EX-10.33 10 file007.htm 2005 MGMT. OMNIBUS INCENTIVE PLAN

EX-10.14 17 file014.htm 2004 MANAGEMENT STOCK PLAN

 
 
 
 
 
                                                                   EXHIBIT 10.14
 
 
                          TAL INTERNATIONAL GROUP, INC.
                           2004 MANAGEMENT STOCK PLAN
                           --------------------------
 
 
                                    SECTION 1
                                     GENERAL
                                     -------
 
         1.1    Purpose. The TAL International Group, Inc. 2004 Management Stock
Plan (the "Plan") has been established by TAL International Group, Inc. (the
"Company") to (i) attract and retain persons eligible to participate in the
Plan; (ii) motivate Participants, by means of appropriate incentives, to achieve
long-range goals; (iii) provide incentive compensation opportunities that are
competitive with those of other similar companies; and (iv) further align
Participants' interests with those of the Company's other shareholders through
compensation that is based on the Company's common stock; and thereby promote
the long-term financial interest of the Company and the Subsidiaries, including
the growth in value of the Company's equity and enhancement of long-term
shareholder return.
 
         1.2    Participation. Subject to the terms and conditions of the Plan,
the Committee shall determine and designate, from time to time, from among the
Eligible Individuals, those persons who will be granted one or more Awards under
the Plan, and thereby become "Participants" in the Plan.
 
         1.3    Operation, Administration, and Definitions. The operation and
administration of the Plan, including the Awards made under the Plan, shall be
subject to the provisions of Section 4 (relating to operation and
administration). Capitalized terms in the Plan shall be defined as set forth in
the Plan (including the definition provisions of Section 8).
 
                                   SECTION 2
                                OPTIONS AND SARS
                                ----------------
 
         2.1    Definitions.
                ------------
(a)      The grant of an "Option" entitles the Participant to purchase shares of
         Stock at an Exercise Price established by the Committee. Any Option
         granted under this Section 2 may be either an incentive stock option
         (an "ISO") or a non-qualified option (an "NQO"), as determined in the
         discretion of the Committee. An "ISO" is an Option that is intended to
         satisfy the requirements applicable to an "incentive stock option"
         described in section 422(b) of the Code. An "NQO" is an Option that is
         not intended to be an "incentive stock option" as that term is
         described in section 422(b) of the Code.
 
(b)      A stock appreciation right (an "SAR") entitles the Participant to
         receive, in cash or Stock (as determined in accordance with subsection
         2.5), value equal to (or otherwise based on) 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.
 
         2.2    Exercise Price. The "Exercise Price" of each Option and SAR
granted under this Section 2 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; provided that, for NQOs and SARs, the
Exercise Price shall not be less than 85% of the Fair Market Value of a share of
Stock on the date of grant, and for ISOs, the Exercise Price shall not be less
than 100% of the Fair Market Value of a share of Stock on the date of grant; and
further provided that the Exercise Price for an Option or SAR with respect to a
share of Stock shall not be less than the par value of a share of Stock.
 
         2.3    Exercise. An Option and an SAR shall be exercisable in
accordance with such terms and conditions and during such periods as may be
established by the Committee.
 
         2.4    Payment of Option Exercise Price. The payment of the Exercise
Price of an Option granted under this Section 2 shall be subject to the
following:
 
(a)      Subject to the following provisions of this subsection 2.4, the full
         Exercise Price for shares of Stock purchased upon the exercise of any
         Option shall be paid at the time of such exercise (except that, in the
         case of an exercise arrangement approved by the Committee and described
         in paragraph 2.4(c), payment may be made as soon as practicable after
         the exercise).
 
(b)      The Exercise Price shall be payable in cash or by tendering, by either
         actual delivery of shares or by attestation, shares of Stock valued at
         Fair Market Value as of the day of exercise, or in any combination
         thereof, as determined by the Committee. Except as otherwise provided
         by the Committee, payments made with shares of Stock shall be limited
         to shares held by the Participant for not less than six months prior to
         the payment date.
 
(c)      The Committee may permit a Participant to elect to pay the Exercise
         Price upon the exercise of an Option by irrevocably authorizing a third
         party to sell shares of Stock (or a sufficient portion of the shares)
         acquired upon exercise of the Option and remit to the Company a
         sufficient portion of the sale proceeds to pay the entire Exercise
         Price and any tax withholding resulting from such exercise.
 
(d)      The Committee may permit a Participant to elect to pay the Exercise
         Price upon the exercise of an Option by delivery of a promissory note
         containing such terms as the Committee shall establish.
 
         2.5    Settlement of Award. Settlement of Options and SARs is subject
to subsection 4.7.
 
 
                                   SECTION 3
                               OTHER STOCK AWARDS
                               ------------------
 
         3.1    Definitions.
                ------------
 
(a)      A "Bonus Stock" Award is a grant of shares of Stock in return for
         previously performed services, or in return for the Participant
         surrendering other compensation that may be due, or in return for
         amounts paid by the Participant.
 
 
 
                                       2
 
 
 
(b)      A "Stock Unit" Award is the grant of a right to receive shares of Stock
         in the future.
 
(c)      A "Performance Share" Award is a grant of a right to receive shares of
         Stock or Stock Units which is contingent on the achievement of
         performance or other objectives during a specified period.
 
(d)      A "Restricted Stock" Award is a grant of shares of Stock, and a
         "Restricted Stock Unit" Award is the grant of a right to receive shares
         of Stock in the future, with such shares of Stock or right to future
         delivery of such shares of Stock subject to a risk of forfeiture or
         other restrictions that will lapse upon the achievement of one or more
         goals relating to completion of service by the Participant, or
         achievement of performance or other objectives, as determined by the
         Committee.
 
         3.2    Restrictions on Awards. Each Bonus Stock Award, Stock Unit
Award, Restricted Stock Award, Restricted Stock Unit Award, and Performance
Share Award shall be subject to such conditions, restrictions and contingencies
as the Committee shall determine.
 
 
                                   SECTION 4
                          OPERATION AND ADMINISTRATION
                          ----------------------------
 
         4.1    Effective Date. Subject to the approval of the shareholders of
the Company, the Plan shall be effective as of November 3, 2004 (the "Effective
Date"); provided, however, that to the extent that Awards are granted under the
Plan prior to its approval by shareholders, the Awards shall be contingent on
approval of the Plan by the shareholders of the Company. The Plan shall be
unlimited in duration and, in the event of Plan termination, shall remain in
effect as long as any Awards under it are outstanding; provided, however, that
no Awards may be granted under the Plan after the ten-year anniversary of the
Effective Date (except for Awards granted pursuant to commitments entered into
prior to such ten-year anniversary).
 
         4.2    Shares Subject to Plan. The shares of Stock for which Awards may
be granted under the Plan shall be subject to the following:
 
(a)      The shares of Stock with respect to which Awards may be made under the
         Plan shall be shares currently authorized but unissued or currently
         held or, to the extent permitted by applicable law, subsequently
         acquired by the Company as treasury shares, including shares purchased
         in the open market or in private transactions.
 
(b)      Subject to the following provisions of this subsection 4.2, the maximum
         number of shares of Stock that may be delivered to Participants and
         their beneficiaries under the Plan shall be equal to (i) 5,265 shares
         of Stock.
 
(c)      To the extent provided by the Committee, any Award may be settled in
         cash rather than Stock. To the extent any shares of Stock covered by an
         Award are not delivered to a Participant or beneficiary because the
         Award is forfeited or canceled, or the shares of Stock are not
         delivered because the Award is settled in cash or used to satisfy the
         applicable tax withholding obligation, such shares shall not be deemed
         to have been delivered for purposes of determining the maximum number
         of shares of Stock available for delivery under the Plan.
 
 
 
                                       3
 
 
 
 
(d)      If the exercise price of any stock option granted under the Plan is
         satisfied by tendering shares of Stock to the Company (by either actual
         delivery or by attestation), only the number of shares of Stock issued
         net of the shares of Stock tendered shall be deemed delivered for
         purposes of determining the maximum number of shares of Stock available
         for delivery under the Plan.
 
(e)      Subject to paragraph 4.2(f), the maximum number of shares of Stock that
         may be issued pursuant to Options intended to be ISOs shall be 5,265
         shares.
 
(f)      In the event of a corporate transaction involving the Company
         (including, without limitation, any stock dividend, stock split,
         extraordinary cash dividend, recapitalization, reorganization, merger,
         consolidation, split-up, spin-off, combination or exchange of shares),
         the Committee may adjust Awards to preserve the benefits or potential
         benefits of the Awards. Action by the Committee may include: (i)
         adjustment of the number and kind of shares which may be delivered
         under the Plan; (ii) adjustment of the number and kind of shares
         subject to outstanding Awards; (iii) adjustment of the Exercise Price
         of outstanding Options and SARs; and (iv) any other adjustments that
         the Committee determines to be equitable (which may include, without
         limitation, (I) replacement of Awards with other Awards which the
         Committee determines have comparable value and which are based on
         stock of a company resulting from the transaction, and (II)
         cancellation of the Award in return for cash payment of the current
         value of the Award, determined as though the Award is fully vested at
         the time of payment, provided that in the case of an Option, the
         amount of such payment may be the excess of value of the Stock subject
         to the Option at the time of the transaction over the exercise price).
         In determining what action, if any, is necessary or appropriate under
         the foregoing provisions of this paragraph (f), the Committee shall
         act in a manner that it determines to be consistent with the purpose
         of the Plan and of the affected Awards and, where applicable or
         otherwise appropriate, in a manner that it determines to be necessary
         to preserve the benefits and potential benefits of the affected Awards
         for the Participants and the Company.
 
         4.3    General Restrictions. Delivery of shares of Stock or other
amounts under the Plan shall be subject to the following:
 
(a)      Notwithstanding any other provision of the Plan, the Company shall have
         no liability to deliver any shares of Stock under the Plan or make any
         other distribution of benefits under the Plan unless such delivery or
         distribution would comply with all applicable laws (including, without
         limitation, the requirements of the Securities Act of 1933 (the
         "Securities Act")), and the applicable requirements of any securities
         exchange or similar entity.
 
(b)      To the extent that the Plan provides for issuance of stock certificates
         to reflect the issuance of shares of Stock, the issuance may be
         effected on a non-certificated basis, to the extent not prohibited by
         applicable law or the applicable rules of any stock exchange.
 
         4.4    Tax Withholding. All distributions under the Plan are subject to
withholding of all applicable taxes, and the Committee may condition the
delivery of any shares or other
 
 
                                       4
 
 
 
benefits under the Plan on satisfaction of the applicable withholding
obligations. Except as otherwise provided by the Committee, such withholding
obligations may be satisfied (i) through cash payment by the Participant, (ii)
through the surrender of shares of Stock which the Participant already owns
(provided, however, that to the extent shares described in this clause (ii) are
used to satisfy more than the minimum statutory withholding obligation, as
described below, then, except as otherwise provided by the Committee, payments
made with shares of Stock in accordance with this clause (ii) above shall be
limited to shares held by the Participant for not less than six months prior to
the payment date), or (iii) through the surrender of shares of Stock to which
the Participant is otherwise entitled under the Plan; provided, however, that
such shares under this clause (iii) may be used to satisfy not more than the
Company's minimum statutory withholding obligation (based on minimum statutory
withholding rates for Federal and state tax purposes, including payroll taxes,
that are applicable to such supplemental taxable income).
 
         4.5    Grant and Use of Awards. In the discretion of the Committee, a
Participant may be granted any Award permitted under the provisions of the Plan,
and more than one Award may be granted to a Participant. Awards may be granted
as alternatives to or replacement of awards granted or outstanding under the
Plan, or any other plan or arrangement of the Company or a Subsidiary (including
a plan or arrangement of a business or entity, all or a portion of which is
acquired by the Company or a Subsidiary). Subject to the overall limitation on
the number of shares of Stock that may be delivered under the Plan, the
Committee may use available shares of Stock as the form of payment for
compensation, grants or rights earned or due under any other compensation plans
or arrangements of the Company or a Subsidiary, including the plans and
arrangements of the Company or a Subsidiary assumed in business combinations.
 
         4.6    Dividends and Dividend Equivalents. An Award (including without
limitation an Option or SAR Award) may provide the Participant with the right to
receive dividend payments or dividend equivalent payments with respect to Stock
subject to the Award (both before and after the Stock subject to the Award is
earned, vested, or acquired), which payments may be either made currently or
credited to an account for the Participant, and may be settled in cash or Stock,
as determined by the Committee. Any such settlements, and any such crediting of
dividends or dividend equivalents or reinvestment in shares of Stock, may be
subject to such conditions, restrictions and contingencies as the Committee
shall establish, including the reinvestment of such credited amounts in Stock
equivalents.
 
         4.7    Settlement of Awards. The obligation to make payments and
distributions with respect to Awards may be satisfied through cash payments, the
delivery of shares of Stock, the granting of replacement Awards, or combination
thereof as the Committee shall determine. Satisfaction of any such obligations
under an Award, which is sometimes referred to as "settlement" of the Award, may
be subject to such conditions, restrictions and contingencies as the Committee
shall determine. The Committee may permit or require the deferral of any Award
payment, subject to such rules and procedures as it may establish, which may
include provisions for the payment or crediting of interest or dividend
equivalents, and may include converting such credits into deferred Stock
equivalents. Each Subsidiary shall be liable for payment of cash due under the
Plan with respect to any Participant to the extent that such benefits are
attributable to the services rendered for that Subsidiary by the Participant.
Any disputes relating to liability of a Subsidiary for cash payments shall be
resolved by the Committee.
 
 
 
 
                                       5
 
 
 
         4.8    Transferability. Except as otherwise provided by the Committee,
Awards under the Plan are not transferable except as designated by the
Participant by will or by the laws of descent and distribution.
 
         4.9    Form and Time of Elections. Unless otherwise specified herein,
each election required or permitted to be made by any Participant or other
person entitled to benefits under the Plan, and any permitted modification, or
revocation thereof, shall be in writing filed with the Committee at such times,
in such form, and subject to such restrictions and limitations, not inconsistent
with the terms of the Plan, as the Committee shall require.
 
         4.10   Agreement With Company. An Award under the Plan shall be subject
to such terms and conditions, not inconsistent with the Plan, as the Committee
shall, in its sole discretion, prescribe. The terms and conditions of any Award
to any Participant shall be reflected in such form of written document as is
determined by the Committee. A copy of such document shall be provided to the
Participant, and the Committee may, but need not require that the Participant
sign a copy of such document. Such document is referred to in the Plan as an
"Award Agreement" regardless of whether any Participant signature is required.
 
         4.11   Action by Company or Subsidiary. Any action required or
permitted to be taken by the Company or any Subsidiary shall be by resolution of
its board of directors, or by action of one or more members of the board
(including a committee of the board) who are duly authorized to act for the
board, or (except to the extent prohibited by applicable law or applicable rules
of any stock exchange) by a duly authorized officer of such company.
 
         4.12   Gender and Number. Where the context admits, words in any gender
shall include any other gender, words in the singular shall include the plural
and the plural shall include the singular.
 
         4.13   Limitation of Implied Rights.
 
(a)      Neither a Participant nor any other person shall, by reason of
         participation in the Plan, acquire any right in or title to any
         assets, funds or property of the Company or any Subsidiary whatsoever,
         including, without limitation, any specific funds, assets, or other
         property which the Company or any Subsidiary, in its sole discretion,
         may set aside in anticipation of a liability under the Plan. A
         Participant shall have only a contractual right to the Stock or
         amounts, if any, payable under the Plan, unsecured by any assets of
         the Company or any Subsidiary, and nothing contained in the Plan shall
         constitute a guarantee that the assets of the Company or any
         Subsidiary shall be sufficient to pay any benefits to any person.
 
(b)      The Plan does not constitute a contract of employment, and selection
         as a Participant will not give any participating employee or other
         individual the right to be retained in the employ of the Company or
         any Subsidiary or the right to continue to provide services to the
         Company or any Subsidiary, nor any right or claim to any benefit under
         the Plan, unless such right or claim has specifically accrued under
         the terms of the Plan. Except as otherwise provided in the Plan, no
         Award under the Plan shall confer upon the holder
 
 
 
                                       6
 
 
 
 
         thereof any rights as a shareholder of the Company prior to the date
         on which the individual fulfills all conditions for receipt of such
         rights.
 
         4.14   Evidence. Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which the person acting on
it considers pertinent and reliable, and signed, made or presented by the proper
party or parties.
 
 
                                   SECTION 5
                                CHANGE IN CONTROL
                                -----------------
 
         Subject to the provisions of paragraph 4.2(f) (relating to the
adjustment of shares), and except as otherwise provided in the Plan or the Award
Agreement reflecting the applicable Award, the effect of a Change in Control
upon an Award under this Plan, if any, shall be determined by the Committee.
 
