Document:

EXHIBIT 10.2

                                  ELCOTEL, INC.

                           DIRECTORS STOCK OPTION PLAN

      1. Definitions

            As used in this Plan, the following  definitions  apply to the terms
indicated below:

            A. "Board" means the Board of Directors of the Company.

            B. A Change of Control  means the  occurrence  of any one or more of
the  following  events:  (i) if any  transaction  occurs  whereby a  substantial
portion of the assets of the Company  are  transferred,  exchanged  or sold to a
non-affiliated  third party other than in the ordinary course of business;  (ii)
if a merger or  consolidation  involving the Company occurs and the stockholders
of the  Company  immediately  before  such  merger or  consolidation  do not own
immediately  after such merger or  consolidation at least fifty percent (50%) of
the  outstanding  common stock of the surviving  entity or the entity into which
the common stock of the Company is converted;  or (iii) if any person (including
without  limitation  any  individual,  partnership or  corporation)  becomes the
owner, directly or indirectly, of securities of the Company or its successor (or
a parent company thereof) representing  thirty-five percent (35%) or more of the
combined voting power of the Company's or its successor's (or a parent's, as the
case may be) securities then outstanding.

            C.  "Committee"  means the  Compensation  and Stock Option Committee
appointed by the Board from time to time to administer  the Plan.  The Committee
shall consist of at least two persons, who shall be directors of the Company.

            D. "Company" means Elcotel, Inc., a Delaware corporation.

            E. "Director"  means a member of the Board who is not an employee of
the Company.

            F.  "Fair  Market  Value"  of a Share on a given day  means,  if the
Shares are traded in a public  market,  the mean  between the highest and lowest
quoted  selling  prices  of a Share  as  reported  on the  principal  securities
exchange on which the Shares are then  listed or admitted to trading,  or if not
so reported,  the mean between the highest and lowest quoted selling prices of a
Share,  or the mean between the highest  asked price and the lowest bid price as
the case may be, as reported on the National  Association of Securities  Dealers
Automated  Quotation  System.  If the Shares  shall not be so  traded,  the Fair
Market  Value shall be  determined  by the  Committee  taking  into  account all
relevant facts and circumstances.

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            G. "Grantee" means a person to whom an Option is granted.

            H.  "Option"  means a right to purchase  Shares  under the terms and
conditions of this Plan as evidenced by an option  certificate  or agreement for
Shares in such form, not inconsistent with this Plan, as the Committee may adopt
for general use or for specific cases from time to time.

            I. "Plan"  means this  Elcotel,  Inc.  Directors  Stock Option Plan,
including any amendments to the Plan.

            J. "Share"  means a share of the Company's  common stock,  par value
$.01 per share,  either now or hereafter  owned by the Company as treasury stock
or authorized but unissued.

            K. As used herein, the masculine  includes the feminine,  the plural
includes the singular, and the singular includes the plural.

      2. Purpose

            The purposes of the Plan are as follows.

            A. To secure  for the  Company  and its  shareholders  the  benefits
arising from share  ownership by  Directors.  The Plan is intended to provide an
incentive  to  Directors by  providing  them with an  opportunity  to acquire an
equity interest or increase an existing equity interest in the Company,  thereby
increasing their personal stake in its continued success and progress.

            B. To enable the Company and its  Subsidiaries  to obtain and retain
the services of Directors, by providing Directors with an opportunity to acquire
Shares under the terms and  conditions  and in the manner  contemplated  by this
Plan.

      3. Plan Adoption and Term

            A. This Plan shall become  effective upon its adoption by the Board,
and Options  shall be issued from time to time  thereafter;  provided,  however,
that the  Plan  shall be  submitted  to the  Company's  shareholders  for  their
approval  at the next  annual  meeting of  shareholders,  or prior  thereto at a
special meeting of shareholders  expressly called for such purpose; and provided
further,  that the  approval  of the  Company's  shareholders  shall be obtained
within  12  months  of the  date of  adoption  of the  Plan.  If the Plan is not
approved  by the  affirmative  vote of the  holders of a majority  of all shares
present in person or by proxy, at a duly called shareholders' meeting at which a
quorum  representing  a majority of all voting  stock is present in person or by
proxy and voting on this Plan,  then this Plan and all Options then  outstanding
under it shall forthwith automatically terminate and be of no force and effect.

