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Sample Business Contracts

1997 Stock Option Plan - Quotesmith.com Inc.

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                              QUOTESMITH.COM INC.
                             1997 STOCK OPTION PLAN
                    (AS AMENDED AND RESTATED MARCH 29, 1999)

1.       Establishment and Purpose.

         (a) Establishment. The Quotesmith Corporation 1997 Stock Option Plan,
initially adopted and effective on _____, 1997, is amended and restated in its
entirety hereby and is renamed the Quotesmith.com Inc.1997 Stock Option Plan
(As Amended and Restated March 29, 1999). Options granted under this Plan may
be "incentive stock options" intended to satisfy the requirements of Section
422 of the Code, or "nonqualified options."

         (b) Purpose. The purposes of this Plan are to attract and retain the
best available personnel for positions of substantial responsibility, to
provide additional incentive to Employees, Directors and Consultants and to
promote the success of the Company's business. Options granted under the Plan
may be Incentive Stock Options or Nonqualified Stock Options, as determined by
the Administrator at the time of grant.

2.       Definitions. As used herein, the following definitions shall apply:

         (a) "Administrator" means the Board of Directors of the Company and/or
Committee appointed by the Board pursuant to Section 4 of the Plan.

         (b) "Affiliate" means a parent or subsidiary corporation as defined in
the applicable provisions (currently Section 424(e) and (f), respectively) of
the Code.

         (c) "Agreement" means the written agreement between the Company and an
Optionee evidencing the grant of an Option and setting forth the terms and
conditions thereof.

         (d) "Applicable Laws" means the requirements relating to the
administration of stock option plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any other country or jurisdiction where Options are granted under the Plan.

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

         (f) "Code" means the Internal Revenue Code of 1986, as amended.


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         (g) "Committee" means a committee appointed by the Board to administer
the Plan in accordance with Section 4 hereof, and to perform the functions set
forth herein.

         (h) "Common Stock" means the Common Stock of the Company.

         (i) "Company" means Quotesmith.com Incorporated, a Delaware
corporation.

         (j) "Consultant" means any person who is engaged by the Company or any
Affiliate to render consulting or advisory services and is compensated for such
services.

         (k) "Director" means a member of the Board of Directors of the Company
or any of its Affiliates.

         (l) "Disability" means total and permanent disability as defined in
Section 22(e)(3) of the Code.

         (m) "Employee" means any person, including Officers and Directors,
employed by the Company or any Affiliate designated by the Administrator as
eligible to receive Options subject to the conditions set forth herein. For
purposes hereof, "Employee" shall also include individuals who have not
commenced employment with the Company but have received an offer of employment
with the Company. A person shall not cease to be an Employee in the case of (i)
any leave approved by the Company or (ii) transfers between locations of the
Company or between the Company and its Affiliates. For purposes of ISOs, no
such leave may exceed ninety (90) days, unless reemployment upon expiration of
such leave is guaranteed by statute or contract. reemployment upon expiration
of a leave of absence as provided by the Company is not so guaranteed, on the
181st day of such leave any ISO held by the Optionee shall cease to be treated
as an ISO and shall be treated for tax purposes as a NQO. Neither service as a
Director nor payment of a director's fee by the Company shall be sufficient to
constitute "employment" by the Company.

         (n) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

         (o) "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:

             (i) if the Common Stock is listed on any established stock
         exchange or a national market system, including without limitation the
         National Market or SmallCap Market of The Nasdaq Stock Market, its
         Fair Market Value shall be the closing sales price for such stock (or
         the closing bid, if no sales were reported) as quoted on such exchange
         or system for the last market trading day prior to the time of
         determination, as reported in The Wall Street Journal or such other
         source as the Administrator deems reliable;



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             (ii) if the Common Stock is regularly quoted by a recognized
         securities dealer but selling prices are not reported, its Fair Market
         Value shall be the mean between the high bid and low asked prices for
         the Common Stock on the last market trading day prior to the day of
         determination; or

             (iii) in the absence of an established market for the Common
         Stock, the Fair Market Value thereof shall be determined in good faith
         by the Administrator.

