PRG SCHULTZ INTERNATIONAL INC
AMENDED STOCK INCENTIVE PLAN
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>7
<FILENAME>g77452exv10w3.txt
<DESCRIPTION>AMENDED STOCK INCENTIVE PLAN
<TEXT>
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                                                                    EXHIBIT 10.3

                         PRG-SCHULTZ INTERNATIONAL, INC.
                              STOCK INCENTIVE PLAN



SECTION 1.        PURPOSE.

         The purpose of PRG-Schultz International, Inc. Stock Incentive Plan
(the "Plan") is to enable PRG-Schultz International, Inc. (the "Company") to
attract, retain and reward directors, officers and other employees of, and
consultants and advisors to, the Company, and any Subsidiaries, Parent or
Affiliates thereof, and strengthen the mutuality of interests between such
persons and the Company's shareholders, by offering such persons performance
based stock incentives and/or other equity interests or equity-based incentives
in the Company.

SECTION 2.        DEFINITIONS.

         For purposes of the Plan, the following terms shall be defined as set
forth below:

         (a)      "Affiliate" means any corporation, partnership or other entity
controlled by, or under common control with, the Company. For these purposes,
control shall consist of the ownership, either directly or indirectly, of more
than 50% of the ownership interests of an entity.

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

         (c)      "Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor thereto.

         (d)      "Committee" means the Committee referred to in Section 3 of
the Plan. If at any time no Committee shall be in office, then the functions of
the Committee specified in the Plan may be exercised by the Board, as set forth
in Section 3 hereof.

         (e)      "Company" means PRG-Schultz International, Inc., a corporation
organized under the laws of the State of Georgia, or any successor corporation.

         (f)      "Fair Market Value" means, for purposes of determining the
exercise price for a Stock Option or SAR granted hereunder, as of any given
date:

                           (i)      if the Stock is listed on an established
                  stock exchange or exchanges, or traded on the Nasdaq National
                  Market System ("Nasdaq/NMS") the closing price of the Stock as
                  listed thereon on the applicable day, or if no sale of Stock
                  has been made on any exchange on that date, on the next
                  preceding day on which there was a sale of Stock;

                           (ii)     if the Stock is not listed on an established
                  stock exchange or Nasdaq/NMS but is instead traded
                  over-the-counter, the mean of the dealer "bid" and "ask"
                  prices of the Stock in the over-the-counter market on the
                  applicable day, as reported by the National Association of
                  Securities Dealers, Inc.;


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                           (iii)    if the Stock is not listed on any exchange
                  or traded over-the-counter, the value as determined in good
                  faith by the Committee;

         (g)      "Incentive Stock Option" means any Stock Option intended to be
and designated as an "Incentive Stock Option" within the meaning of Section 422
of the Code.

         (h)      "Non-Qualified Stock Option" means any Stock Option that is
not an Incentive Stock Option.

         (i)      "Optionee" means any person holding an Option in accordance
with the terms of this Plan.

         (j)      "Parent" means any corporation (other than the Company) and
any successor corporation in an unbroken chain of corporations ending with the
Company if each of the corporations other than the Company owns stock possessing
50% or more of the total combined voting power of all classes of stock in one of
the other corporations in the chain.

         (k)      "Plan" is defined in Section 1 hereof and includes the Plan as
hereinafter amended from time to time.

         (l)      "Plan Participant" means any person granted an Option SAR or
Stock Award pursuant to the Plan.

         (m)      "SAR" means a stock appreciation right which entitles a Plan
Participant to receive, in cash or Stock (as determined in accordance with
Section 6(g)) value equal to all or a portion of the excess of: (a) the Fair
Market Value of a specified number of shares of Stock at the time of exercise,
over (b) an exercise price established by the Committee.

         (n)      "Stock" means the common stock of the Company.

         (o)      "Stock Award" means a grant of shares of Stock or of a right
to receive shares of Stock (or their cash equivalent or a combination of both)
in the future.

         (p)      "Stock Option" or "Option" means any option to purchase shares
of Stock granted pursuant to the Plan.

