Document:

<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM T-1
                                    --------

                            STATEMENT OF ELIGIBILITY
                     UNDER THE TRUST INDENTURE ACT OF 1939
                 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE

                CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
                   OF A TRUSTEE PURSUANT TO SECTION 305(B)(2)
                          ____________________________

                  Bank One Trust Company, National Association
              (EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)

A NATIONAL BANKING ASSOCIATION                31-0838515
                                              (I.R.S. EMPLOYER
                                              identification number)

100 East Broad Street, Columbus, Ohio         43271-0181
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)      (ZIP CODE)

                         BANK ONE TRUST COMPANY, N.A.
                       ONE NORTH STATE STREET, 9TH FLOOR
                            CHICAGO, ILLINOIS 60602
   ATTN: SANDRA L. CARUBA, VICE PRESIDENT AND SENIOR COUNSEL, (312) 336-9436
           (NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
                         _____________________________

                           STATE STREET CORPORATION
              (EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)

Massachusetts                                  04-2456637
(STATE OR OTHER JURISDICTION OF                (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION)                 IDENTIFICATION NUMBER)

225 FRANKLIN STREET                            02110
BOSTON, MASSACHUSETTS                          (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

                                DEBT SECURITIES
                        (Title of Indenture Securities)
<PAGE>

Item 1.   GENERAL INFORMATION.  FURNISH THE FOLLOWING
          information as to the trustee:

          (A) NAME AND ADDRESS OF EACH EXAMINING OR
          SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT.

          Comptroller of Currency, Washington, D.C.;
          Federal Deposit Insurance Corporation,
          Washington, D.C.; The Board of Governors of
          the Federal Reserve System, Washington D.C.

          (B) WHETHER IT IS AUTHORIZED TO EXERCISE
          CORPORATE TRUST POWERS.

          The trustee is authorized to exercise corporate
          trust powers.

ITEM 2.   AFFILIATIONS WITH THE OBLIGOR.  IF THE OBLIGOR
          is an affiliate of the trustee, describe each
          SUCH AFFILIATION.

          No such affiliation exists with the trustee.

ITEM 16.  LIST OF EXHIBITS.   LIST BELOW ALL EXHIBITS FILED AS A
          PART OF THIS STATEMENT OF ELIGIBILITY.

          1.  A copy of the articles of association of the
              trustee now in effect.*

          2.  A copy of the certificate of authority of the
              trustee to commence business.*

          3.  A copy of the authorization of the trustee to
              exercise corporate trust powers.*

          4.  A copy of the existing by-laws of the trustee.*

          5.  Not Applicable.

          6.  The consent of the trustee required by
              Section 321(b) of the Act.
<PAGE>

          7.  A copy of the latest report of condition of the
              trustee published pursuant to law or the
              requirements of its supervising or examining
              authority.

          8.  Not Applicable.

          9.  Not Applicable.

     Pursuant to the requirements of the Trust Indenture Act of 1939, as
     amended, the trustee, Bank One Trust Company, National Association, a
     national banking association organized and existing under the laws of the
     United States of America, has duly caused this Statement of Eligibility to
     be signed on its behalf by the undersigned, thereunto duly authorized, all
     in the City of Chicago and State of Illinois, on the 16th day of June,
     2000.

            BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION,
            Trustee

            BY /S/ SANDRA L. CARUBA
               Sandra L. Caruba
               VICE PRESIDENT

* Exhibits 1, 2, 3, and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 16 of the Form T-1 of Bank One Trust Company,
National Association, filed as Exhibit 25 to the Registration Statement on Form
S-4 of U S WEST Communications, Inc., filed with the Securities and Exchange
Commission on March 24, 2000 (Registration No. 333-32124).
<PAGE>

                                 EXHIBIT 6

                      THE CONSENT OF THE TRUSTEE REQUIRED
                         BY SECTION 321(b) OF THE ACT

                                         June 16, 2000

Securities and Exchange Commission
Washington, D.C.  20549

Ladies and Gentlemen:

In connection with the qualification of an indenture between State Street
Corporation and Bank One Trust Company, National Association, as Trustee, the
undersigned, in accordance with Section 321(b) of the Trust Indenture Act of
1939, as amended, hereby consents that the reports of examinations of the
undersigned, made by Federal or State authorities authorized to make such
examinations, may be furnished by such authorities to the Securities and
Exchange Commission upon its request therefor.

