Document:

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                                                                  EXHIBIT 10.16

                   THE SURFACE MOUNT TECHNOLOGY CENTRE INC.

                                 July 30, 1999

Philip Woodard
356 Kelly Crescent
Newmarket, Ontario L3Y 7K1

     Re:  Employment Agreement

Dear Mr. Woodard:

     This letter sets forth the terms and conditions of your employment with The
Surface Mount Technology Centre Inc., an Ontario corporation (the "COMPANY") to
be effective as of the date of closing of the transactions (the "EFFECTIVE
DATE") described in the Reorganization and Merger Agreement dated as of July 26,
1999 among the Company, SMTC Corporation ("HOLDINGS"), HTM Holdings, Inc.
("HTM"), EMSIcon Investments LLC, the Company's stockholders, the HTM
stockholders and warrantholders and others (the "REORGANIZATION AGREEMENT").
This Agreement is entered into in connection with the transactions described in
the Reorganization Agreement pursuant to which you, as a stockholder of the
Company, will receive certain payments upon the repurchase for cancellation of a
portion of your interest in the Company.

     1.  EMPLOYMENT AND SERVICES.  You shall be employed as a Vice President of
the Company, Holdings and its subsidiaries (the "SMTC GROUP") for the period
beginning on the Effective Date and ending on December 31, 2001 or on such
earlier date as your employment is terminated pursuant to paragraph 4 hereof
(the "EMPLOYMENT PERIOD").  The Employment Period shall automatically be
extended for successive one-year terms on December 31, 2001 and each anniversary
thereof, unless (i) either party has given written notice of non-renewal to the
other party at least 90 days prior to the scheduled expiration date of the
Employment Period or (ii) your employment has been terminated pursuant to
paragraph 4 hereof.

     During the Employment Period, you shall render such services of a senior
executive nature to the SMTC Group and shall have such powers, duties and
responsibilities as may from time to time be prescribed by the Holdings Board of
Directors (the "BOARD").  You shall perform and discharge, faithfully,
diligently and competently, such services, duties and responsibilities.  You
shall devote all of your business time and attention and your best efforts and
ability to the business and affairs of the SMTC Group and shall not engage in
other business activities (whether or not compensated) during the Employment
Period without prior
<PAGE>

                                                                    Phil Woodard
                                                            Employment Agreement
                                                                   July 30, 1999

written consent of the Board. You agree to serve, if elected or appointed
thereto, in one or more positions as an officer or director of any one or more
current or future members of the SMTC Group, or any one or more of the present
or future subsidiaries or affiliates of Holdings, or as an officer, trustee,
director or other fiduciary of any pension or other employee benefit plan of the
Company, or any one or more of the present or future subsidiaries or affiliates
of Holdings. Service in such additional positions will be without additional
compensation except for reimbursement of reasonably related business expenses on
the same terms as provided elsewhere in this Agreement.

     2.  COMPENSATION.  As compensation for your services performed under this
Agreement during the Employment Period, the Company shall pay you a base salary
at the rate of $200,000 per year.  Such salary shall be payable in installments
in accordance with the Company's regular payroll practices.  During the
Employment Period, you will be eligible to receive an annual bonus payment based
on the achievement by Holdings of the EBITDA Targets and the Target Performance
Bonus set forth on Annex A hereto.  Such EBITDA Targets may be adjusted by the
Board from time to time to reflect any future acquisitions, mergers or other
business combinations by or involving Holdings or its affiliates.  For the
fiscal year ending December 31, 1999, the EBITDA Targets shall be calculated on
a pro forma basis as if the combination of HTM and SMTC had occurred on January
1, 1999.  Beginning in fiscal year 2000 you will be entitled to receive a mid-
year advance against your annual bonus payment in an amount equal to 40% of the
annual bonus payment that you would receive based on the  Board's mid-year
projection of the year-end EBITDA.