         (p) "Incentive Stock Option" or "ISO" means an Option satisfying the
requirements of Section 422 of the Code and designated by the Administrator as
an Incentive Stock Option.

         (q) "Nonqualified Stock Option" or "NQO" means an Option that is not
an Incentive Stock Option.

         (r) "Officer" means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

         (s) "Option" means a stock option granted pursuant to the Plan.

         (t) "Option Agreement" means an agreement between the Company and an
Optionee evidencing the terms and conditions of an individual Option grant. The
Option Agreement is subject to the terms and conditions of the Plan.

         (u) "Optioned Stock" means the Common Stock subject to an Option.

         (v) "Optionee" means a person to whom an Option has been granted under
the Plan.

         (w) "Parent" means a "parent corporation" within the meaning of
Section 424(e) of the Code, whether now or hereafter existing.

         (x) "Plan" means the Quotesmith.com Inc. 1997 Stock Option Plan, as
amended and restated hereby.

         (y) "Plan Year" shall be a calendar year.

         (z) "Section 16(b)" means Section 16(b) of the Exchange Act.

         (aa) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 11 of the Plan.



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         (bb) "Subsidiary" means a "subsidiary corporation" within the meaning
of Section 424(f) of the Code, whether now or hereafter existing.

         (cc) "Ten-Percent Stockholder" means an Employee, who, at the time an
Incentive Stock Option is to be granted to him or her, owns (within the meaning
of Section 422(b) (6) of the Code) stock possessing more than ten percent (10%)
of the total combined voting power of all classes of stock of the Company, or
any Affiliate.


         3. Stock Subject to the Plan. Subject to Section 11 of the Plan, the
maximum aggregate number of Shares which may be subject to options and sold
under the Plan is One Million Five Hundred Thousand (1,500,000) Shares.


            If an Option expires, is canceled, surrendered (without exercise)
or otherwise become unexercisable for any reason, the Shares allocable to the
canceled, surrendered or otherwise terminated Option may again be the subject
of Options granted hereunder (unless the Plan has terminated). However, Shares
that have actually been issued under the Plan, upon exercise of an Option,
shall not be returned to the Plan and shall not become available for future
distribution under the Plan. Shares that are retained by the Company upon
exercise of an Option in order to satisfy the exercise price for such Option or
any withholding taxes due with respect to such exercise shall be treated as not
issued and shall continue to be available under the Plan.

         4. Administration.

            (a) Administrator. The Plan shall be administered by the Board
         and/or by a duly appointed Committee of the Board having such powers
         as shall be specified by the Board. A majority of a quorum of the
         Board or Committee, as the case may be, may authorize any action.

            (b) Compliance with Section 162(m) of the Code. In the event that
         the Company is a "publicly held corporation" as defined in paragraph
         (2) of section 162(m) of the Code, as amended, and the regulations
         promulgated thereunder ("Section 162(m)"), the Company may establish a
         committee of outside directors meeting the requirements of Section
         162(m) to approve the grant of Options which might reasonably be
         anticipated to result in the payment of employee remuneration that
         would otherwise exceed the limit on employee remuneration deductible
         for income tax purposes pursuant to Section 162(m).

            (c) Powers of the Administrator. Subject to the provisions of the
         Plan and in the case of a Committee, the specific duties delegated by
         the Board to such Committee, and subject to the approval of any
         relevant authorities, the Administrator shall have the authority in
         its discretion:

                (i) to determine the Fair Market Value;



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                (ii) to select Employees, Directors and/or Consultants to whom
         Options may from time to time be granted hereunder;

                (iii) to determine the terms and conditions of any Option
         granted hereunder. Such terms and conditions include, without
         limitation, the exercise price, the time when Options may be exercised,
         any vesting acceleration or waiver of forfeiture restrictions, and any
         restriction or limitation regarding any Option or the Common Stock
         relating thereto, based in each case on such factors as the
         Administrator, in its sole discretion, shall determine;

                (iv) to determine the number of shares of Common Stock to be
         covered by each such Option granted hereunder;

                (v) to approve forms of agreement for use under the Plan;

                (vi) to determine the terms and conditions, not inconsistent
         with the terms of the Plan, of any Option granted hereunder;

