Document:

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EXHIBIT 10.1 EMPLOYMENT AGREEMENT

                           CELEBRITY INTERVIEWS, INC.
                              375 GREENWICH STREET
                            NEW YORK, NEW YORK 10013

                                                        November 1, 1999

Mr. Joey Berlin 1629 Rising Glen Road

Los Angeles, CA 90069

Dear Mr. Berlin:

    The following constitutes the employment agreement (the "Agreement") between
you (the "Executive") and Celebrity Interviews, Inc. (the "Company"), a Delaware
corporation and a wholly-owned subsidiary of On2.com Inc., a Colorado
corporation ("On2.com"). This is the Employment Agreement referred to in the
Asset Purchase Agreement (the "Purchase Agreement"), dated as of November 11,
1999, among On2.com, the Company, the Executive and Ivy Tombak. Capitalized
terms used herein without definition shall have the meanings accorded them in
the Purchase Agreement.

    1. EMPLOYMENT; ACCEPTANCE OF EMPLOYMENT The Company hereby employs the
Executive during the Term (as defined below) on a full-time and in-person basis
to render exclusive services to the Company as its president. The Executive
hereby accepts this employment and will render his services as required by the
Company conscientiously, loyally, competently and to the best of his talents and
abilities throughout the Term in accordance with the direction and control of
his designated supervisor. During the Term, the Executive will also have the
title of Senior Vice President, Program Content and Licensing, of On2.com.

    2. TERM OF AGREEMENT. The initial term of this Agreement shall commence on
the date hereof and terminate on the day prior to the third anniversary of the
date of this Agreement. This Agreement may be renewed by the Company upon
90 days' written notice to the Executive prior to the expiration of the initial
term or any renewal term and acceptance of such offer of renewal by the
Executive. The initial term, as extended by any renewal term agreed to by the
parties, is referred to herein as the "Term".

    3. EXECUTIVE'S DUTIES AND RIGHTS.

       a. The Executive's principal duties shall be to use his contacts and
          experience in the entertainment industry to further the interests of
          On2.com in its effort to become a significant presence as a producer
          of and an outlet for entertainment-related audio and video information
          distributed on the World Wide Web and syndicated in various other
          media. The Executive shall endeavor to conduct video and audio
          interviews with celebrities, in cooperation with the needs of On2.com,
          and appear on-screen as host and interviewer upon request. The
          Executive shall manage the ongoing syndication business of the Company
          subject to direction by On2.com. The Executive shall provide such
          other related duties and services as may be reasonably assigned to him
          from time to time in the conduct of the business of the Company or
          On2.com.

       b. The Executive's services shall be rendered at the Company's West Coast
          and East Coast offices, as appropriate. The Executive shall travel
          between the Company's offices and to such other locations as the
          Company may request consistent with its business needs. Travel and all
          ordinary and necessary business expenses will be reimbursed by the
          Company in accordance with the Company's policies applicable to its
          senior executives.

       c. At the request of the Executive, the Company will employ up to three
          employees, at an aggregate annual compensation cost of $105,000 (plus
          standard employee benefits), who will

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          primarily participate in the ongoing interviewing and radio
          syndication business of the Company.

       d. At the request of the Executive, the Company will employ as many
          independent contractors as it believes necessary as long as the fees
          paid to such independent contractors are within the Company's annual
          budget as approved by its Board.

    4. EXCLUSIVITY, RESTRICTIVE AGREEMENTS.

       a. During his employment, the Executive shall devote all of his business
          time, skill and energies exclusively to the business of the Company
          and On2.com; PROVIDED, that (i) the Executive shall have the right to
          devote such amounts of his time to produce and broadcast the Critics'
          Choice Awards for the Broadcast Film Critics Association ("BFCA")
          consistent with past requirements and to his own screenwriting
          activities (so long as, in either case), the Executive performs the
          work outside the course of his employment and without interruption to
          his duties and without the use or benefit of any property owned by the
          Company or On2.com and (ii) nothing in this Agreement shall impair the
          rights of the Executive to his book TOXIC FAME and all proceeds of any
          exploitation thereof.

       b. The Executive acknowledges that the nature of the services, position
          and expertise of the Executive are such that he is capable of
          competing with the Company and seriously damaging its business and its
          prospects to the detriment of its stockholders and employees. In
          consideration of the Company's performance of its obligations under
          this Agreement, during the Term and thereafter during the Restricted
          Period (as defined below) the Executive shall not (i) directly or
          indirectly enter into the employ of, or render any advice or services,
          whether or not for compensation, to, any Person (as defined below)
          engaged in any Competitive Business (as defined below); (ii) directly
          or indirectly engage in any Competitive Business; and (iii) directly
          or indirectly become interested, whether or not for compensation, in
          any Competitive Business as an individual, partner, shareholder,
          creditor, director, officer, principal, agent, employee, trustee,
          consultant, advisor or in any other relationship or capacity or, in
          the case of any such company whose securities are traded on a national
          securities exchange in the United States or otherwise or in the
          over-the-counter market, acquire, directly or indirectly, an interest
          in excess of one percent (1%) of the outstanding capital stock of such
          company. The Company's business is worldwide in scope; accordingly,
          the Executive agrees that this covenant not to compete shall not be
          subject to any geographical limit.

       c. For purposes of this Section, any "Competitive Business" shall mean
          any business (including, for the avoidance of doubt, any division,
          unit, subsidiary or affiliate of any other business whether or not
          such other business is a Competitive Business, unless the Executive
          can demonstrate that his employment by, engagement in, or his interest
          in, such unit, division, subsidiary or affiliate does not and will not
          require him to provide services, information, advice or relevant
          knowledge, skill, know-how or contacts to the Competitive Business
          during the Restricted Period) which is principally engaged in the
          design or development of digital compression, or streaming
          technologies, in the design, development or operation of broadcast
          sites on the Internet, or in the production of broadband or other
          content which is directly competitive with content produced by
          On2.com.

       d. For purposes of this Section, "Person" shall mean any corporation,
          partnership, trust, individual or any other entity.

       e. For all purposes of this Section 4, "Restricted Period" shall be the
          365 days immediately following termination of employment if such
          termination is by resignation by the Executive or termination by the
          Company with Cause (as defined in Section 7.a). There shall be no
          Restricted Period upon expiration of the Term.

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    5. COMPENSATION.

       a. During the Term, the Executive shall receive base compensation at the
          rate of $125,000 per year, payable in accordance with the Company's
          regular payroll policies. In addition, the Executive will be entitled
          to receive an annual bonus of at least $25,000 as determined by the
          Company's Board of Directors in its sole discretion. In determining
          the amount of the bonus in excess of $25,000, the Company's Board of
          Directors will consider (i) the extent to which efforts of the
          Executive have increased the assets or the results of On2.com or have
          otherwise added value to the business of On2.com, and (ii) the
          productivity of the Executive in developing new materials exploitable
          by On2.com in its business.

       b. The Company will reimburse the Executive for expenses related to its
          business actually incurred or paid by the Executive in the performance
          of his duties under this Agreement in accordance with policies
          applicable to its senior executives or the senior executives of
          On2.com, upon presentation of accountings, expense statements,
          vouchers or such other supporting information as may be required by
          the Company's policies.

       c. The Company will provide the Executive with a monthly car allowance of
          $850. Fuel expenses incurred in the course of the Company's business
          will be reimbursed in accordance with the Company's policies
          applicable to reimbursement of business expenses.

    6. EXECUTIVE BENEFITS.

       a. During the Term, the Executive shall be entitled to participate in
          such group health, retirement, profit sharing, 401(k) and other
          benefits programs or plans, qualified or unqualified, including any
          future stock option, bonus or other incentive program, which are or
          become available to other senior executives of the Company, subject to
          the policies of the Company with respect to all of such programs or
          plans. Nothing in this Section 6.a shall be construed to create a
          contractual obligation to provide the Executive with any particular
          form or type of benefit or to limit the discretion of the Board of
          Directors or Compensation Committee or any other duly authorized or
          appointed plan administrator.

       b. During the Term, the Executive shall be entitled to three weeks' paid
          vacation per Year of employment to be scheduled on reasonable notice
          to the Company and to be taken, accrued and paid on the same basis as
          other employees of the Company.

