Document:

<PAGE>

Exhibit 10.5

                               Amendment Number 2

         WHEREAS, Hanover Direct, Inc. (the "Company") maintains the Hanover
Direct, Inc. Key Executive Twelve Month Compensation Continuation Plan (the
"Plan"); and

         WHEREAS, pursuant to Section 9 of the Plan, the Company's Board of
Directors (the "Board") has the right at any time to amend the Plan (except
under certain circumstances set forth in said Section 9 which are not applicable
in the instant case); and

         WHEREAS, the Board now desires to amend the Plan to reflect the
reorganization of the Company's subsidiaries which occurred on December 28,
2002;

         NOW, THEREFORE, the Plan is hereby amended, effective as of December
28, 2002, as follows:

         FIRST: The Plan is hereby amended by deleting Appendix A thereto in its
entirety and by substituting the following therefore:

                                   "APPENDIX A

<TABLE>
<CAPTION>
LEGAL ENTITY                               FEDERAL IDENTIFICATION NUMBER
------------                               -----------------------------
<S>                                        <C>
American Down & Textile, LLC               01-0757279
Brawn of California, Inc.                  95-2908436
Clearance World Outlets, LLC               22-3700615
D.M. Advertising, LLC                      22-3760990
Domestications, LLC                        54-1893520
Gump's By Mail, Inc.                       94-3222698
Gump's Corp.                               22-3236243
Hanover Company Store, LLC                 22-3579201
Hanover Gifts, Inc.                        22-3776438
Hanover Home Fashions Group, LLC           54-1893519
Hanover Realty, Inc.                       22-3248825
Keystone Internet Services, LLC            01-0757274
</TABLE>
<PAGE>
<TABLE>
<S>                                        <C>
La Crosse Fulfillment, LLC                 22-3700603
Scandia Down, LLC                          22-3652293
Silhouettes, LLC                           22-3579197
The Company Office, Inc.                   39-1766577
The Company Store Factory, Inc.            39-1766578
The Company Store Group, LLC               01-0757269
The Horn & Hardart Company, Inc.           13-2770055"
</TABLE>

         FOURTH: Except to the extent hereinabove set forth, the Plan shall
remain in full force and effect without change or modification.

         IN WITNESS WHEREOF, and as evidence of the adoption of the foregoing,
the Company has caused this Amendment Number 2 to be executed by a duly
authorized officer this 4th day of November, 2003.

                                  HANOVER DIRECT, INC.

                                  By: /s/ Brian C. Harriss
                                      ----------------------

                                  Name: Brian C. Harriss

                                  Title: EVP HR & Legal

                                       2<PAGE>

Exhibit 10.6

                               Amendment Number 2

         WHEREAS, Hanover Direct, Inc. (the "Company") maintains the Hanover
Direct, Inc. Key Executive Six Month Compensation Continuation Plan (the
"Plan"); and

         WHEREAS, pursuant to Section 9 of the Plan, the Company's Board of
Directors (the "Board") has the right at any time to amend the Plan (except
under certain circumstances set forth in said Section 9 which are not applicable
in the instant case); and

         WHEREAS, the Board now desires to amend the Plan to reflect the
reorganization of the Company's subsidiaries which occurred on December 28,
2002;

         NOW, THEREFORE, the Plan is hereby amended, effective as of December
28, 2002, as follows:

         FIRST: The Plan is hereby amended by deleting Appendix A thereto in its
entirety and by substituting the following therefore:

                                   "APPENDIX A

<TABLE>
<CAPTION>
LEGAL ENTITY                           FEDERAL IDENTIFICATION NUMBER
------------                           -----------------------------
<S>                                    <C>
American Down & Textile, LLC           01-0757279
Brawn of California, Inc.              95-2908436
Clearance World Outlets, LLC           22-3700615
D.M. Advertising, LLC                  22-3760990
Domestications, LLC                    54-1893520
Gump's By Mail, Inc.                   94-3222698
Gump's Corp.                           22-3236243
Hanover Company Store, LLC             22-3579201
Hanover Gifts, Inc.                    22-3776438
Hanover Home Fashions Group, LLC       54-1893519
Hanover Realty, Inc.                   22-3248825
Keystone Internet Services, LLC        01-0757274
La Crosse Fulfillment, LLC             22-3700603
</TABLE>
<PAGE>
<TABLE>
<S>                                    <C>
Scandia Down, LLC                      22-3652293
Silhouettes, LLC                       22-3579197
The Company Office, Inc.               39-1766577
The Company Store Factory, Inc.        39-1766578
The Company Store Group, LLC           01-0757269
The Horn & Hardart Company, Inc.       13-2770055"
</TABLE>

         SECOND: Except to the extent hereinabove set forth, the Plan shall
remain in full force and effect without change or modification.

         IN WITNESS WHEREOF, and as evidence of the adoption of the foregoing,
the Company has caused this Amendment Number 2 to be executed by a duly
authorized officer this 4th day of November, 2003.

                              HANOVER DIRECT, INC.

                              By: /s/ Brian C. Harriss
                                  ----------------------

                              Name: Brian C. Harriss

                              Title: EVP HR & Legal

                                       2<PAGE>
                                                                   EXHIBIT 10.59

                          ESPERION THERAPEUTICS, INC.