                    Very truly yours,

                    BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION

               By:  /s/ Sandra L. Caruba
                    Sandra L. Caruba
                    VICE PRESIDENT
<PAGE>

                                                           EXHIBIT 7
<TABLE>
<CAPTION>
<S>                     <C>                           <C>                  <C>               <C>
Legal Title of Bank:    Bank One Trust Company, N.A.  Call Date: 03/31/00  State #:  391581  FFIEC 032
Address:                100 Broad Street              Vendor ID:  D        Cert #:  21377    Page RC-1
City, State  Zip:       Columbus, OH 43271            Transit #:  04400003
</TABLE>
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for March 31, 2000

All schedules are to be reported in thousands of dollars.  Unless otherwise
indicated, report the amount
outstanding of the last business day of the quarter.

SCHEDULE RC--BALANCE SHEET

<TABLE>
<CAPTION>
                                                                                DOLLAR AMOUNTS IN THOUSANDS
                                                                                ---------------------------
                                                                                RCON  BIL MIL THOU   C300
                                                                                ----  ------------   ------
<S>                                                                             <C>        <C>       <C>
ASSETS
1.  Cash and balances due from depository institutions (from Schedule
    RC-A):                                                                      RCON
                                                                                ----
    a. Noninterest-bearing balances and currency and
       coin(1)...........................................                       0081        48,450    1.a
    b. Interest-bearing balances(2)......................                       0071        17,750    1.b
2.  Securities
    a. Held-to-maturity securities(from Schedule RC-B,
       column A).........................................                       1754             0    2.a
    b. Available-for-sale securities (from Schedule
       RC-B, column D)...................................                       1773         5,714    2.b
3.  Federal funds sold and securities purchased under agreements to
    resell                                                                      1350       396,644    3.
4.  Loans and lease financing receivables:
    a. Loans and leases, net of unearned income (from Schedule                  RCON
                                                                                ----
    RC-C)........................................................               2122        87,817    4.a
b.  LESS: Allowance for loan and lease losses....................               3123            10    4.b
c.  LESS: Allocated transfer risk reserve........................               3128             0    4.c
d.  Loans and leases, net of unearned income, allowance, and                    RCON
                                                                                ----
    reserve (item 4.a minus 4.b and 4.c).........................               2125        87,807    4.d
5.  Trading assets (from Schedule RD-D)                                         3545             0    5.
6.  Premises and fixed assets (including capitalized leases)                    2145        25,200    6.
7.  Other real estate owned (from Schedule RC-M).................               2150             0    7.
8.  Investments in unconsolidated subsidiaries and associated
    companies (from Schedule RC-M)                                              2130             0    8.
9.  Customers' liability to this bank on acceptances outstanding..              2155             0    9.
10. Intangible assets (from Schedule RC-M)........................              2143        26,345   10.
11. Other assets (from Schedule RC-F).............................              2160       176,297   11.
12. Total assets (sum of items 1 through 11)......................              2170       784,207   12.

(1)  Includes cash items in process of collection and unposted debits.
(2)  Includes time certificates of deposit not held for trading.
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
<S>                     <C>                           <C>                  <C>               <C>
Legal Title of Bank:    Bank One Trust Company, N.A.  Call Date: 03/31/00  State #:  391581  FFIEC 032
Address:                100 Broad Street              Vendor ID:  D        Cert #:  21377    Page RC-1
City, State  Zip:       Columbus, OH 43271            Transit #:  04400003

SCHEDULE RC-CONTINUED                                                         DOLLAR AMOUNTS IN THOUSANDS
<S>                                                                             <C>      <C>       <C>
LIABILITIES
13. Deposits:
    a. In domestic offices (sum of totals of columns A and C                     RCON
       from Schedule RC-E, part 1)                                               2200     567,764  13.a
       (1) Noninterest-bearing(1)..............................                  6631     506,455  13.a1
       (2) Interest-bearing....................................                  6636      61,309  13.a2