     3.  BENEFITS.  During the Employment Period, you shall be entitled to
participate in or receive benefits under any life insurance plan, health and
accident insurance plan, retirement plan and all other benefit arrangements
generally available to the Company's executive officers and employees (other
than severance plans or arrangements) as in effect from time to time. Without
limiting the foregoing, you shall be entitled to receive up to Cdn$15,000
annually in accordance with past practice in connection with your contribution
to a registered retirement savings plan.  In addition to any life insurance plan
described above as being generally available to the Company's executive officers
and employees, the Company will at all times maintain a life insurance policy
with a death benefit of $200,000 to be paid to a beneficiary of your choice. In
addition, the Company will reimburse your reasonable out-of-pocket expenses
incurred in connection with the performance of your services hereunder, in each
case subject to and consistent with Company policy.  During the Employment
Period you shall be entitled to twenty paid vacation days in each fiscal year
and shall also be entitled to all paid holidays given by the Company to its
employees.  Your paid vacation days shall be prorated for any period of service
hereunder less than a full year.  You will not be entitled to cash compensation
for any vacation time not taken during the term hereof.

                                       2
<PAGE>

                                                                    Phil Woodard
                                                            Employment Agreement
                                                                   July 30, 1999

     4.   TERMINATION AND SEVERANCE.  The Employment Period shall terminate
prior to its scheduled expiration date on the first to occur of (i) your death
or permanent disability (defined as your actual inability to perform normal
duties for a period of 90 consecutive days or for a total of 120 days in any
two-year period or your prospective inability to perform such duties for such
period as determined in good faith by the Board), (ii) a vote of the Board
directing such termination for Cause, (iii) a vote of the Board directing such
termination without Cause, or (iv) termination by you upon not less than 30
days' prior written notice for Good Reason.  In the event of termination of the
Employment Period pursuant to clauses (iii) or (iv) above and so long as you
comply with the restrictions set forth in paragraphs 5 and 6 below, the Company
shall continue to pay your base salary for two years following the date of such
termination.  Except as set forth in this paragraph 4, you shall not be entitled
to any compensation or other payment from any current or future member, or
affiliate of any such member, of the SMTC Group in connection with the
termination of your employment.  For purposes of this Agreement, (x) "CAUSE"
shall mean (i) your willful and repeated failure to comply with the lawful
directives of the Board, (ii) any criminal act or act of dishonesty, disloyalty,
misconduct or moral turpitude by you that is injurious to the property,
operations, business or reputation of any member of the SMTC Group, or (iii)
your material breach of this Agreement that is not cured within 30 days after
written notice thereof to you by the Company, and (y) "GOOD REASON" shall mean
(i) the Company's material breach of this Agreement that is not cured within 30
days after written notice thereof to the Company by you or (ii) a reduction in
your responsibilities and authority such that you no longer function as a Vice
President of the Company, provided however, that if you do not terminate within
30 days after the Company has provided you notice of any such reduction in
responsibilities, then you shall be deemed to have waived your right to
terminate for Good Reason based on such reduction.

     5.  CONFIDENTIAL INFORMATION.  You acknowledge that information obtained
by you during your employment with the Company (including during the term prior
to the Employment Period) concerning the business or affairs of the Company or
any member of the SMTC Group ("CONFIDENTIAL INFORMATION") is the property of the
Company.  You shall not at any time during or after the Employment Period,
without the prior written consent of the Board, disclose to any unauthorized
person or use for your own account or for the account of any person other than
the Company or its affiliates any Confidential Information, except to the extent
necessary to comply with applicable laws or to the extent that such information
becomes generally known to and available for use by the public other than as a
result of (i) your acts or (ii) during the Employment Period, your omissions to
act.  Upon termination of the Employment Period or at the request of the Board
at any time, you shall deliver to the Board all documents containing
Confidential Information or relating to the business or affairs of the Company
or its affiliates that you may then possess or have under your control.

                                       3
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                                                                    Phil Woodard
                                                            Employment Agreement
                                                                   July 30, 1999

     6.  NON-COMPETITION; NON-SOLICITATION.

         a.  NON-COMPETITION.  You acknowledge that you are and will be in
possession of Confidential Information, that your services are of unique and
great value to the Company, and that some restrictions on your activities during
and after your employment are necessary to protect the goodwill, Confidential
Information and other legitimate interests of the Company and its affiliates.
Accordingly, during the Employment Period and for the period thereafter during
which you receive continued payments of your base salary pursuant to Section 4
or, in the case of termination of your employment for Cause pursuant to Section
4(ii), for a period of one year following the date of termination of your
employment (the "NON-COMPETE PERIOD"), you shall not, directly or indirectly,
own, manage, control, participate in, consult with, render services to, or in
any manner engage in, any enterprise engaged in the assembly of printed circuit
boards or other electronic manufacturing services within any geographical area
in which the Company or its affiliates do business on the date of termination of
your employment.  Such geographical area shall include but not be limited to
North America (including Mexico), Europe, Southeast Asia and China.  Nothing
herein shall prohibit you from being a passive owner of not more than 5% of any
publicly-traded class of capital stock of any entity engaged in a competing
business.