                (vii) to determine whether and under what circumstances an
         Option may be settled in cash under Section 9(e) instead of Common
         Stock;

                (viii) in order to fulfill the purposes of the Plan and without
         amending the Plan, to modify grants of Options to participants who are
         foreign nationals or employed outside of the United States in order to
         recognize differences in local law, tax policies customs;

                (ix) to allow Optionees to satisfy withholding tax obligations
         as contemplated by Section 10 hereof;

                (x) to construe and interpret the terms of the Plan and awards
         granted pursuant to the Plan and to establish, amend and revoke rules
         and regulations for the administration of the Plan, including, but
         without limitation, correcting any defect or supplying any omission,
         or reconciling any inconsistency in the Plan or in any Agreement, in
         the manner and to the extent it shall deem necessary or advisable to
         make the Plan fully effective;

                (xi) to determine the duration and purposes for leaves of
         absence which may be granted to an Optionee on an individual basis
         without constituting a termination of employment or service for
         purposes of the Plan;

                (xii) to exercise its discretion with respect to the powers and
         rights granted to it as set forth in the Plan; and



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                (xiii) generally, to exercise such powers and to perform such
         acts as are deemed necessary or advisable to promote the best
         interests of the Company with respect to the Plan.

         (d)    Effect of Administrator's Decision. All decisions,
determinations and interpretations of the Administrator shall be final, binding
and conclusive upon the Company and its Affiliates, the Optionees and all other
persons having any interest therein.

         (e)    Indemnification. The Administrator shall not be liable for any
action, failure to act, determination or interpretation made in good faith with
respect to this Plan or any transaction hereunder, except for liability arising
from his or her own willful misfeasance, gross negligence or reckless disregard
of his or her duties. The Company hereby agrees to indemnity the Administrator
for all costs and expenses and, to the extent permitted by applicable law, any
liability incurred in connection with defending against, responding to,
negotiation for the settlement of or otherwise dealing with any claim, cause of
action or dispute of any kind arising in connection with any actions in
administering this Plan or in authorizing or denying authorization to any
transaction hereunder.

5.       Eligibility.

         (a)    Nonqualified Stock Options may be granted to Employees,
Directors or Consultants. Incentive Stock Options may be granted only to
Employees.

         (b)    Each Option shall be designated in the Option Agreement as
either an Incentive Stock Option or a Nonqualified Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Affiliate) exceeds $100,000, such Options
shall be treated as Nonqualified Stock Options. For purposes of this Section
5(b), Incentive Stock Options shall be taken into account in the order in which
they were granted. The Fair Market Value of the Shares shall be determined as
of the time the Option with respect to such Shares is granted.

         (c)    The aggregate number of Options that may be granted to any
Optionee under the Plan shall not exceed fifty percent (50%) of the aggregate
number of Shares referred to in Section 3 hereof.

         (d)    Neither the Plan nor any Option shall not confer upon any
Optionee any right with respect to continuing the Optionee's relationship as an
Employee, Director or Consultant with the Company, nor shall it interfere in
any way with his or her right or the Company's right to terminate such
relationship at any time, with or without cause.



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         6.  Term of Plan. The Plan shall become effective upon its adoption by
the Board. It shall continue in effect for a term of ten (10) years unless
sooner terminated under Section 14 of the Plan.

         7.  Term of Option. The term of each Option shall be the term stated in
the Option Agreement; provided, however, that the term shall be no more than
ten (10) years from the date it is granted (five (5) years in the case of an
Incentive Stock Option granted to a Ten-Percent Stockholder), or such shorter
term as the Administrator may, subsequent to the granting of any Option,
provide.

         8.  Option Exercise Price and Consideration.

             (a) Exercise Price. The per share exercise price for the Shares to
         be issued pursuant to exercise of an Option shall be such price as is
         determined by the Administrator, but shall be subject to the
         following:

                 (i)   In the case of an Incentive Stock Option

                       (aa) granted to an Employee who is a Ten-Percent
            Stockholder, the exercise price shall be no less than 110% of the
            Fair Market Value per Share on the date of grant.