                         2000 Equity Compensation Plan
              (Amended and Restated, Effective September 23, 2003)

         The purpose of the Esperion Therapeutics, Inc. 2000 Equity Compensation
Plan (the Plan"), as amended and restated, effective September 23, 2003, is to
provide (i) designated employees of Esperion Therapeutics, Inc. (the "Company")
and its subsidiaries, (ii) certain consultants and advisors who perform services
for the Company or its subsidiaries and (iii) non-employee members of the Board
of Directors of the Company (the "Board") with the opportunity to receive grants
of incentive stock options, nonqualified stock options, stock awards and
performance units. The Company believes that the Plan will encourage the
participants to contribute materially to the growth of the Company, thereby
benefiting the Company's stockholders, and will align the economic interests of
the participants with those of the stockholders.

1.       ADMINISTRATION

(a) Committee. The Plan shall be administered by a committee appointed by the
Board (the "Committee") consisting of two or more persons who are "outside
directors" as defined under section 162(m) of the Internal Revenue Code of 1986,
as amended (the "Code"), and related Treasury regulations and "non-employee
directors" as defined under Rule 16b-3 under the Securities Exchange Act of
1934, as amended (the "Exchange Act"). However, the Board may ratify or approve
any grants as it deems appropriate, and the Board shall approve and administer
all grants made to non-employee directors. The Committee may delegate authority
to one or more subcommittees as it deems appropriate, which must consist of two
or more persons who are both "outside directors" as defined under section 162(m)
of the Code and "non-employee directors" as defined under Rule 16b-3 under the
Exchange Act. To the extent that a subcommittee administers the Plan, references
in the Plan to the "Committee" shall be deemed to refer to the subcommittee.

(b) Committee Authority. The Committee shall have the sole authority to (i)
determine the individuals to whom grants shall be made under the Plan, (ii)
determine the type, size and terms of the grants to be made to each such
individual, (iii) determine the time when the grants will be made and the
duration of any applicable exercise or restriction period, including the
criteria for exercisability and the acceleration of exercisability, (iv) amend
the terms of any previously issued grant, and (v) deal with any other matters
arising under the Plan.

(c) Committee Determinations. The Committee shall have full power and authority
to administer and interpret the Plan, to make factual determinations and to
adopt or amend such rules, regulations, agreements and instruments for
implementing the Plan and for the conduct of its business as it deems necessary
or advisable, in its sole discretion. The Committee's interpretations of the
Plan and all determinations made by the Committee pursuant to the powers vested
in it hereunder shall be conclusive and binding on all persons having any
interest in the Plan or in any awards granted hereunder. All powers of the
Committee shall be executed in its sole discretion, in the best interest of the
Company, not as a fiduciary, and in keeping with the objectives of the Plan and
need not be uniform as to similarly situated individuals.

(d) Delegation of Authority. Notwithstanding the foregoing, the Committee may
delegate to either, or both, of the Chief Executive Officer and the Chief
Financial Officer of the Company the authority to make grants under the Plan to
employees, consultants and advisors of the Company and its subsidiaries who are,
at the time of grant, not subject to the restrictions of section 16(b) of the
Exchange Act and not expected to be subject to the limitations of section 162(m)
of the Code. The grant of authority under this Subsection 1(d) shall be subject
to such conditions and limitations as may be determined by the Committee.

                                       1
<PAGE>

2.       GRANTS

         Awards under the Plan may consist of grants of incentive stock options
as described in Section 5 ("Incentive Stock Options"), nonqualified stock
options as described in Section 5 ("Nonqualified Stock Options") (Incentive
Stock Options and Nonqualified Stock Options are collectively referred to as
"Options"), stock awards as described in Section 6 ("Stock Awards"), and
performance units as described in Section 7 ("Performance Units") (hereinafter
collectively referred to as "Grants"). All Grants shall be subject to the terms
and conditions set forth herein and to such other terms and conditions
consistent with this Plan as the Committee deems appropriate and as are
specified in writing by the Committee to the individual in a grant instrument or
an amendment to the grant instrument (the "Grant Instrument"). The Committee
shall approve the form and provisions of each Grant Instrument. Grants under a
particular Section of the Plan need not be uniform as among the grantees.

3.       SHARES SUBJECT TO THE PLAN

(a) Shares Authorized. Subject to adjustment as described below, the aggregate
number of shares of common stock of the Company ("Company Stock") that may be
issued or transferred under the Plan is 4,469,000 shares; provided, however,
that from April 18, 2002 until May 30, 2003, the aggregate number of shares that
could be issued or transferred under the Plan was 3,069,000; and provided
further, that prior to April 18, 2002, the aggregate number of shares that could
be issued or transferred under the Plan was 1,869,000 shares. The maximum
aggregate number of shares of Company Stock that shall be subject to Grants made
under the Plan to any individual during any calendar year shall be 500,000
shares, subject to adjustment as described below. The shares may be authorized
but unissued shares of Company Stock or reacquired shares of Company Stock,
including shares purchased by the Company on the open market for purposes of the
Plan. If and to the extent Options granted under the Plan terminate, expire, or
are canceled, forfeited, exchanged or surrendered without having been exercised
or if any Stock Awards or Performance Units are forfeited, the shares subject to
such Grants shall again be available for purposes of the Plan.

