Document:

<PAGE>

                                                                    EXHIBIT 10.2

                                                                  Execution Copy

                                 AMENDMENT NO. 3
           TO AMENDED AND RESTATED MASTER LOAN AND SECURITY AGREEMENT

     This AMENDMENT NO. 3 is dated as of June 20, 2002 (this "Amendment"), and
amends the Amended and Restated Master Loan and Security Agreement, dated as of
December 1, 2001, as amended (the "Loan and Security Agreement"), and is between
NC Capital Corporation and Morgan Stanley Dean Witter Mortgage Capital Inc.

                                   WITNESSETH:

     WHEREAS, the parties hereto desire to make a certain amendment to the Loan
and Security Agreement as hereinafter set forth; and

     WHEREAS, pursuant to Section 11.4 of the Loan and Security Agreement, the
parties hereto are permitted to amend the Loan and Security Agreement:

     NOW THEREFORE, in consideration of the above recitals and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:

     SECTION 1. Definitions. Capitalized terms used herein but not defined shall
have the meanings set forth in the Loan and Security Agreement.

     SECTION 2. Amendment. The Loan and Security Agreement is hereby amended as
set forth below:

          (a)   The definition of the term "Custodial Agreement" is hereby
     amended in its entirety as follows:

                "Custodial Agreement" shall mean either the U.S. Bank Custodial
          Agreement or the Deutsche Bank Custodial Agreement, substantially in
          the forms attached hereto as Exhibit B. References to the "Custodial
          Agreement" herein shall mean, the "related Custodial Agreement", "a
          Custodial Agreement," "any Custodial Agreement" or the "Custodial
          Agreements", as the context requires.

          (b)   The definition of the term "Custodian" is hereby amended in its
     entirety as follows:

                "Custodian" shall mean either U.S. Bank Trust National
          Association, as Custodian under the U.S. Bank Trust Custodial
          Agreement or Deutsche Bank National Trust Company, as Custodian under
          the Deutsche Bank Custodial Agreement, and each of their successors
          and permitted assigns thereunder. References to the "Custodian" herein
          shall mean, the "related Custodian", "a Custodian", "any Custodian" or
          the "Custodians", as the context requires.

<PAGE>

          (c)  Section 1.1 is hereby amended to add the following defined term
     after "Delinquent":

               "Deutsche Bank Custodial Agreement" shall mean the Custodial
          Agreement, dated as of June 1, 2002, among the Borrower, the Lender
          and Deutsche Bank National Trust Company, as the same shall be
          modified, supplemented and in effect from time to time.

          (d)  Section 1.1 is hereby amended to add the following defined term
     after "Total Indebtedness":

               "U.S. Bank Custodial Agreement" shall mean the Amended and
          Restated Custodial Agreement, dated as of the date hereof, among the
          Borrower, the Lender and U.S. Bank Trust National Association, as the
          same shall be modified, supplemented and in effect from time to time.

          (e)  Section 2.3(c), (d) and (e) are amended in its entirety as
     follows:

               (c) The Borrower shall release to (i) U.S. Bank Trust National
          Association, as Custodian under the U.S. Bank Custodial Agreement no
          later than 12:00 p.m. New York City time, (2) Business Day prior to
          the requested Funding Date and/or (ii) Deutsche Bank National Trust
          Company, as Custodian under the Deutsche Bank Custodial Agreement, no
          later than 1:30 p.m., New York City time (1) Business Day prior to the
          requested Funding Date (in the case of the first 150 Eligible Mortgage
          Loans delivered in connection with such Funding Date) plus one (1)
          additional Business Day prior to any Funding Date (for each additional
          100 Eligible Mortgage Loans in excess thereof in connection with such
          Funding Date), the Mortgage File pertaining to each Eligible Mortgage
          Loan to be pledged to the Lender and included in the Borrowing Base on
          such requested Funding Date, in accordance with the terms and
          conditions of the related Custodial Agreement.

               (d) Pursuant to the related Custodial Agreement, (i) U.S. Bank
          Trust National Association, as Custodian under the U.S. Bank Custodial
          Agreement, shall deliver to the Lender and the Borrower no later than
          11:00 a.m. New York City time on a Funding Date and (ii) Deutsche Bank
          National Trust Company as Custodian under the Deutsche Bank Custodial
          Agreement, shall deliver to the Lender and the Borrower no later than
          1:00 p.m. New York City time on a Funding Date, a Trust Receipt (as
          defined in the related Custodial Agreement) in respect of all Mortgage
          Loans pledged to the Lender on such Funding Date, and a Mortgage Loan
          Schedule and Exception Report in accordance with the terms of the
          related Custodial Agreement. The Borrower acknowledges that the
          Mortgage Loans listed in the related Exception Report shall not be
          subject to the Lien of this Loan Agreement.

