Document:

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                                                                      Exhibit 4C

                                 [FACE OF NOTE]

Unless this Note is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the Trust (as defined below)
or its agent for registration of transfer, exchange or payment, and any Note
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC and any payment is made to Cede
& Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an
interest herein.*

Unless and until it is exchanged in whole or in part for Notes in a certificated
form, this Note may not be transferred except as a whole by DTC to a nominee of
DTC or by a nominee of DTC to DTC or another nominee of DTC or by DTC or any
such nominee to a successor depository or a nominee of such successor
depository.*

REGISTERED                          CUSIP No.:               PRINCIPAL AMOUNT
No.:  FLR-__________                ________                 $__________

                     WASHINGTON REAL ESTATE INVESTMENT TRUST
                           MEDIUM-TERM NOTE, SERIES B
                                 (Floating Rate)

INTEREST RATE BASIS        ORIGINAL ISSUE DATE:      STATED MATURITY DATE:
OR BASES:

<TABLE>
<S>                                              <C>
IF LIBOR:                                               IF CMT RATE:
    [ ] LIBOR Reuters Page                                [ ] CMT Telerate Page 7051

    [ ] LIBOR Telerate Page                        [ ] CMT Telerate Page 7052
                                                          [ ] One-Week Average Yield
                                                          [ ] One-Month Average Yield

LIBOR CURRENCY:

INDEX MATURITY:            INITIAL INTEREST RATE: ____%       INTEREST PAYMENT DATE(S):

SPREAD (PLUS OR            SPREAD MULTIPLIER:                 INITIAL INTEREST RESET
MINUS):                                                       DATE:
</TABLE>

MINIMUM INTEREST RATE: %   MAXIMUM INTEREST RATE:  % INTEREST RESET DATE(S):

--------------------------------------------
* This paragraph applies to Global Securities only.

                                       1
<PAGE>

INITIAL REDEMPTION        INITIAL REDEMPTION        ANNUAL REDEMPTION PERCENTAGE
DATE:                     PERCENTAGE:    %          REDUCTION:   %

OPTIONAL REPAYMENT DATE(S):                         CALCULATION AGENT:

INTEREST CATEGORY:                            DAY COUNT CONVENTION:
[ ] Regular Floating Rate Note                  [ ] 30/360 for the period
[ ] Floating Rate/Fixed Rate Note                        from      to        .

        Fixed Rate Commencement Date:           [ ] Actual/360 for the period
        Fixed Interest Rate:    %                       from      to       .

[ ] Inverse Floating Rate Note                  [ ] Actual/Actual for the period

          Fixed Interest Rate:    %                     from      to       .

[ ] Original Issue Discount Note                Applicable Interest Rate Basis:
          Issue Price:    %

SPECIFIED CURRENCY:                             AUTHORIZED DENOMINATION:
[ ] United States dollars                       [ ] $1,000 and integral
                                                    multiples thereof

[ ] Other:                                      [ ] Other:

EXCHANGE RATE AGENT:

DEFAULT RATE:    %

ADDENDUM ATTACHED
[ ] Yes
[ ] No

OTHER/ADDITIONAL PROVISIONS:

                                       2
<PAGE>

        WASHINGTON REAL ESTATE INVESTMENT TRUST, a Maryland real estate
investment trust (hereinafter called the "Trust", which term shall include any
successor trust or corporation under the Indenture hereinafter referred to), for
value received, hereby promises to pay to ________________________, or
registered assigns, upon presentation, the principal sum of
_____________________ on the Stated Maturity Date specified above (or any
Redemption Date or Optional Repayment Date, each as defined on the reverse
hereof) (each such Stated Maturity Date, Redemption Date or Optional Repayment
Date being hereinafter referred to as the "Maturity Date" with respect to the
principal repayable on such date) and to pay interest thereon, at a rate per
annum equal to the Initial Interest Rate specified above until the Initial
Interest Reset Date specified above and thereafter at a rate determined in
accordance with the provisions specified above and on the reverse hereof with
respect to one or more Interest Rate Bases specified above until the principal
hereof is paid or duly made available for payment, and (to the extent that the
payment of such interest shall be legally enforceable) at the Default Rate per
annum specified above on any overdue principal, premium and/or interest. The
Trust will pay interest in arrears on each Interest Payment Date, if any,
specified above (each, an "Interest Payment Date"), commencing with the first
Interest Payment Date next succeeding the Original Issue Date specified above,
and on the Maturity Date; provided, however, that if the Original Issue Date
                          --------  -------
occurs between a Record Date (as defined below) and the next succeeding Interest
Payment Date, interest payments will commence on the second Interest Payment
Date next succeeding the Original Issue Date to the Holder of this Note on the
Record Date with respect to such second Interest Payment Date.

        Interest on this Note will accrue from and including the immediately
preceding Interest Payment Date to which interest has been paid or duly provided
for (or from and including the Original Issue Date if no interest has been paid
or duly provided for) to but excluding the applicable Interest Payment Date or
the Maturity Date, as the case may be (each, an "Interest Period"). The interest
so payable, and punctually paid or duly provided for on any Interest Payment
Date will, as provided in the Indenture, be paid to the Person in whose name
this Note (or one or more Predecessor Notes) is registered at the close of
business on the fifteenth calendar day (whether or not a Business Day as defined
below) immediately preceding such Interest Payment Date (the "Record Date");
provided, however, that interest payable on the Maturity Date will be payable to
--------  -------
the Person to whom the principal hereof and premium, if any, hereon shall be
payable. Any such interest not so punctually paid or duly provided for
("Defaulted Interest") shall forthwith cease to be payable to the Holder on such
Record Date, and shall be paid to the Person in whose name this Note (or one or
more Predecessor Notes) is registered at the close of business on a special
record date (the "Special Record Date") for the payment of such Defaulted
Interest to be fixed by the Trustee hereinafter referred to, notice whereof
shall be given to the Holder of this Note by the Trustee not less than 10 days
prior to such Special Record Date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which this Note may be listed, and upon such notice as may be required by
such exchange, all as more fully provided in the Indenture.

        Payment of principal, premium, if any, and interest in respect of this
Note due on the Maturity Date will be made in immediately available funds upon
presentation and surrender of this Note (and, with respect to any applicable
repayment of this Note, a duly completed election form as contemplated on the
reverse hereof) at the corporate trust office of the Trustee maintained for that

                                       3
<PAGE>

purpose in the Borough of Manhattan, The City of New York, currently located c/o
Bank One Trust Company, N.A., 14 Wall Street, Eighth Floor, New York, New York
10005, or at such other paying agency in the Borough of Manhattan, The City of
New York, as the Trust may determine; provided, however, that if such payment is
                                      --------  -------
to be made in a Specified Currency other than United States dollars as set forth
below, such payment will be made by wire transfer of immediately available funds
to an account with a bank designated by the Holder hereof at least 15 calendar
days prior to the Maturity Date, provided that such bank has appropriate
facilities therefor and that this Note (and, if applicable, a duly completed
repayment election form) is presented and surrendered at the aforementioned
office of the Trustee in time for the Trustee to make such payment in such funds
in accordance with its normal procedures. Payment of interest due on any
Interest Payment Date other than the Maturity Date will be made by check mailed
to the address of the person entitled thereto as such address shall appear in
the Security Register maintained at the aforementioned office of the Trustee;
provided, however, that a holder of U.S.$10,000,000 (or, if the Specified
--------  -------
Currency specified above is other than United States dollars, the equivalent
thereof in the Specified Currency) or more in aggregate principal amount of
Notes (whether having identical or different terms and provisions) will be
entitled to receive interest payments on such Interest Payment Date by wire
transfer of immediately available funds if appropriate wire transfer
instructions have been received in writing by the Trustee not less than 15
calendar days prior to such Interest Payment Date. Any such wire transfer
instructions received by the Trustee shall remain in effect until revoked by
such holder.

        If any Interest Payment Date other than the Maturity Date would
otherwise be a day that is not a Business Day, such Interest Payment Date shall
be postponed to the next succeeding Business Day, except that if LIBOR is an
applicable Interest Rate Basis and such Business Day falls in the next
succeeding calendar month, such Interest Payment Date shall be the immediately
preceding Business Day. If the Maturity Date falls on a day that is not a
Business Day, the required payment of principal, any premium and interest shall
be made on the next succeeding Business Day with the same force and effect as if
made on the date such payment was due, and no additional interest shall accrue
with respect to such payment for the period from and after the Maturity Date to
the date of such payment on the next succeeding Business Day.

        The Trust is obligated to make payment of principal, premium, if any,
and interest in respect of this Note in the Specified Currency (or, if the
Specified Currency is not at the time of such payment legal tender for the
payment of public and private debts, in such other coin or currency of the
country which issued the Specified Currency as at the time of such payment is
legal tender for the payment of such debts). If the Specified Currency is other
than United States dollars, any such amounts so payable by the Trust will be
converted by the Exchange Rate Agent specified above into United States dollars
for payment to the holder of this Note; provided, however, that the Holder of
                                        --------  -------
this Note may elect to receive such amounts in such Specified Currency pursuant
to the provisions set forth below.

        If the Specified Currency is other than United States dollars and the
Holder of this Note shall not have duly made an election to receive all or a
specified portion of any payment of principal, premium, if any, and/or interest
in respect of this Note in the Specified Currency, any United States dollar
amount to be received by the Holder of this Note will be based on the highest
bid quotation in The City of New York received by the Exchange Rate Agent at
approximately 11:00 A.M., New

                                       4
<PAGE>

York City time, on the second Business Day preceding the applicable payment date
from three recognized foreign exchange dealers (one of whom may be the Exchange
Rate Agent) selected by the Exchange Rate Agent and approved by the Trust for
the purchase by the quoting dealer of the Specified Currency for United States
dollars for settlement on such payment date in the aggregate amount of the
Specified Currency payable to all holders of Notes scheduled to receive United
States dollar payments and at which the applicable dealer commits to execute a
contract. All currency exchange costs will be borne by the Holder of this Note
by deductions from such payments. If three such bid quotations are not
available, payments on this Note will be made in the Specified Currency.

        All determinations referred to above made by the Exchange Rate Agent
shall be at its sole discretion and shall, in the absence of manifest error, be
conclusive for all purposes and binding on the Holder of this Note.

        If the Specified Currency is other than United States dollars, the
Holder of this Note may elect to receive all or a specified portion of any
payment of principal, premium, if any, and/or interest in respect of this Note
in the Specified Currency by submitting a written request for such payment to
the Trustee at its corporate trust office in The City of New York on or prior to
the applicable Record Date or at least 16 calendar days prior to the Maturity
Date, as the case may be. Such written request may be mailed or hand delivered
or sent by cable, telex or other form of facsimile transmission. The holder of
this Note may elect to receive all or a specified portion of all future payments
in the Specified Currency in respect of such principal, premium, if any, and/or
interest and need not file a separate election for each payment. Such election
will remain in effect until revoked by written notice to the Trustee, but
written notice of any such revocation must be received by the Trustee on or
prior to the applicable Record Date or at least 16 calendar days prior to the
Maturity Date, as the case may be.

        Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof and, if so specified above, in the Addendum hereto,
which further provisions shall have the same force and effect as if set forth on
the face hereof.

        Notwithstanding any provisions to the contrary contained herein, if the
face of this Note specifies that an Addendum is attached hereto or that
"Other/Additional Provisions" apply, this Note shall be subject to the terms set
forth in such Addendum or such "Other/Additional Provisions".

        Unless the certificate of authentication hereon has been executed by or
on behalf of the Trustee by manual signature, this Note shall not be entitled to
any benefit under the Indenture or be valid or obligatory for any purpose.

                                       5
<PAGE>

         IN WITNESS WHEREOF, Washington Real Estate Investment Trust has caused
this Note to be duly executed.

                                    WASHINGTON REAL ESTATE INVESTMENT TRUST

Dated: ______________               By: _________________________________
                                          Name:
                                          Title:

Attest:

By:  ____________________________
      Name:
      Title:

                                       6
<PAGE>

TRUSTEE'S CERTIFICATE OF AUTHENTICATION:

         This is one of the Debt Securities of the series designated therein
referred to in the within-mentioned Indenture.

BANK ONE TRUST COMPANY, N.A.,
 as Trustee

By: _________________________________
         Authorized Signatory

                                       7
<PAGE>

                                [REVERSE OF NOTE]

                     WASHINGTON REAL ESTATE INVESTMENT TRUST
                           MEDIUM-TERM NOTE, SERIES B
                                 (Floating Rate)

         This Note is one of a duly authorized issue of senior debt securities
of the Trust (herein called the "Debt Securities"), issued and to be issued in
one or more series under an Indenture, dated as of August 1, 1996, as amended,
modified or supplemented from time to time (the "Indenture"), between the Trust
and Bank One Trust Company, N.A. (formerly, The First National Bank of Chicago)
(herein called the "Trustee", which term includes any successor trustee under
the Indenture with respect to the Notes), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Trust,
the Trustee and the Holders of the Debt Securities and of the terms upon which
the Debt Securities are, and are to be, authenticated and delivered. This Note
is one of the series of Debt Securities designated as "Medium-Term Notes, Series
B, Due Nine Months or More From Date of Issue" (the "Notes"). All terms used but
not defined in this Note specified on the face hereof or in an Addendum hereto
shall have the meanings assigned to such terms in the Indenture.

         This Note is issuable only in registered form without coupons in
minimum denominations of U.S.$1,000 and integral multiples thereof or the
minimum Authorized Denomination specified on the face hereof.

         This Note will not be subject to any sinking fund and, unless otherwise
provided on the face hereof in accordance with the provisions of the following
two paragraphs, will not be redeemable or repayable prior to the Stated Maturity
Date.

         This Note will be subject to redemption at the option of the Trust on
any date on or after the Initial Redemption Date, if any, specified on the face
hereof, in whole or from time to time in part in increments of U.S.$1,000 or the
minimum Authorized Denomination (provided that any remaining principal amount
hereof shall be at least U.S.$1,000 or such minimum Authorized Denomination), at
the Redemption Price (as defined below), together with unpaid interest accrued
thereon to the date fixed for redemption (each, a "Redemption Date"), on notice
given no more than 60 nor less than 30 calendar days prior to the Redemption
Date and in accordance with the provisions of the Indenture. The "Redemption
Price" shall initially be the Initial Redemption Percentage specified on the
face hereof multiplied by the unpaid principal amount of this Note to be
redeemed. The Initial Redemption Percentage shall decline at each anniversary of
the Initial Redemption Date by the Annual Redemption Percentage Reduction, if
any, specified on the face hereof until the Redemption Price is 100% of unpaid
principal amount to be redeemed. In the event of redemption of this Note in part
only, a new Note of like tenor for the unredeemed portion hereof and otherwise
having the same terms as this Note shall be issued in the name of the holder
hereof upon the presentation and surrender hereof.