    7. TERMINATION OF EMPLOYMENT FOR CAUSE.

       a. The Company may terminate employment of the Executive for any of the
          following reasons, each of which is defined as "Cause":

         i.  commission of a felony, any crime of moral turpitude or any act of
             fraud or dishonesty involving the business of the Company or
             On2.com;

         ii.  repeated failure to satisfactorily perform material services
              required under this Agreement in accordance with the requests of
              the Board of Directors of the Company or On2.com;

         iii. willful misconduct or gross negligence in the performance of his
              duties;

         iv. disregard or violation of the legal rights of any employees of the
             Company or On2.com or of the written policies of On2.com or the
             Company regarding harassment or discrimination; or

         v.  a breach of any material provisions of this Agreement (including,
             but not limited to, any breach of Sections 3 or 9).

    If the Company terminates the employment of the Executive for Cause, or if
the Executive resigns during the Term, certain shares of the common stock of
On2.com shall become forfeitable in accordance

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with the terms of the Escrow Agreement, and the Company's obligations under this
Agreement to pay further compensation shall cease forthwith, except that the
Company will pay the Executive, within 30 days from the date of termination of
his employment, in full and complete satisfaction of all of the Company's
obligations under this Agreement, (i) the Base Salary and, subject to submission
of all required documentation, reimbursable expenses accrued (but unpaid) to the
date of termination and (ii) any accrued but unused vacation days paid at the
rate of the Executive's Base Salary.

       b. If the Executive dies during the Term, such death shall be deemed
          termination for Cause and the Company's obligation to the Executive's
          estate shall be the same as those for termination for Cause as defined
          in Section 7.a.

       c. If, as a result of the Executive's disability or incapacity during the
          Term due to physical illness or condition, or mental illness during
          his employment with the Company, the Executive is unable to perform
          his duties hereunder for a consecutive 6-calendar week period, or an
          aggregate period of 12 calendar weeks during any 12 months (or such
          longer period as may be required to comply with the Family Leave Act
          or other applicable law), the Company shall have the right, upon
          written notice to the Executive, to terminate the Executive's
          employment under this Agreement. Such a termination shall be deemed
          termination for Cause as defined in Section 7.a, but shall in no case
          become effective until the date at which the Company's long-term
          disability plan pays benefits to him.

       d. Any alleged breach of this Agreement by either party shall not be
          deemed a breach until such time as the breaching party shall have
          received written notice from the non-breaching party setting forth the
          alleged breach ("Alleged Breach Notice") and the breaching party shall
          not have cured (if curable) the breach set forth in the Alleged Breach
          Notice in the 15 days (10 days for defaults in payments) after receipt
          of such Alleged Breach Notice. If the breach set forth in the Alleged
          Breach Notice is not curable and has not resulted in a substantive and
          material adverse effect on the party sending the Alleged Breach
          Notice, the Company and the Executive shall, at the request of the
          other, attempt to meet and discuss such alleged breach before
          resorting to remedies or rights under this Agreement or otherwise.
          Notwithstanding the foregoing, this Section shall not apply to, and
          the Executive shall have no right to cure, a breach by him under
          clauses (i) and (iv) of the definition "Cause" contained in
          Section 7.a.

    8. TERMINATION OTHER THAN FOR CAUSE.

    If the Company terminates the Executive's employment without Cause, the
Company's obligations under this Agreement to pay further compensation shall
cease forthwith, except that the Company will pay the Executive (i) all Base
Salary for the period remaining under the Term, (ii) within 30 days after
submission of all required documentation, reimbursable expenses accrued (but
unpaid) to the date of termination and (iii) within 10 business days after such
termination, any accrued but unused vacation days paid at a rate determined
consistently with the Company's practices; provided; that payments of Base
Salary shall not be accelerated and shall remain payable as otherwise provided
in this Agreement. Notwithstanding the foregoing, at all times after termination
the Executive shall have the affirmative duty to seek other employment of
comparable stature and with comparable base compensation to attempt to mitigate
his right to payment, and the foregoing payments of Base Salary shall decrease
if and to the extent that the Executive obtains other employment or provides his
services as a consultant by the amount of compensation (other than contingent or
in kind compensation) payable thereunder in respect of services provided to or
provided by the Executive during the time period prior to the termination of the
Term (without giving effect to early termination). For purposes of defining the
Executive's obligation to mitigate damages and the obligation of the Company to
make the payments referred to in this Section following termination of
employment without Cause, the "Term" shall be the remaining period of the
unexpired Term. The provisions of this Section 8 are the exclusive provisions
that will apply if a court or arbitrator

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should determine that the Company's termination of the Executive's employment
was without Cause or by reason of a material breach by the Company of any of its
material obligations under this Agreement.

    9. NONDISCLOSURE.

       a. Except as required in order to perform his obligations under this
          Agreement, the Executive shall not, without the express prior written
          consent of the Company, directly or indirectly, disclose or divulge to
          any other person or entity any of the Company's Confidential
          Information or Trade Secrets at any time (during or after the
          Executive's employment) during which such data or information
          continues to constitute Confidential Information or a Trade Secret;
          PROVIDED, that the provisions of this Section 9.a shall not restrict
          the Executive from exercising his rights strictly in accordance with
          Section 7.9 of the Purchase Agreement nor from disclosing the
          provisions of this Agreement to his personal advisors. The Executive
          shall not disclose or divulge to any other person (particularly to any
          other employee) any terms of the Executive's compensation under this
          Agreement. Upon any termination or expiration of his employment, the
          Executive will promptly upon request therefor deliver to the Company
          all data, lists, information, memoranda, documents and all other
          property belonging to the Company or containing Confidential
          Information or Trade Secrets of the Company.

       b. As used in this Agreement:

         i.  "Confidential Information" of the Company shall mean any valuable,
             competitively sensitive data and information related to the
             Company's business other than Trade Secrets that are not generally
             known by or readily available to the Company's competitors,
             including, among other things, that which relates to services
             performed by the Executive for the Company, or was created or
             obtained by the Executive while performing services for the Company
             or by virtue of the Executive's relationship with the Company; and

         ii.  "Trade Secrets" shall mean information or data of the Company,
              including but not limited to technical or non-technical data,
              compilations, programs, devices, methods, techniques, processes,
              financial data and financial plans, that: (a) derive economic
              value, actual or potential, from not being generally known to, and
              not being readily ascertainable by proper means by, other persons
              who can obtain economic value from their disclosure or use; and
              (b) are the subject of efforts that are reasonable under the
              circumstances to maintain their secrecy. To the extent that the
              foregoing definition is inconsistent with a definition of "trade
              secret" mandated under applicable law, the latter definition shall
              govern for purposes of interpreting the Executive's obligations
              under this Agreement.

         iii. The obligations set forth in this Section shall not be applicable
              to any information which: (i) the Company has authorized the
              Executive in writing to publicly disclose, copy or use, but only
              to the extent of such authorization; (ii) is generally known or
              becomes part of the public domain through no fault of the
              Executive; (iii) is disclosed to the Company by third parties
              without restrictions on disclosure; or (iv) is required to be
              disclosed in the context of any administrative or judicial
              proceedings; PROVIDED that, if the Executive is requested or
              becomes legally compelled to disclose any Confidential Information
              or Trade Secrets, the Executive will provide the Company with
              prompt written notice so that the Company may seek a protective
              order or other appropriate remedy and/or waive compliance with the
              provisions of this Section and the Executive will cooperate with
              the Company in any effort the Company undertakes to obtain a
              protective order or other remedy. If such a protective order or
              other remedy is not obtained or the Company waives compliance with
              this Section, the Executive will furnish only that portion of the
              Confidential Information and Trade Secrets that is legally
              required and will exercise all reasonable efforts to obtain
              reliable assurance that confidential treatment will be accorded
              the Confidential Information to be disclosed. The Company hereby
              agrees to indemnify and hold harmless the Executive from

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              all costs and expenses, including attorneys' fees, he incurs in
              carrying out his obligations under the proviso provisions of this
              subsection 9.b.iii and further agrees upon the written request of
              the Executive to advance to the Executive the anticipated cost of
              complying with his obligations under such proviso provisions.