               (e) Subject to Article V Hereof, such borrowing will the be made
          available to the Borrower by the Lender transferring, via wire
          transfer, to the

<PAGE>

          following accounts of the Borrower: (i) with respect to the Mortgage
          Loans held by U.S. Bank Trust National Association, for the A/C of NCM
          Collateral Account, ABA# 091-000-022, Account #1731-0091-1378, Attn:
          Andrew Lloyd and (ii) with respect to the Mortgage Loans held by
          Deutsche Bank National Trust Company, ABA # 021001033, Account
          #01419663, Attn: New Century, in the aggregate amount of such
          borrowing in funds immediately available to the Borrower.

     SECTION 3. Survival. Except as expressly amended hereby, the Loan and
Security Agreement shall continue in full force and effect in accordance with
the provisions thereof and the Loan and Security Agreement is in all respects
hereby ratified, confirmed and preserved. This Amendment and all its provisions
shall be deemed a part of the Loan and Security Agreement in the manner and to
the extent herein provided.

     SECTION 4. Successors and Assigns. This Amendment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.

     SECTION 5. Governing Law. This Amendment shall be governed by New York law
without reference to its choice of law doctrine.

     SECTION 6. Counterparts. This Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Amendment by signing
any such counterpart.

                                      * * *

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3 to
be duly executed as of this 20th day of June, 2002.

                                             NC CAPITAL CORPORATION

                                             By:  /s/  Kevin Cloyd
                                                  ------------------------------
                                             Name:
                                             Title:   President

                                             MORGAN STANLEY DEAN WITTER
                                             MORTGAGE CAPITAL INC.

                                             By: /s/ Andrew B. Neuberger
                                                --------------------------------
                                             Name:
                                             Title    Vice President<PAGE>
                                                                    EXHIBIT 10.3

                        NEW CENTURY FINANCIAL CORPORATION
                          EMPLOYEE STOCK PURCHASE PLAN

        (Composite Plan Document Incorporating Amendments through 2002-I)

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                      Page
<S>                                                                                   <C>
1    PURPOSE ........................................................................  3

2    DEFINITIONS ....................................................................  3

3    ELIGIBILITY ....................................................................  5

4    STOCK SUBJECT TO THIS PLAN; SHARE LIMITATIONS ..................................  5

5    OFFERING PERIODS ...............................................................  5

6    PARTICIPATION ..................................................................  5

7    METHOD OF PAYMENT OF CONTRIBUTIONS .............................................  6

8    GRANT OF OPTION ................................................................  7

9    EXERCISE OF OPTION .............................................................  7

10   DELIVERY .......................................................................  8

11   TERMINATION OF EMPLOYMENT; CHANGE IN ELIGIBLE STATUS ...........................  8

12   ADMINISTRATION .................................................................  8

13   DESIGNATION OF BENEFICIARY .....................................................  9

14   TRANSFERABILITY ................................................................ 10

15   USE OF FUNDS; INTEREST ......................................................... 10

16   REPORTS ........................................................................ 10

17   ADJUSTMENTS OF AND CHANGES IN THE STOCK ........................................ 10

18   TERM OF PLAN; AMENDMENT OR TERMINATION ......................................... 11

19   NOTICES ........................................................................ 12

20   CONDITIONS UPON ISSUANCE OF SHARES ............................................. 12

21   PLAN CONSTRUCTION .............................................................. 12

22   EMPLOYEES' RIGHTS .............................................................. 13

23   MISCELLANEOUS .................................................................. 13

24   TAX WITHHOLDING ................................................................ 13
</TABLE>

                                      -i-

<PAGE>

                        NEW CENTURY FINANCIAL CORPORATION
                          EMPLOYEE STOCK PURCHASE PLAN

        (Composite Plan Document Incorporating Amendments through 2002-I)

          The following constitute the provisions of the New Century Financial
Corporation Employee Stock Purchase Plan.

1.   PURPOSE

     The purpose of this Plan is to provide Eligible Employees with an incentive
     to advance the best interests of the Corporation (and those Subsidiaries
     which may be designated by the Committee as "Participating Corporations")
     by providing a method whereby they may voluntarily purchase Common Stock at
     a favorable price and upon favorable terms.

2.   DEFINITIONS

     Capitalized terms used herein which are not otherwise defined shall have
     the following meanings.

          "Account" shall mean the bookkeeping account maintained by the
          Corporation, or by a recordkeeper on behalf of the Corporation, for a
          Participant pursuant to Section 7(a).