            B.  Subject to the  provisions  hereinafter  contained  relating  to
amendment or  discontinuance,  this Plan shall  continue to be in effect for ten
(10) years from the date of adoption of

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this Plan by the Board. No Options may be granted  hereunder  except within such
period of ten (10) years.

      4. Administration of Plan

            A. This  Plan  shall be  administered  by the  Committee.  Except as
otherwise expressly provided in this Plan, the Committee shall have authority to
interpret the  provisions  of the Plan, to construe the terms of any Option,  to
prescribe,  amend and rescind  rules and  regulations  relating to the Plan,  to
determine the terms and provisions of Options granted hereunder, and to make all
other determinations in the judgment of the Committee necessary or desirable for
the  administration of the Plan.  Without limiting the foregoing,  the Committee
shall,  to the  extent  and in the  manner  contemplated  herein,  exercise  the
discretion  granted to it to determine  how many Shares shall be subject to each
discretionary  Option,  whether a Grantee  shall be  required to  surrender  for
cancellation an outstanding  Option as a condition to the grant of a new Option,
and the prices at which  Shares  shall be sold to Grantees.  The  Committee  may
correct any defect or supply any omission or reconcile any  inconsistency in the
Plan or in any Option in the manner and to the extent it shall deem expedient to
carry  the Plan  into  effect  and  shall be the  sole and  final  judge of such
expediency.

            B. No member of the  Committee  shall be liable for any action taken
or omitted or any determination  made by him in good faith relating to the Plan,
and the Company  shall  indemnify and hold harmless each member of the Committee
and each other  director  or  employee  of the Company to whom any duty or power
relating to the  administration or interpretation of the Plan has been delegated
against any cost or expense (including counsel fees) or liability (including any
sum paid in  settlement of a claim with the approval of the  Committee)  arising
out of any act or omission in connection  with the Plan,  unless  arising out of
such person's own fault or bad faith.

            C. Any power  granted to the  Committee may at any time be exercised
by the Board, and any  determination by the Committee shall be subject to review
and reversal or modification by the Board on its own motion.

      5. Options

            A. Subject to  adjustment  as provided in  Paragraph  12 hereof,  an
Option shall be granted to each Director on the last business day of each fiscal
year of the Company for the purchase of (i) 1,000  Shares for each  committee on
which such Director is then serving; and (ii) 1,000 Shares for each committee of
which such Director is then the  chairperson.  Subject to adjustment as provided
in Paragraph 12 hereof, a new Director shall receive a one-time  automatic grant
of an option to  purchase  4,000  Shares  at the time  such  Director  is either
elected by the  shareholders  to serve on the Board or appointed by the Board to
fill a vacancy.  In addition to the grants of Options  mandated by the foregoing
sentences  of this  Paragraph  5A and  subject  to  adjustment  as  provided  in
Paragraph  12 hereof,  a Director  may be granted  discretionary  Options as the
Committee shall determine.

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<PAGE>

            B. Subject to adjustment as provided in Paragraph 12 hereof, Options
may be granted  pursuant to the Plan for the  purchase of not more than  300,000
Shares;  provided,  however,  that if prior to the  termination  of the Plan, an
Option shall expire or terminate for any reason without having been exercised in
full, the  unpurchased  Shares subject  thereto shall again be available for the
purposes of the Plan.

      6. Option Price

            The  purchase  price per Share  deliverable  upon the exercise of an
Option  shall be  determined  by the  Committee  but  shall not be less than the
greater of:

            (1) 100% of the  Fair  Market  Value  of such  Share on the date the
Option is granted, and

            (2) $2.00.

      7. Duration of Options

                  Each  Option and all rights  thereunder  shall  expire and the
Option shall no longer be  exercisable on a date five (5) years from the date on
which the Option was granted.  Options may expire and cease to be exercisable on
such earlier date as the Committee  may determine at the time of grant.  Options
shall be subject to termination before their expiration date as provided herein.