    10. REPRESENTATIONS AND WARRANTIES. The Executive hereby represents and
warrants that (a) he has the right to enter into this Agreement with the Company
and to grant the rights contained in this Agreement, and (b) the provisions of
this Agreement do not violate any other contracts or agreements that the
Executive has entered into with any other individual or entity.

    11. SERVICES OF THE EXECUTIVE. In the course of his employment under this
Agreement, the Executive will have access to Trade Secrets, the disclosure or
unauthorized use of which, the Company seeks to protect and the Executive has
agreed to protect. As a result of benefits accruing to the Executive from his
access to such Trade Secrets, and of the improvement in his knowledge, and
proficiency arising therefrom, the Executive acknowledges that (a) his services
are and will remain special and extraordinary, and have and will have a peculiar
value, the loss of which cannot be reasonably or adequately compensated in
damages in any action at law; (b) he is willing to comply with the restrictions
contained in Sections 4.b and 4.c; (c) the restrictions contained in those
Sections will not impair his ability to earn a living in any businesses other
than those businesses from which he is prohibited during the time of such
restriction; and (d) a material breach of his obligations under Sections 4.b,
4.c or 9 will cause the Company irreparable injury and damage. It is, therefore,
agreed that the Company, in addition to any other remedies, shall be entitled to
injunctive and other equitable relief to enforce its rights under, and to
prevent a breach of, Sections 4.b, 4.c and 9 of this Agreement by the Executive.

    12. ASSIGNABILITY, ETC. This Agreement shall be nondelegable and
nonassignable by the Executive. This Agreement shall be binding upon and inure
to the benefit of the Company and any entity succeeding to all or substantially
all of the business assets of the Company by merger, consolidation, purchase of
assets or otherwise.

    13. NOTICES. Any notice pertaining to this Agreement shall be in writing and
shall be served by delivering said notice (i) by hand, (ii) by overnight mail by
an internationally recognized carrier, (iii) by sending it by certified mail,
postage prepaid, return receipt requested, or (iv) by confirmed telefax, with
notice confirmed, to the Executive at the address first stated above or his
office at the Company, with a courtesy copy to Berlack, Israels & Liberman, LLP,
120 West 45(th) Street, New York, NY 10036, Attention: Stuart Neuhauser, Esq.
and to the Company at:

             375 Greenwich Street
             New York, New York 10013
             Attn.: President

             Fax: (212) 941-3853

with a courtesy copy to:

             William A. Newman, Esq.

             Greenberg Traurig

             200 Park Avenue

             New York, New York 10166

             Fax: (212) 801-6400

The addresses for notice may be changed by notice given to the other party
pursuant to this Section.

    14. MISCELLANEOUS.

       a. This Agreement shall be governed by and construed under the laws and
          decisions 0of the State of New York applicable without regard to the
          principles of conflicts of laws. The parties to this Agreement agree
          that the state or federal courts in the State of New York shall have
          personal

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          jurisdiction over them with respect to, and shall be the exclusive
          forum for the resolution of, any matter or controversy arising from or
          with respect to this Agreement. Service of a summons and complaint
          concerning any such matter or controversy may, in addition to any
          other lawful means, be effected by sending a copy of such summons and
          complaint by certified mail to the party to be served as specified in
          Section 13 of this Agreement or at such other address as the party to
          be served shall have provided in writing to the other from time to
          time in accordance with Section 13.

       b. To the extent permitted by law, the Executive and the Company
          irrevocably waive trial by jury and any objection which he or it may
          now or hereafter have to the venue of any suit, action or proceeding
          arising out of or relating to this Agreement brought in the City of
          New York, and to the extent permitted by law, the Executive and the
          Company hereby further irrevocably waive any claim that any such suit,
          action or proceeding brought in the City of New York has been brought
          in an inconvenient forum.

       c. This Agreement contains the entire understanding of the parties to
          this Agreement with respect to the subject matter of this Agreement
          and supersedes all previous written and oral agreements between the
          parties with respect to the subject matter set forth in this
          Agreement.

       d. This Agreement may not be modified or amended except by a writing
          signed by the parties to this Agreement.

       e. Any provision of this Agreement that is deemed invalid, illegal or
          unenforceable in any jurisdiction shall, as to that jurisdiction and
          subject to this Section, be ineffective to the extent of such
          invalidity, illegality or unenforceability, without affecting in any
          way the remaining provisions of this Agreement in such jurisdiction or
          rendering that or any other provision of this Agreement invalid,
          illegal or unenforceable in any other jurisdiction. If the covenant
          should be deemed invalid, illegal or unenforceable because its scope
          is considered excessive, such covenant shall be modified so that the
          scope of the covenant is reduced only to the minimum extent necessary
          to render the modified covenant valid, legal and enforceable.

       f. The following provisions of this Agreement shall survive in accordance
          with their terms, the expiration or termination of this Agreement for
          any reason: Sections 4, 5, 7, 8, 9 and 14.

       g. A waiver by either party of any Section, term or condition of this
          Agreement in any instance shall not be deemed or construed to be a
          waiver of such Section, term or condition for the future or of any
          subsequent breach thereof, and any such waiver must be in writing,
          signed by the party to be charged. All rights and remedies contained
          in this Agreement are cumulative, and none of them shall be construed
          so as to limit any other right or remedy of either party.

       h. This Agreement may be executed in counterparts, all of which shall
          constitute one and the same agreement.

       i. The headings and titles to the Sections of this Agreement are inserted
          for convenience only and shall not be deemed a part of or affect the
          construction or interpretation of any provisions of this Agreement.

       j. All references to Sections shall be to sections and schedules of this
          Agreement.

       k. All references using male pronouns shall be deemed to include female
          pronouns.

       l. This Agreement may be signed in multiple counterparts, each of which
          shall be deemed an original. Any executed counterpart returned by
          facsimile shall be deemed an original executed counterpart.

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    If the foregoing accurately reflects the Executive's understanding, please
countersign and return one counterpart of this Agreement to the Company.

<TABLE>
<S>                                                    <C>  <C>
                                                       Sincerely yours,

                                                       CELEBRITY INTERVIEWS, INC.

                                                       By:
                                                            -----------------------------------------
                                                            Name: Daniel Miller
                                                            Title: Chairman
</TABLE>

Accepted and agreed to:

<TABLE>
<C>                                                    <S>                          <C>
     -------------------------------------------
                     Joey Berlin
</TABLE>

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                                   GUARANTEE

1.  In consideration of the sum of $10.00 now paid by the Executive to
    On2.com, Inc. ("On2.com") receipt whereof is hereby acknowledged, On2.com
    hereby irrevocably and unconditionally guarantees as a continuing guarantee
    the payment when due of all sums due, owing or outstanding from the Company
    to the Executive hereunder and the performance of all of the Company's
    obligations hereunder and agrees to idemnify the Executive from and against
    all loss, damage, costs and expenses which the Executive may suffer through
    or arising from any failure by the Company duly, fully and punctually to pay
    any such sum required to be paid by it in relation to or otherwise to
    perform its obligations under this Agreement.

2.  Without prejudice to the Executive's rights against the Company as between
    the Executive and On2.com, On2.com shall be liable hereunder as if it were
    the sole principal debtor and not merely a surety, and On2.com's liability
    hereunder shall not be released, discharged or diminished by:

    (a) any legal limitation, lack of capacity or authorization or defect in the
       actions of the Company in relation to, any invalidity or unenforceability
       of, or any variation (whether or not agreed by On2.com) of any of the
       terms of this Agreement, the bankruptcy, liquidation, insolvency, or
       dissolution of the Company or any change in the Company's identity,
       constitution, status or control; or

    (b) any forbearance, neglect or delay in seeking performance of the
       obligations of the Company, any granting of time indulgence or other
       relief to the Company in relation to such performance, or any composition
       with, discharge, waiver or release of the Company; or

    (c) any other act, omission, fact or circumstance which might otherwise
       release, discharge or diminish the liability of a guarantor.