     b. In foreign offices, Edge and Agreement subsidiaries, and
     IBFs (from Schedule RC-E, part II)........................
       (1) Noninterest bearing.................................
       (2) Interest-bearing....................................
14.  Federal funds purchased and securities sold
     under agreements to repurchase:                                             RCFD 2800      0  14
15.  a. Demand notes issued to the U.S. Treasury...............                  RCON 2840      0  15.a
     b. Trading Liabilities(from Schedule RC-D)................                  RCFD 3548      0  15.b
16.  Other borrowed money:                                                       RCON
                                                                                 ----
     a. With original maturity of one year or less.............                  2332           0  16.a
     b. With original  maturity of more than one year..........                  A547           0  16.b
     c.  With original maturity of more than three years ......                  A548           0  16.c
17.  Not applicable
18.  Bank's liability on acceptance executed and
     outstanding...............................................                  2920           0  18.
19.  Subordinated notes and debentures.........................                  3200           0  19.
20.  Other liabilities (from Schedule RC-G)....................                  2930      83,885  20.
21.  Total liabilities (sum of items 13 through 20)............                  2948     651,649  21.
22.  Not applicable
EQUITY CAPITAL
23.  Perpetual preferred stock and related surplus.............                  3838           0  23.
24.  Common stock..............................................                  3230         800  24.
25.  Surplus (exclude all surplus related to
     preferred stock)..........................................                  3839      45,157  25.
26.  a. Undivided profits and capital reserves.................                  3632      86,585  26.a
     b. Net unrealized holding gains (losses) on available-for-sale
        securities.............................................                  8434          16  26.b
     c. Accumulated net gains (losses) on cash flow hedges ....                  4336           0  26.c
27.  Cumulative foreign currency translation
     adjustments...............................................
28.  Total equity capital (sum of items 23 through 27).........                  3210     132,558  28.
29.  Total liabilities, limited-life preferred
     stock, and equity capital (sum of items 21, 22, and 28)...                  3300     784,207  29.
</TABLE>
Memorandum
To be reported only with the March Report of Condition.

1.  Indicate in the box at the right the number of the statement below that best
    describes the  most comprehensive level of auditing work performed for the
    bank by independent external auditors as of any date during 1996
    ...............RCFD 6724..........  Number  M.1.

1 = Independent audit of the bank conducted in accordance with generally
    accepted auditing standards by a certified public accounting firm which
    submits a report on the bank

2 = Independent audit of the bank's parent holding company conducted in
    accordance with generally accepted auditing standards by a certified public
    accounting firm which submits a report on the consolidated holding company
    (but not on the bank separately)

3 = Directors' examination of the bank conducted in accordance with generally
    accepted auditing standards by a certified public accounting firm (may be
    required by state chartering authority)

4 = Directors' examination of the bank performed by other external auditors (may
       be required by state chartering

5 = Review of the bank's financial statements by external auditors

6 = Compilation of the bank's financial statements by external auditors
    authority) (1) Includes total demand deposits and noninterest-bearing time
    and savings deposits.

7 = Other audit procedures (excluding tax preparation work)

8 = No external audit work

(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.<PAGE>
                                                                    EXHIBIT 10.1

                                 BE FREE, INC.

                AMENDED AND RESTATED 1998 STOCK INCENTIVE PLAN
                ----------------------------------------------

1.   Purpose
     -------

The purpose of this Amended and Restated 1998 Stock Incentive Plan (the "Plan")
of Be Free, Inc., a Delaware corporation (the "Company"), is to advance the
interests of the Company's stockholders by enhancing the Company's ability to
attract, retain and motivate persons who make (or are expected to make)
important contributions to the Company by providing such persons with equity
ownership opportunities and performance-based incentives and thereby better
aligning the interests of such persons with those of the Company's stockholders.
Except where the context otherwise requires, the term "Company" shall include
any of the Company's present or future subsidiary corporations of as defined in
Section 424(f) of the Internal Revenue Code of 1986, as amended, and any
regulations promulgated thereunder (the "Code").

2.   Eligibility
     -----------

All of the Company's employees, officers, directors, consultants and advisors
(and any individuals who have accepted an offer for employment) are eligible to
be granted options, restricted stock awards, or other stock-based awards (each,
an "Award") under the Plan.  Each person who has been granted an Award under the
Plan shall be deemed a "Participant".

3.   Administration, Delegation
     --------------------------

     (a)  Administration by Board of Directors. The Plan will be administered by
          ------------------------------------
the Board of Directors of the Company (the "Board"). The Board shall have
authority to grant Awards and to adopt, amend and repeal such administrative
rules, guidelines and practices relating to the Plan as it shall deem advisable.
The Board may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Award in the manner and to the extent it shall
deem expedient to carry the Plan into effect and it shall be the sole and final
judge of such expediency. All decisions by the Board shall be made in the
Board's sole discretion and shall be final and binding on all persons having or
claiming any interest in the Plan or in any Award. No director or person acting
pursuant to the authority delegated by the Board shall be liable for any action
or determination relating to or under the Plan made in good faith.