 
                                    SECTION 6
                                    COMMITTEE
                                    ---------
 
         6.1    Administration. The authority to control and manage the
operation and administration of the Plan shall be vested in a committee (the
"Committee") in accordance with this Section 6. The Committee shall be selected
by the Board. If the Committee does not exist, or for any other reason
determined by the Board, the Board may take any action under the Plan that would
otherwise be the responsibility of the Committee.
 
         6.2    Powers of Committee. The Committee's administration of the Plan
shall be subject to the following:
 
(a)      Subject to the provisions of the Plan, the Committee will have the
         authority and discretion to select from among the Eligible Individuals
         those persons who shall receive Awards, to determine the time or times
         of receipt, to determine the types of Awards and the number of shares
         covered by the Awards, to establish the terms, conditions, performance
         criteria, restrictions, and other provisions of such Awards, and
         (subject to the restrictions imposed by Section 7) to cancel or suspend
         Awards.
 
(b)      To the extent that the Committee determines that the restrictions
         imposed by the Plan preclude the achievement of the material purposes
         of the Awards in jurisdictions outside the United States, the Committee
         will have the authority and discretion to modify those restrictions as
         the Committee determines to be necessary or appropriate to conform to
         applicable requirements or practices of jurisdictions outside of the
         United States.
 
(c)      The Committee will have the authority and discretion to interpret the
         Plan, to establish, amend, and rescind any rules and regulations
         relating to the Plan, to determine the terms and provisions of any
         Award Agreement made pursuant to the Plan, and to make all other
         determinations that may be necessary or advisable for the
         administration of the Plan.
 
(d)      Any interpretation of the Plan by the Committee made in good faith and
         any decision made by it in good faith under the Plan is final and
         binding on all persons.
 
 
 
                                       7
 
 
 
(e)      In controlling and managing the operation and administration of the
         Plan, the Committee shall take action in a manner that conforms to the
         Certificate of Incorporation and By-laws of the Company, and applicable
         state corporate law.
 
         6.3    Delegation by Committee. Except to the extent prohibited by
applicable law or the applicable rules of a stock exchange, the Committee may
allocate all or any portion of its responsibilities and powers to any one or
more of its members and may delegate all or any part of its responsibilities and
powers to any person or persons selected by it. Any such allocation or
delegation may be revoked by the Committee at any time.
 
         6.4    Information to be Furnished to Committee. The Company and
Subsidiaries shall furnish the Committee with such data and information as it
determines may be required for it to discharge its duties. The records of the
Company and Subsidiaries as to an employee's or Participant's employment (or
other provision of services), termination of employment (or cessation of the
provision of services), leave of absence, reemployment and compensation shall be
conclusive on all persons unless determined to be incorrect. Participants and
other persons entitled to benefits under the Plan must furnish the Committee
such evidence, data or information as the Committee considers desirable to carry
out the terms of the Plan.
 
 
                                    SECTION 7
                            AMENDMENT AND TERMINATION
                            -------------------------
 
         The Board may, at any time, amend or terminate the Plan, provided that
no amendment or termination may, in the absence of written consent to the change
by the affected Participant (or, if the Participant is not then living, the
affected beneficiary), adversely affect the rights of any Participant or
beneficiary under any Award granted under the Plan prior to the date such
amendment is adopted by the Board; and further provided that adjustments
pursuant to paragraph 4.2(f) shall not be subject to the foregoing limitations
of this Section 7.
 
 
                                   SECTION 8
                                  DEFINED TERMS
                                  -------------
 
         In addition to the other definitions contained herein, the following
definitions shall apply:
 
(a)      Award. The term "Award" shall mean any award or benefit granted under
         the Plan, including, without limitation, the grant of Options, SARs,
         Bonus Stock Awards, Stock Unit Awards, Restricted Stock Awards,
         Restricted Stock Unit Awards, and Performance Share Awards.
 
(b)      Board. The term "Board" shall mean the Board of Directors of the
         Company.
 
(c)      Change in Control. The term "Change in Control" shall be as defined in
         the Award Agreement, or as otherwise provided by the Committee.
 
(d)      Code. The term "Code" means the Internal Revenue Code of 1986, as
         amended. A reference to any provision of the Code shall include
         reference to any successor provision of the Code.
 
 
 
                                       8
 
 
 
(e)      Eligible Individual. The term "Eligible Individual" shall mean any
         employee of the Company or a Subsidiary and any consultant, director,
         or other person providing services to the Company or a Subsidiary;
         provided however, that an ISO may only be granted to an employee of the
         Company or a Subsidiary. An Award may be granted to an individual, in
         connection with hiring, retention or otherwise, prior to the date the
         individual first performs services for the Company or the Subsidiaries,
         provided that such Awards shall not become vested prior to the date the
         individual first performs such services.
 
(f)      Fair Market Value. For purposes of determining the "Fair Market Value"
         of a share of Stock as of any date, the following rules shall apply:
 
         (i)    If, at that time, the principal market for the Stock is a
         national securities exchange or the Nasdaq stock market, then the
         "Fair Market Value" shall be the mean between the lowest and highest
         reported sale prices of the Stock on that date on the principal
         exchange or market on which the Stock is then listed or admitted to
         trading.
 
         (ii)   If, at that time, the sale prices are not available or the
         principal market for the Stock is not a national securities exchange
         and the Stock is not quoted on the Nasdaq stock market, then the "Fair
         Market Value" shall be the mean between the highest bid and lowest
         asked prices for the Stock on such day as reported on the Nasdaq OTC
         Bulletin Board Service or by the National Quotation Bureau,
         Incorporated or a comparable service.
 
         (iii)  If the day is not a business day, and as a result, paragraphs
         (i) and (ii) next above are inapplicable, the Fair Market Value of the
         Stock shall be determined as of the next earlier business day.
 
         (iv)   If, in accordance with rules established by the Committee, a
         determination of "Fair Market Value" is required as of any date and,
         as of that date, paragraphs (i) and (ii) next above are inapplicable
         for reasons other than those specified in paragraph (iii) next above,
         then the "Fair Market Value" as of that date shall be determined by a
         nationally-recognized appraisal or investment banking firm experienced
         in appraising businesses, or by such other person, employee or entity
         as shall be determined by the Committee from time to time or such
         other method as the Committee may decide in its sole discretion, with
         such valuation to be performed in accordance with such rules and
         considerations as are established by the Committee. The Company shall
         bear the fees and expenses of such valuation.
 
(g)      Subsidiaries. The term "Subsidiary" means any company during any period
         in which it is a "subsidiary corporation" (as that term is defined in
         Code section 424(f)) with respect to the Company.
 
(h)      Stock. The term "Stock" shall mean shares of Common Stock, par value
         $0.001 per share, of the Company.
 
 
                                      * * *
 
 
                                       9
 
 
 
 
                                    EXHIBIT I
 
                           NON-QUALIFIED STOCK OPTION
                               TERMS FOR EMPLOYEES
 
         The Participant has been granted an Option by TAL International Group,
Inc. (the "Company") under the terms of the TAL International Group, Inc. 2004
Management Stock Plan (the "Plan"). The Option shall be subject to the following
Non-Qualified Stock Option Terms (sometimes referred to as the "Option Terms"):
 
         1.     Terms of Award. The following words and phrases used in the
Option Terms shall have the meanings set forth in this paragraph 1:
 
(a)      The "Participant" is __________________________.
 
(b)      The "Grant Date" is __________________________.
 
(c)      The number of "Covered Shares" is ______shares of Stock.
 
(d)      The "Exercise Price" is $ __________per share.
 
Other words and phrases used in the Option Terms are defined in the Plan or
elsewhere in the Option Terms. Except where the context clearly implies or
indicates the contrary, a word, term, or phrase used in the Plan is similarly
used in the Option Terms.
 
         2.     Non-Qualified Stock Option. The Option is a Non-Qualified Stock
Option and is not intended to constitute an "incentive stock option" as that
term is used in Code section 422.
 
         3.     Date of Exercise.
                -----------------
 
(a)      [Except as may otherwise be provided in an applicable employment
         agreement between the Participant and the Company or a Subsidiary,
         and,] Subject to the limitations of the Option Terms, [and unless,
         pursuant to paragraph 3A,] the Participant chooses to exercise the
         Option prior to vesting, the Option shall become exercisable with
         respect to one-fourth (1/4) of the Covered Shares on the one-year
         anniversary of the Grant Date (the "Initial Vesting Date") (but only
         if the Date of Termination has not occurred prior to the Initial
         Vesting Date). After the Initial Vesting Date, the Option shall become
         exercisable with respect to an additional one fourth (1/4) of the
         Covered Shares at each anniversary of the Initial Vesting Date (but
         only if the Date of Termination has not occurred prior to the such
         anniversary), until such time as this Option is fully exercisable.
         [Covered Shares as to which the Option is exercisable in accordance
         with this paragraph 3 (regardless of whether the Option has been
         exercised with respect to those shares) are sometimes referred to as
         "vested shares," and Covered Shares as to which the Option is not
         exercisable in accordance with this paragraph 3, until such time as
         the Option would have become exercisable with respect to those shares
         (regardless of whether the Option has been exercised with respect to
         those shares in accordance with paragraph 3A) are sometimes referred
         to as "unvested shares."]
 
 
 
                                       10
 
 
 
(b)      The Option may be exercised on or after the Date of Termination only as
         to that portion of the Covered Shares for which it was exercisable (or
         became exercisable) immediately prior to such date.
 
         [3A. Exercise Prior to Vesting. Prior to the date on which the Option
would otherwise be exercisable in accordance with paragraph 3 and subject to the
provisions of the Option, the Participant may elect, prior to the Date of
Termination, to exercise the Option as to any part or all of the Covered Shares
subject to this Option; provided, however, that:
 
(a)      A partial exercise of the Option shall be deemed to cover first vested
         shares and then the earliest vesting installment of unvested shares.
 
(b)      Any shares so purchased from installments which have not vested as of
         the date of exercise shall be subject to the purchase option in favor
         of the Company as described in the Early Exercise Stock Purchase
         Agreement (as set forth in Exhibit C).
 
(c)      The Participant shall be required to enter into an Early Exercise Stock
         Purchase Agreement in the form provided by the Company with a vesting
         schedule that will result in the same vesting as if no early exercise
         had occurred.
 
The Participant's right provided in this paragraph 3A to purchase shares upon
the exercise of the Option with respect to unvested shares shall cease upon the
Date of Termination.]
 
         4.     Expiration. The Option shall not be exercisable after the
Company's close of business on the last business day that occurs prior to the
Expiration Date. The "Expiration Date" shall be the earliest to occur of:
 
(a)      the ten-year anniversary of the Grant Date;
 
(b)      if the Date of Termination occurs by reason of the Participant's death
         or Disability, the one-year anniversary of such Date of Termination;
 
(c)      if the Date of Termination occurs by reason of termination of the
         Participant by the employer for Cause, or by the Participant other than
         for Good Reason, such Date of Termination; or
 
(d)      if the Date of Termination occurs for reasons other than (i) the
         Participant's death, (ii) the Participant's Disability, (iii)
         termination of the Participant by the employer for Cause, or (iv)
         termination by the Participant other than for Good Reason, the 90-day
         anniversary of such Date of Termination.
 
         5.     Method of Option Exercise. Subject to the Option Terms and the
Plan, the Option may be exercised in whole or in part by filing an option
exercise notice in the form attached as Exhibit A (the "Exercise Notice") with
the Secretary of the Company at its corporate headquarters prior to the
Company's close of business on the last business day that occurs prior to the
Expiration Date. Such notice shall specify the number of shares of Stock which
the Participant elects to purchase and such other representations and agreements
as may be required by the Company, and shall be accompanied by payment of the
Exercise Price. This Option may
 
 
 
                                        2
 
 
 
 
not be exercised until such time as the Plan has been approved by the
shareholders of the Company. The Option shall not be exercisable if and to the
extent the Company determines that such exercise would violate applicable state
or Federal securities laws or the rules and regulations of any securities
exchange on which the Stock is traded. If the Company makes such a
determination, it shall use all reasonable efforts to obtain compliance with
such laws, rules and regulations. In making any determination hereunder, the
Company may rely on the opinion of counsel for the Company.
 
         6.     Payment of Exercise Price. Payment of the Exercise Price may be
made by any of the following methods or any combination thereof:
 
(a)      By cash or by check payable to the Company.
 
(b)      Except as otherwise provided by the Committee before the Option is
         exercised and provided that the Company's common stock is publicly
         traded and quoted regularly in the Wall Street Journal, by delivery of
         shares of Stock owned by the Participant having an aggregate Fair
         Market Value (valued as of the date of exercise) that is equal to the
         amount of cash that would otherwise be required. Except as otherwise
         provided by the Committee, payments made with shares of Stock shall be
         limited to shares held by the Participant for not less than six months
         prior to the payment date.
 
(c)      Except as otherwise provided by the Committee before the Option is
         exercised and provided that the Company's common stock is publicly
         traded and quoted regularly in the Wall Street Journal, by authorizing
         a third party to sell shares of Stock (or a sufficient portion of the
         shares) acquired upon exercise of the Option and remit to the Company a
         sufficient portion of the sale proceeds to pay the entire Exercise
         Price and any tax withholding resulting from such exercise
 
(d)      By delivery of a duly executed full-recourse promissory note in the
         form attached to the Option Terms as Exhibit D (the "Note") made to
         the Company. The Note shall become payable one year following the Date
         of Termination that occurs for reasons of death or Disability, and
         thirty (30) days following the Date of Termination that occurs for any
         other reason. As security for the repayment of the amount owing under
         the Note, the Participant shall deliver to the Secretary of the
         Company, acting as escrow holder, or such other escrow holder as
         designated by the Company (the "Escrow Holder"), all certificates
         representing the Stock and an executed blank stock assignment, in the
         form attached hereto as Exhibit E, for use in transferring all or a
         portion of said Stock to the Company, as required under this paragraph
         (d) or under any other provision of the Option Terms. As security for
         the payment of the Note and any renewal, extension or modification
         thereof, the Participant hereby grants to the Company, pursuant to the
         Security Agreement attached hereto as Exhibit F, a security interest
         in and pledges with and delivers to the Company the certificate or
         certificates representing the Stock.
 
7.       Change in Control. Subject to the provisions of paragraph 4.2(f) of the
         Plan (relating to the adjustment of shares), and except as otherwise
         provided in the Plan, upon the occurrence of a Change in Control:
 
 
 
                                       3
 
 
 
(a)      If the Date of Termination has not occurred prior to the time of a
         Change in Control, the Options and any Stock purchased by the
         Participant under paragraph 3A shall vest in full.
 
(b)      If the Participant's Date of Termination has not occurred prior to the
         time of a Change in Control, and prior to the one-year anniversary of
         the Change in Control (i) the Participant's employment is terminated
         for reasons other than Cause or (ii) the Participant resigns for Good
         Reason, the Participant shall become fully vested in the Option as of
         the Date of Termination and shall have the greater of (i) 90 days from
         the Date of Termination or (ii) the period otherwise specified for
         exercise after the Date of Termination had the Participant been fully
         vested in the Option on the Date of Termination to exercise the
         Option; provided, however, that in no event shall the Option be
         exercisable at a date that is later than the date it would have been
         exercisable if the Participant had remained employed by the Company or
         a Subsidiary.
 
         8.     Withholding. All deliveries and distributions under the Option
Terms are subject to withholding of all applicable taxes. At the election of the
Participant, and subject to such rules and limitations as may be established by
the Committee from time to time, such withholding obligations may be satisfied
through the surrender of shares of Stock which the Participant already owns, or
to which the Participant is otherwise entitled under the Plan; provided,
however, that such shares may be used to satisfy not more than the Company's
minimum statutory withholding obligation (based on minimum statutory withholding
rates for Federal and state tax purposes, including payroll taxes, that are
applicable to such supplemental taxable income).
 
         9.     Participant's Representations and Shareholders Agreement. In the
event the Shares have not been registered under the Securities Act, at the time
this Option is exercised, the Participant shall, if required by the Company,
concurrently with the exercise of all or any portion of this Option (i) deliver
to the Company his or her Investment Representation Statement in the form
attached hereto as Exhibit B; and (ii) agree to execute and become a party to
the Shareholders Agreement, as may be in effect on such date.
 
         10.    Lock-Up Period. The Participant hereby agrees that, if so
requested by the Company or any representative of the underwriters (the
"Managing Underwriter") in connection with any registration of the offering of
any securities of the Company under the Securities Act, the Participant shall
not sell or otherwise transfer any Shares or other securities of the Company
during the 180-day period, or such other period as may be requested in writing
by the Managing Underwriter and agreed to in writing by the Company (the "Market
Standoff Period") following the effective date of a registration statement of
the Company filed under the Securities Act. Such restriction shall apply only to
the first registration statement of the Company to become effective under the
Securities Act that includes securities to be sold on behalf of the Company to
the public in an underwritten public offering under the Securities Act. The
Company may impose stop-transfer instructions with respect to securities subject
to the foregoing restrictions until the end of such Market Standoff Period.
 
