Document:

<PAGE>
                                                                   Exhibit 10.14

                            FIRST AMENDMENT OF LEASE

THIS FIRST AMENDMENT OF LEASE ("AMENDMENT") is made and entered into effective
as of September 23, 2002 by and between CSM INVESTORS, INC., a Minnesota
corporation, ("Landlord") and SYNOVIS LIFE TECHNOLOGIES, INC., formerly
Bio-Vascular, Inc., a Minnesota corporation, ("Tenant").

                                    RECITALS

A.       Landlord and Tenant are parties to a Lease dated February 28, 1995 (the
         "Lease") pursuant to which Tenant leases from Landlord the Premises,
         consisting of approximately 36,027 square feet within the WESTGATE
         BUSINESS CENTER PHASE IV ("Building"), located at 2575 UNIVERSITY
         AVENUE WEST, SUITE 180, ST. PAUL, MINNESOTA, as more particularly
         described in the Lease.

B.       The parties wish to amend certain terms and conditions of the Lease as
         more particularly set forth herein.

NOW, THEREFORE, in consideration of the foregoing recitals, the mutual covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Landlord and Tenant agree that the
Lease is hereby amended as follows:

                                    AGREEMENT

1.       SECTION 1.2 PREMISES.

         A.       Effective October 15, 2002, the area of the original Premises
                  ("Original Premises") shall be increased by 4,865 square feet
                  of office space in the Building in the area marked "First
                  Expansion Area" on REVISED EXHIBITS A AND B attached hereto,
                  from 36,027 square feet to 40,892 square feet.

         B.       Effective as of the date Landlord notifies Tenant in writing
                  that CSM Corporation has vacated the approximately 28,826
                  square foot area in the Building in the area marked "Second
                  Expansion Area" on REVISED EXHIBITS A AND B (which shall be no
                  earlier than January 1, 2004), the area of the Premises shall
                  be increased by the 28,826 square foot Second Expansion Area
                  (consisting of approximately 19,712 square feet of first floor
                  office space, 4,690 square feet of mezzanine office space, and
                  4,424 square feet of warehouse space), from 40,892 square feet
                  to 69,718 square feet.

                  The lease of the Second Expansion Area shall include Tenant's
                  right to utilize certain existing furniture, fixtures and
                  other furnishings ("Furnishings") remaining in the Premises
                  after CSM Corporation vacates therefrom which are the property
                  of Landlord. Upon termination or expiration of the Lease,
                  Tenant shall surrender possession of the Furnishings to
                  Landlord in as good as condition as of the Commencement Date,
                  ordinary wear and tear excepted. An inventory of such
                  Furnishings which the parties reasonably anticipate to remain
                  in the Premises

<PAGE>

                  after CSM Corporation vacates is attached hereto as EXHIBIT G.
                  The parties will confirm the inventory when Tenant takes
                  possession of the Second Expansion Area.

         C.       After Tenant's lease of the Second Expansion Area commences,
                  Tenant shall promptly vacate the First Expansion Area.
                  Effective as of the date of Tenant's vacation of the First
                  Expansion Area (projected to be February 1, 2004), the area of
                  the Premises shall be reduced by 4,865 square feet, from
                  69,718 square feet to 64,853 square feet. Tenant shall remain
                  responsible for payment of Rent on the First Expansion Area
                  until it vacates and surrenders possession thereof to Landlord
                  broom-clean, in as good as condition that existed on October
                  15, 2002, ordinary wear and tear excepted, and with all of
                  Tenant's belongings removed. In any event, Tenant shall vacate
                  the First Expansion Area in accordance with the terms of this
                  Amendment no later than thirty (30) days after taking
                  occupancy of the Second Expansion Area.

2.       SECTION 1.3 IMPROVEMENTS. Except as set forth herein, Tenant shall
         accept the First Expansion Area and the Second Expansion Area in "As
         Is" condition. For the period of November 1, 2002 until the date of
         delivery of the Second Expansion Space, Landlord agrees to provide
         Tenant with a temporary weather shelter in the form of a walkway and
         canopy or scaffold structure spanning from the current Synovis
         pedestrian warehouse door to the outside door accessing the First
         Expansion Space. Furthermore, Landlord agrees to provide Tenant an
         allowance of up to $50,000.00 toward the cost of improvements to the
         Second Expansion Area, payable to Tenant upon receipt of paid invoice
         receipts and/or completed lien waivers from the contractor(s)
         performing the work.

3.       SECTION 1.4 LEASE TERM. The term of the Lease will be extended for an
         additional forty-one (41) month period commencing August 1, 2005 and
         expiring December 31, 2008.

4.       SECTION 1.6 BASE RENT. Commencing October 1, 2002, the Base Rental rate
         shall be comprised of the following amounts:

         A.       ORIGINAL PREMISES:

<TABLE>
<CAPTION>
                                                      MONTHLY      PER RENTABLE
                               PERIOD                 BASE RENT      SQUARE FOOT
                               ------                 ---------     -----------
<S>               <C>                                 <C>           <C>
                               10/1/02 - 07/31/05     $21,286.76          $7.09
                               08/1/05 - 12/31/08     market             market

                  Option Term: 01/1/09 - 12/31/11     market             market
</TABLE>

         B.       FIRST EXPANSION AREA:

<TABLE>
<CAPTION>
                                                      MONTHLY      PER RENTABLE
                               PERIOD                 BASE RENT    SQUARE FOOT
                               ------                 ---------    -----------
<S>                            <C>                    <C>          <C>
                               10/15/02 - 01/31/04*   $3,851.46          $9.50
</TABLE>

                               * Subject to adjustment per the terms of
                               Paragraph 1.C. of this Amendment. In the
                               event that RESPEC vacates the First Expansion
                               Area earlier than October 14, 2002, Tenant may
                               occupy the First Expansion Area as of the date of
                               vacation, under

                                      -2-
<PAGE>

                               the same terms and conditions contained herein,
                               exclusive of Rent and Operating Expenses.

