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                        PATH 1 NETWORK TECHNOLOGIES INC.

                      1999 STOCK OPTION/STOCK ISSUANCE PLAN


                                   ARTICLE 1

                               GENERAL PROVISIONS

         I.       PURPOSE OF THE PLAN

                  This 1999 Stock Option/Stock Issuance Plan is intended to
promote the interests of Path 1 Network Technologies Inc., a Delaware
corporation, by providing eligible persons in the Corporation's employ or
service with the opportunity to acquire a proprietary interest, or otherwise
increase their proprietary interest, in the Corporation as an incentive for them
to continue in such employ or service.

                  Capitalized terms herein shall have the meanings assigned to
such terms in the attached Appendix.

         II.      STRUCTURE OF THE PLAN

                  A. The Plan shall be divided into two separate equity
programs:

                                    (i) the Option Grant Program under which
eligible persons may, at the discretion of the Plan Administrator, be granted
options to purchase shares of Common Stock, and

                                    (ii) the Stock Issuance Program under which
eligible persons may, at the discretion of the Plan Administrator, be issued
shares of Common Stock directly, either through the immediate purchase of such
shares or as a bonus for services rendered the Corporation (or any Parent or
Subsidiary).

                  B. The provisions of Articles One and Four shall apply to both
equity programs under the Plan and shall accordingly govern the interests of all
persons under the Plan.

         III.     ADMINISTRATION OF THE PLAN

                  A. The Plan shall be administered by the Board. However, any
or all administrative functions otherwise exercisable by the Board may be
delegated to the Committee. Members of the Committee shall serve for such period
of time as the Board may determine and shall be subject to removal by the Board
at any time. The Board may also at any time terminate the functions of the
Committee and reassume all powers and authority previously delegated to the
Committee.

                  B. The Plan Administrator shall have full power and authority
(subject to the provisions of the Plan) to establish such rules and regulations
as it may deem appropriate for

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proper administration of the Plan and to make such determinations under, and
issue such interpretations of, the Plan and any outstanding options or stock
issuances thereunder as it may deem necessary or advisable. Decisions of the
Plan Administrator shall be final and binding on all parties who have an
interest in the Plan or any option or stock issuance thereunder.

         IV.      ELIGIBILITY

                  A. The persons eligible to participate in the Plan are as
follows:

                                    (i)  Employees,

                                    (ii) non-employee members of the Board or
the non-employee members of the board of directors of any Parent or Subsidiary,
and

                                    (iii) consultants and other independent
advisors who provide services to the Corporation (or any Parent or Subsidiary).

                  B. The Plan Administrator shall have full authority to
determine, (i) with respect to the grants made under the Option Grant Program,
which eligible persons are to receive the option grants, the time or times when
those grants are to be made, the number of shares to be covered by each such
grant, the status of the granted option as either an Incentive Option or a
Non-Statutory Option, the time or times when each option is to become
exercisable, the vesting schedule (if any) applicable to the option shares and
the maximum term for which the option is to remain outstanding, and (ii) with
respect to stock issuances made under the Stock Issuance Program, which eligible
persons are to receive such stock issuances, the time or times when those
issuances are to be made, the number of shares to be issued to each Participant,
the vesting schedule (if any) applicable to the issued shares and the
consideration to be paid by the Participant for such shares.

                  C. The Plan Administrator shall have the absolute discretion
either to grant options in accordance with the Option Grant Program or to effect
stock issuances in accordance with the Stock Issuance Program.

         V.       STOCK SUBJECT TO THE PLAN

                  A. The stock issuable under the Plan shall be shares of
authorized but unissued or reacquired Common Stock. The maximum number of shares
of Common Stock which may be issued over the term of the Plan shall not exceed
1,500,000 shares.

                  B. Shares of Common Stock subject to outstanding options shall
be available for subsequent issuance under the Plan to the extent (i) the
options expire or terminate for any reason prior to exercise in full or (ii) the
options are cancelled in accordance with the cancellation-regrant provisions of
Article Two. Unvested shares issued under the Plan and subsequently repurchased
by the Corporation, at the option exercise or direct issue price paid per share,
pursuant to the Corporation's repurchase rights under the Plan shall be added
back to the number of shares of Common Stock reserved for issuance under the
Plan and shall accordingly be

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available for reissuance through one or more subsequent option grants or direct
stock issuances under the Plan.