          "Board" shall mean the Board of Directors of the Corporation.

          "Code" shall mean the Internal Revenue Code of 1986, as amended.

          "Committee" shall mean the committee appointed by the Board to
          administer this Plan pursuant to Section 12.

          "Common Stock" shall mean the common stock of the Corporation.

          "Company" shall mean the Corporation and its Subsidiaries.

          "Compensation" shall mean an Eligible Employee's regular earnings,
          overtime pay, sick pay, commissions, vacation pay, incentive
          compensation and bonuses. Compensation also includes any amounts
          contributed as salary reduction contributions to a plan qualifying
          under Section 401(k), 125 or 129 of the Code. Any other form of
          remuneration is excluded from Compensation, including (but not limited
          to) the following: prizes, awards, housing allowances, stock option
          exercises, stock appreciation rights, restricted stock exercises,
          performance awards, auto allowances, tuition reimbursement and other
          forms of imputed income. Compensation shall be determined before
          giving effect to any deferral election under the Corporation's
          nonqualified Deferred Compensation Plan and Compensation shall not
          include any amounts paid under such plan.

                                        3

<PAGE>

          "Contributions" shall mean all bookkeeping amounts credited to the
          Account of a Participant pursuant to Section 7(a).

          "Corporation" shall mean New Century Financial Corporation, a Delaware
          corporation.

          "Eligible Employee" shall mean any employee of the Corporation, or of
          any Subsidiary which has been designated in writing by the Committee
          as a "Participating Corporation" (including any Subsidiaries which
          have become such after the date that this Plan is approved by
          shareholders). Notwithstanding the foregoing, "Eligible Employee"
          shall not include any employee who (i) has not as of the Grant Date
          completed at least 90 days of continuous full-time employment with the
          Company, (ii) whose customary employment is for less than 20 hours per
          week, or (iii) whose customary employment is for not more than five
          months in a calendar year.

          "Effective Date" shall mean October 13, 1997.

          "Exchange Act" shall mean the Securities Exchange Act of 1934, as
          amended.

          "Exercise Date" shall mean, with respect to an Offering Period, the
          last day of that Offering Period. Effective January 1, 2003, the
          Exercise Date shall be March 31 for an Option granted on January 1,
          June 30 for an Option granted on April 1, September 30 for an Option
          granted on July 1, and December 31 for an Option granted on October 1.

          "Fair Market Value" shall mean the closing price of a Share on The New
          York Stock Exchange on such date (or, in the event that the Common
          Stock is not traded on such date, on the immediately preceding trading
          date), as reported in The Wall Street Journal or, in the event the
          Common Stock is not listed on The New York Stock Exchange, the "Fair
          Market Value" shall be the closing price of the Common Stock for such
          date (or, in the event that the Common Stock is not traded on such
          date, on the immediately preceding trading date), as reported by the
          National Association of Securities Dealers Automated Quotation
          ("NASDAQ") or, if such price is not reported, the mean of the bid and
          asked prices per Share as reported by NASDAQ or, if such prices are
          not so listed or reported, as determined by the Committee (or its
          delegate), in its discretion

          "Grant Date" shall mean the first day of each Offering Period.

          "Offering Period" shall, effective January 1, 2003, mean the
          three-consecutive month period commencing on each January 1, April 1,
          July 1, and October 1.

          "Option" shall mean the stock option to acquire Shares granted to a
          Participant pursuant to Section 8.

          "Option Price" shall mean the per share exercise price of an Option as
          determined in accordance with Section 8(b).

                                        4

<PAGE>

          "Participant" shall mean an Eligible Employee who has elected to
          participate in this Plan and who has filed a valid and effective
          Subscription Agreement to make Contributions pursuant to Section 6.

          "Plan" shall mean this New Century Financial Corporation Employee
          Stock Purchase Plan, as amended from time to time.

          "Rule 16b-3" shall mean Rule 16b-3 promulgated under Section 16.

          "Section 16" shall mean Section 16 of the Exchange Act.

          "Share" shall mean a share of Common Stock.

          "Subscription Agreement" shall mean the written agreement filed by an
          Eligible Employee with the Corporation pursuant to Section 6 to
          participate in this Plan.

          "Subsidiary" shall mean any corporation in an unbroken chain of
          corporations (beginning with the Corporation) in which each
          corporation (other than the last corporation) owns stock possessing
          50% or more of the total combined voting power of all classes of stock
          in one or more of the other corporations in the chain.

3.   ELIGIBILITY

     Any person employed as an Eligible Employee as of a Grant Date shall be
     eligible to participate in this Plan during the Offering Period in which
     such Grant Date occurs, subject to the Eligible Employee satisfying the
     requirements of Section 6.