         C.       SECOND EXPANSION AREA:

<TABLE>
<CAPTION>
                                                       MONTHLY     PER RENTABLE
                               PERIOD                 BASE RENT    SQUARE FOOT
                               ------                 ---------    -----------
<S>                            <C>                    <C>          <C>
                               01/1/04* - 12/31/06    $26,370.46   $10.978
                               08/1/07 - 12/31/08     $27,511.03   $11.452
</TABLE>

                               * Subject to adjustment per the terms of
                               Paragraph 1.C. of this Amendment.

<TABLE>
<S>                            <C>                    <C>          <C>
                  Option Term: 01/1/09 - 12/31/11     market       market
</TABLE>

5.       SECTION 1.9 PRORATA SHARE. Commencing October 1, 2002, Tenant's Pro
         Rata Share of Operating Expenses shall be 40.28%. Commencing on the
         date Tenant commences leasing the Second Expansion Area, Tenant's Pro
         Rata Share of Operating Expenses shall be 69.03%. Commencing on the
         date Tenant vacates and surrenders possession of the First Expansion
         Area, Tenant's Pro Rata Share shall be 63.93%.

6.       SECTION 1.10 ADDRESSES FOR INVOICES AND PAYMENTS:

         Effective immediately, the addresses for invoices and payments shall
be:

<TABLE>
<CAPTION>
        If to Landlord:                    If to Tenant:
        ---------------                    -------------
<S>                                        <C>
        CSM Investors, Inc.                Synovis Life Technologies, Inc.
        SDS 12-1243                        2575 University Ave. W., Suite 180
        P.O. Box 86                        St. Paul, MN  55114
        Minneapolis, MN 55486-1243
</TABLE>

         Effective immediately, the addresses for legal notices shall be:

<TABLE>
<CAPTION>
         If to Landlord:                                   If to Tenant:
         ---------------                                   -------------
<S>                                               <C>
         CSM Corporation                          Synovis Life Technologies, Inc.
         2575 University Ave. W., Suite 150       2575 University Ave. W., Suite 180
         St. Paul, MN  55114                      St. Paul, MN  55114
         Attn:  V.P. of Property Management

         with a copy to:

         CSM Corporation
         2575 University Ave. W., Suite 150
         St. Paul, MN  55114
         Attn:  General Counsel
</TABLE>

         Either party may change such address by written notice to the other
party.

7.       SECTION 2.3 OPERATING EXPENSES. Section 2.3 of the Lease is amended to
         provide that Operating Expenses shall also include (i) all real
         property taxes, installments of special assessments and governmental
         impositions of any kind whatsoever imposed upon

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<PAGE>

         Landlord by reason of its ownership, operation or management of the
         Project, including without limitation the so called Minnesota "state
         general tax", and legal fees incurred in connection with actions to
         reduce the same; and (ii) all premiums, deductibles and retentions for
         insurance coverages Landlord is required to carry pursuant to the Lease
         or by its lender, or that Landlord otherwise deems reasonably necessary
         to carry, including without limitation, property insurance, commercial
         general liability insurance, and rent loss insurance.

8.       SECTION 14.13 PARKING. The number of underground parking spaces
         provided to Tenant at no charge shall increase from five (5) to thirty
         (30) as of January 1, 2004.

9.       SECTION 14.14 OPTION TO EXTEND. Landlord and Tenant acknowledge and
         agree that execution of this Amendment by both parties shall constitute
         Tenant's election to exercise its first of two options to extend the
         term of the Lease as set forth in Section 14.14 of the initial Lease
         dated February 28, 1995. Landlord shall determine the market base
         rental rate for the extension term under the terms set forth in the
         Lease no earlier than February 1, 2005, and no later than April 30,
         2005.

10.      SECTION 14.16 EXPANSION OPTION. Section 14.16 of the Lease is deleted
         in its entirety and replaced with the following:

                  "14.16 EXPANSION OPTION. During the term of the Lease, Tenant
                  shall have the option to lease space contiguous to the
                  Premises ("Option Space"), in the "As Is" condition, as it
                  becomes available during the term of the Lease, at the market
                  base rent for the Building, as established by Landlord from
                  time to time, in effect at the time of Landlord's notice.
                  Landlord shall provide Tenant written notice of the
                  availability of the Option Space, and Tenant shall have
                  fifteen (15) days from receipt of Landlord's availability
                  notice within which to forward written notice to Landlord of
                  Tenant's irrevocable intent to lease that part of the Option
                  Space described in Landlord's availability notice, with a term
                  commencing no later than sixty (60) days following the date
                  the Option Space actually becomes available, and expiring
                  coterminous with the term of the Lease. In the event that
                  Tenant fails to exercise its option rights described herein,
                  Tenant's option rights shall be null and void. Tenant and
                  Landlord agree that the expiration and renewal of an existing
                  tenant's lease shall not trigger Tenant's rights under this
                  section, and a condition of Tenant's option right shall be
                  that Tenant is not in default under Section 11 of the Lease
                  and that the Lease is in full force and effect. Landlord and
                  Tenant agree and acknowledge that Tenant has received notice
                  of the availability of the 4,865 square foot First Expansion
                  Space and the 2,993 square foot and 4,618 square foot former
                  CSM Corporation space depicted on REVISED EXHIBIT B."

