation to the environmental condition of the Leases; however, it
         is understood that GMX does not currently have an Environmental
         Assessment Report covering the said property and should Tara so desire
         such a report, then Tara shall arrange or shall have arranged same at
         its own cost.

13.      Covenants and Warranties of Tara:

         13.1 Tara states that neither the execution and delivery of this
         Agreement nor the consummation of the transaction contemplated hereby
         will constitute a material breach or a default under any contract or
         agreement to which Tara is a party.

         13.2 Tara states that there are no bankruptcy proceedings pending,
         being contemplated by or threatened against Tara.

         13.3 Tara shall indemnify and hold harmless GMX from any and all
         claims, costs, expenses, liabilities or causes of action to or by third
         parties arising from the activities attributable to its undivided
         interest in the Leases which occur on or after the date of this
         Agreement.

         13.4 Tara states that it has the requisite power to acquire an interest
         in the Leases and that the execution, delivery and performance of this
         Agreement and the transaction contemplated hereby have been duly and
         validly authorized by all necessary requisite corporate action.

14.      All ad valorem, property, production, severance, windfall profit and
         similar taxes and assessments (other than income taxes) based on or
         measured by the ownership of property or the production of hydrocarbons
         or the receipt of the proceeds therefrom, shall be apportioned and
         prorated between GMX and Tara as of the effective date of the
         assignments to be made pursuant to this Agreement.

                                       4
<PAGE>

15.      The Parties agree in principle that following completion of the Work
         Program Tara Energy Inc. shall take over all rights and obligations of
         Tara hereunder, and that such rights and obligations will thereafter be
         embodied by amendment in the JOA and that this Agreement shall then
         thereupon terminate.

16.      Tara will pay to GMX a fee in respect of geological and geophysical
         work to be done by GMX on the Leases in the amount of $22,500 for each
         of the Wells that may be drilled, and such amounts are shown separately
         on Exhibit "B".

17.      Tara confirms that, subject to and following satisfactory technical and
         economic results from the Wells, Tara will discuss with GMX applying
         the principles of this Agreement to the drilling of further wells to be
         funded in like manner. This Clause does not represent a commitment by
         Tara or GMX to proceed with such further drilling, nor a commitment by
         Tara to retain available or to allocate funds for such activity.

18.      Notwithstanding anything to the contrary herein, the Interests shall be
         proportionately reduced, on a lease by lease basis, to the extent GMX
         owns less than the entire leasehold estate created by such lease, and
         to the extent such lease covers less than the entire oil and gas
         mineral fee estate in and under the land covered by such lease.

         Proper Names and Addresses of the parties and the respective Contact
names and telephone numbers under this Agreement are as follows:

Operator:                  GMX Resources Inc.
                           One Benham Place, Suite 600
                           9400 North Broadway
                           Oklahoma City, Oklahoma 73114

                           Operations; Ken Kenworthy, Jr., ext. 11
                           All Other; Ken Kenworthy, ext. 16
                           Phone # 405-600-0711
                           Fax # 405-600-0600

Non-Operator:     Tara Energy Services Limited
                           c/o Quinn & Associates
                           1801 Broadway, Suite 800
                           Denver, Colorado 80202

                           Contact:  Jan Podoll
                           Phone # 303-298-7262
                           Fax # 303-298-7502

         This Agreement shall extent to and bind the respective successors and
assigns, heirs, and any personal representatives of the Parties hereto and the
terms and provisions hereof shall constitute covenants running with the land and
leasehold estates covered hereby. This contract shall be governed by the laws of
the State of Oklahoma.

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         IN WITNESS WHEREOF, the Parties have signed this Agreement as of this
date first above written.

GMX  RESOURCES  INC.

