Document:

AMENDMENT

to the

POOLING AND SERVICING AGREEMENT

dated as of August 1, 2005

among

DEUTSCHE ALT-A SECURITIES, INC.,

WELLS FARGO BANK, NATIONAL ASSOCIATION, and 

HSBC BANK USA, NATIONAL ASSOCIATION

 

Deutsche Alt-A Securities, Inc. Mortgage Loan Trust, Series 2005-4

Mortgage Pass-Through Certificates

 

This AMENDMENT (this “Amendment”) is made and is effective as of this 9th day of December, 2005, among Deutsche Alt-A Securities, Inc., as depositor (the “Depositor”), Wells Fargo Bank, National Association, as master servicer (the “Master Servicer”) and securities administrator (the “Securities Administrator”) and HSBC Bank USA, National Association, as trustee (the “Trustee”), to the Pooling and Servicing Agreement relating to the above-captioned Mortgage Pass-Through Certificates, dated as of August 1, 2005 (the “Pooling and Servicing Agreement”), among the Depositor, the Master Servicer, the Securities Administrator and the Trustee.

RECITALS

 

WHEREAS, the Depositor, the Master Servicer, the Securities Administrator and the Trustee entered into the Pooling and Servicing Agreement;

WHEREAS, the Depositor desires to amend certain provisions of the Pooling and Servicing Agreement as set forth herein; and

WHEREAS, Section 11.1 of the Pooling and Servicing Agreement provides that the Pooling and Servicing Agreement may be amended by the Depositor, the Master Servicer, the Securities Administrator and the Trustee with the consent of the holders of each Class of Certificates affected thereby for the purpose of adding any provisions to the Pooling and Servicing Agreement or changing in any manner or eliminating any of the provisions thereof or of modifying in any manner the rights of the Holders of such Class or Classes of affected Certificates, upon the satisfaction of certain conditions set forth therein.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and of the mutual covenants herein contained, the parties hereto hereby agree as follows:

SECTION 1.     Defined Terms.  Capitalized terms used but not defined herein shall have the meanings ascribed thereto in the Pooling and Servicing Agreement.

SECTION 2.   Amendment.  The parties hereto agree to amend the Pooling and Servicing Agreement as provided herein:

 

 

(a)          Section 1.1 of the Pooling and Servicing Agreement is hereby amended by adding the following new definition thereto:

Optional Termination Date: The Distribution Date on which the aggregate Principal Balance of the Loans and the fair market value of each REO Property remaining in the Trust Fund is reduced to less than or equal to 5% of the sum of (i) the Scheduled Principal Balance of the Loans as of the Cut-Off Date and (ii) the Original Pre-Funded Amount.

(b)          The definition of “Pass-Through Rate” in Section 1.1 of the Pooling and Servicing Agreement is hereby amended by deleting the fourth paragraph in its entirety and replacing it with the following:

With respect to the Class A-4 Certificates and the Distribution Date in September 2005, 5.50% per annum, and with respect to any Distribution Date thereafter, a per annum rate equal to the lesser of (a) 5.50% per annum in the case of each Distribution Date through and including the Optional Termination Date, or 6.00% per annum in the case of any Distribution Date following the Optional Termination Date and (b) the Net WAC Pass-Through Rate for the related Distribution Date. For federal income tax purposes, the Pass-Through Rate on the Class A-4 Certificates will be a per annum rate equal to the lesser of (a) 5.50% per annum in the case of each Distribution Date through and including the Optional Termination Date and 6.00% per annum in the case of each Distribution Date thereafter and (b) the Uncertificated REMIC II Pass-Through Rate on REMIC II Regular Interest MT-A4.

SECTION 3.   Limited Effect. Except as expressly amended and modified by this Amendment, the Pooling and Servicing Agreement shall continue in full force and effect in accordance with its terms.  Reference to this Amendment need not be made in the Pooling and Servicing Agreement or any other instrument or document executed in connection therewith or herewith, or in any certificate, letter or communication issued or made pursuant to, or with respect to, the Pooling and Servicing Agreement, any reference in any of such items to the Pooling and Servicing Agreement being sufficient to refer to the Pooling and Servicing Agreement as amended hereby.

SECTION 4.   Governing Law. This Amendment shall be construed in accordance with the laws of the State of New York and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws without regard to conflicts of laws principles (other than Section 5-1401 of the New York General Obligations Law).

SECTION 5.   Counterparts.  This Amendment may be executed simultaneously in any number of counterparts, each of which counterparts shall be deemed to be an original, and such counterparts shall constitute but one and the same instrument.

SECTION 6.   Severability of Provisions.  If any one or more of the covenants, agreements, provisions or terms of this Amendment for any reason whatsoever shall be held 

 

invalid, then such covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants, agreements, provisions or terms of this Amendment and shall in no way affect the validity or enforceability of the other provisions of this Amendment.  

SECTION 7.   Successors and Assigns.  The provisions of this Amendment shall be binding upon and inure to the benefit of the respective successors and assigns of the parties hereto, and all such provisions shall inure to the benefit of the Certificateholders.

SECTION 8.   Section Headings.  The section headings used in this Amendment are for convenience of reference only, and shall not limit or otherwise affect the meaning hereof.

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered by their duly authorized officers as of the day and year first above written.

	
            DEUTSCHE ALT-A SECURITIES, INC.,
 as Depositor
 
	
             
 	
             
 
	
            By:
 	
            /s/ Susan Valenti
 
	
            Name:
 	
            Susan Valenti
 
	
            Title:
 	
             
 
	
             
 	
             
 
	
             
 	
             
 
	
            By:
 	
            /s/ Marina Tukhin
 
	
            Name:
 	
            Marina Tukhin
 
	
            Title:
 	
             
 
	
             
 	
             
 
	
             
 	
             
 
	
            HSBC BANK USA, NATIONAL ASSOCIATION,
 not in its individual capacity but solely as Trustee
 
	
             
 	
             
 
	
             
 	
             
 
	
            By:
 	
            /s/ Elena Zheng
 
	
            Name:
 	
            Elena Zheng
 
	
            Title:
 	
            Assistant Vice President
 
	
             
 	
             
 
	
             
 	
             
 
	
            WELLS FARGO BANK, N.A.,
 as Master Servicer and Securities Administrator
 
	
             
 	
             
 
	
             
 	
             
 
	
            By:
 	
            /s/ Kristen Ann Cronin
 
	
            Name:
 	
            Kristen Ann Cronin
 
	
            Title:
 	
            Vice President
 

 

 

 

Consented and Agreed:

	
            DEUTSCHE BANK SECURITIES INC.
 Holder of 100% Percentage Interest of the Class M Certificates, the Class B-1 Certificates, the Class B-2 Certificates, the Class B-3 Certificates, the Class B-4 Certificates and the Class B-5 Certificates
 
	
             
 	
             
 
	
            By:
 	
            /s/ Susan Valenti
 
	
            Name:
 	
            Susan Valenti
 
	
            Title:
 	
             
 
	
             
 	
             
 
	
             
 	
             
 
	
            By:
 	
            /s/ Marina Tukhin
 
	
            Name:
 	
            Marina Tukhin
 
	
            Title:
 	
             
 

 

 

 

Consented and Agreed:

	
            DEUTSCHE BANK SECURITIES INC.
 Holder of 100% Percentage Interest of the Class A-X1B Certificates

 
 
	
             
 	
             
 
	
            By:
 	
            /s/ Marina Tukhin
 
	
            Name:
 	
            Marina Tukhin
 
	
            Title:
 	
            Vice President
 
	
             
 	
             
 
	
             
 	
             
 
	
            By:
 	
            /s/ Hyung Peak
 
	
            Name:
 	
            Hyung Peak
 
	
            Title:
 	
            Managing Director<PAGE>
                                                                   EXHIBIT 10.11

                                REMEDYTEMP, INC.
                                (THE "COMPANY")

                            1996 STOCK INCENTIVE PLAN

             (AMENDED AND RESTATED EFFECTIVE AS OF JANUARY 1, 2005)

                                    ARTICLE I
                                   DEFINITIONS

          1.01 DEFINITIONS. Capitalized terms used in the Plan and not otherwise
defined shall have the meanings set forth below:

          (a) "AWARD" means an Incentive Award or a Non-employee Director's
Option.