11.      MISCELLANEOUS. Except as otherwise provided herein, all capitalized
         terms used herein shall have the meaning ascribed to them in the Lease.
         Except as specifically modified herein, all of the covenants,
         conditions, and obligations under the Lease shall remain unchanged and
         in full force and effect. In the event of a conflict between the terms
         of the Lease and this Amendment, the terms of this Amendment shall
         prevail. This Amendment shall be binding upon the parties hereto and
         their respective successors and assigns. This Amendment may be executed
         in one or more counterparts each of which when so

                                      -4-
<PAGE>

         executed and delivered shall constitute an original, but together said
         counterparts shall constitute one and the same instrument.

IN WITNESS WHEREOF, the parties have executed this Amendment as of the day and
year first above written.

LANDLORD:                                                     TENANT:
--------                                                      ------

CSM INVESTORS, INC.                         SYNOVIS LIFE TECHNOLOGIES, INC.

By: /s/ David Carland                      By: /s/ Connie Magnuson
    ---------------------------                ---------------------------------
Print Name: David Carland                  Print Name:  Connie Magnuson
            -------------------                       --------------------------
Title: Vice-President                       Title: Vice-President of Finance-CFO
       ------------------------                    -----------------------------

                                      -5-<PAGE>
                                                                     EXHIBIT 4.2

                              GUMP & COMPANY, INC.

                          2002 LONG TERM INCENTIVE PLAN

                         (Effective as of June 12, 2002)

<PAGE>

                              GUMP & COMPANY, INC.

                          2002 LONG TERM INCENTIVE PLAN

                         (Effective as of June 12, 2002)

         1. Purpose. The purpose of this 2002 Long Term Incentive Plan (the
"Plan") of Gump & Company, Inc., a Delaware corporation (the "Company"), is to
advance the interests of the Company and its stockholders by providing a means
to attract, retain, and reward Directors, executive officers, and other key
employees and consultants of and service providers to the Company and its
subsidiaries (including consultants and others providing services of substantial
value) and to enable such persons to acquire or increase a proprietary interest
in the Company, thereby promoting a closer identity of interests between such
persons and the Company's stockholders.

         2. Definitions. The definitions of awards under the Plan, including
Options, SARs (including Limited SARs), Restricted Stock, Deferred Stock, Stock
granted as a bonus or in lieu of other awards, Dividend Equivalents and Other
Stock-Based Awards are set forth in Section 6 hereof. Such awards, together with
any other right or interest granted to a Participant under the Plan, are termed
"Awards." For purposes of the Plan, the following additional terms shall be
defined as set forth below:

            (a) "Award Agreement" means any written agreement, contract, notice
or other instrument or document evidencing an Award.

            (b) "Beneficiary" shall mean the person, persons, trust or trusts
which have been designated by a Participant in his or her most recent written
beneficiary designation filed with the Committee to receive the benefits
specified under the Plan upon such Participant's death or, if there is no
designated Beneficiary or surviving designated Beneficiary, then the person,
persons, trust or trusts entitled by will or the laws of descent and
distribution to receive such benefits.

            (c) "Board" means the Board of Directors of the Company.

            (d) "Code" means the Internal Revenue Code of 1986. References to
any provision of the Code shall be deemed to include regulations thereunder and
successor provisions and regulations thereto.

            (e) "Committee" means the Compensation Committee of the Board, or
such other Board committee as may be designated by the Board to administer the
Plan; provided, however, that the Committee shall consist of two or more
Directors, each of whom is a "nonemployee director" within the meaning of Rule
16b-3 and an "outside director" within the meaning of Section 162(m) of the
Code.

            (f) "Director" means a member of the Board or a member of the board
of directors of a subsidiary of the Company.

<PAGE>

            (g) "Employee" means an employee (as defined under Section 3401(c)
of the Code and the regulations thereunder) of the Company or of any subsidiary
of the Company that adopts the Plan, including officers.

            (h) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time. References to any provision of the Exchange Act shall
be deemed to include rules thereunder and successor provisions and rules
thereto.

            (i) "Fair Market Value" means, with respect to Stock, Awards, or
other property, the fair market value of such Stock, Awards, or other property
determined by such methods or procedures as shall be established from time to
time by the Committee, provided, however, that (i) if the Stock is listed on a
national securities exchange or quoted in an interdealer quotation system, the
Fair Market Value of such Stock on a given date shall be based upon the last
sales price or, if unavailable, the average of the closing bid and asked prices
per share of the Stock on such date (or, if there was no trading or quotation in
the Stock on such date, on the next preceding date on which there was trading or
quotation) as reported in The Wall Street Journal (or other reporting service
approved by the Committee..