/s/ Ken L. Kenworthy
---------------------------------
OFFICER

                                        TARA  ENERGY  SERVICES LIMITED

                                           /s/ Janice J. Podoll
                                        ------------------------------
                                        Authorized Signatory

                                       6
<PAGE>

APPENDIX  A

PAYOUT DATE:

Cash outflows (treated as negative numbers) in respect of the funds provided by
Tara and cash inflows from the net proceeds of sale of Tara's share of monthly
production from all wells financed by such funds (treated on a pooled basis),
less operating costs and production taxes for Tara's interest in such wells,
together with any proceeds from disposal or advance payments (all treated as
positive numbers) are to be summarized periodically to arrive at a monthly net
cash flow for Tara from the Advance Date (being the date of Tara's first advance
of funds to GMX in respect of the operations in question) up to the latest
available monthly figures. When the cumulative monthly net cash flow from the
Advance Date first calculates so as to result in a positive number, the Payout
Date shall be deemed to have occurred on the first day of the month following
the latest month included in such calculation. Month herein means the 12 months
of the calendar year.

In the event that the Advances are paid to GMX by more than one advance of
funds, interest at 4.5% per annum shall be calculated on each such Advance
(other than the first Advance), between and including the Advance Date (being
the date of the first Advance) and the date upon which the Advance in question
is transmitted to GMX, and the interest so calculated shall be treated for the
purposes of the payout calculation and included in such calculation as if such
interest were proceeds received by Tara out of the net revenues of the Wells so
funded by the Advances. Such interest calculation shall use a 360-day year.<PAGE>
                                                                     Exhibit 4.2

                            HARRIS INTERACTIVE INC.
                            LONG-TERM INCENTIVE PLAN

SECTION 1  GENERAL

    1.1  PURPOSE.  This Harris Interactive Inc. Long-Term Incentive Plan (the
"Plan") has been established by Harris Interactive Inc. (the "Company") (a) to
attract and retain persons eligible to participate in the Plan; (b) motivate
Participants, by means of appropriate incentives, to achieve long-range goals;
(c) provide incentive compensation opportunities that are competitive with those
of other similar companies; and (d) further identify Participants' interests
with those of the Company's other stockholders through compensation that is
based on the Company's common stock; and thereby promote the long-term financial
interest of the Company and the Related Companies, including the growth in value
of the Company's equity and enhancement of long-term stockholder return.

    1.2  PARTICIPATION.  Subject to the terms and conditions of the Plan, the
Committee shall determine and designate, from time to time, from among the
Eligible Individuals, those persons who will be granted one or more Awards under
the Plan, and thereby become "Participants" in the Plan. In the discretion of
the Committee, a Participant may be granted any Award permitted under the
provisions of the Plan, and more than one Award may be granted to a Participant.
Awards may be granted as alternatives to or replacements of awards outstanding
under the Plan, or any other plan or arrangement of the Company or a Related
Company (including a plan or arrangement of a business or entity, all or a
portion of which is acquired by the Company or a Related Company).

    1.3  OPERATION, ADMINISTRATION AND DEFINITIONS.  The operation and
administration of the Plan, including the Awards made under the Plan, shall be
subject to the provisions of Section 4 (relating to Operation and
Administration). Capitalized terms in the Plan shall be defined as set forth in
the Plan (including the definition provisions of Section 1.4 of the Plan).

    1.4  DEFINED TERMS.  For purposes of the Plan, the terms listed below shall
be defined as follows:

        (a) AWARD.  The term "Award" shall mean any award or benefit granted to
    any Participant under the Plan, including, without limitation, the grant of
    Options, SARs, Stock Awards and Cash Awards.

        (b) BOARD.  The term "Board" shall mean the Board of Directors of the
    Company.