4.   STOCK SUBJECT TO THIS PLAN; SHARE LIMITATIONS

     The total number of Shares to be made available under this Plan is
     2,000,000 authorized and unissued or treasury shares of Common Stock, or
     Shares repurchased on the open market, subject to adjustments pursuant to
     Section 17. In the event that all of the Shares made available under this
     Plan are subscribed prior to the expiration of this Plan, this Plan may be
     terminated in accordance with Section 18.

5.   OFFERING PERIODS

     During the term of this Plan, the Corporation will offer Options to
     purchase Shares to all Participants during each Offering Period. Each
     Option shall become effective on the Grant Date. The term of each Option
     shall, effective January 1, 2003, be three months and shall end on the
     respective Exercise Date. Offering Periods shall continue until this Plan
     is terminated in accordance with Section 18, or, if earlier, until no
     Shares remain available for Options pursuant to Section 4.

6.   PARTICIPATION

     An Eligible Employee may become a participant in this Plan by completing a
     Subscription Agreement on a form approved by and in a manner prescribed by
     the

                                       5

<PAGE>

     Committee (or its delegate). To become effective, Subscription Agreements
     must be filed with the Corporation prior to the applicable Grant Date and
     must set forth the whole percentage of the Eligible Employee's Compensation
     (which shall not be less than 1% and not more than 10% of such Eligible
     Employee's Compensation) to be credited to the Participant's Account as
     Contributions each pay period. The Committee may permit Eligible Employees
     to make separate Contribution elections with respect to the bonus portion
     of their Compensation, on such terms and conditions as the Committee may
     prescribe. Subscription Agreements shall contain the Eligible Employee's
     authorization and consent to the Corporation's withholding from his or her
     Compensation the amount of his or her Contributions. A Participant's
     Subscription Agreement (as it may periodically be changed in accordance
     with Section 7) shall remain valid for all Offering Periods until (i) the
     Participant terminates his or her Contributions in accordance with Section
     7(c), (ii) the date the Participant's employment with the Company is
     terminated, or (iii) the date the Participant is no longer an Eligible
     Employee.

7.   METHOD OF PAYMENT OF CONTRIBUTIONS

     (a)  The Corporation shall maintain on its books, or cause to be maintained
          by a recordkeeper, an Account in the name of each Participant. The
          percentage of Compensation elected to be applied as Contributions by a
          Participant shall be deducted from such Participant's Compensation on
          each payday during the period for payroll deductions set forth below
          and such payroll deductions shall be credited to that Participant's
          Account as soon as administratively practicable after such date. A
          Participant may not make any additional payments to his or her
          Account. A Participant's Account shall be reduced by any amounts used
          to pay the Option Price of Shares acquired, or by any other amounts
          distributed pursuant to the terms hereof.

     (b)  Payroll deductions with respect to an Offering Period shall commence
          as of the first day of the payroll period which coincides with or
          immediately follows the applicable Grant Date and shall end on the
          last day of the payroll period which coincides with or immediately
          precedes the applicable Exercise Date, unless sooner terminated by the
          Participant as provided in this Section or until his or her
          participation terminates pursuant to Section 11.

     (c)  A Participant may terminate his or her Contributions during an
          Offering Period by completing and filing with the Corporation, in such
          form and on such terms as the Committee (or its delegate) may
          prescribe, a written withdrawal form which shall be signed by the
          Participant. Such termination shall be effective as soon as
          administratively practicable after its receipt by the Corporation.

     (d)  A Participant may discontinue or otherwise decrease (but may not
          increase) the level of his or her Contributions (within Plan limits)
          during an Offering Period by completing and filing with the
          Corporation, in such form and on such terms as the Committee (or its
          delegate) may prescribe, a written change in Contributions election
          which shall be signed by the Participant. Such change shall be
          effective as soon as administratively practicable after its receipt by
          the Corporation. A

                                       6

<PAGE>

          Participant shall make no more than one election pursuant to this
          Section 7(d) in any one Offering Period and any elections in excess of
          such limit shall be invalid.

     (e)  A Participant may discontinue or otherwise increase or decrease the
          level of his or her Contributions (within Plan limits) effective as of
          the first day of the next succeeding Offering Period by completing and
          filing with the Corporation, in such form and on such terms as the
          Committee (or its delegate) may prescribe, a written change in
          Contributions election which shall be signed by the Participant.