         (q)      "Subsidiary" means any corporation (other than the Company)
and any successor corporation in an unbroken chain of corporations beginning
with the Company if each of the corporations (other than the last corporation in
the unbroken chain) owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in the
chain.

SECTION 3.        ADMINISTRATION.

         (a)      By Committee. The Plan shall be administered by a Committee of
not less than two Directors who are not employees of the Company, who shall be
members of the Board and who


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shall serve at the pleasure of the Board. The functions of the Committee
specified in the Plan may be exercised by the Board, if and to the extent that
no Committee exists which has the authority to so administer the Plan.

         (b)      Authority of Committee. The Committee shall have full
authority to grant, pursuant to the terms of the Plan, Stock Options, SARs and
Stock Awards to directors, officers and other key employees, consultants and
advisors eligible to be Plan Participants under Section 5 hereof. The Committee
shall have the authority to adopt, alter and repeal such rules, guidelines and
practices governing the Plan as it shall, from time to time, deem advisable; to
interpret the terms and provisions of the Plan and any award under the Plan (and
any agreements relating thereto); and to otherwise supervise the administration
of the Plan. Without limiting the generality of the foregoing, the Committee
shall have the authority:

                           (i)      to select the directors, officers and other
                  key employees of, and consultants and advisors to, the Company
                  and any Subsidiaries, Parent and Affiliate to whom Stock
                  Options, SARs and other Stock Awards may from time to time be
                  granted hereunder;

                           (ii)     to determine whether and to what extent
                  Incentive Stock Options, Non-Qualified Stock Options, SARS and
                  other Stock Awards or any combination thereof are to be
                  granted hereunder to one or more eligible persons;

                           (iii)    to determine the number of shares subject to
                  each such Option, SAR and other Stock Award granted hereunder;

                           (iv)     to determine the terms and conditions, not
                  inconsistent with the terms of the Plan, of any Option, SAR or
                  other Stock Award granted hereunder including, but not limited
                  to, the exercise price, or any vesting, acceleration, or
                  forfeiture restrictions regarding any Option, SAR or other
                  Stock Award and/or the shares of Stock relating thereto, or
                  any other restrictions and to waive any such terms or
                  conditions in each case on such factors as the Committee shall
                  determine, in its sole discretion; and

                           (v)      to determine whether and under what
                  circumstances cash payments shall be made upon the termination
                  of a Stock Option, SAR or other Stock Award, and whether and
                  under what circumstances Stock acquired pursuant to the
                  exercise of a Stock Option or SAR or pursuant to the grant of
                  a Stock Award shall be repurchased by the Company.

         (c)      Committee Decisions Final and Binding. All decisions made by
the Committee pursuant to the provisions of the Plan shall be made in the
Committee's sole discretion and shall be final and binding on all persons,
including the Company and Plan Participants.

         (d)      Indemnification. In addition to such other rights of
indemnification that they may have as directors of the Company or as members of
the Committee, the members of the Committee shall be indemnified by the Company
against the reasonable expenses, including attorneys' fees


                                       -3-
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actually and necessarily incurred in connection with the defense of any action,
suit or proceeding, or in connection with any appeal therein, to which they or
any of them may be a party by reason of any action taken or failure to act under
or in connection with the Plan or any option granted thereunder, and against all
amounts paid by them in settlement thereof (provided such settlement is approved
by independent legal counsel selected by the Company) or paid by them in
satisfaction of a judgment in any such action, suit or proceeding, except in
relation to matters as to which it shall be adjudged in such action, suit or
proceeding that such Committee member is liable for negligence or misconduct in
the performance of his or her duties.

SECTION 4.        STOCK SUBJECT TO PLAN.

         The total number of shares of Stock reserved and available for
distribution under the Plan shall be 12,625,000 shares (including shares subject
to previous grants under the Company's 1996 Stock Option Plan), subject to
adjustment as set forth herein, increased from time to time by action of the
Board of Directors and the Stockholders of the Company. Such shares may consist,
in whole or in part, of authorized and unissued shares or treasury shares. If
any outstanding Option, SAR or other Stock Award under the Plan expires or is
terminated, the shares allocated to the unexercised portion of such Option, SAR
or other Stock Award shall again be available for future Stock Option grants.