                       (bb) granted to any other Employee, the per Share
             exercise price shall be no less than 100% of the Fair Market
             Value per Share on the date of grant.

                 (ii)  In the case of a Nonqualified Stock Option granted to an
             Employee, Director or Consultant, the per Share exercise price
             shall be no less than [85%] of the Fair Market Value per Share on
             the date of grant.

                 (iii) Notwithstanding the foregoing, Options may be granted
             with a per Share exercise price other than as required above
             pursuant to a merger or other corporate transaction.

             (b) Payment of Option Price. The consideration to be paid for the
         Shares to be issued upon exercise of an Option, including the method
         of payment, shall be determined by the Administrator (and in the case
         of an ISO, shall be determined at the time of grant). Such
         consideration may consist of: (i) cash, by check, or cash equivalent,
         (ii) promissory note, (iii) by tender to the Company of other Shares
         owned by the Optionee which (A) in the case of Shares acquired upon
         exercise of an Option have been owned by the Optionee for more than
         six months on the date of surrender, and (B) have a Fair Market Value,
         as determined by the Administrator (but without regard to any
         restrictions on transferability applicable to such stock by reason of
         federal or state securities laws or agreements with an underwriter for



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         the Company), of not less than the option price of the Shares as to
         which such Option shall be exercised (provided such tender of stock
         would not constitute a violation of the provisions of any law,
         regulation and/or agreement restricting the redemption of the Common
         Stock), (iv) consideration received by the Company under a cashless
         exercise program, (v) authorization for the Company to retain from the
         total number of Shares as to which the Option is exercised that number
         of Shares having a Fair Market Value on the date of exercise equal to
         the exercise price for the total number of Shares as to which the
         Option is exercised, or (vi) such other consideration and method of
         payment for the issuance of Shares that may be permitted under
         Applicable Laws.

             The Administrator shall have the authority to permit or require
         the Optionee to secure any promissory note used to exercise an Option
         with the Shares acquired on exercise of the Option and/or with other
         collateral acceptable to the Company. In making its determination as
         to the type of consideration to accept, the Administrator shall
         consider if acceptance of such consideration may be reasonably
         expected to benefit the Company. The Administrator may at any time or
         from time to time grant Options which do not permit all of the
         foregoing forms of consideration to be used in payment of the option
         price and/or which otherwise restrict one or more forms of
         consideration.

         9.  Exercise of Option.

             (a) Procedure for Exercise; Rights as a Shareholder. Any Option
         granted hereunder shall be exercisable at such times and under such
         conditions as determined by the Administrator, including performance
         criteria with respect to the Company and/or the Optionee, and as shall
         be permissible under the terms of the Plan. An Option may not be
         exercised for a fraction of a Share.

                 An Option shall be deemed to be exercised when the Company
         receives: (i) written or electronic notice of exercise (in accordance
         with the Option Agreement) from the person entitled to exercise the
         Option and (ii) full payment for the Shares with respect to which the
         Option is exercised. Full payment may, as authorized by the
         Administrator, consist of any consideration and method of payment
         authorized by the Administrator and permitted by the Option Agreement
         and the Plan. Shares issued upon exercise of an Option shall be issued
         in the name of the Optionee or, if requested by the Optionee, in the
         name of the Optionee and his or her spouse. Until the Shares are
         issued (as evidenced by the appropriate entry on the books of the
         Company or of a duly authorized transfer agent of the Company), no
         right to vote or receive dividends or any other rights as a
         shareholder shall exist with respect to the Optioned Stock,
         notwithstanding the exercise of the Option. The Company shall issue
         (or cause to be issued) such stock certificate promptly upon exercise
         of the Option. No adjustment will be made for a dividend or other
         right for which the record date is prior to the date the stock
         certificate is issued, except as provided in Section 11 of the Plan.



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                 Exercise of an Option in any manner shall result in a decrease
         in the number of Shares thereafter available, both for purposes of the
         Plan and for sale under the Option, by the number of Shares as to
         which the Option is exercised.

