EXABYTE CORPORATION
INCENTIVE STOCK PLAN
AS AMENDED AND RESTATED
ON SEPTEMBER 11, 2002.

        1.        Purpose of Plan.

This Incentive Stock Plan is intended to encourage ownership of Shares of
Exabyte Corporation (the "Corporation") (i) by key Employees and Consultants,
thereby providing additional incentive for such Employees and Consultants to
promote the success of the business, and (ii) by each director of the
Corporation who is not an Employee of the Corporation or an Affiliate of the
Corporation, thereby securing the services of such qualified directors and
providing them with incentives to exert maximum efforts for the success of the
Corporation. Options granted hereunder to Employees may be either Incentive
Stock Options or Nonstatutory Stock Options, at the discretion of the Board and
as reflected in the terms of the written Stock Option Agreement. Options granted
hereunder to Consultants and Directors who are not Employees shall be
Nonstatutory Stock Options. The Board also has the discretion to grant Stock
Purchase Rights to Employees, Directors and Consultants.

        2.        Definitions.

As used herein, the following definitions shall apply:

                (a)        "Affiliate"

shall mean any Parent or Subsidiary, whether now or hereafter existing.

                (b)        "Board"

shall mean the Committee, if one has been appointed, or the Board of the
Corporation, if no Committee is appointed.

                (c)        "Code"

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

                (d)        "Corporation"

shall mean Exabyte Corporation, a Delaware corporation.

                (e)        "Committee"

shall mean the Committee appointed by the Board in accordance with Section 4 of
the Plan, if one is appointed.

                (f)        "Consultant"

shall mean any person, performing services for the benefit of the Corporation
(or of any Affiliate of the Corporation) as an independent consultant or
advisor; provided, however, that directors who receive only directors' fees are
not Consultants.

                (g)        

"Continuous Status as an Employee, Director or Consultant" shall mean the
absence of any interruption or termination of service as an Employee, Director
or Consultant, as applicable. Continuous Status as an Employee, Director or
Consultant shall not be considered interrupted in the case of sick leave,
military leave, or any other leave of absence approved by the Board.

                (h)        "Covered Employee"

shall mean the Chief Executive Officer and the four other highest compensated
officers of the Corporation for whom total compensation is required to be
reported to Stockholders under the Exchange Act, as determined for purposes of
Section 162(m) of the Code.

                (i)        "Director"

shall mean a member of the Board of Directors.

                (j)        "Employee"

shall mean any person employed by the Corporation or by any Affiliate of the
Corporation. The payment of a director's fee by the Corporation shall not be
sufficient to constitute "employment" by the Corporation.

                (k)        "Exchange Act"

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

                (l)        "Incentive Stock Option"

shall mean an Option intended to qualify as an Incentive Stock Option within the
meaning of Section 422 of the Code.

                (m)        "Non-Insider Director"

shall mean a director of the Corporation who is not an Employee provided,
however, such director may be a Consultant.

                (n)        "Non-Employee Director"

shall mean a director of the Corporation who either is not a current employee or
officer of the company or its parent or subsidiary, does not receive
compensation (directly or indirectly) from the Corporation or its parent or
subsidiary for services rendered as a consultant or in any capacity other than
as a director (except for an amount as to which disclosure would not be required
under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act
of 1933 ("Regulation S-K"), does not possess an interest in any other
transaction as to which disclosure would be required under Item 404(a) of
Regulation S-K, and is not engaged in a business relationship as to which
disclosure would be required under Item 404(b) of Regulation S-K; or is
otherwise considered a "non-employee director" for purposes of Rule 16b-3.

                (o)        "Nonstatutory Stock Option"

shall mean an Option not intended to qualify as an Incentive Stock Option.

                (p)        "Option"

shall mean a Stock Option granted pursuant to the Plan.

                (q)        "Optioned Stock"

shall mean the Stock subject to an Option.

                (r)        "Optionee"

shall mean an Employee, Consultant or Non-Insider Director, as applicable, who
receives an Option.