         Notwithstanding the foregoing,

                  (i)      The maximum number of shares that may be covered by
                           awards granted to any one individual pursuant to
                           Section 6 (relating to Options and SARs) shall be
                           500,000 shares during any consecutive 12 month
                           period.

                  (ii)     On or before March 12, 2002, the maximum number of
                           shares that may be covered by Stock Awards granted to
                           any one individual pursuant to Section 7 shall be
                           500,000 shares during any consecutive 12 month
                           period. After March 12, 2002, the maximum number of
                           shares that may be covered by Stock Awards granted to
                           any one individual pursuant to Section 7 shall be
                           300,000 shares during any consecutive 12 month
                           period. The maximum number of shares covered by Stock
                           Awards that may be granted after March 12, 2002
                           pursuant to Section 7 shall be, in the aggregate,
                           300,000 shares.

         In the event of any transaction described in Section 8(d) hereof, such
substitution or adjustment shall be made in the aggregate number of shares
reserved for issuance under the Plan, in the individual maximums set forth
above, in the number and option price of shares subject to outstanding Options
and SARs and in the number of shares subject to outstanding Stock Awards such
that each Plan Participant will continue to hold the same economic equivalent he
had immediately prior to such transaction and such that all maximums will be
increased or decreased in accordance with such transaction, provided that the
number of shares subject to any such award shall always be a whole number.


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SECTION 5.        ELIGIBILITY.

         Directors, officers and key employees of, and consultants and advisors
to, the Company and any Subsidiaries, Parent and Affiliate thereof who are
responsible for or contribute to the management, growth and/or profitability of
the business of the Company and/or any Subsidiaries, Parent and Affiliate
thereof are eligible to be Plan Participants and to receive awards under the
Plan.

SECTION 6.        TERMS AND CONDITIONS OF OPTIONS AND SARS.

         Stock Options granted under the Plan may be of two types: (i) Incentive
Stock Options, and (ii) Non-Qualified Stock Options. The Committee shall have
the authority to grant to any eligible person Incentive Stock Options,
Non-Qualified Stock Options, or both types of Stock Options; provided, however,
that no person who is not an employee of the Company, its Parent or its
Subsidiaries shall be eligible to be granted Incentive Stock Options.

         Options and SARs granted under the Plan shall be subject to the
following terms and conditions and shall contain such additional terms and
conditions, not inconsistent with the terms of the Plan, as the Committee shall
deem desirable:

         (a)      Option Designation. Each Option granted under the Plan shall
be clearly identified at the time of grant as an Incentive Stock Option or a
Non-Qualified Stock Option. An Incentive Stock Option may not be granted in
tandem stock option arrangements under the Plan (i.e., where an Incentive Stock
Option is issued together with a Non-Qualified Stock Option and the exercise of
either type of Option affects the right to exercise the other type of Option).

         (b)      Written Agreement. Each Option and SAR granted under the Plan
shall be evidenced by a written agreement in such form as the Committee shall
from time to time approve. All such agreements shall comply with and be subject
to the terms of the Plan.

         (c)      Exercise Price. The "Exercise Price" of each Option and SAR
granted under this Section 6 shall be established by the Committee or shall be
determined by a method established by the Committee at the time the Option or
SAR is granted, except that:

                  (i)      no Option may be repriced in violation of Section 13
                           below; and

                  (ii)     the Exercise Price shall not be less than the greater
                           of 100% of the Fair Market Value or the par value of
                           a share of Stock as of the Pricing Date, as defined
                           below. However, if the Plan participant owns more
                           than 10% of the total combined voting power of all
                           classes of capital stock of the Company or any
                           Subsidiary or Parent, the Exercise Price of an
                           Incentive Stock Option granted to such Plan
                           Participant shall not be less than 110% of the Fair
                           Market Value of a share of Stock as of the Pricing
                           Date. For purposes of the preceding sentence, the
                           "Pricing Date" shall be the date on which the Option
                           or SAR is granted, except that the Committee may
                           provide that: (x) the Pricing Date is the date on
                           which the recipient is hired or promoted (or similar
                           event), if the grant of the Option or SAR occurs


                                       -5-
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                           not more than 90 days after the date of such hiring,
                           promotion or other event; and (y) if an Option or SAR
                           is granted in tandem with, or in substitution for, an
                           outstanding award, the Pricing Date is the date of
                           grant of such outstanding award.