      8. Conditions Relating to Exercise of Options

            A. The Shares  subject to any  Option may be  purchased  at any time
during the term of the Option  beginning  on the first  anniversary  date of the
date of the grant of such Option.  To the extent an Option is not exercised when
it becomes  initially  exercisable,  or is exercised only in part, the Option or
remaining  part thereof shall not expire but shall be carried  forward and shall
be  exercisable  until the  expiration  or  termination  of the Option.  Partial
exercise as to whole Shares is  permitted  from time to time,  provided  that no
partial  exercise of an Option shall be for a number of Shares having a purchase
price of less than $1,000.

            B. No Option shall be transferable by the Grantee thereof other than
by will or by the  laws of  descent  and  distribution,  and  Options  shall  be
exercisable  during the  lifetime of a Grantee only by such Grantee or by his or
her guardian or legal representative.

            C.  Certificates for Shares purchased upon exercise of Options shall
be issued  either in the name of the  Grantee or in the name of the  Grantee and
another person jointly with the right of survivorship.  Such certificates  shall
be delivered as soon as practical following the date the Option is exercised.

            D. An Option  shall be  exercised  by the delivery to the Company at
its principal  office,  to the attention of its Secretary,  of written notice of
the number of Shares with respect to

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<PAGE>

which  the  Option  is being  exercised,  and of the name or names in which  the
certificate for the Shares is to be issued, and by paying the purchase price for
the Shares.  The purchase  price shall be paid in cash or by certified  check or
bank cashier's  check.  Alternatively,  to the extent permitted by the Committee
and in its sole discretion,  the purchase price may be paid by delivering to the
Company:

                  (1) Shares (in proper form for transfer and accompanied by all
requisite  stock  transfer  tax  stamps  or cash in lieu  thereof)  owned by the
Grantee having a Fair Market Value equal to the purchase price; or

                  (2) a notarized statement attesting to ownership of the number
of Shares which are intended to be used at Fair Market Value to pay the purchase
price,  with the  certificate  number(s)  thereof,  and requesting that only the
incremental number of Shares as to which the Option is being exercised be issued
by the Company.

            E.  Notwithstanding  any other provision in this Plan, no Option may
be  exercised  unless  and  until  (i)  this  Plan  has  been  approved  by  the
shareholders of the Company,  and (ii) the Shares to be issued upon the exercise
thereof have been  registered  under the  Securities  Act of 1933 and applicable
state securities laws, or are, in the opinion of counsel to the Company,  exempt
from  such  registration.  The  Company  shall not be under  any  obligation  to
register  under  applicable  Federal or state  securities  laws any Shares to be
issued upon the exercise of an Option  granted  hereunder,  or to comply with an
appropriate  exemption from registration  under such laws in order to permit the
exercise of an Option or the issuance and sale of Shares subject to such Option.
If the Company chooses to comply with such an exemption from  registration,  the
certificates  for Shares  issued  under the Plan,  may, at the  direction of the
Committee,  bear an appropriate  restrictive  legend restricting the transfer or
pledge  of the  Shares  represented  thereby,  and the  Committee  may also give
appropriate stop-transfer instructions to the transfer agent of the Company.

            F. Any person  exercising  an Option or  transferring  or  receiving
Shares shall comply with all  regulations and  requirements of any  governmental
authority having jurisdiction over the issuance,  transfer or sale of securities
of the Company or over the extension of credit for the purposes of purchasing or
carrying any margin  securities,  or the  requirements  of any stock exchange on
which the Shares may be listed,  and as a  condition  to  receiving  any Shares,
shall execute all such  instruments as the Committee in its sole  discretion may
deem necessary or advisable.

            G. Each  Option  shall be  subject  to the  requirement  that if the
Committee shall determine that the listing, registration or qualification of the
Shares subject to such Option upon any securities exchange or under any state or
Federal law, or the consent or approval of any  governmental or regulatory body,
is necessary or desirable as a condition of, or in connection with, the granting
of such Option or the issuance or purchase of Shares thereunder, such Option may
not be  exercised  in  whole  or in  part  unless  such  listing,  registration,
qualification, consent or approval shall have been effective or obtained free of
any conditions not acceptable to the Committee.