                  C. Should any change be made to the Common Stock by reason of
any stock split, stock dividend, recapitalization, combination of shares,
exchange of shares or other change affecting the outstanding Common Stock as a
class without the Corporation's receipt of consideration, appropriate
adjustments shall be made to (i) the maximum number and/or class of securities
issuable under the Plan and (ii) the number and/or class of securities and the
exercise price per share in effect under each outstanding option in order to
prevent the dilution or enlargement of benefits thereunder. The adjustments
determined by the Plan Administrator shall be final, binding and conclusive.


                                   ARTICLE 2

                              OPTION GRANT PROGRAM

         I.       OPTION TERMS

                  Each option shall be evidenced by one or more documents in the
form approved by the Plan Administrator; PROVIDED, however, that each such
document shall comply with the terms specified below. Each document evidencing
an Incentive Option shall, in addition, be subject to the provisions of the Plan
applicable to Incentive Options.

                  A.       EXERCISE PRICE.

                           1. The exercise  price per share shall be fixed by
the Plan Administrator at the time of grant.

                           2. The exercise price shall become immediately due
upon exercise of the option and shall, subject to the provisions of Section I of
Article Four and the documents evidencing the option, be payable in cash or
check made payable to the Corporation. Should the Common Stock be registered
under Section 12 of the 1934 Act at the time the option is exercised, then the
exercise price may also be paid as follows:

                                    (i) in shares of Common Stock held for the
requisite period necessary to avoid a charge to the Corporation's earnings for
financial reporting purposes and valued at Fair Market Value on the Exercise
Date, or

                                    (ii) to the extent the option is exercised
for vested shares, through a special sale and remittance procedure pursuant to
which the Optionee shall concurrently provide irrevocable instructions (A) to a
Corporation-designated brokerage firm to effect the immediate sale of the
purchased shares and remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
exercise price payable for the purchased shares plus all applicable Federal,
state and local income and employment taxes required to be withheld by the
Corporation by reason of such

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exercise and (B) to the Corporation to deliver the certificates for the
purchased shares directly to such brokerage firm in order to complete the sale.

                  Except to the extent such sale and remittance procedure is
utilized, payment of the exercise price for the purchased shares must be made on
the Exercise Date.

                  B. EXERCISE AND TERM OF OPTIONS.

                  Each option shall be exercisable at such time or times,
during such period and for such number of shares as shall be determined by
the Plan Administrator and set forth in the documents evidencing the option
grant. However, no option shall have a term in excess of ten (10) years
measured from the option grant date.

                  C. EFFECT OF TERMINATION OF SERVICE.

                           1. The following provisions shall govern the exercise
of any options held by the Optionee at the time of cessation of Service or
death:

                                    (i) Should the Optionee cease to remain in
Service for any reason other than death, Disability or Misconduct, then the
Optionee shall have a period of three months following the date of such
cessation of Service during which to exercise each outstanding option held by
such Optionee.

                                    (ii) Should Optionee's Service terminate by
reason of Disability, then the Optionee shall have a period of twelve (12)
months following the date of such cessation of Service during which to exercise
each outstanding option held by such Optionee.

                                    (iii) If the Optionee dies while holding an
outstanding option, then the personal representative of his or her estate or the
person or persons to whom the option is transferred pursuant to the Optionee's
will or the laws of inheritance shall have a twelve (12)-month period following
the date of the Optionee's death to exercise such option.

                                    (iv) Under no circumstances, however, shall
any such option be exercisable after the specified expiration of the option
term.

                                    (v) During the applicable post-Service
exercise period, the option may not be exercised in the aggregate for more than
the number of vested shares for which the option is exercisable on the date of
the Optionee's cessation of Service. Upon the expiration of the applicable
exercise period or (if earlier) upon the expiration of the option term, the
option shall terminate and cease to be outstanding for any vested shares for
which the option has not been exercised. However, the option shall, immediately
upon the Optionee's cessation of Service, terminate and cease to be outstanding
with respect to any and all option shares for which the option is not otherwise
at the time exercisable or in which the Optionee is not otherwise at that time
vested.