8.   GRANT OF OPTION

     (a)  On each Grant Date, each Eligible Employee who is a participant during
          that Offering Period shall be granted an Option to purchase a number
          of Shares. The Option shall be exercised on the Exercise Date. The
          number of Shares subject to the Option shall be determined by dividing
          the Participant's Account balance as of the applicable Exercise Date
          by the Option Price.

     (b)  The Option Price per Share of the Shares subject to an Option shall be
          the lesser of: (i) 90% of the Fair Market Value of a Share on the
          applicable Grant Date; or (ii) 90% of the Fair Market Value of a Share
          on the applicable Exercise Date.

     (c)  Notwithstanding anything else contained herein, a person who is
          otherwise an Eligible Employee shall not be granted any Option or
          other right to purchase Shares under this Plan to the extent (i) it
          would, if exercised, cause the person to own "stock" (as such term is
          defined for purposes of Section 423(b)(3) of the Code) possessing 5%
          or more of the total combined voting power or value of all classes of
          stock of the Corporation, or any Subsidiary, or (ii) such Option
          causes such individual to have rights to purchase stock under this
          Plan and any other plan of the Company qualified under Section 423 of
          the Code which accrue at a rate which exceeds $25,000 of the fair
          market value of the stock of the Corporation or of a Subsidiary
          (determined at the time the right to purchase such Stock is granted)
          for each calendar year in which such right is outstanding. For this
          purpose a right to purchase Shares accrues when it first become
          exercisable during the calendar year. In determining whether the stock
          ownership of an Eligible Employee equals or exceeds the 5% limit set
          forth above, the rules of Section 424(d) of the Code (relating to
          attribution of stock ownership) shall apply.

9.   EXERCISE OF OPTION

     Unless a Participant's Plan participation is terminated as provided in
     Section 11, his or her Option for the purchase of Shares shall be exercised
     automatically on the Exercise Date for that Offering Period, without any
     further action on the Participant's part, and the maximum number of Shares
     subject to such Option shall be purchased at the Option Price with the
     balance of such Participant's Account. The Committee, in its discretion and
     prior to the applicable Offering Period, may limit the purchase of
     fractional Shares under the Plan; provided that if any amount (which is not
     sufficient to purchase a whole Share) remains in a Participant's Account
     after the exercise of his or her Option on the Exercise

                                       7

<PAGE>

     Date: (i) such amount shall be credited to such Participant's Account for
     the next Offering Period, if he or she is then a Participant; or (ii) if
     such Participant is not a Participant in the next Offering Period, or if
     the Committee so elects, such amount shall be refunded to such Participant
     as soon as administratively practicable after such date.

10.  DELIVERY

     As soon as administratively practicable after the Exercise Date, the
     Corporation shall deliver to each Participant a certificate representing
     the Shares purchased upon exercise of his or her Option. The Corporation
     may make available an alternative arrangement for delivery of Shares to a
     recordkeeping service. The Committee (or its delegate), in its discretion,
     may either require or permit the Participant to elect that such
     certificates be delivered to such recordkeeping service. In the event the
     Corporation is required to obtain from any commission or agency authority
     to issue any such certificate, the Corporation will seek to obtain such
     authority. Inability of the Corporation to obtain from any such commission
     or agency authority which counsel for the Corporation deems necessary for
     the lawful issuance of any such certificate shall relieve the Corporation
     from liability to any Participant except to return to the Participant the
     amount of the balance in his or her Account.

11.  TERMINATION OF EMPLOYMENT; CHANGE IN ELIGIBLE STATUS

     (a)  Upon a Participant's termination from employment with the Company for
          any reason or in the event that a Participant is no longer an Eligible
          Employee or if the Participant elects to terminate Contributions
          pursuant to Section 7(c), at any time prior to the last day of an
          Offering Period in which he or she participates, such Participant's
          Account shall be paid to him or her or in cash, or, in the event of
          such Participant's death, paid to the person or persons entitled
          thereto under Section 13, and such Participant's Option for that
          Offering Period shall be automatically terminated.

     (b)  A Participant's termination from Plan participation precludes the
          Participant from again participating in this Plan during that Offering
          Period. However, such termination shall not have any effect upon his
          or her ability to participate in any succeeding Offering Period,
          provided that the applicable eligibility and participation
          requirements are again then met. A Participant's termination from Plan
          participation shall be deemed to be a revocation of that Participant's
          Subscription Agreement and such Participant must file a new
          Subscription Agreement to resume Plan participation in any succeeding
          Offering Period.