         b.  NON-SOLICITATION OF EMPLOYEES, SUPPLIERS AND CUSTOMERS.  During
the Non-Compete Period, you shall not (i) interfere with the relationship
between the Company or any of its affiliates, and any of their employees, or
induce or attempt to induce any employee of the Company or its affiliates to
terminate his or her employment, (ii) hire directly or through another entity
any person who was an employee of the Company or any of its affiliates at any
time during the Employment Period (other than a former employee of the Company
who left his or her employment without any inducement by you), (iii) induce or
attempt to induce any independent contractor providing services to the Company
or any of its affiliates to terminate or diminish its relationship with the
Company or its affiliates, (iv) induce or attempt to induce any customer,
supplier, licensee or other business relation of the Company or its affiliates
to cease doing business with such entity, or (v) in any way interfere in any
material respect with the relationship between any such customer, supplier,
licensee or business relation and the Company or its affiliates.

         c.  SCOPE OF RESTRICTION.  If, at the time of enforcement of this
paragraph 6, a court shall hold that the duration, scope or area restrictions
stated herein are unreasonable under circumstances then existing, you agree that
the maximum duration, scope or area reasonable under such circumstances shall be
substituted for the stated duration, scope or area.

                                       4
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                                                                    Phil Woodard
                                                            Employment Agreement
                                                                   July 30, 1999

         d.  NECESSITY OF RESTRAINTS.  You acknowledge that the restraints
imposed by this paragraph 6 and by paragraph 5 above are reasonable and
necessary for the protection of the Company and its affiliates, and that any
such entity would be irreparably harmed by a breach by you of these provisions.

     7.  WITHHOLDING; CURRENCY.  All payments made by the Company under this
Agreement shall be net of any tax or other amounts required to be withheld by
the Company under any applicable law or legal requirement.  Except as
specifically noted, all amounts set forth in this Agreement are denominated in
US Dollars.

     8.  PRIOR AGREEMENTS.  Except as expressly provided herein, all prior
agreements, arrangements or understandings, written or oral, with respect to
your employment with the Company or any subsidiary or affiliate thereof are
superseded by this Agreement and shall be of no further force and effect.

     9.  SURVIVAL.  The provisions of paragraphs 5 and 6 hereof will survive
any termination of this Agreement in accordance with their respective terms.

     10. GOVERNING LAW.  All questions concerning the construction, validity
and interpretation of this Agreement shall be governed by the laws of the
Province of Ontario without giving effect to any choice or conflict of laws
provision or rule that would cause the application of the domestic substantive
laws of any other jurisdiction.

     11. NOTICES.  All notices, requests and demands to or upon the parties
hereto to be effective shall be in writing, by facsimile, by overnight courier
or by registered or certified mail, postage prepaid and return receipt
requested, and shall be deemed to have been duly given or made upon: (i)
delivery by hand, (ii) one business day after being sent by overnight courier;
or (iii) in the case of transmission by facsimile, when confirmation of receipt
is obtained.  Such communications shall be addressed and directed to the parties
as follows (or to such other address as either party shall designate by giving
like notice of such change to the other party):

         If to you, at the address first stated above.

                                       5
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                                                                    Phil Woodard
                                                            Employment Agreement
                                                                   July 30, 1999

         If to the Company:

               The Surface Mount Technology Centre Inc.
               625 Hood Road
               Markham, Ontario  L3R 4N6
               Canada

         with a copy to:

               Ropes & Gray
               One International Place
               Boston, MA  02110
               Attention:  Alfred O. Rose
               Facsimile:  617-951-7050

     12. AMENDMENT; WAIVER.  No provision of this Agreement may be amended
modified, waived or discharged unless such amendment waiver, modification or
discharge is approved by the Board and agreed to in writing signed by you and
such officer as may be specifically authorized by the Board in connection with
such approval.  No waiver of any condition or provision of this Agreement shall
be deemed a waiver of similar or dissimilar provisions or conditions at the same
or at any prior or subsequent time.