                                    (vi) Should Optionee's Service be terminated
for Misconduct, then all

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outstanding options held by the Optionee shall terminate immediately and cease
to remain outstanding.

                           2. The Plan Administrator shall have the discretion,
exercisable either at the time an option is granted or at any time while the
option remains outstanding, to:

                                    (i) extend the period of time for which the
option is to remain exercisable following Optionee's cessation of Service or
death from the limited period otherwise in effect for that option to such
greater period of time as the Plan Administrator shall deem appropriate, but in
no event beyond the expiration of the option term, and/or

                                    (ii) permit the option to be exercised,
during the applicable post-Service exercise period, not only with respect to the
number of vested shares of Common Stock for which such option is exercisable at
the time of the Optionee's cessation of Service but also with respect to one or
more additional installments in which the Optionee would have vested under the
option had the Optionee continued in Service.

                  D. STOCKHOLDER RIGHTS.

                  The holder of an option shall have no stockholder rights with
respect to the shares subject to the option until such person shall have
exercised the option, paid the exercise price and become the recordholder of the
purchased shares.

                  E. UNVESTED SHARES.

                  The Plan Administrator shall have the discretion to grant
options which are exercisable for unvested shares of Common Stock. Should the
Optionee cease Service while holding such unvested shares, the Corporation shall
have the right to repurchase, at the exercise price paid per share, any or all
of those unvested shares. The terms upon which such repurchase right shall be
exercisable (including the period and procedure for exercise and the appropriate
vesting schedule for the purchased shares) shall be established by the Plan
Administrator and set forth in the document evidencing such repurchase right.
The Plan Administrator may not impose a vesting schedule upon any option grant
or the shares of Common Stock subject to that option which is more restrictive
than twenty percent (20%) per year vesting, with the initial vesting to occur
not later than one year after the option grant date. However, such limitation
shall not be applicable to any option grants made to individuals who are
officers of the Corporation, non-employee Board members or independent
consultants.

                  F. LIMITED TRANSFERABILITY OF OPTIONS.

                  During the lifetime of the Optionee, Incentive Options shall
be exercisable only by the Optionee and shall not be assignable or transferable
other than by will or by the laws of descent and distribution following the
Optionee's death. Non-Statutory Options may, to the extent permitted by the Plan
Administrator, be assigned in whole or in part during the Optionee's lifetime to
one or more members of the Optionee's immediate family or to a trust established
exclusively for one or more such family members. The terms applicable to the
assigned portion

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shall be the same as those in effect for the option immediately prior to such
assignment and shall be set forth in such documents issued to the assignee as
the Plan Administrator may deem appropriate.

         II.      INCENTIVE OPTIONS

                  The terms specified below shall be applicable to all Incentive
Options. Except as modified by the provisions of this Section II, all the
provisions of Articles One, Two and Four shall be applicable to Incentive
Options. Options which are specifically designated as Non-Statutory Options
shall NOT be subject to the terms of this Section II.

                  A. ELIGIBILITY.

                  Incentive Options may only be granted to Employees.

                  B. EXERCISE PRICE.

                  The exercise price per share shall not be less than one
hundred percent (100%) of the Fair Market Value per share of Common Stock on the
option grant date.

                  C. DOLLAR LIMITATION.

                  The aggregate Fair Market Value of the shares of Common Stock
(determined as of the respective date or dates of grant) for which one or more
options granted to any Employee under the Plan (or any other option plan of the
Corporation or any Parent or Subsidiary) may for the first time become
exercisable as Incentive Options during any one calendar year shall not exceed
the sum of One Hundred Thousand Dollars ($100,000). To the extent the Employee
holds two or more such options which become exercisable for the first time in
the same calendar year, the foregoing limitation on the exercisability of such
options as Incentive Options shall be applied on the basis of the order in which
such options are granted.