         This Note will be subject to repayment by the Trust at the option of
the holder hereof on the Optional Repayment Date(s), if any, specified on the
face hereof, in whole or in part in increments

                                       8
<PAGE>

of U.S.$1,000 or the minimum Authorized Denomination (provided that any
remaining principal amount hereof shall be at least U.S.$1,000 or such minimum
Authorized Denomination), at a repayment price equal to 100% of the unpaid
principal amount to be repaid, together with unpaid interest accrued thereon to
the date fixed for repayment (each, a "Repayment Date"). For this Note to be
repaid, this Note must be received, together with the form hereon entitled
"Option to Elect Repayment" duly completed, by the Trustee at its corporate
trust office in The City of New York not more than 60 nor less than 30 calendar
days prior to the Repayment Date. Exercise of such repayment option by the
Holder hereof will be irrevocable. In the event of repayment of this Note in
part only, a new Note of like tenor for the unrepaid portion hereof and
otherwise having the same terms as this Note shall be issued in the name of the
holder hereof upon the presentation and surrender hereof.

         If this Note is an Original Issue Discount Note as specified on the
face hereof, the amount payable to the Holder of this Note in the event of
redemption, repayment or acceleration of maturity will be equal to the sum of
(1) the Issue Price specified on the face hereof (increased by any accruals of
the Discount, as defined below) and, in the event of any redemption of this Note
(if applicable), multiplied by the Initial Redemption Percentage (as adjusted by
the Annual Redemption Percentage Reduction, if applicable) and (2) any unpaid
interest on this Note accrued from the Original Issue Date to the Redemption
Date, Repayment Date or date of acceleration of maturity, as the case may be.
The difference between the Issue Price and 100% of the principal amount of this
Note is referred to herein as the "Discount".

          For purposes of determining the amount of Discount that has accrued as
of any Redemption Date, Repayment Date or date of acceleration of maturity of
this Note, such Discount will be accrued so as to cause an assumed yield on the
Note to be constant. The constant yield will be calculated using a 30-day month,
360-day year convention, a compounding period that, except for the Initial
Period (as defined below), corresponds to the shortest period between Interest
Payment Dates (with ratable accruals within a compounding period), a constant
coupon rate equal to the initial interest rate applicable to this Note and an
assumption that the maturity of this Note will not be accelerated. If the period
from the Original Issue Date to the initial Interest Payment Date (the "Initial
Period") is shorter than the compounding period for this Note, a proportionate
amount of the yield for an entire compounding period will be accrued. If the
Initial Period is longer than the compounding period, then such period will be
divided into a regular compounding period and a short period, with the short
period being treated as provided in the preceding sentence.

                  The interest rate borne by this Note will be determined as
follows:

                  (i) Unless the Interest Category of this Note is specified on
         the face hereof as a "Floating Rate/Fixed Rate Note" or an "Inverse
         Floating Rate Note", this Note shall be designated as a "Regular
         Floating Rate Note" and, except as set forth below or on the face
         hereof, shall bear interest at the rate determined by reference to the
         applicable Interest Rate Basis or Bases (a) plus or minus any Spread
         and/or (b) multiplied by any Spread Multiplier, in each case as
         specified on the face hereof. Commencing on the Initial Interest Reset
         Date, the rate at which interest on this Note shall be payable shall be
         reset as of each Interest Reset Date specified on the face hereof;
         provided, however, that the interest rate in effect for the
         --------  -------

                                       9
<PAGE>

         period, if any, from the Original Issue Date to the Initial Interest
         Reset Date shall be the Initial Interest Rate.

                  (ii) If the Interest Category of this Note is specified on the
         face hereof as a "Floating Rate/Fixed Rate Note", then, except as set
         forth below or on the face hereof, this Note shall bear interest at the
         rate determined by reference to the applicable Interest Rate Basis or
         Bases (a) plus or minus any Spread and/or (b) multiplied by any Spread
         Multiplier. Commencing on the Initial Interest Reset Date, the rate at
         which interest on this Note shall be payable shall be reset as of each
         Interest Reset Date; provided, however, that (y) the interest rate in
                              --------  -------
         effect for the period, if any, from the Original Issue Date to the
         Initial Interest Reset Date shall be the Initial Interest Rate and (z)
         the interest rate in effect for the period commencing on the Fixed Rate
         Commencement Date specified on the face hereof to the Maturity Date
         shall be the Fixed Interest Rate specified on the face hereof or, if no
         such Fixed Interest Rate is specified, the interest rate in effect
         hereon on the day immediately preceding the Fixed Rate Commencement
         Date.

                  (iii) If the Interest Category of this Note is specified on
         the face hereof as an "Inverse Floating Rate Note", then, except as set
         forth below or on the face hereof, this Note shall bear interest at the
         Fixed Interest Rate minus the rate determined by reference to the
         applicable Interest Rate Basis or Bases (a) plus or minus any Spread
         and/or (b) multiplied by any Spread Multiplier; provided, however,
                                                         --------  -------
         that, unless otherwise specified on the face hereof, the interest rate
         hereon shall not be less than zero. Commencing on the Initial Interest
         Reset Date, the rate at which interest on this Note shall be payable
         shall be reset as of each Interest Reset Date; provided, however, that
                                                        --------  -------
         the interest rate in effect for the period, if any, from the Original
         Issue Date to the Initial Interest Reset Date shall be the Initial
         Interest Rate.

         Unless otherwise specified on the face hereof, the rate with respect to
each Interest Rate Basis will be determined in accordance with the applicable
provisions below. Except as set forth above or on the face hereof, the interest
rate in effect on each day shall be (i) if such day is an Interest Reset Date,
the interest rate determined as of the Interest Determination Date (as defined
below) immediately preceding such Interest Reset Date or (ii) if such day is not
an Interest Reset Date, the interest rate determined as of the Interest
Determination Date immediately preceding that Interest Reset Date.

         If any Interest Reset Date would otherwise be a day that is not a
Business Day, such Interest Reset Date shall be postponed to the next succeeding
Business Day, except that if LIBOR is an applicable Interest Rate Basis and such
Business Day falls in the next succeeding calendar month, such Interest Reset
Date shall be the immediately preceding Business Day. In addition, if the
Treasury Rate is an applicable Interest Rate Basis and the Interest
Determination Date would otherwise fall on an Interest Reset Date, then such
Interest Reset Date will be postponed to the next succeeding Business Day.

         As used herein, "Business Day" means any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which commercial banks are
authorized or required by law or executive order to close in The City of New
York; provided, however, that if the Specified Currency
      --------  -------

                                       10
<PAGE>

is other than United States dollars and any payment is to be made in the
Specified Currency in accordance with the provisions hereof, such day is also
not a day on which commercial banks are authorized or required by law or
executive order to close in the Principal Financial Center (as defined below) of
the country issuing the Specified Currency, unless the Specified Currency is the
Euro, in which case such day is also not a day on which the Trans-European
Automated Real-time Gross Settlement Express Transfer (TARGET) System is closed;
provided, further, that if LIBOR is an applicable Interest Rate Basis, such day
--------  -------
is also a London Business Day (as defined below). "London Business Day" means
any day on which commercial banks are open for business, including dealings in
the LIBOR Currency, as defined below, in London.

         "Principal Financial Center" means (i) the capital city of the country
issuing the Specified Currency, except that with respect to (a) United States
dollars, it means The City of New York, (b) Australian dollars, it means Sydney
and Melbourne, (c) Canadian dollars, it means Toronto, (d) Deutsche marks, it
means Frankfurt, (e) Dutch guilders, it means Amsterdam, (f) Italian lire, it
means Milan, (g) South African rand, it means Johannesburg, and (h) Swiss
francs, it means Zurich, or (ii) the capital city of the country to which the
LIBOR Currency, if applicable, relates, except that with respect to (a) United
States dollars, it means The City of New York, (b) Australian dollars, it means
Sydney, (c) Canadian dollars, it means Toronto, (d) Deutsche marks, it means
Frankfurt, (e) Dutch guilders, it means Amsterdam, (f) Italian lire, it means
Milan, (g) Portuguese escudos, it means London, (h) South African rand, it means
Johannesburg, and (i) Swiss francs, it means Zurich.

         The "Interest Determination Date" with respect to the Federal Funds
Rate and the Prime Rate will be the Business Day immediately preceding the
applicable Interest Reset Date; the "Interest Determination Date" with respect
to the CD Rate, the CMT Rate and the Commercial Paper Rate will be the second
Business Day immediately preceding the applicable Interest Reset Date; the
"Interest Determination Date" with respect to the Eleventh District Cost of
Funds Rate shall be the last working day of the month immediately preceding the
applicable Interest Reset Date on which the Federal Home Loan Bank of San
Francisco (the "FHLB of San Francisco") publishes the Index (as defined below);
and the "Interest Determination Date" with respect to LIBOR shall be the second
London Business Day immediately preceding the applicable Interest Reset Date.
The "Interest Determination Date" with respect to the Treasury Rate shall be the
day in the week in which the applicable Interest Reset Date falls on which day
Treasury Bills (as defined below) are normally auctioned (Treasury Bills are
normally sold at an auction held on Monday of each week, unless that day is a
legal holiday, in which case the auction is normally held on the following
Tuesday, except that such auction may be held on the preceding Friday);
provided, however, that if an auction is held on the Friday of the week
--------  -------
preceding the applicable Interest Reset Date, the Interest Determination Date
shall be such preceding Friday. If the interest rate of this Note is determined
with reference to two or more Interest Rate Bases specified on the face hereof,
the "Interest Determination Date" pertaining to this Note shall be the latest
Business Day that is at least two Business Days prior to the applicable Interest
Reset Date on which each Interest Rate Basis is determinable.

         CD Rate.  If an Interest Rate Basis for this Note is specified on the
         -------
face hereof as the CD Rate, the CD Rate shall be determined as of the applicable
Interest Determination Date (a "CD Rate Interest Determination Date") as the
rate on such date for negotiable United States dollar certificates of deposit
having the Index Maturity specified on the face hereof as published by the Board
of

                                       11
<PAGE>

Governors of the Federal Reserve System in the weekly statistical release
designated as H.15(519), or any successor publication ("H.15(519)") under the
caption "CDs (secondary market)", or, if not so published by 3:00 P.M., New York
City time, on the related Calculation Date (as defined below), the rate on such
CD Rate Interest Determination Date for negotiable United States dollar
certificates of deposit of the Index Maturity specified on the face hereof as
published in the daily update of H.15(519), available through the world wide web
site of the Board of Governors of the Federal Reserve System at
http://www.bog.frb.fed.us/releases/h15/update or any successor site or
publication or other recognized electronic source used for the purpose of
displaying the applicable rate ("H.15 Daily Update"), under the caption "CDs
(secondary market)". If such rate is not yet published in either H.15(519) or
H.15 Daily Update by 3:00 P.M., New York City time, on the related Calculation
Date, then the CD Rate on such CD Rate Interest Determination Date will be
calculated by the Calculation Agent specified on the face hereof and will be the
arithmetic mean of the secondary market offered rates as of 10:00 A.M., New York
City time, on such CD Rate Interest Determination Date, of three leading non-
bank dealers in negotiable United States dollar certificates of deposit in The
City of New York selected by the Calculation Agent for negotiable United States
dollar certificates of deposit of major United States money market banks for
negotiable United States certificates of deposit with a remaining maturity
closest to the Index Maturity in an amount that is representative for a single
transaction in that market at that time; provided, however, that if the dealers
                                         --------  -------
so selected by the Calculation Agent are not quoting as mentioned in this
sentence, the CD Rate determined as of such CD Rate Interest Determination Date
will be the CD Rate in effect on such CD Rate Interest Determination Date.

         CMT Rate. If an Interest Rate Basis for this Note is specified on the
         --------
face hereof as the CMT Rate, the CMT Rate shall be determined as of the
applicable Interest Determination Date (a "CMT Rate Interest Determination
Date") as the rate displayed on (i) the CMT Telerate Page 7051 or (ii) the CMT
Telerate Page 7052, as specified on the face hereof.

         If CMT Telerate Page 7051 is specified on the face hereof, the CMT Rate
as of the applicable CMT Rate Interest Determination Date shall be the
percentage equal to the yield for United States Treasury securities at "constant
maturity" having the Index Maturity specified on the face hereof as published in
H.15(519) under the caption "Treasury Constant Maturities", as the yield is
displayed on Bridge Telerate, Inc. (or any successor service) on page 7051 (or
any other page as may replace the specified page on that service) ("Telerate
Page 7051"), for the particular CMT Rate Interest Determination Date. If such
rate is not so displayed on Telerate Page 7051, then the CMT Rate shall be the
percentage equal to the yield for United States Treasury securities at "constant
maturity" having the particular Index Maturity and for the particular CMT Rate
Interest Determination Date as published in H.15(519) under the caption
"Treasury Constant Maturities." If such rate does not so appear in H.15(519),
then the CMT Rate shall be the rate on the particular CMT Rate Interest
Determination Date for the period of the particular Index Maturity as may then
be published by either the Federal Reserve System Board of Governors or the
United States Department of the Treasury that the Calculation Agent determines
to be comparable to the rate which would otherwise have been published in
H.15(519). If such rate is not so published, then the CMT Rate shall be the rate
on the particular CMT Rate Interest Determination Date calculated by the
Calculation Agent as a yield to maturity based on the arithmetic mean of the
secondary market bid prices at approximately 3:30 P.M., New York City time, on
that CMT Rate Interest Determination

                                       12
<PAGE>

Date of three leading primary United States government securities dealers in The
City of New York (each, a "Reference Dealer"), selected by the Calculation Agent
from five Reference Dealers selected by the Calculation Agent and eliminating
the highest quotation, or, in the event of equality, one of the highest, and the
lowest quotation or, in the event of equality, one of the lowest, for United
States Treasury securities with an original maturity equal to the particular
Index Maturity, a remaining term to maturity no more than 1 year shorter than
that Index Maturity and in a principal amount that is representative for a
single transaction in the securities in that market at that time. If fewer than
five but more than two of the prices are provided as requested, then the CMT
Rate shall be the rate on the particular CMT Rate Interest Determination Date
calculated by the Calculation Agent based on the arithmetic mean of the bid
prices obtained and neither the highest nor the lowest of the quotations shall
be eliminated; or if fewer than three prices are provided as requested, then the
CMT Rate shall be the rate on the particular CMT Rate Interest Determination
Date calculated by the Calculation Agent as a yield to maturity based on the
arithmetic mean of the secondary market bid prices as of approximately 3:30
P.M., New York City time, on that CMT Rate Interest Determination Date of three
Reference Dealers selected by the Calculation Agent from five Reference Dealers
selected by the Calculation Agent and eliminating the highest quotation or, in
the event of equality, one of the highest and the lowest quotation or, in the
event of equality, one of the lowest, for United States Treasury securities with
an original maturity greater than the particular Index Maturity, a remaining
term to maturity closest to that Index Maturity and in a principal amount that
is representative for a single transaction in the securities in that market at
that time. If fewer than five but more than two prices referred to in the
previous sentence are provided as requested, the CMT Rate on the particular CMT
Rate Interest Determination Date shall be calculated by the Calculation Agent
based on the arithmetic mean of the bid prices obtained and neither the highest
nor the lowest of the quotations will be eliminated; or if fewer than three
prices referred to in the previous sentence are provided as requested, then the
CMT Rate shall be the CMT Rate in effect on the particular CMT Rate Interest
Determination Date.