(b) Adjustments. If there is any change in the number or kind of shares of
Company Stock outstanding (i) by reason of a stock dividend, spinoff,
recapitalization, stock split, or combination or exchange of shares, (ii) by
reason of a merger, reorganization or consolidation in which the Company is the
surviving corporation, (iii) by reason of a reclassification or change in par
value, or (iv) by reason of any other extraordinary or unusual event affecting
the outstanding Company Stock as a class without the Company's receipt of
consideration, or if the value of

                                       2
<PAGE>

outstanding shares of Company Stock is substantially reduced as a result of a
spinoff or the Company's payment of an extraordinary dividend or distribution,
the maximum number of shares of Company Stock available for Grants, the maximum
number of shares of Company Stock that any individual participating in the Plan
may be granted in any year, the number of shares covered by outstanding Grants,
the kind of shares issued under the Plan, and the price per share or the
applicable market value of such Grants may be appropriately adjusted by the
Committee to reflect any increase or decrease in the number of, or change in the
kind or value of, issued shares of Company Stock to preclude, to the extent
practicable, the enlargement or dilution of rights and benefits under such
Grants; provided, however, that any fractional shares resulting from such
adjustment shall be eliminated. Any adjustments determined by the Committee
shall be final, binding and conclusive.

4.       ELIGIBILITY FOR PARTICIPATION

(a) Eligible Persons. All employees of the Company and its subsidiaries
("Employees"), including Employees who are officers or members of the Board, and
members of the Board who are not Employees ("Non-Employee Directors") shall be
eligible to participate in the Plan. Consultants and advisors who perform
services for the Company or any of its subsidiaries ("Key Advisors") shall be
eligible to participate in the Plan if the Key Advisors render bona fide
services to the Company or its subsidiaries, the services are not in connection
with the offer and sale of securities in a capital-raising transaction and the
Key Advisors do not directly or indirectly promote or maintain a market for the
Company's securities.

(b) Selection of Grantees. The Committee shall select the Employees,
Non-Employee Directors and Key Advisors to receive Grants and shall determine
the number of shares of Company Stock subject to a particular Grant in such
manner as the Committee determines. Employees, Key Advisors and Non-Employee
Directors who receive Grants under this Plan shall hereinafter be referred to as
"Grantees".

5.       GRANTING OF OPTIONS

(a) Number of Shares. The Committee shall determine the number of shares of
Company Stock that will be subject to each Grant of Options to Employees,
Non-Employee Directors and Key Advisors.

(b) Type of Option and Price.

(i) The Committee may grant Incentive Stock Options that are intended to qualify
as "incentive stock options" within the meaning of section 422 of the Code or
Nonqualified Stock Options that are not intended so to qualify or any
combination of Incentive Stock Options and Nonqualified Stock Options, all in
accordance with the terms and conditions set forth herein. Incentive Stock
Options may be granted only to Employees. Nonqualified Stock Options may be
granted to Employees, Non-Employee Directors and Key Advisors.

(ii) The purchase price (the "Exercise Price") of Company Stock subject to an
Option shall be determined by the Committee and may be equal to or greater than
the Fair Market Value (as

                                       3
<PAGE>

defined below) of a share of Company Stock on the date the Option is granted;
provided, however, that an Incentive Stock Option may not be granted to an
Employee who, at the time of grant, owns stock possessing more than 10 percent
of the total combined voting power of all classes of stock of the Company or any
parent or subsidiary of the Company, unless the Exercise Price per share is not
less than 110% of the Fair Market Value of Company Stock on the date of grant.

(iii) If the Company Stock is publicly traded, then the Fair Market Value per
share shall be determined as follows: (x) if the principal trading market for
the Company Stock is a national securities exchange or the Nasdaq National
Market, the last reported sale price thereof on the relevant date or (if there
were no trades on that date) the latest preceding date upon which a sale was
reported, or (y) if the Company Stock is not principally traded on such exchange
or market, the mean between the last reported "bid" and "asked" prices of
Company Stock on the relevant date, as reported on Nasdaq or, if not so
reported, as reported by the National Daily Quotation Bureau, Inc. or as
reported in a customary financial reporting service, as applicable and as the
Committee determines. If the Company Stock is not publicly traded or, if
publicly traded, is not subject to reported transactions or "bid" or "asked"
quotations as set forth above, the Fair Market Value per share shall be as
determined by the Committee.

(c) Option Term. The Committee shall determine the term of each Option. The term
of any Option shall not exceed ten years from the date of grant. However, an
Incentive Stock Option that is granted to an Employee who, at the time of grant,
owns stock possessing more than 10 percent of the total combined voting power of
all classes of stock of the Company, or any parent or subsidiary of the Company,
may not have a term that exceeds five years from the date of grant.

(d) Exercisability of Options. Options shall become exercisable in accordance
with such terms and conditions, consistent with the Plan, as may be determined
by the Committee and specified in the Grant Instrument. The Committee may
accelerate the exercisability of any or all outstanding Options at any time for
any reason.

(e) Termination of Employment, Disability or Death.

(i) Except as provided below, an Option may only be exercised while the Grantee
is employed by, or providing service to, the Company as an Employee, Key Advisor
or member of the Board. In the event that a Grantee ceases to be employed by, or
provide service to, the Company for any reason other than Disability, death, or
termination for Cause (as defined below), any Option which is otherwise
exercisable by the Grantee shall terminate unless exercised within 90 days after
the date on which the Grantee ceases to be employed by, or provide service to,
the Company (or within such other period of time as may be specified by the
Committee), but in any event no later than the date of expiration of the Option
term. Except as otherwise provided by the Committee, any of the Grantee's
Options that are not otherwise exercisable as of the date on which the Grantee
ceases to be employed by, or provide service to, the Company shall terminate as
of such date.