     13. ASSIGNMENT.  This Agreement shall inure to the benefit of and be
binding upon (i) you, your personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees and (ii)
the Company and its successors (including, without limitation, by means of
reorganization, merger, amalgamation, consolidation or liquidation) and
permitted assigns.  The Company may assign this Agreement to Holdings or any
subsidiary or affiliate of Holdings or to any successor of the Company or
Holdings by reorganization, merger, amalgamation, consolidation or liquidation
and any transferee of all or substantially all of the business or assets of the
Company, Holdings or of any division or line of business of the Company or
Holdings with which you are at any time associated.  The Company and Holdings
require your personal services hereunder and you may not assign this Agreement.

                                   * * * * *

                                       6
<PAGE>

                                                                    Phil Woodard
                                                            Employment Agreement
                                                                   July 30, 1999

     Please execute the extra copy of this letter Agreement in the space below
and return it to the undersigned at the address set forth above to confirm your
understanding and acceptance of the agreements contained herein.

                                 Very truly yours,

                                 THE SURFACE MOUNT TECHNOLOGY CENTRE INC.

                                 By: /s/ Paul Walker
                                    ----------------
                                 Name:   Paul Walker
                                 Title:  President

Accepted and agreed to:

EMPLOYEE

/s/ Phil Woodard
-------------------
    Phil Woodard

                                       7<PAGE>

                                                                    Exhibit 10.1

                           RENAISSANCE WORLDWIDE, INC.
                                 1996 STOCK PLAN
                         (as amended on April 21, 1998)

      1. Purpose. The purpose of this 1996 Stock Plan (the "Plan") is to advance
the interests of Renaissance Worldwide, Inc., a Massachusetts corporation (the
"Company"), by strengthening the ability of the Company to attract, retain and
motivate key employees, officers and consultants of or to the Company or any
present or future parent or subsidiary of the Company (the "Company Group") by
providing them with an opportunity to purchase or receive as bonuses stock of
the Company and thereby permitting them to share in the Company's success. It is
intended that this purpose will be effected by granting (i) incentive stock
options ("Incentive Options") which are intended to qualify under the provisions
of Section 422 of the Internal Revenue Code of 1986, as heretofore and hereafter
amended (the "Code"), and non-statutory stock options ("Nonqualified Options")
which are not intended to meet the requirements of Section 422 of the Code and
which are intended to be taxed under Section 83 of the Code (both Incentive
Options and Nonqualified Options shall be collectively referred to as
"Options"), (ii) stock purchase authorizations ("Purchase Authorizations") and
(iii) stock bonus awards ("Bonuses").

      2. Effective Date. This Plan was adopted by the Board of Directors of the
Company (the "Board") on March 6, 1996, approved by the sole stockholder of the
Company on March 22, 1996 (the "effective date" of the Plan) and subsequently
amended on January 9, 1997 to increase the number of shares that may be made
subject to Options, Purchase Authorization or Bonuses. On April 21, 1998, the
Board of Directors voted to amend the Plan by increasing the number of shares
that may be made subject to Options, Purchase Authorization or Bonuses, subject
to stockholder approval.

      3. Stock Covered by the Plan.

      a.    Subject to adjustment as provided in Sections 9 and 10 below, and
            further subject to stockholder approval as noted in Section 2 above,
            the shares that may be made subject to Options, Purchase
            Authorizations or Bonuses under this Plan shall not exceed in the
            aggregate 7,200,000' shares of the common stock, without par value,
            of the Company ("Company Stock"), plus the number of shares of
            Company Stock added pursuant to paragraph 3b (the "Shares").

      b.    The number of Shares that may be made subject to Options, Purchase
            Authorizations or Bonuses under this Plan shall automatically
            increase on the first day of each fiscal year, beginning in 1998 and
            continuing through 2000, by a number of shares of Company Stock
            equal to four percent (4%) of the total number of shares of Company
            Stock outstanding on the last trading day of the previous fiscal
            year. For 1998, the

-----------------

      (1) This figure was amended in the 1998 amendment to reflect the 2-for-1
stock split effected the first quarter.
<PAGE>

            increase shall take effect on the date of stockholder approval of
            the amendments to the Plan and shall be based on the total number of
            shares of Company Stock outstanding on the day of the 1998 annual
            meeting.