         If CMT Telerate Page 7052 is specified on the face hereof, the CMT Rate
as of the applicable CMT Rate Interest Determination Date shall be the
percentage equal to the one-week or one-month, as specified on the face hereof,
average yield for United States Treasury securities at "constant maturity"
having the Index Maturity specified on the face hereof as published in H.15(519)
opposite the caption "Treasury Constant Maturities", as the yield is displayed
on Bridge Telerate, Inc. (or any successor service) (on page 7052 or any other
page as may replace the specified page on that service) ("Telerate Page 7052"),
for the week or month, as applicable, ended immediately preceding the week or
month, as applicable, in which the particular Interest Determination Date falls.
If the rate referred to in the preceding sentence does not so appear on Telerate
Page 7052, then the CMT Rate shall be the percentage equal to the one-week or
one-month, as specified on the face hereof, average yield for United States
Treasury securities at "constant maturity" having the particular Index Maturity
and for the week or month, as applicable, preceding the particular Interest
Determination Date as published in H.15(519) opposite the caption "Treasury
Constant Maturities." If such rate does not so appear in H.15(519), then the CMT
Rate shall be the one-week or one-month, as specified on the face hereof,
average yield for United States Treasury securities at "constant maturity"
having the particular Index Maturity as otherwise announced by the Federal
Reserve Bank of New York for the week or month, as applicable, ended immediately
preceding the week or month, as applicable, in which the particular Interest
Determination Date falls.

                                       13
<PAGE>

If such rate is not so published, then the CMT Rate shall be the rate on the
particular Interest Determination Date calculated by the Calculation Agent as a
yield to maturity based on the arithmetic mean of the secondary market bid
prices at approximately 3:30 P.M., New York City time, on that Interest
Determination Date of three Reference Dealers selected by the Calculation Agent
from five Reference Dealers selected by the Calculation Agent and eliminating
the highest quotation, or, in the event of equality, one of the highest, and the
lowest quotation or, in the event of equality, one of the lowest, for United
States Treasury securities with an original maturity equal to the particular
Index Maturity, a remaining term to maturity no more than 1 year shorter than
that Index Maturity and in a principal amount that is representative for a
single transaction in the securities in that market at that time. If fewer than
five but more than two of the prices referred to in the previous sentence are
provided as requested, then the CMT Rate shall be the rate on the particular
Interest Determination Date calculated by the Calculation Agent based on the
arithmetic mean of the bid prices obtained and neither the highest nor the
lowest of the quotations shall be eliminated; or if fewer than three prices are
provided as requested, then CMT Rate on the particular Interest Determination
Date shall be calculated by the Calculation Agent as a yield to maturity based
on the arithmetic mean of the secondary market bid prices as of approximately
3:30 P.M., New York City time, on that Interest Determination Date of three
Reference Dealers selected by the Calculation Agent from five Reference Dealers
selected by the Calculation Agent and eliminating the highest quotation or, in
the event of equality, one of the highest and the lowest quotation or, in the
event of equality, one of the lowest, for United States Treasury securities with
an original maturity greater than the particular Index Maturity, a remaining
term to maturity closest to that Index Maturity and in a principal amount that
is representative for a single transaction in the securities in that market at
the time. If fewer than five but more than two prices referred to in the
previous sentence are provided as requested, then the CMT Rate shall be the rate
on the particular Interest Determination Date calculated by the Calculation
Agent based on the arithmetic mean of the bid prices obtained and neither the
highest or the lowest of the quotations will be eliminated; or if fewer than
three prices referred to in the previous sentence are provided as requested,
then the CMT Rate shall be the CMT Rate in effect on that Interest Determination
Date.

         If two United States Treasury securities with an original maturity
greater than the Index Maturity specified on the face hereof have remaining
terms to maturity equally close to the particular Index Maturity, the quotes for
the United States Treasury security with the shorter original remaining term to
maturity will be used.

         Commercial Paper Rate. If an Interest Rate Basis for this Note is
         ---------------------
specified on the face hereof as the Commercial Paper Rate, the Commercial Paper
Rate shall be determined as of the applicable Interest Determination Date (a
"Commercial Paper Rate Interest Determination Date") as the Money Market Yield
(as defined below) on such date of the rate for commercial paper having the
Index Maturity as published in H.15(519) under the heading "Commercial Paper-
Nonfinancial". In the event that such rate is not published by 3:00 P.M., New
York City time, on such Calculation Date, then the Commercial Paper Rate on such
Commercial Paper Rate Interest Determination Date will be the Money Market Yield
of the rate for commercial paper having the Index Maturity as published in H.15
Daily Update under the heading "Commercial Paper-Nonfinancial". If such rate is
not yet published in either H.15(519) or H.15 Daily Update by 3:00 P.M., New
York City time, on such Calculation Date, then the Commercial Paper Rate on such
Commercial Paper Rate Interest

                                       14
<PAGE>

Determination Date will be calculated by the Calculation Agent and shall be the
Money Market Yield of the arithmetic mean of the offered rates at approximately
11:00 A.M., New York City time, on such Commercial Paper Rate Interest
Determination Date of three leading dealers of United States dollar commercial
paper in The City of New York, selected by the Calculation Agent for commercial
paper having the Index Maturity placed for industrial issuers whose bond rating
is "Aa", or the equivalent, from a nationally recognized statistical rating
organization; provided, however, that if the dealers so selected by the
              --------  -------
Calculation Agent are not quoting as mentioned in this sentence, the Commercial
Paper Rate determined as of such Commercial Paper Rate Interest Determination
Date will be the Commercial Paper Rate in effect on such Commercial Paper Rate
Interest Determination Date.

         "Money Market Yield" means a yield (expressed as a percentage)
calculated in accordance with the following formula:

         Money Market Yield         =            D x 360          x  100
                                            ----------------
                                            360 - (D x M)

where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the Interest Period for which interest is being calculated.

         Eleventh District Cost of Funds Rate. If an Interest Rate Basis for
         ------------------------------------
this Note is specified on the face hereof as the Eleventh District Cost of Funds
Rate, the Eleventh District Cost of Funds Rate shall be determined as of the
applicable Interest Determination Date (an "Eleventh District Cost of Funds Rate
Interest Determination Date") as the rate equal to the monthly weighted average
cost of funds for the calendar month immediately preceding the month in which
such Eleventh District Cost of Funds Rate Interest Determination Date falls, as
set forth under the caption "11th District" on the display on Bridge Telerate,
Inc. or any successor service on page 7058 or any other page as may replace the
specified page on that service ("Telerate Page 7058") as of 11:00 A.M., San
Francisco time, on such Eleventh District Cost of Funds Rate Interest
Determination Date. If such rate does not appear on Telerate Page 7058 on such
Eleventh District Cost of Funds Rate Interest Determination Date, then the
Eleventh District Cost of Funds Rate on such Eleventh District Cost of Funds
Rate Interest Determination Date shall be the monthly weighted average cost of
funds paid by member institutions of the Eleventh Federal Home Loan Bank
District that was most recently announced (the "Index") by the FHLB of San
Francisco as such cost of funds for the calendar month immediately preceding
such Eleventh District Cost of Funds Rate Interest Determination Date. If the
FHLB of San Francisco fails to announce the Index on or prior to such Eleventh
District Cost of Funds Rate Interest Determination Date for the calendar month
immediately preceding such Eleventh District Cost of Funds Rate Interest
Determination Date, the Eleventh District Cost of Funds Rate determined as of
such Eleventh District Cost of Funds Rate Interest Determination Date will be
the Eleventh District Cost of Funds Rate in effect on such Eleventh District
Cost of Funds Rate Interest Determination Date.

         Federal Funds Rate. If an Interest Rate Basis for this Note is
         ------------------
specified on the face hereof as the Federal Funds Rate, the Federal Funds Rate
shall be determined as of the applicable Interest

                                       15
<PAGE>

Determination Date (a "Federal Funds Rate Interest Determination Date") as the
rate on such date for United States dollar federal funds as published in
H.15(519) under the caption "Federal Funds (Effective)" as displayed on Bridge
Telerate, Inc. or any successor service on page 120 or any other page as may
replace the specified page on that service ("Telerate Page 120"), or, if such
rate does not appear on Telerate Page 120 or is not published by 3:00 P.M., New
York City time, on the Calculation Date, the rate on such Federal Funds Rate
Interest Determination Date for United States dollar federal funds published in
H.15 Daily Update under the caption "Federal Funds/Effective Rate". If such rate
is not published in either H.15(519) or H.15 Daily Update by 3:00 P.M., New York
City time, on the related Calculation Date, then the Federal Funds Rate on such
Federal Funds Interest Determination Date shall be calculated by the Calculation
Agent as the arithmetic mean of the rates for the last transaction in overnight
United States dollar federal funds arranged by three leading brokers of United
States dollar federal funds transactions in The City of New York, selected by
the Calculation Agent, prior to 9:00 A.M., New York City time, on such Federal
Funds Rate Interest Determination Date; provided, however, that if the brokers
                                        --------  -------
so selected by the Calculation Agent are not quoting as mentioned in this
sentence, the Federal Funds Rate determined as of such Federal Funds Rate
Interest Determination Date will be the Federal Funds Rate in effect on such
Federal Funds Rate Interest Determination Date.

         LIBOR. If an Interest Rate Basis for this Note is specified on the face
         -----
hereof as LIBOR, LIBOR shall be determined by the Calculation Agent as of the
applicable Interest Determination Date (a "LIBOR Interest Determination Date")
in accordance with the following provisions:

          (i) if (a) "LIBOR Reuters" is specified on the face hereof, the
arithmetic mean of the offered rates calculated by the Calculation Agent (unless
the LIBOR Page (as defined below) by its terms provides only for a single rate,
in which case such single rate will be used) for deposits in the LIBOR Currency
(as defined below) having the Index Maturity, commencing on the related Interest
Reset Date, that appear (or, if only a single rate is required as aforesaid,
appears) on the LIBOR Page (as defined below) as of 11:00 A.M., London time, on
such LIBOR Interest Determination Date, or (b) "LIBOR Telerate" is specified on
the face hereof, or if neither "LIBOR Reuters" nor "LIBOR Telerate" is specified
on the face hereof as the method for calculating LIBOR, the rate for deposits in
the LIBOR Currency having the Index Maturity, commencing on the related Interest
Reset Date, that appears on the LIBOR Page as of 11:00 A.M., London time, on
such LIBOR Interest Determination Date.

         (ii) With respect to a LIBOR Interest Determination Date on which fewer
than two offered rates appear, or no rate appears, as the case may be, on the
LIBOR Page as specified in clause (i) above, LIBOR will be calculated by the
Calculation Agent of at least two offered quotations obtained by the Calculation
Agent after requesting the principal London offices of each of four major
reference banks in the London interbank market to provide the Calculation Agent
with its offered quotation for deposits in the LIBOR Currency for the period of
the Index Maturity, commencing on the related Interest Reset Date, to prime
banks in the London interbank market at approximately 11:00 A.M., London time,
on such LIBOR Interest Determination Date and in a principal amount that is
representative for a single transaction in such LIBOR Currency in such market at
such time. If fewer than two offered quotations are so provided as requested,
then LIBOR on such LIBOR Interest Determination Date will be the arithmetic mean
of the rates quoted at

                                       16
<PAGE>

approximately 11:00 A.M., in the applicable Principal Financial Center, on such
LIBOR Interest Determination Date by three major banks in that Principal
Financial Center, selected by the Calculation Agent for loans in the LIBOR
Currency to leading European banks, having the Index Maturity and in a principal
amount that is representative for a single transaction in such LIBOR Currency in
such market at such time; provided, however, that if the banks so selected by
                          --------  -------
the Calculation Agent are not quoting as mentioned in this sentence, LIBOR
determined as of such LIBOR Interest Determination Date shall be LIBOR in effect
on such LIBOR Interest Determination Date.

         "LIBOR Currency" means the currency specified on the face hereof as to
which LIBOR shall be calculated. If no such currency is specified on the face
hereof, the LIBOR Currency shall be United States dollars.

         "LIBOR Page" means (a) if "LIBOR Reuters" is specified on the face
hereof, the display on the Reuter Monitor Money Rates Service (or any successor
service) on the page specified on the face hereof (or any other page as may
replace such page on such service) for the purpose of displaying the London
interbank rates of major banks for the LIBOR Currency, or (b) if "LIBOR
Telerate" is specified on the face hereof or neither "LIBOR Reuters" nor "LIBOR
Telerate" is specified on the face hereof as the method for calculating LIBOR,
the display on Bridge Telerate, Inc. (or any successor service) for the purpose
of displaying the London interbank rates of major banks for the LIBOR Currency.

         Prime Rate. If an Interest Rate Basis for this Note is specified on the
         ----------
face hereto as the Prime Rate, the Prime Rate shall be determined as of the
applicable Interest Determination Date (a "Prime Rate Interest Determination
Date") as the rate on such date as such rate is published in H.15(519) under the
caption "Bank Prime Loan". If such rate is not published by 3:00 P.M., New York
City time, on the related Calculation Date, then the Prime Rate shall be the
rate published in H.15 Daily Update under the caption "Bank Prime Loan". If such
rate is not yet published in either H.15(519) or H.15 Daily Update by 3:00 P.M.,
New York City time, on the related Calculation Date, then the Prime Rate shall
be the arithmetic mean of the rates of interest publicly announced by each bank
that appears on the Reuters Screen US PRIME 1 Page (as defined below) as the
applicable bank's prime rate or base lending rate as of 11:00 A.M., New York
City time, on such Prime Rate Interest Determination Date. If fewer than four
such rates appear by 3:00 P.M., New York City time, on the Reuters Screen US
PRIME 1 Page for such Prime Rate Interest Determination Date, the Prime Rate
shall be the arithmetic mean of the prime rates or base lending rates quoted on
the basis of the actual number of days in the year divided by a 360-day year as
of the close of business on such Prime Rate Interest Determination Date by three
major banks in The City of New York selected by the Calculation Agent; provided,
however, that if the banks so selected by the Calculation Agent are not quoting
as mentioned in this sentence, the Prime Rate determined as of such Prime Rate
Interest Determination Date will be the Prime Rate in effect on such Prime Rate
Interest Determination Date.