                                       4
<PAGE>

(ii) In the event the Grantee ceases to be employed by, or provide service to,
the Company on account of a termination for Cause by the Company, any Option
held by the Grantee shall terminate as of the date the Grantee ceases to be
employed by, or provide service to, the Company. In addition, notwithstanding
any other provisions of this Section 5, if the Committee determines that the
Grantee has engaged in conduct that constitutes Cause at any time while the
Grantee is employed by, or providing service to, the Company or after the
Grantee's termination of employment or service, any Option held by the Grantee
shall immediately terminate and the Grantee shall automatically forfeit all
shares underlying any exercised portion of an Option for which the Company has
not yet delivered the share certificates, upon refund by the Company of the
Exercise Price paid by the Grantee for such shares. Upon any exercise of an
Option, the Company may withhold delivery of share certificates pending
resolution of an inquiry that could lead to a finding resulting in a forfeiture.

(iii) In the event the Grantee ceases to be employed by, or provide service to,
the Company because the Grantee is Disabled, any Option which is otherwise
exercisable by the Grantee shall terminate unless exercised within one year
after the date on which the Grantee ceases to be employed by, or provide service
to, the Company (or within such other period of time as may be specified by the
Committee), but in any event no later than the date of expiration of the Option
term. Except as otherwise provided by the Committee, any of the Grantee's
Options which are not otherwise exercisable as of the date on which the Grantee
ceases to be employed by, or provide service to, the Company shall terminate as
of such date.

(iv) If the Grantee dies while employed by, or providing service to, the Company
or within 90 days after the date on which the Grantee ceases to be employed or
provide service on account of a termination specified in Section 5(e)(i) above
(or within such other period of time as may be specified by the Committee), any
Option that is otherwise exercisable by the Grantee shall terminate unless
exercised within one year after the date on which the Grantee ceases to be
employed by, or provide service to, the Company (or within such other period of
time as may be specified by the Committee), but in any event no later than the
date of expiration of the Option term. Except as otherwise provided by the
Committee, any of the Grantee's Options that are not otherwise exercisable as of
the date on which the Grantee ceases to be employed by, or provide service to,
the Company shall terminate as of such date.

(v) For purposes of this Section 5(e), and Sections 6 and 7:

(A) The term "Company" shall mean the Company and its parent and subsidiary
corporations or other entities, as determined by the Committee.

(B) "Employed by, or provide service to, the Company" shall mean employment or
service as an Employee, Key Advisor or member of the Board (so that, for
purposes of exercising Options and satisfying conditions with respect to Stock
Awards and Performance Units, a Grantee shall not be considered to have
terminated employment or service until the Grantee ceases to be an Employee, Key
Advisor and member of the Board), unless the Committee determines otherwise.

                                       5
<PAGE>

(C) "Disability" shall mean a Grantee's becoming disabled within the meaning of
section 22(e)(3) of the Code or the Grantee becomes entitled to receive
long-term disability benefits under the Company's long-term disability plan.

(D) "Cause" shall mean, except to the extent specified otherwise by the
Committee, a finding by the Committee that the Grantee (i) has breached his or
her employment or service contract with the Company, (ii) has engaged in
disloyalty to the Company, including, without limitation, fraud, embezzlement,
theft, commission of a felony or proven dishonesty in the course of his or her
employment or service, (iii) has disclosed trade secrets or confidential
information of the Company to persons not entitled to receive such information
or (iv) has engaged in such other behavior detrimental to the interests of the
Company as the Committee determines.

(f) Exercise of Options. A Grantee may exercise an Option that has become
exercisable, in whole or in part, by delivering a notice of exercise to the
Company. The Grantee shall pay the Exercise Price for an Option as specified by
the Committee (w) in cash, (x) with the approval of the Committee, by delivering
shares of Company Stock owned by the Grantee (including Company Stock acquired
in connection with the exercise of an Option, subject to such restrictions as
the Committee deems appropriate) and having a Fair Market Value on the date of
exercise equal to the Exercise Price or by attestation (on a form prescribed by
the Committee) to ownership of shares of Company Stock having a Fair Market
Value on the date of exercise equal to the Exercise Price, (y) payment through a
broker in accordance with procedures permitted by Regulation T of the Federal
Reserve Board, or (z) by such other method as the Committee may approve. Shares
of Company Stock used to exercise an Option shall have been held by the Grantee
for the requisite period of time to avoid adverse accounting consequences to the
Company with respect to the Option. The Grantee shall pay the Exercise Price and
the amount of any withholding tax due on or before the date that shares of
Common Stock are delivered in consideration of the exercise.

(g) Limits on Incentive Stock Options. Each Incentive Stock Option shall provide
that, if the aggregate Fair Market Value of the stock on the date of the grant
with respect to which Incentive Stock Options are exercisable for the first time
by a Grantee during any calendar year, under the Plan or any other stock option
plan of the Company or a parent or subsidiary, exceeds $100,000, then the
Option, as to the excess, shall be treated as a Nonqualified Stock Option. An
Incentive Stock Option shall not be granted to any person who is not an Employee
of the Company or a parent or subsidiary (within the meaning of section 424(f)
of the Code).