         (d)      Term. The term of each Stock Option and SAR shall be fixed by
the Committee, but no Stock Option granted on or before March 12, 2002 shall be
exercised more than ten years (or, in the case of an Incentive Stock Option
granted to an employee who owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or any Subsidiary
or Parent, more than five years) after the date the Option is granted. Stock
Options and SARs granted after March 12, 2002 shall not be exercised more than
seven years after the date the Option is granted.

         (e)      Exercisability. Stock Options and SARs shall be exercised at
such time or times and subject to such terms and conditions as shall be
determined by the Committee at or after grant. If the Committee provides, in its
sole discretion, that any Stock Option or SAR is exercisable only in
installments, the Committee may waive such installment exercise provisions at
any time at or after grant in whole or in part, based on such factors as the
Committee shall determine, in its sole discretion.

         (f)      Method of Exercise. Subject to whatever installment exercise
provisions apply pursuant to Section 6(e) hereof, Options and SARs may be
exercised in whole or in part at any time during the term thereof, by giving
written notice of exercise to the Company specifying the number of shares to be
purchased or the amount of the SAR to be exercised.

         Such notice shall be accompanied by payment in full of the purchase
price in the case of an Option, either by cash, check, note or such other
instrument as the Committee may accept. As determined by the Committee, in its
sole discretion, at or after grant, payment in full or in part may also be made
in the form of Stock already owned by the Optionee based, in each case, on the
fair market value of the Stock on the date the Option is exercised, as
determined for this purpose by the Committee in its sole discretion; provided,
however, that in no event shall payment in full or in part for the exercise of
an Option be made with any Stock which, as of the date of exercise of the
Option, has been owned by the Optionee less than six (6) months. If the
Committee permits such payment in the form of Stock, the certificate or
certificates representing the shares of Stock to be delivered shall be duly
executed in blank by the Optionee or shall be accompanied by a stock power duly
executed in blank suitable for purposes of transferring such shares to the
Company. Fractional shares of Stock will not be accepted in payment of the
purchase price of shares acquired upon exercise of the Option.

         No shares of Stock shall be issued until full payment therefor has been
made.

         (g)      Settlement of Award. Distribution following exercise of an
Option or SAR, and shares of Stock distributed pursuant to such exercise, shall
be subject to such conditions, restrictions and contingencies as the Committee
may establish. Settlement of SARs may be made in shares of Stock (valued at
their Fair Market Value at the time of exercise), in cash, or in a combination


                                       -6-
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thereof, as determined in the discretion of the Committee. The Committee, in its
discretion, may impose such conditions, restrictions and contingencies and may
waive any such conditions, restrictions and contingencies, at or after grant, or
otherwise accelerate the vesting of any Option or SAR, at any time, in its
discretion with respect to shares of Stock acquired pursuant to the exercise of
an Option or an SAR as the Committee determines to be desirable.

SECTION 7.        STOCK AWARDS.

         Each Stock Award shall be subject to such conditions, restrictions and
contingencies as the Committee shall determine. These may include continuous
service and/or the achievement of performance measures. The performance measures
that may be used by the Committee for such Awards shall be measured by revenues,
income, or such other criteria as the Committee may specify. The Committee may
designate a single goal criterion or multiple goal criteria for performance
measurement purposes, with the measurement based on absolute Company or business
unit performance and/or on performance as compared with that of other
publicly-traded companies. If the right to become vested in a Stock Award
granted under this Section 7 is conditioned on the completion of a specified
period of service with the Company or any Subsidiary or Parent without
achievement of performance measures or other objectives being required as a
condition of vesting, then the required period of service for vesting shall be
not less than three years (subject to acceleration of vesting, to the extent
permitted by the Committee, in the event of the Participant's death, disability,
change in control or involuntary termination).