      c.    The number of Shares subject to Options that are intended to be
            Incentive Options shall not exceed 15,000,000.

      d.    Any Shares subject to an Option or Purchase Authorization which for
            any reason expires or is terminated unexercised as to such Shares
            and any Shares reacquired by the Company pursuant to forfeiture or a
            repurchase right hereunder may again be the subject of an Option,
            Purchase Authorization or Bonus under the Plan. The Shares purchased
            pursuant to Purchase Authorizations or the exercise of Options under
            this Plan or issued as Bonuses may, in whole or in part, be either
            authorized but unissued Shares or issued Shares reacquired by the
            Company.

      4. Administration. This Plan shall be administered by the Board, whose
construction and interpretation of the Plan's terms and provisions shall be
final and conclusive. The Board shall have authority, subject to the express
provisions of the Plan, to construe the Plan and the respective Options,
Purchase Authorizations, Bonuses and related agreements, to prescribe, amend and
rescind rules and regulations relating to the Plan, to determine the terms and
provisions of the respective Options, Purchase Authorizations, Bonuses and
related agreements, and to make all other determinations in the judgement of the
Board necessary or desirable for the administration of the Plan. The Board may
correct any defect or supply any omission or reconcile any inconsistency in the
Plan or in any Option, Purchase Authorization, Bonus, or 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. No director
shall be liable for any action or determination made in good faith.

      Effective on and as of the date that the Company registers the Company
Stock pursuant to Section 12 of the Securities Exchange Act of 1934, as amended
(the "Act"), the Plan shall be administered by a committee (the "Committee")
consisting of not less than two (2) members of the Board, provided that the
Committee may delegate authority to grant Options to any single member of the
Board subject to such guidelines and qualifications as may be from time to time
determined by the Committee. Each member of the Committee must be an "outside
director" as that term is used in Treasury Regulation Section 1. 162-27(e)(3)(i)
under Section 162(m) of the Code.

      The Committee shall be appointed by, and shall serve at the pleasure of,
the Board and shall have the powers granted to the Board in this Section 4, and
on and after the commencement of the Committee's duties hereunder, all
references (other than in this sentence) to the Board in Sections 4, 5 and 7 of
this Plan or as specified in any agreement associated with this Plan shall mean
and relate to such Committee.

                                      -2-
<PAGE>

      5. Eligible Recipients. Options, Purchase Authorizations and Bonuses may
be granted to such key employees, officers, directors or consultants of or to
the Company Group, as are selected by the Board (a "Participant"); provided,
however, that only employees of the Company Group may be granted Incentive
Options.

      6. Duration of the Plan. This Plan shall terminate ten (10) years from the
effective date hereof, unless terminated earlier pursuant to Section 14 below,
and no Options, Purchase Authorizations or Bonuses may be granted or made
thereafter.

      7. Terms and Conditions of Options, Purchase Authorizations and Bonuses.
Options, Purchase Authorizations and Bonuses granted or made under this Plan
shall be evidenced by agreements in such form and containing such terms and
conditions as the Committee shall determine; provided, however, that such
agreements shall evidence among their terms and conditions the following:

      a.    Price. The purchase price per Share payable upon the exercise of
            each Option or the purchase pursuant to each Purchase Authorization
            granted or made hereunder shall be determined by the Committee at
            the time the Option or Purchase Authorization is granted or made.
            The purchase price per Share payable upon the exercise of each
            Incentive Option granted hereunder shall not be less than one
            hundred percent (100%) of the fair market value per Share of Company
            Stock on the day the Incentive Option is granted (or 110% in the
            case of Incentive Options to which paragraph 7(j)(i) applies). The
            purchase price per Share payable on exercise of each Nonqualified
            Option or upon the purchase of Shares pursuant to each Purchase
            Authorization granted hereunder shall be not less than eighty-five
            percent (85%) of the fair market value per Share of Company Stock
            on the date of the grant. Fair market value shall be determined in
            accordance with procedures to be established in good faith by the
            Board. Bonus Shares shall be issued in consideration of services
            previously rendered, which shall be valued for such purposes by the
            Board.