6.       STOCK AWARDS

         The Committee may issue or transfer shares of Company Stock to an
Employee, Non-Employee Director or Key Advisor under a Stock Award, upon such
terms as the Committee deems appropriate. The following provisions are
applicable to Stock Awards:

(a) General Requirements. Shares of Company Stock issued or transferred pursuant
to Stock Awards may be issued or transferred for consideration or for no
consideration, and subject to restrictions or no restrictions, as determined by
the Committee. The Committee may, but shall

                                       6
<PAGE>

not be required to, establish conditions under which restrictions on Stock
Awards shall lapse over a period of time or according to such other criteria as
the Committee deems appropriate, including, without limitation, restrictions
based upon the achievement of specific performance goals. The period of time
during which the Stock Awards will remain subject to restrictions will be
designated in the Grant Instrument as the "Restriction Period."

(b) Number of Shares. The Committee shall determine the number of shares of
Company Stock to be issued or transferred pursuant to a Stock Award and the
restrictions applicable to such shares.

(c) Requirement of Employment or Service. If the Grantee ceases to be employed
by, or provide service to, the Company (as defined in Section 5(e)) during a
period designated in the Grant Instrument as the Restriction Period, or if other
specified conditions are not met, the Stock Award shall terminate as to all
shares covered by the Grant as to which the restrictions have not lapsed, and
those shares of Company Stock must be immediately returned to the Company. The
Committee may, however, provide for complete or partial exceptions to this
requirement as it deems appropriate.

(d) Restrictions on Transfer and Legend on Stock Certificate. During the
Restriction Period, a Grantee may not sell, assign, transfer, pledge or
otherwise dispose of the shares of a Stock Award except to a Successor Grantee
under Section 11(a). Each certificate for a share of a Stock Award shall contain
a legend giving appropriate notice of the restrictions in the Grant. The Grantee
shall be entitled to have the legend removed from the stock certificate covering
the shares subject to restrictions when all restrictions on such shares have
lapsed. The Committee may determine that the Company will not issue certificates
for Stock Awards until all restrictions on such shares have lapsed, or that the
Company will retain possession of certificates for shares of Stock Awards until
all restrictions on such shares have lapsed.

(e) Right to Vote and to Receive Dividends. Unless the Committee determines
otherwise, during the Restriction Period, the Grantee shall have the right to
vote shares of Stock Awards and to receive any dividends or other distributions
paid on such shares, subject to any restrictions deemed appropriate by the
Committee, including, without limitation, the achievement of specific
performance goals.

(f) Lapse of Restrictions. All restrictions imposed on Stock Awards shall lapse
upon the expiration of the applicable Restriction Period and the satisfaction of
all conditions imposed by the Committee. The Committee may determine, as to any
or all Stock Awards, that the restrictions shall lapse without regard to any
Restriction Period.

7.       PERFORMANCE UNITS

(a) General Requirements. The Committee may grant performance units
("Performance Units") to an Employee or Key Advisor. Each Performance Unit shall
represent the right of the Grantee to receive an amount based on the value of
the Performance Unit, if performance goals established by the Committee are met.
The value of a Performance Unit shall equal the Fair

                                       7
<PAGE>

Market Value of a share of Company Stock. The Committee shall determine the
number of Performance Units to be granted and the requirements applicable to
such Units.

(b) Performance Period and Performance Goals. When Performance Units are
granted, the Committee shall establish the performance period during which
performance shall be measured (the "Performance Period"), performance goals
applicable to the Units ("Performance Goals") and such other conditions of the
Grant as the Committee deems appropriate. Performance Goals may relate to the
financial performance of the Company or its operating units, the performance of
Company Stock, individual performance, or such other criteria as the Committee
deems appropriate.

(c) Payment with respect to Performance Units. At the end of each Performance
Period, the Committee shall determine to what extent the Performance Goals and
other conditions of the Performance Units are met, the value of the Performance
Units (if applicable), and the amount, if any, to be paid with respect to the
Performance Units. Payments with respect to Performance Units shall be made
partly in cash, in Company Stock, or in a combination of the two, as determined
by the Committee, provided that the cash portion does not exceed 50% of the
amount to be distributed.

(d) Requirement of Employment or Service. If the Grantee ceases to be employed
by, or provide service to, the Company (as defined in Section 5(e)) during a
Performance Period, or if other conditions established by the Committee are not
met, the Grantee's Performance Units shall be forfeited. The Committee may,
however, provide for complete or partial exceptions to this requirement as it
deems appropriate.

8.       QUALIFIED PERFORMANCE-BASED COMPENSATION

(a) Designation as Qualified Performance-Based Compensation. The Committee may
determine that Performance Units or Stock Awards granted to an Employee shall be
considered "qualified performance-based compensation" under Section 162(m) of
the Code. The provisions of this Section 8 shall apply to Grants of Performance
Units and Stock Awards that are to be considered "qualified performance-based
compensation" under section 162(m) of the Code.