SECTION 8.        MISCELLANEOUS.

         (a)      Non-Transferability of Options, SARs and Stock Awards. No
Option, SAR or Stock Award shall be transferable by a Plan Participant otherwise
than by will or by the laws of descent and distribution, and all Options and
SARs shall be exercisable, during the Plan Participant's lifetime, only by the
Plan Participant.

         (b)      Investment Representations. The Company may require any
grantee, as a condition of exercising an Option or SAR, to give written
assurances in substance and form satisfactory to the Company to the effect that
such person is acquiring the Stock subject to the Option or SAR for his own
account for investment and not with any present intention of selling or
otherwise distributing the same, and to such other effect as the Company deems
necessary or appropriate in order to comply with federal and applicable state
securities laws.

         (c)      Compliance with Securities Laws. Each Option and SAR shall be
subject to the requirement that, if at any time counsel to the Company shall
determine that the listing, registration, or qualification of the shares subject
to such Option and SAR upon any securities exchange or under any state or
federal law, or the consent or approval of any governmental or regulatory body,
is necessary as a condition of, or in connection with, the issuance or purchase
of shares thereunder, such Option or SAR may not be exercised in whole or in
part unless such listing, registration, qualification, consent, or approval
shall have been effected or obtained on conditions acceptable to the Committee.
Nothing herein shall be deemed to require the Company to apply for or to obtain
such listing, registration, or qualification.



                                       -7-
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         (d)      Recapitalization. If the outstanding shares of Stock are
changed into or exchanged for a different number or kind of shares or other
securities of the Company by reason of any recapitalization, reclassification,
stock split, stock dividend, combination, subdivision or similar transaction,
then, subject to any required action by the stockholders of the Company, the
number and kind of shares of Stock subject to outstanding Options, SARs or Stock
Awards and available under the Plan and price per share of Stock for any
outstanding Options and SARs shall be proportionately adjusted; provided,
however, that no fractional shares shall be issued or made subject to an Option,
SAR or Stock Award in making the foregoing adjustments. All adjustments made by
the Committee under this Section shall be final, conclusive and binding upon the
holders of Options, SARs and Stock Awards.

         (e)      Reorganization. If, while unexercised Options and/or SARs
remain outstanding under the Plan, the Company proposes to merge or consolidate
with another corporation, whether or not the Company is to be the surviving
corporation, or if the Company proposes to liquidate or sell or otherwise
dispose of substantially all of its assets or substantially all of the
outstanding shares of Stock of the Company are to be sold, then the Committee
may, in its sole discretion, either (i) make appropriate provision for the
protection of any such outstanding Options and SARs by the substitution on an
equitable basis of appropriate stock of the surviving corporation or its parent
in the merger or consolidation, or other reorganized corporation that will be
issuable in respect to the shares of Stock of the Company subject to such
Options and SARs, provided that, with respect to Incentive Stock Options, such
provision shall satisfy the requirement that no additional benefits shall be
conferred upon Optionees as a result of such substitution within the meaning of
Section 424(a) of the Code, and that the excess of the aggregate fair market
value of the shares subject to the Options immediately after such substitution
over the purchase price thereof is not more than the excess of the aggregate
fair market value of the shares subject to such Options immediately before such
substitution over the purchase price thereof, or (ii) upon written notice to the
Plan Participants, provide that all unexercised Options and SARs must be
exercised within a specified number of days of the date of such notice or they
will be terminated. In any such case, the Committee may, in its discretion,
accelerate the date on which outstanding Options and SARs become exercisable. In
no event, however, shall the Committee be obligated to take any action as a
result of any transaction described in this Section 8(e), it being acknowledged
that it is in the Committee's sole discretion to determine if, and to what
extent, the action authorized by this Section 8(e) shall be taken.

         (f)      Rights as a Shareholder. A Plan Participant shall have no
rights as a shareholder with respect to any shares subject to an Option or SAR
until the date of issue of a stock certificate to him or her for such shares and
only after such shares are fully paid. No adjustment shall be made for dividends
or other rights for which the record date is prior to the date such stock
certificate is issued.