     (b)  Delegation to Executive Officers. To the extent permitted by
          --------------------------------
applicable law, the Board may delegate to one or more executive officers of the
Company the power to make Awards and exercise such other powers under the Plan
as the Board may determine, provided that the Board shall fix the maximum number
of shares subject to Awards and the maximum number of shares for any one
Participant to be made by such executive officers.

     (c)  Appointment of Committees. To the extent permitted by applicable law,
          -------------------------
the Board may delegate any or all of its powers under the Plan to one or more
committees or subcommittees of the Board (a "Committee"). All references in the
Plan to the "Board" shall mean the Board or a Committee of the Board or the
executive officer referred to in Section 3(b)
<PAGE>

to the extent that the Board's powers or authority under the Plan have been
delegated to such Committee or executive officer.

4.   Stock Available for Awards
     --------------------------

     (a)  Number of Shares. Subject to adjustment under Section 8, Awards may be
          ----------------
made under the Plan for up to 10,109,500 shares of common stock, $.01 par value
per share, of the Company (the "Common Stock"), plus an annual increase to be
added on each June 1, commencing on June 1, 2000, equal to the lesser of: (i)
the number of shares of Common Stock necessary so that the shares available for
grant hereunder (and not subject to issuance under any vested or unvested option
outstanding and in effect on such June 1) equals 5% of the shares of Common
Stock of the Company outstanding on such June 1 and (ii) an amount determined by
the Board. Notwithstanding the foregoing, the maximum cumulative number of
shares available for grants of Incentive Stock Options (as hereinafter defined)
under the Plan is 50,000,000 shares, subject to adjustment under Section 8. If
any Award expires or is terminated, surrendered or canceled without having been
fully exercised or is forfeited in whole or in part or results in any Common
Stock not being issued, the unused Common Stock covered by such Award shall
again be available for the grant of Awards under the Plan, subject, however, in
the case of Incentive Stock Options (as hereinafter defined), to any limitation
required under the Code. Shares issued under the Plan may consist in whole or in
part of authorized but unissued shares or treasury shares.

     (b)  Per-Participant Limit. Subject to adjustment under Section 8, for
          ---------------------
Awards granted after the Common Stock is registered under the Securities
Exchange Act of 1934 (the "Exchange Act"), the maximum number of shares of
Common Stock with respect to which an Award may be granted to any Participant
under the Plan shall be 4,000,000 per calendar year. The per-Participant limit
described in this Section 4(b) shall be construed and applied consistently with
Section 162(m) of the Code.

5.   Stock Options
     -------------

     (a)  General. The Board may grant options to purchase Common Stock (each,
          -------
an "Option") and determine the number of shares of Common Stock to be covered by
each Option, the exercise price of each Option and the conditions and
limitations applicable to the exercise of each Option, including conditions
relating to applicable federal or state securities laws, as it considers
necessary or advisable. An Option which is not intended to be an Incentive Stock
Option (as hereinafter defined) shall be designated a "Nonstatutory Stock
Option".

     (b)  Incentive Stock Options. An Option that the Board intends to be an
          -----------------------
"incentive stock option" as defined in Section 422 of the Code (an "Incentive
Stock Option") shall only be granted to employees of the Company and shall be
subject to and shall be construed consistently with the requirements of Section
422 of the Code. The Company shall have no liability to a Participant, or any
other party, if an Option (or any part thereof) which is intended to be an
Incentive Stock Option is not an Incentive Stock Option.

     (c)  Exercise Price. The Board shall establish the exercise price at the
          --------------
time each Option is granted and specify it in the applicable option agreement.

                                      -2-
<PAGE>

     (d)  Duration of Options.  Each Option shall be exercisable at such
          -------------------
times and subject to such terms and conditions as the Board may specify in the
applicable option agreement.

     (e)  Exercise of Option. Options may be exercised by delivery to the
          ------------------
Company of a written notice of exercise signed by the proper person or by any
other form of notice (including electronic notice) approved by the Board
together with payment in full as specified in Section 5(f) for the number of
shares for which the Option is exercised.