(b) Performance Goals. When Performance Units or Stock Awards that are to be
considered "qualified performance-based compensation" are granted, the Committee
shall establish in writing (i) the objective performance goals that must be met
in order for restrictions on the Stock Awards to lapse or amounts to be paid
under the Performance Units, (ii) the Performance Period during which the
performance goals must be met, (iii) the threshold, target and maximum amounts
that may be paid if the performance goals are met, and (iv) any other conditions
that the Committee deems appropriate and consistent with the Plan and section
162(m) of the Code. The performance goals may relate to the Employee's business
unit or the performance of the Company and its subsidiaries as a whole, or any
combination of the foregoing. The Committee shall use objectively determinable
performance goals based on one or more of the following criteria: stock price,
earnings per share, net earnings, operating earnings, return on assets,
stockholder return, return on equity, growth in assets, unit volume, sales,
market share, scientific goals, pre-clinical or clinical goals, regulatory
approvals, or strategic business criteria consisting

                                       8
<PAGE>

of one or more objectives based on meeting specified revenue goals, market
penetration goals, geographic business expansion goals, cost targets, goals
relating to acquisitions or divestitures, or strategic partnerships.

(c) Establishment of Goals. The Committee shall establish the performance goals
in writing either before the beginning of the Performance Period or during a
period ending no later than the earlier of (i) 90 days after the beginning of
the Performance Period or (ii) the date on which 25% of the Performance Period
has been completed, or such other date as may be required or permitted under
applicable regulations under section 162(m) of the Code. The performance goals
shall satisfy the requirements for "qualified performance-based compensation,"
including the requirement that the achievement of the goals be substantially
uncertain at the time they are established and that the goals be established in
such a way that a third party with knowledge of the relevant facts could
determine whether and to what extent the performance goals have been met. The
Committee shall not have discretion to increase the amount of compensation that
is payable upon achievement of the designated performance goals.

(d) Maximum Payment. Performance Units and Stock Awards under this Section 8 may
be granted to an Employee with respect to not more than 500,000 shares of
Company Stock for any Performance Period.

(e) Announcement of Grants. The Committee shall certify and announce the results
for each Performance Period to all Grantees immediately following the
announcement of the Company's financial results for the Performance Period. If
and to the extent that the Committee does not certify that the performance goals
have been met, the grants of Stock Awards or Performance Units for the
Performance Period shall be forfeited.

(f) Death, Disability, Change of Control or Other Circumstances. The Committee
may provide that Performance Units shall be payable or restrictions on Stock
Awards shall lapse, in whole or in part, in the event of the Grantee's death or
Disability (as defined in Section 5(e) above) during the Performance Period, or
under other circumstances consistent with the regulations and rulings under
section 162(m), and the provisions of Section 13 shall apply in the event of a
Change of Control.

9.       DEFERRALS

         The Committee may permit or require a Grantee to defer receipt of the
payment of cash or the delivery of shares that would otherwise be due to such
Grantee in connection with any Option, the lapse or waiver of restrictions
applicable to Stock Awards, or the satisfaction of any requirements or
objectives with respect to Performance Units. If any such deferral election is
permitted or required, the Committee shall, in its sole discretion, establish
rules and procedures for such deferrals.

10.      WITHHOLDING OF TAXES

(a) Required Withholding. All Grants under the Plan shall be subject to
applicable federal (including FICA), state and local tax withholding
requirements. The Company shall have the

                                       9
<PAGE>

right to deduct from all Grants paid in cash, or from other wages paid to the
Grantee, any federal, state or local taxes required by law to be withheld with
respect to such Grants. In the case of Options, Stock Awards and other Grants
paid in Company Stock, the Company may require that the Grantee or other person
receiving or exercising Grants pay to the Company the amount of any federal,
state or local taxes that the Company is required to withhold with respect to
such Grants, or the Company may deduct from other wages paid by the Company the
amount of any withholding taxes due with respect to such Grants.

(b) Election to Withhold Shares. If the Committee so permits, a Grantee may
elect to satisfy the Company's income tax withholding obligation with respect to
Options, Stock Awards or Performance Units paid in Company Stock by having
shares withheld up to an amount that does not exceed the Company's minimum
applicable withholding tax rate for federal (including FICA), state and local
tax liabilities. The election must be in a form and manner prescribed by the
Committee and may be subject to the prior approval of the Committee.

11.      TRANSFERABILITY OF GRANTS

(a) Nontransferability of Grants. Except as provided below, only the Grantee may
exercise rights under a Grant during the Grantee's lifetime. A Grantee may not
transfer those rights except by will or by the laws of descent and distribution
or, with respect to Grants other than Incentive Stock Options, if permitted in
any specific case by the Committee, pursuant to a domestic relations order. When
a Grantee dies, the personal representative or other person entitled to succeed
to the rights of the Grantee ("Successor Grantee") may exercise such rights. A
Successor Grantee must furnish proof satisfactory to the Company of his or her
right to receive the Grant under the Grantee's will or under the applicable laws
of descent and distribution.

(b) Transfer of Nonqualified Stock Options. Notwithstanding the foregoing, the
Committee may provide, in a Grant Instrument, that a Grantee may transfer
Nonqualified Stock Options to family members, or one or more trusts or other
entities for the benefit of or owned by family members, consistent with the
applicable securities laws, according to such terms as the Committee may
determine; provided that the Grantee receives no consideration for the transfer
of an Option and the transferred Option shall continue to be subject to the same
terms and conditions as were applicable to the Option immediately before the
transfer.