      b.    Number of Shares. Each agreement shall specify the number of Shares
            to which it pertains. The maximum number of Shares with respect to
            which Options may be granted under the Plan to any individual during
            any single calendar year shall be 200,000 Shares.

      c.    Exercise of Options. Each Option shall be exercisable for the full
            amount or for any part thereof and at such intervals or in such
            installments as the Board may determine at the time it grants such
            Option; provided, however, that no Option shall be exercisable with
            respect to any Shares later than ten (10) years after the date of
            the grant of such Option (or five (5) years in the case of Incentive
            Options to which paragraph 7(j)(ii) applies). An Option shall be
            exercisable only by delivery of a written notice to the Company's
            Treasurer, or any other officer of the Company designated by the
            Board to accept such notices on its behalf, specifying the number of

                                      -3-
<PAGE>

            Shares for which the Option is exercised and accompanied by either
            (i) full payment or (ii) if permitted by the Board, irrevocable
            instructions to a broker to promptly deliver to the Company full
            payment in accordance with subparagraph (ii) of the first sentence
            of paragraph 7(d) below of the amount necessary to pay the aggregate
            exercise price. With respect to an Incentive Option, the permission
            of the Board referred to in clause (ii) of the preceding sentence
            must be specifically granted at the time the Incentive Option is
            granted.

      d.    Payment. Payment shall be made in full (i) at the time the Option is
            exercised, (ii) promptly after the Participant forwards the
            irrevocable instructions referred to in paragraph 7(c)(ii) above to
            the appropriate broker, if exercise of an Option is made pursuant to
            paragraph 7(c)(ii) above, or (iii) at the time the purchase pursuant
            to a Purchase Authorization is made. Payment shall be made either
            (a) in cash, (b) by check, (c) if permitted by the Board (with
            respect to an Incentive Option, such permission to have been granted
            at the time of the Incentive Option grant), by delivery and
            assignment to the Company of shares of Company Stock (provided that
            such shares have been held by such Participant for at least 6 months
            before delivery) having a fair market value (as determined by the
            Board) equal to the exercise or purchase price, (d) if permitted by
            the Board, stated in the agreement evidencing the Option or Purchase
            Authorization, and to the extent permitted by any applicable law, by
            the Participant's recourse promissory note, which note must be due
            and payable not more than five (5) years after the date the Option
            or Purchase Authorization is exercised, or (e) by a combination of
            (a), (b), (c) and/or (d). If shares of Company Stock are to be used
            to pay the exercise price of an Incentive Option, the Company prior
            to such payment must be furnished with evidence satisfactory to it
            that the acquisition of such shares and their transfer in payment of
            the exercise price satisfy the requirements of Section 422 of the
            Code and other applicable laws.

      e.    Withholding Taxes Delivery of Shares. The Company's obligation to
            deliver Shares upon exercise of an Option or upon purchase pursuant
            to a Purchase Authorization or issuance pursuant to a Bonus shall be
            subject to the satisfaction of all applicable federal, state and
            local income and employment tax withholding obligations. Without
            limiting the generality of the foregoing, the Company shall have the
            right to deduct from payments of any kind otherwise due to the
            Participant any federal, state or local taxes of any kind required
            by law to be withheld with respect to any Shares issued upon
            exercise of Options or purchased or issued pursuant to Purchase
            Authorization or Bonuses. The Participant may elect to satisfy such
            obligation(s), in whole or in part, by (i) delivering to the Company
            a check for the amount required to be withheld or (ii) if the Board
            in its sole discretion approves in any specific or general case,
            having the Company withhold Shares or delivering to the Company
            already-owned shares of Company Stock, having a value equal to the
            amount required to be withheld, as determined by the Board.

                                      -4-
<PAGE>

      f.    Non-Transferability. No Option or Purchase Authorization shall be
            transferable by the Participant otherwise than by will or the laws
            of descent or distribution, and each Option or Purchase
            Authorization shall be exercisable during the Participant's lifetime
            only by the Participant; provided, however, that (i) Nonqualified
            Options may be transferred pursuant to a qualified domestic
            relations order (as defined in Rule 1 6b-3 under the Act) and (ii)
            the Board may grant Nonqualified Options that are transferable
            (subject to any terms and conditions imposed by the Board) by the
            Participant, either directly or in trust, to one or more members of
            the Participant's family, and the Board may amend accordingly the
            form of Option Grant attached hereto. Following any transfer
            permitted pursuant to this paragraph, of which the Participant has
            notified the Board in writing, such option may be exercised by the
            transferee(s), subject to all terms and conditions of the Option
            Grant. For these purposes, the members of the Participant's family
            are only the Participant's: (i) spouse, (ii) lineal descendants;
            (iii) lineal ancestors; and (iv) siblings and spouses and children
            of such siblings.