                (s)        "Outside Director"

means a director who either (i) is not a current Employee of the Corporation or
an "affiliated corporation" (as defined in the Treasury regulations promulgated
under Section 162(m) of the Code), is not a former Employee of the Corporation
or of an affiliated corporation receiving compensation for prior services (other
than benefits under a tax qualified pension plan), was not an officer of the
Corporation or of an affiliated corporation at any time, and is not currently
receiving direct or indirect remuneration for services in any capacity other
than as a director, or (ii) is otherwise considered an "outside director" for
purposes of Section 162(m) of the Code.

                (t)        "Parent"

shall mean a "parent corporation," whether now or hereafter existing, as defined
in Section 424(e) of the Code.

                (u)        "Plan"

shall mean this Incentive Stock Plan.

                (v)        "Purchaser"

shall mean an Employee, Director or Consultant who exercises a Stock Purchase
Right.

                (w)        "Share"

shall mean a share of the Stock, as adjusted in accordance with Section 14 of
the Plan.

                (x)        "Stock"        

shall mean the Common Stock of the Corporation.

                (y)        "Stock Option Agreement"

shall mean the written agreement setting forth the grant of an Option and terms
and conditions relating thereto (which need not be the same for each Option), in
such form as the Board in its discretion may approve and for Non-Employee
Directors.

                (z)        "Stock Purchase Agreement"

shall mean a written agreement (which need not be the same for each Stock
Purchase Right) setting forth the terms and conditions relating to the purchase
of Stock under a Stock Purchase Right, in the form attached hereto or such other
form as the Board in its discretion may approve.

                (aa)        "Stock Purchase Right"

shall mean a right to purchase Stock pursuant to the Plan.

                (ab)        "Subsidiary"

shall mean a "subsidiary corporation," whether now or hereafter existing, as
defined in Section 424(f) of the Code.

        3.        Shares Subject to the Plan. There will be reserved for use
from time to time under the Plan, an aggregate of 9,500,000 shares of Stock of
$0.001 par value of the Corporation. As the Board shall from time to time
determine, the Shares may be in whole or in part, authorized but unissued Shares
or issued Shares which shall have been reacquired by the Corporation. If an
Option or Stock Purchase Right should expire or become unexercisable for any
reason without having been exercised in full, the unpurchased Shares which were
subject thereto shall become available for future grant or sale under the Plan
unless the Plan shall have been terminated.

        4.        Administration of Plan.

                (a)        Committee. The Plan shall be administered by the
Board; provided that the Board may appoint a Committee, which shall consist of
not fewer than two members of the Board. In the discretion of the Board, the
Committee may consist solely of two or more Outside Directors, in accordance
with Code Section 162(m), or solely of two or more Non-Employee Directors, in
accordance with Rule 16b-3. The Board may from time to time appoint members of
the Committee in substitution for or in addition to members previously appointed
and may fill vacancies, however caused, in the Committee. The Committee shall
select one of its members as its chairman and shall hold its meetings at such
times and places as it shall deem advisable. A majority of its members shall
constitute a quorum. All action of the Committee shall be taken by a majority of
its members. Any action may be taken by a written instrument signed by a
majority of the members and action so taken shall be fully as effective as if it
had been taken by a vote held. The Committee may appoint a secretary, shall keep
minutes of its meetings, and shall make such rules and regulations for the
conduct of its business as it shall deem advisable. The Committee's
interpretation and construction of any of the provisions of this Plan, or of any
rules promulgated under this Plan, or of any agreements entered into under this
Plan, shall be final and binding on all Optionees, Purchasers, and any other
holders of any Options or Stock Purchase Rights granted under the Plan. No
member of the Committee shall be liable for any action or determination made in
good faith in connection with this Plan. Notwithstanding anything in this
Section 4 to the contrary, the Board or the Committee may delegate to a
committee of one or more members of the Board the authority to grant Options and
Stock Purchase Rights to eligible persons who (1) are not then subject to
Section 16 of the Exchange Act and/or (2) are either: (i) not then Covered
Employees and are not expected to be Covered Employees at the time of
recognition of income resulting from such Option or Stock Purchase Right; or
(ii) not persons with respect to whom the Corporation wishes to comply with
Section 162(m) of the Code.