3.  Any release, settlement or discharge between the Executive and On2.com shall
    be conditional upon no security or payment made or given to the Executive
    being avoided, reduced, set aside or rendered unenforceable by virtue of any
    provision or enactment now or hereafter in force relating to bankruptcy,
    insolvency or liquidation and if any such security or payment shall be
    avoided, reduced, set aside or rendered unenforceable, the Executive shall
    be entitled to recover the full amount or value of any such security or
    payment from On2.com and otherwise to enforce this Section as if such
    release, settlement or discharge had not taken place.

    IN WITNESS WHEREOF, the undersigned has executed this Guarantee as of
November   , 1999.

                                          ON2.COM INC.
                                          a Colorado corporation
                                          By: __________________________________
                                             Name:
                                             Title:

                                       9<PAGE>

                               RADISYS CORPORATION

                            1995 STOCK INCENTIVE PLAN

                     (As Amended Through February 25, 2000)

         1. PURPOSE. The purpose of this Stock Incentive Plan (the "Plan") is
to enable RadiSys Corporation (the "Company") to attract and retain the
services of (1) selected employees, officers and directors of the Company or
of any subsidiary of the Company and (2) selected nonemployee agents,
consultants, advisors, persons involved in the sale or distribution of the
Company's products and independent contractors of the Company or any
subsidiary.

         2. SHARES SUBJECT TO THE PLAN. Subject to adjustment as provided
below and in paragraph 13, the shares to be offered under the Plan shall
consist of Common Stock of the Company, and the total number of shares of
Common Stock that may be issued under the Plan shall not exceed 4,125,000*
shares. The shares issued under the Plan may be authorized and unissued
shares or reacquired shares. If an option, stock appreciation right or
performance unit granted under the Plan expires, terminates or is canceled,
the unissued shares subject to such option, stock appreciation right or
performance unit shall again be available under the Plan. If shares sold or
awarded as a bonus under the Plan are forfeited to the Company or repurchased
by the Company, the number of shares forfeited or repurchased shall again be
available under the Plan.

         3.       EFFECTIVE DATE AND DURATION OF PLAN.

                  (a) EFFECTIVE DATE. The Plan shall become effective as of
August 7, 1995. No option, stock appreciation right or performance unit
granted under the Plan to an officer who is subject to Section 16(b) of the
Securities Exchange Act of 1934, as amended (an "Officer") or a director, and
no incentive stock option, shall become exercisable, however, until the Plan
is approved by the affirmative vote of the holders of a majority of the
shares of Common Stock represented at a shareholders meeting at which a
quorum is present and any such awards under the Plan prior to such approval
shall be conditioned on and subject to such approval. Subject to this
limitation, options, stock appreciation rights and performance units may be
granted and shares may be awarded as bonuses or sold under the Plan at any
time after the effective date and before termination of the Plan.

                  (b) DURATION. The Plan shall continue in effect until all
shares available for issuance under the Plan have been issued and all
restrictions on such shares have lapsed. The Board of Directors may suspend
or terminate the Plan at any time except with respect to

------------------
         *        Adjusted to reflect a 3-for-2 stock split of the shares of
                  Common Stock, without par value, of the Company, effected in
                  the form of a 50% share dividend in accordance with ORS
                  60.154, declared by the Board of Directors on October 19,
                  1999, and paid on November 29, 1999 to shareholders of record
                  at the close of business on November 8, 1999.

<PAGE>

options, performance units and shares subject to restrictions then
outstanding under the Plan. Termination shall not affect any outstanding
options, any right of the Company to repurchase shares or the forfeitability
of shares issued under the Plan.

         4.       ADMINISTRATION.

                  (a) BOARD OF DIRECTORS. The Plan shall be administered by
the Board of Directors of the Company, which shall determine and designate
from time to time the individuals to whom awards shall be made, the amount of
the awards and the other terms and conditions of the awards. Subject to the
provisions of the Plan, the Board of Directors may from time to time adopt
and amend rules and regulations relating to administration of the Plan,
advance the lapse of any waiting period, accelerate any exercise date, waive
or modify any restriction applicable to shares (except those restrictions
imposed by law) and make all other determinations in the judgment of the
Board of Directors necessary or desirable for the administration of the Plan.
The interpretation and construction of the provisions of the Plan and related
agreements by the Board of Directors shall be final and conclusive. The Board
of Directors may correct any defect or supply any omission or reconcile any
inconsistency in the Plan or in any related agreement in the manner and to
the extent it shall deem expedient to carry the Plan into effect, and it
shall be the sole and final judge of such expediency.

                  (b) COMMITTEE. The Board of Directors may delegate to a
committee of the Board of Directors or specified officers of the Company, or
both (the "Committee") any or all authority for administration of the Plan.
If authority is delegated to a Committee, all references to the Board of
Directors in the Plan shall mean and relate to the Committee except (i) as
otherwise provided by the Board of Directors, (ii) that only the Board of
Directors may amend or terminate the Plan as provided in paragraphs 3 and 15
and (iii) that a Committee including officers of the Company shall not be
permitted to grant options to persons who are officers of the Company. If
awards are to be made under the Plan to Officers or directors, authority for
selection of Officers and directors for participation and decisions
concerning the timing, pricing and amount of a grant or award, if not
determined under a formula meeting the requirements of Rule 16b-3 under the
Securities Exchange Act of 1934, as amended, shall be delegated to a
committee consisting of two or more disinterested directors.

         5. TYPES OF AWARDS; ELIGIBILITY. The Board of Directors may, from
time to time, take the following action, separately or in combination, under
the Plan: (i) grant Incentive Stock Options, as defined in Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), as provided in
paragraphs 6(a) and 6(b); (ii) grant options other than Incentive Stock
Options ("Non-Statutory Stock Options") as provided in paragraphs 6(a) and
6(c); (iii) award stock bonuses as provided in paragraph 7; (iv) sell shares
subject to restrictions as provided in paragraph 8; (v) grant stock
appreciation rights as provided in paragraph 9; (vi) grant cash bonus rights
as provided in paragraph 10; (vii) grant performance units as provided in
paragraph 11 and (viii) grant foreign qualified awards as provided in
paragraph 12. Any such awards may be made to employees, including employees
who are officers or

                                       2
<PAGE>

directors, and to other individuals described in paragraph 1 who the Board of
Directors believes have made or will make an important contribution to the
Company or any subsidiary of the Company; provided, however, that only
employees of the Company shall be eligible to receive Incentive Stock Options
under the Plan. The Board of Directors shall select the individuals to whom
awards shall be made and shall specify the action taken with respect to each
individual to whom an award is made. At the discretion of the Board of
Directors, an individual may be given an election to surrender an award in
exchange for the grant of a new award. No employee may be granted options or
stock appreciation rights under the Plan for more than an aggregate of
450,000 shares of Common Stock in connection with the hiring of the employee
or 100,000 shares of Common Stock in any calendar year otherwise.

         6.       OPTION GRANTS.

                  (a)      GENERAL RULES RELATING TO OPTIONS.

                           (i) TERMS OF GRANT. The Board of Directors may grant
         options under the Plan. With respect to each option grant, the Board of
         Directors shall determine the number of shares subject to the option,
         the option price, the period of the option, the time or times at which
         the option may be exercised and whether the option is an Incentive
         Stock Option or a Non-Statutory Stock Option. At the time of the grant
         of an option or at any time thereafter, the Board of Directors may
         provide that an optionee who exercised an option with Common Stock of
         the Company shall automatically receive a new option to purchase
         additional shares equal to the number of shares surrendered and may
         specify the terms and conditions of such new options.

                           (ii) EXERCISE OF OPTIONS. Except as provided in
         paragraph 6(a)(iv) or as determined by the Board of Directors, no
         option granted under the Plan may be exercised unless at the time of
         such exercise the optionee is employed by or in the service of the
         Company or any subsidiary of the Company and shall have been so
         employed or provided such service continuously since the date such
         option was granted. Absence on leave or on account of illness or
         disability under rules established by the Board of Directors shall not,
         however, be deemed an interruption of employment or service for this
         purpose. Unless otherwise determined by the Board of Directors, vesting
         of options shall not continue during an absence on leave (including an
         extended illness) or on account of disability. Except as provided in
         paragraphs 6(a)(iv) and 13, options granted under the Plan may be
         exercised from time to time over the period stated in each option in
         such amounts and at such times as shall be prescribed by the Board of
         Directors, provided that options shall not be exercised for fractional
         shares. Unless otherwise determined by the Board of Directors, if the
         optionee does not exercise an option in any one year with respect to
         the full number of shares to which the optionee is entitled in that
         year, the optionee's rights shall be cumulative and the optionee may
         purchase those shares in any subsequent year during the term of the
         option. Unless otherwise determined by the Board of Directors, if an
         Officer exercises

                                       3
<PAGE>

         an option within six months of the grant of the option, the shares
         acquired upon exercise of the option may not be sold until six months
         after the date of grant of the option.