            (j) "Nonemployee Director" means a member of the Board who is not an
Employee; provided, however, that, as used in Section 2(e) without initial
capital letters, the term "nonemployee director" has the meaning provided in
that section.

            (k) "Participant" means a person who, at a time when eligible under
Section 5 hereof, has been granted an Award under the Plan.

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

            (m) "Stock" means the common stock, par value $0.01 per share, of
the Company, and such other securities as may be substituted for Stock or such
other securities pursuant to Section 4 hereof.

         3. Administration.

            (a) Authority of the Committee. The Plan shall be administered by
the Committee. The Committee shall have full and final authority to take the
following actions, in each case subject to and consistent with the provisions of
the Plan and applicable law:

                  (i) to select persons to whom Awards may be granted;

                  (ii) to determine the type or types of Awards to be granted to
            each such person;

                  (iii) to determine the number of Awards to be granted, the
            number of shares of Stock to which an Award will relate, the terms
            and conditions of any Award granted under the Plan (including, but
            not limited to, any exercise price, grant price or purchase price,
            any restriction or condition, any schedule for lapse

                                       2
<PAGE>

            of restrictions or conditions relating to transferability or
            forfeiture, exercisability or settlement of an Award, and waivers or
            accelerations thereof, performance conditions relating to an Award
            (including performance conditions relating to Awards not intended to
            be governed by Section 7(e) and waivers and modifications thereof),
            based in each case on such considerations as the Committee shall
            determine), and all other matters to be determined in connection
            with an Award;

                  (iv) to determine whether, to what extent and under what
            circumstances an Award may be settled, or the exercise price of an
            Award may be paid, in cash, Stock, other Awards, or other property,
            or an Award may be cancelled, forfeited, or surrendered;

                  (v) to determine whether, to what extent and under what
            circumstances cash, Stock, other Awards or other property payable
            with respect to an Award will be deferred either automatically, at
            the election of the Committee or at the election of the Participant;

                  (vi) to prescribe the form of each Award Agreement, which need
            not be identical for each Participant;

                  (vii) to adopt, amend, suspend, waive and rescind such rules
            and regulations and appoint such agents as the Committee may deem
            necessary or advisable to administer the Plan;

                  (viii) to correct any defect or supply any omission or
            reconcile any inconsistency in the Plan and to construe and
            interpret the Plan and any Award, rules and regulations, Award
            Agreement or other instrument hereunder; and

                  (ix) to make all other decisions and determinations as may be
            required under the terms of the Plan or as the Committee may deem
            necessary or advisable for the administration of the Plan.

            (b) Manner of Exercise of Committee Authority. Unless authority is
specifically reserved to the Board under the terms of the Plan, the Company's
Certificate of Incorporation or Bylaws, or applicable law, the Committee shall
have sole discretion in exercising authority under the Plan. Any action of the
Committee with respect to the Plan shall be final, conclusive and binding on all
persons, including the Company, subsidiaries of the Company, Participants, any
person claiming any rights under the Plan from or through any Participant and
stockholders, except to the extent the Committee may subsequently modify, or
take further action not consistent with, its prior action. If not specified in
the Plan, the time at which the Committee must or may make any determination
shall be determined by the Committee, and any such determination may thereafter
be modified by the Committee (subject to Section 8(e)). The express grant of any
specific power to the Committee, and the taking of any action by the Committee,
shall not be construed as limiting any power or authority of the Committee. The
Committee may delegate to officers or managers of the Company or any subsidiary
of the Company the authority, subject to such terms as the Committee shall
determine,

                                       3
<PAGE>

to perform administrative functions and, with respect to Participants not
subject to Section 16 of the Exchange Act, to perform such other functions as
the Committee may determine, to the extent permitted under Rule 16b-3, if
applicable, and other applicable law.

            (c) Limitation of Liability. Each member of the Committee shall be
entitled to, in good faith, rely or act upon any report or other information
furnished to him by any officer or other Employee of the Company or any
subsidiary, the Company's independent certified public accountants or any
executive compensation consultant, legal counsel or other professional retained
by the Company to assist in the administration of the Plan. No member of the
Committee, nor any officer or Employee of the Company acting on behalf of the
Committee, shall be personally liable for any action, determination or
interpretation taken or made in good faith with respect to the Plan, and all
members of the Committee and any officer or Employee of the Company acting on
its behalf shall, to the extent permitted by law, be fully indemnified and
protected by the Company with respect to any such action, determination or
interpretation.

         4. Stock Subject to Plan.

            (a) Amount of Stock Reserved. The total amount of Stock that may be
subject to outstanding awards, determined immediately after the grant of any
Award, shall not exceed 2,200,000 shares of Stock. If an Award valued by
reference to Stock may be settled only in cash, the number of shares to which
such Award relates shall be deemed to be Stock subject to such Award for
purposes of this Section 4(a). Any shares of Stock delivered pursuant to an
Award may consist, in whole or in part, of authorized and unissued shares,
treasury shares or shares acquired in the market for a Participant's account.