                (b)        Powers of the Board. Subject to the provisions of the
Plan, the Board shall have the authority, in its discretion: (i) to grant
Incentive Stock Options, Nonstatutory Stock Options or Stock Purchase Rights;
(ii) to determine, upon review of relevant information in accordance with
Section 6 of the Plan, the fair market value of the Stock; (iii) to determine
the exercise price per share of Options or Stock Purchase Rights to be granted,
which exercise price shall be determined in accordance with Section 6 of the
Plan; (iv) to determine the Employees, Directors and Consultants to whom, and
the time or times at which, Options, or Stock Purchase Rights shall be granted
and the number of Shares to be represented by each Option or Stock Purchase
Right; (v) to interpret the Plan; (vi) to prescribe, amend, and rescind rules
and regulations relating to the Plan; (vii) to determine the terms and
provisions of each Option granted (which need not be the same for each Option
granted) and, with the consent of the holder thereof, modify, terminate or amend
each Option provided, however, that the Board shall not have the power to lower
the Option price except pursuant to the terms of Section 13 of the Plan; (viii)
to accelerate or defer (with the consent of the Optionee) the exercise date of
any Option; (ix) to authorize any person to execute on behalf of the Corporation
any instrument required to effectuate the grant of an Option or Stock Purchase
Right previously granted by the Board; and (x) to make all other determinations
deemed necessary or advisable for the administration of the Plan.

        5.        Eligibility of Employees, Directors and Consultants. With
respect to Options and Stock Purchase Rights granted to Employees, Directors and
Consultants:

                (a)        Generally. Options and Stock Purchase Rights may be
granted to Employees, Directors and Consultants, provided that Incentive Stock
Options may only be granted to Employees. An Employee, Director or Consultant
who has been granted an Option or Stock Purchase Right may, if he is otherwise
eligible, be granted additional Options or Stock Purchase Rights.

        

        (b)        Criteria. In making any determination as to Employees,
Directors and Consultants to whom Options and Stock Purchase Rights shall be
granted, the Committee shall take into account such factors as it shall deem
relevant in accomplishing the purpose of the Plan, including but not limited to
the Employee's, Director's or Consultant's loyalty, performance, and experience.

                (c)        ISO Limitations with Respect to Price and Term. In no
event shall an Incentive Stock Option be granted to an Employee who, at the time
such Option is granted, owns (as defined in Section 422 of the Code) Shares
possessing more than 10% of the total combined voting power of all classes of
Shares of the Corporation or any of its Affiliates, unless the Option price is
at least 110% of the fair market value of the Stock subject to the Option, and
such Option is by its terms not exercisable after the expiration of five years
from date such Option is granted.

                (d)        ISO Limitations with Respect to Shares. Moreover, the
aggregate fair market value (determined as of the time that Option is granted)
of the Shares with respect to which Incentive Stock Options are exercisable for
the first time by any individual Employee during any single calendar year under
this Plan and all the incentive stock plans of the Corporation (and its
Affiliates, if any), shall not exceed $100,000.

                (e)        Subject to the provisions of Section 13 relating to
adjustments upon changes in Stock, no person shall be eligible to be granted
Options or Stock Purchase Rights covering more than Five Hundred Thousand
(500,000) Shares in any calendar year.