             (b) Termination of Relationship as Employee, Director or
         Consultant. If an Optionee ceases to be an Employee, Director or
         Consultant, as the case may be, such Optionee may exercise his or her
         Option within such period of time as is specified in the Option
         Agreement to the extent that the Option is vested on the date of
         termination (but in no event later than the expiration of the term of
         the Option as set forth in the Option Agreement). In the absence of a
         specified time in the Option Agreement, the Option shall remain
         exercisable for three (3) months following the Optionee's termination.
         If, on the date of termination, the Optionee is not vested as to his
         or her entire Option, the Shares covered by the unvested portion of
         the Option shall revert to the Plan. If, after termination, the
         Optionee does not exercise his or her Option within the time specified
         by the Administrator, the Option shall terminate, and the Shares
         covered by such Option shall revert to the Plan. No termination shall
         be deemed to occur if (i) the Optionee is a Consultant or Director who
         becomes an Employee within the time specified herein; or (ii) the
         Optionee is an Employee who becomes a Consultant or Director who is
         not also an employee, within the time specified herein.

             (c) Disability of Optionee. If an Optionee ceases to be an
         Employee, Director or Consultant as a result of Optionee's Disability,
         the Optionee may within six (6) months from the date of such
         termination (but in no event later than the expiration date of the
         term of such Option as set forth in the Option Agreement), exercise an
         Option to the extent otherwise entitled to exercise it at the date of
         such termination. To the extent that Optionee is not entitled to
         exercise the Option on the date of termination, or if Optionee does
         not exercise such Option to the extent so entitled within the time
         specified herein, the Option shall terminate, and the Shares covered
         by such Option shall revert to the Plan.

             (d) Death of Optionee. If an Optionee dies while an Employee,
         Director or Consultant, the Option may be exercised at any time within
         six (6) months following the date of death (but in no event later than
         the expiration date of the term of such Option as set forth in the
         Option Agreement), to the extent the Optionee was vested on the date
         of death. If, at the time of death, Optionee is not vested as to the
         entire Option, the Shares covered by the unvested portion of the
         Option shall revert to the Plan. The Option may be exercised by the
         executor or administrator of the Optionee's estate or, if none, by the
         person(s) entitled to exercise the Option under the Optionee's will or
         under the laws of descent and distribution. If the Option is not so
         exercised within the time specified herein, the Option shall
         terminate, and the Shares covered by such Option shall revert to the
         Plan.

             (e) Buyout Provisions. The Administrator may at any time offer
         to buy out for a payment in cash or Shares, an Option previously
         granted, based on such terms and conditions as the Administrator shall
         establish and communicate to the Optionee at the time that such offer
         is made.




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         10. Withholding to Satisfy Tax Obligations.

             (a) Permitted Methods. At the discretion of the Administrator,
         Optionees may satisfy withholding obligations as provided in this
         Section 10. When an Optionee incurs tax liability in connection with
         an Option, which tax liability is subject to tax withholding under
         applicable tax laws, and the Optionee is obligated to pay the Company
         an amount required to be withheld under applicable tax laws, the
         Optionee may satisfy the withholding tax obligation by one or some
         combination of the following methods: (i) by cash payment; (ii) out of
         Optionee's current compensation; (iii) if permitted by the
         Administrator, in its discretion, by surrendering to the Company
         Shares that (A) in the case of Shares previously acquired from the
         Company, have been owned by the Optionee for more than six months on
         the date of surrender, and (B) have a Fair Market Value on the date of
         surrender equal to or less than Optionee's marginal tax rate times the
         ordinary income recognized; or (iv) by electing to have the Company
         withhold from the Shares to be issued upon exercise of the Option, if
         any, that number of Shares having a Fair Market Value equal to the
         amount of withholding due. The Fair Market Value of the Shares to be
         withheld shall be determined on the date that the amount of tax to be
         withheld is to be determined.