            (b) Adjustments. In the event that the Committee shall determine
that any dividend or other distribution (whether in the form of cash, Stock or
other property), recapitalization, forward or reverse split, reorganization,
merger, consolidation, spin-off, combination, repurchase or exchange of Stock or
other securities, liquidation, dissolution, or other similar corporate
transaction or event, affects the Stock such that an adjustment is appropriate
in order to prevent dilution or enlargement of the rights of Participants under
the Plan, then the Committee shall, in such manner as it may deem equitable,
adjust any or all of (i) the number and kind of shares of Stock reserved and
available for Awards under Section 4(a), (ii) the number and kind of shares of
outstanding Restricted Stock or other outstanding Award in connection with which
shares have been issued, (iii) the number and kind of shares that may be issued
in respect of other outstanding Awards and (iv) the exercise price, grant price
or purchase price relating to any Award or, if deemed appropriate, the Committee
may make provision for a cash payment with respect to any outstanding Award. In
addition, the Committee is authorized to make adjustments in the terms and
conditions of, and the criteria included in, Awards in recognition of unusual or
nonrecurring events (including, without limitation, events described in the
preceding sentence) affecting the Company or any subsidiary or the financial
statements of the Company or any subsidiary, or in response to changes in
applicable laws, regulations, or accounting principles. The foregoing
notwithstanding, no adjustments shall be authorized under this Section 4(b) with
respect to Options, SARs or other Awards subject to Section 7(e) to the extent
that such authority wold cause such Awards to fail to qualify as "qualified
performance-based compensation" under Section 162(m)(4)(C) of the Code.

                                       4
<PAGE>

         5. Eligibility. Executive officers and other Employees of the Company
and its subsidiaries, Directors, and persons who provide consulting, advisory,
or other services to the Company deemed by the Committee to be of substantial
value to the Company are eligible to be granted Awards under the Plan. In
addition, a person who has been offered employment by the Company or its
subsidiaries is eligible to be granted an Award under the Plan, provided that
such Award shall be cancelled if such person fails to commence such employment,
and no payment of value may be made in connection with such Award until such
person has commenced such employment.

         6. Specific Terms of Awards.

            (a) General. Awards may be granted on the terms and conditions set
forth in this Section 6. In addition, the Committee may impose on any Award or
the exercise thereof such additional terms and conditions, not inconsistent with
the provisions of the Plan, as the Committee shall determine, including terms
requiring forfeiture of Awards in the event of termination of employment or
service of the Participant. Except as provided in Section 6(f), 6(h), or 7(a),
or to the extent required to comply with requirements of the Delaware General
Corporation Law that lawful consideration be paid for Stock, only services may
be required as consideration for the grant (but not the exercise) of any Award.

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

                  (i) Nature of Options. Options may be either incentive stock
            options (within the meaning of Section 422 of the Code) ("Incentive
            Options") or Options that do not qualify as Incentive Options
            ("Nonqualified Options"); provided, however, that an Incentive
            Option may be granted only to a person who is an Employee on the
            date of grant of the Option.

                  (ii) Exercise Price. The exercise price per share of Stock
            purchasable under an Option shall be determined by the Committee;
            provided, however, that such exercise price shall be not less than
            the Fair Market Value of a share of Stock on the date of grant of
            such Option; and provided further that, in the case of an Incentive
            Option granted to a person who, on the date of grant of the Option,
            owns stock possessing more than ten percent of the total combined
            voting power of all classes of stock of the Company or of any
            subsidiary of the Company, the exercise price per share of Stock
            purchasable under such Incentive Option shall be not less than 110
            percent of the Fair Market Value of a share of Stock on the date the
            Incentive Option is granted.

                  (iii) Time and Method of Exercise. The Committee shall
            determine the time or times at which an Option may be exercised in
            whole or in part, the methods by which such exercise price may be
            paid or deemed to be paid, the form of such payment, including,
            without limitation, cash, Stock, other Awards or awards granted
            under other Company plans or other property (including notes or
            other contractual obligations of Participants to make payment on a
            deferred basis, such as through "cashless exercise" arrangements, to
            the extent permitted by

                                       5
<PAGE>

            applicable law), and the methods by which Stock will be delivered or
            deemed to be delivered to Participants. Notwithstanding the
            foregoing, no Incentive Option shall be exercisable after the
            expiration of ten years from the date such Incentive Option is
            granted; provided, that, in the case of an Incentive Option granted
            to a person who, on the date of grant of the Option, owns stock
            possessing more than ten percent of the total combined voting power
            of all classes of stock of the Company or of any subsidiary of the
            Company, the Incentive Option shall not be exercisable after the
            expiration of five years from the date of grant of the Incentive
            Option.

                  (iv) Termination of Employment. Unless otherwise determined by
            the Committee, upon termination of a Participant's employment with
            the Company and its subsidiaries, such Participant may exercise any
            Options during the three-month period (or such other period as may
            be specified by the Committee in an Award Agreement) following such
            termination of employment, but only to the extent such Option was
            exercisable immediately prior to such termination of employment.
            Notwithstanding the foregoing, if the Participant's employment with
            the Company is governed by an employment agreement and the Committee
            determines that such termination is "for cause" as defined in the
            Participant's employment agreement, all Options held by the
            Participant shall terminate as of the termination of employment
            unless otherwise specified in the Participant's Award Agreement.

                  (v) Automatic Grants of Options to Directors.