        6.        Prices for Options and Stock Purchase Rights. With respect to
Options and Stock Purchase Rights:

                (a)        Generally. The per share exercise price for the
Shares to be issued pursuant to exercise of an Option or a Stock Purchase Right
shall be such price as is determined by the Board. However, unless approved by
the holders of a majority of the shares present and entitled to vote at a duly
convened meeting of the Stockholders, the Board shall not (i) grant any Option
with an exercise price that is less than 100% of the fair market value of the
Shares on the date of grant or (ii) reduce the exercise price of any Option

                (b)        Payment. The consideration to be paid for the Shares
to be issued upon exercise of an Option, or Stock Purchase Right, including the
method of payment, shall be determined by the Board and may consist entirely of
cash, check, or other Shares having a fair market value on the date of surrender
equal to the aggregate exercise price of the Shares as to which said Option or
Stock Purchase Right shall be exercised, or any combination of such methods of
payment, or such other consideration and method of payment for the issuance of
Shares to the extent permitted under applicable law. In addition, the
Corporation may accept a promissory note issued by a person exercising an Option
or a Stock Purchase Right; provided that such person pay in cash at the time of
purchase at least the aggregate par value of the Shares purchased and the
promissory note be for an amount no greater than the full purchase price less
such aggregate par value amount. In making its determination as to the type of
consideration to accept, the Board shall consider if acceptance of such
consideration may be reasonably expected to benefit the Corporation.

        7.        Option Provisions.

                (a)        Generally. Subject to the provisions of the Plan, the
Board shall determine for each Option (which need not be identical) the number
of Shares for which the Option shall be granted, the exercise price of the
Option, and all other terms and conditions of the Option.

                (b)        Term of Option. The term of each Option may be up to
10 years from the date of grant thereof or such shorter term as may be provided
in the Stock Option Agreement. However, in the case of an Incentive Stock Option
granted to an Employee who, at the time the Incentive Stock Option is granted,
owns Stock representing more than 10% of the voting power of all classes of
Stock of the Corporation or any Affiliate of the Corporation, the term of the
Incentive Stock Option shall be five years from the date of grant thereof or
such shorter time as may be provided in the Stock Option Agreement.

                (c)        Exercise of Option.

                        (i)        Any Option granted hereunder shall be
exercisable at such times and under such conditions as determined by the Board,
including performance criteria with respect to the Corporation or the Optionee,
or both, and as such shall be permissible under the terms of the Plan.

                        (ii)        An Option may not be exercised for a
fraction of a Share.

                        (iii)        An Option shall be deemed to be exercised
when written notice of such exercise has been given to the Corporation in
accordance with the terms of the Option by the person entitled to exercise the
Option and full payment for the Shares with respect to which the Option is
exercised has been received by the Corporation. Full payment may, as authorized
by the Board, consist of any consideration and method of payment allowable under
Section 6 of the Plan. Until the issuance (as evidenced by the appropriate entry
on the books of the Corporation or of a duly authorized transfer agent of the
Corporation) of the Stock certificate evidencing such Shares, no right to vote
or receive dividends or any other rights of a Stockholder shall exist with
respect to the Optioned Stock, notwithstanding the exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the Stock certificate is issued, except as provided in
Section 13 of the Plan.

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

                        (v)        Except as otherwise specifically provided
herein or in the Stock Option Agreement, an Option may not be exercised at any
time unless the holder thereof shall have maintained Continuous Status as an
Employee, Director or Consultant of the Corporation or of one or more of its
Affiliates, from the date of the granting of the Option to the date of its
exercise.

                (d)        Termination of Employment. In the event that an
Optionee's Continuous Status as an Employee, Director or Consultant shall be
terminated other than by reason of death or disability, such Option may be
exercised (to the extent that the Optionee shall have been entitled to do so at
the termination of Continuous Status as an Employee, Director or Consultant) at
any time within three months after such termination or such other longer or
shorter period as set forth in the Stock Option Agreement, but in any event no
later than the date of expiration of the Option term. So long as the holder of
an Option shall maintain Continuous Status as an Employee, Director or
Consultant, his Option shall not be affected by any change of duties or
position. To the extent that the holder of an Option was not entitled to
exercise his Option at the time of his termination, or insofar as he does not
exercise such Option to the extent he was entitled within the time specified
herein, the Option shall itself terminate at the time of such termination.