     (f)  Payment Upon Exercise. Common Stock purchased upon the exercise of an
          ----------------------
Option granted under the Plan shall be paid for as follows:

          (1)  in cash or by check, payable to the order of the Company;

          (2)  except as the Board may, in its sole discretion, otherwise
provide in an option agreement, by (i) delivery of an irrevocable and
unconditional undertaking by a creditworthy broker to deliver promptly to the
Company sufficient funds to pay the exercise price or (ii) delivery by the
Participant to the Company of a copy of irrevocable and unconditional
instructions to a creditworthy broker to deliver promptly to the Company cash or
a check sufficient to pay the exercise price;

          (3)  when the Common Stock is registered under the Exchange Act, by
delivery of shares of Common Stock owned by the Participant valued at their fair
market value as determined by (or in a manner approved by) the Board in good
faith ("Fair Market Value"), which Common Stock was owned by the Participant at
least six months prior to such delivery;

          (4)  to the extent permitted by the Board, in its sole discretion by
(i) delivery of a promissory note of the Participant to the Company on terms
determined by the Board, or (ii) payment of such other lawful consideration as
the Board may determine; or

          (5)  by any combination of the above permitted forms of payment.

6.   Restricted Stock
     ----------------

     (a)  Grants. The Board may grant Awards entitling recipients to acquire
          ------
shares of Common Stock, subject to the right of the Company to repurchase all or
part of such shares at their issue price or other stated or formula price (or to
require forfeiture of such shares if issued at no cost) from the recipient in
the event that conditions specified by the Board in the applicable Award are not
satisfied prior to the end of the applicable restriction period or periods
established by the Board for such Award (each, a "Restricted Stock Award").

     (b)  Terms and Conditions. The Board shall determine the terms and
          --------------------
conditions of any such Restricted Stock Award, including the conditions for
repurchase (or forfeiture) and the issue price, if any. Any stock certificates
issued in respect of a Restricted Stock Award shall be registered in the name of
the Participant and, unless otherwise determined by the Board, deposited by the
Participant, together with a stock power endorsed in blank, with the Company (or
its designee). At the expiration of the applicable restriction periods, the
Company (or such designee) shall deliver the certificates no longer subject to
such restrictions to the Participant or

                                      -3-
<PAGE>

if the Participant has died, to the beneficiary designated, in a manner
determined by the Board, by a Participant to receive amounts due or exercise
rights of the Participant in the event of the Participant's death (the
"Designated Beneficiary"). In the absence of an effective designation by a
Participant, Designated Beneficiary shall mean the Participant's estate.

7.   Other Stock-Based Awards
     ------------------------

The Board shall have the right to grant other Awards based upon the Common Stock
having such terms and conditions as the Board may determine, including the grant
of shares based upon certain conditions, the grant of securities convertible
into Common Stock and the grant of stock appreciation rights.

8.   Adjustments for Changes in Common Stock and Certain Other Events
     ----------------------------------------------------------------

     (a)  Changes in Capitalization. In the event of any stock split, reverse
          -------------------------
stock split, stock dividend, recapitalization, combination of shares,
reclassification of shares, spin-off or other similar change in capitalization
or event, or any distribution to holders of Common Stock other than a normal
cash dividend, (i) the number and class of securities available under this Plan,
(ii) the per-Participant limit set forth in Section 4(b), (iii) the number and
class of securities and exercise price per share subject to each outstanding
Option, (iv) the repurchase price per share subject to each outstanding
Restricted Stock Award, and (v) the terms of each other outstanding Award shall
be appropriately adjusted by the Company (or substituted Awards may be made, if
applicable) to the extent the Board shall determine, in good faith, that such an
adjustment (or substitution) is necessary and appropriate. If this Section 8(a)
applies and Section 8(c) also applies to any event, Section 8(c) shall be
applicable to such event, and this Section 8(a) shall not be applicable.

     (b)  Liquidation or Dissolution. In the event of a proposed liquidation or
          --------------------------
dissolution of the Company, the Board shall upon written notice to the
Participants provide that all then unexercised Options will (i) become
exercisable in full as of a specified time at least 10 business days prior to
the effective date of such liquidation or dissolution and (ii) terminate
effective upon such liquidation or dissolution, except to the extent exercised
before such effective date. The Board may specify the effect of a liquidation or
dissolution on any Restricted Stock Award or other Award granted under the Plan
at the time of the grant of such Award.

     (c)  Acquisition and Change in Control Events
          ----------------------------------------

          (1)  Definitions
               -----------

               (a)  An "Acquisition Event" shall mean:

                    (i)  any merger or consolidation of the Company with or into
                         another entity as a result of which the Common Stock is
                         converted into or exchanged for the right to receive
                         cash, securities or other property; or

                                      -4-
<PAGE>

                    (ii) any exchange of shares of the Company for cash,
                         securities or other property pursuant to a statutory
                         share exchange transaction.