      g.    Termination of Options and Purchase Authorizations. The Board is
            authorized, subject to the express provisions of this Plan, to
            determine the timing and terms on which an Option or Purchase
            Authorization granted or awarded hereunder shall terminate and to
            alter or amend the form of Option Agreement attached hereto to
            effect such determinations.

      h.    Rights as Stockholders. A Participant shall have no rights as a
            stockholder with respect to any Shares covered by an Option,
            Purchase Authorization or Bonus until the date of issuance of a
            stock certificate in the Participants name for such Shares.

      i.    Repurchase of Shares by the Company. Any Shares purchased or
            acquired upon exercise of an Option or pursuant to a Purchase
            Authorization or Bonus may in the discretion of the Board be subject
            to repurchase by or forfeiture to the Company and to the extent set
            forth in the option, purchase or bonus agreement pursuant to which
            the Shares were purchased or acquired. Certificates representing
            Shares subject to such repurchase or forfeiture may be subject to
            such escrow and stock legending provisions as may be set forth in
            the option, purchase or bonus agreement pursuant to which the Shares
            were purchased or acquired.

      j.    10% Stockholder. If any Participant to whom an Incentive Option is
            granted pursuant to the provisions of the Plan is on the date of
            grant the owner of stock (as determined under Section 424(d) of the
            Code) possessing more than 10% of the total combined voting power or
            value of all classes of stock of the Company, its parent, if any, or
            subsidiaries, then the following special provisions shall be
            applicable:

            i.    The exercise price per Share subject to such Option shall not
                  be less than 110% of the fair market value of each Share on
                  the date of grant; and

                                      -5-
<PAGE>

            ii.   The Option shall not have a term in excess of five years from
                  the date of grant.

      k.    Confidentiality and Non-Solicitation Agreements. In the sole
            discretion of the Board, each Participant shall be required to
            execute, prior to or contemporaneously with the grant of any Option,
            Purchase Authorization or Bonus hereunder, the Company's then
            standard form of agreement relating to nondisclosure of confidential
            information, non-solicitation and related matters.

      8. Restrictions on Incentive Options. Incentive Options granted under this
Plan shall be specifically designated as such and shall be subject to the
additional restriction that the aggregate fair market value, determined as of
the date the Incentive Option is granted, of the Shares with respect to which
Incentive Options are exercisable for the first time by a Participant during any
calendar year shall not exceed $100,000. If an Incentive Option which exceeds
the $100,000 limitation of this paragraph 8 is granted, the portion of such
Option which is exercisable for Shares in excess of the $100,000 limitation
shall be treated as a Nonqualified Option pursuant to Section 422(d) of the
Code, notwithstanding its original designation as an Incentive Option. In the
event that such Participant is eligible to participate in any other stock
incentive plans of the Company, its parent, if any, or a subsidiary which are
also intended to comply with the provisions of Section 422 of the Code, such
annual limitation shall apply to the aggregate number of Shares for which
options may be granted under all such plans.

      9. Stock Dividends; Stock Splits; Stock Combinations; Recapitalizations.
Appropriate adjustment shall be made by the Board in the maximum number of
Shares subject to the Plan and in the number, kind, and exercise or purchase
price of Shares covered by outstanding Options and Purchase Authorizations
granted hereunder to give effect to any stock dividends, stock splits, stock
combinations, recapitalizations and other similar changes in the capital
structure of the Company after the effective date of the Plan.