         (g)      Annual Limitation For Incentive Stock Options. To the extent
that the Fair Market Value (determined as of the date of grant of an Option) of
shares of Stock with respect to which an Incentive Stock Option first becomes
exercisable by an Optionee during any calendar year exceeds $100,000, such
excess portion of the Stock Option shall thereafter be treated as a
Non-Qualified Stock Option.


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SECTION 9.        NO SPECIAL EMPLOYMENT RIGHTS.

         Nothing contained in the Plan or in any agreement pursuant to which an
Option, SAR or Stock Award is granted under the Plan shall confer upon any Plan
Participant any right with respect to the continuation of his employment or
other engagement by the Company or any Subsidiary, Parent or Affiliate or
interfere in any way with the ability of the Company or any Subsidiary, Parent
or Affiliate at any time to terminate such employment or other engagement or to
increase or decrease the compensation of the Plan Participant from the rate in
existence at the time of the grant of an award.

SECTION 10.       OTHER EMPLOYEE BENEFITS.

         The amount of any compensation deemed to be received by an Plan
Participant as a result of the exercise of an Option or the sale of shares
received upon such exercise will not constitute "earnings" with respect to which
any other benefits of such Plan Participant are determined, including, without
limitation, benefits under any pension, profit sharing, life insurance, or
salary continuation plan.

SECTION 11.       WITHHOLDING.

         The Company's obligation to deliver shares upon the exercise of any
Option or SAR granted under the Plan or to make any payments required by any
option agreement shall be subject to the grantee's satisfaction of any
applicable federal, state, and local income and employment tax and withholding
requirements in a manner and form satisfactory to the Company.

SECTION 12.       GOVERNING LAW.

         The Plan, all awards granted under the Plan and actions taken
thereunder shall be governed by and construed in accordance with the laws of the
State of Georgia.

SECTION 13.       AMENDMENT OF THE PLAN.

         The Board may at any time and from time to time amend, suspend, alter,
or discontinue the Plan in any respect, except that the Board may not, without
the approval of the Company's shareholders:

                  (a)      except as expressly provided in Section 8(d) hereof,
         alter the total number of shares reserved for issuance pursuant to the
         Plan;

                  (b)      change the price at which Options and SARs may be
         granted pursuant to Section 6(c) hereof;

                  (c)      change the persons or class of persons eligible to
         participate in the Plan;

                  (d)      extend the maximum Option period under Section 6(d)
         hereof or the term of the Plan described in Section 14(b) hereof;


                                       -9-
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                  (e)      materially increase the benefits accruing to Plan
         Participants;

                  (f)      amend the terms of any award, prospectively or
         retroactively, if, subject to Section 3 hereof, such amendment would
         impair the rights of any holder without the holder's consent; or

                  (g)      except as provided in Section 8(c), reprice any
         Option issued under the Plan by:

                           (i)      lowering the exercise price of that Option;
                                    or

                           (ii)     canceling that Option and subsequently
                                    granting a replacement or regranted Option
                                    with a lower exercise price, to the extent
                                    that such cancellation, replacement or
                                    regrant would fall within the definition of
                                    "repriced" contained in Item 402(i) of
                                    Regulation S-K promulgated under the
                                    Securities Act of 1933, such definition to
                                    be applied to grants to all persons, not
                                    just "named executive officers" as that term
                                    is defined in Item 402(a)(3) of Regulation
                                    S-K.

SECTION 14.       EFFECTIVE DATE AND DURATION OF THE PLAN.

         (a)      Effective Date. The Plan shall become effective when approved
by the Company's shareholders.

         (b)      Termination. Unless the Plan is sooner terminated in
accordance with the terms herein, no further grants of awards may be made under
the Plan after the earlier of (i) the close of business on the day next
preceding the tenth anniversary of the date of its adoption by the shareholders
and (ii) the date on which all shares available for issuance under the Plan
shall have been issued pursuant to Stock Awards or the exercise of Options or
SARs. Notwithstanding the foregoing, Options granted prior to the date specified
in (i) above may extend beyond that date.

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