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<PAGE>

      9. Effect of Termination of Directorship or Death

            A. In the event of termination  of a Grantee's  status as a Director
by reason of such Grantee's death or disability,  any outstanding Option held by
such  Grantee  shall,  notwithstanding  the  extent  to which  such  Option  was
exercisable prior to such termination,  immediately become exercisable as to the
total number of Shares purchasable  thereunder.  Any such Option shall remain so
exercisable at any time prior to its expiration date or, if earlier,  only until
the first anniversary of termination of the Grantee's status as a Director.

            B. In the event of termination  of a Grantee's  status as a Director
for any reason other than death or disability,  any  outstanding  Option held by
such Grantee shall remain  exercisable at any time prior to the expiration  date
of such Option absent termination of Director status or, if earlier,  only until
the date  thirty  days  after the  termination  of  Director  status;  provided,
however, that if such termination of Director status (other than by resignation)
occurs within one year after a Change of Control, any outstanding Option held by
such Grantee shall remain  exercisable at any time prior to the expiration  date
of such  Option  absent  such  termination  of Director  status;  and  provided,
further,  however,  that the Board may permit any  outstanding  Option to remain
exercisable at any time prior to the expiration  date of such Option absent such
termination  of Director  status to the extent that such Option is or was vested
as the date of  termination  of a Grantee's  status as a Director for any reason
other than death or disability.

            C. Whether an authorized  leave of absence or absence in military or
government service shall constitute termination of status as a Director shall be
determined by the Committee.

      10. No Special Rights

            Nothing contained in the Plan or in any Option shall confer upon any
Grantee  any right with  respect to the  continuation  of his or her status as a
Director  or  interfere  in any way with the right of the Company at any time to
terminate such status or to increase or decrease the compensation of the Grantee
from the rate in existence at the time of the grant of an Option.

      11. Rights as a Shareholder

            The Grantee of an Option shall have no rights as a shareholder  with
respect  to any  Shares  covered by an Option  until the date of  issuance  of a
certificate to him for such Shares.  Except as otherwise  expressly  provided in
the Plan,  no  adjustment  shall be made for dividends or other rights for which
the record date occurs prior to the date of issuance of such certificate.

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<PAGE>

      12. Anti-dilution Provision

            A. In case the Company  shall (i) declare a dividend or dividends on
its  Shares  payable  in  shares  of  its  capital  stock,  (ii)  subdivide  its
outstanding  Shares,  (iii) combine its outstanding Shares into a smaller number
of Shares, or (iv) issue any shares of capital stock by  reclassification of its
Shares (including any such  reclassification  in connection with a consolidation
or merger in which the  Company is the  continuing  corporation),  the number of
Shares authorized under the Plan will be adjusted proportionately. Similarly, in
any such event, there will be a proportionate adjustment in the number of Shares
subject to unexercised  Options (but without  adjustment to the aggregate option
price).

            B. The Committee may provide,  either before or at or about the time
of the  occurrence of a Change of Control,  in any  outstanding  or newly issued
Option that a Grantee's right to exercise any such Option shall  accelerate as a
consequence of or in connection with a Change of Control.

      13. Amendment of the Plan

            The Board may at any time and from time to time  terminate or modify
or amend the Plan in any respect, except that

            (1) without shareholder  approval,  the Board may not (a) materially
increase  the  number of  securities  which may be issued  under the Plan or (b)
materially modify the requirements as to eligibility for participation under the
Plan; and

            (2) the Plan provisions governing the amounts and purchase prices of
Shares and the  requirements  as to  eligibility  for  participation  may not be
amended more than once every six (6) months,  other than to comport with changes
in the Internal Revenue Code or the rules thereunder.

The termination or modification or amendment of the Plan shall not,  without the
consent of a Grantee,  affect his rights under an Option  previously  granted to
him or her.

      14. Miscellaneous

            A. It is expressly  understood  that this Plan grants  powers to the
Committee  but does not require  their  exercise;  nor shall any rights begin to
accrue under the Plan except as Options may be granted hereunder.

            B. All  expenses  of the  Plan,  including  the cost of  maintaining
records, shall be borne by the Company.

      15. Governing Law

            This  Plan  and  all  rights  hereunder  shall  be  governed  by and
interpreted in accordance with the laws of the State of Delaware.

                                       7EXHIBIT 10.3

                                  ELCOTEL, INC.

                             1999 STOCK OPTION PLAN

      1. Definitions

            As used in this Plan, the following  definitions  apply to the terms
indicated below:

            1. "Board" means the Board of Directors of the Company.