          (b) "BOARD" means the Board of Directors of the Company.

          (c) "CODE" means the Internal Revenue Code of 1986, as amended from
time to time. Where the context so requires, a reference to a particular Code
section or regulation thereunder shall also be a reference to any successor
provision of the Code to such section or regulation.

          (d) "COMMISSION" means the Securities and Exchange Commission.

          (e) "COMMITTEE" means the committee appointed by the Board to
administer the Plan and, to the extent required to comply with Rule 16b-3 under
the Exchange Act, consisting of two or more Board members, each of whom shall be
a "Non-Employee Director" within the meaning of Rule 16b-3 under the Exchange
Act. In addition, if Incentive Awards are to be made to persons subject to
Section 162(m) of the Code and such awards are intended to constitute
Performance-Based Compensation, then each of the Committee's members shall also
be an "outside director," as such term is defined in the regulations under
Section 162(m) of the Code.

          (f) "COMMON STOCK" means the Class A Common Stock of the Company,
$0.01 par value.

          (g) "DIVIDEND EQUIVALENT" means a right granted by the Company under
Section 3.07 to a holder of a Stock Option, Stock Appreciation Right, or other
Award denominated in shares of Common Stock to receive from the Company during
the Applicable Dividend Period (as defined in Section 3.07) payments equivalent
to the amount of dividends payable to holders of the number of shares of Common
Stock underlying such Stock Option, Stock Appreciation Right, or other Award.

          (h) "ELIGIBLE PERSON" shall include, as determined by the Committee,
officers or key employees, consultants, and advisors of the Company or a
Subsidiary other than Non-Employee Directors."

<PAGE>

          (i) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended. Where the context so requires, a reference to a particular section of
the Exchange Act or rule thereunder shall also refer to any successor provision
to such section or rule.

          (j) "FAIR MARKET VALUE" of a share of the Company's capital stock as
of a particular date shall be: (i) if the stock is listed on an established
stock exchange or exchanges (including, for this purpose, The Nasdaq National
Market), the mean between the highest and lowest sale prices of the stock quoted
for such date in the Transactions Index of each such exchange as averaged with
such mean price as reported on any and all other exchanges, as published in The
Wall Street Journal and determined by the Committee, or, if no sale price was
quoted in any such Index for such date, then as of the next preceding date on
which such a sale price was quoted; or (ii) if the stock is not then listed on
an exchange, the average of the closing bid and asked prices per share for the
stock in the over-the-counter market as quoted on the NASDAQ system on such date
(in the case of (i) or (ii), subject to adjustment as and if necessary and
appropriate to set an exercise price not less than 100% of the fair market value
of the stock on the date an option is granted); or (iii) if the stock is not
then listed on an exchange or quoted in the over-the-counter market, an amount
determined in good faith by the Committee; provided, however, that when
appropriate, the Committee in determining Fair Market Value of capital stock of
the Company may take into account such other factors as it may deem appropriate
under the circumstances. Notwithstanding the foregoing, the Fair Market Value of
capital stock for purposes of grants of Incentive Stock Options shall be
determined in compliance with applicable provisions of the Code. The Fair Market
Value of rights or property other than capital stock of the Company means the
fair market value thereof as determined by the Committee on the basis of such
factors as it may deem appropriate.

          (k) "INCENTIVE AWARD" means any Stock Option, Restricted Stock, Stock
Appreciation Right or Dividend Equivalent granted or sold to an Eligible Person
under the Plan, but not a Non-employee Director's Option.

          (l) "INCENTIVE STOCK OPTION" means a Stock Option that qualifies as an
incentive stock option under Section 422 of the Code and the regulations
thereunder.

          (m) "JUST CAUSE DISMISSAL" means a termination of a Recipient's
employment for any of the following reasons: (i) the Recipient violates any
reasonable rule or regulation of the Board or the Recipient's superiors or the
Chief Executive Officer or President of the Company that results in damage to
the Company or which the Recipient fails to correct within a reasonable time
after written notice; (ii) any willful misconduct or gross negligence by the
Recipient in the discharge of the responsibilities assigned to him or her; (iii)
any willful failure to perform his or her job as required to meet Company
objectives; (iv) any wrongful conduct of a Recipient which has an adverse impact
on the Company or which constitutes a misappropriation of Company assets; (v)
the Recipient's performing services for any other person or entity which
competes with the Company while he or she is employed by the Company, without
the written approval of the Chief Executive Officer or President of the Company;
or (vi) any other conduct that the Board or Committee determines constitutes
Just Cause for Dismissal, provided, however, that if a Recipient is party to an
employment agreement with the Company providing for just cause dismissal (or
some comparable notion) of Recipient from his or her employment with the
Company, "Just Cause Dismissal" purposes of the Plan shall have the same meaning
as ascribed thereto or to such comparable notion in such employment agreement.

          (n) "NON-EMPLOYEE DIRECTOR" means a director of the Company who
qualifies as a "Non-Employee Director" under Rule 16b-3 under the Exchange Act.

                                        2

<PAGE>

          (o) "NON-EMPLOYEE DIRECTOR'S OPTION" means a Stock Option granted to a
Non-employee Director pursuant to Article IV of the Plan.

          (p) "NON-QUALIFIED STOCK OPTION" means a Stock Option that is not an
Incentive Stock Option.

          (q) "OPTION" or "STOCK OPTION" means a right to purchase Common Stock
granted under the Plan, and can be an Incentive Stock Option or a Non-qualified
Stock Option.

          (r) "PAYMENT EVENT" means the event or events giving rise to the right
to payment of a Performance Award.

          (s) "PERFORMANCE AWARD" means an award granted under Section 3.03,
payable in cash, Common Stock or a combination thereof, which vests and becomes
payable over a period of time upon attainment of performance criteria
established in connection with the grant of the award.

          (t) "PERFORMANCE-BASED COMPENSATION" means performance-based
compensation as described in Section 162(m) of the Code and the regulations
thereunder. If the amount of compensation a Recipient will receive under any
Incentive Award is not based solely on an increase in the value of Common Stock
after the date of grant or award, the Committee, in order to qualify an
Incentive Award as performance-based compensation under Section 162(m) of the
Code and the regulations thereunder, can condition the grant, award, vesting, or
exercisability of such an award on the attainment of a preestablished, objective
performance goal. For this purpose, a preestablished, objective performance goal
may include one or more of the following performance criteria: (i) cash flow,
(ii) earnings per share (including earnings before interest, taxes, and
amortization), (iii) return on equity, (iv) total stockholder return, (v) return
on capital, (vi) return on assets or net assets, (vii) income or net income,
(viii) operating margin, (ix) return on operating revenue, and (x) any other
similar performance criteria contemplated by the regulations under Section
162(m).