                                      -6-
<PAGE>

      10. Merger; Sale of Assets.

      a.    In the event of a change of the Company Stock resulting from a
            merger or similar reorganization as to which the Company is the
            surviving corporation, the number and kind of Shares which
            thereafter may be purchased pursuant to an Option or Purchase
            Authorization under the Plan and the number and kind of Shares then
            subject to Options or Purchase Authorizations granted hereunder and
            the price per Share thereof shall be appropriately adjusted in such
            manner as the Board may determine equitable to prevent dilution or
            enlargement of the rights available or granted hereunder.

      b.    Except as otherwise determined by the Board, a merger or a similar
            reorganization which the Company does not survive, or a sale of all
            or substantially all of the assets of the Company, shall cause every
            Option and Purchase Authorization hereunder to terminate, to the
            extent not then exercised, unless any surviving entity agrees to
            assume the obligations hereunder; provided, however, that, in the
            case of such a merger or similar reorganization, or such a sale of
            all or substantially all of the assets of the Company, if there is
            no such assumption, the Board may provide that some or all of the
            unexercised portion of any one or more of the outstanding Options or
            Purchase Authorizations and some or all of the Unvested Shares (as
            defined in the applicable agreement with the Participant) acquired
            upon exercise of any one or more of such Options or Purchase
            Authorizations or acceptance of any one or more of the outstanding
            Bonuses shall be immediately exercisable and vested or no longer
            subject to repurchase rights as of such date prior to such merger,
            similar reorganization or sale of assets as the Board determines.

      c.    If any person or group, other than the Company, any of its
            subsidiaries or affiliates or any employee benefit plan of the
            Company, either publicly or in a written communication to the
            Company or to its Board of Directors, makes a tender or exchange
            offer or other bona fide offer to acquire directly or indirectly
            voting securities under circumstances such that, immediately after
            such acquisition, such person or group would beneficially own voting
            securities with aggregate voting power representing 20% or more of
            the total voting power of the Company, the Board may in its sole
            discretion provide that all outstanding options shall immediately
            become fully exercisable.

      11. Investment Representations; Transfer Restrictions. The Company may
require Participants, as a condition of purchasing Shares pursuant to the
exercise of an Option or to a Purchase Authorization or receipt of Shares as a
Bonus, to give written assurances in substance and form satisfactory to the
Company to the effect that such person is acquiring the Shares for the
Participant's own account for investment and not with any present intention of
selling or otherwise distributing the same, and to such other effects as the
Company deems necessary or appropriate (including without limitation
confirmation that the Participant is aware of any

                                      -7-
<PAGE>

applicable restrictions on transfer of the Shares, as specified in the by-laws
of the Company or otherwise) in order to comply with federal and applicable
state securities laws.

      12. Definitions.

      a.    The term "employee" shall have, for purposes of this Plan, the
            meaning ascribed to "employee" under Section 3401(c) of the Code and
            the regulations promulgated thereunder.

      b.    The term "parent" shall have, for purposes of this Plan, the meaning
            ascribed to it under Section 424(e) of the Code and the regulations
            promulgated thereunder.

      c.    The term "subsidiary" shall have, for all purposes under this Plan,
            the meaning ascribed to it under Section 424(f) of the Code and the
            regulations promulgated thereunder.

      13. Termination or Amendment of Plan. The Board may at any time terminate
the Plan or make such changes in or additions to the Plan as it deems advisable
without further action on the part of the stockholders of the Company, provided:

      a.    that no such termination or amendment shall adversely affect or
            impair any then outstanding Option, Purchase Authorization, Bonus or
            related agreement without the consent of the Participant holding
            such Option, Purchase Authorization, Bonus or related agreement; and

      b.    that no such amendment which (i) increases the maximum number of
            Shares subject to this Plan (except to the extent provided in
            Sections 3, 9 and 10) or (ii) increases the benefits accruing to
            Participants or modifies the requirements as to eligibility for
            participation in the Plan (but only to the extent that either such
            change would require approval by the stockholders pursuant to the
            Code or the regulations thereunder) may be made without obtaining,
            or being conditioned upon, stockholder approval.

      With the written consent of the Participant affected, the Board may amend
outstanding Options, Purchase Authorizations, Bonuses or related agreements in a
manner not inconsistent with the Plan. The Board shall have the right to amend
or modify the terms and provisions of the Plan and of any outstanding Incentive
Options granted under the Plan to the extent necessary to qualify any or all
such Options for such favorable federal income tax treatment (including deferral
of taxation upon exercise) as may be afforded incentive stock options under
Section 422 of the Code.

      14. Governing Law. This Plan shall be governed by, and construed and
enforced in accordance with, the laws of the Commonwealth of Massachusetts.

                                      -8-

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