            2. "Change of Control"  means the  occurrence  of any one or more of
the following events: (i) if any transaction occurs whereby substantially all of
the assets of the Company are transferred, exchanged or sold to a non-affiliated
third party other than in the ordinary  course of business;  (ii) if a merger or
consolidation  involving the Company occurs and the  stockholders of the Company
immediately  before such merger or  consolidation  do not own immediately  after
such merger or  consolidation  at least fifty percent  (50%) of the  outstanding
common stock of the  surviving  entity or the entity into which the common stock
of the  Company  is  converted;  or  (iii)  if  any  person  (including  without
limitation any individual,  partnership or corporation),  other than Fundamental
Management  Corporation and its affiliates or other than Wexford  Management LLC
and its affiliates,  becomes the owner, directly or indirectly, of securities of
the  Company  or  its  successor  (or a  parent  company  thereof)  representing
thirty-five  percent (35%) or more of the combined voting power of the Company's
or its  successor's  (or a  parent's,  as  the  case  may  be)  securities  then
outstanding.

            3.  "Committee"  means the  Compensation  and Stock Option Committee
appointed by the Board from time to time to administer  the Plan.  The Committee
shall  consist of at least two  persons,  who shall be  directors of the Company
and, while the Company has any class of equity securities registered pursuant to
the Securities  Exchange Act of 1934 (the "Exchange Act"), who shall satisfy the
requirements of Rule 16b-3 promulgated by the Securities and Exchange Commission
under the  Exchange  Act, or any  successor  rule or  regulation  adopted by the
Securities  and Exchange  Commission  which exempts  certain  transactions  from
Section 16(b) of the Exchange Act.

            4. "Company" means Elcotel, Inc., a Delaware corporation.

            5. "Fair Market  Value" of a Share on a given day means:  (i) if the
Shares are listed or  admitted to trading on a national  securities  exchange or
the National  Association  of  Securities  Dealers  Automated  Quotation  System
National Market System ("NMS"),  then the closing sale price on such exchange or
NMS on such date, or, if no trading  occurred on such date,  then on the closest
preceding  date on which the Shares were  traded;  (ii) if the Shares are not so
listed or admitted but are reported by the National  Association  of  Securities
Dealers Automated Quotation System, the mean between the highest asked price and
the lowest bid price,  as reported on the  National  Association  of  Securities
Dealers Automated  Quotation System on such date; or (iii) if the

<PAGE>

Shares are not so listed or admitted,  the Fair Market Value shall be determined
by the Committee taking into account all relevant facts and circumstances.

            6. "Grantee"  means a person to whom an Option is granted under this
Plan.

            7.  "Option"  means a right to purchase  Shares  under the terms and
conditions of this Plan as evidenced by an option  certificate  or agreement for
Shares in such form, not inconsistent with this Plan, as the Committee may adopt
for general use or for specific cases from time to time.

            8.  "Parent"  means any  corporation  (other than the Company) in an
unbroken  chain of  corporations  ending  with the  Company  if,  at the time of
granting an Option,  each of the  corporations in the unbroken chain (other than
the Company)  owns stock  possessing  fifty  percent  (50%) or more of the total
combined  voting power of all classes of stock in one of the other  corporations
in the chain.

            9. "Plan" means this Elcotel, Inc. 1999 Stock Option Plan, including
any amendments to the Plan.

            10. "Share" means a share of the Company's  common stock,  par value
$.01 per share.

            11.  "Subsidiary"  means any corporation (other than the Company) in
an unbroken chain of corporations  beginning with the Company if, at the time of
granting an Option,  each of the  corporations in the unbroken chain (other than
the last  corporation in the chain) owns stock possessing fifty percent (50%) or
more of the total  combined  voting  power of all classes of stock in one of the
other corporations in the chain.

            12. Options shall be deemed "granted" under this Plan on the date on
which the  Committee,  by  appropriate  action,  approves the grant of an Option
hereunder or on such subsequent date as the Committee may designate.

            13. As used herein, the masculine includes the feminine,  the plural
includes the singular, and the singular includes the plural.

      2. Purpose

            The purposes of the Plan are as follows.