                           (iii) NONTRANSFERABILITY. Each Incentive Stock Option
         and, unless otherwise determined by the Board of Directors with respect
         to an option granted to a person who is neither an Officer nor a
         director of the Company, each other option granted under the Plan by
         its terms shall be nonassignable and nontransferable by the optionee,
         either voluntarily or by operation of law, except by will or by the
         laws of descent and distribution of the state or country of the
         optionee's domicile at the time of death, and shall be exercisable
         during the optionee's lifetime only by the optionee.

                           (iv)     TERMINATION OF EMPLOYMENT OR SERVICE.

                                    (A) GENERAL RULE. Unless otherwise
                  determined by the Board of Directors, in the event the
                  employment or service of the optionee with the Company or a
                  subsidiary terminates for any reason other than because of
                  physical disability or death as provided in subparagraphs
                  6(a)(iv)(B) and (C), the option may be exercised at any time
                  prior to the expiration date of the option or the expiration
                  of 30 days after the date of such termination, whichever is
                  the shorter period, but only if and to the extent the optionee
                  was entitled to exercise the option at the date of such
                  termination.

                                    (B) TERMINATION BECAUSE OF TOTAL DISABILITY.
                  Unless otherwise determined by the Board of Directors, in the
                  event of the termination of employment or service because of
                  total disability, the option may be exercised at any time
                  prior to the expiration date of the option or the expiration
                  of 12 months after the date of such termination, whichever is
                  the shorter period, but only if and to the extent the optionee
                  was entitled to exercise the option at the date of such
                  termination. The term "total disability" means a medically
                  determinable mental or physical impairment which is expected
                  to result in death or which has lasted or is expected to last
                  for a continuous period of 12 months or more and which causes
                  the optionee to be unable, in the opinion of the Company and
                  two independent physicians, to perform his or her duties as an
                  employee, director, officer or consultant of the Company and
                  to be engaged in any substantial gainful activity. Total
                  disability shall be deemed to have occurred on the first day
                  after the Company and the two independent physicians have
                  furnished their opinion of total disability to the Company.

                                    (C) TERMINATION BECAUSE OF DEATH. Unless
                  otherwise determined by the Board of Directors, in the event
                  of the death of an optionee while employed by or providing
                  service to the Company or a subsidiary, the option may be
                  exercised at any time prior to the expiration date of the
                  option or

                                       4
<PAGE>

                  the expiration of 12 months after the date of death,
                  whichever is the shorter period, but only if and to the extent
                  the optionee was entitled to exercise the option at the date
                  of death and only by the person or persons to whom such
                  optionee's rights under the option shall pass by the
                  optionee's will or by the laws of descent and distribution of
                  the state or country of domicile at the time of death.

                                    (D) AMENDMENT OF EXERCISE PERIOD APPLICABLE
                  TO TERMINATION. The Board of Directors, at the time of grant
                  or, with respect to an option that is not an Incentive Stock
                  Option, at any time thereafter, may extend the 30-day and
                  12-month exercise periods any length of time not longer than
                  the original expiration date of the option, and may increase
                  the portion of an option that is exercisable, subject to such
                  terms and conditions as the Board of Directors may determine.

                                    (E) FAILURE TO EXERCISE OPTION. To the
                  extent that the option of any deceased optionee or of any
                  optionee whose employment or service terminates is not
                  exercised within the applicable period, all further rights to
                  purchase shares pursuant to such option shall cease and
                  terminate.

                           (v) PURCHASE OF SHARES. Unless the Board of Directors
         determines otherwise, shares may be acquired pursuant to an option
         granted under the Plan only upon receipt by the Company of notice in
         writing from the optionee of the optionee's intention to exercise,
         specifying the number of shares as to which the optionee desires to
         exercise the option and the date on which the optionee desires to
         complete the transaction, and if required in order to comply with the
         Securities Act of 1933, as amended, containing a representation that it
         is the optionee's present intention to acquire the shares for
         investment and not with a view to distribution. Unless the Board of
         Directors determines otherwise, on or before the date specified for
         completion of the purchase of shares pursuant to an option, the
         optionee must have paid the Company the full purchase price of such
         shares in cash (including, with the consent of the Board of Directors,
         cash that may be the proceeds of a loan from the Company (provided
         that, with respect to an Incentive Stock Option, such loan is approved
         at the time of option grant)) or, with the consent of the Board of
         Directors (which, in the case of an Incentive Stock Option, shall be
         given only at the time of option grant), in whole or in part, in Common
         Stock of the Company valued at fair market value*, restricted stock,
         performance units or other contingent awards denominated in either
         stock or cash,

------------------
         *  The Board of Directors has consented to the use of Common Stock
            in payment of the purchase price, at a fair market value equal to
            the closing price of the Common Stock as reported in THE WALL
            STREET JOURNAL on the last trading day preceding the date the
            option is exercised.

                                       5
<PAGE>

         promissory notes and other forms of consideration. The fair market
         value of Common Stock provided in payment of the purchase price shall
         be determined by the Board of Directors. If the Common Stock of the
         Company is not publicly traded on the date the option is exercised,
         the Board of Directors may consider any valuation methods it deems
         appropriate and may, but is not required to, obtain one or more
         independent appraisals of the Company. If the Common Stock of the
         Company is publicly traded on the date the option is exercised, the
         fair market value of Common Stock provided in payment of the purchase
         price shall be the closing price of the Common Stock as reported in THE
         WALL STREET JOURNAL on the last trading day preceding the date the
         option is exercised, or such other reported value of the Common Stock
         as shall be specified by the Board of Directors. No shares shall be
         issued until full payment for the shares has been made. With the
         consent of the Board of Directors (which, in the case of an Incentive
         Stock Option, shall be given only at the time of option grant), an
         optionee may request the Company to apply automatically the shares to
         be received upon the exercise of a portion of a stock option (even
         though stock certificates have not yet been issued) to satisfy the
         purchase price for additional portions of the option. Each optionee who
         has exercised an option shall immediately upon notification of the
         amount due, if any, pay to the Company in cash amounts necessary to
         satisfy any applicable federal, state and local tax withholding
         requirements. If additional withholding is or becomes required beyond
         any amount deposited before delivery of the certificates, the optionee
         shall pay such amount to the Company on demand. If the optionee fails
         to pay the amount demanded, the Company may withhold that amount from
         other amounts payable by the Company to the optionee, including salary,
         subject to applicable law. With the consent of the Board of Directors
         (which in the case of an Incentive Stock Option, shall be given only at
         the time of option grant), an optionee may satisfy this obligation, in
         whole or in part, by having the Company withhold from the shares to be
         issued upon the exercise that number of shares that would satisfy the
         withholding amount due or by delivering to the Company Common Stock to
         satisfy the withholding amount. Upon the exercise of an option, the
         number of shares reserved for issuance under the Plan shall be reduced
         by the number of shares issued upon exercise of the option.

                  (b) INCENTIVE STOCK OPTIONS. Incentive Stock Options shall be
         subject to the following additional terms and conditions:

                           (i) LIMITATION ON AMOUNT OF GRANTS. No employee may
         be granted Incentive Stock Options under the Plan if the aggregate fair
         market value, on the date of grant, of the Common Stock with respect to
         which Incentive Stock Options are exercisable for the first time by
         that employee during any calendar year under the Plan and under all
         incentive stock option plans (within the meaning of Section 422 of the
         Code) of the Company or any parent or subsidiary of the Company exceeds
         $100,000.