                                       17
<PAGE>

         "Reuters Screen US PRIME 1 Page" means the display on the Reuter
Monitor Money Rates Service (or any successor service) on the US PRIME 1 page
(or any other page as may replace that page on that service) for the purpose of
displaying prime rates or base lending rates of major United States banks.

         Treasury Rate. If an Interest Rate Basis for this Note is specified on
         -------------
the face hereof as the Treasury Rate, the Treasury Rate shall be determined as
of the applicable Interest Determination Date (a "Treasury Rate Interest
Determination Date") as the rate from the auction held on such Treasury Rate
Interest Determination Date (the "Auction") of direct obligations of the United
States ("Treasury Bills") having the Index Maturity under the caption
"INVESTMENT RATE" on the display on Bridge Telerate, Inc. or any successor
service on page 56 or any other page as may replace that page on that service
("Telerate Page 56") or page 57 or any other page as may replace page 57 on that
service ("Telerate Page 57"). In the event that the results of the Auction of
Treasury Bills having the Index Maturity are not published as provided above by
3:00 P.M., New York City time, on such Calculation Date, then the Treasury Rate
shall be the Bond Equivalent Yield of the rate for the applicable Treasury Bills
as published in H.15 Daily Update, or another recognized electronic source used
for the purpose of displaying the applicable rate, under the caption "U.S.
Government Securities/Treasury Bills/Auction High", or, if such rate is not
published by 3:00 P.M., New York City time, on the Calculation Date, the rate on
such Treasury Rate Interest Determination Date shall be the Bond Equivalent
Yield of the auction rate of the applicable Treasury Bills announced by the
United States Department of the Treasury, or, in the event the auction rate is
not announced by the United States Department of the Treasury, or if the Auction
is not held, the Treasury Rate shall be the Bond Equivalent Yield of the rate on
the applicable Interest Determination Date of Treasury Bills having the Index
Maturity published in H.15(519) under the caption "U.S. Government
Securities/Treasury Bills/Secondary Market". In the event that such rate is not
published by 3:00 P.M., New York City time, on such Calculation Date, then the
Treasury Rate on such Treasury Rate Interest Determination Date will be the rate
of Treasury Bills having the Index Maturity as published in H.15 Daily Update
under the heading "U.S. Government Securities/Treasury Bills/Secondary Market".
If such rate is not yet published in either H.15(519) or H.15 Daily Update by
3:00 P.M., New York City time, on such Calculation Date, then the Treasury Rate
on such Treasury Rate Interest Determination Date will be calculated by the
Calculation Agent and shall be the Bond Equivalent Yield of the arithmetic mean
of the secondary market bid rates, as of approximately 3:30 P.M., New York City
time, on such Treasury Rate Interest Determination Date, of three primary United
States government securities dealers, selected by the Calculation Agent, for the
issue of Treasury Bills with a remaining maturity closest to the Index Maturity;
provided, however, that if the dealers so selected by the Calculation Agent are
not quoting as mentioned in this sentence, the Treasury Rate determined as of
such Treasury Rate Interest Determination Date will be the Treasury Rate in
effect on such Treasury Rate Interest Determination Date.

         "Bond Equivalent Yield" means a yield (expressed as a percentage)
calculated in accordance with the following formula:

               Bond Equivalent Yield =          D x N          x    100
                                               -------
                                            360 - ( D x M )

                                       18
<PAGE>

where "D" refers to the applicable per annum rate for Treasury Bills quoted on a
bank discount basis and expressed as a decimal, "N" refers to 365 or 366, as the
case may be, and "M" refers to the actual number of days in the interest period
for which interest is being calculated.

         Notwithstanding the foregoing, the interest rate hereon shall not be
greater than the Maximum Interest Rate, if any, or less than the Minimum
Interest Rate, if any, in each case as specified on the face hereof. The
interest rate on this Note will in no event be higher than the maximum rate
permitted by New York law, as the same may be modified by United States law of
general application.

         The Calculation Agent shall calculate the interest rate hereon on or
before each Calculation Date. The "Calculation Date", if applicable, pertaining
to any Interest Determination Date shall be the earlier of (i) the tenth
calendar day after such Interest Determination Date or, if such day is not a
Business Day, the next succeeding Business Day or (ii) the Business Day
immediately preceding the applicable Interest Payment Date or the Maturity Date,
as the case may be. At the request of the Holder hereof, the Calculation Agent
will provide to the Holder hereof the interest rate hereon then in effect and,
if determined, the interest rate that will become effective as a result of a
determination made for the next succeeding Interest Reset Date.

         Accrued interest hereon shall be an amount calculated by multiplying
the principal amount hereof by an accrued interest factor. Such accrued interest
factor shall be computed by adding the interest factor calculated for each day
in the applicable Interest Period. Unless otherwise specified as the Day Count
Convention on the face hereof, the interest factor for each such date shall be
computed by dividing the interest rate applicable to such day by 360 if the CD
Rate, the Commercial Paper Rate, the Eleventh District Cost of Funds Rate, the
Federal Funds Rate, LIBOR or the Prime Rate is an applicable Interest Rate Basis
or by the actual number of days in the year if the CMT Rate or the Treasury Rate
is an applicable Interest Rate Basis. Unless otherwise specified as the Day
Count Convention on the face hereof, the interest factor for this Note, if the
interest rate is calculated with reference to two or more Interest Rate Bases,
shall be calculated in each period in the same manner as if only the Applicable
Interest Rate Basis specified on the face hereof applied.

         All percentages resulting from any calculation on this Note shall be
rounded to the nearest one hundred-thousandth of a percentage point, with five
one-millionths of a percentage point rounded upwards, and all amounts used in or
resulting from such calculation on this Note shall be rounded, in the case of
United States dollars, to the nearest cent.

         If an Event of Default, as defined in the Indenture, shall occur and be
continuing, the principal of the Notes may be declared due and payable in the
manner and with the effect provided in the Indenture.

         The Indenture contains provisions for defeasance at any time of (a) the
entire indebtedness of the Trust on this Note and (b) certain restrictive
covenants and the related defaults and Events of Default applicable to the
Trust, in each case, upon compliance by the Trust with certain conditions set
forth in the Indenture, which provisions apply to this Note.

                                       19
<PAGE>

         The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trust and the rights of the Holders of the Debt Securities at any time by the
Trust and the Trustee with the consent of the Holders of not less than a
majority in principal amount of all Debt Securities at the time outstanding and
affected thereby. The Indenture also contains provisions permitting the Holders
of not less than a majority of the aggregate principal amount of the outstanding
Debt Securities of any series, on behalf of the Holders of all such Debt
Securities, to waive compliance by the Trust with certain provisions of the
Indenture. Furthermore, provisions in the Indenture permit the Holders of not
less than a majority of the aggregate principal amount of the outstanding Debt
Securities of any series, in certain instances, to waive, on behalf of all of
the Holders of Debt Securities of such series, certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note shall be conclusive and binding upon such Holder and upon all future
Holders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Note.

         No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Trust, which is
absolute and unconditional, to pay the principal, premium, if any, and interest
in respect of this Note at the times, place and rate or formula, and in the coin
or currency, herein prescribed.

         As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note is registrable in the Security Register of
the Trust upon presentation and surrender of this Note for registration of
transfer at the office or agency or the Trust in any place where the principal
hereof and any premium or interest hereon are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Trust and the Security Registrar for the Notes duly executed by, the Holder
hereof or his attorney duly authorized in writing, and thereupon one or more new
Notes of this series, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.

         As provided in the Indenture and subject to certain limitations therein
and herein set forth, this Note is exchangeable for a like aggregate principal
amount of Notes of different authorized denominations but otherwise having the
same terms and conditions, as requested by the Holder hereof surrendering the
same.

         No service charge shall be made for any such registration of transfer
or exchange, but the Trust may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         Prior to due presentment of this Note for registration of transfer, the
Trust, the Trustee and any agent of the Trust or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Trust, the
Trustee nor any such agent shall be affected by notice to the contrary.

                                       20
<PAGE>

         The obligations of the Trust under the Indenture and this Note and all
documents delivered in the name of the Trust in connection herewith and
therewith do not and shall not constitute personal obligations of the trustees,
officers, employees, agents or shareholders of the Trust or any of them, and
shall not involve any claim against or personal liability on the part of any of
them, and all persons including the Trustee shall look solely to the assets of
the Trust for the payment of any claim thereunder or for the performance thereof
and shall not seek recourse against such trustees, officers, employees, agents
or shareholders of the Trust or any of them or any of their personal assets for
such satisfaction. The performance of the obligations of the Trust under the
Indenture and this Note and all documents delivered in the name of the Trust in
connection therewith shall not be deemed a waiver of any rights or powers of the
Trust, trustees or shareholders under the Trust's Declaration of Trust.

         THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

                                 ABBREVIATIONS

         The following abbreviations, when used in the inscription on the face
of this Note, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<S>                                            <C>
TEN COM - as tenants in common                 UNIF GIFT MIN ACT - ______  Custodian  _____
TEN ENT - as tenants by the entireties                  (Cust)        (Minor)
JT TEN - as joint tenants with right of        under Uniform Gifts to Minors
          survivorship and not as tenants      Act_____________________
          in common                                   (State)
</TABLE>

         Additional abbreviations may also be used though not in the above list.

                                       21
<PAGE>

                                ASSIGNMENT FORM

                  FOR VALUE RECEIVED, the undersigned hereby
                       sells, assigns and transfers unto

PLEASE INSERT SOCIAL
SECURITY OR OTHER IDENTIFYING
NUMBER OF ASSIGNEE

----------------------------------
                                       ........................................
----------------------------------

 ................................................................................
             (Please Print or Typewrite Name and Address, including
                             Zip Code, of Assignee)

 ................................................................................
the within Note of Washington Real Investment Trust and _____________________
hereby does irrevocably constitute and appoint

 ................................................................................
Attorney to transfer said Note on the books of the within-named Trust with full
power of substitution in the premises.

Dated: .........................................................................

Signature: .....................................................................
NOTICE: The signature to this assignment must correspond with the name as it
appears on the first page of the within Note in every particular, without
alteration or enlargement or any change whatever.

Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed by an "eligible guarantor institution"
that is a member or participant in a "signature guarantee program" (e.g., the
Securities Transfer Agents Medallion Program, the Stock Exchange Medallion
Program or the New York Stock Exchange, Inc. Medallion Signature Program).
<PAGE>

                            OPTION TO ELECT REPAYMENT

         The undersigned hereby irrevocably request(s) and instruct(s) the Trust
to repay this Note (or portion hereof specified below) pursuant to its terms at
a price equal to 100% of the principal amount to be repaid, together with unpaid
interest accrued hereon to the Repayment Date, to the undersigned, at
_______________________________________________________________________________
_______________________________________________________________________________
        (Please print or typewrite name and address of the undersigned)

         For this Note to be repaid, the Trustee must receive at its corporate
trust office in the Borough of Manhattan, The City of New York, currently
located at __________________________ ____________, not more than 60 nor less
than 30 calendar days prior to the Repayment Date, this Note with this "Option
to Elect Repayment" form duly completed.

         If less than the entire principal amount of this Note is to be repaid,
specify the portion hereof (which shall be increments of U.S.$1,000 (or, if the
Specified Currency is other than United States dollars, the minimum Authorized
Denomination specified on the face hereof)) which the holder elects to have
repaid and specify the denomination or denominations (which shall be an
Authorized Denomination) of the Notes to be issued to the holder for the portion
of this Note not being repaid (in the absence of any such specification, one
such Note will be issued for the portion not being repaid).

Principal Amount
to be Repaid:  $ _________                ____________________________________

                                          Notice: The signature(s) on this
Date: ____________________                Option to Elect Repayment must
                                          correspond with the name(s) as written
                                          upon the face of this Note in every
                                          particular, without alteration or
                                          enlargement or any change whatsoever.EXHIBIT 4.1

                              SPORTSLINE.COM, INC.

                        1997 Incentive Compensation Plan

                             (As Amended April 2000)

<PAGE>

                              SPORTSLINE.COM, INC.

                        1997 Incentive Compensation Plan

1. Purpose.....................................................................1
2. Definitions.................................................................1
3. Administration..............................................................4
   (a)      Authority of the Committee.........................................4
   (b)      Manner of Exercise of Committee Authority..........................5
   (c)      Limitation of Liability............................................5
4. Stock Subject to Plan.......................................................5
   (a)      Limitation on Overall Number of Shares Subject to Awards...........5
   (b)      Application of Limitations.........................................6
5. Eligibility; Per-Person Award Limitations...................................6
6. Specific Terms of Awards....................................................6
   (a)      General............................................................6
   (b)      Options............................................................6
   (c)      Stock Appreciation Rights..........................................8
   (d)      Restricted Stock...................................................9
   (e)      Deferred Stock....................................................10
   (f)      Bonus Stock and Awards in Lieu of Obligations.....................11
   (g)      Dividend Equivalents..............................................11
   (h)      Other Stock-Based Awards..........................................11
7. Certain Provisions Applicable to Awards....................................11
   (a)      Stand-Alone, Additional, Tandem, and Substitute Awards............11
   (b)      Term of Awards....................................................12
   (c)      Form and Timing of Payment Under Awards; Deferrals................12
   (d)      Exemptions from Section 16(b) Liability...........................12
8. Performance and Annual Incentive Awards....................................13
   (a)      Performance Conditions............................................13
   (b)      Performance Awards Granted to Designated Covered Employees........13
   (c)      Annual Incentive Awards Granted to Designated Covered Employees...14
   (d)      Written Determinations............................................15
   (e)      Status of Section 8(b) and Section 8(c) Awards Under Code
            Section 162(m)....................................................15
9. Change in Control..........................................................16
   (a)      Effect of "Change in Control."....................................16
   (b)      Definition of "Change in Control..................................16
   (c)      Definition of "Change in Control Price."..........................17
10.General Provisions.........................................................17
   (a)      Compliance With Legal and Other Requirements......................17
   (b)      Limits on Transferability; Beneficiaries..........................18
   (c)      Adjustments.......................................................18

                                      (i)

<PAGE>

   (d)      Taxes.............................................................19
   (e)      Changes to the Plan and Awards....................................19
   (f)      Limitation on Rights Conferred Under Plan.........................20
   (g)      Unfunded Status of Awards; Creation of Trusts.....................20
   (h)      Nonexclusivity of the Plan........................................20
   (i)      Payments in the Event of Forfeitures; Fractional Shares...........20
   (j)      Governing Law.....................................................21
   (k)      Plan Effective Date and Stockholder Approval; Termination
            of Plan...........................................................21

                                      (ii)

<PAGE>

                              SPORTSLINE.COM, INC.