            1. To secure  for the  Company  and its  stockholders  the  benefits
arising from share ownership by those senior  executive  officers of the Company
and its Subsidiaries who will be responsible for the Company's future growth and
continued  success.  The Plan is  intended  to  provide an  incentive  to senior
executive  officers by providing  them with an  opportunity to acquire an equity
interest  or  increase  an existing  equity  interest  in the  Company,  thereby
increasing their personal stake in its continued success and progress.

                                       2
<PAGE>

            2. To enable the Company and its  Subsidiaries  to obtain and retain
the services of senior  executive  officers,  by providing such senior executive
officers with an  opportunity  to acquire  Shares under the terms and conditions
and in the manner contemplated by this Plan.

      3. Plan Adoption and Term

            1. This Plan shall become  effective upon its adoption by the Board,
and Options may be issued upon such adoption and from time to time thereafter.

            2.  Subject to the  provisions  hereinafter  contained  relating  to
amendment or  discontinuance,  this Plan shall continue to be in effect for five
(5) years from the date of adoption of this Plan by the Board. No Options may be
granted hereunder except within such period of five (5) years.

      4. Administration of Plan

            1. This  Plan  shall be  administered  by the  Committee.  Except as
otherwise expressly provided in this Plan, the Committee shall have authority to
interpret the  provisions  of the Plan, to construe the terms of any Option,  to
prescribe,  amend and rescind  rules and  regulations  relating to the Plan,  to
determine the terms and provisions of Options granted hereunder, and to make all
other determinations in the judgment of the Committee necessary or desirable for
the  administration of the Plan.  Without limiting the foregoing,  the Committee
shall,  to the  extent  and in the  manner  contemplated  herein,  exercise  the
discretion granted to it to determine to whom Options shall be granted, how many
Shares shall be subject to each such Option, whether a Grantee shall be required
to surrender for cancellation an outstanding  Option as a condition to the grant
of a new Option,  and the prices at which Shares shall be sold to Grantees.  The
Committee  may  correct  any  defect or supply any  omission  or  reconcile  any
inconsistency  in the Plan or in any  Option in the  manner and to the extent it
shall  deem  expedient  to carry the Plan into  effect and shall be the sole and
final judge of such expediency.

            2. No member of the  Committee  shall be liable for any action taken
or omitted or any determination  made by him in good faith relating to the Plan,
and the Company  shall  indemnify and hold harmless each member of the Committee
and each other  director  or  employee  of the Company to whom any duty or power
relating to the  administration or interpretation of the Plan has been delegated
against any cost or expense (including counsel fees) or liability (including any
sum paid in  settlement of a claim with the approval of the  Committee)  arising
out of any act or omission in connection  with the Plan,  unless  arising out of
such person's own fault or bad faith.

            3. Any power granted to the Committee  either in this Plan or by the
Board, may at any time be exercised by the Board,  and any  determination by the
Committee shall be subject to review and approval or reversal or modification by
the Board.

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<PAGE>

      5. Eligibility

            Senior executive  officers of the Company and its Subsidiaries shall
be eligible for  selection  by the  Committee  to be granted  Options.  A senior
executive  officer  who has been  granted  an  Option  may,  if he is  otherwise
eligible,  be granted an additional  Option or Options if the Committee shall so
determine.

      6. Options

            1. Subject to adjustment as provided in Paragraph 13 hereof, Options
may be granted  pursuant to the Plan for the  purchase of not more than  539,988
Shares;  provided,  however,  that if prior to the  termination  of the Plan, an
Option shall expire or terminate for any reason without having been exercised in
full, the  unpurchased  Shares subject  thereto shall again be available for the
purposes of the Plan.  Options to purchase not more than  539,988  Shares may be
granted to one Grantee.

            2. All  Options  granted  under  this  Plan  shall be  non-qualified
options.

      7. Option Price

            The  purchase  price per Share  deliverable  upon the exercise of an
Option shall be determined by the Committee.

      8. Duration of Options

            Each Option and all rights  thereunder  shall  expire and the Option
shall no longer  be  exercisable  on that  date five (5) years  from the date on
which the Option was granted.  Options may expire and cease to be exercisable on
such earlier date as the Committee  may determine at the time of grant.  Options
shall be subject to termination before their expiration date as provided herein.