                                       6
<PAGE>

                           (ii) LIMITATIONS ON GRANTS TO 10 PERCENT
         SHAREHOLDERS. An Incentive Stock Option may be granted under the Plan
         to an employee possessing more than 10 percent of the total combined
         voting power of all classes of stock of the Company or of any parent or
         subsidiary of the Company only if the option price is at least 110
         percent of the fair market value, as described in paragraph 6(b)(iv),
         of the Common Stock subject to the option on the date it is granted and
         the option by its terms is not exercisable after the expiration of five
         years from the date it is granted.

                           (iii) DURATION OF OPTIONS. Subject to paragraphs
         6(a)(ii) and 6(b)(ii), Incentive Stock Options granted under the Plan
         shall continue in effect for the period fixed by the Board of
         Directors, except that no Incentive Stock Option shall be exercisable
         after the expiration of 10 years from the date it is granted.

                           (iv) OPTION PRICE. The option price per share shall
         be determined by the Board of Directors at the time of grant. Except as
         provided in paragraph 6(b)(ii), the option price shall not be less than
         100 percent of the fair market value of the Common Stock covered by the
         Incentive Stock Option at the date the option is granted. The fair
         market value shall be determined by the Board of Directors. If the
         Common Stock of the Company is not publicly traded on the date the
         option is granted, the Board of Directors may consider any valuation
         methods it deems appropriate and may, but is not required to, obtain
         one or more independent appraisals of the Company. If the Common Stock
         of the Company is publicly traded on the date the option is exercised,
         the fair market value shall be deemed to be the closing price of the
         Common Stock as reported in THE WALL STREET JOURNAL on the day
         preceding the date the option is granted, or, if there has been no sale
         on that date, on the last preceding date on which a sale occurred or
         such other value of the Common Stock as shall be specified by the Board
         of Directors.

                           (v) LIMITATION ON TIME OF GRANT. No Incentive Stock
         Option shall be granted on or after the tenth anniversary of the
         effective date of the Plan.

                           (vi) CONVERSION OF INCENTIVE STOCK OPTIONS. The Board
         of Directors may at any time without the consent of the optionee
         convert an Incentive Stock Option to a Non-Statutory Stock Option.

                  (c) NON-STATUTORY STOCK OPTIONS. Non-Statutory Stock Options
         shall be subject to the following terms and conditions in addition to
         those set forth in paragraph 6(a) above:

                           (i) OPTION PRICE. The option price for Non-Statutory
         Stock Options shall be determined by the Board of Directors at the time
         of grant and may be any amount determined by the Board of Directors.

                                       7
<PAGE>

                           (ii) DURATION OF OPTIONS. Non-Statutory Stock Options
         granted under the Plan shall continue in effect for the period fixed by
         the Board of Directors.

         7. STOCK BONUSES. The Board of Directors may award shares under the
Plan as stock bonuses. Shares awarded as a bonus shall be subject to the
terms, conditions, and restrictions determined by the Board of Directors. The
restrictions may include restrictions concerning transferability and
forfeiture of the shares awarded, together with such other restrictions as
may be determined by the Board of Directors. If shares are subject to
forfeiture, all dividends or other distributions paid by the Company with
respect to the shares shall be retained by the Company until the shares are
no longer subject to forfeiture, at which time all accumulated amounts shall
be paid to the recipient. The Board of Directors may require the recipient to
sign an agreement as a condition of the award, but may not require the
recipient to pay any monetary consideration other than amounts necessary to
satisfy tax withholding requirements. The agreement may contain any terms,
conditions, restrictions, representations and warranties required by the
Board of Directors. The certificates representing the shares awarded shall
bear any legends required by the Board of Directors. Unless otherwise
determined by the Board of Directors, shares awarded as a stock bonus to an
Officer may not be sold until six months after the date of the award. The
Company may require any recipient of a stock bonus to pay to the Company in
cash upon demand amounts necessary to satisfy any applicable federal, state
or local tax withholding requirements. If the recipient fails to pay the
amount demanded, the Company may withhold that amount from other amounts
payable by the Company to the recipient, including salary or fees for
services, subject to applicable law. With the consent of the Board of
Directors, a recipient may deliver Common Stock to the Company to satisfy
this withholding obligation. Upon the issuance of a stock bonus, the number
of shares reserved for issuance under the Plan shall be reduced by the number
of shares issued.

         8. RESTRICTED STOCK. The Board of Directors may issue shares under
the Plan for such consideration (including promissory notes and services) as
determined by the Board of Directors. Shares issued under the Plan shall be
subject to the terms, conditions and restrictions determined by the Board of
Directors. The restrictions may include restrictions concerning
transferability, repurchase by the Company and forfeiture of the shares
issued, together with such other restrictions as may be determined by the
Board of Directors. If shares are subject to forfeiture or repurchase by the
Company, all dividends or other distributions paid by the Company with
respect to the shares shall be retained by the Company until the shares are
no longer subject to forfeiture or repurchase, at which time all accumulated
amounts shall be paid to the recipient. All Common Stock issued pursuant to
this paragraph 8 shall be subject to a purchase agreement, which shall be
executed by the Company and the prospective recipient of the shares prior to
the delivery of certificates representing such shares to the recipient. The
purchase agreement may contain any terms, conditions, restrictions,
representations and warranties required by the Board of Directors. The
certificates representing the shares shall bear any legends required by the
Board of Directors. Unless otherwise determined by the Board of Directors,
shares issued under this paragraph 8 to an

                                       8
<PAGE>

Officer may not be sold until six months after the shares are issued. The
Company may require any purchaser of restricted stock to pay to the Company
in cash upon demand amounts necessary to satisfy any applicable federal,
state or local tax withholding requirements. If the purchaser fails to pay
the amount demanded, the Company may withhold that amount from other amounts
payable by the Company to the purchaser, including salary, subject to
applicable law. With the consent of the Board of Directors, a purchaser may
deliver Common Stock to the Company to satisfy this withholding obligation.
Upon the issuance of restricted stock, the number of shares reserved for
issuance under the Plan shall be reduced by the number of shares issued.

         9.       STOCK APPRECIATION RIGHTS.

                  (a) GRANT. Stock appreciation rights may be granted under the
Plan by the Board of Directors, subject to such rules, terms, and conditions as
the Board of Directors prescribes.

                  (b)      EXERCISE.

                           (i) Each stock appreciation right shall entitle the
         holder, upon exercise, to receive from the Company in exchange therefor
         an amount equal in value to the excess of the fair market value on the
         date of exercise of one share of Common Stock of the Company over its
         fair market value on the date of grant (or, in the case of a stock
         appreciation right granted in connection with an option, the excess of
         the fair market value of one share of Common Stock of the Company over
         the option price per share under the option to which the stock
         appreciation right relates), multiplied by the number of shares covered
         by the stock appreciation right or the option, or portion thereof, that
         is surrendered. No stock appreciation right shall be exercisable at a
         time that the amount determined under this subparagraph is negative.
         Payment by the Company upon exercise of a stock appreciation right may
         be made in Common Stock valued at fair market value, in cash, or partly
         in Common Stock and partly in cash, all as determined by the Board of
         Directors.

                           (ii) A stock appreciation right shall be exercisable
         only at the time or times established by the Board of Directors. If a
         stock appreciation right is granted in connection with an option, the
         following rules shall apply: (1) the stock appreciation right shall be
         exercisable only to the extent and on the same conditions that the
         related option could be exercised; (2) the stock appreciation rights
         shall be exercisable only when the fair market value of the stock
         exceeds the option price of the related option; (3) the stock
         appreciation right shall be for no more than 100 percent of the excess
         of the fair market value of the stock at the time of exercise over the
         option price; (4) upon exercise of the stock appreciation right, the
         option or portion thereof to which the stock appreciation right relates
         terminates; and (5) upon exercise of the option, the related stock
         appreciation right or portion thereof terminates. Unless otherwise
         determined by

                                       9
<PAGE>

         the Board of Directors, no stock appreciation right granted to an
         Officer or director may be exercised during the first six months
         following the date it is granted.

                           (iii) The Board of Directors may withdraw any stock
         appreciation right granted under the Plan at any time and may impose
         any conditions upon the exercise of a stock appreciation right or adopt
         rules and regulations from time to time affecting the rights of holders
         of stock appreciation rights. Such rules and regulations may govern the
         right to exercise stock appreciation rights granted prior to adoption
         or amendment of such rules and regulations as well as stock
         appreciation rights granted thereafter.