                        1997 Incentive Compensation Plan

         1. Purpose. The purpose of this 1997 Incentive Compensation Plan (the
"Plan") is to assist SportsLine.Com, Inc. (the "Company") and its subsidiaries
in attracting, motivating, retaining and rewarding high-quality executives and
other employees, officers, Directors and independent contractors enabling such
persons to acquire or increase a proprietary interest in the Company in order to
strengthen the mutuality of interests between such persons and the Company's
stockholders, and providing such persons with annual and long term performance
incentives to expend their maximum efforts in the creation of shareholder value.
The Plan is also intended to qualify certain compensation awarded under the Plan
for tax deductibility under Section 162(m) of the Code (as hereafter defined) to
the extent deemed appropriate by the Committee (or any successor committee) of
the Board of Directors of the Company.

         2. Definitions. For purposes of the Plan, the following terms shall be
defined as set forth below, in addition to such terms defined in Section 1
hereof.

                  (a) "Annual Meeting Date" shall mean the date of the annual
meeting of the Company's stockholders at which the Directors are elected.

                  (b) "Annual Incentive Award" means a conditional right granted
to a Participant under Section 8(c) hereof to receive a cash payment, Stock or
other Award, unless otherwise determined by the Committee, after the end of a
specified fiscal year.

                  (c) "Award" means any Option, SAR (including Limited SAR),
Restricted Stock, Deferred Stock, Stock granted as a bonus or in lieu of another
award, Dividend Equivalent, Other Stock-Based Award, Performance Award or Annual
Incentive Award, together with any other right or interest granted to a
Participant under the Plan.

                  (d) "Beneficiary" means the person, persons, trust or trusts
which have been designated by a Participant in his or her most recent written
beneficiary designation filed with the Committee to receive the benefits
specified under the Plan upon such Participant's death or to which Awards or
other rights are transferred if and to the extent permitted under Section 10(b)
hereof. If, upon a Participant's death, there is no designated Beneficiary or
surviving designated Beneficiary, then the term Beneficiary means the person,
persons, trust or trusts entitled by will or the laws of descent and
distribution to receive such benefits.

                  (e) "Beneficial Owner", "Beneficially Owning" and "Beneficial
Ownership" shall have the meanings ascribed to such terms in Rule 13d-3 under
the Exchange Act and any successor to such Rule.

                  (f) "Board" means the Company's Board of Directors.

<PAGE>

                  (g) "Change in Control" means Change in Control as defined
with related terms in Section 9 of the Plan.

                  (h) "Change in Control Price" means the amount calculated in
accordance with Section 9(c) of the Plan.

                  (i) "Code" means the Internal Revenue Code of 1986, as amended
from time to time, including regulations thereunder and successor provisions and
regulations thereto.

                  (j) "Committee" means a committee designated by the Board to
administer the Plan; provided, however, that the Committee shall consist solely
of at least two directors, each of whom shall be (i) a "non-employee director"
within the meaning of Rule 16b-3 under the Exchange Act, unless administration
of the Plan by "non-employee directors" is not then required in order for
exemptions under Rule 16b-3 to apply to transactions under the Plan, and (ii) an
"outside director" within the meaning of Section 162(m) of the Code, unless
administration of the Plan by "outside directors" is not then required in order
to qualify for tax deductibility under Section 162(m) of the Code.

                  (k) "Corporate Transaction" means a Corporate Transaction as
defined in Section 9(b)(i) of the Plan.

                  (l) "Covered Employee" means an Eligible Person who is a
Covered Employee as specified in Section 8(e) of the Plan.

                  (m) "Deferred Stock" means a right, granted to a Participant
under Section 6(e) hereof, to receive Stock, cash or a combination thereof at
the end of a specified deferral period.

                  (n) "Director" means a member of the Board.

                  (o) "Disability" means a permanent and total disability
(within the meaning of Section 22(e) of the Code), as determined by a medical
doctor satisfactory to the Committee.

                  (p) "Dividend Equivalent" means a right, granted to a
Participant under Section 6(g) hereof, to receive cash, Stock, other Awards or
other property equal in value to dividends paid with respect to a specified
number of shares of Stock, or other periodic payments.

                  (q) "Effective Date" means the effective date of the Plan,
which shall be March 1, 1997.

                  (r) "Eligible Person" means each Executive Officer of the
Company (as defined under the Exchange Act) and other officers, Directors and
employees of the Company or of any Subsidiary, and independent contractors with
the Company or any Subsidiary. The foregoing notwithstanding, (i) only employees
of the Company or any Subsidiary shall be an Eligible Persons for purposes of
receiving any Incentive Stock Options and (ii) no independent contractor shall
be an Eligible Person for purposes of receiving any Awards other than Options
under Section 6(b) of the Plan. An employee on leave of absence may be
considered as still in the employ of the Company or a Subsidiary for purposes of
eligibility for participation in the Plan.

                                       2
<PAGE>

                  (s) "Exchange Act" means the Securities Exchange Act of 1934,
as amended from time to time, including rules thereunder and successor
provisions and rules thereto.

                  (t) "Executive Officer" means an executive officer of the
Company as defined under the Exchange Act.

                  (u) "Fair Market Value" means the fair market value of Stock,
Awards or other property as determined by the Committee or the Board, or under
procedures established by the Committee or the Board. Unless otherwise
determined by the Committee or the Board, the Fair Market Value of Stock as of
any given date shall be the closing sale price per share reported on a
consolidated basis for stock listed on the principal stock exchange or market on
which Stock is traded on the date as of which such value is being determined or,
if there is no sale on that date, then on the last previous day on which a sale
was reported.

                  (v) ""Formula Grants" means the Formula Grant Options granted
to Non-Employee Directors pursuant to Section 6(b)(iv) of the Plan.

                  (w) "Incentive Stock Option" or "ISO" means any Option
intended to be designated as an incentive stock option within the meaning of
Section 422 of the Code or any successor provision thereto.

                  (x) "Incumbent Board" means the Incumbent Board as defined in
Section 9(b)(ii) of the Plan.

                  (y) "Initial Grant Date" means the date on which a
Non-Employee Director is first elected or appointed as a Director.

                  (z) "Limited SAR" means a right granted to a Participant under
Section 6(c) hereof.

                  (aa) "Non-Employee Director" shall mean a member of the Board
who is not an employee of the Company or any subsidiary.

                  (bb) "Option" means a right granted to a Participant under
Section 6(b) hereof, to purchase Stock or other Awards at a specified price
during specified time periods.

                  (cc) "Other Stock-Based Awards" means Awards granted to a
Participant under Section 6(h) hereof.

                  (dd) "Parent Corporation" means any corporation (other than
the Company) in an unbroken chain of corporations ending with the Company, if
each of the corporations in the chain (other than the Company) owns stock
possessing 50% or more of the combined voting power of all classes of stock in
one of the other corporations in the chain.

                  (ee) "Participant" means a person who has been granted an
Award under the Plan which remains outstanding, including a person who is no
longer an Eligible Person.

                                       3
<PAGE>

                  (ff) "Performance Award" means a right, granted to a Eligible
Person under Section 8 hereof, to receive Awards based upon performance criteria
specified by the Committee or the Board.

                  (gg) "Person" shall have the meaning ascribed to such term in
Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d)
thereof, and shall include a "group" as defined in Section 13(d) thereof.

                  (hh) "Restricted Stock" means Stock granted to a Participant
under Section 6(d) hereof, that is subject to certain restrictions and to a risk
of forfeiture.

                  (ii) "Retire" or "Retirement" means termination of service as
a Director after having attained at least age 62 and having served as a Director
for at least 5 years, other than by reason of death, Disability or the
Director's wilful misconduct or negligence.

                  (jj) "Rule 16b-3" and "Rule 16a-1(c)(3)" means Rule 16b-3 and
Rule 16a-1(c)(3), as from time to time in effect and applicable to the Plan and
Participants, promulgated by the Securities and Exchange Commission under
Section 16 of the Exchange Act

                  (kk) "Stock" means the Company's Common Stock, and such other
securities as may be substituted (or resubstituted) for Stock pursuant to
Section 10(c) hereof.

                  (ll) "Stock Appreciation Rights" or "SAR" means a right
granted to a Participant under Section 6(c) hereof.

                  (mm) "Subsidiary" means any corporation or other entity in
which the Company has a direct or indirect ownership interest of 50% or more of
the total combined voting power of the then outstanding securities or interests
of such corporation or other entity entitled to vote generally in the election
of directors or in which the Company has the right to receive 50% or more of the
distribution of profits or 50% or more of the assets on liquidation or
dissolution.

                  3. Administration.

                  (a) Authority of the Committee. The Plan shall be administered
by the Committee; provided, however, that except as otherwise expressly provided
in this Plan or in order to comply with Code Section 162(m) or Rule 16b-3 under
the Exchange Act, the Board may exercise any power or authority granted to the
Committee under this Plan. The Committee or the Board shall have full and final
authority, in each case subject to and consistent with the provisions of the
Plan, to select Eligible Persons to become Participants, grant Awards, determine
the type, number and other terms and conditions of, and all other matters
relating to, Awards, prescribe Award agreements (which need not be identical for
each Participant) and rules and regulations for the administration of the Plan,
construe and interpret the Plan and Award agreements and correct defects, supply
omissions or reconcile inconsistencies therein, and to make all other decisions
and determinations as the Committee or the Board may deem necessary or advisable
for the administration of the Plan. In exercising any discretion granted to the
Committee or the Board under the Plan or pursuant to any Award, the Committee or
the

                                       4
<PAGE>

Board shall not be required to follow past practices, act in a manner consistent
with past practices, or treat any Eligible Person in a manner consistent with
the treatment of other Eligible Persons.

                  (b) Manner of Exercise of Committee Authority. The Committee,
and not the Board, shall exercise sole and exclusive discretion on any matter
relating to a Participant then subject to Section 16 of the Exchange Act with
respect to the Company to the extent necessary in order that transactions by
such Participant shall be exempt under Rule 16b-3 under the Exchange Act. Any
action of the Committee or the Board shall be final, conclusive and binding on
all persons, including the Company, its subsidiaries, Participants,
Beneficiaries, transferees under Section 10(b) hereof or other persons claiming
rights from or through a Participant, and stockholders. The express grant of any
specific power to the Committee or the Board, and the taking of any action by
the Committee or the Board, shall not be construed as limiting any power or
authority of the Committee or the Board. The Committee or the Board may delegate
to officers or managers of the Company or any subsidiary, or committees thereof,
the authority, subject to such terms as the Committee or the Board shall
determine, (i) to perform administrative functions, (ii) with respect to
Participants not subject to Section 16 of the Exchange Act, to perform such
other functions as the Committee or the Board may determine, and (iii) with
respect to Participants subject to Section 16, to perform such other functions
of the Committee or the Board as the Committee or the Board may determine to the
extent performance of such functions will not result in the loss of an exemption
under Rule 16b-3 otherwise available for transactions by such persons, in each
case to the extent permitted under applicable law and subject to the
requirements set forth in Section 8(d). The Committee or the Board may appoint
agents to assist it in administering the Plan.

                  (c) Limitation of Liability. The Committee and the Board, and
each member thereof, shall be entitled to, in good faith, rely or act upon any
report or other information furnished to him or her by any executive officer,
other officer or employee of the Company or a Subsidiary, the Company's
independent auditors, consultants or any other agents assisting in the
administration of the Plan. Members of the Committee and the Board, and any
officer or employee of the Company or a subsidiary acting at the direction or on
behalf of the Committee or the Board, shall not be personally liable for any
action or determination taken or made in good faith with respect to the Plan,
and shall, to the extent permitted by law, be fully indemnified and protected by
the Company with respect to any such action or determination.

         4. Stock Subject to Plan.

                  (a) Limitation on Overall Number of Shares Subject to Awards.
Subject to adjustment as provided in Section 10(c) hereof, the total number of
shares of Stock reserved and available for delivery in connection with Awards
under the Plan shall be the sum of (i) 8,000,000, plus (ii) the number of shares
with respect to Awards previously granted under the Plan that terminate without
being exercised, expire, are forfeited or canceled, and the number of shares of
Stock that are surrendered in payment of any Awards or any tax withholding with
regard thereto. Any shares of Stock delivered under the Plan may consist, in
whole or in part, of authorized and unissued shares or treasury shares. Subject
to adjustment as provided in Section 10(c) hereof, in no event shall the
aggregate number of shares of Stock which may be issued pursuant to ISOs exceed
1,500,000 shares.

                                       5
<PAGE>

                  (b) Application of Limitations. The limitation contained in
Section 4(a) shall apply not only to Awards that are settleable by the delivery
of shares of Stock but also to Awards relating to shares of Stock but settleable
only in cash (such as cash-only SARs). The Committee or the Board may adopt
reasonable counting procedures to ensure appropriate counting, avoid double
counting (as, for example, in the case of tandem or substitute awards) and make
adjustments if the number of shares of Stock actually delivered differs from the
number of shares previously counted in connection with an Award.

         5. Eligibility; Per-Person Award Limitations. Awards may be granted
under the Plan only to Eligible Persons. In each fiscal year during any part of
which the Plan is in effect, an Eligible Person may not be granted Awards
relating to more than 250,000 shares of Stock, subject to adjustment as provided
in Section 10(c), under each of Sections 6(b), 6(c), 6(d), 6(e), 6(f), 6(g),
6(h), 8(b) and 8(c). In addition, the maximum amount that may be earned as an
Annual Incentive Award or other cash Award in any fiscal year by any one
Participant shall be $2,000,000, and the maximum amount that may be earned as a
Performance Award or other cash Award in respect of a performance period by any
one Participant shall be $5,000,000.