               (b)  A "Change in Control Event" shall mean:

                    (i)  the acquisition by an individual, entity or group
                         (within the meaning of Section 13(d)(3) or 14(d)(2) of
                         the Securities Exchange Act of 1934, as amended (the
                         "Exchange Act")) (a "Person") of beneficial ownership
                         of any capital stock of the Company if, after such
                         acquisition, such Person beneficially owns (within the
                         meaning of Rule 13d-3 promulgated under the Exchange
                         Act) 50% or more of either (x) the then-outstanding
                         shares of common stock of the Company (the "Outstanding
                         Company Common Stock") or (y) the combined voting power
                         of the then-outstanding securities of the Company
                         entitled to vote generally in the election of directors
                         (the "Outstanding Company Voting Securities");
                         provided, however, that for purposes of this subsection
                         --------  -------
                         (i), the following acquisitions shall not constitute a
                         Change in Control Event: (A) any acquisition directly
                         from the Company (excluding an acquisition pursuant to
                         the exercise, conversion or exchange of any security
                         exercisable for, convertible into or exchangeable for
                         common stock or voting securities of the Company,
                         unless the Person exercising, converting or exchanging
                         such security acquired such security directly from the
                         Company or an underwriter or agent of the Company), (B)
                         any acquisition by any employee benefit plan (or
                         related trust) sponsored or maintained by the Company
                         or any corporation controlled by the Company, or (C)
                         any acquisition by any corporation pursuant to a
                         Business Combination (as defined below) which complies
                         with clauses (x) and (y) of subsection (iii) of this
                         definition; or

                    (ii) such time as the Continuing Directors (as defined
                         below) do not constitute a majority of the Board (or,
                         if applicable, the Board of Directors of a successor
                         corporation to the Company), where the term "Continuing
                         Director" means at any date a member of the Board (x)
                         who was a member of the Board on the date of the
                         initial adoption of this Plan by the Board or (y) who
                         was nominated or elected subsequent to such date by at
                         least a majority of the directors who were Continuing
                         Directors at the time of such nomination or election or
                         whose election to the Board was recommended or endorsed
                         by at least a majority of the directors who were

                                      -5-
<PAGE>

                          Continuing Directors at the time of such nomination or
                          election; provided, however, that there shall be
                                    --------  -------
                          excluded from this clause (y) any individual whose
                          initial assumption of office occurred as a result of
                          an actual or threatened election contest with respect
                          to the election or removal of directors or other
                          actual or threatened solicitation of proxies or
                          consents, by or on behalf of a person other than the
                          Board; or

                    (iii) the consummation of a merger, consolidation,
                          reorganization, recapitalization or statutory share
                          exchange involving the Company or a sale or other
                          disposition of all or substantially all of the assets
                          of the Company (a "Business Combination"), unless,
                          immediately following such Business Combination, each
                          of the following two conditions is satisfied: (x) all
                          or substantially all of the individuals and entities
                          who were the beneficial owners of the Outstanding
                          Company Common Stock and Outstanding Company Voting
                          Securities immediately prior to such Business
                          Combination beneficially own, directly or indirectly,
                          more than 50% of the then-outstanding shares of common
                          stock and the combined voting power of the then-
                          outstanding securities entitled to vote generally in
                          the election of directors, respectively, of the
                          resulting or acquiring corporation in such Business
                          Combination (which shall include, without limitation,
                          a corporation which as a result of such transaction
                          owns the Company or substantially all of the Company's
                          assets either directly or through one or more
                          subsidiaries) (such resulting or acquiring corporation
                          is referred to herein as the "Acquiring Corporation")
                          in substantially the same proportions as their
                          ownership of the Outstanding Company Common Stock and
                          Outstanding Company Voting Securities, respectively,
                          immediately prior to such Business Combination and (y)
                          no Person (excluding the Acquiring Corporation or any
                          employee benefit plan (or related trust) maintained or
                          sponsored by the Company or by the Acquiring
                          Corporation) beneficially owns, directly or
                          indirectly, 50% or more of the then-outstanding shares
                          of common stock of the Acquiring Corporation, or of
                          the combined voting power of the then-outstanding
                          securities of such corporation entitled to vote
                          generally in the election of directors (except to the
                          extent that such ownership existed prior to the
                          Business Combination).