        (c) CHANGE IN CONTROL.  The term "Change in Control" means a change in
    control occurring after the Effective Date of this Plan of a nature that
    would be required to be reported in a proxy statement with respect to the
    Company (even if the Company is not actually subject to said reporting
    requirements) in response to Item 6(e) (or any comparable or successor Item)
    of Schedule 14A of Regulation 14A promulgated under the Securities Exchange
    Act of 1934, as amended (the "Exchange Act"), except that any merger,
    consolidation or corporate reorganization in which the owners of the
    Company's capital stock entitled to vote in the election of directors (the
    "Voting Stock") prior to said combination receive 75% or more of the
    resulting entity's Voting Stock shall not be considered a change in control
    for the purposes of this Plan; and provided that, without limitation of the
    foregoing, such change in control shall be deemed to have occurred if
    (i) any "person" (as that term is used in Sections 13(d) and 14(d)(2) of the
    Exchange Act, excluding any stock purchase or employee stock ownership plan
    maintained by the Company or a Related Company) becomes the "beneficial
    owner" (as that term is defined by the Securities and Exchange Commission
    for purposes of Section 13(d) of the Exchange Act), directly or indirectly,
    of more than 15% of the outstanding Voting Stock of the Company or its
    successors; or (ii) during any period of two consecutive years a majority of
    the Board of Directors no longer consists of individuals who were members of
    the Board of Directors at the beginning of such period, unless the election
    of each director who was not a director at the beginning
<PAGE>

    of the period was approved by a vote of at least 75% of the directors still
    in office who were directors at the beginning of the period.

        (d) CODE.  The term "Code" means the Internal Revenue Code of 1986, as
    amended. A reference to any provision of the Code shall include reference to
    any successor provision of the Code.

        (e) The term "COMMITTEE" is as defined in Section 5.

        (f) The term "ELIGIBLE INDIVIDUAL" shall mean any employee, officer or
    non-employee director of the Company or a Related Company.

        (g) FAIR MARKET VALUE.  For purposes of determining the "FAIR MARKET
    VALUE" of a share of Stock, the following rules shall apply:

           (i) If the Stock is at the time listed or admitted to trading on any
       stock exchange or a national market system, including without limitation
       the Nasdaq National Market, then the "Fair Market Value" shall be the
       mean between the lowest and highest reported sale prices of the Stock on
       the date in question on the principal exchange on which the Stock is then
       listed or admitted to trading. If no reported sale of Stock takes place
       on the date in question on the principal exchange, then the reported
       closing asked price of the Stock on such date on the principal exchange
       shall be determinative of "Fair Market Value."

           (ii) If the Stock is not at the time listed or admitted to trading on
       a stock exchange, the "Fair Market Value" shall be the mean between the
       lowest reported bid price and highest reported asked price of the Stock
       on the date in question in the over-the-counter market, as such prices
       are reported in a publication of general circulation selected by the
       Committee and regularly reporting the market price of Stock in such
       market.

           (iii) If the Stock is not listed or admitted to trading on any stock
       exchange or traded in the over-the-counter market, the "Fair Market
       Value" shall be as determined in good faith by the Committee.

        (h) RELATED COMPANIES.  The term "Related Company" means (i) any
    corporation, partnership, joint venture or other entity during any period in
    which it owns, directly or indirectly, at least 50% of the voting power of
    all classes of stock of the Company (or successor to the Company) entitled
    to vote; and (ii) any corporation, partnership, joint venture or other
    entity during any period in which at least 50% voting or profits interest is
    owned, directly or indirectly, by the Company, by any entity that is a
    successor to the Company, or by any entity that is a Related Company by
    reason of clause (i) next above.

        (i) STOCK.  The term "Stock" shall mean shares of common stock of the
    Company.

SECTION 2.  OPTIONS AND SARS

    2.1  DESCRIPTIONS.

        (a) The grant of an "Option" entitles the Participant to purchase shares
    of Stock at an Exercise Price established by the Committee. Options granted
    under this Section 2 may be either Incentive Stock Options or Non-Qualified
    Stock Options, as determined in the discretion of the Committee. An
    "Incentive Stock Option" is an Option that is intended to satisfy the
    requirements applicable to an "incentive stock option" described in
    Section 422(b) of the Code. A "Non-Qualified Option" is an Option that is
    not intended to be an "incentive stock option" as that term is described in
    Section 422(b) of the Code.