          (u) "PERMANENT DISABILITY" means that the Recipient becomes physically
or mentally incapacitated or disabled so that he or she is unable to perform
substantially the same services as he or she performed prior to incurring such
incapacity or disability (the Company, at its option and expense, being entitled
to retain a physician to confirm the existence of such incapacity or disability,
and the determination of such physician to be binding upon the Company and the
Recipient), and such incapacity or disability continues for a period of three
consecutive months or six months in any 12-month period or such other period(s)
as may be determined by the Committee with respect to any Option, provided that
for purposes of determining the period during which an Incentive Stock Option
may be exercised pursuant to Section 3.02(g)(ii) hereof, Permanent Disability
shall mean "permanent and total disability" as defined in Section 22(e) of the
Code.

          (v) "PURCHASE PRICE" means the purchase price (if any) to be paid by a
Recipient for Restricted Stock as determined by the Committee (which price shall
be at least equal to the minimum price required under applicable laws and
regulations for the issuance of Common Stock which is nontransferable and
subject to a substantial risk of forfeiture until specific conditions are met).

          (w) "RECIPIENT" means a recipient of an Award hereunder.

                                        3

<PAGE>

          (x) "RESTRICTED STOCK" means Common Stock that is the subject of an
award made under Section 3.04 and which is nontransferable and subject to a
substantial risk of forfeiture until specific conditions are met as set forth in
this Plan and in any statement evidencing the grant of such Award.

          (y) "SECURITIES ACT" means the Securities Act of 1933, as amended.

          (z) "STOCK APPRECIATION RIGHT" or "SAR" means a right granted under
Section 3.05 to receive a payment that is measured with reference to the amount
by which the Fair Market Value of a specified number of shares of Common Stock
appreciates from a specified date, such as the date of grant of the SAR, to the
date of exercise.

          (aa) "STOCK PAYMENT" means a payment in shares of the Company's Common
Stock to replace all or any portion of the compensation (other than base salary)
that would otherwise become payable to a Recipient.

          (bb) "SUBSIDIARY" has the meaning as set forth under Section 424(f) of
the Code.

                                   ARTICLE II
                                     GENERAL

          2.01 ADOPTION. The Plan has been adopted by the Board and approved by
the shareholders of the Company and is effective immediately prior to the
closing of the initial public offering of the Company's securities.

          2.02 PURPOSE. The purpose of the Plan is to promote the interests of
the Company and its shareholders by using investment interests in the Company to
attract and retain key personnel, to encourage and reward their contributions to
the performance of the Company, and to align their interests with the interests
of Company's shareholders.

          2.03 ADMINISTRATION OF THE PLAN. The Plan shall be administered by the
Committee, which, subject to the express provisions of the Plan, shall have the
power to construe the Plan and any agreements or memoranda defining the rights
and obligations of the Company and Recipients thereunder, to determine all
questions arising thereunder, to adopt and amend such rules and regulations for
the administration thereof as it may deem desirable, and otherwise to carry out
the terms of the Plan and such agreements and confirming memoranda. The
interpretation and construction by the Committee of any provisions of the Plan
or of any Award granted under the Plan shall be final. Any action taken by, or
inaction of, the Committee relating to the Plan or Awards shall be within the
absolute discretion of the Committee and shall be conclusive and binding upon
all persons. No member of the Committee shall be liable for any such action or
inaction except in circumstances involving bad faith of himself or herself.
Subject only to compliance with the express provisions hereof, the Committee may
act in its absolute discretion in matters related to the Plan or Awards,
provided, however, that notwithstanding anything herein to the contrary, the
Committee shall have no authority or discretion as to the selection of persons
eligible to receive Non-employee Director's Options or the timing, exercise
price, or number of shares covered by Non-employee Director's Options, which
matters are specifically governed by the Plan. Any action of the Committee with
respect to administration of the Plan shall be taken pursuant to a majority vote
or unanimous written consent of its members. Subject to the requirements of
Section 1.01(e), the Board may from time to time increase or

                                        4

<PAGE>

decrease the number of members of the Committee, remove from membership on the
Committee all or any portion of its members, and appoint such person or persons
as it desires to fill any vacancy existing on the Committee, whether caused by
removal, resignation or otherwise.

          2.04 PARTICIPATION. A person shall be eligible to receive grants of
Incentive Awards under the Plan if, at the time of the Award's grant, he or she
is an Eligible Person.

          2.05 SHARES OF COMMON STOCK SUBJECT TO PLAN.

          (a) Plan Limit and Counting. The shares that may be issued upon
exercise of or in the form of Awards under the Plan shall be authorized and
unissued shares of Common Stock, previously issued shares of Common Stock
reacquired by the Company, and unused Award shares pursuant to the final
sentence of this Section 2.05(a). The aggregate number of shares that may be
issued pursuant to Awards under the Plan shall not exceed 1,800,000 shares of
Common Stock, subject to adjustment in accordance with Article V. Shares of
Common Stock subject to unexercised portions of any Award granted under the Plan
that expire, terminate or are cancelled, and shares of Common Stock issued
pursuant to an Award under the Plan that are reacquired by the Company pursuant
to the terms of the Award under which such shares were issued, will again become
available for the grant of further Awards under this Plan.

          (b) Annual Limit. Notwithstanding any other provision of this Plan, no
Eligible Person shall be granted Incentive Awards with respect to more than
100,000 shares of Common Stock in any one calendar year; provided, however, that
this limitation shall not apply if it is not required in order for the
compensation attributable to Incentive Awards hereunder to qualify as
Performance-Based Compensation. The limitation set forth in this Section 2.05(b)
shall be subject to adjustment as provided in Article V, but only to the extent
such adjustment would not affect the status of compensation attributable to
Incentive Awards hereunder as Performance-Based Compensation.

          2.06 AWARDS SUBJECT TO PLAN.

          (a) Terms. Each Award shall be subject to the terms and conditions of
the Plan and such other terms and conditions (whether or not applicable to any
other award) established by the Committee as are not inconsistent with the
purpose and provisions of the Plan including, without limitation, provisions to
assist the Recipient in financing the purchase of Common Stock through the
exercise of Stock Options, provisions for the forfeiture of or restrictions on
resale or other disposition of shares of Common Stock acquired under any Award,
provisions giving the Company the right to repurchase shares of Common Stock
acquired under any Award in the event the Recipient elects to dispose of such
shares, and provisions to comply with federal and state securities laws and
federal and state income tax withholding requirements.

          (b) Award Documents. Each Award granted under the Plan shall be
evidenced by an award agreement duly executed on behalf of the Company and by
the Recipient or, in the Committee's discretion, a confirming memorandum issued
by the Company to the Recipient, setting forth such terms and conditions
applicable to the Award as the Committee may in its discretion determine. Such
option agreements or confirming memoranda may but need not be identical and
shall comply with and be subject to the terms and conditions of the Plan, a copy
of which shall be provided to each Recipient and incorporated by reference into
each option agreement or confirming memorandum. Any award agreement or
confirming memorandum may contain such other terms, provisions and conditions
not inconsistent with the Plan as may be determined by the Committee.

                                        5

<PAGE>

          2.07 AMENDMENTS.

          (a) Amendment and Suspension of the Plan. The Board or the Committee
may, insofar as permitted by applicable laws and regulations, from time to time
suspend or discontinue the Plan or revise or amend it in any respect whatsoever,
and the Plan as so revised or amended will govern all options thereunder,
including those granted before such revision or amendment, except that no such
amendment shall impair or diminish in any material respect any rights or impose
additional material obligations under any Award theretofore granted under the
Plan without the consent of the person to whom such Award was granted.
Amendments shall be subject to approval by the Company's shareholders only to
the extent required to comply with the express provisions of the Plan and
applicable laws or regulations.