         11.    Non-Transferability of Option. This Option may not be
transferred in any manner otherwise than by will or by the laws of descent or
distribution and may be exercised during the lifetime of the Participant only by
the Participant. The terms of the Plan and the Option Terms
 
 
                                       4
 
 
 
shall be binding upon the executors, administrators, heirs, successors and
assigns of the Participant.
 
         12.    All Terms. The Plan is incorporated herein by reference. The
Plan and the Option Terms, including all Exhibits hereto, as applicable,
constitute all of the terms with respect to the subject matter hereof and
supersede in their entirety all prior undertakings and agreements of the Company
and the Participant with respect to the subject matter hereof. The Option Terms
may be amended by written agreement of the Company and the Participant without
the consent of any other person.
 
         13.    Definitions. For purposes of the Option Terms, words and phrases
used in this Agreement shall be defined as follows:
 
(a)      Cause. [If the Participant is subject to an employment agreement (or
         other similar agreement) with the Company or a Subsidiary that
         provides a definition of termination for "cause," then, for purposes
         of this Award, the term "Cause" shall have meaning set forth in such
         agreement. In the absence of such a definition,] the term "Cause"
         shall mean any of the following: (1) the willful and continued failure
         by the Participant to substantially perform his duties, other than by
         reason of his being Disabled (as defined below), (2) the willful
         engaging by the Participant in conduct which is demonstrably and
         materially injurious to the Company or its Affiliates, (3) conduct by
         the Participant that involves theft or fraud or, dishonesty in
         connection with his duties, (4) the Participant's violation of a
         non-compete or confidentiality agreement with the Company or an
         Affiliate, or (5) conviction of felony involving moral turpitude.
 
(b)      Change in Control. The term "Change in Control" means any of the
         following: (i) the closing of any merger, combination, consolidation
         or similar business transaction involving the Company in which the
         holders of Stock immediately prior to such closing are not the
         holders, directly or indirectly, of a majority of the ordinary voting
         securities of the surviving person in such transaction immediately
         after such closing, (ii) the closing of any sale or transfer by the
         Company of all or substantially all of its assets to an acquiring
         person in which the holders of Stock immediately prior to such closing
         are not the holders of a majority of the ordinary voting securities of
         the acquiring person immediately after such closings, (iii) the
         closing of any sale by the holders of Stock of an amount of Stock that
         equals or exceeds a majority of the shares of Stock immediately prior
         to such closing to a person in which the holders of the Stock
         immediately prior to such closing are not the holders of a majority of
         the ordinary voting securities of such person immediately after such
         closing or (iv) the consummation of a registered public offering of
         Common Stock by the Company pursuant to the Securities Act of 1933, as
         amended, for gross proceeds of at least $50 million.
 
(c)      Date of Termination. The "Date of Termination" shall be the first day
         occurring on or after the Grant Date on which the Participant ceases to
         be an Employee of, or Service Provider to, the Company or any
         Subsidiary, regardless of the reason for such cessation, subject to the
         following:
 
 
 
                                       5
 
 
 
         (i)    The Participant's cessation as an Employee and Service Provider
         shall not be deemed to occur by reason of the transfer of the
         Participant between the Company and a Subsidiary or between two
         Subsidiaries.
 
         (ii)   The Participant's cessation as an Employee and Service Provider
         shall not be deemed to occur by reason of the Participant's being on a
         leave of absence from the Company or a Subsidiary approved by the
         Company or Subsidiary otherwise receiving the Participant's services.
 
         (iii)  If, as a result of a sale or other transaction, the Subsidiary
         for whom Participant is employed (or to whom the Participant is
         providing services as a Service Provider) ceases to be a Subsidiary
         (and the entity for whom the Participant is employed or to whom the
         Participant is providing services is or becomes an entity that is
         separate from the Company), and the Participant is not, at the end of
         the 30-day period following the transaction, an Employee of or Service
         Provider to the Company or an entity that is then a Subsidiary, then
         the occurrence of such transaction shall be treated as the
         Participant's Date of Termination caused by the Participant being
         discharged by the entity for whom the Participant is employed or to
         whom the Participant is providing services.
 
         (iv)   A Service Provider whose services to the Company or a Subsidiary
         are governed by a written agreement with the Service Provider will
         cease to be a Service Provider at the time the term of such written
         agreement ends (without renewal); and a Service Provider whose
         services to the Company or a Subsidiary are not governed by a written
         agreement with the Service Provider will cease to be a Service
         Provider on the date that is 90 days after the date the Service
         Provider last provides services requested by Company or Subsidiary (as
         determined by the Committee).
 
         It should be understood that if the Option is exercised more than
         three months after the date on which the Participant ceases to be an
         Employee of the Company or a Subsidiary (including by reason of
         becoming a Service Provider rather than an Employee), applicable tax
         rules may require that the Option be treated as a non-qualified stock
         option rather than an incentive stock option.
 
(d)      Director. "Director" means a member of the Board of Directors of the
         Company or any Subsidiary.
 
(e)      Disability. [If the participant is subject to an employment (or other
         similar agreement) with the Company or a Subsidiary that provides a
         definition of termination for "disability" then for purpose of this
         Award, the term "Disability" shall have the meaning set forth in such
         agreement. In the absence of such a definition,] the Participant shall
         be considered to have a "Disability" during the period in which the
         Participant is unable, by reason of a medically determinable physical
         or mental impairment, to engage in any substantial gainful activity,
         which condition, in the opinion of a physician selected by the
         Committee, is expected to have a duration of not less than 120 days.
 
(f)      Employee. The term "Employee" means any person, including Officers and
         Directors, employed by the Company or any Subsidiary.
 
 
 
                                       6
 
 
 
(g)      Good Reason. [If the Participant is subject to an employment agreement
         (or other similar agreement) with the Company or a Subsidiary that
         provides a definition of termination for "good reason," then, for
         purposes of this Award, the term "Good Reason" shall have meaning set
         forth in such agreement. In the absence of such a definition,] the
         term "Good Reason" shall mean either of (1) a reduction in the
         Participant's salary rate; or (2) a reduction in the Participant's
         rank which occur without the Participant's consent and which are not
         corrected by the Company within 10 days of delivery of a written
         notice to the Company by the Participant which identifies the
         circumstances which the Participant believes constitute a reduction in
         salary rate or rank.
 
(h)      Service Provider. The term "Service Provider" means any person that is
         engaged by the Company or any Subsidiary to provide consulting or
         advisory service to the Company or a Subsidiary as an independent
         contractor.
 
(i)      Shareholders Agreement. The term "Shareholders Agreement" means the
         agreement governing the rights and obligations with respect to shares
         of Stock and to holders of Stock (including, without limitation, voting
         and sale rights), which agreement shall be in such form as the Company
         determines.
 
         IN WITNESS WHEREOF, the Company has caused these presents to be
executed in its name and on its behalf, all as of the Grant Date.
 
TAL INTERNATIONAL GROUP, INC.
 
 
 
By:                                       Its:
   ---------------------------------          ---------------------------------
 
 
                                       7
 
 
 
 
                                   EXHIBIT II
 
                        NON-QUALIFIED STOCK OPTION TERMS
                      [FOR NON-EMPLOYEE SERVICE PROVIDERS]
 
         The Participant has been granted an Option by TAL International Group,
Inc. (the "Company") under the terms of the TAL International Group, Inc. 2004
Management Stock Plan (the "Plan"). The Option shall be subject to the following
Non-Qualified Stock Option Terms (sometimes referred to as the "Option Terms"):
 
         1.     Terms of Award. The following words and phrases used in the
Option Terms shall have the meanings set forth in this paragraph 1:
 
(a)      The "Participant" is __________________________.
 
(b)      The "Grant Date" is __________________________.
 
(c)      The number of "Covered Shares" is ____________ shares of Stock.
 
(d)      The "Exercise Price" is $ ______________per share.
 
Other words and phrases used in the Option Terms are defined in the Plan or
elsewhere in the Option Terms. Except where the context clearly implies or
indicates the contrary, a word, term, or phrase used in the Plan is similarly
used in the Option Terms.
 
         2.     Non-Qualified Stock Option. The Option is a Non-Qualified Stock
Option and is not intended to constitute an "incentive stock option" as that
term is used in Code section 422.
 
         3.     Date of Exercise.
                -----------------
 
(a)      Subject to the limitations of the Option Terms, [and unless, pursuant
         to paragraph 3A, the Participant chooses to exercise the Option prior
         to vesting,] the Option shall become exercisable with respect to
         one-fourth (1/4) of the Covered Shares on the one-year anniversary of
         the Grant Date (the "Initial Vesting Date") (but only if the Date of
         Termination has not occurred prior to the Initial Vesting Date). After
         the Initial Vesting Date, the Option shall become exercisable with
         respect to an additional one fourth (1/4) of the Covered Shares at
         each anniversary of the Initial Vesting Date (but only if the Date of
         Termination has not occurred prior to such anniversary), until such
         time as this Option is fully exercisable. [Covered Shares as to which
         the Option is exercisable in accordance with this paragraph 3
         (regardless of whether the Option has been exercised with respect to
         those shares) are sometimes referred to as "vested shares," and
         Covered Shares as to which the Option is not exercisable in accordance
         with this paragraph 3, until such time as the Option would have become
         exercisable with respect to those shares (regardless of whether the
         Option has been exercised with respect to those shares in accordance
         with paragraph 3A) are sometimes referred to as "unvested shares."]
 
 
 
 
 
 
 
(b)      The Option may be exercised on or after the Date of Termination only as
         to that portion of the Covered Shares for which it was exercisable (or
         became exercisable) immediately prior to such date.
 
         [3A. Exercise Prior to Vesting. Prior to the date on which the Option
would otherwise be exercisable in accordance with paragraph 3 and subject to the
provisions of the Option, the Participant may elect, prior to the Date of
Termination, to exercise the Option as to any part or all of the Covered Shares
subject to this Option; provided, however, that:
 
(a)      A partial exercise of the Option shall be deemed to cover first vested
         shares and then the earliest vesting installment of unvested shares.
 
(b)      Any shares so purchased from installments which have not vested as of
         the date of exercise shall be subject to the purchase option in favor
         of the Company as described in the Early Exercise Stock Purchase
         Agreement (as set forth in Exhibit C).
 
(c)      The Participant shall be required to enter into an Early Exercise Stock
         Purchase Agreement in the form provided by the Company with a vesting
         schedule that will result in the same vesting as if no early exercise
         had occurred.
 
The Participant's right provided in this paragraph 3A to purchase shares upon
the exercise of the Option with respect to unvested shares shall cease upon the
Date of Termination.]
 
         4.     Expiration. The Option shall not be exercisable after the
Company's close of business on the last business day that occurs prior to the
Expiration Date. The "Expiration Date" shall be the earliest to occur of:
 
(a)      the ten-year anniversary of the Grant Date;
 
(b)      if the Date of Termination occurs by reason of the Participant's death,
         the one-year anniversary of such Date of Termination;
 
(c)      if the Date of Termination occurs by reason of termination of the
         Participant by the Company or a Subsidiary for Cause, such Date of
         Termination; or
 
(d)      if the Date of Termination occurs for reasons other than the
         Participant's death, or termination of the Participant by the Company
         or a Subsidiary for Cause, the 90-day anniversary of such Date of
         Termination.
 
         5.     Method of Option Exercise. Subject to the Option Terms and the
Plan, the Option may be exercised in whole or in part by filing an option
exercise notice in the form attached as Exhibit A (the "Exercise Notice") with
the Secretary of the Company at its corporate headquarters prior to the
Company's close of business on the last business day that occurs prior to the
Expiration Date. Such notice shall specify the number of shares of Stock which
the Participant elects to purchase and such other representations and agreements
as may be required by the Company, and shall be accompanied by payment of the
Exercise Price. This Option may not be exercised until such time as the Plan has
been approved by the shareholders of the Company. The Option shall not be
exercisable if and to the extent the Company determines that
 
 
 
                                       2
 
 
 
 
such exercise would violate applicable state or Federal securities laws or the
rules and regulations of any securities exchange on which the Stock is traded.
If the Company makes such a determination, it shall use all reasonable efforts
to obtain compliance with such laws, rules and regulations. In making any
determination hereunder, the Company may rely on the opinion of counsel for the
Company.
 
         6.     Payment of Exercise Price. Payment of the Exercise Price may be
made by any of the following methods or any combination thereof:
 
(a)      By cash or by check payable to the Company.
 
(b)      Except as otherwise provided by the Committee before the Option is
         exercised and provided that the Company's common stock is publicly
         traded and quoted regularly in the Wall Street Journal, by delivery of
         shares of Stock owned by the Participant having an aggregate Fair
         Market Value (valued as of the date of exercise) that is equal to the
         amount of cash that would otherwise be required. Except as otherwise
         provided by the Committee, payments made with shares of Stock shall be
         limited to shares held by the Participant for not less than six months
         prior to the payment date.
 
(c)      Except as otherwise provided by the Committee before the Option is
         exercised and provided that the Company's common stock is publicly
         traded and quoted regularly in the Wall Street Journal, by authorizing
         a third party to sell shares of Stock (or a sufficient portion of the
         shares) acquired upon exercise of the Option and remit to the Company a
         sufficient portion of the sale proceeds to pay the entire Exercise
         Price and any tax withholding resulting from such exercise.
 
(d)      By delivery of a duly executed full-recourse promissory note in the
         form attached to the Option Terms as Exhibit D (the "Note") made to
         the Company. The Note shall become payable one year following the Date
         of Termination that occurs for reasons of death or Disability, and
         thirty (30) days following the Date of Termination that occurs for any
         other reason. As security for the repayment of the amount owing under
         the Note, the Participant shall deliver to the Secretary of the
         Company, acting as escrow holder, or such other escrow holder as
         designated by the Company (the "Escrow Holder"), all certificates
         representing the Stock and an executed blank stock assignment, in the
         form attached hereto as Exhibit E, for use in transferring all or a
         portion of said Stock to the Company, as required under this paragraph
         (d) or under any other provision of the Option Terms. As security for
         the payment of the Note and any renewal, extension or modification
         thereof, the Participant hereby grants to the Company, pursuant to the
         Security Agreement attached hereto as Exhibit F, a security interest
         in and pledges with and delivers to the Company the certificate or
         certificates representing the Stock.
 
         7.     Change in Control. Subject to the provisions of paragraph 4.2(f)
of the Plan (relating to the adjustment of shares), and except as otherwise
provided in the Plan, upon the occurrence of a Change in Control:
 
 
 
                                       3
 
 
 
(a)      If the Date of Termination has not occurred prior to the time of a
         Change in Control, all of the Options of any Stock purchased by the
         Participant under paragraph 3A shall vest in full.
 
(b)      If the Participant's Date of Termination has not occurred prior to the
         time of a Change in Control, and prior to the one-year anniversary of
         the Change in Control the Participant's engagement is terminated by
         the Company for reasons other than Cause, the Participant shall become
         fully vested in the Option and shall have the greater of (i) 90 days
         from the date of such termination or (ii) the period otherwise
         specified for exercise after termination had the Participant been
         fully vested in the Option on the Date of Termination to exercise the
         Option; provided, however, that in no event shall the Option be
         exercisable at a date that is later than the date it would have been
         exercisable if the Participant had continued as a Service Provider for
         the Company or a Subsidiary.
 
         8.     Withholding. All deliveries and distributions under the Option
Terms are subject to withholding of all applicable taxes. At the election of the
Participant, and subject to such rules and limitations as may be established by
the Committee from time to time, such withholding obligations may be satisfied
through the surrender of shares of Stock which the Participant already owns, or
to which the Participant is otherwise entitled under the Plan; provided,
however, that such shares may be used to satisfy not more than the Company's
minimum statutory withholding obligation (based on minimum statutory withholding
rates for Federal and state tax purposes, including payroll taxes, that are
applicable to such supplemental taxable income).
 
         9.     Participant's Representations and Shareholders Agreement. In the
event the Shares have not been registered under the Securities Act, at the time
this Option is exercised, the Participant shall, if required by the Company,
concurrently with the exercise of all or any portion of this Option (i) deliver
to the Company his or her Investment Representation Statement in the form
attached hereto as Exhibit B; and (ii) agree to execute and become a party to
the Shareholders Agreement, as may be in effect on such date.
 
         10.    Lock-Up Period. The Participant hereby agrees that, if so
requested by the Company or any representative of the underwriters (the
"Managing Underwriter") in connection with any registration of the offering of
any securities of the Company under the Securities Act, the Participant shall
not sell or otherwise transfer any Shares or other securities of the Company
during the 180-day period, or such other period as may be requested in writing
by the Managing Underwriter and agreed to in writing by the Company (the "Market
Standoff Period") following the effective date of a registration statement of
the Company filed under the Securities Act. Such restriction shall apply only to
the first registration statement of the Company to become effective under the
Securities Act that includes securities to be sold on behalf of the Company to
the public in an underwritten public offering under the Securities Act. The
Company may impose stop-transfer instructions with respect to securities subject
to the foregoing restrictions until the end of such Market Standoff Period.
 