                      (A) (I) Effective immediately following the closing of the
            merger between CRD Acquisition, Inc., a wholly-owned subsidiary of
            the Company, and Car Rental Direct, Inc., a Nevada corporation, the
            directors continuing as directors of the Company following such
            merger will receive a Nonqualified Option to purchase 75,000 shares
            of Common Stock, which shall vest on a pro rata basis each calendar
            month over the three-year period from the date of grant (but only if
            such Director is a Director at the time of vesting), with vesting
            commencing on the first day of the calendar month following the date
            of grant and final vesting occurring on the date immediately prior
            to the third anniversary of the date of grant (the "Initial Grant").
            (II) Upon every third anniversary of the initial election of a
            Director, that Director will receive a Nonqualified Stock Option to
            purchase an additional 75,000 shares of Common Stock provided such
            Director is, on such anniversary, still a director of the Company
            (the "Renewal Option"). Each Renewal Option shall vest on a pro rata
            basis each calendar month over the three year period from the date
            of grant (but only if such Director is a director of the Company at
            the time of vesting), with vesting commencing on the first day of
            the calendar month following the date of grant and final vesting on
            the date immediately prior to the third anniversary of the date of
            grant.

                      (B) The purchase price for Stock acquired pursuant to the
            exercise of an Option granted pursuant to this subparagraph (v)
            shall be the Fair

                                       6
<PAGE>

            Market Value of the Stock on the date of the grant of the Option.
            All Options granted under this subparagraph (v) shall provide for a
            period of exercisability of four years as to each Option (or, where
            vesting is in increments, as to each vested portion of the Option),
            commencing on the date the Option (or, if applicable, such portion
            of the Option) vests. If a person receiving an Option under this
            subparagraph (v) is not reelected to the Board, resigns, or is
            removed from the Board for any reason, then any portion of such
            persons Options granted under this subparagraph (v) that is not
            vested at such time shall terminate.

                      (C) The Committee, in its discretion, may change the terms
            and conditions of, and the number of shares of Stock subject to, an
            Option granted pursuant to this subparagraph (v) at any time prior
            to or on the date such Option is to be automatically granted
            hereunder.

            (c) Stock Appreciation Rights. The Committee is authorized to grant
SARs on the following terms and conditions ("SARs"):

                  (i) Right to Payment. An SAR shall confer on the Participant
            to whom it is granted a right to receive, upon exercise thereof, the
            excess of (A) the Fair Market Value of one share of Stock on the
            date of exercise (or, if the Committee shall so determine in the
            case of any such right, the Fair Market Value of one share at any
            time during a specified period before or after the date of
            exercise), over (B) the grant price of the SAR as determined by the
            Committee as of the date of grant of the SAR, which, except as
            provided in Section 7(a), shall be not less than the Fair Market
            Value of one share of Stock on the date of grant.

                  (ii) Other Terms. The Committee shall determine the time or
            times at which an SAR may be exercised in whole or in part, the
            method of exercise, method of settlement, form of consideration
            payable in settlement, method by which Stock will be delivered or
            deemed to be delivered to Participants, whether or not an SAR shall
            be in tandem with any other Award, and any other terms and
            conditions of any SAR. Limited SARs that may be exercised only upon
            the occurrence of a change in control of the Company (as defined in
            the applicable Award Agreement) may be granted on such terms, not
            inconsistent with this Section 6(c), as the Committee may determine.
            Limited SARs may be either freestanding or in tandem with other
            Awards.

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

                  (i) Grant and Restrictions. Restricted Stock shall be subject
            to such restrictions on transferability and other restrictions, if
            any, as the Committee may impose, which restrictions may lapse
            separately or in combination at such times, under such
            circumstances, in such installments, or otherwise, as the Committee
            may determine. Except to the extent restricted under the terms of
            the Plan and any Award Agreement relating to the Restricted Stock, a
            Participant granted Restricted Stock shall have all of the rights of
            a stockholder including, without

                                       7
<PAGE>

            limitations, the right to vote Restricted Stock and the right to
            receive dividends thereon.

                  (ii) Forfeiture. Except as otherwise determined by the
            Committee, upon termination of employment or service (as determined
            under criteria established by the Committee) during the applicable
            restriction period, Restricted Stock that is at that time subject to
            restrictions shall be forfeited and reacquired by the Company;
            provided, however, that the Committee may provide, by rule or
            regulation or in any Award Agreement, or may determine in any
            individual case, that restrictions or forfeiture conditions relating
            to Restricted Stock will be waived in whole or in part in the event
            of termination resulting from specified causes.

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

                  (iv) Dividends. Dividends paid on Restricted Stock shall be
            paid at the dividend payment dates in cash or in the shares of
            unrestricted Stock having a Fair Market Value equal to the amount of
            such dividends, or the payment of such dividends shall be deferred
            and/or the amount or value thereof automatically reinvested in
            additional Restricted Stock, other Awards, or other investment
            vehicles, as the Committee shall determine or permit the Participant
            to elect. Stock distributed in connection with a Stock split or
            Stock dividend, and other property distributed as a dividend, shall
            be subject to restrictions and a risk of forfeiture to the same
            extent as the Restricted Stock with respect to which such Stock or
            other property has been distributed, unless otherwise determined by
            the Committee.

            (e) Deferred Stock. The Committee is authorized to grant Deferred
Stock subject to the following terms and conditions ("Deferred Stock"):

                  (i) Award and Restrictions. Delivery of Stock will occur upon
            expiration of the deferral period specified for an Award of Deferred
            Stock by the Committee (or, if permitted by the Committee, as
            elected by the Participant). In addition, Deferred Stock shall be
            subject to such restrictions as the Committee may impose, if any,
            which restrictions may lapse at the expiration of the deferral
            period or at earlier specified times, separately or in combination,
            in installments or otherwise, as the Committee may determine.