                  D. 10% STOCKHOLDER.

                  If any Employee to whom an Incentive Option is granted is a
10% Stockholder, then the option term shall not exceed five years measured from
the option grant date and the exercise price per share shall not be less than
one hundred ten percent (110%) of the Fair Market Value per share of Common
Stock on the option grant date.

         III.     CORPORATE TRANSACTION

                  A. The Plan does not provide for automatic acceleration of
unvested shares in the event of a Corporate Transaction, although the Plan
Administrator has discretion to grant individual options which so provide. In
the event of a Corporate Transaction, all options shall be assumed or equivalent
options shall be substituted by the successor corporation (or other entity) or a
parent or subsidiary of such successor corporation (or other entity). If such
successor does not agree to assume the options or to substitute equivalent
options therefor, unless the Plan Administration shall determine otherwise, such
options will expire upon such event.

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                  B. In the event of the proposed dissolution or liquidation of
the Company, the Plan Administrator shall notify each Optionee at least thirty
(30) days prior to such proposed action. To the extent not previously exercised,
all options will terminate immediately prior to consummation of such proposed
action.

                  C. Each option which is assumed in connection with a Corporate
Transaction shall be appropriately adjusted, immediately after such Corporate
Transaction, to apply to the number and class of securities which would have
been issuable to the Optionee in consummation of such Corporate Transaction, had
the option been exercised immediately prior to such Corporate Transaction.
Appropriate adjustments shall also be made to (i) the number and class of
securities available for issuance under the Plan following the consummation of
such Corporate Transaction and (ii) the exercise price payable per share under
each outstanding option, PROVIDED the aggregate exercise price payable for such
securities shall remain the same.

                  D. The grant of options under the Plan shall in no way affect
the right of the Corporation to adjust, reclassify, reorganize or otherwise
change its capital or business structure or to merge, consolidate, dissolve,
liquidate or sell or transfer all or any part of its business or assets.

         IV.      CANCELLATION AND REGRANT OF OPTIONS

                  The Plan Administrator shall have the authority to effect, at
any time and from time to time, with the consent of the affected option holders,
the cancellation of any or all outstanding options under the Plan and to grant
in substitution therefor new options covering the same or different number of
shares of Common Stock but with an exercise price per share based on the Fair
Market Value per share of Common Stock on the new option grant date.


                                   ARTICLE 3

                             STOCK ISSUANCE PROGRAM

         I.       STOCK ISSUANCE TERMS

                  Shares of Common Stock may be issued under the Stock Issuance
Program through direct and immediate issuances without any intervening option
grants. Each such stock issuance shall be evidenced by a Stock Issuance
Agreement which complies with the terms specified below.

                  A.       PURCHASE PRICE.

                           1.       The  purchase  price per  share  shall be
fixed by the Plan  Administrator  but shall not be less than the par value per
share of Common Stock.

                           2. Subject to the provisions of Section I of Article
Four, shares of Common Stock may be issued under the Stock Issuance Program for
any of the following items of consideration which the Plan Administrator may
deem appropriate in each individual instance:

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                                    (i)  cash or check made payable to the
Corporation, or

                                    (ii) past services rendered to the
Corporation (or any Parent or Subsidiary).

                  B.       VESTING PROVISIONS.

                           1. Shares of Common Stock issued under the Stock
Issuance Program may, in the discretion of the Plan Administrator, be fully and
immediately vested upon issuance or may vest in one or more installments over
the Participant's period of Service or upon attainment of specified performance
objectives. However, the Plan Administrator may not impose a vesting schedule
upon any stock issuance effected under the Stock Issuance Program which is more
restrictive than twenty percent (20%) per year vesting, with initial vesting to
occur not later than one year after the issuance date. Such limitation shall not
apply to any Common Stock issuances made to the officers of the Corporation,
non-employee Board members or independent consultants.