             (b) Procedures for Stock Withholding. All elections by an Optionee
         to have Shares withheld to satisfy tax withholding obligations shall
         be made in writing in a form acceptable to the Administrator and shall
         be subject to the following restrictions: (i) the election must be
         made on or prior to the applicable tax withholding date; (ii) once
         made, the election shall be irrevocable as to the particular Shares of
         the Option as to which the election is made; (iii) all elections shall
         be subject to the consent or disapproval of the Administrator; (iv) if
         the Optionee is an Officer, Director or greater than Ten-Percent
         Stockholder within the meaning of Rule 16a-2 under the Exchange Act
         ("Reporting Person"), the election must comply with the applicable
         provisions of Rule 16b-3 and shall be subject to such additional
         conditions or restrictions as may be required thereunder to qualify
         for the maximum exemption from Section 16 of the Exchange Act with
         respect to Plan transactions.

         11. Adjustments upon Changes in Capitalization, Merger or Certain
Other Transactions.

             (a) Changes in Capitalization. Subject to any required action
         by the shareholders of the Company, the number and class of shares of
         Common Stock with respect to which Options may be granted under the
         Plan, the number and class of Shares of Common Stock which are subject
         to outstanding Options granted under the Plan, and the purchase price
         per Share of Common Stock , if applicable, shall be proportionately
         adjusted for any increase or decrease in the number of issued Shares
         of Common Stock resulting from a stock split, reverse stock split,
         stock dividend, combination or reclassification of the Common Stock,
         or any other increase or decrease in the number of issued Shares of
         Common Stock effected without receipt of consideration by the Company.
         The conversion of any convertible securities of the Company shall not
         be deemed to have been "effected without receipt of consideration."
         Any such adjustment in the Shares subject to outstanding Incentive
         Stock



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         Options (including any adjustments in the purchase price) shall be
         made in such manner as not to constitute a modification as defined by
         Section 424(h)(3) of the Code and only to the extent otherwise
         permitted by Sections 422 and 424 of the Code. Adjustments shall be
         made by the Administrator, whose determination in that respect shall
         be final, binding and conclusive. If, by reason of a change in
         Capitalization, an Optionee shall be entitled to exercise an Option
         with respect to new, additional or different shares of stock, such
         new, additional or different shares shall thereupon be subject to all
         of the conditions which were applicable to the Shares subject to the
         Option, as the case may be, prior to such Change in Capitalization.

             (b) Dissolution or Liquidation. In the event of the proposed
         dissolution or liquidation of the Company, the Administrator shall
         notify each Optionee as soon as practicable prior to the effective
         date of such proposed action. The Administrator in its discretion may
         provide for an Optionee to have the right to exercise his or her
         Option until fifteen (15) days prior to such transaction as to all of
         the Optioned Stock covered thereby, including Shares as to which the
         Option would not otherwise be exercisable. To the extent it has not
         been previously exercised, an Option will terminate immediately prior
         to the consummation of such proposed action.

             (c) Merger or Sale of Assets. If the Company is to be consolidated
         with or acquired by another entity in a merger or other reorganization
         in which the holders of the outstanding voting stock of the Company
         immediately preceding the consummation of such event, shall,
         immediately following such event, hold, as a group, less than a
         majority of the voting securities of the surviving or successor
         entity, or in the event of a sale of all or substantially all of the
         Company's assets or otherwise (each, a "Change-of-Control"), then all
         outstanding Options, whether or not then vested or exercisable, shall
         be deemed to be vested and exercisable immediately prior to the
         Change-of-Control.

             (d) Certain Distributions. In the event of any distribution to the
         Company's shareholders of securities of any other entity or other
         assets (other than dividends payable in cash or stock of the Company)
         without receipt of consideration by the Company, the Administrator
         may, in its discretion, appropriately adjust the price per share of
         Common Stock covered by each outstanding Option to reflect the effect
         of such distribution.

         12. Non-Transferability of Options. Except as otherwise provided in
this Section, Options may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised or purchased during the lifetime
of the Optionee, only by the Optionee. Notwithstanding the foregoing, the
Administrator may, in its discretion, authorize all or a portion of the Options
to be granted to an Optionee to be transferred by such Optionee to (i) the
spouse, children or grandchildren of such Optionee ("Immediate Family
Members"), (ii) a trust of trusts for the benefit of an Immediate Family
Member, or (iii) a partnership in which Immediate Family Members are the only
partners, provided, that (x) there is no consideration for such transfer, (y)
the Option Agreement expressly provides for



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the transfer of the Options in accordance with this Section, and (z) subsequent
transfers of such Options are prohibited except by or in accordance with the
laws of descent or distribution.