                  (ii) Forfeiture. Except as otherwise determined by the
            Committee, upon termination of employment or service (as determined
            under criteria

                                       8
<PAGE>

            established by the Committee) during the applicable deferral period
            or portion thereof to which forfeiture conditions apply (as provided
            in the Award Agreement evidencing the Deferred Stock), all Deferred
            Stock that is at that time subject to such forfeiture conditions
            shall be forfeited; provided, however, that the Committee may
            provide, by rule or regulation or in any Award Agreement, or may
            determine in any individual case, that restrictions or forfeiture
            conditions relating to Deferred Stock will be waived in whole or in
            part in the event of termination resulting from specified causes.

            (f) Bonus Stock and Awards in Lieu of Cash Obligations. The
Committee is authorized to grant Stock as a bonus, or to grant Stock or other
Awards in lieu of Company obligations to pay cash under other plans or
compensatory arrangements. Stock or Awards granted hereunder shall be subject to
such other terms as shall be determined by the Committee.

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

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

         7. Certain Provisions Applicable to Awards.

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

                                       9
<PAGE>

Awards or awards may be granted either as of the same time as or a different
time from the grant of such other Awards or awards.

            (b) Term of Awards. The term of each Award shall be for such period
as may be determined by the Committee.

            (c) Form of Payment Under Awards. Subject to the terms of the Plan
and any applicable Award Agreement, payments to be made by the Company or a
subsidiary upon the grant, exercise or settlement of an Award may be made in
such forms as the Committee shall determine, including, without limitation,
cash, Stock, other Awards or other property, and may be in a single payment or
transfer, in installments or on a deferred basis. Such payments may include,
without limitation, provisions for the payment or crediting of reasonable
interest on installment or deferred payments or the grant or crediting of
Dividend Equivalents in respect of installment or deferred payments denominated
in Stock.

            (d) Loan Provisions. With the consent of the Committee, and subject
at all times to, and only to the extent, if any, permitted under and in
accordance with, laws and regulations and other binding obligations or
provisions applicable to the Company, the Company may make, guarantee or arrange
for a loan or loans to a Participant with respect to the exercise of any Option
or other payment in connection with any Award, including the payment by a
Participant of any or all federal, state or local income or other taxes due in
connection with any Award. Subject to such limitations, the Committee shall have
full authority to decide whether to make a loan or loans hereunder and to
determine the amount, terms and provisions of any such loan or loans, including
the interest rate to be charged in respect of any such loan or loans, whether
the loan or loans are to be with or without recourse against the borrower, the
terms on which the loan is to be repaid and conditions, if any, under which the
loan or loans may be forgiven.

            (e) Performance-Based Awards. The Committee may, in its discretion,
designate any Award the exercisability or settlement of which is subject to the
achievement of performance conditions as a performance-based Award subject to
this Section 7(e), in order to qualify such Award as "qualified
performance-based compensation" within the meaning of Code Section 162(m) and
regulations thereunder. The performance objectives of an Award subject to this
Section 7(e) shall consist of one or more business criteria and a targeted level
or levels of performance with respect to such criteria, as specified by the
Committee subject to this Section 7(e). Performance objectives shall be
objective, shall be stated in writing not later than ninety (90) days after the
beginning of the period of service to which they relate, and shall otherwise
meet the requirements of Section 162(m)(4)(C) (or successor provisions) of the
Code and the regulations thereunder. Business criteria used by the Committee in
establishing performance objectives for Awards subject to this Section 7(e)
shall be selected exclusively from among the following:

                           (1)      Annual return on capital;

                           (2)      Annual earnings per share;

                           (3)      Annual cash flow provided by operations;

                                       10
<PAGE>

                           (4)      Changes in annual revenues; and/or

                           (5)      Strategic business criteria, consisting of
                                    one or more objectives based on meeting
                                    specified revenue, market penetration,
                                    geographic business expansion goals, cost
                                    targets, and goals relating to acquisitions
                                    or divestitures.

The levels of performance required with respect to such business criteria may be
expressed in absolute or relative levels. Achievement of performance objectives
with respect to such Awards shall be measured over a period of not less than one
year nor more than five years, as the Committee may specify. Performance
objectives may differ for such Awards to different Participants. The Committee
shall specify the weight to be given to each performance objective for purposes
of determining the final amount payable with respect to any such Award. The
Committee may, in its discretion, reduce the amount of a payout otherwise to be
made in connection with an Award subject to this Section 7(e), but may not
exercise discretion to increase such amount, and the Committee may consider
other performance criteria in exercising such discretion. All determinations by
the Committee as to the achievement of performance objectives shall be in
writing. The Committee may not delegate any responsibility with respect to an
Award subject to this Section 7(e).

            (f) Acceleration. The Committee may accelerate the exercisability or
vesting of any Award in whole or in part at any time and may provide for the
acceleration of any Award in whole or in part upon the occurrence of certain
events as may be set forth in one or more Award Agreements.