          (b) Amendment of Incentive Awards. Subject to the requirements set
forth in the Plan for amendment of particular Incentive Awards, the Committee
may, with the consent of a Recipient, make such modifications in the terms and
conditions of an Incentive Award as it deems advisable. Without limiting the
generality of the foregoing, the Committee may, in its discretion with the
consent of the Recipient, at any time and from time to time after the grant of
any Incentive Award accelerate or extend the vesting or exercise period of the
Incentive Award in whole or part. Notwithstanding the above, upon obtaining
prior approval by the Company's shareholders, the Committee may adjust or reduce
the purchase or exercise price of Incentive Awards by cancellation of such
Incentive Awards and granting of Incentive Awards at lower purchase or exercise
prices or by modification, extension or renewal of such Incentive Awards. If the
Committee, with the consent of the Recipient, amends the exercise price of an
Option or Stock Appreciation Right below the Fair Market Value, such change will
be a "modification" of the existing grant, as that term is defined in the
proposed regulations of section 409A of the Internal Revenue Code, and will be
treated as a new grant and will not qualify from the exclusion from coverage
under section 409A.

          (c) Other Rights. Except as otherwise provided in this Plan or in the
applicable award agreement or confirming memorandum, no amendment, suspension or
termination of the Plan will, without the consent of the Recipient, alter,
terminate, impair or adversely affect any right or obligation under any Award
previously granted under the Plan.

          2.08 TERM OF PLAN. Awards may be granted under the Plan until the
tenth anniversary of the effective date of the Plan, whereupon the Plan shall
terminate. No Awards may be granted during any suspension of the Plan or after
its termination for any reason. Notwithstanding the foregoing, each Award
properly granted under the Plan shall remain in effect until such Award has been
exercised or terminated in accordance with its terms and the terms of the Plan.

          2.09 RESTRICTIONS. All Awards granted under the Plan shall be subject
to the requirement that, if at any time the Company shall determine, in its
discretion, that the listing, registration or qualification of the shares
subject to Awards granted under the Plan upon any securities exchange or under
any state or federal law, or the consent or approval of any government or
regulatory body or authority, is necessary or desirable as a condition of, or in
connection with, the granting of such an Award or the issuance, if any, or
purchase of shares in connection therewith, such Award may not be exercised in
whole or in part unless such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any conditions not
acceptable to the Company. Unless the shares of stock covered by an Award
granted under the Plan have been effectively registered under the Securities
Act, the Company shall be under no obligation to issue such shares unless the
Recipient shall give a written representation and undertaking to the Company
satisfactory in form and scope to counsel to the

                                        6

<PAGE>

Company and upon which, in the opinion of such counsel, the Company may
reasonably rely, that he or she is acquiring such shares for his or her own
account as an investment and not with a view to, or for sale in connection with,
the distribution of any such shares of stock, and that he or she will make no
transfer of the same except in compliance with any rules and regulations in
force at the time of such transfer under the Securities Act, or any other
applicable law or regulation, and that if shares of stock are issued without
such registration, a legend to this effect may be endorsed upon the securities
so issued, and the Company may order its transfer agent to stop transfers of
such shares.

          2.10 NONASSIGNABILITY. No Award granted under the Plan shall be
assignable or transferable except (a) by will or by the laws of descent and
distribution, or (b) subject to the final sentence of this Section 2.10, upon
dissolution of marriage pursuant to a qualified domestic relations order or, in
the discretion of the Committee and under circumstances that would not adversely
affect the interests of the Company, pursuant to a nominal transfer that does
not result in a change in beneficial ownership. During the lifetime of a
Recipient, an Award granted to him or her shall be exercisable only by the
Recipient (or the Recipient's permitted transferee) or his or her guardian or
legal representative. Notwithstanding the foregoing, (x) no Award owned by a
Recipient subject to Section 16 of the Exchange Act may be assigned or
transferred in any manner inconsistent with Rule 16b-3 as interpreted and
administered by the Commission and its staff, and (y) Incentive Stock Options
(or other Awards subject to transfer restrictions under the Code) may not be
assigned or transferred in violation of Section 422(b)(5) of the Code or the
Treasury Regulations thereunder, and nothing herein is intended to allow such
assignment or transfer.

          2.11 WITHHOLDING TAXES. Whenever shares of stock are to be issued upon
exercise of or in connection with an Award granted under the Plan or
subsequently transferred, the Committee shall have the right to require the
Recipient to remit to the Company an amount sufficient to satisfy any federal,
state and local withholding tax requirements prior to issuance of such shares.
The Committee may, in the exercise of its discretion, allow satisfaction of tax
withholding requirements by accepting delivery of stock of the Company or by
withholding a portion of the stock otherwise issuable in connection with an
Award.

          2.12 RIGHTS OF ELIGIBLE PERSONS AND RECIPIENTS. Except as otherwise
set forth herein, a Recipient or a permitted transferee of an Award shall have
no rights as a shareholder with respect to any shares issuable or issued in
connection with the Award until the date of the receipt by the Company of all
amounts payable in connection with exercise of the Award and performance by the
Recipient of all obligations thereunder. Status as an Eligible Person shall not
be construed as a commitment that any Award will be granted under this Plan to
an Eligible Person or to Eligible Persons generally. Nothing contained in this
Plan (or in award agreements or confirming memoranda or in any other documents
related to this Plan or to Awards granted hereunder) shall confer upon any
Eligible Person or Recipient any right to continue in the employ of the Company
or any of its subsidiaries or affiliates or constitute any contract or agreement
of employment or engagement, or interfere in any way with the right of the
Company or any of its subsidiaries or affiliates to reduce such person's
compensation or other benefits or to terminate the employment of such Eligible
Person or Recipient, with or without cause. No person shall have any right,
title or interest in any fund or in any specific asset (including shares of
capital stock) of the Company or any of its subsidiaries or affiliates by reason
of any Award granted hereunder. Neither this Plan (or any documents related
hereto) nor any action taken pursuant hereto shall be construed to create a
trust of any kind or a fiduciary relationship between the Company or any of its
subsidiaries or affiliates and any person. To the extent that any person
acquires a right to receive an Award hereunder, such right shall be no greater
than the right of any unsecured general creditor of the Company.

                                        7

<PAGE>

          2.13 OTHER COMPENSATION PLANS. The adoption of the Plan shall not
affect any other stock option, incentive or other compensation plans in effect
for the Company, and the Plan shall not preclude the Company from establishing
any other forms of incentive or other compensation for employees, directors, or
advisors of the Company, whether or not approved by shareholders.

          2.14 PLAN BINDING ON SUCCESSORS. The Plan shall be binding upon the
successors and assigns of the Company.

          2.15 PARTICIPATION BY FOREIGN EMPLOYEES. Notwithstanding anything to
the contrary herein, the Committee may, consistent with the purposes of the
Plan, modify grants of Awards to confer the intended benefits of the Plan upon
Recipients who are foreign nationals or employed outside of the United States to
recognize differences in applicable law, tax policy or local custom.