          (2)  Effect on Options, Restricted Stock Awards and Other Awards
               -----------------------------------------------------------

                                      -6-
<PAGE>

               (a)  Upon the occurrence of an Acquisition Event (regardless of
                    whether such event also constitutes a Change in Control
                    Event), or the execution by the Company of any agreement
                    with respect to an Acquisition Event (regardless of whether
                    such event will result in a Change in Control Event), the
                    Board shall provide that all outstanding Options shall be
                    assumed, or equivalent options shall be substituted, by the
                    acquiring or succeeding corporation (or an affiliate
                    thereof); provided that if such Acquisition Event also
                              -------- ----
                    constitutes a Change in Control Event, the ability to
                    exercise each Option shall be as provided in the instrument
                    evidencing any Option or any other agreement between a
                    Participant and the Company.  For purposes hereof, an Option
                    shall be considered to be assumed if, following consummation
                    of the Acquisition Event, the Option confers the right to
                    purchase, for each share of Common Stock subject to the
                    Option immediately prior to the consummation of the
                    Acquisition Event, the consideration (whether cash,
                    securities or other property) received as a result of the
                    Acquisition Event by holders of Common Stock for each share
                    of Common Stock held immediately prior to the consummation
                    of the Acquisition Event (and if holders were offered a
                    choice of consideration, the type of consideration chosen by
                    the holders of a majority of the outstanding shares of
                    Common Stock); provided, however, that if the consideration
                    received as a result of the Acquisition Event is not solely
                    common stock of the acquiring or succeeding corporation (or
                    an affiliate thereof), the Company may, with the consent of
                    the acquiring or succeeding corporation, provide for the
                    consideration to be received upon the exercise of Options to
                    consist solely of common stock of the acquiring or
                    succeeding corporation (or an affiliate thereof) equivalent
                    in fair market value to the per share consideration received
                    by holders of outstanding shares of Common Stock as a result
                    of the Acquisition Event.

                         Notwithstanding the foregoing, if the acquiring or
                    succeeding corporation (or an affiliate thereof) does not
                    agree to assume, or substitute for, such Options, then the
                    Board shall, upon written notice to the Participants,
                    provide that all then unexercised Options will become
                    exercisable in full as of a specified time prior to the
                    Acquisition Event and will terminate immediately prior to
                    the consummation of such Acquisition Event, except to the
                    extent exercised by the Participants before the consummation
                    of such Acquisition Event; provided, however, that in the
                    event of an Acquisition Event under the terms of which
                    holders of Common Stock will receive upon consummation
                    thereof a cash payment for each share of Common Stock
                    surrendered pursuant to such Acquisition Event (the
                    "Acquisition Price"), then the Board may instead provide
                    that all outstanding Options shall terminate upon

                                      -7-
<PAGE>

                    consummation of such Acquisition Event and that each
                    Participant shall receive, in exchange therefor, a cash
                    payment equal to the amount (if any) by which (A) the
                    Acquisition Price multiplied by the number of shares of
                    Common Stock subject to such outstanding Options (whether or
                    not then exercisable), exceeds (B) the aggregate exercise
                    price of such Options.

               (b)  Upon the occurrence of an Acquisition Event, subject to the
                    effect of a Change in Control Event as set forth in the
                    following paragraph, the repurchase and other rights of the
                    Company under each outstanding Restricted Stock Award shall
                    inure to the benefit of the Company's successor and shall
                    apply to the cash, securities or other property which the
                    Common Stock was converted into or exchanged for pursuant to
                    such Acquisition Event in the same manner and to the same
                    extent as they applied to the Common Stock subject to such
                    Restricted Stock Award.

                    Upon the occurrence of a Change in Control Event (regardless
                    of whether such event also constitutes an Acquisition
                    Event), the vesting schedule of each Restricted Stock Award
                    shall be adjusted as provided in the instrument evidencing
                    any Restricted Stock Award.

               (c)  The Board shall specify the effect of an Acquisition Event
                    and any Change in Control Event on any other Award granted
                    under the Plan at the time of the grant of such Award.

9.   General Provisions Applicable to Awards
     ---------------------------------------

     (a)  Transferability of Awards. Except as the Board may otherwise determine
          -------------------------
or provide in an Award, Awards shall not be sold, assigned, transferred, pledged
or otherwise encumbered by the person to whom they are granted, either
voluntarily or by operation of law, except by will or the laws of descent and
distribution, and, during the life of the Participant, shall be exercisable only
by the Participant. References to a Participant, to the extent relevant in the
context, shall include references to authorized transferees.

     (b)  Documentation. Each Award shall be evidenced by a written instrument
          -------------
in such form as the Board shall determine. Each Award may contain terms and
conditions in addition to those set forth in the Plan.