12.      CHANGE OF CONTROL OF THE COMPANY

As used herein, a "Change of Control" shall be deemed to have occurred if:

(a) Any "person" (as such term is used in sections 13(d) and 14(d) of the
Exchange Act) becomes a "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing
more than 50% of the voting power of the then outstanding securities of the
Company; provided that a Change of Control shall not be deemed to occur as a
result of a transaction in which the Company becomes a subsidiary of another
corporation and in which the stockholders of the Company, immediately prior to
the transaction, will beneficially own, immediately after the transaction,
shares entitling such stockholders to more than 50% of all votes to which all
stockholders of the parent corporation

                                       10
<PAGE>

would be entitled in the election of directors (without consideration of the
rights of any class of stock to elect directors by a separate class vote);

(b) The stockholders of the Company approve (or, if stockholder approval is not
required, the Board approves) an agreement providing for (i) the merger or
consolidation of the Company with another corporation where the stockholders of
the Company, immediately prior to the merger or consolidation, will not
beneficially own, immediately after the merger or consolidation, shares
entitling such stockholders to more than 50% of all votes to which all
stockholders of the surviving corporation would be entitled in the election of
directors (without consideration of the rights of any class of stock to elect
directors by a separate class vote), (ii) the sale or other disposition of all
or substantially all of the assets of the Company, or (iii) a liquidation or
dissolution of the Company;

(c) Any person has commenced a tender offer or exchange offer for 30% or more of
the voting power of the then outstanding shares of the Company; or

(d) After the date this Plan is approved by the stockholders of the Company,
directors are elected such that a majority of the members of the Board shall
have been members of the Board for less than two years, unless the election or
nomination for election of each new director who was not a director at the
beginning of such two-year period was approved by a vote of at least two-thirds
of the directors then still in office who were directors at the beginning of
such period.

13.      CONSEQUENCES OF A CHANGE OF CONTROL

(a) Assumption of Grants. Upon a Change of Control where the Company is not the
surviving corporation (or survives only as a subsidiary of another corporation),
unless the Committee determines otherwise, all outstanding Options that are not
exercised shall be assumed by, or replaced with comparable options or rights by
the surviving corporation (or a parent of the surviving corporation), and other
outstanding Grants shall be converted to similar grants of the surviving
corporation (or a parent of the surviving corporation).

(b) Other Alternatives. Notwithstanding the foregoing, in the event of a Change
of Control, the Committee may, but shall not be obligated to, take any of the
following actions with respect to any or all outstanding Grants: the Committee
may (i) determine that outstanding Options shall automatically accelerate and
become fully exercisable and that the restrictions and conditions on outstanding
Stock Awards shall immediately lapse, (ii) determine that Grantees holding
Performance Units shall receive a payment in settlement of such Performance
Units in an amount determined by the Committee, (iii) require that Grantees
surrender their outstanding Options in exchange for a payment by the Company, in
cash or Company Stock as determined by the Committee, in an amount equal to the
amount by which the then Fair Market Value of the shares of Company Stock
subject to the Grantee's unexercised Options exceeds the Exercise Price of the
Options or (iv) after giving Grantees an opportunity to exercise their
outstanding Options, terminate any or all unexercised Options at such time as
the Committee deems appropriate. Such surrender, termination or settlement shall
take place as of the date of the Change of Control or such other date as the
Committee may specify. The Committee shall have no obligation to take any of the
foregoing actions, and, in the absence of any such actions, outstanding Grants
shall

                                       11
<PAGE>

continue in effect according to their terms (subject to any assumption pursuant
to Subsection (a)).

14.      REQUIREMENTS FOR ISSUANCE OR TRANSFER OF SHARES

(a) Limitations on Issuance or Transfer of Shares. No Company Stock shall be
issued or transferred in connection with any Grant hereunder unless and until
all legal requirements applicable to the issuance or transfer of such Company
Stock have been complied with to the satisfaction of the Committee. The
Committee shall have the right to condition any Grant made to any Grantee
hereunder on such Grantee's undertaking in writing to comply with such
restrictions on his or her subsequent disposition of such shares of Company
Stock as the Committee shall deem necessary or advisable, and certificates
representing such shares may be legended to reflect any such restrictions.
Certificates representing shares of Company Stock issued or transferred under
the Plan will be subject to such stop-transfer orders and other restrictions as
may be required by applicable laws, regulations and interpretations, including
any requirement that a legend be placed thereon.

(b) Lock-Up Period. If so requested by the Company or any representative of the
underwriters (the "Managing Underwriter") in connection with any underwritten
offering of securities of the Company under the Securities Act of 1933, as
amended (the "Securities Act"), a Grantee (including any successors or assigns)
shall not sell or otherwise transfer any shares or other securities of the
Company during the 30-day period preceding and the 120-day period following the
effective date of a registration statement of the Company filed under the
Securities Act for such underwriting (or such shorter period as may be requested
by the Managing Underwriter and agreed to by the Company) (the "Market Standoff
Period"). The Company may impose stop-transfer instructions with respect to
securities subject to the foregoing restrictions until the end of such Market
Standoff Period.

15.      AMENDMENT AND TERMINATION OF THE PLAN

(a) Amendment. The Board may amend or terminate the Plan at any time; provided,
however, that the Board shall not amend the Plan without stockholder approval if
(i) such approval is required in order for Incentive Stock Options granted or to
be granted under the Plan to meet the requirements of section 422 of the Code,
(ii) such approval is required in order to exempt compensation under the Plan
from the deduction limit under section 162(m) of the Code, or (iii) such
approval is required by applicable stock exchange requirements.