        (b) A stock appreciation right (a "SAR") entitles the Participant to
    receive, in cash or Stock (as determined in accordance with subsection 2.5),
    value equal to all or a portion of the excess of:

                                       2
<PAGE>

           (a) the Fair Market Value of a specified number of shares of Stock at
       the time of exercise; over

           (b) an Exercise Price established by the Committee pursuant to
       Section 2.2 of the Plan.

    2.2  EXERCISE PRICE.  The "Exercise Price" of each Option and SAR granted
under this Section 2 shall be established by the Committee or shall be
determined by a method established by the Committee at the time the Option or
SAR is granted; except that the Exercise Price for Incentive Stock Options shall
not be less than 100% of the Fair Market Value of a share of Stock as of the
Pricing Date (or less than 110% of the Fair Market Value of a share of Stock as
of the Pricing Date in the case of Participants owning 10% of the voting stock
of the Company). For purposes of the preceding sentence, the "Pricing Date"
shall be the date on which the Option is granted.

    2.3  EXERCISE.  An Option and SAR shall be exercisable in accordance with
such terms and conditions and during such periods as may be established by the
Committee.

    2.4  PAYMENT OF OPTION EXERCISE PRICE.  The payment of the Exercise Price of
an Option granted under this Section 2 shall be subject to the following:

        (a) Subject to the following provisions of this subsection 2.4, the full
    Exercise Price for shares of Stock purchased upon the exercise of any Option
    shall be paid at the time of such exercise (except that, in the case of an
    exercise arrangement approved by the Committee and described in subsection
    2.4(c), payment may be made as soon as practicable after the exercise).

        (b) The Exercise Price shall be payable in cash or, at the option of the
    Committee, by tendering shares of Stock (by either actual delivery of shares
    or by attestation, with such shares valued at Fair Market Value as of the
    day of exercise), or in any combination thereof, as determined by the
    Committee.

        (c) The Committee may permit a Participant to elect to pay the Exercise
    Price upon the exercise of an Option by authorizing a third party to sell
    shares of Stock (or a sufficient portion of the shares) acquired upon
    exercise of the Option and remit to the Company a sufficient portion of the
    sale proceeds to pay the entire Exercise Price and any tax withholding
    resulting from such exercise.

    2.5  SETTLEMENT OF AWARD.  Distribution following exercise of an Option or
SAR, and shares of Stock distributed pursuant to such exercise, shall be subject
to such conditions, restrictions and contingencies as the Committee may
establish. Settlement of SARs may be made in shares of Stock (valued at their
Fair Market Value at the time of exercise), in cash, or in a combination
thereof, as determined in the discretion of the Committee. The Committee, in its
discretion, may impose such conditions, restrictions and contingencies with
respect to shares of Stock acquired pursuant to the exercise of an Option or SAR
as the Committee determines to be desirable.

SECTION 3  OTHER AWARDS

    3.1  STOCK AWARD.  A Stock Award is a grant of shares of Stock or of a right
to receive shares of Stock (or their cash equivalent or a combination of both)
in the future. Each Stock Award shall be subject to such conditions,
restrictions and contingencies as the Committee shall determine. These may
include continuous service and/or the achievement of performance goals. The
performance goals that may be used by the Committee for such Awards may consist
of cash generation targets, profit, revenue and market share targets,
profitability targets as measured by return ratios, and stockholder returns. The
Committee may designate a single goal criterion or multiple goal criteria for
performance measurement purposes, with the measurement based on absolute Company
or business unit performance and/or on performance as compared with that of
other publicly-traded companies.

                                       3
<PAGE>

    3.2  CASH AWARD.  A Cash Award is a right denominated in cash or cash units
to receive a payment, which may be in the form of cash, shares of Stock or a
combination, based on the attainment of pre-established performance goals and
such other conditions, restrictions and contingencies as the Committee shall
determine. The performance goals that may be used by the Committee for such
awards may consist of cash generation targets, profits, revenue and market share
targets, profitability targets as measured by return ratio, stockholder returns
and such other goals as may be designated by the Committee. The Committee may
designate a single goal criterion or multiple goal criteria for performance
measurement purposes with the measurement based on absolute Company or business
unit performance and/or on performance as compared with that of other
publicly-traded companies.