                           (iv) For purposes of this paragraph 9, the fair
         market value of the Common Stock shall be determined as of the date the
         stock appreciation right is exercised, under the methods set forth in
         paragraph 6(b)(iv).

                           (v) No fractional shares shall be issued upon
         exercise of a stock appreciation right. In lieu thereof, cash may be
         paid in an amount equal to the value of the fraction or, if the Board
         of Directors shall determine, the number of shares may be rounded
         downward to the next whole share.

                           (vi) Each stock appreciation right granted in
         connection with an Incentive Stock Option, and unless otherwise
         determined by the Board of Directors with respect to a stock
         appreciation right granted to a person who is neither an Officer nor a
         director of the Company, each other stock appreciation right granted
         under the Plan by its terms shall be nonassignable and nontransferable
         by the holder, either voluntarily or by operation of law, except by
         will or by the laws of descent and distribution of the state or country
         of the holder's domicile at the time of death, and each stock
         appreciation right by its terms shall be exercisable during the
         holder's lifetime only by the holder.

                           (vii) Each participant who has exercised a stock
         appreciation right shall, upon notification of the amount due, pay to
         the Company in cash amounts necessary to satisfy any applicable
         federal, state and local tax withholding requirements. If the
         participant fails to pay the amount demanded, the Company may withhold
         that amount from other amounts payable by the Company to the
         participant including salary, subject to applicable law. With the
         consent of the Board of Directors a participant may satisfy this
         obligation, in whole or in part, by having the Company withhold from
         any shares to be issued upon the exercise that number of shares that
         would satisfy the withholding amount due or by delivering Common Stock
         to the Company to satisfy the withholding amount.

                           (viii) Upon the exercise of a stock appreciation
         right for shares, the number of shares reserved for issuance under the
         Plan shall be reduced by the number

                                       10
<PAGE>

         of shares issued. Cash payments of stock appreciation rights shall
         not reduce the number of shares of Common Stock reserved for issuance
         under the Plan.

         10.      CASH BONUS RIGHTS.

                  (a) GRANT. The Board of Directors may grant cash bonus
rights under the Plan in connection with (i) options granted or previously
granted, (ii) stock appreciation rights granted or previously granted, (iii)
stock bonuses awarded or previously awarded and (iv) shares sold or
previously sold under the Plan. Cash bonus rights will be subject to rules,
terms and conditions as the Board of Directors may prescribe. Unless
otherwise determined by the Board of Directors with respect to a cash bonus
right granted to a person who is neither an Officer nor a director of the
Company, each cash bonus right granted under the Plan by its terms shall be
nonassignable and nontransferable by the holder, either voluntarily or by
operation of law, except by will or by the laws of descent and distribution
of the state or country of the holder's domicile at the time of death. The
payment of a cash bonus shall not reduce the number of shares of Common Stock
reserved for issuance under the Plan.

                  (b) CASH BONUS RIGHTS IN CONNECTION WITH OPTIONS. A cash
bonus right granted in connection with an option will entitle an optionee to
a cash bonus when the related option is exercised (or terminates in
connection with the exercise of a stock appreciation right related to the
option) in whole or in part if, in the sole discretion of the Board of
Directors, the bonus right will result in a tax deduction that the Company
has sufficient taxable income to use. If an optionee purchases shares upon
exercise of an option and does not exercise a related stock appreciation
right, the amount of the bonus, if any, shall be determined by multiplying
the excess of the total fair market value of the shares to be acquired upon
the exercise over the total option price for the shares by the applicable
bonus percentage. If the optionee exercises a related stock appreciation
right in connection with the termination of an option, the amount of the
bonus, if any, shall be determined by multiplying the total fair market value
of the shares and cash received pursuant to the exercise of the stock
appreciation right by the applicable bonus percentage. The bonus percentage
applicable to a bonus right, including a previously granted bonus right, may
be changed from time to time at the sole discretion of the Board of Directors
but shall in no event exceed 75 percent.

                  (c) CASH BONUS RIGHTS IN CONNECTION WITH STOCK BONUS. A
cash bonus right granted in connection with a stock bonus will entitle the
recipient to a cash bonus payable when the stock bonus is awarded or
restrictions, if any, to which the stock is subject lapse. If bonus stock
awarded is subject to restrictions and is repurchased by the Company or
forfeited by the holder, the cash bonus right granted in connection with the
stock bonus shall terminate and may not be exercised. The amount and timing
of payment of a cash bonus shall be determined by the Board of Directors.

                  (d) CASH BONUS RIGHTS IN CONNECTION WITH STOCK PURCHASES. A
cash bonus right granted in connection with the purchase of stock pursuant to
paragraph 8 will entitle

                                       11
<PAGE>

the recipient to a cash bonus when the shares are purchased or restrictions,
if any, to which the stock is subject lapse. Any cash bonus right granted in
connection with shares purchased pursuant to paragraph 8 shall terminate and
may not be exercised in the event the shares are repurchased by the Company
or forfeited by the holder pursuant to applicable restrictions. The amount of
any cash bonus to be awarded and timing of payment of a cash bonus shall be
determined by the Board of Directors.

                  (e) TAXES. The Company shall withhold from any cash bonus
paid pursuant to paragraph 10 the amount necessary to satisfy any applicable
federal, state and local withholding requirements.

         11. PERFORMANCE UNITS. The Board of Directors may grant performance
units consisting of monetary units which may be earned in whole or in part if
the Company achieves certain goals established by the Board of Directors over
a designated period of time, but not in any event more than 10 years. The
goals established by the Board of Directors may include earnings per share,
return on shareholders' equity, return on invested capital, and such other
goals as may be established by the Board of Directors. In the event that the
minimum performance goal established by the Board of Directors is not
achieved at the conclusion of a period, no payment shall be made to the
participants. In the event the maximum corporate goal is achieved, 100
percent of the monetary value of the performance units shall be paid to or
vested in the participants. Partial achievement of the maximum goal may
result in a payment or vesting corresponding to the degree of achievement as
determined by the Board of Directors. Payment of an award earned may be in
cash or in Common Stock or in a combination of both, and may be made when
earned, or vested and deferred, as the Board of Directors determines.
Deferred awards shall earn interest on the terms and at a rate determined by
the Board of Directors. Unless otherwise determined by the Board of Directors
with respect to a performance unit granted to a person who is neither an
Officer nor a director of the Company, each performance unit granted under
the Plan by its terms shall be nonassignable and nontransferable by the
holder, either voluntarily or by operation of law, except by will or by the
laws of descent and distribution of the state or country of the holder's
domicile at the time of death. Each participant who has been awarded a
performance unit shall, upon notification of the amount due, pay to the
Company in cash amounts necessary to satisfy any applicable federal, state
and local tax withholding requirements. If the participant fails to pay the
amount demanded, the Company may withhold that amount from other amounts
payable by the Company to the participant, including salary or fees for
services, subject to applicable law. With the consent of the Board of
Directors a participant may satisfy this obligation, in whole or in part, by
having the Company withhold from any shares to be issued that number of
shares that would satisfy the withholding amount due or by delivering Common
Stock to the Company to satisfy the withholding amount. The payment of a
performance unit in cash shall not reduce the number of shares of Common
Stock reserved for issuance under the Plan. The number of shares reserved for
issuance under the Plan shall be reduced by the number of shares issued upon
payment of an award.

                                       12
<PAGE>

         12. FOREIGN QUALIFIED GRANTS. Awards under the Plan may be granted
to such officers and employees of the Company and its subsidiaries and such
other persons described in paragraph 1 residing in foreign jurisdictions as
the Board of Directors may determine from time to time. The Board of
Directors may adopt such supplements to the Plan as may be necessary to
comply with the applicable laws of such foreign jurisdictions and to afford
participants favorable treatment under such laws; provided, however, that no
award shall be granted under any such supplement with terms which are more
beneficial to the participants than the terms permitted by the Plan.