         6. Specific Terms of Awards.

                  (a) General. Awards may be granted on the terms and conditions
set forth in this Section 6. In addition, the Committee or the Board may impose
on any Award or the exercise thereof, at the date of grant or thereafter
(subject to Section 10(e)), such additional terms and conditions, not
inconsistent with the provisions of the Plan, as the Committee or the Board
shall determine, including terms requiring forfeiture of Awards in the event of
termination of employment by the Participant and terms permitting a Participant
to make elections relating to his or her Award. The Committee or the Board shall
retain full power and discretion to accelerate, waive or modify, at any time,
any term or condition of an Award that is not mandatory under the Plan. Except
in cases in which the Committee or the Board is authorized to require other
forms of consideration under the Plan, or to the extent other forms of
consideration must be paid to satisfy the requirements of Delaware law, no
consideration other than services may be required for the grant (but not the
exercise) of any Award.

                  (b) Options. The Committee and the Board each is authorized to
grant Options to Participants on the following terms and conditions:

                           (i) Exercise Price. The exercise price per share of
                  Stock purchasable under an Option shall be determined by the
                  Committee or the Board, provided that such exercise price
                  shall not, in the case of Incentive Stock Options, be less
                  than 100% of the Fair Market Value of the Stock on the date of
                  grant of the Option and shall not, in any event, be less than
                  the par value of a share of Stock on the date of grant of such
                  Option. If an employee owns or is deemed to own (by reason of
                  the attribution rules applicable under Section 424(d) of the
                  Code) more than 10% of the combined voting power of all
                  classes of stock of the Company or any Parent Corporation and
                  an Incentive Stock Option is granted to such employee, the
                  option price of such Incentive Stock Option (to the extent
                  required by the Code at the time of grant) shall be no less

                                       6
<PAGE>

                  than 110% of the Fair Market Value of the Stock on the date
                  such Incentive Stock Option is granted.

                           (ii) Time and Method of Exercise. The Committee or
                  the Board shall determine the time or times at which or the
                  circumstances under which an Option may be exercised in whole
                  or in part (including based on achievement of performance
                  goals and/or future service requirements), the time or times
                  at which Options shall cease to be or become exercisable
                  following termination of employment or upon other conditions,
                  the methods by which such exercise price may be paid or deemed
                  to be paid (including in the discretion of the Committee or
                  the Board a cashless exercise procedure), the form of such
                  payment, including, without limitation, cash, Stock, other
                  Awards or awards granted under other plans of the Company or
                  any subsidiary, or other property (including notes or other
                  contractual obligations of Participants to make payment on a
                  deferred basis), and the methods by or forms in which Stock
                  will be delivered or deemed to be delivered to Participants.

                           (iii) ISOs. The terms of any ISO granted under the
                  Plan shall comply in all respects with the provisions of
                  Section 422 of the Code. Anything in the Plan to the contrary
                  notwithstanding, no term of the Plan relating to ISOs
                  (including any SAR in tandem therewith) shall be interpreted,
                  amended or altered, nor shall any discretion or authority
                  granted under the Plan be exercised, so as to disqualify
                  either the Plan or any ISO under Section 422 of the Code,
                  unless the Participant has first requested the change that
                  will result in such disqualification. Thus, if and to the
                  extent required to comply with Section 422 of the Code,
                  Options granted as Incentive Stock Options shall be subject to
                  the following special terms and conditions:

                                    (A) the Option shall not be exercisable more
                  than ten years after the date such Incentive Stock Option is
                  granted; provided, however, that if a Participant owns or is
                  deemed to own (by reason of the attribution rules of Section
                  424(d) of the Code) more than 10% of the combined voting power
                  of all classes of stock of the Company or any Parent
                  Corporation and the Incentive Stock Option is granted to such
                  Participant, the term of the Incentive Stock Option shall be
                  (to the extent required by the Code at the time of the grant)
                  for no more than five years from the date of grant; and

                                    (B) The aggregate Fair Market Value
                  (determined as of the date the Incentive Stock Option is
                  granted) of the shares of stock with respect to which
                  Incentive Stock Options granted under the Plan and all other
                  option plans of the Company or its Parent Corporation during
                  any calendar year exercisable for the first time by the
                  Participant during any calendar year shall not (to the extent
                  required by the Code at the time of the grant) exceed
                  $100,000.

                           (iv) Formula Grants of Options to Non-Employee
                  Directors. Each Non-Employee Director, other than a
                  Non-Employee Director who is, or is an affiliate or designee
                  of, a Beneficial Owner of more than 5% of the Company Voting
                  Securities Outstanding (as defined in Section 9(b)(i)), shall
                  receive on such Non-Employee

                                       7
<PAGE>

                  Director's Initial Grant Date an Option to purchase 12,000
                  shares of Stock. In addition, each Non-Employee Director shall
                  receive on each Annual Meeting Date thereafter, an Option to
                  purchase 3,000 shares of Stock. Options granted to
                  Non-Employee Directors pursuant to this Section shall be for a
                  term of 10 years and shall become exercisable at the rate of
                  25% per year commencing on the first anniversary of the date
                  on which the Option is granted; provided, however, that the
                  Options shall be fully exercisable in the event that, while
                  serving as a Director, the Non-Employee Director dies, suffers
                  a Disability, or Retires. The per share exercise price of all
                  Options granted to Non-Employee Directors pursuant to this
                  paragraph (iv) shall be equal to the Fair Market Value of a
                  share of Stock on the date such Option is granted. Unless
                  otherwise extended in the sole discretion of the Committee,
                  the unexercised portion of any Option granted pursuant to this
                  paragraph (iv) shall become null and void (V) three months
                  after the date on which such Non-Employee Director ceases to
                  be a Director of the Company for any reason other than the
                  Non-Employee Director's wilful misconduct or negligence,
                  Disability, death or Retirement, (W) immediately in the event
                  of the Non-Employee Director's wilful misconduct or
                  negligence, (X) one year after the Non-Employee Director
                  ceases to be a Director by reason of his Disability, (Y) at
                  the expiration of its original term, if the Non-Employee
                  Director ceases to be a Director by reason of his Retirement,
                  and (Z) twelve months after the date of the Non-Employee
                  Director's death in the event that such death occurs prior to
                  the time the Option otherwise would become null and void
                  pursuant to this sentence.

                           (v) Repricing. Except for adjustments pursuant to
                  Section 10(c) (relating to the adjustment of shares of Stock),
                  the exercise price per share of Stock purchasable under an
                  Option may not be decreased after the date of the grant of the
                  Option nor may an outstanding Option granted under the Plan be
                  surrendered to the Company as consideration for the grant of a
                  new Option with a lower exercise price.

                  (c) Stock Appreciation Rights. The Committee and the Board
each is authorized to grant SAR's to Participants on the following terms and
conditions:

                           (i) Right to Payment. A SAR shall confer on the
                  Participant to whom it is granted a right to receive, upon
                  exercise thereof, the excess of (A) the Fair Market Value of
                  one share of stock on the date of exercise (or, in the case of
                  a "Limited SAR" that may be exercised only in the event of a
                  Change in Control, the Fair Market Value determined by
                  reference to the Change in Control Price, as defined under
                  Section 9(c) hereof), over (B) the grant price of the SAR as
                  determined by the Committee or the Board. The grant price of
                  an SAR shall not be less than the Fair Market Value of a share
                  of Stock on the date of grant except as provided under Section
                  7(a) hereof.

                           (ii) Other Terms. The Committee or the Board shall
                  determine at the date of grant or thereafter, the time or
                  times at which and the circumstances under which a SAR may be
                  exercised in whole or in part (including based on achievement
                  of performance goals and/or future service requirements), the
                  time or times at which SARs shall cease to be or become
                  exercisable following termination of employment or upon

                                       8
<PAGE>

                  other conditions, the method of exercise, method of
                  settlement, form of consideration payable in settlement,
                  method by or forms in which Stock will be delivered or deemed
                  to be delivered to Participants, whether or not a SAR shall be
                  in tandem or in combination with any other Award, and any
                  other terms and conditions of any SAR. Limited SARs that may
                  only be exercised in connection with a Change in Control or
                  other event as specified by the Committee or the Board, may be
                  granted on such terms, not inconsistent with this Section
                  6(c), as the Committee or the Board may determine. SARs and
                  Limited SARs may be either freestanding or in tandem with
                  other Awards.

                  (d) Restricted Stock. The Committee and the Board each is
authorized to grant Restricted Stock to Participants on the following terms and
conditions:

                           (i) Grant and Restrictions. Restricted Stock shall be
                  subject to such restrictions on transferability, risk of
                  forfeiture and other restrictions, if any, as the Committee or
                  the Board may impose, which restrictions may lapse separately
                  or in combination at such times, under such circumstances
                  (including based on achievement of performance goals and/or
                  future service requirements), in such installments or
                  otherwise, as the Committee or the Board may determine at the
                  date of grant or thereafter. Except to the extent restricted
                  under the terms of the Plan and any Award agreement relating
                  to the Restricted Stock, a Participant granted Restricted
                  Stock shall have all of the rights of a stockholder, including
                  the right to vote the Restricted Stock and the right to
                  receive dividends thereon (subject to any mandatory
                  reinvestment or other requirement imposed by the Committee or
                  the Board). During the restricted period applicable to the
                  Restricted Stock, subject to Section 10(b) below, the
                  Restricted Stock may not be sold, transferred, pledged,
                  hypothecated, margined or otherwise encumbered by the
                  Participant.

                           (ii) Forfeiture. Except as otherwise determined by
                  the Committee or the Board at the time of the Award, upon
                  termination of a Participant's employment during the
                  applicable restriction period, the Participant's Restricted
                  Stock that is at that time subject to restrictions shall be
                  forfeited and reacquired by the Company; provided that the
                  Committee or the Board may provide, by rule or regulation or
                  in any Award agreement, or may determine in any individual
                  case, that restrictions or forfeiture conditions relating to
                  Restricted Stock shall be waived in whole or in part in the
                  event of terminations resulting from specified causes, and the
                  Committee or the Board may in other cases waive in whole or in
                  part the forfeiture of Restricted Stock.

                           (iii) Certificates for Stock. Restricted Stock
                  granted under the Plan may be evidenced in such manner as the
                  Committee or the Board shall determine. If certificates
                  representing Restricted Stock are registered in the name of
                  the Participant, the Committee or the Board may require that
                  such certificates bear an appropriate legend referring to the
                  terms, conditions and restrictions applicable to such
                  Restricted Stock, that the Company retain physical possession
                  of the certificates, and that the Participant deliver a stock
                  power to the Company, endorsed in blank, relating to the
                  Restricted Stock.

                                       9
<PAGE>

                           (iv) Dividends and Splits. As a condition to the
                  grant of an Award of Restricted Stock, the Committee or the
                  Board may require that any cash dividends paid on a share of
                  Restricted Stock be automatically reinvested in additional
                  shares of Restricted Stock or applied to the purchase of
                  additional Awards under the Plan. Unless otherwise determined
                  by the Committee or the Board, Stock distributed in connection
                  with a Stock split or Stock dividend, and other property
                  distributed as a dividend, shall be subject to restrictions
                  and a risk of forfeiture to the same extent as the Restricted
                  Stock with respect to which such Stock or other property has
                  been distributed.

                  (e) Deferred Stock. The Committee and the Board each is
authorized to grant Deferred Stock to Participants, which are rights to receive
Stock, cash, or a combination thereof at the end of a specified deferral period,
subject to the following terms and conditions:

                           (i) Award and Restrictions. Satisfaction of an Award
                  of Deferred Stock shall occur upon expiration of the deferral
                  period specified for such Deferred Stock by the Committee or
                  the Board (or, if permitted by the Committee or the Board, as
                  elected by the Participant). In addition, Deferred Stock shall
                  be subject to such restrictions (which may include a risk of
                  forfeiture) as the Committee or the Board may impose, if any,
                  which restrictions may lapse at the expiration of the deferral
                  period or at earlier specified times (including based on
                  achievement of performance goals and/or future service
                  requirements), separately or in combination, in installments
                  or otherwise, as the Committee or the Board may determine.
                  Deferred Stock may be satisfied by delivery of Stock, cash
                  equal to the Fair Market Value of the specified number of
                  shares of Stock covered by the Deferred Stock, or a
                  combination thereof, as determined by the Committee or the
                  Board at the date of grant or thereafter. Prior to
                  satisfaction of an Award of Deferred Stock, an Award of
                  Deferred Stock carries no voting or dividend or other rights
                  associated with share ownership.

                           (ii) Forfeiture. Except as otherwise determined by
                  the Committee or the Board, upon termination of a
                  Participant's employment during the applicable deferral period
                  thereof to which forfeiture conditions apply (as provided in
                  the Award agreement evidencing the Deferred Stock), the
                  Participant's Deferred Stock that is at that time subject to
                  deferral (other than a deferral at the election of the
                  Participant) shall be forfeited; provided that the Committee
                  or the Board may provide, by rule or regulation or in any
                  Award agreement, or may determine in any individual case, that
                  restrictions or forfeiture conditions relating to Deferred
                  Stock shall be waived in whole or in part in the event of
                  terminations resulting from specified causes, and the
                  Committee or the Board may in other cases waive in whole or in
                  part the forfeiture of Deferred Stock.

                           (iii) Dividend Equivalents. Unless otherwise
                  determined by the Committee or the Board at date of grant,
                  Dividend Equivalents on the specified number of shares of
                  Stock covered by an Award of Deferred Stock shall be either
                  (A) paid with respect to such Deferred Stock at the dividend
                  payment date in cash or in shares of unrestricted Stock having
                  a Fair Market Value equal to the amount of such

                                       10
<PAGE>

                  dividends, or (B) deferred with respect to such Deferred Stock
                  and the amount or value thereof automatically deemed
                  reinvested in additional Deferred Stock, other Awards or other
                  investment vehicles, as the Committee or the Board shall
                  determine or permit the Participant to elect.

                  (f) Bonus Stock and Awards in Lieu of Obligations. The
Committee and the Board each is authorized to grant Stock as a bonus, or to
grant Stock or other Awards in lieu of Company obligations to pay cash or
deliver other property under the Plan or under other plans or compensatory
arrangements, provided that, in the case of Participants subject to Section 16
of the Exchange Act, the amount of such grants remains within the discretion of
the Committee to the extent necessary to ensure that acquisitions of Stock or
other Awards are exempt from liability under Section 16(b) of the Exchange Act.
Stock or Awards granted hereunder shall be subject to such other terms as shall
be determined by the Committee or the Board.

                  (g) Dividend Equivalents. The Committee and the Board each is
authorized to grant Dividend Equivalents to a Participant entitling the
Participant to receive cash, Stock, other Awards, or other property equal in
value to dividends paid with respect to a specified number of shares of Stock,
or other periodic payments. Dividend Equivalents may be awarded on a
free-standing basis or in connection with another Award. The Committee or the
Board may provide that Dividend Equivalents shall be paid or distributed when
accrued or shall be deemed to have been reinvested in additional Stock, Awards,
or other investment vehicles, and subject to such restrictions on
transferability and risks of forfeiture, as the Committee or the Board may
specify.