                                   ARTICLE III
                                     AWARDS

          3.01 GRANTS OF AWARDS. Subject to the express provisions of the Plan,
the Committee may from time to time in its discretion select the Eligible
Persons to whom, and the time or times at which, Incentive Awards shall be
granted or sold, the nature of each Incentive Award, the number of shares of
Common Stock or the number of rights that make up or underlie each Incentive
Award, the period for the exercise of each Incentive Award, the performance
criteria (which need not be identical) utilized to measure the value of
Performance Awards, and such other terms and conditions applicable to each
individual Incentive Award as the Committee shall determine. The Committee may
grant at any time new Incentive Awards to an Eligible Person who has previously
received Incentive Awards or other grants (including other stock options)
whether such prior Incentive Awards or such other grants are still outstanding,
have previously been exercised in whole or in part, or are cancelled in
connection with the issuance of new Incentive Awards. The Committee may grant
Incentive Awards singly or in combination or in tandem with other Incentive
Awards as it determines in its discretion. The purchase price or initial value
and any and all other terms and conditions of the Incentive Awards may be
established by the Committee without regard to existing Incentive Awards or
other grants. Further, the Committee may amend in a manner not inconsistent with
the Plan the terms of any existing Incentive Award previously granted to such
Eligible Person, provided that the consent of the Recipient shall be required
for amendments that impair or diminish in any material respect any rights or
impose additional material obligations under the Incentive Award to be amended.
Notwithstanding the foregoing, however, members of the Committee shall not be
eligible to receive Incentive Awards.

          3.02 STOCK OPTIONS.

          (a) Nature of Stock Options. Stock Options may be Incentive Stock
Options or Non-qualified Stock Options; Stock Options granted as Incentive Stock
Options that fail or cease to qualify as such shall be treated as Non-qualified
Stock Options hereunder.

          (b) Setting the Exercise Price. The exercise price for each Option
shall be the Fair Market Value of the Common Stock subject to the Option. Upon
obtaining prior approval by the Company's shareholders, the Committee, with the
consent of the Recipient, and subject to compliance with statutory or
administrative requirements applicable to Incentive Stock Options, may amend the
terms of any Option (other than a Non-employee Director's Option) to provide
that the exercise price of the shares remaining subject to the Option shall be
reestablished at a

                                        8

<PAGE>

price below the existing exercise price thereof or effect a reduction in
exercise price by cancellation of an existing option and grant of a replacement
option at an exercise price below the existing exercise price thereof. If the
Committee, with the consent of the Recipient, amends the exercise price of an
Option below the Fair Market Value, such change will be a "modification" of the
existing grant, as that term is defined in the proposed regulations of section
409A of the Internal Revenue Code, and will be treated as a new grant and will
not qualify from the exclusion from coverage under section 409A. If the exercise
price of an Option is reduced (or such Option is canceled for a new Option), and
such Option is Performance-Based Compensation, the reduction of the Option's
price (or the cancellation and grant of a new Option) shall be treated as the
grant of a new Option and both the old and new Option shall be taken into
account for purposes of applying the stock limit of Section 2.05(b). No
modification of any other term or provision of any Option which is amended in
accordance with the foregoing shall be required, although the Committee may, in
its discretion, make such further modifications of any such Option (other than
Non-employee Director's Options) as are not inconsistent with the Plan.

          (c) Payment of the Exercise Price. The exercise price shall be payable
upon the exercise of an Option in legal tender of the United States or capital
stock of the Company delivered in transfer to the Company by or on behalf of the
person exercising the Option and duly endorsed in blank or accompanied by stock
powers duly endorsed in blank, with signatures guaranteed in accordance with the
Exchange Act if required by the Committee, or retained by the Company from the
Stock otherwise issuable upon exercise or surrender of vested and/or exercisable
Awards or other equity incentive awards previously granted to the Recipient and
being exercised (if applicable) (in either case valued at Fair Market Value as
of the exercise date); or such other consideration as the Committee may from
time to time in the exercise of its discretion deem acceptable in any particular
instance, provided, however, that the Committee may, in the exercise of its
discretion, (i) allow exercise of an Option in a broker-assisted or similar
transaction in which the exercise price is not received by the Company until
promptly after exercise, and/or (ii) allow the Company to loan the exercise
price to the person entitled to exercise the Option, if the exercise will be
followed by a prompt sale of some or all of the underlying shares and a portion
of the sales proceeds is dedicated to full payment of the Exercise Price and
amounts required pursuant to Section 2.11.

          (d) Option Period and Vesting. Options granted hereunder (other than
Non-employee Director's Options) shall vest and may be exercised as determined
by the Committee, except that exercise of such Options after termination of the
Recipient's employment shall be subject to Section 3.02(g). Each Option granted
hereunder (other than a Non-employee Director's Option) and all rights or
obligations thereunder shall expire on such date as shall be determined by the
Committee, but not later than ten years after the date the Option is granted, or
five years after the date of grant in the case of a Recipient of an Incentive
Stock Option who at the time of grant owns more than 10% of the combined voting
power of the Company (after application of the constructive ownership rules of
Section 424(d) of the Code), or any Parent or Subsidiary (as defined in Sections
424(e) and (f) of the Code, respectively), and shall be subject to earlier
termination as herein provided.

          (e) Exercise of Options. Except as otherwise provided herein, an
Option may become exercisable, in whole or in part, on the date or dates
specified by the Committee (or, in the case of Non-employee Director's Options,
the Plan) and thereafter shall remain exercisable until the expiration or
earlier termination of the Option. No Option shall be exercisable except in
respect of whole shares, and fractional share interests shall be disregarded.
Not less than 100 shares of stock (or such other amount as is set forth in the
applicable option agreement or confirming memorandum) may be purchased at one
time and Options must be exercised in multiples of 100 unless the number
purchased upon exercise is the total number at the time

                                        9

<PAGE>

available for purchase under the terms of the Option. An Option shall be deemed
to be exercised when the Secretary or other designated official of the Company
receives written notice of such exercise from the Recipient, together with
payment of the exercise price and any amounts required under Section 2.11.
Notwithstanding any other provision of the Plan, the Committee may impose, by
rule and in option agreements or confirming memoranda, such conditions upon the
exercise of Options (including, without limitation, conditions limiting the time
of exercise to specified periods) as may be required to satisfy applicable
regulatory requirements, including without limitation Rule 10b-5 or Rule 16b-3
(or any successor rule) under the Exchange Act and any applicable section of or
regulation under the Code.

          (f) Limitation on Exercise of Incentive Stock Options. The aggregate
Fair Market Value (determined as of the respective date or dates of grant) of
the stock for which one or more Options granted to any Recipient under the Plan
(or any other option plan of the Company or any of its subsidiaries or
affiliates) may for the first time become exercisable as Incentive Stock Options
under the federal tax laws during any one calendar year shall not exceed
$100,000. Any Options granted as Incentive Stock Options pursuant to the Plan in
excess of such limitation shall be treated as Non-qualified Stock Options.

          (g) Termination of Employment.

               (i) Termination for Cause. Except as otherwise provided in a
written agreement between the Company and the Recipient, which may be entered
into at any time before or after termination, in the event of a Just Cause
Dismissal of a Recipient all of the Recipient's unexercised Options, whether or
not vested, shall expire and become unexercisable as of the date of such Just
Cause Dismissal.

               (ii) Termination other than Just Cause Dismissal. Subject to
subsection (i) above and subsection (iii) below, and except as otherwise
provided in a written agreement between the Company and the Recipient, or a
confirming memorandum issued by the Company to the Recipient with the
Recipient's consent, which may be entered into or delivered at any time before
or after termination, in the event of a Recipient's termination of employment
for:

                    (A) any reason other than Just Cause Dismissal, death, or
     Permanent Disability, the Recipient's unexercised Options, whether or not
     vested, shall expire and become unexercisable as of the earlier of (1) the
     date such Options would expire in accordance with their terms if the
     Recipient remained employed or (2) three calendar months after the date of
     termination in the case of Incentive Stock Options, or six months after the
     date of termination in the case of Non-qualified Stock Options.