SECTION 4  OPERATION AND ADMINISTRATION

    4.1  EFFECTIVE DATE.  Subject to the approval of the stockholders of the
Company, the Plan shall be effective as of September 7, 1999 (the "Effective
Date"); provided, however, that to the extent that Awards are made under the
Plan prior to its approval by stockholders, they shall be contingent on approval
of the Plan by the stockholders of the Company. The Plan shall be unlimited in
duration and, in the event of Plan termination, shall remain in effect as long
as any Awards under it are outstanding; provided, however, that, to the extent
required by the Code, no Incentive Stock Options may be granted under the Plan
on a date that is more than ten years from the date the Plan is adopted or, if
earlier, the date the Plan is approved by stockholders.

    4.2  SHARES SUBJECT TO PLAN.

        (a) (i) Subject to the following provisions of this subsection 4.2, the
    maximum number shares of Stock that may be delivered to Participants and
    their beneficiaries under the Plan shall be 2,750,000.

           (ii) Any shares of Stock granted under the Plan that are forfeited
       back to the Company because of the failure to meet an Award contingency
       or condition shall again be available for delivery pursuant to new Awards
       granted under the Plan. To the extent any shares of Stock covered by an
       Award are not delivered to a Participant or beneficiary because the Award
       is forfeited or canceled, or the shares of Stock are not delivered
       because the Award is settled in cash, such shares shall not be deemed to
       have been delivered for purposes of determining the maximum number of
       shares of Stock available for delivery under the Plan.

           (iii) If the Exercise Price of any Option granted under the Plan or
       any Prior Plan is satisfied by tendering shares of Stock to the Company
       (by either actual delivery or by attestation), only the number of shares
       of Stock issued net of the shares of Stock tendered shall be deemed
       delivered for purposes of determining the maximum number of shares of
       Stock available for delivery under the Plan.

           (iv) Shares of Stock delivered under the Plan in settlement,
       assumption or substitution of outstanding awards (or obligations to grant
       future awards) under the plans or arrangements of another entity shall
       not reduce the maximum number of shares of Stock available for delivery
       under the Plan, to the extent that such settlement, assumption or
       substitution as a result of the Company or a Related Company acquiring
       another entity (or an interest in another entity).

        (b) Subject to subsection 4.2(c), the following additional maximums are
    imposed under the Plan.

           (i) The maximum number of shares of Stock that may be issued by
       Options intended to be Incentive Stock Options shall be 2,750,000 shares.

           (ii) The maximum number of shares that may be covered by Awards
       granted to any one individual pursuant to Section 2 (relating to Options
       and SARs) shall be 500,000 shares during any three consecutive calendar
       years.

                                       4
<PAGE>

           (iii) The maximum payment that can be made for awards granted to any
       one individual pursuant to Section 3 (relating to Stock Awards and Cash
       Awards) shall be $1,000,000 for any single or combined performance goals
       established for any specified performance period. If an Award granted
       under Section 3 is, at the time of grant, denominated in shares, the
       value of the shares of Stock for determining this maximum individual
       payment amount will be the Fair Market Value of a share of Stock on the
       first day of the applicable performance period.

        (c) Subject to Section 4.14 below relating to changes in control, in the
    event of a corporate transaction involving the Company (including, without
    limitation, any stock dividend, stock split, extraordinary cash dividend,
    recapitalization, reorganization, merger, consolidation, split-up, spin-off,
    combination or exchange of shares), the Committee (a) will make any
    appropriate adjustments to the maximum number of shares of Stock that may be
    delivered to Participants and their beneficiaries under this subsection
    4.2(a) and (b), and (b) will adjust Awards to preserve the benefits or
    potential benefits of the Awards. Action by the Committee may include
    adjustment of: (i) the number and kind of shares which may be delivered
    under the Plan; (ii) the number and kind of shares subject to outstanding
    Awards; and (iii) the Exercise Price of outstanding Options and SARs; as
    well as any other adjustments that the Committee determines to be equitable.