                  (h) Other Stock-Based Awards. The Committee and the Board each
is authorized, subject to limitations under applicable law, to grant to
Participants such other Awards that may be denominated or payable in, valued in
whole or in part by reference to, or otherwise based on, or related to, Stock,
as deemed by the Committee or the Board to be consistent with the purposes of
the Plan, including, without limitation, convertible or exchangeable debt
securities, other rights convertible or exchangeable into Stock, purchase rights
for Stock, Awards with value and payment contingent upon performance of the
Company or any other factors designated by the Committee or the Board, and
Awards valued by reference to the book value of Stock or the value of securities
of or the performance of specified subsidiaries or business units. The Committee
or the Board shall determine the terms and conditions of such Awards. Stock
delivered pursuant to an Award in the nature of a purchase right granted under
this Section 6(h) shall be purchased for such consideration, paid for at such
times, by such methods, and in such forms, including, without limitation, cash,
Stock, other Awards or other property, as the Committee or the Board shall
determine. Cash awards, as an element of or supplement to any other Award under
the Plan, may also be granted pursuant to this Section 6(h).

         7. Certain Provisions Applicable to Awards.

                  (a) Stand-Alone, Additional, Tandem, and Substitute Awards.
Awards granted under the Plan may, in the discretion of the Committee or the
Board, be granted either alone or in addition to, in tandem with, or in
substitution or exchange for, any other Award or any award granted under another
plan of the Company, any subsidiary, or any business entity to be acquired by
the Company or a subsidiary, or any other right of a Participant to receive
payment from the Company or

                                       11
<PAGE>

any subsidiary. Such additional, tandem, and substitute or exchange Awards may
be granted at any time. If an Award is granted in substitution or exchange for
another Award or award, the Committee or the Board shall require the surrender
of such other Award or award in consideration for the grant of the new Award. In
addition, Awards may be granted in lieu of cash compensation, including in lieu
of cash amounts payable under other plans of the Company or any subsidiary, in
which the value of Stock subject to the Award is equivalent in value to the cash
compensation (for example, Deferred Stock or Restricted Stock), or in which the
exercise price, grant price or purchase price of the Award in the nature of a
right that may be exercised is equal to the Fair Market Value of the underlying
Stock minus the value of the cash compensation surrendered (for example, Options
granted with an exercise price "discounted" by the amount of the cash
compensation surrendered).

                  (b) Term of Awards. The term of each Award shall be for such
period as may be determined by the Committee or the Board; provided that in no
event shall the term of any Option or SAR exceed a period of ten years (or such
shorter term as may be required in respect of an ISO under Section 422 of the
Code).

                  (c) Form and Timing of Payment Under Awards; Deferrals.
Subject to the terms of the Plan and any applicable Award agreement, payments to
be made by the Company or a subsidiary upon the exercise of an Option or other
Award or settlement of an Award may be made in such forms as the Committee or
the Board shall determine, including, without limitation, cash, Stock, other
Awards or other property, and may be made in a single payment or transfer, in
installments, or on a deferred basis. The settlement of any Award may be
accelerated, and cash paid in lieu of Stock in connection with such settlement,
in the discretion of the Committee or the Board or upon occurrence of one or
more specified events (in addition to a Change in Control). Installment or
deferred payments may be required by the Committee or the Board (subject to
Section 10(e) of the Plan) or permitted at the election of the Participant on
terms and conditions established by the Committee or the Board. Payments may
include, without limitation, provisions for the payment or crediting of a
reasonable interest rate on installment or deferred payments or the grant or
crediting of Dividend Equivalents or other amounts in respect of installment or
deferred payments denominated in Stock.

                  (d) Exemptions from Section 16(b) Liability. It is the intent
of the Company that this Plan comply in all respects with applicable provisions
of Rule 16b-3 or Rule 16a-1(c)(3) to the extent necessary to ensure that neither
the grant of any Awards to nor other transaction by a Participant who is subject
to Section 16 of the Exchange Act is subject to liability under Section 16(b)
thereof (except for transactions acknowledged in writing to be non-exempt by
such Participant). Accordingly, if any provision of this Plan or any Award
agreement does not comply with the requirements of Rule 16b-3 or Rule
16a-1(c)(3) as then applicable to any such transaction, such provision will be
construed or deemed amended to the extent necessary to conform to the applicable
requirements of Rule 16b-3 or Rule 16a-1(c)(3) so that such Participant shall
avoid liability under Section 16(b). In addition, the purchase price of any
Award conferring a right to purchase Stock shall be not less than any specified
percentage of the Fair Market Value of Stock at the date of grant of the Award
then required in order to comply with Rule 16b-3.

                                       12
<PAGE>

         8. Performance and Annual Incentive Awards.

                  (a) Performance Conditions. The right of a Participant to
exercise or receive a grant or settlement of any Award, and the timing thereof,
may be subject to such performance conditions as may be specified by the
Committee or the Board. The Committee or the Board may use such business
criteria and other measures of performance as it may deem appropriate in
establishing any performance conditions, and may exercise its discretion to
reduce the amounts payable under any Award subject to performance conditions,
except as limited under Sections 8(b) and 8(c) hereof in the case of a
Performance Award or Annual Incentive Award intended to qualify under Code
Section 162(m). If and to the extent required under Code Section 162(m), any
power or authority relating to a Performance Award or Annual Incentive Award
intended to qualify under Code Section 162(m), shall be exercised by the
Committee and not the Board.

                  (b) Performance Awards Granted to Designated Covered
Employees. If and to the extent that the Committee determines that a Performance
Award to be granted to an Eligible Person who is designated by the Committee as
likely to be a Covered Employee should qualify as "performance-based
compensation" for purposes of Code Section 162(m), the grant, exercise and/or
settlement of such Performance Award shall be contingent upon achievement of
preestablished performance goals and other terms set forth in this Section 8(b).

                           (i) Performance Goals Generally. The performance
                  goals for such Performance Awards shall consist of one or more
                  business criteria and a targeted level or levels of
                  performance with respect to each of such criteria, as
                  specified by the Committee consistent with this Section 8(b).
                  Performance goals shall be objective and shall otherwise meet
                  the requirements of Code Section 162(m) and regulations
                  thereunder including the requirement that the level or levels
                  of performance targeted by the Committee result in the
                  achievement of performance goals being "substantially
                  uncertain." The Committee may determine that such Performance
                  Awards shall be granted, exercised and/or settled upon
                  achievement of any one performance goal or that two or more of
                  the performance goals must be achieved as a condition to
                  grant, exercise and/or settlement of such Performance Awards.
                  Performance goals may differ for Performance Awards granted to
                  any one Participant or to different Participants.

                           (ii) Business Criteria. One or more of the following
                  business criteria for the Company, on a consolidated basis,
                  and/or specified subsidiaries or business units of the Company
                  (except with respect to the total stockholder return and
                  earnings per share criteria), shall be used exclusively by the
                  Committee in establishing performance goals for such
                  Performance Awards: (1) total stockholder return; (2) such
                  total stockholder return as compared to total return (on a
                  comparable basis) of a publicly available index such as, but
                  not limited to, the Standard & Poor's 500 Stock Index or the
                  Nasdaq Composite Index; (3) net income; (4) pretax earnings;
                  (5) earnings before interest expense, taxes, depreciation and
                  amortization; (6) pretax operating earnings after interest
                  expense and before bonuses, service fees, and extraordinary or
                  special items; (7) operating margin; (8) earnings per share;
                  (9) return on equity; (10) return on capital; (11) return on
                  investment; (12) operating earnings; (13) working capital or
                  inventory;

                                       13
<PAGE>

                  and (14) ratio of debt to stockholders' equity. One or more of
                  the foregoing business criteria shall also be exclusively used
                  in establishing performance goals for Annual Incentive Awards
                  granted to a Covered Employee under Section 8(c) hereof that
                  are intended to qualify as "performance-based compensation"
                  under Code Section 162(m).

                           (iii) Performance Period; Timing For Establishing
                  Performance Goals. Achievement of performance goals in respect
                  of such Performance Awards shall be measured over a
                  performance period of up to ten years, as specified by the
                  Committee. Performance goals shall be established not later
                  than 90 days after the beginning of any performance period
                  applicable to such Performance Awards, or at such other date
                  as may be required or permitted for "performance-based
                  compensation" under Code Section 162(m).

                           (iv) Performance Award Pool. The Committee may
                  establish a Performance Award pool, which shall be an unfunded
                  pool, for purposes of measuring Company performance in
                  connection with Performance Awards. The amount of such
                  Performance Award pool shall be based upon the achievement of
                  a performance goal or goals based on one or more of the
                  business criteria set forth in Section 8(b)(ii) hereof during
                  the given performance period, as specified by the Committee in
                  accordance with Section 8(b)(iii) hereof. The Committee may
                  specify the amount of the Performance Award pool as a
                  percentage of any of such business criteria, a percentage
                  thereof in excess of a threshold amount, or as another amount
                  which need not bear a strictly mathematical relationship to
                  such business criteria.

                           (v) Settlement of Performance Awards; Other Terms.
                  Settlement of such Performance Awards shall be in cash, Stock,
                  other Awards or other property, in the discretion of the
                  Committee. The Committee may, in its discretion, reduce the
                  amount of a settlement otherwise to be made in connection with
                  such Performance Awards. The Committee shall specify the
                  circumstances in which such Performance Awards shall be paid
                  or forfeited in the event of termination of employment by the
                  Participant prior to the end of a performance period or
                  settlement of Performance Awards.

                  (c) Annual Incentive Awards Granted to Designated Covered
Employees. If and to the extent that the Committee determines that an Annual
Incentive Award to be granted to an Eligible Person who is designated by the
Committee as likely to be a Covered Employee should qualify as
"performance-based compensation" for purposes of Code Section 162(m), the grant,
exercise and/or settlement of such Annual Incentive Award shall be contingent
upon achievement of preestablished performance goals and other terms set forth
in this Section 8(c).

                           (i) Annual Incentive Award Pool. The Committee may
                  establish an Annual Incentive Award pool, which shall be an
                  unfunded pool, for purposes of measuring Company performance
                  in connection with Annual Incentive Awards. The amount of such
                  Annual Incentive Award pool shall be based upon the
                  achievement of a performance goal or goals based on one or
                  more of the business criteria set forth in

                                       14
<PAGE>

                  Section 8(b)(ii) hereof during the given performance period,
                  as specified by the Committee in accordance with Section
                  8(b)(iii) hereof. The Committee may specify the amount of the
                  Annual Incentive Award pool as a percentage of any such
                  business criteria, a percentage thereof in excess of a
                  threshold amount, or as another amount which need not bear a
                  strictly mathematical relationship to such business criteria.

                           (ii) Potential Annual Incentive Awards. Not later
                  than the end of the 90th day of each fiscal year, or at such
                  other date as may be required or permitted in the case of
                  Awards intended to be "performance-based compensation" under
                  Code Section 162(m), the Committee shall determine the
                  Eligible Persons who will potentially receive Annual Incentive
                  Awards, and the amounts potentially payable thereunder, for
                  that fiscal year, either out of an Annual Incentive Award pool
                  established by such date under Section 8(c)(i) hereof or as
                  individual Annual Incentive Awards. In the case of individual
                  Annual Incentive Awards intended to qualify under Code Section
                  162(m), the amount potentially payable shall be based upon the
                  achievement of a performance goal or goals based on one or
                  more of the business criteria set forth in Section 8(b)(ii)
                  hereof in the given performance year, as specified by the
                  Committee; in other cases, such amount shall be based on such
                  criteria as shall be established by the Committee. In all
                  cases, the maximum Annual Incentive Award of any Participant
                  shall be subject to the limitation set forth in Section 5
                  hereof.

                           (iii) Payout of Annual Incentive Awards. After the
                  end of each fiscal year, the Committee shall determine the
                  amount, if any, of (A) the Annual Incentive Award pool, and
                  the maximum amount of potential Annual Incentive Award payable
                  to each Participant in the Annual Incentive Award pool, or (B)
                  the amount of potential Annual Incentive Award otherwise
                  payable to each Participant. The Committee may, in its
                  discretion, determine that the amount payable to any
                  Participant as a final Annual Incentive Award shall be reduced
                  from the amount of his or her potential Annual Incentive
                  Award, including a determination to make no final Award
                  whatsoever. The Committee shall specify the circumstances in
                  which an Annual Incentive Award shall be paid or forfeited in
                  the event of termination of employment by the Participant
                  prior to the end of a fiscal year or settlement of such Annual
                  Incentive Award.

                  (d) Written Determinations. All determinations by the
Committee as to the establishment of performance goals, the amount of any
Performance Award pool or potential individual Performance Awards and as to the
achievement of performance goals relating to Performance Awards under Section
8(b), and the amount of any Annual Incentive Award pool or potential individual
Annual Incentive Awards and the amount of final Annual Incentive Awards under
Section 8(c), shall be made in writing in the case of any Award intended to
qualify under Code Section 162(m). The Committee may not delegate any
responsibility relating to such Performance Awards or Annual Incentive Awards if
and to the extent required to comply with Code Section 162(m).

                  (e) Status of Section 8(b) and Section 8(c) Awards Under Code
Section 162(m). It is the intent of the Company that Performance Awards and
Annual Incentive Awards under Section 8(b) and 8(c) hereof granted to persons
who are designated by the Committee as likely to be

                                       15
<PAGE>

Covered Employees within the meaning of Code Section 162(m) and regulations
thereunder shall, if so designated by the Committee, constitute "qualified
performance-based compensation" within the meaning of Code Section 162(m) and
regulations thereunder. Accordingly, the terms of Sections 8(b), (c), (d) and
(e), including the definitions of Covered Employee and other terms used therein,
shall be interpreted in a manner consistent with Code Section 162(m) and
regulations thereunder. The foregoing notwithstanding, because the Committee
cannot determine with certainty whether a given Participant will be a Covered
Employee with respect to a fiscal year that has not yet been completed, the term
Covered Employee as used herein shall mean only a person designated by the
Committee, at the time of grant of Performance Awards or an Annual Incentive
Award, as likely to be a Covered Employee with respect to that fiscal year. If
any provision of the Plan or any agreement relating to such Performance Awards
or Annual Incentive Awards does not comply or is inconsistent with the
requirements of Code Section 162(m) or regulations thereunder, such provision
shall be construed or deemed amended to the extent necessary to conform to such
requirements.