                    (B) death or Permanent Disability, the Recipient's
     unexercised Options, whether or not vested, shall expire and become
     unexercisable as of the earlier of (1) the date such Options would expire
     in accordance with their terms if the Recipient remained employed or (2) 12
     months after the date of termination.

               (iii) Alteration of Vesting and Exercise Periods. Notwithstanding
anything to the contrary in subsections (i) or (ii) above, the Committee may in
its discretion pursuant to Section 2.07(b) designate shorter or longer periods
to exercise Options following a Recipient's termination of employment. Provided
that if the Committee determines to designate a longer period for the Recipient
to exercise Options, such period of time shall not be longer than the later of
(1) the fifteenth (15) day of the third month following the date at which, or
(2) December 31 of the calendar year in which, the stock right would otherwise
have expired if the stock right had not been extended, based on the terms of the
stock right at the original grant date.

                                       10

<PAGE>

Options shall be exercisable by a Recipient (or his successor in interest)
following such Recipient's termination of employment only to the extent that
installments thereof had become exercisable on or prior to the date of such
termination unless the Company has a written agreement with the Recipient of the
Option providing otherwise or the vesting period is extended pursuant to Section
2.07(b).

          3.03 PERFORMANCE AWARDS.

          (a) Grant of Performance Award. The Committee shall determine the
performance criteria (which need not be identical and may be established on an
individual or group basis) governing Performance Awards, the terms thereof, and
the form and time of payment of Performance Awards.

          (b) Payment of Award; Limitation. Upon satisfaction of the conditions
applicable to a Performance Award, payment will be made to the Recipient in cash
or in shares of Common Stock valued at Fair Market Value or a combination of
Common Stock and cash, as the Committee in its discretion may determine, but no
later than 2 1/2 months after the year in which the satisfaction of the
conditions applicable to the Performance Award occurs.

          (c) Annual Limit. Notwithstanding any other provision of this Plan, no
Eligible Person shall be paid a Performance Award in excess of $250,000 in any
one calendar year; provided, however, that this limitation shall not apply to
the extent it is not required in order for the compensation attributable to the
Performance Award hereunder to qualify as Performance-Based Compensation.

          (d) Expiration of Performance Award. If any Recipient's employment
with the Company is terminated for any reason other than normal retirement,
death, or Permanent Disability prior to the time a Performance Award or any
portion thereof becomes payable, all of the Recipient's rights under the unpaid
portion of the Performance Award shall expire and terminate unless otherwise
determined by the Committee. In the event of termination of employment by reason
of death, Permanent Disability or normal retirement, the Committee, in its
discretion, may determine what portions, if any, of the Performance Award should
be paid to the Recipient.

          3.04 RESTRICTED STOCK.

          (a) Award of Restricted Stock. The Committee shall determine the
Purchase Price (if any) applicable to Restricted Stock, the terms of payment of
the Purchase Price, the restrictions upon the Restricted Stock, and when such
restrictions shall lapse.

          (b) Requirements of Restricted Stock. All shares of Restricted Stock
granted or sold pursuant to the Plan will be subject to the following
conditions:

               (i) No Transfer. The shares may not be sold, assigned,
transferred, pledged, hypothecated or otherwise disposed of, alienated or
encumbered until the restrictions are removed or expire;

               (ii) Certificates. The Committee may require that the
certificates representing Restricted Stock granted or sold to a Recipient
pursuant to the Plan remain in the physical custody of an escrow holder or the
Company until all restrictions are removed or expire;

                                       11

<PAGE>

               (iii) Restrictive Legends. Each certificate representing
Restricted Stock granted or sold to a Recipient pursuant to the Plan will bear
such legend or legends making reference to the restrictions imposed upon such
Restricted Stock as the Committee in its discretion deems necessary or
appropriate to enforce such restrictions; and

               (iv) Other Restrictions. The Committee may impose such other
conditions on Restricted Stock as the Committee may deem advisable including,
without limitation, restrictions under the Securities Act, under the Exchange
Act, under the requirements of any stock exchange upon which such Restricted
Stock or shares of the same class are then listed and under any blue sky or
other securities laws applicable to such shares.

          (c) Lapse of Restrictions. The restrictions imposed upon Restricted
Stock will lapse in accordance with such schedule or other conditions as are
determined by the Committee.

          (d) Rights of Recipient. Subject to the provisions of Section 3.04(b)
and any restrictions imposed upon the Restricted Stock, the Recipient will have
all rights of a shareholder with respect to the Restricted Stock granted or sold
to such Recipient under the Plan, including the right to vote the shares and
receive all dividends and other distributions paid or made with respect thereto.

          (e) Termination of Employment. Unless the Committee in its discretion
determines otherwise, upon a Recipient's termination of employment for any
reason, all of the Recipient's Restricted Stock remaining subject to
restrictions imposed pursuant to the Plan on the date of such termination of
employment shall be repurchased by the Company at the Purchase Price (if any)
paid therefor by the Recipient.

          3.05 STOCK APPRECIATION RIGHTS.

          (a) Granting of Stock Appreciation Rights. The Committee may approve
the grant to Eligible Persons of Stock Appreciation Rights, related or unrelated
to Options, at any time.

          (b) SARs Related to Options.

               (i) A Stock Appreciation Right granted in connection with an
Option granted under this Plan will entitle the holder of the related Option,
upon exercise of the Stock Appreciation Right, to surrender such Option, or any
portion thereof to the extent unexercised, with respect to the number of shares
as to which such Stock Appreciation Right is exercised, and to receive payment
of an amount computed pursuant to Section 3.05(b)(iii). Such Option will, to the
extent surrendered, then cease to be exercisable.

               (ii) A Stock Appreciation Right granted in connection with an
Option hereunder will be exercisable at such time or times, and only to the
extent that, the related Option is exercisable, and will not be transferable
except to the extent that such related Option may be transferable.

               (iii) Upon the exercise of a Stock Appreciation Right related to
an Option, the Holder will be entitled to receive payment of an amount
determined by multiplying: (i) the difference obtained by subtracting the
Exercise Price of a share of Common Stock specified in the related Option from
the Fair Market Value of a share of Common Stock on the date of exercise of such
Stock Appreciation Right (or as of such other date or as of the occurrence of
such event as may have been specified in the instrument evidencing the grant of

                                       12

<PAGE>

the Stock Appreciation Right), by (ii) the number of shares as to which such
Stock Appreciation Right is exercised.

          (c) SARs Unrelated to Options. The Committee may grant Stock
Appreciation Rights unrelated to Options to Eligible Persons. Section
3.05(b)(iii) shall be used to determine the amount payable at exercise under
such Stock Appreciation Right, except that in lieu of the Option Exercise Price
specified in the related Option the initial base amount specified in the Award
shall be used.

          (d) Limits. Notwithstanding the foregoing, the Committee, in its
discretion, may place a dollar limitation on the maximum amount that will be
payable upon the exercise of a Stock Appreciation Right under the Plan.

          (e) Payments. Payment of the amount determined under the foregoing
provisions may be made solely in whole shares of Common Stock valued at their
Fair Market Value on the date of exercise of the Stock Appreciation Right or,
alternatively, at the sole discretion of the Committee, in cash or in a
combination of cash and shares of Common Stock as the Committee deems advisable.
The Committee has full discretion to determine the form in which payment of A
Stock Appreciation Right will be made and to consent to or disapprove the
election of a Recipient to receive cash in full or partial settlement of a Stock
Appreciation Right. If the Committee decides to make full payment in shares of
Common Stock, and the amount payable results in a fractional share, payment for
the fractional share will be made in cash.