      9. Conditions Relating to Exercise of Options

            1. The Shares  subject to any  Option may be  purchased  at any time
during the term of the Option,  unless,  at the time an Option is  granted,  the
Committee  shall have fixed a specific  period or periods in which exercise must
take place.  To the extent an Option is not exercised when it becomes  initially
exercisable,  or is exercised only in part, the Option or remaining part thereof
shall not expire but shall be carried forward and shall be exercisable until the
expiration or termination of the Option.  Partial exercise as to whole Shares is
permitted  from time to time,  provided  that no partial  exercise  of an Option
shall be for a number of Shares having a purchase price of less than $100.

            2. No Option shall be transferable by the Grantee thereof other than
by will or by the  laws of  descent  and  distribution,  and  Options  shall  be
exercisable  during the  lifetime of a Grantee only by such Grantee or by his or
her guardian or legal representative.

                                       4
<PAGE>

            3.  Certificates for Shares purchased upon exercise of Options shall
be issued  either in the name of the  Grantee or in the name of the  Grantee and
another person jointly with the right of survivorship.  Such certificates  shall
be delivered as soon as practical following the date the Option is exercised.

            4. An Option  shall be  exercised  by the delivery to the Company at
its principal  office,  to the attention of its Secretary,  of written notice of
the number of Shares with respect to which the Option is being exercised, and of
the name or names in which the certificate  for the Shares is to be issued,  and
by paying the purchase price for the Shares. The purchase price shall be paid in
cash or by certified check or bank cashier's check. Alternatively,  the purchase
price may be paid by delivering to the Company:

                  (1) Shares (in proper form for transfer and accompanied by all
requisite  stock  transfer  tax  stamps  or cash in lieu  thereof)  owned by the
Grantee having a Fair Market Value equal to the purchase price; or

                  (2) a notarized statement attesting to ownership of the number
of Shares which are intended to be used at Fair Market Value to pay the purchase
price,  with the  certificate  number(s)  thereof,  and requesting that only the
incremental number of Shares as to which the Option is being exercised be issued
by the Company.

            5.  Notwithstanding  any other provision in this Plan, no Option may
be exercised  unless and until the Shares to be issued upon the exercise thereof
have been  registered  under the  Securities  Act of 1933 and  applicable  state
securities  laws, or are, in the opinion of counsel to the Company,  exempt from
such  registration.  The Company  shall not be under any  obligation to register
under  applicable  Federal or state securities laws any Shares to be issued upon
the exercise of an Option  granted  hereunder,  or to comply with an appropriate
exemption from  registration  under such laws in order to permit the exercise of
an Option or the  issuance  and sale of Shares  subject to such  Option.  If the
Company  chooses  to  comply  with  such an  exemption  from  registration,  the
certificates  for Shares  issued  under the Plan,  may, at the  direction of the
Committee,  bear an appropriate  restrictive  legend restricting the transfer or
pledge  of the  Shares  represented  thereby,  and the  Committee  may also give
appropriate stop-transfer instructions to the transfer agent of the Company.

            6. Any person  exercising  an Option or  transferring  or  receiving
Shares shall comply with all  regulations and  requirements of any  governmental
authority having jurisdiction over the issuance,  transfer or sale of securities
of the Company or over the extension of credit for the purposes of purchasing or
carrying any margin  securities,  or the  requirements  of any stock exchange on
which the Shares may be listed,  and as a  condition  to  receiving  any Shares,
shall execute all such  instruments as the Committee in its sole  discretion may
deem necessary or advisable.

            7. Each  Option  shall be  subject  to the  requirement  that if the
Committee shall determine that the listing, registration or qualification of the
Shares subject to such Option upon any securities exchange or under any state or
Federal law, or the consent or approval of any  governmental or regulatory body,
is necessary or desirable as a condition of, or in connection with, the granting
of such Option or the issuance or purchase of Shares thereunder, such Option may
not be  exercised  in

                                       5
<PAGE>

whole or in part unless such listing,  registration,  qualification,  consent or
approval  shall have been  effective  or  obtained  free of any  conditions  not
acceptable to the Committee.