         8. General Provisions.

            (a) Compliance With Laws and Obligations. The Company shall not be
obligated to issue or deliver Stock in connection with any Award or take any
other action under the Plan in a transaction subject to the restriction
requirements of the Securities Act of 1933, as amended, or any other federal or
state securities law, any requirement under any listing agreement between the
Company and any national securities exchange or automated quotation system or
any other law, regulation or contractual obligation of the Company until the
Company is satisfied that such laws, regulations, and other obligations of the
Company have been complied with in full. Certificates representing shares of
Stock issued under the Plan will be subject to such stop-transfer orders and
other restrictions as may be applicable under such laws, regulations and other
obligations of the Company, including any requirement that a legend or legends
be placed thereon.

            (b) Limitations on Transferability. Awards and other rights under
the Plan, including any Award or right which constitutes a derivative security
as generally defined in Rule 16a-1(c) under the Exchange Act, will not be
transferable by a Participant except by will or the laws of descent and
distribution or to a Beneficiary in the event of the Participant's death, and,
if exercisable, shall be exercisable during the lifetime of a Participant only
by such Participant or his guardian or legal representative; provided, however,
that such Awards and other rights may be transferred to one or more transferees
during the lifetime of the Participant, and may be

                                       11
<PAGE>

exercised by such transferees in accordance with the terms of such Award, but
only if and to the extent then permitted under Rule 16b-3, consistent with the
registration of the offer and sale of Stock on Form S-8 or Form S-3 or a
successor registration form of the Securities and Exchange Commission, and
permitted by the Committee. Awards and other rights under the Plan may not be
pledged, mortgaged, hypothecated or otherwise encumbered, and shall not be
subject to the claims of creditors.

            (c) No Right to Continued Employment or Service. Neither the Plan
nor any action taken hereunder shall be construed as giving any Employee or
other person the right to be retained in the employ or service of the Company or
any of its subsidiaries, nor shall it interfere in any way with the right of the
Company or any of its subsidiaries to terminate any Employee's employment or
other person's service at any time.

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

            (e) Changes to the Plan and Awards. The Board may amend, alter,
suspend, discontinue or terminate the Plan or the Committee's authority to grant
Awards under the Plan without the consent of stockholders or Participants,
except that any such action shall be subject to the approval of the Company's
stockholders at or before the next annual meeting of stockholders for which the
record date is after such Board action if such stockholder approval is required
by any federal or state law or regulation or the rules of any stock exchange or
automated quotation system on which the Stock may then be listed or quoted, and
the Board may otherwise, in its discretion, determine to submit other such
changes to the Plan to Stockholders for approval; provided, however, that,
without the consent of an affected Participant, no such action may materially
impair the rights of such Participant under any Award theretofore granted to
him. The Committee may waive any conditions or rights under, or amend, alter,
suspend, discontinue, or terminate, any Award theretofore granted and any Award
Agreement relating thereto; provided, however, that, without the consent of an
affected Participant, no such action may materially impair the rights of such
Participant under such Award.

            (f) No Rights to Awards: No Stockholder Rights. No Participant or
Employee shall have any claim to be granted any Award under the Plan, and there
is no obligation for uniformity or treatment of Participants and Employees. No
Award shall confer on any Participant any of the rights of a stockholder of the
Company unless and until Stock is duly issued or transferred and delivered to
the Participants in accordance with the terms of the Award or, in the case of an
Option, the Option is duly exercised.

            (g) Unfunded Status of Awards: Creation of Trusts. The Plan is
intended to constitute an "unfunded" plan for incentive and deferred
compensation. With respect to any

                                       12
<PAGE>

payments not yet made to a Participant pursuant to an Award, nothing contained
in the Plan or any Award shall give any such Participant any rights that are
greater than those of a general creditor of the Company; provided, however, that
the Committee may authorize the creation of trusts or make other arrangements to
meet the Company's obligations under the Plan to deliver cash, Stock, other
Awards, or other property pursuant to any Award, which trusts or other
arrangements shall be consistent with the "unfunded" status of the Plan unless
the Committee otherwise determines with the consent of each affected
Participant.

            (h) Nonexclusivity of the Plan. Neither the adoption of the Plan by
the Board nor its submission to the stockholders of the Company for approval
shall be construed as creating any limitations on the power of the Board to
adopt such other compensatory arrangements as it may deem desirable, including,
without limitation, the granting of stock options otherwise than under the Plan,
and such arrangements may be either applicable generally or only in specific
cases.

            (i) No Fractional Shares. No fractional shares of Stock shall be
issued or delivered pursuant to the Plan or any Award. 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.

            (j) Compliance with Code Section 162(m). It is the intent of the
Company that Options, SARs and other Awards designated as Awards subject to
Section 7(e) shall constitute "qualified performance-based compensation" within
the meaning of the Code Section 162(m). Accordingly, if any provision of the
Plan or any Award Agreement relating to such an Award does not comply or is
inconsistent with the requirements of Code Section 162(m), such provision shall
be construed or deemed amended to the extent necessary to conform to such
requirements, and no provision shall be deemed to confer upon the Committee or
any other person discretion to increase the amount of compensation otherwise
payable in connection with any such Award upon attainment of the performance
objectives.

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

            (l) Effective Date: Plan Termination. The Plan shall become
effective as of June __, 2002, and shall continue in effect until the earlier of
(i) such time as the Plan is terminated by the Board or (ii) June 11, 2012.

                                       13

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