          (f) Rule 16b-3. The Committee may, at the time a Stock Appreciation
Right is granted, impose such conditions on the exercise of the Stock
Appreciation Right as may be required to satisfy the requirements of Rule 16b-3
under the Exchange Act (or any other comparable provisions in effect at the time
or times in question).

          (g) Termination of Employment. Section 3.02(g) will govern the
treatment of Stock Appreciation Rights upon the termination of a Recipient's
employment with the Company.

          3.06 STOCK PAYMENTS. The Committee may approve Stock Payments of the
Company's Common Stock to any Eligible Person for all or any portion of the
compensation (other than base salary) or other payment that would otherwise
become payable by the Company to the Eligible Person in cash.

          3.07 DIVIDEND EQUIVALENTS. The Committee may grant Dividend
Equivalents to any Recipient who has received a Stock Option, SAR, or other
Award denominated in shares of Common Stock. Such Dividend Equivalents shall be
effective and shall entitle the recipients thereof to payments during the
"APPLICABLE DIVIDEND PERIOD," which shall be no later than 2 1/2 months
following the calendar year for which the Dividend Equivalents are granted.
Dividend Equivalents may be paid in cash, Common Stock, or other Awards; the
amount of Dividend Equivalents paid other than in cash shall be determined by
the Committee by application of such formula as the Committee may deem
appropriate to translate the cash value of dividends paid to the alternative
form of payment of the Dividend Equivalent. Dividend Equivalents shall be
computed as of each dividend record date and shall be payable to recipients
thereof at such time as the Committee may determine. Notwithstanding the
foregoing, if it is intended that an Incentive Award qualify as
Performance-Based Compensation and the amount of the compensation the Eligible
Person could receive under the award is based solely on an increase in value of
the underlying stock after the date of grant or award (i.e., the grant, vesting,
or exercisability of the award is not conditioned upon the attainment of a
preestablished, objective

                                       13

<PAGE>

performance goal described in Section 1.01(t)), then the payment of any Dividend
Equivalents related to the award shall not be made contingent on the exercise of
the award.

                                   ARTICLE IV
                         NON-EMPLOYEE DIRECTOR'S OPTIONS

          4.01 GRANTS OF ORIGINAL AND INITIAL OPTIONS.

          (a) Original Options. Persons serving as Non-employee Directors as of
the closing of the initial public offering of the Company's securities shall,
upon such closing, receive a one-time grant of an option to purchase up to
10,000 shares (or 15,000 shares if such person has served as a director of the
Company for at least two years) of the Company's Common Stock at an exercise
price per share equal to the price to the public in such initial public
offering, subject to adjustment as set forth in Article V. Options granted under
this Section 4.01(a) are "ORIGINAL OPTIONS" for purposes hereof.

          (b) Initial Options. Each Non-employee Director who joins the Board
after the consummation of the initial public offering of the Company's
securities shall, upon first becoming a Non-employee Director ("Eligible
Director"), receive a one-time grant of an option to purchase up to 5,000 shares
of the Company's Common Stock at an exercise price per share equal to the Fair
Market Value of the Company's Common Stock on the date of grant, subject to (a)
vesting as set forth in Section 4.03, and (b) adjustment as set forth in Article
V. Options granted under this Section 4.01(b) are "INITIAL OPTIONS" for purposes
hereof.

          4.02 GRANTS OF ADDITIONAL OPTIONS. Immediately following the annual
meeting of shareholders of the Company next following an Eligible Director's
becoming an Eligible Director, and immediately following each subsequent annual
meeting of shareholders of the Company, in each case if the Eligible Director
has served as a director since his or her election or appointment and has been
re-elected as a director at such annual meeting or is continuing as a director
without being re-elected due to the classification of the board, such Eligible
Director shall automatically receive an option to purchase up to 2,500 shares of
the Company's Common Stock (an "ADDITIONAL OPTION"). In addition to the
Additional Options described above, an individual who was previously an Eligible
Director and received an initial grant of stock options under the Plan or
pursuant to a prior option plan for the Company's directors, who then ceased to
be a director for any reason, and who then again becomes an Eligible Director,
shall upon again becoming an Eligible Director automatically receive an
Additional Option. The exercise price per share for all Additional Options shall
be equal to the fair market value of the Company's Common Stock on the date of
grant, subject to (a) vesting as set forth in Section 4.03, and (b) adjustment
as set forth in Article V. No individual may receive Additional Options to
purchase more than an aggregate of 20,000 shares of the Company's Common Stock,
less the number of additional options received under any other option plan for
the Company's directors.

          4.03 VESTING. Original Options shall vest and become exercisable with
respect to all underlying shares upon grant. Initial Options shall vest and
become exercisable with respect to 50% of the underlying shares upon the date of
grant and 50% of the underlying shares immediately prior to the next annual
shareholders' meeting following the date of grant (or, if an annual meeting of
shareholders occurs within six months after the grant date, then immediately
prior to the second annual shareholders' meeting after the date of grant), if
the Recipient has remained a director from the grant date to such vesting time.
Additional Options shall vest and become exercisable with respect to all
underlying shares upon the earlier of (y) the first anniversary the grant date
or (z) immediately prior to the annual meeting of shareholders of the

                                       14

<PAGE>

Company next following the grant date, if the optionee has served as a director
from the grant date to such earlier date. Notwithstanding the foregoing,
however, Initial Options and Additional Options that have not vested and become
exercisable at the time the optionee ceases to be a director shall terminate.

          4.04 EXERCISE. The exercise price for Non-employee Directors' Options
shall be payable as set forth in Section 3.02(c). Non-employee Directors'
Options shall be exercised in the manner provided in Section 3.02(e).

          4.05 TERM OF OPTIONS AND EFFECT OF TERMINATION. Notwithstanding any
other provision of the Plan, no Non-employee Director's Option granted under the
Plan shall be exercisable after the expiration of ten years from the effective
date of its grant. In the event that the recipient of any Non-employee
Directors' Options granted under the Plan shall cease to be a director of the
Company, (a) all Original Options and Initial Options granted under this plan to
such recipient shall be exercisable, to the extent already exercisable at the
date such recipient ceases to be a director and regardless of the reason the
recipient ceases to be a director, for a period of 365 days after that date (or,
if sooner, until the expiration of the option according to its terms), and shall
then terminate; and (b) all Additional Options granted under this Plan to such
recipient shall be exercisable, to the extent already exercisable at the date
such recipient ceases to be a director, for a period of 365 days after that date
(or, if sooner, until the expiration of the option according to its terms) if he
or she ceases to be a director because of death or permanent disability, or for
a period of 90 days after that date (or, if sooner, until the expiration of the
option according to its terms) if he or she ceases to be a director for any
other reason, and shall then terminate. In the event of the death of an optionee
while such optionee is a director of the Company or within the period after
termination of such status during which he or she is permitted to exercise an
option, such option may be exercised by any person or persons designated by the
optionee on a beneficiary designation form adopted by the Plan administrator for
such purpose or, if there is no effective beneficiary designation form on file
with the Company, by the executors or administrators of the optionee's estate or
by any person or persons who shall have acquired the option directly from the
optionee by his or her will or the applicable laws of descent and distribution.