      10. Effect of Termination of Employment

            1. In the event a  Grantee's  employment  is (i)  terminated  by the
Company For Cause (as defined in any  employment  agreement  between the Company
and the Grantee),  or (ii) terminated by the Grantee for any reason, the Options
shall  cease  vesting as of the date that the  Company or the  Grantee  provides
notice of such  termination,  and any  unvested  Options  as of such date  shall
immediately terminate and become void.

            2. In the  event  the  Grantee's  employment  is  terminated  by the
Company other than for Cause (as defined in any employment agreement between the
Company  and the  Grantee),  any  Options  held by the  Grantee  that would have
vested,  if the Grantee's  employment had not been  terminated,  during the (12)
twelve months after such  termination  or such lesser period  through the end of
the term of any employment  agreement  between the Grantee and the Company shall
immediately vest.

            3. Whether an authorized  leave of absence or absence in military or
government   service  shall  constitute   termination  of  employment  shall  be
determined by the  Committee.  Transfer of employment  between the Company and a
Subsidiary  corporation or between one Subsidiary  corporation and another shall
not constitute termination of employment.

      11. No Special Employment Rights

            Nothing contained in the Plan or in any Option shall confer upon any
Grantee any right with respect to the  continuation  of his or her employment by
the  Company  or a  Subsidiary  or  interfere  in any way with the  right of the
Company  or a  Subsidiary,  subject  to the  terms  of any  separate  employment
agreement  to the  contrary,  at any time to  terminate  such  employment  or to
increase or decrease the  compensation of the Grantee from the rate in existence
at the time of the grant of an Option.

      12. Rights as a Stockholder

            The Grantee of an Option shall have no rights as a stockholder  with
respect  to any  Shares  covered by an Option  until the date of  issuance  of a
certificate to him for such Shares.  Except as otherwise  expressly  provided in
the Plan,  no  adjustment  shall be made for dividends or other rights for which
the record date occurs prior to the date of issuance of such certificate.

                                       6
<PAGE>

      13. Anti-dilution Provision

            1. In case the  Company  shall,  by  stock  dividend,  stock  split,
combination,  reclassification or exchange, or through merger,  consolidation or
otherwise,  change its shares of Common Stock into a different  number,  kind or
class of shares or other  securities  or property,  then the Board shall arrange
for the  successor  or  surviving  corporation,  if any,  to  grant  replacement
options, or to adjust  appropriately the number of shares covered by the Options
and the price of each share. The determination of the Board shall be conclusive.

            2. Upon the occurrence of a Change of Control,  all unvested Options
shall become immediately exercisable in their entirety.

      14. Withholding Taxes

            Whenever an Option is to be  exercised  under the Plan,  the Company
shall have the right to require the  Grantee,  as a condition of exercise of the
Option,  to remit to the Company an amount  sufficient  to satisfy the Company's
(or a Subsidiary's) Federal, state and local withholding tax obligation, if any,
that will, in the sole opinion of the  Committee,  result from the exercise.  In
addition,  the  Company  shall have the  right,  at the sole  discretion  of the
Committee, to satisfy any such withholding tax obligation by retention of Shares
issuable upon such  exercise  having a Fair Market Value on the date of exercise
equal to the amount to be withheld.

      15. Amendment of the Plan

            The Board may at any time and from time to time  terminate or modify
or amend the Plan in any respect except to the extent that stockholder  approval
of such  amendment  is required by  applicable  law or the rules of any national
securities  exchange or any  automated  quotation  system.  The  termination  or
modification  or  amendment  of the Plan shall  not,  without  the  consent of a
Grantee,  affect his rights  under an Option  previously  granted to him or her.
With the consent of the Grantee,  the Board may amend  outstanding  Options in a
manner not inconsistent with the Plan.

      16. Miscellaneous

            1. It is expressly  understood  that this Plan grants  powers to the
Committee but does not require their exercise;  nor shall any person,  by reason
of the  adoption  of this  Plan,  be deemed to be  entitled  to the grant of any
Option;  nor shall any rights  begin to accrue  under the Plan except as Options
may be granted hereunder.

            2. All  expenses  of the  Plan,  including  the cost of  maintaining
records, shall be borne by Company.

      17. Governing Law

            This  Plan  and  all  rights  hereunder  shall  be  governed  by and
interpreted in accordance with the laws of the State of Delaware.

                                       7

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