    4.3  LIMIT ON DISTRIBUTION.  Distribution of shares of Stock or other
amounts under the Plan shall be subject to the following:

        (a) Notwithstanding any other provision of the Plan, the Company shall
    have no liability to deliver any shares of Stock under the Plan or make any
    other distribution of benefits under the Plan unless such delivery or
    distribution would comply with all applicable laws (including, without
    limitation, the requirements of the Securities Act of 1933), and the
    applicable requirements of any securities exchange or similar entity.

        (b) To the extent that the Plan provides for issuance of stock
    certificates to reflect the issuance of shares of Stock, the issuance may be
    effected on a noncertificated basis, to the extent not prohibited by
    applicable law or the applicable rules of any stock exchange or a national
    market system, including without limitation the Nasdaq National Stock
    Market.

    4.4  TAX WITHHOLDING.  Whenever the Company proposes or is required to
distribute Stock under the Plan, the Company may require the recipient to remit
to the Company an amount sufficient to satisfy any Federal, state and local tax
withholding requirements prior to the delivery of any certificate for such
shares or, in the discretion of the Committee, the Company may withhold from the
shares to be delivered shares sufficient to satisfy all or a portion of such tax
withholding requirements. Whenever under the Plan payments are to be made in
cash, such payments may be net of an amount sufficient to satisfy any Federal,
state and local tax withholding requirements.

    4.5  DIVIDENDS AND DIVIDEND EQUIVALENTS.  An Award may provide the
Participant with the right to receive dividends or dividend equivalent payments
with respect to Stock which may be either paid currently or credited to an
account for the Participant, and may be settled in cash or Stock as determined
by the Committee. Any such settlements, and any such crediting of dividends or
dividend equivalents or reinvestment in shares of Stock, may be subject to such
conditions, restrictions and contingencies as the Committee shall establish,
including the reinvestment of such credited amounts in Stock equivalents.

    4.6  PAYMENTS.  Awards may be settled through cash payments, the delivery of
shares of Stock, the granting of replacement Awards, or combination thereof as
the Committee shall determine. Any Award settlement, including payment
deferrals, may be subject to such conditions, restrictions and contingencies as
the Committee shall determine. The Committee may permit or require the deferral
of any Award payment, subject to such rules and procedures as it may establish,
which may include provisions for the payment or crediting of interest, or
dividend equivalents, including converting such credits into deferred Stock
equivalents.

                                       5
<PAGE>

    4.7  TRANSFERABILITY.  Except as otherwise provided by the Committee, Awards
under the Plan are not transferable except as designated by the Participant by
will or by the laws of descent and distribution.

    4.8  FORM AND TIME OF ELECTIONS.  Unless otherwise specified herein, each
election required or permitted to be made by any Participant or other person
entitled to benefits under the Plan, and any permitted modification, or
revocation thereof, shall be in writing filed with the Committee at such times,
in such form, and subject to such restrictions and limitations, not inconsistent
with the terms of the Plan, as the Committee shall require.

    4.9  AGREEMENT WITH COMPANY.  At the time of an Award to a Participant under
the Plan, the Committee may require a Participant to enter into an agreement
with the Company (the "Agreement") in a form specified by the Committee,
agreeing to the terms and conditions of the Plan and to such additional terms
and conditions, not inconsistent with the Plan, as the Committee may, in its
sole discretion, prescribe.

    4.10  LIMITATION OF IMPLIED RIGHTS.

        (a) Neither a Participant nor any other person shall, by reason of the
    Plan, acquire any right in or title to any assets, funds or property of the
    Company or any Related Company whatsoever, including, without limitation,
    any specific funds, assets, or other property which the Company or any
    Related Company, in their sole discretion, may set aside in anticipation of
    a liability under the Plan. A Participant shall have only a contractual
    right to the stock or amounts, if any, payable under the Plan, unsecured by
    any assets of the Company or any Related Company. Nothing contained in the
    Plan shall constitute a guarantee that the assets of such companies shall be
    sufficient to pay any benefits to any person.