12.  ADMINISTRATION

     (a)  The Board shall appoint the Committee, which shall be composed of not
          less than two members of the Board. Each member of the Committee, in
          respect of any transaction at a time when an affected Participant may
          be subject to Section 16 of the Exchange Act, shall be a "non-employee
          director" within the meaning of Rule 16b-3 promulgated under Section
          16. The Board may, at any time, increase or

                                       8

<PAGE>

          decrease the number of members of the Committee, may remove from
          membership on the Committee all or any portion of its members, and may
          appoint such person or persons as it desires to fill any vacancy
          existing on the Committee, whether caused by removal, resignation, or
          otherwise. The Board may also, at any time, assume or change the
          administration of this Plan.

     (b)  The Committee shall supervise and administer this Plan and shall have
          full power and discretion to adopt, amend and rescind any rules deemed
          desirable and appropriate for the administration of this Plan and not
          inconsistent with the terms of this Plan, and to make all other
          determinations necessary or advisable for the administration of this
          Plan. The Committee shall act by majority vote or by unanimous written
          consent. No member of the Committee shall be entitled to act on or
          decide any matter relating solely to himself or herself or any of his
          or her rights or benefits under this Plan. The Committee shall have
          full power and discretionary authority to construe and interpret the
          terms and conditions of this Plan, which construction or
          interpretation shall be final and binding on all parties including the
          Corporation, Participants and beneficiaries. The Committee may
          delegate ministerial non-discretionary functions to third parties,
          including officers of the Corporation.

     (c)  Any action taken by, or inaction of, the Corporation, the Board or the
          Committee relating to this Plan shall be within the absolute
          discretion of that entity or body. No member of the Board or
          Committee, or officer of the Corporation shall be liable for any such
          action or inaction.

13.  DESIGNATION OF BENEFICIARY

     (a)  A Participant may file, in a manner prescribed by the Committee (or
          its delegate), a written designation of a beneficiary who is to
          receive any Shares or cash from such Participant's Account under this
          Plan in the event of such Participant's death. If a Participant's
          death occurs subsequent to the end of an Offering Period but prior to
          the delivery to him or her of any Shares deliverable under the terms
          of this Plan, such Shares and any remaining balance of such
          Participant's Account shall be paid to such beneficiary (or such other
          person as set forth in Section 13(b)) as soon as administratively
          practicable after the Corporation receives notice of such
          Participant's death and any outstanding unexercised Option shall
          terminate. If a Participant's death occurs at any other time, the
          balance of such Participant's Account shall be paid to such
          beneficiary (or such other person as set forth in Section 13(b)) in
          cash as soon as administratively practicable after the Corporation
          receives notice of such Participant's death and such Participant's
          Option shall terminate. If a Participant is married and the designated
          beneficiary is not his or her spouse, spousal consent shall be
          required for such designation to be effective.

     (b)  Beneficiary designations may be changed by the Participant (and his or
          her spouse, if required) at any time on forms provided and in the
          manner prescribed by the Committee (or its delegate). If a Participant
          dies with no validly

                                       9

<PAGE>

          designated beneficiary under this Plan who is living at the time of
          such Participant's death, the Corporation shall deliver all Shares
          and/or cash payable pursuant to the terms hereof to the executor or
          administrator of the estate of the Participant, or if no such executor
          or administrator has been appointed, the Corporation, in its
          discretion, may deliver such Shares and/or cash to the spouse or to
          any one or more dependents or relatives of the Participant, or if no
          spouse, dependent or relative is known to the Corporation, then to
          such other person as the Corporation may designate.

14.  TRANSFERABILITY

     Neither Contributions credited to a Participant's Account nor any Options
     or rights with respect to the exercise of Options or right to receive
     Shares under this Plan may be anticipated, alienated, encumbered, assigned,
     transferred, pledged or otherwise disposed of in any way (other than by
     will, the laws of descent and distribution, or as provided in Section 13)
     by the Participant. Any such attempt at anticipation, alienation,
     encumbrance, assignment, transfer, pledge or other disposition shall be
     without effect and all amounts shall be paid and all shares shall be
     delivered in accordance with the provisions of this Plan. Amounts payable
     or Shares deliverable pursuant to this Plan shall be paid or delivered only
     to the Participant or, in the event of the Participant's death, to the
     Participant's beneficiary pursuant to Section 13.

15.  USE OF FUNDS; INTEREST

     All Contributions received or held by the Corporation under this Plan will
     be included in the general assets of the Corporation and may be used for
     any corporate purpose. No interest will be paid to any Participant or
     credited to his or her Account under this Plan.

16.  REPORTS

     Statements shall be provided to Participants as soon as administratively
     practicable following each Exercise Date. Each Participant's statement
     shall set forth, as of such Exercise Date, that Participant's Account
     balance immediately prior to the exercise of his or her Option, the Fair
     Market Value of a Share, the Option Price, the number of Shares purchased
     and his or her remaining Account balance, if any.