                                    ARTICLE V
                             CORPORATE TRANSACTIONS

          5.01 ANTI-DILUTION ADJUSTMENTS. The number of shares of Common Stock
available for issuance upon exercise of Awards granted under the Plan, the
number of shares for which each Award can be exercised, and the exercise price
per share of Awards shall be appropriately and proportionately adjusted for any
increase or decrease in the number of issued and outstanding shares of Common
Stock resulting from a subdivision or consolidation of shares or the payment of
a stock dividend or any other increase or decrease in the number of issued and
outstanding shares of capital stock of the Company effected without receipt of
consideration by the Company. No fractional interests will be issued under the
Plan resulting from any such adjustments. The preceding sentence shall not
result in an adjustment to the terms of an Incentive Stock Option unless such
adjustment either (a) would not cause the Option to lose its status as an
Incentive Stock Option or (b) is agreed to in writing by the Committee and the
Recipient.

          5.02 REORGANIZATIONS; MERGERS; CHANGES IN CONTROL. Subject to the
other provisions of this Section 5.02, if the Company shall consummate any
reorganization or merger or consolidation in which holders of shares of the
Company's Common Stock are entitled to receive in respect of such shares any
other consideration (including, without limitation, a

                                       15

<PAGE>

different number of such shares), each Award outstanding under the Plan
exercisable for Common Stock shall thereafter be exercisable, in accordance with
the Plan, only for the kind and amount of securities, cash and/or other property
receivable upon such reorganization or merger or consolidation by a holder of
the same number of shares of Common Stock as are subject to that Award
immediately prior to such reorganization or merger or consolidation, and any
appropriate adjustments will be made to the exercise price thereof. In addition,
if a Change in Control (as defined below) occurs and in connection with such
Change in Control any Recipient's employment with the Company is terminated,
then subject to the terms of any written employment agreement between the
Company and the Recipient and the specific terms of any Award, such Recipient
shall have the right to exercise or receive the full benefit of his or her
Awards granted under the Plan in whole or in part during the applicable time
period provided in Section 3.02(g) without regard to any vesting or performance
requirements or other milestones. For purposes hereof, but without limitation, a
Recipient's employment with the Company will be deemed to have been terminated
in connection with a Change of Control if (a) the Recipient is removed from his
or her employment with the Company by or resigns his or her employment with the
Company upon request of a Person (as defined in paragraph (i) below) exercising
practical voting control over the Company following the Change in Control or a
person acting upon authority or at the instruction of such Person, or (b) the
Recipient's position is eliminated as a result of a reduction in force within
150 days after the consummation of the Change in Control. In addition, if a
Change in Control occurs and in connection with such Change in Control any
recipient of a Non-employee Director's Option granted under the Plan ceases to
be a director of the Company or its successor, then such recipient shall have
the right to exercise his or her Non-Employee Director's Options granted under
the Plan in whole or in part during the applicable time period provided in
Section 4.05 without regard to any vesting requirements. For purposes hereof,
but without limitation, a director will be deemed to have ceased to be a
director of the Company or its successor in connection with a Change in Control
if such director (a) is removed by or resigns upon request of a Person (as
defined in paragraph (i) below) exercising practical voting control over the
Company following the Change in Control or a person acting upon authority or at
the instruction of such Person, or (b) is willing and able to continue as a
director of the Company or its successor but is not re-elected to or retained on
the Company's board of directors by the Company's shareholders through the
shareholder vote or consent action for election of directors that precedes and
is taken in connection with, or next follows, the Change in Control, and is not
elected or appointed to the board of directors of the successor. For purposes
hereof, a "CHANGE IN CONTROL" means the following and shall be deemed to occur
if any of the following events occur:

     (I)  The acquisition by any individual, entity or group (within the meaning
          of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a "Person")) of
          beneficial ownership (within the meaning of Rule 13d-3 promulgated
          under the Exchange Act) of 50% or more of either (1) the
          then-outstanding shares of common stock of the Company (the
          "Outstanding Company Common Stock") or (2) the combined voting power
          of the then-outstanding voting securities of the Company entitled to
          vote generally in the election of directors (the "Outstanding Company
          Voting Securities"); provided, however, that, for purposes of this
          definition, the following acquisitions shall not constitute a Change
          in Control; (A) any acquisition directly from the Company, (B) any
          acquisition by the Company, (C) any acquisition by any employee
          benefit plan (or related trust) sponsored or maintained by the Company
          or any affiliate of the Company or a successor, or (D) any acquisition
          by any entity pursuant to a transaction that complies with clauses
          (iii)(A), (B) and (C) below;

     (II) Individuals who, as of the Effective Date, constitute the Board (the
          "Incumbent Board") cease for any reason to constitute at least a
          majority of the Board; provided,

                                       16

<PAGE>

          however, that any individual becoming a director subsequent to the
          Effective Date whose election, or nomination for election by the
          Company's shareholders, was approved by a vote of a least a majority
          of the directors then comprising the Incumbent Board (including for
          these purposes, the new members whose election or nomination was so
          approved, without counting the member and his predecessor twice) shall
          be considered as though such individual were a member of the Incumbent
          Board, but excluding, for this purpose, any such individual whose
          initial assumption of office occurs as a result of an actual or
          threatened election contest with respect to the election or removal of
          directors or other actual or threatened solicitation of proxies or
          consents by or on behalf of a Person other than the Board;

     (III) Consummation of a reorganization, merger, statutory share exchange or
          consolidation or similar corporate transaction involving the Company
          or any of its subsidiaries, a sale or other disposition of all or
          substantially all of the assets of the Company, or the acquisition of
          assets or stock of another entity by the Company or any of its
          subsidiaries (each, a "Business Combination"), (A) all or
          substantially all of the individuals and entities that were the
          beneficial owners of the Outstanding Company Common Stock and the
          outstanding Company Voting Securities immediately prior to such
          Business Combination beneficially own, directly or indirectly, more
          than 50% of the then-outstanding shares of common stock and the
          combined voting power of the then-outstanding voting securities
          entitled to vote generally in the election of directors, as the case
          may be, of the entity resulting from such Business Combination
          (including, without limitation, an entity that, as a result of such
          transaction, owns the Company or all or substantially all of the
          Company's assets directly or through one or more subsidiaries (a
          "Parent")) in substantially the same proportions as their ownership
          immediately prior to such Business Combination of the Outstanding
          Company Common Stock and the Outstanding Company Voting Securities, as
          the case may be, (B) no Person (excluding any entity resulting from
          such Business Combination or a Parent or any employee benefit plan (or
          related trust) of the Company or such entity resulting from such
          Business Combination or Parent) beneficially owns, directly or
          indirectly, more than 50% of, respectively, the then-outstanding
          shares of common stock of the entity resulting from such Business
          Combination or the combined voting power of the then-outstanding
          voting securities of such entity, except to the extent that the
          ownership in excess of 50% existed prior to the Business Combination,
          and (C) at least a majority of the members of the board of directors
          or trustees of the entity resulting from such Business Combination or
          a Parent were members of the Incumbent Board at the time of the
          execution of the initial agreement or of the action of the Board
          providing for such Business Combination; or

     (IV) Approval by the shareholders of the Company of a complete liquidation
          or dissolution of the Company other than in the context of a
          transaction that does not constitute a Change in Control under clause
          (iii) above.

          5.03 DETERMINATION BY THE COMMITTEE. To the extent that the foregoing
adjustments relate to stock or securities of the Company, such adjustments shall
be made by the Committee, whose determination in that respect shall be final,
binding and conclusive. The grant of an Award pursuant to the Plan shall not
affect in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge or to consolidate or to dissolve, liquidate or sell, or
transfer all of any part of its business or assets.

                                       17

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