        (b) The Plan does not constitute a contract of employment, and selection
    as a Participant will not give any Eligible Individual the right to be
    retained in the employ of the Company or any Related Company, nor any right
    or claim to any benefit under the Plan, unless such right or claim has
    specifically accrued under the terms of the Plan. Except as otherwise
    provided in the Plan, no Award under the Plan shall confer upon the holder
    thereof any right as a stockholder of the Company prior to the date on which
    the individual fulfills all conditions for receipt of such rights.

    4.11  NO FRACTIONAL SHARES.  No fractional shares of Stock shall be issued
or delivered pursuant to the Plan or any Award, and the Committee shall
determine whether cash shall be paid or transferred in lieu of any fractional
shares of Stock, or whether such fractional shares of Stock or any rights
thereto shall be canceled.

    4.12  EVIDENCE.  Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which the person acting on
it considers pertinent and reliable, and signed, made or presented by the proper
party or parties.

    4.13  EXCEEDING LIMITATIONS.  To the extent that the aggregate Fair Market
Value of Stock (determined at the time the Option is granted) with respect to
which Incentive Stock Options are exercisable for the first time by a
Participant during any calendar year (under all plans of the Company and all
Related Companies) exceeds $100,000, such Options shall be treated as
Non-Qualified Stock Options, to the extent required by Section 422 of the Code.

    4.14  CHANGE IN CONTROL.  Subject to the provisions of subsection 4.2
(relating to the adjustment of shares), and except as otherwise provided in the
Plan or the agreement reflecting the applicable Award, upon the occurrence of a
Change in Control:

        (a) All outstanding Options (regardless of whether in tandem with SARs)
    shall become fully exercisable.

                                       6
<PAGE>

        (b) All outstanding SARs (regardless of whether in tandem with Options)
    shall become fully exercisable.

        (c) All Stock Awards shall become fully vested.

    4.15.  ACTION BY COMPANY OR RELATED COMPANY.  Any action required or
permitted to be taken by the Company or any Related Company shall be by
resolution of its board of directors, or by action of one or more members of the
board (including a committee of the board) who are duly authorized to act for
the board, or (except to the extent prohibited by applicable law or applicable
rules of any stock exchange) by a duly authorized officer of the Company.

    4.16.  GENDER AND NUMBER.  Where the context admits, words in any gender
shall include any other gender, words in the singular shall include the plural
and the plural shall include the singular.

SECTION 5  COMMITTEE

    5.1.  ADMINISTRATION.  The authority to control and manage the operation and
administration of the Plan shall be vested in a committee (the "Committee") in
accordance with this Section 5.

    5.2.  SELECTION OF COMMITTEE.  The Committee shall be selected by the Board,
and shall consist of two or more members of the Board.

    5.3.  POWERS OF COMMITTEE.  The authority to manage and control the
operation and administration of the Plan shall be vested in the Committee,
subject to the following:

        (a) Subject to the provisions of the Plan, the Committee will have the
    authority and discretion to select from among the Eligible Individuals those
    persons who shall receive Awards, to determine the time or times of receipt,
    to determine the types of Awards and the number of shares covered by the
    Awards, to establish the terms, conditions, performance criteria,
    restrictions, and other provisions of such Awards, and (subject to the
    restrictions imposed by Section 6) to cancel or suspend Awards. In making
    such Award determinations, the Committee may take into account the nature of
    services rendered by the individual, the individual's present and potential
    contribution to the Company's success and such other factors as the
    Committee deems relevant.