                (e)        Disability of Optionee. Notwithstanding the
provisions of Section 7(d) above, in the event an Optionee does not maintain
Continuous Status as an Employee, Director or Consultant as a result of his
total and permanent disability (as defined in Section 22(e)(3) of the Code), he
may, but only within six months after termination due to such disability (or
such other longer or shorter period as set forth in the Stock Option Agreement),
exercise his Option to the extent he was entitled to exercise it at the date of
such disability. To the extent that he was not entitled to exercise the Option
at the date of disability, or insofar as he does not exercise such Option to the
extent he was entitled within the time specified herein, the Option shall
terminate.

                (f)        Death of Optionee. Unless otherwise set forth in the
Stock Option Agreement, in the event of the death of an Optionee who at the time
of his death is an Employee, Director or Consultant and who shall have been in
Continuous Status as an Employee, Director or Consultant since the date of grant
of the Option, or with respect to an Optionee who was such an Employee, Director
or Consultant within the preceding three months, the Option may be exercised, at
any time within six months following the date of death (or such longer or
shorter period as set forth in the Stock Option Agreement), by the Optionee's
estate or by a person who acquired the right to exercise the Option by bequest
or inheritance, but only to the extent of the right to exercise that has accrued
at the date of such termination or otherwise pursuant to the terms of the Stock
Option Agreement.

                (g)        Other. Notwithstanding any provision in this Plan to
the contrary, no Option shall terminate later than the original expiration date
set forth in any related Stock Option Agreement.

        8.        Stock Purchase Rights.

                (a)        Rights to Purchase. After the Board determines that
it will offer an Employee, Director or Consultant the right to purchase Shares
(other than pursuant to an Option) under the Plan, it shall advise the offeree
in writing of the terms, conditions, and restrictions relating to the offer,
including the number of Shares which such person shall be entitled to purchase,
the proposed Stock Purchase Agreement, and the time within which such person
must accept such offer, which shall in no event exceed nine months from the date
upon which the Board made the determination to grant the Stock Purchase Right.
The offer may be accepted by execution of the Stock Purchase Agreement and its
return to the Corporation (together with payment for the Stock being purchased)
within the time specified.

                (b)        Issuance of Shares. Forthwith after payment therefor,
the Shares purchased shall be duly issued; provided, however, that the Board may
require that the Purchaser make adequate provision for any Federal and State
withholding obligations as a condition to the Purchaser purchasing such Shares.

                (c)        Repurchase Option. Unless the Board determines
otherwise, the Stock Purchase Agreement shall (i) grant the Corporation a
repurchase option exercisable upon the voluntary or involuntary termination of
the Purchaser's Continuous Status as an Employee, Director or Consultant for any
reason; and (ii) set the purchase price for Shares repurchased at the original
price paid by the Purchaser (plus interest, if any, to be paid pursuant to the
Stock Purchase Agreement), which may be paid by cancellation of any indebtedness
of the Purchaser to the Corporation. The repurchase option shall lapse at such
rate as the Board may determine.

                (d)        Other Provisions. The Stock Purchase Agreement shall
contain such other terms, provisions, and conditions not inconsistent with the
Plan as may be determined by the Board.

        9.        Non-Discretionary Grants to Non-Insider Directors.

                (a)        New Non-Insider Directors. Each person who is on or
after January 27, 1993 elected for the first time to be a Non-Insider Director
shall, upon the date of his initial election to be a Non-Insider Director by the
Board or Stockholders of the Corporation, whichever shall first occur, be
granted a Nonstatutory Stock Option to purchase 25,000 Shares of Common Stock of
the Corporation on the terms and conditions set forth herein.

                (b)        Annual Grants. On January 27th of each fiscal year,
commencing with January 27, 1993, each person who is then a Non-Insider Director
and has been a Non-Insider Director for at least three months shall be granted a
Nonstatutory Stock Option to purchase 15,000 Shares of Common Stock of the
Corporation on the terms and conditions set forth herein.