         11.    Non-Transferability of Option. This Option may not be
transferred in any manner otherwise than by will or by the laws of descent or
distribution and may be exercised during the lifetime of the Participant only by
the Participant. The terms of the Plan and the Option Terms
 
 
 
                                       4
 
 
 
 
shall be binding upon the executors, administrators, heirs, successors and
assigns of the Participant.
 
         12.    All Terms. The Plan is incorporated herein by reference. The
Plan and the Option Terms, including all Exhibits hereto, as applicable,
constitute all of the terms with respect to the subject matter hereof and
supersede in their entirety all prior undertakings and agreements of the Company
and the Participant with respect to the subject matter hereof. The Option Terms
may be amended by written agreement of the Company and the Participant without
the consent of any other person.
 
         13.    Definitions. For purposes of the Option Terms, words and phrases
used in this Agreement shall be defined as follows:
 
(a)      Cause. The term "Cause" shall mean any of the following: (1) the
         willful and continued failure by the Participant to substantially
         perform the duties as required by the applicable consulting
         arrangement, (2) the willful engaging by the Participant in conduct
         which is demonstrably and materially injurious to the Company or its
         Affiliates, (3) conduct by the Participant that involves theft or fraud
         or, dishonesty in connection with the consulting arrangement, (4) the
         Participant's violation of a non-compete agreement, confidentiality
         agreement, or other agreement with the Company or an Affiliate.
 
(b)      Change in Control. The term "Change in Control" means any of the
         following: (i) the closing of any merger, combination, consolidation
         or similar business transaction involving the Company in which the
         holders of Stock immediately prior to such closing are not the
         holders, directly or indirectly, of a majority of the ordinary voting
         securities of the surviving person in such transaction immediately
         after such closing, (ii) the closing of any sale or transfer by the
         Company of all or substantially all of its assets to an acquiring
         person in which the holders of Stock immediately prior to such closing
         are not the holders of a majority of the ordinary voting securities of
         the acquiring person immediately after such closings, (iii) the
         closing of any sale by the holders of Stock of an amount of Stock that
         equals or exceeds a majority of the shares of Stock immediately prior
         to such closing to a person in which the holders of the Stock
         immediately prior to such closing are not the holders of a majority of
         the ordinary voting securities of such person immediately after such
         closing or (iv) the consummation of a registered public offering of
         Common Stock by the Company pursuant to the Securities Act of 1933, as
         amended, for gross proceeds of at least $50 million.
 
(c)      Date of Termination. The "Date of Termination" shall be the first day
         occurring on or after the Grant Date on which the Participant ceases to
         be an Employee of, or Service Provider to, the Company or any
         Subsidiary, regardless of the reason for such cessation, subject to the
         following:
 
         (i)    The Participant's cessation as an Employee and Service Provider
         shall not be deemed to occur by reason of the transfer of the
         Participant between the Company and a Subsidiary or between two
         Subsidiaries.
 
 
 
                                       5
 
 
 
         (ii)   The Participant's cessation as an Employee and Service Provider
         shall not be deemed to occur by reason of the Participant's being on a
         leave of absence from the Company or a Subsidiary approved by the
         Company or Subsidiary otherwise receiving the Participant's services.
 
         (iii)  If, as a result of a sale or other transaction, the Subsidiary
         for whom Participant is employed (or to whom the Participant is
         providing services as a Service Provider) ceases to be a Subsidiary
         (and the entity for whom the Participant is employed or to whom the
         Participant is providing services is or becomes an entity that is
         separate from the Company), and the Participant is not, at the end of
         the 30-day period following the transaction, an Employee of or Service
         Provider to the Company or an entity that is then a Subsidiary, then
         the occurrence of such transaction shall be treated as the
         Participant's Date of Termination caused by the Participant being
         discharged by the entity for whom the Participant is employed or to
         whom the Participant is providing services.
 
         (iv)   A Service Provider whose services to the Company or a Subsidiary
         are governed by a written agreement with the Service Provider will
         cease to be a Service Provider at the time the term of such written
         agreement ends (without renewal); and a Service Provider whose
         services to the Company or a Subsidiary are not governed by a written
         agreement with the Service Provider will cease to be a Service
         Provider on the date that is 90 days after the date the Service
         Provider last provides services requested by Company or Subsidiary (as
         determined by the Committee).
 
(d)      Employee. The term "Employee" means any person, including Officers and
         Directors, employed by the Company or any Subsidiary.
 
(e)      Service Provider. The term "Service Provider" means any person that is
         engaged by the Company or any Subsidiary to provide consulting or
         advisory service to the Company or a Subsidiary as an independent
         contractor.
 
(f)      Shareholders Agreement. The term "Shareholders Agreement" means the
         agreement governing the rights and obligations with respect to shares
         of Stock and to holders of Stock (including, without limitation, voting
         and sale rights), which agreement shall be in such form as the Company
         determines.
 
         IN WITNESS WHEREOF, the Company has caused these presents to be
executed in its name and on its behalf, all as of the Grant Date.
 
                               TAL INTERNATIONAL GROUP, INC.
 
 
                               By:
                                  ----------------------------------------------
                               Its:
                                   ---------------------------------------------
 
 
                                       6
 
 
 
 
                                   EXHIBIT III
 
                          INCENTIVE STOCK OPTION TERMS
                                 [FOR EMPLOYEE]
 
         The Participant has been granted an Option by TAL International Group,
Inc. (the "Company") under the terms of the TAL International Group, Inc. 2004
Management Stock Plan (the "Plan"). The Option shall be subject to the following
Incentive Stock Option Terms (sometimes referred to as the "Option Terms"):
 
         1.     Terms of Award. The following words and phrases used in the
Option Terms shall have the meanings set forth in this paragraph 1:
 
(a)      The "Participant" is .
 
(b)      The "Grant Date" is .
 
(c)      The number of "Covered Shares" is shares of Stock.
 
(d)      The "Exercise Price" is $           per share.
              --------------      ----------
 
Other words and phrases used in the Option Terms are defined in the Plan or
elsewhere in the Option Terms. Except where the context clearly implies or
indicates the contrary, a word, term, or phrase used in the Plan is similarly
used in the Option Terms.
 
         2.     Incentive Stock Option. The Option is intended to constitute an
"incentive stock option" as that term is used in Code section 422. To the extent
that the aggregate fair market value (determined at the time of grant) of
Covered Shares with respect to which incentive stock options are exercisable for
the first time by the Participant during any calendar year under all plans of
the Company and its Subsidiaries exceeds $100,000, the options or portions
thereof which exceed such limit (according to the order in which they were
granted) shall be treated as nonstatutory stock options. It should be understood
that there is no assurance that the Option will, in fact, be treated as an
incentive stock option.
 
         3.     Date of Exercise.
                -----------------
 
(a)      [Except as may otherwise be provided in an applicable employment
         agreement between the Participant and the Company or a Subsidiary,
         and] Subject to the limitations of the Option Terms, the Option shall
         become exercisable with respect to one-fourth (1/4) of the Covered
         Shares on the one-year anniversary of the Grant Date (the "Initial
         Vesting Date") (but only if the Date of Termination has not occurred
         prior to the Initial Vesting Date). After the Initial Vesting Date,
         the Option shall become exercisable with respect to an additional one
         fourth (1/4) of the Covered Shares at each anniversary the Initial
         Vesting Date (but only if the Date of Termination has not occurred
         prior to of such anniversary), until such time as this Option is fully
         exercisable.
 
 
 
                                       7
 
 
 
(b)      The Option may be exercised on or after the Date of Termination only as
         to that portion of the Covered Shares for which it was exercisable (or
         became exercisable) immediately prior to such date.
 
         4.     Expiration. The Option shall not be exercisable after the
Company's close of business on the last business day that occurs prior to the
Expiration Date. The "Expiration Date" shall be the earliest to occur of:
 
(a)      the ten-year anniversary of the Grant Date;
 
(b)      if the Date of Termination occurs by reason of the Participant's death
         or Disability, the one-year anniversary of such Date of Termination;
 
(c)      if the Date of Termination occurs by reason of termination of the
         Participant by the employer for Cause, or by the Participant other than
         for Good Reason, such Date of Termination; or
 
(d)      if the Date of Termination occurs for reasons other than (i) the
         Participant's death, (ii) the Participant's Disability, (iii)
         termination of the Participant by the employer for Cause, or (iv)
         termination by the Participant other than for Good Reason, the 90-day
         anniversary of such Date of Termination.
 
         5.     Method of Option Exercise. Subject to the Option Terms and the
Plan, the Option may be exercised in whole or in part by filing an option
exercise notice in the form attached as Exhibit A (the "Exercise Notice") with
the Secretary of the Company at its corporate headquarters prior to the
Company's close of business on the last business day that occurs prior to the
Expiration Date. Such notice shall specify the number of shares of Stock which
the Participant elects to purchase and such other representations and agreements
as may be required by the Company, and shall be accompanied by payment of the
Exercise Price. This Option may not be exercised until such time as the Plan has
been approved by the shareholders of the Company. The Option shall not be
exercisable if and to the extent the Company determines that such exercise would
violate applicable state or Federal securities laws or the rules and regulations
of any securities exchange on which the Stock is traded. If the Company makes
such a determination, it shall use all reasonable efforts to obtain compliance
with such laws, rules and regulations. In making any determination hereunder,
the Company may rely on the opinion of counsel for the Company.
 
         6.     Payment of Exercise Price. Payment of the Exercise Price may be
made by any of the following methods or any combination thereof:
 
(a)      By cash or by check payable to the Company.
 
(b)      Except as otherwise provided by the Committee before the Option is
         exercised and provided that the Company's common stock is publicly
         traded and quoted regularly in the Wall Street Journal, by delivery of
         shares of Stock owned by the Participant having an aggregate Fair
         Market Value (valued as of the date of exercise) that is equal to the
         amount of cash that would otherwise be required. Except as otherwise
         provided by the
 
 
                                       2
 
 
 
 
         Committee, payments made with shares of Stock shall be limited to
         shares held by the Participant for not less than six months prior to
         the payment date.
 
(c)      Except as otherwise provided by the Committee before the Option is
         exercised and provided that the Company's common stock is publicly
         traded and quoted regularly in the Wall Street Journal, by authorizing
         a third party to sell shares of Stock (or a sufficient portion of the
         shares) acquired upon exercise of the Option and remit to the Company a
         sufficient portion of the sale proceeds to pay the entire Exercise
         Price and any tax withholding resulting from such exercise.
 
         7.     Change in Control. Subject to the provisions of paragraph 4.2(f)
of the Plan (relating to the adjustment of shares), and except as otherwise
provided in the Plan, upon the occurrence of a Change in Control, all of the
options shall vest in full.
 
         8.     Withholding. All deliveries and distributions under the Option
Terms are subject to withholding of all applicable taxes. At the election of the
Participant, and subject to such rules and limitations as may be established by
the Committee from time to time, such withholding obligations may be satisfied
through the surrender of shares of Stock which the Participant already owns, or
to which the Participant is otherwise entitled under the Plan; provided,
however, that such shares may be used to satisfy not more than the Company's
minimum statutory withholding obligation (based on minimum statutory withholding
rates for Federal and state tax purposes, including payroll taxes, that are
applicable to such supplemental taxable income).
 
         9.     Participant's Representations and Shareholders Agreement. At the
time this Option is exercised, the Participant shall, if required by the
Company, concurrently with the exercise of all or any portion of this Option (i)
deliver to the Company his or her Investment Representation Statement in the
form attached hereto as Exhibit B; and (ii) agree to execute and become a party
to the Shareholders Agreement, as may be in effect on such date.
 
         10.    Lock-Up Period. The Participant hereby agrees that, if so
requested by the Company or any representative of the underwriters (the
"Managing Underwriter") in connection with any registration of the offering of
any securities of the Company under the Securities Act, the Participant shall
not sell or otherwise transfer any Shares or other securities of the Company
during the 180-day period, or such other period as may be requested in writing
by the Managing Underwriter and agreed to in writing by the Company (the "Market
Standoff Period") following the effective date of a registration statement of
the Company filed under the Securities Act. Such restriction shall apply only to
the first registration statement of the Company to become effective under the
Securities Act that includes securities to be sold on behalf of the Company to
the public in an underwritten public offering under the Securities Act. The
Company may impose stop-transfer instructions with respect to securities subject
to the foregoing restrictions until the end of such Market Standoff Period.
 
         11.    Non-Transferability of Option. This Option may not be
transferred in any manner otherwise than by will or by the laws of descent or
distribution and may be exercised during the lifetime of the Participant only by
the Participant. The terms of the Plan and the Option Terms
 
 
 
                                       3
 
 
 
shall be binding upon the executors, administrators, heirs, successors and
assigns of the Participant.
 
         12.    All Terms. The Plan is incorporated herein by reference. The
Plan and the Option Terms, including all Exhibits hereto, as applicable,
constitute all of the terms with respect to the subject matter hereof and
supersede in their entirety all prior undertakings and agreements of the Company
and the Participant with respect to the subject matter hereof. The Option Terms
may be amended by written agreement of the Company and the Participant without
the consent of any other person.
 
         13.    Definitions. For purposes of the Option Terms, words and phrases
used in this Agreement shall be defined as follows:
 
(a)      Cause. [If the Participant is subject to an employment agreement (or
         other similar agreement) with the Company or a Subsidiary that
         provides a definition of termination for "cause," then, for purposes
         of this Award, the term "Cause" shall have meaning set forth in such
         agreement. In the absence of such a definition,] the term "Cause"
         shall mean any of the following: (1) the willful and continued failure
         by the Participant to substantially perform his duties, other than by
         reason of his being Disabled (as defined below), (2) the willful
         engaging by the Participant in conduct which is demonstrably and
         materially injurious to the Company or its Affiliates, (3) conduct by
         the Participant that involves theft or fraud or, dishonesty in
         connection with his duties, (4) the Participant's violation of a
         non-compete or confidentiality agreement with the Company or an
         Affiliate, or (5) conviction of felony involving moral turpitude.
 
(b)      Change in Control. The term "Change in Control" means any of the
         following: (i) the closing of any merger, combination, consolidation
         or similar business transaction involving the Company in which the
         holders of Stock immediately prior to such closing are not the
         holders, directly or indirectly, of a majority of the ordinary voting
         securities of the surviving person in such transaction immediately
         after such closing, (ii) the closing of any sale or transfer by the
         Company of all or substantially all of its assets to an acquiring
         person in which the holders of Stock immediately prior to such closing
         are not the holders of a majority of the ordinary voting securities of
         the acquiring person immediately after such closings, (iii) the
         closing of any sale by the holders of Stock of an amount of Stock that
         equals or exceeds a majority of the shares of Stock immediately prior
         to such closing to a person in which the holders of the Stock
         immediately prior to such closing are not the holders of a majority of
         the ordinary voting securities of such person immediately after such
         closing or (iv) the consummation of a registered public offering of
         Stock by the Company pursuant to the Securities Act of 1933, as
         amended, for gross proceeds of at least $50 million.
 
(c)      Date of Termination. The "Date of Termination" shall be the first day
         occurring on or after the Grant Date on which the Participant ceases to
         be an Employee of, or Service Provider to, the Company or any
         Subsidiary, regardless of the reason for such cessation, subject to the
         following:
 
 
 
                                       4
 
 
 
         (i)    The Participant's cessation as an Employee and Service Provider
         shall not be deemed to occur by reason of the transfer of the
         Participant between the Company and a Subsidiary or between two
         Subsidiaries.
 
         (ii)   The Participant's cessation as an Employee and Service Provider
         shall not be deemed to occur by reason of the Participant's being on a
         leave of absence from the Company or a Subsidiary approved by the
         Company or Subsidiary otherwise receiving the Participant's services.
 
         (iii)  If, as a result of a sale or other transaction, the Subsidiary
         for whom Participant is employed (or to whom the Participant is
         providing services as a Service Provider) ceases to be a Subsidiary
         (and the entity for whom the Participant is employed or to whom the
         Participant is providing services is or becomes an entity that is
         separate from the Company), and the Participant is not, at the end of
         the 30-day period following the transaction, an Employee of or Service
         Provider to the Company or an entity that is then a Subsidiary, then
         the occurrence of such transaction shall be treated as the
         Participant's Date of Termination caused by the Participant being
         discharged by the entity for whom the Participant is employed or to
         whom the Participant is providing services.
 