         9. Change in Control.

                  (a) Effect of "Change in Control." If and to the extent
provided in the Award, in the event of a "Change in Control," as defined in
Section 9(b), the following provisions shall apply:

                           (i) Any Award carrying a right to exercise that was
                  not previously exercisable and vested shall become fully
                  exercisable and vested as of the time of the Change in
                  Control, subject only to applicable restrictions set forth in
                  Section 10(a) hereof;

                            (ii) Limited SARs (and other SARs if so provided by
                  their terms) shall become exercisable for amounts, in cash,
                  determined by reference to the Change in Control Price;

                           (iii) The restrictions, deferral of settlement, and
                  forfeiture conditions applicable to any other Award granted
                  under the Plan shall lapse and such Awards shall be deemed
                  fully vested as of the time of the Change in Control, except
                  to the extent of any waiver by the Participant and subject to
                  applicable restrictions set forth in Section 10(a) hereof; and

                           (iv) With respect to any such outstanding Award
                  subject to achievement of performance goals and conditions
                  under the Plan, such performance goals and other conditions
                  will be deemed to be met if and to the extent so provided by
                  the Committee in the Award agreement relating to such Award.

                  (b) Definition of "Change in Control. A "Change in Control"
shall be deemed to have occurred upon:

                           (i) An acquisition by any Person of Beneficial
Ownership of the shares of Common Stock of the Company then outstanding (the
"Company Common Stock Outstanding") or the voting securities of the Company then
outstanding entitled to vote generally in the election of directors

                                       16
<PAGE>

(the "Company Voting Securities Outstanding") if such acquisition of Beneficial
Ownership results in the Person's Beneficially Owning 25% or more of the Company
Common Stock outstanding or 25% or more of the combined voting power of the
Company Voting Securities Outstanding; or

                           (ii) Approval by the shareholders of the Company of a
reorganization, merger, consolidation or other form of corporate transaction or
series of transactions, in each case, with respect to which persons who were the
shareholders of the Company immediately prior to such reorganization, merger or
consolidation or other transaction do not, immediately thereafter, own more than
50% of the combined voting power entitled to vote generally in the election of
directors of the reorganized, merged or consolidated company's then outstanding
voting securities, or a liquidation or dissolution of the Company or the sale of
all or substantially all of the assets of the Company (unless such
reorganization, merger, consolidation or other corporate transaction,
liquidation, dissolution or sale (any such event being referred to as a
"Corporate Transaction") is subsequently abandoned); or

                           (iii) A change in the composition of the Board such
that individuals who, as of the date hereof, constitute the Board (as of the
date hereof the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board, provided that any person becoming a director subsequent
to the date hereof whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board (other than an election or nomination of an
individual whose initial assumption of office is in connection with an actual or
threatened election contest relating to the election of the Directors of the
Company, as such terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Securities Exchange Act) shall be, for purposes of this Agreement,
considered as though such person were a member of the Incumbent Board.

         Notwithstanding the provisions set forth in subparagraphs (i) and (ii)
of this Section 9(b), any acquisition or consummation of a Corporate Transaction
unanimously approved by the Incumbent Board shall not constitute a Change in
Control for purposes of the Plan.

                  (c) Definition of "Change in Control Price." The "Change in
Control Price" means an amount in cash equal to the higher of (i) the amount of
cash and fair market value of property that is the highest price per share paid
(including extraordinary dividends) in any Corporate Transaction triggering the
Change in Control under Section 9(b)(i) hereof or any liquidation of shares
following a sale of substantially all of the assets of the Company, or (ii) the
highest Fair Market Value per share at any time during the 60-day period
preceding and the 60-day period following the Change in Control.

         10. General Provisions.

                  (a) Compliance With Legal and Other Requirements. The Company
may, to the extent deemed necessary or advisable by the Committee or the Board,
postpone the issuance or delivery of Stock or payment of other benefits under
any Award until completion of such registration or qualification of such Stock
or other required action under any federal or state law, rule or regulation,
listing or other required action with respect to any stock exchange or automated
quotation system upon which the Stock or other Company securities are listed or
quoted, or compliance with any other obligation of the Company, as the Committee
or the Board, may consider appropriate, and may require

                                       17
<PAGE>

any Participant to make such representations, furnish such information and
comply with or be subject to such other conditions as it may consider
appropriate in connection with the issuance or delivery of Stock or payment of
other benefits in compliance with applicable laws, rules, and regulations,
listing requirements, or other obligations. The foregoing notwithstanding, in
connection with a Change in Control, the Company shall take or cause to be taken
no action, and shall undertake or permit to arise no legal or contractual
obligation, that results or would result in any postponement of the issuance or
delivery of Stock or payment of benefits under any Award or the imposition of
any other conditions on such issuance, delivery or payment, to the extent that
such postponement or other condition would represent a greater burden on a
Participant than existed on the 90th day preceding the Change in Control.

                  (b) Limits on Transferability; Beneficiaries. No Award or
other right or interest of a Participant under the Plan, including any Award or
right which constitutes a derivative security as generally defined in Rule
16a-1(c) under the Exchange Act, shall be pledged, hypothecated or otherwise
encumbered or subject to any lien, obligation or liability of such Participant
to any party (other than the Company or a Subsidiary), or assigned or
transferred by such Participant otherwise than by will or the laws of descent
and distribution or to a Beneficiary upon the death of a Participant, and such
Awards or rights that may be exercisable shall be exercised during the lifetime
of the Participant only by the Participant or his or her guardian or legal
representative, except that Awards and other rights (other than ISOs and SARs in
tandem therewith) may be transferred to one or more Beneficiaries or other
transferees during the lifetime of the Participant, and may be exercised by such
transferees in accordance with the terms of such Award, but only if and to the
extent such transfers and exercises are permitted by the Committee or the Board
pursuant to the express terms of an Award agreement (subject to any terms and
conditions which the Committee or the Board may impose thereon, and further
subject to any prohibitions or restrictions on such transfers pursuant to Rule
16b-3). A Beneficiary, transferee, or other person claiming any rights under the
Plan from or through any Participant shall be subject to all terms and
conditions of the Plan and any Award agreement applicable to such Participant,
except as otherwise determined by the Committee or the Board, and to any
additional terms and conditions deemed necessary or appropriate by the Committee
or the Board.

                  (c) Adjustments. In the event that any dividend or other
distribution (whether in the form of cash, Stock, or other property),
recapitalization, forward or reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, share exchange, liquidation,
dissolution or other similar corporate transaction or event affects the Stock
such that a substitution or adjustment is determined by the Committee or the
Board to be appropriate in order to prevent dilution or enlargement of the
rights of Participants under the Plan, then the Committee or the Board shall, in
such manner as it may deem equitable, substitute or adjust any or all of (i) the
number and kind of shares of Stock which may be delivered in connection with
Awards granted thereafter, (ii) the number and kind of shares of Stock by which
annual per-person Award limitations are measured under Section 5 hereof, (iii)
the number and kind of shares of Stock subject to or deliverable in respect of
outstanding Awards and (iv) the exercise price, grant price or purchase price
relating to any Award and/or make provision for payment of cash or other
property in respect of any outstanding Award. In addition, the Committee (and
the Board if and only to the extent such authority is not required to be
exercised by the Committee to comply with Code Section 162(m)) is authorized to
make adjustments in the terms and conditions of,

                                       18
<PAGE>

and the criteria included in, Awards (including Performance Awards and
performance goals, and Annual Incentive Awards and any Annual Incentive Award
pool or performance goals relating thereto) in recognition of unusual or
nonrecurring events (including, without limitation, events described in the
preceding sentence, as well as acquisitions and dispositions of businesses and
assets) affecting the Company, any Subsidiary or any business unit, or the
financial statements of the Company or any Subsidiary, or in response to changes
in applicable laws, regulations, accounting principles, tax rates and
regulations or business conditions or in view of the Committee's assessment of
the business strategy of the Company, any Subsidiary or business unit thereof,
performance of comparable organizations, economic and business conditions,
personal performance of a Participant, and any other circumstances deemed
relevant; provided that no such adjustment shall be authorized or made if and to
the extent that such authority or the making of such adjustment would cause
Options, SARs, Performance Awards granted under Section 8(b) hereof or Annual
Incentive Awards granted under Section 8(c) hereof to Participants designated by
the Committee as Covered Employees and intended to qualify as "performance-based
compensation" under Code Section 162(m) and the regulations thereunder to
otherwise fail to qualify as "performance-based compensation" under Code Section
162(m) and regulations thereunder.

                  (d) Taxes. The Company and any Subsidiary is authorized to
withhold from any Award granted, any payment relating to an Award under the
Plan, including from a distribution of Stock, or any payroll or other payment to
a Participant, amounts of withholding and other taxes due or potentially payable
in connection with any transaction involving an Award, and to take such other
action as the Committee or the Board may deem advisable to enable the Company
and Participants to satisfy obligations for the payment of withholding taxes and
other tax obligations relating to any Award. This authority shall include
authority to withhold or receive Stock or other property and to make cash
payments in respect thereof in satisfaction of a Participant's tax obligations,
either on a mandatory or elective basis in the discretion of the Committee.

                  (e) Changes to the Plan and Awards. The Board may amend,
alter, suspend, discontinue or terminate the Plan, or the Committee's authority
to grant Awards under the Plan without the consent of stockholders or
Participants, except that any amendment or alteration to the Plan shall be
subject to the approval of the Company's stockholders not later than the annual
meeting next following such Board action if such stockholder approval is
required by any federal or state law or regulation (including, without
limitation, Rule 16b-3 or Code Section 162(m)) or the rules of any stock
exchange or automated quotation system on which the Stock may then be listed or
quoted, and the Board may otherwise, in its discretion, determine to submit
other such changes to the Plan to stockholders for approval; provided that,
without the consent of an affected Participant, no such Board action may
materially and adversely affect the rights of such Participant under any
previously granted and outstanding Award; provided, further, that the provisions
of Section 6(b)(v) (relating to Option repricing) may not be amended without
stockholder approval. The Committee or the Board may waive any conditions or
rights under, or amend, alter, suspend, discontinue or terminate any Award
theretofore granted and any Award agreement relating thereto, except as
otherwise provided in the Plan; provided that, without the consent of an
affected Participant, no such Committee or the Board action may materially and
adversely affect the rights of such Participant under such Award.
Notwithstanding anything in the Plan to the contrary, if any right under this
Plan would cause a

                                       19
<PAGE>

transaction to be ineligible for pooling of interest accounting that would, but
for the right hereunder, be eligible for such accounting treatment, the
Committee or the Board may modify or adjust the right so that pooling of
interest accounting shall be available, including the substitution of Stock
having a Fair Market Value equal to the cash otherwise payable hereunder for the
right which caused the transaction to be ineligible for pooling of interest
accounting. Notwithstanding anything herein to the contrary, the provisions of
Section 6(b)(iv) of this Plan which govern formula grants of Options to
Non-Employee Directors, shall not be amended more than once every six months
other than to comport with changes to the Code or the rules promulgated
thereunder or the Employee Retirement Income Security Act of 1974, as amended,
or the rules promulgated thereunder, or with rules promulgated by the Securities
and Exchange Commission, unless such limit on amendments is not required under
Rule 16b-3 or other applicable law.

                  (f) Limitation on Rights Conferred Under Plan. Neither the
Plan nor any action taken hereunder shall be construed as (i) giving any
Eligible Person or Participant the right to continue as an Eligible Person or
Participant or in the employ of the Company or a Subsidiary; (ii) interfering in
any way with the right of the Company or a Subsidiary to terminate any Eligible
Person's or Participant's employment at any time, (iii) giving an Eligible
Person or Participant any claim to be granted any Award under the Plan or to be
treated uniformly with other Participants and employees, or (iv) conferring on a
Participant any of the rights of a stockholder of the Company unless and until
the Participant is duly issued or transferred shares of Stock in accordance with
the terms of an Award.

                  (g) Unfunded Status of Awards; Creation of Trusts. The Plan is
intended to constitute an "unfunded" plan for incentive and deferred
compensation. With respect to any payments not yet made to a Participant or
obligation to deliver Stock pursuant to an Award, nothing contained in the Plan
or any Award shall give any such Participant any rights that are greater than
those of a general creditor of the Company; provided that the Committee may
authorize the creation of trusts and deposit therein cash, Stock, other Awards
or other property, or make other arrangements to meet the Company's obligations
under the Plan. Such trusts or other arrangements shall be consistent with the
"unfunded" status of the Plan unless the Committee otherwise determines with the
consent of each affected Participant. The trustee of such trusts may be
authorized to dispose of trust assets and reinvest the proceeds in alternative
investments, subject to such terms and conditions as the Committee or the Board
may specify and in accordance with applicable law.

                  (h) Nonexclusivity of the Plan. Neither the adoption of the
Plan by the Board nor its submission to the stockholders of the Company for
approval shall be construed as creating any limitations on the power of the
Board or a committee thereof to adopt such other incentive arrangements as it
may deem desirable including incentive arrangements and awards which do not
qualify under Code Section 162(m).

                  (i) Payments in the Event of Forfeitures; Fractional Shares.
Unless otherwise determined by the Committee or the Board, in the event of a
forfeiture of an Award with respect to which a Participant paid cash or other
consideration, the Participant shall be repaid the amount of such cash or other
consideration. No fractional shares of Stock shall be issued or delivered
pursuant to the Plan or any Award. The Committee or the Board shall determine
whether cash, other Awards or other

                                       20
<PAGE>

property shall be issued or paid in lieu of such fractional shares or whether
such fractional shares or any rights thereto shall be forfeited or otherwise
eliminated.

                  (j) Governing Law. The validity, construction and effect of
the Plan, any rules and regulations under the Plan, and any Award agreement
shall be determined in accordance with the laws of the State of Delaware without
giving effect to principles of conflicts of laws, and applicable federal law.

                  (k) Plan Effective Date and Stockholder Approval; Termination
of Plan. The Plan shall become effective on the Effective Date, subject to
subsequent approval within 12 months of its adoption by the Board by
stockholders of the Company eligible to vote in the election of directors, by a
vote sufficient to meet the requirements of Code Sections 162(m) and 422, Rule
16b-3 under the Exchange Act, applicable stock exchange requirements, and other
laws, regulations, and obligations of the Company applicable to the Plan. Awards
may be granted subject to stockholder approval, but may not be exercised or
otherwise settled in the event stockholder approval is not obtained. The Plan
shall terminate at such time as no shares of Common Stock remain available for
issuance under the Plan and the Company has no further rights or obligations
with respect to outstanding Awards under the Plan.

                                       21

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