17.  ADJUSTMENTS OF AND CHANGES IN THE STOCK

     (a)  The following provisions will apply if any extraordinary dividend or
          other extraordinary distribution occurs in respect of the Shares
          (whether in the form of cash, Common Stock, other securities, or other
          property), or any reclassification, recapitalization, stock split
          (including a stock split in the form of a stock dividend), reverse
          stock split, reorganization, merger, combination, consolidation,
          split-up, spin-off, combination, repurchase, or exchange of Common
          Stock or other securities of the Corporation, or any similar, unusual
          or extraordinary corporate transaction (or event in respect of the
          Common Stock) or a sale of substantially all the assets of the
          Corporation as an entirety occurs. The

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          Committee will, in such manner and to such extent (if any) as it deems
          appropriate and equitable

          (i)  proportionately adjust any or all of (1) the number and type of
               Shares (or other securities) that thereafter may be made the
               subject of Options (including the specific maxima and numbers of
               Shares set forth elsewhere in this Plan), (2) the number, amount
               and type of Shares (or other securities or property) subject to
               any or all outstanding Options, (3) the Option Price of any or
               all outstanding Options, or (4) the securities, cash or other
               property deliverable upon exercise of any outstanding Options, or

          (ii) in the case of an extraordinary dividend or other distribution,
               recapitalization, reclassification, merger, reorganization,
               consolidation, combination, sale of assets, split up, exchange,
               or spin off, make provision for the substitution, settlement, or
               exchange of any or all outstanding Options or the cash,
               securities or property deliverable to the holder of any or all
               outstanding Options based upon the distribution or consideration
               payable to holders of the Common Stock upon or in respect of such
               event.

          In each case, no such adjustment will be made that would cause this
          Plan to violate Section 423 of the Code or any successor provisions
          without the written consent of the holders materially adversely
          affected thereby. In any of such events, the Committee may take such
          action sufficiently prior to such event if necessary to permit the
          Participant to realize the benefits intended to be conveyed with
          respect to the underlying shares in the same manner as is available to
          stockholders generally.

     (b)  Upon a dissolution of the Corporation, or any other event described in
          Section 17(a) that the Corporation does not survive, the Plan and, if
          prior to the last day of an Offering Period, any outstanding Option
          granted with respect to that Offering Period shall terminate, subject
          to any provision that has been expressly made by the Committee through
          a plan or reorganization approved by the Board or otherwise for the
          survival, substitution, assumption, exchange or other settlement of
          the Plan and Options. In the event a Participant's Option is
          terminated pursuant to this Section 17(b), such Participant's Account
          shall be paid to him or her in cash.

18.  TERM OF PLAN; AMENDMENT OR TERMINATION

     (a)  This Plan shall become effective as of the Effective Date. No new
          Offering Periods shall commence on or after the tenth anniversary of
          the Effective Date and this Plan shall terminate on such date unless
          sooner terminated pursuant to this Section 18.

     (b)  The Board may amend, modify or terminate this Plan at any time without
          notice. Shareholder approval for any amendment or modification shall
          not be required, except to the extent required by Section 423 of the
          Code or other applicable law,

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                  or deemed necessary or advisable by the Board. No amendment,
                  modification, or termination pursuant to this Section 18(b)
                  shall, without written consent of the Participant, affect in
                  any manner materially adverse to the Participant any rights or
                  benefits of such Participant or obligations of the Corporation
                  under any Option granted under this Plan prior to the
                  effective date of such change. Changes contemplated by Section
                  17 shall not be deemed to constitute changes or amendments
                  requiring Participant consent. Notwithstanding the foregoing,
                  the Committee shall have the right to designate from time to
                  time the Subsidiaries whose employees may be eligible to
                  participate in this Plan and such designation shall not
                  constitute any amendment to this Plan requiring shareholder
                  approval.

19.      NOTICES

         All notices or other communications by a Participant to the Corporation
         contemplated by this Plan shall be deemed to have been duly given when
         received in the form and manner specified by the Committee (or its
         delegate) at the location, or by the person, designated by the
         Committee (or its delegate) for that purpose.

20.      CONDITIONS UPON ISSUANCE OF SHARES

         Shares shall not be issued with respect to an Option unless the
         exercise of such Option and the issuance and delivery of such Shares
         complies with all applicable provisions of law, domestic or foreign,
         including, without limitation, the Securities Act of 1933, as amended,
         the Exchange Act, any applicable state securities laws, the rules and
         regulations promulgated thereunder, and the requirements of any stock
         exchange upon which the Shares may then be listed.