         (iv)   A Service Provider whose services to the Company or a Subsidiary
         are governed by a written agreement with the Service Provider will
         cease to be a Service Provider at the time the term of such written
         agreement ends (without renewal); and a Service Provider whose
         services to the Company or a Subsidiary are not governed by a written
         agreement with the Service Provider will cease to be a Service
         Provider on the date that is 90 days after the date the Service
         Provider last provides services requested by Company or Subsidiary (as
         determined by the Committee).
 
(d)      Disability. [If Participant is subject to an employment agreement (or
         other similar agreement), with the Company or a Subsidiary that
         provides a definition of termination for "disability" then for
         purposes of this Award, the term "Disability" shall have the meaning
         set forth in such agreement. In the absence of such definition,] the
         Participant shall be considered to have a "Disability" during the
         period in which the Participant is unable, by reason of a medically
         determinable physical or mental impairment, to engage in any
         substantial gainful activity, which condition, in the opinion of a
         physician selected by the Committee, is expected to have a duration of
         not less than 120 days.
 
(e)      Employee. The term "Employee" means any person, including Officers and
         Directors, employed by the Company or any Subsidiary.
 
(f)      Good Reason. [If the Participant is subject to an employment agreement
         (or other similar agreement) with the Company or a Subsidiary that
         provides a definition of termination for "good reason," then, for
         purposes of this Award, the term "Good Reason" shall have meaning set
         forth in such agreement. In the absence of such a definition,] the
         term "Good Reason" shall mean either of (1) a reduction in the
         Participant's salary rate; or (2) a reduction in the Participant's
         rank which occur without the Participant's consent and which are not
         corrected by the Company within 10 days of delivery of a written
         notice to
 
 
 
                                       5
 
 
 
         the Company by the Participant which identifies the circumstances
         which the Participant believes constitute a reduction in salary rate
         or rank.
 
(g)      Shareholders Agreement. The term "Shareholders Agreement" means the
         agreement governing the rights and obligations with respect to shares
         of Stock and to holders of Stock (including, without limitation, voting
         and sale rights), which agreement shall be in such form as the Company
         determines.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                       6
 
 
 
 
         IN WITNESS WHEREOF, the Company has caused these presents to be
executed in its name and on its behalf, all as of the Grant Date.
 
TAL INTERNATIONAL GROUP, INC.
 
 
 
By:                                        Its:
   ----------------------------------          --------------------------------
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                       7
 
 
 
 
                                    EXHIBIT A
                             OPTION EXERCISE NOTICE
 
 
TAL International Group, Inc.
[address]
Attention: Secretary
 
 
Ladies and Gentlemen:
 
 
         This constitutes notice that, as of the date this notice and payment of
the exercise price is received by the Secretary of TAL International Group, Inc.
(the "Company"), the Participant is electing to exercise the stock option
granted under TAL International Group, Inc. 2004 Management Stock Plan (the
"Plan") and identified below, and to purchase the number of shares for the price
set forth below:
 
Grant Date of stock option:                        _________________________
 
If both incentive stock options and nonstatutory   ___ Incentive Stock Option
stock options were granted to the Participant on
that date, indicate type of option being           ___ Non-qualified Stock
exercised:                                             Option
 
Number of shares as to which option
is exercised:                                      _________________
 
Stock certificate to be issued in name of:         ____________________________
 
Total exercise price:                              $____________
 
Cash payment delivered with this election:         $____________
 
Principal amount of promissory note delivered
with this election:                                $____________
 
Value of _____ shares of common
stock delivered with this election:(1)             $____________
 
 
 
--------------------
(1)       This alternative applies only if shares meet the public trading
requirements. Shares must be valued in accordance with the terms of the option
being exercised, must have been owned for the minimum period required in the
option, and must be owned free and clear of any liens, claims, encumbrances or
security interests. Certificates must be endorsed or accompanied by an executed
assignment separate from the certificate.
 
 
 
 
 
 
 
 
         By this exercise, the Participant agrees (i) to provide such additional
documents as the Company may require pursuant to the terms of the Plan, and (ii)
to provide for the payment to the Company (in the manner determined by the
Company) of amounts required to satisfy the Company's withholding obligation, if
any, relating to this option exercise. The Participant also acknowledges having
received, read and understood the Plan, and agrees to abide by and be bound by
its terms and conditions.
 
Submitted by Participant                   Accepted by TAL INTERNATIONAL
                                           GROUP, INC.
 
______________________________             By: ________________________________
Signature
 
_______________________________            Its: _______________________________
Print Name
 
Address:                                   Date Received: _____________________
 
_______________________________
 
_______________________________
 
_______________________________
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                       2
 
 
 
                                    EXHIBIT B
                       INVESTMENT REPRESENTATION STATEMENT
 
         [This form is to be completed at the time option is exercised,
                 unless stock is publicly traded at that time.]
 
         Effective as of ___________________ [insert date of option exercise]
(the "Effective Date"), the undersigned ("Participant") has elected to purchase
__________ shares of the Stock (the "Shares") of TAL International Group, Inc.
(the "Company") under and pursuant to the TAL International Group, Inc. 2004
Management Stock Plan (the "Plan") and the Non-Qualified Stock Option Terms
dated ______________ [insert grant date of option] (the "Option Terms"). The
Participant hereby makes the following certifications, representations,
warranties and agreements with respect to the purchase of the Shares:
 
         The Participant acknowledges that he or she is aware of the Company's
business affairs and financial condition and has acquired sufficient information
about the Company to reach an informed and knowledgeable decision to acquire the
Shares. The Participant represents and warrants to the Company that he or she is
acquiring these Shares for investment for the Participant's own account only and
not with a view to, or for resale in connection with, any "distribution" thereof
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act").
 
         The Participant further acknowledges that the Shares have not been
registered under the Securities Act, are deemed to constitute "restricted
securities" under Rule 701 and Rule 144 promulgated under the Securities Act and
must be held indefinitely unless they are subsequently registered under the
Securities Act and qualified under any applicable state securities laws or an
exemption from such registration and qualification is available. The Participant
further acknowledges that the Company is under no obligation to register the
Shares.
 
         The Participant further acknowledges that he or she is familiar with
the provisions of Rule 701 and Rule 144, which Rules, in substance, permit
limited public resale of "restricted securities" acquired, directly or
indirectly from the issuer thereof, in a non-public offering subject to the
satisfaction of certain conditions. The Participant understands that if the
Company becomes subject to the reporting requirements of Section 13 or 15(d) of
the Securities Exchange Act of 1934, the Participant will not be able to resell
the Shares under Rule 701 (i) until at least ninety (90) days after the Company
became subject to such reporting requirements (or any longer stand-off period,
as discussed below, may require) and (ii) unless such resale satisfies those
provisions of Rule 144 that are specified in Rule 701(g)(3). Even if the Company
is not subject to such reporting requirements, the Shares may be resold in
certain limited circumstances subject to satisfaction of all of the applicable
provisions of Rule 144. The Participant further acknowledges that in the event
all of the applicable requirements of Rule 144 are not satisfied, registration
under the Securities Act, compliance with Regulation A, or some other
registration exemption will be required in order to resell the Shares. The
Participant understands that no assurances can be given that any such
registration will be made or any such exemption will be available in such event.
 
 
 
 
 
 
 
         The Participant further acknowledges and understands that all
certificates representing any of the Shares shall have endorsed thereon
appropriate legends reflecting the foregoing limitations, as well as any legends
reflecting any other restrictions pursuant to the Company's Articles of
Incorporation, Bylaws, the Option, the Plan and/or applicable securities laws.
 
         The Participant further agrees that, if so requested by the Company or
any representative of the underwriters (the "Managing Underwriter") in
connection with any registration of the offering of any securities of the
Company under the Securities Act, the Participant shall not sell or otherwise
transfer any Shares or other securities of the Company during the 180-day
period, or such other period as may be requested in writing by the Managing
Underwriter and agreed to in writing by the Company (the "Market Standoff
Period"), following the effective date of a registration statement of the
Company filed under the Securities Act. Such restriction shall apply only to the
first registration statement of the Company to become effective under the
Securities Act that includes securities to be sold on behalf of the Company to
the public in an underwritten public offering under the Securities Act. The
Company may impose stop-transfer instructions with respect to securities subject
to the foregoing restrictions until the end of such Market Standoff Period.
 
         The Participant further acknowledge and agrees that the Company shall
not be required (i) to transfer on its books any Shares that have been sold or
otherwise transferred in violation of any of the representations, warranties,
agreements or other provisions contained in this Notice of Exercise or (ii) to
treat as owner of such Shares or to accord the right to vote or pay dividends to
any purchaser or other transferee to whom such Shares shall have been so
transferred.
 
 
                                          Submitted by Participant:
 
 
                                          ------------------------------
                                          Signature
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                       2
 
 
 
 
                                    EXHIBIT C
                     EARLY EXERCISE STOCK PURCHASE AGREEMENT
 
       [This form is to be completed at the time the option is exercised,
                if it is exercised before the option is vested.]
 
         Effective as of ___________________ [insert date of option exercise],
the undersigned ("Participant") has elected to purchase __________ shares of the
Stock (the "Shares") of TAL International Group, Inc. (the "Company") under and
pursuant to the TAL International Group, Inc. 2004 Management Stock Plan (the
"Plan") and the Non-Qualified Stock Option Terms dated ______________ [insert
grant date of option] (the "Option Terms"). All or a portion of the shares so
purchased are Unvested Shares (as that term is defined in the Option Terms). The
Unvested Shares shall be subject to the terms of this Agreement, and are to be
held in escrow by the Secretary of the Company (the "Escrow Agent") in
accordance with the escrow instructions contained herein. If, on the Date of
Termination, any shares are Unvested Shares, the Company shall have the right to
purchase such Unvested Shares (determined as of the Date of Termination) in
accordance with this Agreement.
 
         1.     Transfer. Unvested Shares may not be transferred in any manner
otherwise than by will or by the laws of descent or distribution. The terms of
the Plan, the Option Terms, and this Early Exercise Stock Purchase Agreement
shall be binding upon the executors, administrators, heirs, successors and
assigns of the Participant.
 
         2.     Repurchase Right. The Company shall have the right to purchase
the Unvested Shares from the Participant or the Participant's personal
representative, as the case may be, at the Option Exercise Price per share
originally paid for the Shares (the "Exercise Price") or, if less, the Fair
Market Value of the Shares at the Date of Termination.
 
         3.     Repurchase Procedure. Within 90 days following the Date of
Termination, the Company shall notify the Participant and the Escrow Agent by
written notice delivered or mailed, as to whether it wishes to purchase the
Unvested Shares pursuant to exercise of this Agreement. If the Company (or its
assignee) elects to purchase the Unvested Shares hereunder, it shall set a date
for the closing of the transaction at a place and time specified by the Company
or, at the Company's option, such closing may be consummated by mail. At such
closing, the Company (or its assignee) shall tender payment for the Unvested
Shares to the Escrow Agent, the Escrow Agent will complete and deliver all stock
assignments necessary to effect the transfer of the Shares to the Company, and
the certificates representing the Unvested Shares so purchased shall be
canceled. The Exercise Price shall be payable, at the option of the Company, in
cash or by check.
 
         4.     Restrictive Legends and Stop-Transfer Orders.
                ---------------------------------------------
 
(a)      Legends. Participant understands and agrees that the Company shall
         cause the legend set forth below or a legend substantially equivalent
         thereto, to be placed upon any certificate(s) evidencing ownership of
         the Unvested Shares together with any other legends that may be
         required by the Company or by the state or federal securities laws:
 
 
 
 
 
 
 
                THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
         CERTAIN RESTRICTIONS ON TRANSFER AND A RIGHT OF REPURCHASE HELD BY THE
         ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN THE EARLY EXERCISE STOCK
         PURCHASE AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE
         SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE
         ISSUER. SUCH TRANSFER RESTRICTIONS AND RIGHT OF REPURCHASE ARE BINDING
         ON TRANSFEREES OF THESE SHARES.
 
(b)      Stop-Transfer Notices. Participant agrees that, in order to ensure
         compliance with the restrictions referred to herein, the Company may
         issue appropriate "stop transfer" instructions to its transfer agent,
         if any, and that, if the Company transfers its own securities, it may
         make appropriate notations to the same effect in its own records.
 
(c)      Refusal to Transfer. The Company shall not be required (i) to transfer
         on its books any Shares that have been sold or otherwise transferred in
         violation of any of the provisions of this Agreement or (ii) to treat
         as owner of such Shares or to accord the right to vote or pay dividends
         to any purchaser or other transferee to whom such Shares shall have
         been so transferred.
 
5.       Certain Matters Regarding the Escrow Agent.
         -------------------------------------------
 
(a)      The Participant irrevocably authorizes the Company to deposit with the
         Escrow Agent any certificates evidencing the Shares to be held by the
         Escrow Agent hereunder. The Participant hereby irrevocably constitutes
         and appoints the Escrow Agent as the Participant's attorney-in-fact and
         agent for the term of the escrow arrangement created hereunder to
         execute with respect to such Shares all documents necessary or
         appropriate to make such Shares negotiable and to complete any
         transaction herein contemplated.
 
(b)      The Escrow Agent is a party to this Agreement only for the purpose of
         the escrow instructions contained herein. The duties of the Escrow
         Agent hereunder are limited to those expressly set forth herein, and
         may be altered, amended, modified or revoked only by a writing signed
         by all of the parties hereto. The Escrow Agent may rely and shall be
         protected in relying or refraining from acting on any instrument
         reasonably believed by the Escrow Agent to be genuine and to have been
         signed or presented by the proper party or parties. The Escrow Agent
         shall not be personally liable for any act the Escrow Agent may do or
         omit to do hereunder as Escrow Agent while acting in good faith, and
         any act done or omitted by the Escrow Agent pursuant to the advice of
         the Escrow Agent's attorneys shall be conclusive evidence of such good
         faith.
 
(c)      The Escrow Agent shall not be liable in any respect on account of the
         identity, authorities or rights of the parties executing or delivering
         or purporting to execute or deliver this Agreement or any documents or
         papers deposited or called for hereunder.
 
(d)      If the Escrow Agent reasonably requires other or further instruments in
         connection with the instructions contained in this Agreement, the
         necessary parties hereto shall join in furnishing such instruments.
 
 
 
                                       2
 
 
 
(e)      The responsibilities of the Escrow Agent hereunder shall terminate if
         the Escrow Agent ceases to be an officer or agent of the Company or if
         the Escrow Agent resigns by written notice to each party. Upon such
         termination, the Company shall appoint a successor Escrow Agent. If at
         the time of such termination, the Escrow Agent has in its possession
         any documents, securities or other property belonging to, and then
         deliverable to the Participant, it shall deliver all of the same to the
         Participant and shall be discharged of all further obligations under
         this Agreement.
 
(f)      In the event of any dispute with respect to the delivery and/or
         ownership or right of possession of the Shares held by the Escrow Agent
         hereunder, the Company and the Participant authorize and direct the
         Escrow Agent to retain in its possession without liability to anyone
         all or any part of such Shares until settlement or such disputes by
         mutual written agreement of the parties concerned or by a final order,
         decree or judgment of a court of competent jurisdiction after the time
         for appeal has expired and no appeal has been perfected, but the Escrow
         Agent shall be under no duty to institute or defend any such
         proceedings.
 
(g)      The Escrow Agent shall be entitled to employ such legal counsel as it
         deems reasonably necessary with respect to the obligations of the
         Escrow Agent hereunder, and may rely on upon the advice of such
         counsel.
 
(h)      The Escrow Agent shall not be liable for the outlawing of any rights
         under the statute of limitations with respect to the escrow
         instructions contained herein.
 
         6.     Definitions. Except where the context clearly implies or
indicates the contrary, a word, term, or phrase used in the Plan is similarly
used in this Agreement.
 
Submitted by Participant                    Accepted by TAL INTERNATIONAL
                                            GROUP, INC.
 
 
______________________________              By: _______________________________
Signature
 
_______________________________             Its: _______________________________
Print Name
 
Address:                                    Date Received: _____________________
 
_______________________________
 
_______________________________
 
_______________________________
 
 
Escrow Agent:
 
_______________________________
Signature
Print Name ______________________
Title: Secretary
 
 
                                       3
 
 
 
 
Address:
 
________________________________
 
________________________________
 
________________________________
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                       4
 
 
 
 
 
 
                                    EXHIBIT D
                                 PROMISSORY NOTE
 
       [This form is to be completed at the time the option is exercised,
               if a loan is extended to pay the purchase price.]
 
     [insert amount of loan]                  [insert date of option exercise]
 
         Effective as of ___________________ [insert date of option exercise]
(the "Effective Date"), the undersigned ("Participant") has elected to purchase
__________ shares [insert number of shares purchased by option exercise] of
Stock (the "Shares") of TAL International Group, Inc. (the "Company") under and
pursuant to the TAL International Group, Inc. 2004 Management Stock Plan (the
"Plan") and the Non-Qualified Stock Option Terms dated ______________ [insert
grant date of option] (the "Option Terms").
 