        (b) Subject to the provisions of the Plan, the Committee will have the
    authority and discretion to determine the extent to which Awards under the
    Plan will be structured to conform to the requirements applicable to
    performance-based compensation as described in Code Section 162(m), and to
    take such action, establish such procedures, and impose such restrictions at
    the time such Awards are granted as the Committee determines to be necessary
    or appropriate to conform to such requirements.

        (c) The Committee will have the authority and discretion to establish
    terms and conditions of Awards as the Committee determines to be necessary
    or appropriate to conform to applicable requirements or practices of
    jurisdictions outside of the United States.

        (d) The Committee will have the authority and discretion to interpret
    the Plan, to establish, amend, and rescind any rules and regulations
    relating to the Plan, to determine the terms and provisions of any
    agreements made pursuant to the Plan, and to make all other determinations
    that may be necessary or advisable for the administration of the Plan.

        (e) Any interpretation of the Plan by the Committee and any decision
    made by it under the Plan is final and binding.

        (f) Except as otherwise expressly provided in the Plan, where the
    Committee is authorized to make a determination with respect to any Award,
    such determination shall be made at the time the Award is made, except that
    the Committee may reserve the authority to have such determination

                                       7
<PAGE>

    made by the Committee in the future (but only if such reservation is made at
    the time the Award is granted and is expressly stated in the Agreement
    reflecting the Award).

        (g) In controlling and managing the operation and administration of the
    Plan, the Committee shall act by a majority of its then members, by meeting
    or by a writing filed without a meeting. The Committee shall maintain and
    keep adequate records concerning the Plan and concerning its proceedings and
    acts in such form and detail as the Committee may decide.

    5.4  DELEGATION BY COMMITTEE.  Except to the extent prohibited by applicable
law or the applicable rules of a stock exchange, the Committee may allocate all
or any portion of its responsibilities and powers to any one or more of its
members and may delegate all or any part of its responsibilities and powers to
any person or persons selected by it. Any such allocation or delegation may be
revoked by the Committee at any time.

    5.5  INFORMATION TO BE FURNISHED TO COMMITTEE.  The Company and Related
Companies shall furnish the Committee with such data and information as may be
required for it to discharge its duties. The records of the Company and Related
Companies as to an Eligible Individual's employment or other provision of
services, termination of employment or cessation of the provision of services,
leave of absence, reemployment and compensation shall be conclusive on all
persons unless determined to be incorrect. Participants and other persons
entitled to benefits under the Plan must furnish the Committee such evidence,
data or information as the Committee considers desirable to carry out the terms
of the Plan.

SECTION 6  EFFECT, DISCONTINUANCE, CANCELLATION, AMENDMENT AND TERMINATION

    6.1  EFFECT ON OTHER AWARDS OR BONUSES.  Neither adoption of the Plan nor
the grant of Awards to a Participant will affect the Company's right to grant to
such Participant Awards that are not subject to the Plan, to issue to such
Participant Stock as a bonus or otherwise, or to adopt other plans or
arrangements under which Stock may be issued to Eligible Individuals.

    6.2  DISCONTINUANCE, CANCELLATION, AMENDMENT AND TERMINATION.  The Board may
at any time discontinue granting Awards under the Plan. The Board may at any
time or times alter or amend the Plan or any outstanding Award for any purpose
which may at the time be permitted by law, or may at any time terminate the Plan
as to any further grants of Awards, provided that (except to the extent
expressly required or permitted by the Plan) no such amendment will, without the
approval of (a) the Company's stockholders, to the extent stockholder approval
of the amendment is required by applicable law or regulations or the
requirements of the principal exchange or interdealer quotation system on which
the Stock is listed or quoted, (i) increase the maximum number of shares
available under the Plan, (ii) change the group of persons eligible to receive
Awards under the Plan, (iii) extend the time within which Awards may be granted,
or (iv) amend the provisions of this Section 6.2, and (b) each affected
Participant if the amendment, alteration or termination would adversely affect
the Participant's rights or obligations under any Award made prior to the date
of the amendment, alteration or termination. The termination of the Plan would
not affect the validity of any Award outstanding on the date of termination.

                                       8

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