        10.        Prices for Non-Insider Directors.

                (a)        Generally. The exercise price of each Option granted
under Section 9 shall be 100% of the fair market value of the Common Stock
(which shall be the closing sales price) subject to such Option on the date such
Option is granted; provided, however, that if such date of grant is not a
trading day, the exercise price of such Option shall be 100% of the fair market
value of the Common Stock subject to such Option on the trading day immediately
preceding the date such Option is granted.

                (b)        Payment. Each Non-Insider Director may elect to make
payment of the exercise price under one of the following alternatives:

                        (i)         Payment of the exercise price per share in
cash at the time of exercise; or

                        (ii)        Provided that at the time of the exercise
the Corporation's Common Stock is publicly traded and quoted regularly in The
Wall Street Journal, payment by delivery of Shares of Common Stock of the
Corporation already owned by the Non-Insider Director, held for the period
required to avoid a charge to the Corporation's reported earnings, and owned
free and clear of any liens, claims, encumbrances or security interest, which
Common Stock shall be valued at fair market value on the date preceding the date
of exercise; or

                        (iii)        Payment by a combination of methods of
payment specified in subparagraph 10(b)(i) and 10(b)(ii) above.

        11.        Non-Insider Directors' Option Provisions.

                Notwithstanding any provisions in this Plan to the contrary,
each Option issued to Non-Insider Directors under Section 10 shall contain the
following terms and conditions:

                (a)        Term of Option. The term of each Option commences on
the date it is granted and, unless sooner terminated as set forth herein,
expires on the date ("Expiration Date") ten years from the date of grant.

                (b)        Termination of Service. In the event that the
services of a Non-Insider Director to whom a Non-Insider Director Option has
been granted terminate for any reason or no reason, other than by reason of
death or disability, such Option may be exercised (to the extent that the
Non-Insider Director shall have been entitled to do so at the termination of his
service) at any time within three months after such termination. To the extent
that such Non-Insider Director was not entitled to exercise his Option at the
time of his termination, or insofar as he does not exercise such Option to the
extent he was entitled within the time specified herein, the Option shall itself
terminate at the time of such termination. Notwithstanding any provision in this
Section 11(b) to the contrary, the services of a Non-Insider Director shall not
be deemed terminated if such Non-Insider Director subsequently becomes an
Employee, Director or Consultant.

                (c)        Disability of Optionee. Notwithstanding the
provisions of Section 11(b) above, in the event a Non-Insider Director is unable
to perform services as a Non-Insider Director for the benefit of the Corporation
as a result of his total and permanent disability (as defined in Section
22(e)(3) of the Code), he may, but only within six months after termination due
to such disability, exercise his Option to the extent he was entitled to
exercise it at the date of such disability. To the extent that he was not
entitled to exercise the Option at the date of disability, or insofar as he does
not exercise such Option to the extent he was entitled within the time specified
herein, the Option shall terminate.

                (d)        Death of Optionee. In the event of the death of an
Optionee who at the time of his death is a Non-Insider Director of the
Corporation and who shall have continuously served as a Non-Insider Director
since the date of grant of the Option, or with respect to an Optionee who was a
Non-Insider Director within the preceding three months, the Option may be
exercised, at any time within six months following the date of death, by the
Optionee's estate or by a person who acquired the right to exercise the Option
by bequest or inheritance, but only to the extent of the right to exercise that
has accrued at the date of such termination or otherwise pursuant to the terms
of the Stock Option Agreement.

                (e)        No Extension. Notwithstanding any provision in this
Plan to the contrary, no Option granted to a Non-Insider Director under Section
9 shall terminate later than its original Expiration Date.

                (f)        Exercisability. Options granted under Section 9 shall
become exercisable from the date of grant at the rate of 2% per month over a
period of 50 months; provided that the Optionee has, during the entire period
prior to such vesting date, continuously served as a Non-Insider Director or
subsequent to serving as a Non-Insider Director continuously served as an
Employee, Director or Consultant, whereupon such Option shall become fully
exercisable in accordance with its terms with respect to that portion of the
Shares represented by that installment.