         For value received, the Participant promises to pay to the Company, at
its principal office, the principal sum of ______________ [insert amount of
loan, which will ordinarily be the option exercise price] with interest at the
rate determined in accordance with the provisions of this paragraph, compounded
semi-annually, on the unpaid balance of the principal sum. Said principal and
any accrued but unpaid interest shall be due one year after the Date of
Termination (as that term is defined in the Option Terms) for reasons of death
or Disability, and thirty (30) days after such cessation for any other reason.
Interest shall be charged at the minimum rate of interest necessary to avoid the
treatment as interest, under any applicable provisions of the Internal Revenue
Code, of any portion of any amounts other than amounts stated to be interest
under this Note.
 
         This Note is secured by a pledge of the Company's Stock acquired
pursuant to the exercise of the Option Terms, is held under the terms of a
Security Agreement of even date herewith, and is subject to all the provisions
thereof.
 
         The holder of this Note shall have full recourse against the
Participant personally for failure to pay the Note as and when due.
 
         The principal is payable in lawful money of the United States of
America. The privilege is reserved to prepay any portion of Note at any time.
 
         Should suit be commenced to collect this Note or any portion thereof,
such sum as the Court may deem reasonable shall be added hereto as attorneys'
fees. The maker waives presentment for payment, protest, notice of protest and
notice of non-payment of this Note. This Note shall be governed by the laws of
the State of [insert applicable state] as they apply to contracts entered into
and wholly to be performed within such state.
 
 
                                      Participant
 
                                      --------------------------------
 
 
 
 
 
                                       1
 
 
 
 
 
 
                                    EXHIBIT E
                                STOCK ASSIGNMENT
 
[This form is to be completed at the time the option is exercised, if a loan is
extended to pay the purchase price, or if the shares are purchased pursuant to
the exercise of the option before vesting .]
 
         Effective as of ___________________ [insert date of option exercise]
(the "Effective Date"), the undersigned ("Participant") has elected to purchase
__________ shares [insert number of shares purchased by option exercise] of
Stock (the "Shares") of TAL International Group, Inc. (the "Company") under and
pursuant to the TAL International Group, Inc. 2004 Management Stock Plan (the
"Plan") and the Non-Qualified Stock Option Terms dated ______________ [insert
grant date of option] (the "Option Terms").
 
         For value received, Participant hereby sells, assigns and transfers to
the Company _________ shares of the Stock standing in the Participant's name of
the books of the Company represented by Certificate No. _______ herewith and do
hereby irrevocably constitute and appoint the Corporate Secretary of the Company
to transfer the said stock on the books of the Company with full power of
substitution in the premises.
 
         This Stock Assignment may be used only in accordance with the Option
Terms and the Security Agreement between the Company and the Participant of even
date.
 
 
Dated:______________________            ___________________________________
                                        (to be signed exactly as name
                                        is to appear on stock certificate)
 
 
INSTRUCTIONS TO PARTICIPANT: Please do not fill in the blanks other than the
signature line. The purpose of this assignment is to enable the Company to
exercise its rights as set forth in the Security Agreement, without requiring
additional signatures on the part of the Participant.
 
INSTRUCTIONS TO COMPANY: Complete blanks in first paragraph before Participant
signs form.
 
 
 
 
 
 
 
 
 
 
 
 
                                       1
 
 
 
 
 
 
                                    EXHIBIT F
                               SECURITY AGREEMENT
 
       [This form is to be completed at the time the option is exercised,
               if a loan is extended to pay the purchase price.]
 
         This Security Agreement, made as of _________________ [insert date of
option exercise] (the "Effective Date") by and among TAL International Group,
Inc. (the "Company"), _____________ [insert Participant's name] (the
"Participant"), and the Corporate Secretary of the Company, as the holder of the
Shares pledged hereunder (the "Pledgeholder");
 
                                Witnesseth that:
                                ----------------
 
         As of the Effective Date, the Participant has purchased ____________
[insert number of shares covered by option exercise] shares of the Company's
Stock (the "Shares") under the TAL International Group, Inc. 2004 Management
Stock Plan (the "Plan") and the Non-Qualified Stock Option Terms dated
______________ [insert grant date of option] (the "Option Terms"), and the
Participant has elected under the terms of the Option Terms to pay for such
shares with the Participant's promissory note (the "Note"). The Note and the
obligations thereunder are as set forth in an exhibit to this Security
Agreement.
 
         NOW, THEREFORE, it is agreed as follows:
 
         1.     Creation and Description of Security Interest.
 
(a)      In consideration of the transfer of the Shares to the Participant under
         the Option Terms, the Participant, pursuant to the [insert applicable
         state] Uniform Commercial Code, hereby pledges to the Company all of
         such Shares (herein sometimes referred to as the "Collateral")
         represented by certificate number _____, duly endorsed in blank or with
         an executed stock power or powers, and herewith delivers said
         certificate to Pledgeholder, who shall hold said certificate subject to
         the terms and conditions of this Security Agreement
 
(b)      The pledged Shares (together with an executed blank stock assignment or
         assignments for use in transferring all or a portion of the Shares to
         the Company if, as, and when required pursuant to this Security
         Agreement) shall be held by Pledgeholder as security for the repayment
         of the Note, and any extensions or renewals thereof, to be executed by
         the Participant pursuant to the terms of the Option Terms, and
         Pledgeholder shall not encumber or dispose of such Shares except in
         accordance with the provisions of this Security Agreement.
 
         2.     Participant's Representations and Covenants. To induce the
Company to enter into this Security Agreement, the Participant represents and
covenants to the Company, its successors and assigns, as follows:
 
(a)      Payment of Indebtedness. The Participant will pay the principal sum of
         the Note secured hereby, and interest thereon, at the time and in the
         manner provided in the Note.
 
 
 
 
 
 
 
(b)      Encumbrances. The Shares are free of all other encumbrances, defenses
         and liens (other than restrictions on transfer imposed by applicable
         securities laws), except for (i) the Company's rights to repurchase
         Shares pursuant to paragraph 3A of the Option Terms and (ii) the pledge
         of the Shares hereunder as security for payment of the Note, and the
         Participant will not further encumber the Shares without the prior
         written consent of the Company.
 
(c)      Margin Regulations. In the event that the Company's Stock is now or
         later becomes margin-listed by the Federal Reserve Board and the
         Company is classified as a "lender" within the meaning of the
         regulations under Part 221 of Title 12 of the Code of Federal
         Regulations ("Regulation U"), the Participant agrees to cooperate with
         the Company in making any amendments to the Note or providing any
         additional collateral as may be necessary to comply with such
         regulations.
 
         3.     Voting Rights. During the term of this pledge and so long as all
payments of principal and interest are made as they become due under the terms
of the Note, the Participant shall have the right to vote all of the Shares
pledged hereunder.
 
         4.     Stock Adjustments. In the event that during the term of the
pledge any stock dividend, reclassification, readjustment or other changes are
declared or made in the capital structure of the Company, all new, substituted
and additional shares or other securities issued by reason of any such change
shall be delivered to and held by the Company under the terms of this Security
Agreement in the same manner as the Shares originally pledged hereunder. In the
event of substitution of such securities, the Participant, the Company and the
Pledgeholder shall cooperate and execute such documents as are reasonable so as
to provide for the substitution of such Collateral and, upon such substitution,
references to "Shares" in this Security Agreement shall include the substituted
shares of capital stock of the Participant as a result thereof.
 
         5.     Options and Rights. In the event that, during the term of this
pledge, subscription options or other rights or options shall be issued in
connection with the pledged Shares, such rights and options shall be the
property of the Participant and, if exercised by the Participant, all new stock
or other securities so acquired by the Participant as it relates to the pledged
Shares then held by Pledgeholder shall be immediately delivered to Pledgeholder,
to be held under the terms of this Security Agreement in the same manner as the
Shares pledged.
 
         6.     Default. The Participant shall be deemed to be in default of the
Note and of this Security Agreement in the event:
 
(a)      payment of principal or interest on the Note shall be delinquent for a
         period of 10 days or more; or
 
(b)      the Participant fails to perform any of the covenants set forth in the
         Option Terms or contained in this Security Agreement for a period of 10
         days after written notice thereof from the Company.
 
In the case of an event of Default, as set forth above, the Company shall have
the right to accelerate payment of the Note upon notice to the Participant, and
the Company shall thereafter be entitled to pursue its remedies under the
[insert applicable state] Uniform Commercial Code.
 
 
 
                                       2
 
 
 
         7.     Release of Collateral. Subject to any applicable contrary rules
under Regulation U, there shall be released from this pledge a portion of the
pledged Shares held by Pledgeholder hereunder upon payments of the principal of
the Note. The number of the pledged Shares which shall be released shall be that
number of full Shares which bears the same proportion to the initial number of
Shares pledged hereunder as the payment of principal bears to the initial full
principal amount of the Note.
 
         8.     Withdrawal or Substitution of Collateral. The Participant shall
not sell, withdraw, pledge, substitute or otherwise dispose of all or any part
of the Collateral without the prior written consent of the Company.
 
         9.     Term. The within pledge of Shares shall continue until the
payment of all indebtedness secured hereby, subject to the provisions for prior
release of a portion of the Collateral as provided in paragraph 7 above.
 
         10.    Insolvency. The Participant agrees that if a bankruptcy or
insolvency proceeding is instituted by or against him or her, or if a receiver
is appointed for the property of the Participant, or if the Participant makes an
assignment for the benefit of creditors, the entire amount unpaid on the Note
shall become immediately due and payable, and the Company may proceed as
provided in the case of default.
 
         11.    Pledgeholder Liability.
                -----------------------
 
(a)      Pledgeholder shall not be liable to any party for any of his or her
         acts, or omissions to act, as Pledgeholder unless Pledgeholder is
         proved to have acted in bad faith. Any act done or omitted pursuant to
         the advice of legal counsel, other than an act or omission involving
         gross or willful negligence, shall be deemed to be done or omitted in
         good faith.
 
(b)      Pledgeholder shall be entitled to employ such legal counsel and other
         experts as Pledgeholder may deem necessary properly to advise
         Pledgeholder in connection with its obligations hereunder, and
         Pledgeholder may rely upon the advice of such counsel.
 
(c)      It is understood and agreed that should any dispute arise with respect
         to the delivery and/or ownership or right of possession of the Shares
         held by Pledgeholder hereunder, Pledgeholder is authorized and directed
         to retain in Pledgeholder's possession without liability to anyone all
         or any part of said Shares until such disputes shall have been settled.
 
         12.    Invalidity of Particular Provisions. The Participant and the
Company agree that the enforceability or invalidity of any provision or
provisions of this Security Agreement shall not render any other provision or
provisions herein contained unenforceable or invalid.
 
         13.    Successors or Assigns. The Participant and the Company agree
that all of the terms of this Security Agreement shall be binding on their
respective successors and assigns, and that the term "Participant" and the term
"Company" as used herein shall be deemed to include, for all purposes, the
respective designees, successors, assigns, heirs, executors and administrators.
 
 
 
                                       3
 
 
 
         14.    Governing Law. This Security Agreement shall be interpreted and
governed under the laws of the State of [insert applicable state] as they apply
to contracts entered into and wholly to be performed within such state.
 
         IN WITNESS WHEREOF, the parties hereto have executed this Security
Agreement as of the Effective Date.
 
                                      Participant: __________________________
 
                                      Print Name: ___________________________
 
                                      Address: ______________________________
 
 
                                      TAL INTERNATIONAL GROUP, INC.
 
                                      By: ___________________________________
 
                                      Its: __________________________________
                                           Secretary of the Company
 
 
 
 
 
 
 
 
 
 
 
                                       4
 
 
 
 
 
                                    EXHIBIT G
 
                          ELECTION UNDER SECTION 83(B)
                      OF THE INTERNAL REVENUE CODE OF 1986
 
         The undersigned taxpayer hereby makes an election under Section 83(b)
of the Internal Revenue Code of 1986, as amended, to include in gross income any
excess of (i) the fair market value of stock of TAL International Group, Inc.
acquired by exercise of an option granted in connection with the taxpayer's
performance of services over (ii) the amount taxpayer paid for such property.
Taxpayer hereby provides the following statement as required pursuant to
Treasury Department Regulation Section 1.83-2(e):
 
1.       Name:
 
         Address:
 
         Social Security Number:
 
2.       Description of the Property: common stock of TAL International Group,
         Inc. (the "Stock").
 
3.       (I)    Date on which the Stock was transferred:
 
         (II)   Calendar year for which election is made:
 
4.       The nature of the restrictions to which the Stock is subject: If
         taxpayer ceases to be a service provider to TAL International Group,
         Inc. and its subsidiaries, prior to a date specified in the option
         agreement, TAL International Group, Inc. shall have the right to
         acquire some or all of the taxpayer's Stock for the lesser of the price
         paid for the Stock or the value of the Stock at the time of repurchase.
 
5.       The fair market value of the Stock at the time of transfer is:
         $____________ per share, for a total of $___________________.
 
6.       The amount paid for the Stock: $_____________.
 
7.       Taxpayer states that a copy of this election has been furnished to TAL
         International Group, Inc.
 
 
 
                                         --------------------------------
                                         [signature of taxpayer]
 
The taxpayer understands that the foregoing election may not be revoked except
with the consent of the Commissioner of Internal Revenue.
 
 
 
 
 
 
 
 
 
                                       1
 
 
 
 
                  INSTRUCTIONS FOR ELECTION UNDER SECTION 83(b)
                          OF THE INTERNAL REVENUE CODE
 
o        If you decide to make an election under section 83(b) of the Internal
         Revenue Code with respect to the stock you have been purchased by
         exercise of the option granted under the TAL International Group, Inc.
         2004 Management Stock Plan, the election must be filed with the
         Internal Revenue Service Center where you file your income tax return
         no later than 30 days after the date of exercise. It should be mailed
         by certified mail or registered mail (return receipt requested) to
         establish proof of timely filing.
 
o        One copy of the election must also be filed with TAL International
         Group, Inc. (Attention: -------------).
 
o        One copy of the election must also be submitted with your tax return
         for the year in which you acquired the stock.
 
o        Once filed with the Internal Revenue Service, an 83(b) election is
         generally irrevocable and, in the limited cases in which it is
         revocable, such revocation requires the consent of the Commissioner of
         Internal Revenue. Accordingly, you should consult your personal tax
         advisor prior to making this election.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                       2
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                          TAL INTERNATIONAL GROUP, INC.
                     2005 MANAGEMENT OMNIBUS INCENTIVE PLAN
 
                                    ARTICLE 1
                     ESTABLISHMENT, OBJECTIVES AND DURATION
 
      1.1     Establishment of the Plan. TAL International Group, Inc., a
corporation organized and existing under Delaware law (hereinafter referred to
as the "Company"), established the TAL International Group, Inc. 2005 Management
Omnibus Incentive Plan (hereinafter referred to as the "Plan") effective October
11, 2005 (the "Effective Date"). The Plan shall remain in effect as provided in
Section 1.3 hereof. The Plan permits the grant of Nonqualified Stock Options,
Incentive Stock Options, Stock Appreciation Rights, and Restricted Stock.
 
      1.2     Objectives of the Plan. The objectives of the Plan are to (i)
attract and retain persons eligible to participate in the Plan; (ii) motivate
Participants, by means of appropriate incentives, to achieve long-range goals;
(iii) provide incentive compensation opportunities that are competitive with
those of other similar companies; and (iv) further align Participants' interests
with those of the Company's other stockholders through compensation that is
based on the Company's common stock; and thereby promote the long-term financial
interest of the Company and the Subsidiaries, including the growth in value of
the Company's equity and enhancement of long-term stockholder return.
 
      1.3     Duration of Plan. The Plan shall remain in effect, subject to the
right of the Board to amend or terminate the Plan at any time pursuant to
Article 15 hereof, until the earlier to occur of (a) all Shares subject to it
shall have been purchased or acquired according to the Plan's provisions, or (b)
November 30, 2005 if an initial public offering of the Company's common stock is
not consummated by such date. However, in no event may an Award of Incentive
Stock Options be granted under the Plan after the tenth anniversary of the
Effective Date.
 
                                    ARTICLE 2
                                   DEFINITIONS
 
      Wherever used in the Plan, the following terms shall have the meanings set
forth below, and, when the meaning is intended, the initial letter of the word
shall be capitalized.
 
      2.1     "Affiliate" means any person or entity which, at the time of
reference, directly, or indirectly through one or more intermediaries, is
controlled by the Company.
 
      2.2     "Award" means, individually or collectively, a grant under this
Plan of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation
Rights, or Restricted Stock.
 
      2.3     "5% Owner" means an Employee who, immediately after the grant of
an Option, owns stock possessing more than 5% of the total combined voting power
or value of all classes of stock of the Company or a parent or subsidiary
corporation (as defined in Code Sections 424(e) and 424(f), respectively).
 