         13. Time of Granting Options. The date of grant of an Option shall,
for all purposes, be the date on which the Administrator makes the
determination granting such Option, or such other date as is determined by the
Administrator. Notice of the determination shall be given to each Employee,
Director or Consultant to whom an Option is so granted within a reasonable time
after the date of such grant.

         14. Amendment and Termination of the Plan.

             (a) Amendment and Termination. The Board or the Administrator may
         at any time amend, alter, suspend or terminate the Plan.

             (b) Shareholder Approval. To the extent necessary and desirable to
         comply with Applicable Laws, the Company shall obtain shareholder
         approval of any Plan amendment in such a manner and to such a degree
         as required.

             (c) Effect of Amendment or Termination. No amendment, alteration,
         suspension or termination of the Plan shall impair the rights of any
         Optionee, unless mutually agreed otherwise between the Optionee and
         the Administrator, which agreement must be in writing and signed by
         the Optionee and the Company. Termination of the Plan shall not affect
         the Administrator's ability to exercise the powers granted to it
         hereunder with respect to Options granted under the Plan prior to the
         date of such termination.

         15. Conditions Upon Issuance of Shares.

             (a) Legal Compliance. Shares shall not be issued pursuant to the
         exercise of an Option unless the exercise of such Option and the
         issuance and delivery of such Shares pursuant thereto shall comply
         with all relevant provisions of law, including, without limitation,
         the Securities Act of 1933, as amended, the Exchange Act, the rules
         and regulations promulgated thereunder, and the requirements of any
         Stock Exchange.

             (b) Investment Representations. As a condition to the exercise of
         an Option, the Administrator may require the person exercising such
         Option to represent and warrant to the Company in writing at the time
         of any such exercise that the Shares are being purchased only for
         investment and without any present intention to sell or distribute
         such Shares, and will not be sold or transferred other than pursuant
         to an effective registration thereof under the Exchange Act or
         pursuant to an exemption applicable under the Securities Act of 1933,
         as amended, or the rules and regulations promulgated thereunder. The
         certificates evidencing any such Shares shall be appropriately
         legended to reflect their status as restricted securities.



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         16. Regulations and Other Approvals; Governing Law.

             (a) This Plan and the rights of all persons claiming hereunder
         shall be construed and determined in accordance with the laws of the
         State of Illinois.

             (b) The obligation of the Company to sell or deliver Shares with
         respect to Options granted under the Plan shall be subject to all
         Applicable Laws, and the obtaining of all such approvals by
         governmental agencies as may be deemed necessary or appropriate by the
         Administrator.

             (c) The inability of the Company to obtain authority from any
         regulatory body having jurisdiction, which authority is deemed by the
         Company's counsel to be necessary to the lawful issuance and sale of
         any Shares hereunder, shall relieve the Company of any liability in
         respect of the failure to issue or sell such Shares as to which such
         requisite authority shall not have been obtained.

             (d) The Plan is intended to comply with Rule 16b-3 promulgated
         under the Exchange Act and the Administrator shall interpret and
         administer the provisions of the Plan or any Agreement in a manner
         consistent therewith. Any provisions inconsistent with such Rule shall
         be inoperative and shall not affect the validity of the Plan.

             (e) The Administrator may make such changes as may be necessary or
         appropriate to comply with the rules and regulations of any government
         authority, or to obtain for Employees granted Incentive Stock Options
         the tax benefits under the applicable provisions of the Code and
         regulations promulgated thereunder.

         17. Reservation of Shares. The Company, during the term of this Plan,
shall at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

         18. Agreements. Options shall be evidenced by written agreements in
such form as the Administrator shall approve from time to time.

         19. Shareholder Approval. The Plan, as amended and restated, shall be
subject to approval by the shareholders of the Company within twelve (12)
months after the date the Plan is so amended and restated. Such shareholder
approval shall be obtained in the degree and manner required under Applicable
Law. All Options issued under the Plan shall become void in the event such
approval is not obtained.



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