        12.        Non-Transferability of Options and Stock Purchase Rights. The
Options and Stock Purchase Rights may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any manner other than by will or by
the laws of descent or distribution and may be exercised, during the lifetime of
the Optionee or Purchaser, only by the Optionee or Purchaser, provided that the
Board may grant a Nonstatutory Stock Option that is transferable to the extent
provided in the Stock Option Agreement.

        13.        Adjustments Upon Changes in Capitalization or Merger.

                (a)        Proportional Adjustments. Subject to any required
action by the Stockholders of the Corporation, the number of Shares covered by
each outstanding Option and Stock Purchase Right, the number of Shares which
have been authorized for issuance under the Plan but as to which no Options or
Stock Purchase Rights have yet been granted or which have been returned to the
Plan upon cancellation or expiration of an Option or Stock Purchase Right, and
the maximum number of Shares subject to award to any person during any calendar
year period pursuant to Section 5(e), as well as the price per Share covered by
each such outstanding Option or Stock Purchase Right, shall be proportionately
adjusted for any increase or decrease in the number of issued Shares resulting
from a stock split, the payment of a stock dividend with respect to the stock,
or any other increase or decrease in the number of issued Shares effected
without receipt of consideration by the Corporation; provided, however, that
conversion of any convertible securities of the Corporation shall not be deemed
to have been "effected without receipt of consideration." Such adjustment shall
be made by the Board, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no issuance by the
Corporation of shares of stock of any class, shall affect, and no adjustment by
reason thereof shall be made with respect to, the number or price of Shares
subject to an Option or Stock Purchase Right.

                (b)        Reorganization. With respect to Options granted other
than to Non-Insider Directors pursuant to Section 9, in the event of the
proposed dissolution or liquidation of the Corporation, or in the event of a
proposed sale of all or substantially all of the assets of the Corporation, or
the merger of the Corporation with or into another corporation, at the sole
discretion of the Board and to the extent permitted by applicable law: (i) any
surviving corporation shall assume any Options outstanding under the Plan or
shall substitute similar Options for those outstanding under the plan; (ii) such
Options shall continue in full force and effect; or (iii) each Option held by an
Optionee then performing services as an Employee, Director or Consultant will
become fully exercisable with respect to all of the Shares subject to the Option
prior to the consummation of such proposed action at such time as the Board in
its discretion may determine and the Option terminated if not exercised prior to
such event. The Board may also in its discretion require that all of the Shares
purchased pursuant to the foregoing clause (iii) which would not otherwise be
purchasable at such time except by operation of such clause (iii) shall be
subject to a repurchase right of the Corporation (or its successor) which
repurchase right shall expire at the same (or earlier) times and to the same (or
greater) extent as such Shares would have become purchasable under the Option
had the Option not become fully exercisable pursuant to clause (iii). For this
purpose, the Board may require that the Optionee and the Corporation (or its
successor) execute an agreement (in such form as determined by the Board) with
respect to such Shares to reflect the Corporation's (or its successor's)
repurchase right. If such Option is to be assumed or substituted, then such
Option shall be appropriately adjusted to apply to the kind, class and number of
securities or other property which would have been issuable to the Optionee in
the consummation of such transaction had the Option been exercised immediately
prior to such transaction and appropriate adjustments shall also be made to the
price payable per share, provided that the aggregate Option price payable
thereunder shall remain the same. With respect to Options granted to Non-Insider
Directors pursuant to Section 9, in the event of the proposed dissolution or
liquidation of the Corporation, or in the event of a proposed sale of all or
substantially all of the assets of the Corporation, or the merger of the
Corporation with or into another corporation, to the extent permitted by
applicable law, each Option held by an Optionee then performing services as a
Non-Insider Director will become fully exercisable with respect to all of the
Shares subject to the Option immediately prior to the consummation of such
proposed action and the Option terminated if not exercised prior to such event.

        14.        Effectiveness of Plan. The Plan became effective on January
22, 1987.

        15.        Time of Granting Options. Unless otherwise specifically
determined by the Board, the granting of an Option shall be deemed to occur at
such time as final corporate action necessary to authorize the grant shall have
occurred.