 
                                       -1-
 
 
 
      2.4     "Award Agreement" means an agreement entered into by the Company
and each Participant setting forth the terms and provisions applicable to Awards
granted under the Plan.
 
      2.5     "Board" means the Board of Directors of the Company.
 
      2.6     "Cause" shall be defined in the Award Agreement, or, if not
defined in the Award Agreement, as otherwise defined by the Committee.
 
      2.7     "Change in Control" shall be defined in the Award Agreement, or,
if not defined in the Award Agreement, as otherwise defined by the Committee.
 
      2.8     "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
 
      2.9     "Committee" means the Compensation Committee of the Board, as
specified in Article 3 herein, or such other Committee appointed by the Board to
administer the Plan with respect to grants of Awards.
 
      2.10    "Company" means TAL International Group, Inc., a corporation
organized and existing under Delaware law, and any successor thereto as provided
in Article 18 herein.
 
      2.11    "Consultant" means an independent contractor who is performing
consulting services for one or more entities in the Group and who is not an
employee of any entity in the Group.
 
      2.12    "Director" means a member of the Board or a member of the board of
directors of an Affiliate.
 
      2.13    "Disabled" shall be defined in the Award Agreement, or, if not
defined in the Award Agreement, as otherwise defined by the Committee.
 
      2.14    "Effective Date" shall have the meaning ascribed to such term in
Section 1.1 hereof.
 
      2.15    "Employee" means any employee of the Group, including any
employees who are also Directors and employees who are employees of Affiliates
that become such after the Effective Date. Nonemployee Directors and Consultants
shall not be considered Employees under this Plan. For purposes of the grant of
ISOs under the Plan, and Employee shall be any person who is employed by the
Company or a parent or subsidiary corporation (as defined in Code Sections
424(e) and 424(f), respectively).
 
      2.16    "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor act thereto.
 
      2.17    "Exercise Price" means the price at which a Share may be purchased
by a Participant pursuant to an Option.
 
      2.18    "Fair Market Value". For purposes of determining the "Fair Market
Value" of a Share as of any date, the following rules shall apply:
 
 
                                        2
 
 
 
              (a)   If, at that time, the principal market for the Share is the
      New York Stock Exchange or another national securities exchange or the
      Nasdaq stock market, then the "Fair Market Value" shall be the mean
      between the lowest and highest reported sale prices of the Share on that
      date on the principal exchange or market on which the Share is then listed
      or admitted to trading.
 
              (b)   If, at that time, the sale prices are not available or the
      principal market for the Share is not the New York Stock Exchange or
      another national securities exchange and the Share is not quoted on the
      Nasdaq stock market, then the "Fair Market Value" shall be the mean
      between the highest bid and lowest asked prices for the Share on such day
      as reported on the Nasdaq OTC Bulletin Board Service or by the National
      Quotation Bureau, Incorporated or a comparable service.
 
              (c)   If the day is not a business day, and as a result,
      subclauses (a) and (b) next above are inapplicable, the Fair Market Value
      of the Share shall be determined as of the business day immediately
      preceding such day.
 
              (d)   If, in accordance with rules established by the Committee, a
      determination of "Fair Market Value" is required as of any date and, as of
      that date, subclauses (a) and (b) next above are inapplicable for reasons
      other than those specified in subclause (c) next above, then the "Fair
      Market Value" as of that date shall be determined by a
      nationally-recognized appraisal or investment banking firm experienced in
      appraising businesses, or by such other person, employee or entity as
      shall be determined by the Committee from time to time or such other
      method as the Committee may decide in its sole discretion, with such
      valuation to be performed in accordance with such rules and considerations
      as are established by the Committee. The Company shall bear the fees and
      expenses of such valuation.
 
      2.19    "Freestanding SAR" means an SAR that is granted independently of
any Options, as described in Article 7 herein.
 
      2.20    "Good Reason" shall be defined in the Award Agreement, or, if not
defined in the Award Agreement, as otherwise defined by the Committee.
 
      2.21    "Group" means the Company and the Affiliates.
 
      2.22    "Incentive Stock Option" or "ISO" means an option to purchase
Shares granted under Article 6 herein and which is designated as an Incentive
Stock Option intended to meet the requirements of Code Section 422.
 
      2.23    "Named Executive Officer" means a Participant who, as of the date
of vesting and/or payout of an Award, as applicable, is one of the group of
"covered employees," as defined in the regulations promulgated under Code
Section 162(m), or any successor statute.
 
      2.24    "Nonemployee Director" shall have the meaning ascribed to such
term in Rule 16b-3 of the Exchange Act.
 
 
                                        3
 
 
 
      2.25    "Nonqualified Stock Option" or "NQSO" means an option to purchase
Shares granted under Article 6 herein and which is not intended to meet the
requirements of Code Section 422.
 
      2.26    "Option" means an Incentive Stock Option or a Nonqualified Stock
Option, as described in Article 6 herein.
 
      2.27    "Outside Director" shall have the meaning ascribed to such term
under the regulations promulgated with respect to Code Section 162(m).
 
      2.28    "Participant" means a current or former Employee, Director, or
Consultant who has outstanding an Award granted under the Plan.
 
      2.29    "Performance-Based Exception" means the performance-based
exception from the tax deductibility limitations of Code Section 162(m).
 
      2.30    "Period of Restriction" means the period during which the transfer
of Shares of Restricted Stock is limited in some way (based on the passage of
time, the achievement of performance goals, or upon the occurrence of other
events as determined by the Committee, at its discretion), and the Shares are
subject to a substantial risk of forfeiture, as provided in Article 8 herein.
 
      2.31    "Restricted Stock" or "Restricted Share" means an Award granted to
a Participant pursuant to Article 8 herein.
 
      2.32    "Shares" means the shares of common stock of the Company, par
value $0.001 per share.
 
      2.33    "Stock Appreciation Right" or "SAR" means an Award, granted alone
or in connection with a related Option, designated as an SAR, pursuant to the
terms of Article 7 herein.
 
      2.34    "Tandem SAR" means an SAR that is granted in connection with a
related Option pursuant to Article 7 herein.
 
      2.35    "Termination of Service" means, if an Employee, termination of
employment with all entities in the Group, if a Director, termination of service
on the Board and the board of directors of any Affiliate, as applicable, and if
a Consultant, termination of the consulting relationship with all entities in
the Group, subject to the following:
 
              (a)   The Participant's cessation as an Employee or Consultant
      shall not be deemed to occur by reason of the transfer of the Participant
      between the Company and a subsidiary of the Company or between two of the
      Company's subsidiaries.
 
              (b)   The Participant's cessation as an Employee or Consultant
      shall not be deemed to occur by reason of the Participant's being on a
      leave of absence from the Company or a subsidiary of the Company approved
      by the Company or such subsidiary otherwise receiving the Participant's
      services.
 
 
                                        4
 
 
 
              (c)   If, as a result of a sale or other transaction, the
      subsidiary of the Company for whom Participant is employed (or to whom the
      Participant is providing services as a Consultant) ceases to be a
      subsidiary of the Company (and the entity for whom the Participant is
      employed or to whom the Participant is providing services is or becomes an
      entity that is separate from the Company), and the Participant is not, at
      the end of the 30-day period following the transaction, an Employee of or
      Consultant to the Company or an entity that is then a subsidiary of the
      Company, then the occurrence of such transaction shall be treated as the
      Participant's Termination of Service caused by the Participant being
      discharged by the entity for whom the Participant is employed or to whom
      the Participant is providing services.
 
              (d)   A Consultant whose services to the Company or a subsidiary
      of the Company are governed by a written agreement with the Consultant
      will cease to be a Consultant at the time the term of such written
      agreement ends (without renewal); and a Consultant whose services to the
      Company or a subsidiary of the Company are not governed by a written
      agreement with the Consultant will cease to be a Consultant on the date
      that is 90 days after the date the Consultant last provides services
      requested by Company or a subsidiary of the Company (as determined by the
      Committee).
 
                                    ARTICLE 3
                                 ADMINISTRATION
 
      3.1     The Committee. The Plan shall be administered by the Committee. To
the extent the Company deems it to be necessary or desirable with respect to any
Awards made hereunder, the members of the Committee may be limited to
Nonemployee Directors or Outside Directors, who shall be appointed from time to
time by, and shall serve at the discretion of, the Board.
 
      3.2     Authority of the Committee. Except as limited by law, and subject
to the provisions herein, the Committee shall have full power to select the
persons who shall participate in the Plan; determine the sizes and types of
Awards; determine the terms and conditions of Awards in a manner consistent with
the Plan; construe and interpret the Plan and any agreement or instrument
entered into under the Plan as they apply to Participants; establish, amend, or
waive rules and regulations for the Plan's administration as they apply to
Participants; and (subject to the provisions of Article 15 herein) amend the
terms and conditions of any outstanding Award to the extent such terms and
conditions are within the discretion of the Committee as provided in the Plan.
Further, the Committee shall make all other determinations which may be
necessary or advisable for the administration of the Plan, as the Plan applies
to Participants. As permitted by law, the Committee may delegate its authority
as identified herein.
 
      3.3     Decisions Binding. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan and all related orders and
resolutions of the Board shall be final, conclusive and binding on all persons,
including the Company, its stockholders, Affiliates, Participants, and their
estates and beneficiaries.
 
 
                                        5
 
 
 
                                    ARTICLE 4
                  SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS
 
      4.1     Number of Shares Available for Grants.
 
              (a)   Subject to further adjustment as provided in Section 4.2
      herein, the maximum number of Shares available for grants to Participants
      under the Plan shall be 24,629.28, provided that this limit shall
      automatically be increased in accordance with Section 4.2 to 2,500,000 to
      reflect the stock split declared in conjunction with the Company's initial
      public offering. In the event any Award under the Plan is forfeited or if
      any outstanding Award for any reason expires, is terminated, or cancelled
      without exercise, the Shares subject to such Award shall again be
      available for grant or issuance under the Plan. Except for purposes of
      determining the maximum number of Shares that may be subject to ISOs,
      Shares tendered by a Participant to satisfy applicable tax withholding
      obligations or Exercise Price shall again be available for grant or
      issuance under the Plan.
 
              (b)   Unless the Committee determines that Code Section 162(m)
      will not apply to an Award, or that an Award should not be designed to
      comply with the Performance-Based Exception, the following limitations
      shall apply to grants of Awards under the Plan:
 
              (i)   Options: The maximum aggregate number of Shares with respect
                    to which Options may be granted in any one calendar year to
                    any one Participant shall be 24,629.28, provided that this
                    limit shall automatically be increased in accordance with
                    Section 4.2 to 2,500,000 to reflect the stock split declared
                    in conjunction with the Company's initial public offering.
 
              (ii)  SARS: The maximum aggregate number of Shares with respect to
                    which Stock Appreciation Rights may be granted in any one
                    calendar year to any one Participant shall be 24,629.28,
                    provided that this limit shall automatically be increased in
                    accordance with Section 4.2 to 2,500,000 to reflect the
                    stock split declared in conjunction with the Company's
                    initial public offering.
 
              (iii) Restricted Stock: The maximum aggregate number of Shares of
                    Restricted Stock that may be granted in any one calendar
                    year to any one Participant shall be 24,629.28, provided
                    that this limit shall automatically be increased in
                    accordance with Section 4.2 to 2,500,000 to reflect the
                    stock split declared in conjunction with the Company's
                    initial public offering.
 
              (c)   The maximum aggregate number of Shares with respect to which
      Incentive Stock Options may be granted under the Plan is 24,629.28,
      provided that this limit shall automatically be increased in accordance
      with Section 4.2 to 2,500,000 to reflect the stock split declared in
      conjunction with the Company's initial public offering.
 
      4.2     Adjustments in Authorized Shares. In the event of any change in
corporate capitalization, such as a stock split or a stock dividend, or a
corporate transaction, such as any
 
 
                                        6
 
 
 
merger, consolidation, separation, including a spin-off, or other distribution
of stock or property of the Company, any reorganization (whether or not such
reorganization comes within the definition of such term in Code Section 368) or
any partial or complete liquidation of the Company, an adjustment shall be made
in the number and kind of Shares which may be delivered pursuant to Section 4.1,
in the number and kind of and/or price of Shares subject to outstanding Awards
granted under the Plan, and in the Award limits set forth in subsections
4.1(b)(i) through 4.1(b)(iii) and 4(c), as may be determined to be appropriate
and equitable by the Committee, in its sole discretion, to prevent dilution or
enlargement of rights; provided, however, that the number of Shares subject to
any Award shall always be rounded to the nearest whole number, with one-half
(1/2) of a share rounded up to the next higher number.
 
                                    ARTICLE 5
                          ELIGIBILITY AND PARTICIPATION
 
      5.1     Eligibility. Persons eligible to participate in this Plan include
all Employees, Directors and Consultants of the Group.
 
      5.2     Actual Participation. Subject to the provisions of the Plan, the
Committee may, from time to time, select from all eligible Employees, Directors
and Consultants those to whom Awards shall be granted and shall determine the
nature and amount of each Award.
 
                                    ARTICLE 6
                                     OPTIONS
 
      6.1     Grant of Options. Subject to the terms and provisions of the Plan,
Options may be granted to Participants in such number (subject to Article 4
herein), and upon such terms, and at any time and from time to time as shall be
determined by the Committee; provided, however, that ISOs may be granted only to
Employees.
 
      6.2     Award Agreement. Each Option grant shall be evidenced by an Award
Agreement that shall specify the Exercise Price, the duration of the Option, the
number of Shares to which the Option pertains, and such other provisions as the
Committee shall determine. The Award Agreement also shall specify whether the
Option is intended to be an ISO or an NQSO.
 
      6.3     Exercise Price. The Exercise Price for each grant of an Option
under this Plan shall be established by the Committee or shall be determined by
a method established by the Committee at the time the Option is granted;
provided, however, that the Exercise Price shall not be less than 100% of the
Fair Market Value of a Share on the date of grant (110% in the case of the grant
of an ISO to a 5% Owner); and further provided that the Exercise Price of an
Option shall not be less than the par value of a Share.
 
      6.4     Duration of Options. Each Option granted to a Participant shall
expire at such time as the Committee shall determine at the time of grant;
provided, however, that no Option shall be exercisable later than the tenth
(10th) anniversary date of its grant (the fifth (5th) anniversary date in the
case of an ISO granted to a 5% Owner).
 
      6.5     Exercise of Options. Options granted under this Article 6 shall be
exercisable at such times and be subject to such restrictions and conditions as
set forth in the Award Agreement
 
 
                                        7
 
 
 
and as the Committee shall in each instance approve, which need not be the same
for each grant or for each Participant.
 
      6.6     Payment.
 
              (a)   Options granted under this Article 6 shall be exercised by
      the delivery of a written notice of exercise to the Company, setting forth
      the number of Shares with respect to which the Option is to be exercised,
      accompanied by full payment for the Shares.
 
              (b)   The Exercise Price of any Option shall be payable to the
      Company in full (i) in cash or its equivalent, (ii) if permitted by the
      Committee, by tendering previously acquired Shares having an aggregate
      Fair Market Value at the time of exercise equal to the total Exercise
      Price (provided that the Shares, other than Shares purchased by the
      Participant on the open market, must have been held by the Participant for
      at least six (6) months prior to their tender), or (iii) by a combination
      of (i) and (ii).
 
              (c)   If the Company's shares are publicly traded, an Option may
      be exercised by means of a cashless exercise with the assistance of a
      broker or by any other means permitted by the Committee in accordance with
      such terms and conditions as the Committee, in its sole discretion, shall
      determine to be consistent with the Plan's purpose and applicable law.
 
              (d)   Subject to any governing rules or regulations, as soon as
      practicable after receipt of a written notification of exercise and full
      payment, the Company shall deliver to the Participant, in the
      Participant's name, either individually or jointly, Shares in an
      appropriate amount based upon the number of Shares purchased under the
      Option(s).
 
      6.7     Nontransferability of Options.
 
              (a)   Incentive Stock Options. No ISO granted under the Plan may
      be sold, transferred, pledged, assigned, or otherwise alienated or
      hypothecated, other than by will or by the laws of descent and
      distribution. Further, during the lifetime of a Participant, all ISOs
      granted to such Participant under the Plan shall be exercisable only by
      such Participant.
 
              (b)   Nonqualified Stock Options. Except as otherwise provided in
      a Participant's Award Agreement, no NQSO granted under this Article 6 may
      be sold, transferred, pledged, assigned, or otherwise alienated or
      hypothecated, other than by will or by the laws of descent and
      distribution. Further, except as otherwise provided in a Participant's
      Award Agreement, during the lifetime of a Participant, all NQSOs granted
      to such Participant under the Plan shall be exercisable only by such
      Participant.
 