         13.      CHANGES IN CAPITAL STRUCTURE.

                  (a) STOCK SPLITS; STOCK DIVIDENDS. If the outstanding
Common Stock of the Company is hereafter increased or decreased or changed
into or exchanged for a different number or kind of shares or other
securities of the Company by reason of any stock split, combination of shares
or dividend payable in shares, recapitalization or reclassification
appropriate adjustment shall be made by the Board of Directors in the number
and kind of shares available for grants under the Plan. In addition, the
Board of Directors shall make appropriate adjustment in the number and kind
of shares as to which outstanding options, or portions thereof then
unexercised, shall be exercisable, so that the optionee's proportionate
interest before and after the occurrence of the event is maintained.
Notwithstanding the foregoing, the Board of Directors shall have no
obligation to effect any adjustment that would or might result in the
issuance of fractional shares, and any fractional shares resulting from any
adjustment may be disregarded or provided for in any manner determined by the
Board of Directors. Any such adjustments made by the Board of Directors shall
be conclusive.

                  (b) MERGERS, REORGANIZATIONS, ETC. In the event of a
merger, consolidation, plan of exchange, acquisition of property or stock,
separation, reorganization or liquidation to which the Company or a
subsidiary is a party or a sale of all or substantially all of the Company's
assets (each, a "Transaction"), the Board of Directors shall, in its sole
discretion and to the extent possible under the structure of the Transaction,
select one of the following alternatives for treating outstanding options
under the Plan:

                           (i) Outstanding options shall remain in effect in
         accordance with their terms.

                           (ii) Outstanding options shall be converted into
         options to purchase stock in the corporation that is the surviving or
         acquiring corporation in the Transaction. The amount, type of
         securities subject thereto and exercise price of the converted options
         shall be determined by the Board of Directors of the Company, taking
         into account the relative values of the companies involved in the
         Transaction and the exchange rate, if any, used in determining shares
         of the surviving corporation to be issued to holders of shares of the
         Company. Unless otherwise determined by the Board

                                       13
<PAGE>

         of Directors, the converted options shall be vested only to the extent
         that the vesting requirements relating to options granted hereunder
         have been satisfied.

                           (iii) The Board of Directors shall provide a 30-day
         period prior to the consummation of the Transaction during which
         outstanding options may be exercised to the extent then exercisable,
         and upon the expiration of such 30-day period, all unexercised options
         shall immediately terminate. The Board of Directors may, in its sole
         discretion, accelerate the exercisability of options so that they are
         exercisable in full during such 30-day period.

                  (c) DISSOLUTION OF THE COMPANY. In the event of the
dissolution of the Company, options shall be treated in accordance with
paragraph 13(b)(iii).

                  (d) RIGHTS ISSUED BY ANOTHER CORPORATION. The Board of
Directors may also grant options, stock appreciation rights, performance units,
stock bonuses and cash bonuses and issue restricted stock under the Plan having
terms, conditions and provisions that vary from those specified in this Plan
provided that any such awards are granted in substitution for, or in connection
with the assumption of, existing options, stock appreciation rights, stock
bonuses, cash bonuses, restricted stock and performance units granted, awarded
or issued by another corporation and assumed or otherwise agreed to be provided
for by the Company pursuant to or by reason of a Transaction.

         14. AMENDMENT OF PLAN. The Board of Directors may at any time, and from
time to time, modify or amend the Plan in such respects as it shall deem
advisable because of changes in the law while the Plan is in effect or for any
other reason, except that without the approval of the shareholders of the
Company, the Board of Directors may not increase the number of shares authorized
to be issued under paragraph 2 of the Plan (except for adjustments permitted
under paragraph 13(a) of the Plan). Except as provided in paragraphs 6(a)(iv),
9, 10 and 13, however, no change in an award already granted shall be made
without the written consent of the holder of such award.

         15. APPROVALS. The obligations of the Company under the Plan are
subject to the approval of state and federal authorities or agencies with
jurisdiction in the matter. The Company will use its best efforts to take steps
required by state or federal law or applicable regulations, including rules and
regulations of the Securities and Exchange Commission and any stock exchange on
which the Company's shares may then be listed, in connection with the grants
under the Plan. The foregoing notwithstanding, the Company shall not be
obligated to issue or deliver Common Stock under the Plan if such issuance or
delivery would violate applicable state or federal securities laws.

         16. EMPLOYMENT AND SERVICE RIGHTS. Nothing in the Plan or any award
pursuant to the Plan shall (i) confer upon any employee any right to be
continued in the employment of the Company or any subsidiary or interfere in any
way with the right of the Company or any

                                       14
<PAGE>

subsidiary by whom such employee is employed to terminate such employee's
employment at any time, for any reason, with or without cause, or to decrease
such employee's compensation or benefits, or (ii) confer upon any person
engaged by the Company any right to be retained or employed by the Company or
to the continuation, extension, renewal, or modification of any compensation,
contract, or arrangement with or by the Company.

         17. RIGHTS AS A SHAREHOLDER. The recipient of any award under the
Plan shall have no rights as a shareholder with respect to any Common Stock
until the date of issue to the recipient of a stock certificate for such
shares. Except as otherwise expressly provided in the Plan, no adjustment
shall be made for dividends or other rights for which the record date occurs
prior to the date such stock certificate is issued.

         18.      OPTION GRANTS TO NON-EMPLOYEE DIRECTORS.

                  (a) INITIAL BOARD GRANTS. Each person who becomes a
Non-Employee Director after the Plan is adopted shall be automatically
granted an option to purchase 15,000 shares of Common Stock when he or she
becomes a Non-Employee Director, so long as such person has not previously
served as a director of the Company. A "Non-Employee Director" is a director
who is not an employee of the Company or any of its subsidiaries, but does
not include such a director whose employer prohibits such director from
receiving any grant of an option to purchase shares of Common Stock of the
Company.

                  (b) ADDITIONAL GRANTS. Each Non-Employee Director shall be
automatically granted an option to purchase additional shares of Common Stock
in each calendar year subsequent to the year in which such Non-Employee
Director was granted an option pursuant to paragraph 18(a), such option to be
granted as of the date of the Company's annual meeting of shareholders held
in such calendar year, provided that the Non-Employee Director continues to
serve in such capacity as of such date. The number of shares subject to each
additional grant shall be 5,000 shares for each Non-Employee Director.

                  (c) EXERCISE PRICE. The exercise price of all options
granted pursuant to this paragraph 18 shall be equal to 100 percent of the
fair market value of the Common Stock determined pursuant to paragraph
6(b)(iv).

                  (d) TERM OF OPTION.  The term of each option granted
pursuant to this paragraph 18 shall be 10 years from the date of grant.

                  (e) EXERCISABILITY. Until an option expires or is
terminated and except as provided in paragraphs 18(g) and 13, an option
granted under this paragraph 18 shall be exercisable in full on the date one
year following the grant of the option.

                  (f) TERMINATION AS A DIRECTOR. If an optionee ceases to be
a director of the Company for any reason, including death, the option may be
exercised at any time prior to the

                                       15
<PAGE>

expiration date of the option or the expiration of 30 days (or 12 months in
the event of death) after the last day the optionee served as a director,
whichever is the shorter period, but only if and to the extent the optionee
was entitled to exercise the option as of the last day the optionee served as
a director.

                  (g) NONTRANSFERABILITY. Each option by its terms shall be
nonassignable and nontransferable by the optionee, either voluntarily or by
operation of law, except by will or by the laws of descent and distribution
of the state or country of the optionee's domicile at the time of death, and
each option by its terms shall be exercisable during the optionee's lifetime
only by the optionee.

                  (h) EXERCISE OF OPTIONS. Options may be exercised upon
payment of cash or shares of Common Stock of the Company in accordance with
paragraph 6(a)(v).

Adopted: August 7, 1995.
Amended: May 20, 1997 (to increase shares in paragraph 2 to 1,500,000).
Amended: May 18, 1999 (to increase shares in paragraph 2 to 2,250,000 and to
increase individual limits in paragraph 5 to 450,000 and 100,000 shares).
Amended: August 12, 1999 (to increase shares in paragraph 2 to 2,750,000).
Amended: February 25, 2000 (amendments to paragraphs 6(a)(iii), 6(a)(v) and 14).

                                       16

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