        16.        No Employee Contract. The Plan shall not confer upon any
holder of an Option or holder of a Stock Purchase Right any right with respect
to continuation of employment by or the rendition of consulting or director
services to the Corporation or any Affiliate of the Corporation, nor shall it
interfere in any way with his right or the Corporation's or its Affiliates' (and
in the case of directors, the Stockholders') right to terminate his employment
or services as a Consultant or director at any time.

        17.        Withholding. To the extent provided by the terms of a Stock
Option Agreement or Stock Purchase Agreement, any Optionee or Purchaser may
satisfy any federal, state or local tax withholding obligation relating to the
purchase of Stock by any of the following means or by a combination of such
means: (1) tendering a cash payment; (2) authorizing the Corporation to withhold
from the Shares otherwise issuable to the purchaser a number of Shares having a
fair market value less than or equal to the amount of the withholding tax
obligation; or (3) delivering to the Corporation owned and unencumbered Shares
having a fair market value less than or equal to the amount of withholding tax
obligation.

        18.        Termination and Amendment of Plan.

                (a)        Termination. The Plan shall terminate on January 16,
2007, and no Option or Stock Purchase Right shall be granted under the Plan
after that date.

                (b)        Amendment. However, except as provided in Section
13(a) relating to adjustments upon changes in Stock, no amendment shall be
effective unless approved by the Stockholders of the Corporation with respect to
the stockholder approval required by Section 6(a) or otherwise to the extent
stockholder approval is necessary to satisfy the requirements of Section 422(b)
of the Code, to comply with the requirements of Rule 16b-3 promulgated under the
Exchange Act, or to satisfy any Nasdaq or securities exchange listing
requirements. The Board may, in its sole discretion, submit any other amendment
to the Plan for Stockholder approval, including, but not limited to amendments
to the Plan intended to satisfy the requirements of Section 162(m) of the Code
and the regulations promulgated thereunder regarding the exclusion of
performance-based compensation from the limit on corporate deductibility of
compensation paid to certain executive officers.

                (c)        It is expressly contemplated that the Board may amend
the Plan in any respect the Board deems necessary or advisable to provide
Optionees with the maximum benefits provided or to be provided under the
provisions of the Code and the regulations promulgated thereunder relating to
employee Incentive Stock Options and/or to bring the Plan and/or Incentive Stock
Options granted under it into compliance therewith.

                (d)        Rights and obligations under any Option granted
before amendment or termination of the Plan shall not be altered or impaired by
any amendment of the Plan unless: (i) the Corporation requests the consent of
the person to whom the Option was granted; and (ii) such person consents in
writing.

        19.        Issuance of Shares.

                (a)        The Corporation shall not be required to issue Shares
pursuant to the exercise of an Option or Stock Purchase Right unless the
exercise of such Option or Stock Purchase Right and the issuance and delivery of
such Shares pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations promulgated thereunder, and the
requirements of any Stock exchange upon which the Shares may then be listed, and
shall be further subject to the approval of counsel for the Corporation with
respect to such compliance; provided, however, that this provision shall not
require the Corporation to register under the Securities Act of 1933, as
amended, either the Plan, any Option or Stock Purchase Right, or any Stock
issued or issuable pursuant to such Option or Right.

                (b)        As a condition to the exercise of an Option or Stock
Purchase Right, the Corporation may impose various conditions, including a
requirement that the person exercising such Option represent and warrant, at the
time of any such exercise, that the Shares are being purchased only for
investment and without any present intention to sell or distribute such Shares.

        20.        Reservation of Shares. The Corporation, during the term of
this Plan, will at all times reserve and keep available such number of Shares as
shall be sufficient to satisfy the requirements of the Plan. The inability of
the Corporation to obtain authority from any regulatory body having
jurisdiction, which authority is deemed by the Corporation's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall relieve
the Corporation of any liability in respect of the failure to issue or sell such
Shares as to which such requisite authority shall not have been obtained.