 
                                        8
 
 
 
                                    ARTICLE 7
                            STOCK APPRECIATION RIGHTS
 
      7.1     Grant of SARS.
 
              (a)   Subject to the terms and conditions of the Plan, SARs may be
      granted to Participants at any time and from time to time as shall be
      determined by the Committee. The Committee may grant Freestanding SARs,
      Tandem SARs, or any combination of these forms of SAR.
 
              (b)   The Committee shall have complete discretion in determining
      the number of SARs granted to each Participant (subject to Article 4
      herein) and, consistent with the provisions of the Plan, in determining
      the terms and conditions pertaining to such SARs.
 
              (c)   The grant price of a Freestanding SAR shall equal the Fair
      Market Value of a Share on the date of grant of the SAR. The grant price
      of Tandem SARs shall equal the Exercise Price of the related Option.
 
      7.2     Exercise of Tandem SARS.
 
              (a)   Tandem SARs may be exercised for all or part of the Shares
      subject to the related Option upon the surrender of the right to exercise
      the equivalent portion of the related Option. A Tandem SAR may be
      exercised only with respect to the Shares for which its related Option is
      then exercisable.
 
              (b)   Notwithstanding any other provision of this Plan to the
      contrary, with respect to a Tandem SAR granted in connection with an ISO:
      (i) the Tandem SAR will expire no later than the expiration of the
      underlying ISO; (ii) the value of the payout with respect to the Tandem
      SAR may be for no more than one hundred percent (100%) of the difference
      between the Exercise Price of the underlying ISO and the Fair Market Value
      of the Shares subject to the underlying ISO at the time the Tandem SAR is
      exercised; and (iii) the Tandem SAR may be exercised only when the Fair
      Market Value of the Shares subject to the ISO exceeds the Exercise Price
      of the ISO.
 
      7.3     Exercise of Freestanding SARS. Freestanding SARs may be exercised
upon whatever terms and conditions the Committee, in its sole discretion,
imposes upon them and sets forth in the Award Agreement.
 
      7.4     SAR Agreement. Each SAR grant shall be evidenced by an Award
Agreement that shall specify the grant price, the term of the SAR, and such
other provisions as the Committee shall determine.
 
      7.5     Term of SARS. The term of an SAR granted under the Plan shall be
determined by the Committee, in its sole discretion; provided, however, that
such term shall not exceed ten (10) years.
 
      7.6     Payment of SAR Amount. Upon exercise of an SAR, a Participant
shall be entitled to receive payment from the Company in an amount determined by
multiplying:
 
 
                                        9
 
 
 
              (a)   the difference between the Fair Market Value of a Share on
      the date of exercise over the grant price; by
 
              (b)   the number of Shares with respect to which the SAR is
      exercised.
 
At the discretion of the Committee, the payment upon SAR exercise may be in
cash, in Shares of equivalent value, or in some combination thereof.
 
      7.7     Nontransferability of SARS. Except as otherwise provided in a
Participant's Award Agreement, no SAR granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. Further, except as
otherwise provided in a Participant's Award Agreement, during the lifetime of a
Participant, all SARs granted to such Participant under the Plan shall be
exercisable only by such Participant.
 
                                    ARTICLE 8
                                RESTRICTED STOCK
 
      8.1     Grant of Restricted Stock. Subject to the terms and provisions of
the Plan, the Committee, at any time and from time to time, may grant Shares of
Restricted Stock to Participants in such amounts as the Committee shall
determine.
 
      8.2     Restricted Stock Agreement. Each Restricted Stock grant shall be
evidenced by an Award Agreement that shall specify the Period(s) of Restriction,
the number of Shares of Restricted Stock granted, and such other provisions as
the Committee shall determine.
 
      8.3     Transferability. Except as provided in this Article 8, the Shares
of Restricted Stock granted herein may not be sold, transferred, pledged,
assigned or otherwise alienated or hypothecated until the end of the applicable
Period of Restriction established by the Committee and specified in the Award
Agreement, or upon earlier satisfaction of any other conditions, as specified by
the Committee in its sole discretion and set forth in the Award Agreement.
During the lifetime of a Participant, all rights with respect to the Restricted
Stock granted to such Participant under the Plan shall be available only to such
Participant.
 
      8.4     Restrictions.
 
              (a)   Subject to the terms hereof, the Committee shall impose such
      conditions and/or restrictions on any Shares of Restricted Stock granted
      pursuant to the Plan as it may deem advisable and as are set forth in the
      Award Agreement including, without limitation, a requirement that
      Participants pay a stipulated purchase price for each Share of Restricted
      Stock, restrictions based upon the achievement of specific performance
      goals (Company-wide, divisional, and/or individual), time-based
      restrictions on vesting following the attainment of the performance goals,
      and/or restrictions under applicable federal or state securities laws.
 
              (b)   The Company shall retain the certificates representing
      Shares of Restricted Stock in the Company's possession until such time as
      all conditions and/or restrictions applicable to such Shares have been
      satisfied.
 
 
                                       10
 
 
 
              (c)   Except as otherwise provided in this Article 8, Shares of
      Restricted Stock covered by each Restricted Stock grant made under the
      Plan shall become freely transferable by the Participant after the last
      day of the applicable Period of Restriction.
 
      8.5     Voting Rights. During the Period of Restriction, subject to any
limitations imposed under the By-laws of the Company, Participants holding
Shares of Restricted Stock granted hereunder may exercise full voting rights
with respect to those Shares.
 
      8.6     Dividends and Other Distributions. During the Period of
Restriction, Participants holding Shares of Restricted Stock granted hereunder
may be credited with regular dividends paid with respect to the underlying
Shares while they are so held. The Committee may apply any restrictions to the
dividends that the Committee deems appropriate and as are set forth in the Award
Agreement. Without limiting the generality of the preceding sentence, if the
grant or vesting of Restricted Shares granted to a Named Executive Officer is
designed to comply with the requirements of the Performance-Based Exception, the
Committee may apply any restrictions it deems appropriate to the payment of
dividends declared with respect to such Restricted Shares, such that the
dividends and/or the Restricted Shares maintain eligibility for the
Performance-Based Exception.
 
                                    ARTICLE 9
                             TERMINATION OF SERVICE
 
      Each Award Agreement shall set forth the extent to which the Participant
shall have the right to exercise Options and SARs, and receive unvested Shares
of Restricted Stock, following Termination of Service with the Group. Such
provisions shall be determined in the sole discretion of the Committee, shall be
included in the Award Agreement entered into with each Participant, need not be
uniform among all Awards issued pursuant to the Plan, and may reflect
distinctions based on the reasons for Termination of Service; provided, however,
that the following shall automatically apply to the extent different provisions
are not set forth in a Participant's Award Agreement:
 
              (a)   If the Termination of Service is by the Company for Cause,
      by a Nonemployee Director or Consultant for any reason, or by an Employee
      without Good Reason, all previously unexercised Options and SARs shall
      expire and all unvested Restricted Shares shall be forfeited upon the date
      of Termination of Service.
 
              (b)   If the Participant is an Employee and the Termination of
      Service is by the Participant for Good Reason, all previously unexercised
      Options and SARs may be exercised for a period of three (3) months after
      the Participant's date of Termination of Service and all unvested
      Restricted Shares shall be forfeited as of the date of Termination of
      Service.
 
              (c)   If the Termination of Service is a result of the
      Participant's death or being Disabled, all previously unexercised Options
      and SARs may be exercised for a period of 12 months after the
      Participant's date of Termination of Service and all unvested Restricted
      Shares shall vest as of the date of the Participant's death or date of
      Termination of Service if Participant is Disabled.
 
 
                                       11
 
 
 
              (d)   If the Company terminates a Nonemployee Director's or
      Consultant's service for any reason other than the Participant's being
      Disabled, or terminates an Employee's employment for any reason other than
      Cause or the Participant's being Disabled, all previously unexercised
      Options and SARs may be exercised for a period of three (3) months after
      the Participant's date of Termination of Service and all unvested
      Restricted Shares which were not granted during the year in which such
      Termination of Service occurs shall vest. Any Restricted Shares granted
      during the year of Termination of Service shall be forfeited on the date
      of Termination of Service.
 
                                   ARTICLE 10
                             RESTRICTIONS ON SHARES
 
      All Shares acquired pursuant Awards granted hereunder, and Participants'
right to exercise Options and SARS and/or receive Shares upon exercise or
vesting of an Award, shall be subject to all applicable restrictions contained
in the Company's By-laws, stockholders agreement or insider trading policy, and
any other restrictions imposed by the Committee, including, without limitation,
restrictions under applicable securities laws, under the requirements of any
stock exchange or market upon which such Shares are then listed and/or traded,
and restrictions under any blue sky or state securities laws applicable to such
Shares.
 
                                   ARTICLE 11
                              PERFORMANCE MEASURES
 
      If Awards under the Plan are subject to Code Section 162(m) and the
Committee determines that such Awards should be designed to comply with the
Performance-Based Exception, the performance measure(s), the attainment of which
determine the degree of payout and/or vesting, to be used for purposes of such
Awards shall be chosen from among earnings per share, economic value added,
market share (actual or targeted growth), net income (before or after taxes),
operating income, return on assets (actual or targeted growth), return on
capital (actual or targeted growth), return on equity (actual or targeted
growth), return on investment (actual or targeted growth), gross or net
underwriting results, revenue (actual or targeted growth), share price, stock
price growth, total stockholder return, or such other performance measures as
are approved by the Committee and the Company's stockholders.
 
      The Committee shall have the discretion to adjust the determinations of
the degree of attainment of the pre-established performance goals; provided,
however, that Awards which are designed to qualify for the Performance-Based
Exception, and which are held by Named Executive Officers, may not be adjusted
upward (the Committee shall retain the discretion to adjust such Awards
downward).
 
      In the event that applicable tax laws change to permit the Committee to
alter the governing performance measures without obtaining stockholder approval
of such changes, the Committee shall have sole discretion to make such changes
without obtaining stockholder approval. In addition, if the Committee determines
that it is advisable to grant Awards that do not qualify for the
Performance-Based Exception, the Committee may make such grants without
satisfying the requirements thereof.
 
 
                                       12
 
 
 
                                   ARTICLE 12
                             BENEFICIARY DESIGNATION
 
      Subject to the terms and conditions of the Plan and applicable Award
Agreement, each Participant may, from time to time, name any beneficiary or
beneficiaries (who may be named contingently or successively) to whom any
benefit under the Plan is to be paid in case of his or her death before he or
she receives any or all of such benefit. Each such designation shall revoke all
prior designations by the same Participant, shall be in a form prescribed by the
Company, and will be effective only when filed by the Participant in writing
during the Participant's lifetime with the party chosen by the Company, from
time to time, to administer the Plan. In the absence of any such designation,
benefits remaining unpaid at the Participant's death shall be paid to the
Participant's estate.
 
                                   ARTICLE 13
                             RIGHTS OF PARTICIPANTS
 
      13.1    Continued Service. Nothing in the Plan shall:
 
              (a)   interfere with or limit in any way the right of the Company
      to terminate any Participant's employment, service as a Director, or
      service as a Consultant at any time, or
 
              (b)   confer upon any Participant any right to continue in the
      service of any member of the Group as an Employee, Director or Consultant.
 
      13.2    Participation. Participation is determined by the Committee. No
person shall have the right to be selected to receive an Award under the Plan,
or, having been so selected, to be selected to receive a future Award.
 
                                   ARTICLE 14
                                CHANGE IN CONTROL
 
      14.1    Treatment of Outstanding Awards. Upon the occurrence of a Change
in Control, unless otherwise specifically prohibited under applicable laws, or
by the rules and regulations of any governing governmental agencies or national
securities exchanges:
 
              (a)   any and all Options and SARs granted hereunder shall become
      immediately exercisable; and
 
              (b)   any restriction periods and restrictions imposed on
      Restricted Shares shall lapse.
 
      14.2    Termination, Amendment and Modifications of Change-in-Control
Provisions. Notwithstanding any other provision of this Plan or any Award
Agreement provision, the provisions of this Article 14 may not be terminated,
amended, or modified on or after the date of a Change in Control to affect
adversely any Award theretofore granted under the Plan without the prior written
consent of the Participant with respect to said Participant's outstanding
Awards; provided, however, that the Board, upon recommendation of the Committee,
may terminate,
 
 
                                       13
 
 
 
amend, or modify this Article 14 at any time and from time to time prior to the
date of a Change in Control.
 
                                   ARTICLE 15
                     AMENDMENT, MODIFICATION AND TERMINATION
 
      15.1    Amendment, Modification and Termination. The Board may at any time
and from time to time, alter, amend, suspend or terminate the Plan or any Award
hereunder in whole or in part; provided, however, that no amendment which
requires stockholder approval in order for the Plan to continue to comply with
any applicable tax or securities or the rules of any securities exchange on
which the securities of the Company are listed, shall be effective unless such
amendment shall be approved by the requisite vote of stockholders of the Company
entitled to vote thereon; provided further that no such shall alteration,
amendment, suspension or termination shall adversely affect any Award hereunder
without the consent of the Participant to whom such Award shall have been made.
Notwithstanding the foregoing (and without the consent of any Participant), the
Board may amend the Plan as it determines appropriate to conform to the
requirements of Code Section 409A and applicable guidance of general
applicability issued thereunder.
 
      15.2    Adjustment of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events. The Committee may make adjustments in the terms and
conditions of, and the criteria included in, Awards in recognition of unusual or
nonrecurring events (including, without limitation, the events described in
Section 4.2 hereof) affecting the Company or the financial statements of the
Company or of changes in applicable laws, regulations, or accounting principles,
as the Committee determines appropriate in its discretion whenever the Committee
determines that such adjustments are appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan; provided that no such adjustment shall be authorized to the
extent that such authority would be inconsistent with the Plan's meeting the
requirements, if applicable, of Code Section 162(m), as amended from time to
time or cause the Plan to fail to conform to Code Section 409A.
 
      15.3    Compliance with Code Section 162(m). At all times when Code
Section 162(m) is applicable, all Awards granted under this Plan to Named
Executive Officers, or to Participants who will likely become Named Executive
Officers at the time of vesting or payment, shall be awarded and administered to
comply with the requirements of Code Section 162(m), unless the Committee
determines that such compliance is not desired. In addition, if changes are made
to Code Section 162(m) or the regulations promulgated thereunder to permit
greater flexibility with respect to any Award or Awards available under the
Plan, the Committee may, subject to this Article 15, make any adjustments it
deems appropriate.
 
                                   ARTICLE 16
                                   WITHHOLDING
 
      16.1    Tax Withholding. The Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy any taxes required by federal, state, or local law or
regulation to be withheld with respect to any taxable event arising as a result
of this Plan.
 
 
                                       14
 
 
 
      16.2    Share Withholding. Participants may elect, subject to the approval
of the Committee, to satisfy all or part of such withholding requirement by
having the Company withhold Shares having a Fair Market Value equal to the
minimum statutory total tax which could be imposed on the transaction. All such
elections shall be irrevocable, made in writing, signed by the Participant, and
shall be subject to any restrictions or limitations that the Committee, in its
sole discretion, deems appropriate.
 
                                   ARTICLE 17
                                 INDEMNIFICATION
 
      Each person who is or shall have been a member of the Committee, or of the
Board, shall be indemnified and held harmless by the Company to the fullest
extent permitted by applicable law against and from any loss, cost, liability,
or expense that may be imposed upon or reasonably incurred by him or her in
connection with or resulting from any claim, action, suit, or proceeding to
which he or she may be a party or in which he or she may be involved by reason
of any action taken or failure to act under the Plan and against and from any
and all amounts paid by him or her in settlement thereof, with the Company's
approval, or paid by him or her in satisfaction of any judgment in any such
action, suit, or proceeding against him or her, provided he or she shall give
the Company an opportunity, at its own expense, to handle and defend the same
before he or she undertakes to handle and defend it on his or her own behalf.
The foregoing right of indemnification is subject to the person having been
successful in the legal proceedings or having acted in good faith and what is
reasonably believed to be a lawful manner in the Company's best interests. The
foregoing right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the Company's
Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or any
power that the Company may have to indemnify them or hold them harmless.
 
                                   ARTICLE 18
                                   SUCCESSORS
 
      All obligations of the Company under the Plan with respect to Awards
granted hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.
 
                                   ARTICLE 19
                               LEGAL CONSTRUCTION
 
      19.1    Gender and Number. Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine; the
plural shall include the singular and the singular shall include the plural.
 
      19.2    Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
 
      19.3    Requirements of Law. The granting of Awards and the issuance of
Shares under the Plan shall be subject to, and may be made contingent upon
satisfaction of, all applicable
 
 
                                       15
 
 
 
laws, rules, and regulations, and to such approvals by any governmental agencies
or national securities exchanges as may be required.
 
      19.4    Governing Law. To the extent not preempted by federal law, the
Plan, and all agreements hereunder, shall be construed in accordance with and
governed by the laws of the state of New York.
 
 
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