         As a condition precedent to the exercise of any Option, if, in the
         opinion of counsel for the Corporation such a representation is
         required under applicable law, the Corporation may require any person
         exercising such Option to represent and warrant that the Shares subject
         thereto are being acquired only for investment and without any present
         intention to sell or distribute such Shares.

21.      PLAN CONSTRUCTION

         (a)      It is the intent of the Corporation that transactions in and
                  affecting Options in the case of Participants who are or may
                  be subject to the prohibitions of Section 16 satisfy any then
                  applicable requirements of Rule 16b-3 so that such persons
                  (unless they otherwise agree) will be entitled to the
                  exemptive relief of Rule 16b-3 in respect of those
                  transactions and will not be subject to avoidable liability
                  thereunder. Accordingly, this Plan shall be deemed to contain
                  and the Shares issued upon exercise thereof shall be subject
                  to, such additional conditions and restrictions as may be
                  required by Rule 16b-3 to qualify for the maximum exemption
                  from Section 16 with respect to Plan transactions.

         (b)      This Plan and Options are intended to qualify under Section
                  423 of the Code.

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         (c)      If any provision of this Plan or of any Option would otherwise
                  frustrate or conflict with the intents expressed above, that
                  provision to the extent possible shall be interpreted so as to
                  avoid such conflict. If the conflict remains irreconcilable,
                  the Committee may disregard the provision if it concludes that
                  to do so furthers the interest of the Corporation and is
                  consistent with the purposes of this Plan as to such persons
                  in the circumstances.

22.      EMPLOYEES' RIGHTS

         Nothing in this Plan (or in any agreement related to this Plan) shall
         confer upon any Eligible Employee or Participant any right to continue
         in the service or employ of the Company or constitute any contract or
         agreement of service or employment, or interfere in any way with the
         right of the Company to reduce such person's compensation or other
         benefits or to terminate the services or employment or such Eligible
         Employee or Participant, with or without cause, but nothing contained
         in this Plan or any document related hereto shall affect any other
         contractual right of any Eligible Employee or Participant. No
         Participant shall have any rights as a shareholder until a certificate
         for Shares has been issued in the Participant's name following exercise
         of his or her Option. No adjustment will be made for dividends or other
         rights as a shareholder for which a record date is prior to the
         issuance of such Share certificate. Nothing in this Plan shall be
         deemed to create any fiduciary relationship between the Corporation and
         any Participant.

23.      MISCELLANEOUS

         (a)      This Plan and related documents shall be governed by, and
                  construed in accordance with, the laws of the State of
                  California. If any provision shall be held by a court of
                  competent jurisdiction to be invalid and unenforceable, the
                  remaining provisions of this Plan shall continue to be fully
                  effective.

         (b)      Captions and headings are given to the sections of this Plan
                  solely as a convenience to facilitate reference. Such captions
                  and headings shall not be deemed in any way material or
                  relevant to the construction of interpretation of this Plan or
                  any provision hereof.

         (c)      The adoption of this Plan shall not affect any other
                  compensation or incentive plans in effect for the Company.
                  Nothing in this Plan shall be construed to limit the right of
                  the Company (i) to establish any other forms of incentives or
                  compensation for employees of the Company, or (ii) to grant or
                  assume options (outside the scope of and in addition to those
                  contemplated by this Plan) in connection with any proper
                  corporate purpose.

24.      TAX WITHHOLDING

         Notwithstanding anything else contained in this Plan herein to the
         contrary, the Company may deduct from a Participant's Account balance
         as of an Exercise Date, before the exercise of the Participant's Option
         is given effect on such date, the amount of any taxes which the Company
         reasonably determines it may be required to withhold with respect to
         such exercise. In such event, the maximum number of whole Shares
         subject to such

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         Option (subject to the other limits set forth in this Plan) shall be
         purchased at the Option Price with the balance of the Participant's
         Account (after reduction for the tax withholding amount).

         Should the Company for any reason be unable, or elect not to, satisfy
         its tax withholding obligations in the manner described in the
         preceding paragraph with respect to a Participant's exercise of an
         Option, or should the Company reasonably determine that it has a tax
         withholding obligation with respect to a disposition of Shares acquired
         pursuant to the exercise of an Option prior to satisfaction of the
         holding period requirements of Section 423 of the Code, the Company
         shall have the right at its option to (i) require the Participant to
         pay or provide for payment of the amount of any taxes which the Company
         reasonably determines that it is required to withhold with respect to
         such event or (ii) deduct from any amount otherwise payable to or for
         the account of the Participant the amount of any taxes which the
         Company reasonably determines that it is required to withhold with
         respect to such event.

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