(b) Stockholder Approval for "Qualified Performance-Based Compensation." If
Performance Units or Stock Awards are granted as "qualified performance-based
compensation" under Section 8 above, the Plan must be reapproved by the
stockholders no later than the first stockholders meeting that occurs in the
fifth year following the year in which the stockholders previously approved the
provisions of Section 8, if required by section 162(m) of the Code or the
regulations thereunder.

                                       12
<PAGE>

(c) Termination of Plan. The Plan shall terminate on the day immediately
preceding the tenth anniversary of its effective date, unless the Plan is
terminated earlier by the Board or is extended by the Board with the approval of
the stockholders.

(d) Termination and Amendment of Outstanding Grants. A termination or amendment
of the Plan that occurs after a Grant is made shall not materially impair the
rights of a Grantee unless the Grantee consents or unless the Committee acts
under Section 21(c). The termination of the Plan shall not impair the power and
authority of the Committee with respect to an outstanding Grant. Whether or not
the Plan has terminated, an outstanding Grant may be terminated or amended under
Section 21(c) or may be amended by agreement of the Company and the Grantee
consistent with the Plan.

(e) Governing Document. The Plan shall be the controlling document. No other
statements, representations, explanatory materials or examples, oral or written,
may amend the Plan in any manner. The Plan shall be binding upon and enforceable
against the Company and its successors and assigns.

16.      FUNDING OF THE PLAN

         This Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the payment of any Grants under this Plan. In no event shall
interest be paid or accrued on any Grant, including unpaid installments of
Grants.

17.      RIGHTS OF PARTICIPANTS

         Nothing in this Plan shall entitle any Employee, Key Advisor,
Non-Employee Director or other person to any claim or right to be granted a
Grant under this Plan. Neither this Plan nor any action taken hereunder shall be
construed as giving any individual any rights to be retained by or in the employ
of the Company or any other employment rights.

18.      NO FRACTIONAL SHARES

         No fractional shares of Company Stock shall be issued or delivered
pursuant to the Plan or any Grant. The Committee shall determine whether cash,
other awards or other 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.

19.      HEADINGS

         Section headings are for reference only. In the event of a conflict
between a title and the content of a Section, the content of the Section shall
control.

                                       13
<PAGE>

20.   EFFECTIVE DATE OF THE PLAN

         The Plan was initially effective as of March 24, 2000. The Plan was
amended and restated on May 22, 2001 and on April 18, 2002. The effective date
of this amendment and restatement of the Plan is September 23, 2003.

21.      MISCELLANEOUS

(a) Grants in Connection with Corporate Transactions and Otherwise. Nothing
contained in this Plan shall be construed to (i) limit the right of the
Committee to make Grants under this Plan in connection with the acquisition, by
purchase, lease, merger, consolidation or otherwise, of the business or assets
of any corporation, firm or association, including Grants to employees thereof
who become Employees of the Company, or for other proper corporate purposes, or
(ii) limit the right of the Company to grant stock options or make other awards
outside of this Plan. Without limiting the foregoing, the Committee may make a
Grant to an employee of another corporation who becomes an Employee by reason of
a corporate merger, consolidation, acquisition of stock or property,
reorganization or liquidation involving the Company or any of its subsidiaries
in substitution for a stock option or stock awards grant made by such
corporation. The terms and conditions of the substitute grants may vary from the
terms and conditions required by the Plan and from those of the substituted
stock incentives. The Committee shall prescribe the provisions of the substitute
grants.

(b) Employees Subject to Taxation Outside the United States. With respect to
Grantees who are subject to taxation in countries other than the United States,
the Committee may make Grants on such terms and conditions as the Committee
deems appropriate to comply with the laws of the applicable countries, and the
Committee may create such procedures, addenda and subplans and make such
modifications as may be necessary or advisable to comply with such laws.

(c) Compliance with Law. The Plan, the exercise of Options and the obligations
of the Company to issue or transfer shares of Company Stock under Grants shall
be subject to all applicable laws and to approvals by any governmental or
regulatory agency as may be required. With respect to persons subject to section
16 of the Exchange Act, it is the intent of the Company that the Plan and all
transactions under the Plan comply with all applicable provisions of Rule 16b-3
or its successors under the Exchange Act. In addition, it is the intent of the
Company that the Plan and applicable Grants under the Plan comply with the
applicable provisions of section 162(m) of the Code and section 422 of the Code.
To the extent that any legal requirement of section 16 of the Exchange Act or
section 162(m) or 422 of the Code as set forth in the Plan ceases to be required
under section 16 of the Exchange Act or section 162(m) or 422 of the Code, that
Plan provision shall cease to apply. The Committee may revoke any Grant if it is
contrary to law or modify a Grant to bring it into compliance with any valid and
mandatory government regulation. The Committee may also adopt rules regarding
the withholding of taxes on payments to Grantees. The Committee may, in its sole
discretion, agree to limit its authority under this Section.

(d) Governing Law. The validity, construction, interpretation and effect of the
Plan and Grant Instruments issued under the Plan shall be governed and construed
by and determined

                                       14

<PAGE>

in accordance with the laws of Delaware, without giving effect to the conflict
of laws provisions thereof.

                                       15

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