     (c)  Board Discretion. Except as otherwise provided by the Plan, each Award
          ----------------
may be made alone or in addition or in relation to any other Award. The terms of
each Award need not be identical, and the Board need not treat Participants
uniformly.

     (d)  Termination of Status. The Board shall determine the effect on an
          ---------------------
Award of the disability, death, retirement, authorized leave of absence or other
change in the employment or other status of a Participant and the extent to
which, and the period during which, the Participant,

                                      -8-
<PAGE>

the Participant's legal representative, conservator, guardian or Designated
Beneficiary may exercise rights under the Award.

     (e)  Withholding. Each Participant shall pay to the Company, or make
          -----------
provision satisfactory to the Board for payment of, any taxes required by law to
be withheld in connection with Awards to such Participant no later than the date
of the event creating the tax liability. Except as the Board may otherwise
provide in an Award, when the Common Stock is registered under the Exchange Act,
Participants may satisfy such tax obligations in whole or in part by delivery of
shares of Common Stock, including shares retained from the Award creating the
tax obligation, valued at their Fair Market Value. The Company may, to the
extent permitted by law, deduct any such tax obligations from any payment of any
kind otherwise due to a Participant.

     (f)  Amendment of Award.  The Board may amend, modify or terminate any
          ------------------
outstanding Award, including but not limited to, substituting therefor another
Award of the same or a different type, changing the date of exercise or
realization, and converting an Incentive Stock Option to a Nonstatutory Stock
Option, provided that the Participant's consent to such action shall be required
unless the Board determines that the action, taking into account any related
action, would not materially and adversely affect the Participant.

     (g)  Conditions on Delivery of Stock. The Company will not be obligated to
          -------------------------------
deliver any shares of Common Stock pursuant to the Plan or to remove
restrictions from shares previously delivered under the Plan until (i) all
conditions of the Award have been met or removed to the satisfaction of the
Company, (ii) in the opinion of the Company's counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied,
including any applicable securities laws and any applicable stock exchange or
stock market rules and regulations, and (iii) the Participant has executed and
delivered to the Company such representations or agreements as the Company may
consider appropriate to satisfy the requirements of any applicable laws, rules
or regulations.

     (h)  Acceleration. The Board may at any time provide that any Options shall
          ------------
become immediately exercisable in full or in part, that any Restricted Stock
Awards shall be free of restrictions in full or in part or that any other Awards
may become exercisable in full or in part or free of some or all restrictions or
conditions, or otherwise realizable in full or in part, as the case may be.

10.  Miscellaneous
     -------------

     (a)  No Right To Employment or Other Status. No person shall have any claim
          --------------------------------------
or right to be granted an Award, and the grant of an Award shall not be
construed as giving a Participant the right to continued employment or any other
relationship with the Company. The Company expressly reserves the right at any
time to dismiss or otherwise terminate its relationship with a Participant free
from any liability or claim under the Plan, except as expressly provided in the
applicable Award.

     (b)  No Rights As Stockholder. Subject to the provisions of the applicable
          ------------------------
Award, no Participant or Designated Beneficiary shall have any rights as a
stockholder with respect to any

                                      -9-
<PAGE>

shares of Common Stock to be distributed with respect to an Award until becoming
the record holder of such shares. Notwithstanding the foregoing, in the event
the Company effects a split of the Common Stock by means of a stock dividend and
the exercise price of and the number of shares subject to such Option are
adjusted as of the date of the distribution of the dividend (rather than as of
the record date for such dividend), then an optionee who exercises an Option
between the record date and the distribution date for such stock dividend shall
be entitled to receive, on the distribution date, the stock dividend with
respect to the shares of Common Stock acquired upon such Option exercise,
notwithstanding the fact that such shares were not outstanding as of the close
of business on the record date for such stock dividend.

     (c)  Effective Date and Term of Plan. The Plan shall become effective on
          -------------------------------
the date on which it is adopted by the Board. No Awards shall be granted under
the Plan after the completion of ten years from the earlier of (i) the date on
which the Plan was adopted by the Board or (ii) the date the Plan was approved
by the Company's stockholders, but Awards previously granted may extend beyond
that date.

     (d)  Amendment of Plan. The Board may amend, suspend or terminate the Plan
          -----------------
or any portion thereof at any time.

     (e)  Governing Law. The provisions of the Plan and all Awards made
          -------------
hereunder shall be governed by and interpreted in accordance with the laws of
the State of Delaware, without regard to any applicable conflicts of law.

                                      -10-

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