                           2. Any new, substituted or additional securities or
other property (including money paid other than as a regular cash dividend)
which the Participant may have the right to receive with respect to the
Participant's unvested shares of Common Stock by reason of any stock dividend,
stock split, recapitalization, combination of shares, exchange of shares or
other change affecting the outstanding Common Stock as a series or class without
the Corporation's receipt of consideration shall be issued subject to (i) the
same vesting requirements applicable to the Participant's unvested shares of
Common Stock and (ii) such escrow arrangements as the Plan Administrator shall
deem appropriate.

                           3. The Participant shall have full stockholder rights
with respect to any shares of Common Stock issued to the Participant under the
Stock Issuance Program, whether or not the Participant's interest in those
shares is vested. Accordingly, the Participant shall have the right to vote such
shares and to receive any regular cash dividends paid on such shares.

                           4. Should the Participant cease to remain in Service
while holding one or more unvested shares of Common Stock issued under the Stock
Issuance Program or should the performance objectives not be attained with
respect to one or more such unvested shares of Common Stock, then those shares
shall be immediately surrendered to the Corporation for cancellation, and the
Participant shall have no further stockholder rights with respect to those
shares. To the extent the surrendered shares were previously issued to the
Participant for consideration paid in cash or cash equivalent (including the
Participant's purchase-money indebtedness), the Corporation shall repay to the
Participant the cash consideration paid for the surrendered shares and shall
cancel the unpaid principal balance of any outstanding purchase-money note of
the Participant attributable to such surrendered shares.

                           5. The Plan Administrator may in its discretion waive
the surrender and cancellation of one or more unvested shares of Common Stock
(or other assets attributable thereto) which would otherwise occur upon the
non-completion of the vesting schedule applicable to those shares. Such waiver
shall result in the immediate vesting of the Participant's

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interest in the shares of Common Stock as to which the waiver applies. Such
waiver may be effected at any time (including prospective effectuation, in the
Stock Issuance Agreement or in any other written agreement), whether before or
after the Participant's cessation of Service or the attainment or non-attainment
of the applicable performance objectives.

         II.      CORPORATE TRANSACTION

                  The Plan does not provide for automatic acceleration of
unvested shares in the event of a Corporate Transaction, although the Plan
Administrator has discretion to award individual stock issuances which so
provide.

         III.     SHARE ESCROW/LEGENDS

                  Unvested shares may, in the Plan Administrator's discretion,
be held in escrow by the Corporation until the Participant's interest in such
shares vests or may be issued directly to the Participant with restrictive
legends on the certificates evidencing those unvested shares.


                                   ARTICLE 4

                                  MISCELLANEOUS

         I.       FINANCING

                  The Plan Administrator may permit any Optionee or Participant
to pay the option exercise price under the Option Grant Program or the purchase
price for shares issued under the Stock Issuance Program by delivering a
full-recourse, interest bearing promissory note payable in one or more
installments and secured by the purchased shares. The terms of any such
promissory note (including the interest rate and the terms of repayment) shall
be established by the Plan Administrator in its sole discretion. In no event may
the maximum credit available to the Optionee or Participant exceed the sum of
(i) the aggregate option exercise price or purchase price payable for the
purchased shares (less the par value of those shares) plus (ii) any Federal,
state and local income and employment tax liability incurred by the Optionee or
the Participant in connection with the option exercise or share purchase.

         II.      EFFECTIVE DATE AND TERM OF PLAN

                  A. The Plan shall become effective when adopted by the Board,
but no option granted under the Plan may be exercised, and no shares shall be
issued under the Plan, until the Plan is approved by the Corporation's
stockholders. If such stockholder approval is not obtained within twelve (12)
months after the date of the Board's adoption of the Plan, then all options
previously granted under the Plan shall terminate and cease to be outstanding,
and no further options shall be granted and no shares shall be issued under the
Plan. Subject to such limitation, the Plan Administrator may grant options and
issue shares under the Plan at any time after the effective date of the Plan and
before the date fixed herein for termination of the Plan.

                  B. The Plan shall terminate upon the EARLIEST of (i) the
expiration of the ten (10)-year

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period measured from the date the Plan is adopted by the Board, (ii) the date on
which all shares available for issuance under the Plan shall have been issued as
vested shares or (iii) the termination of all outstanding options in connection
with a Corporate Transaction. All options and unvested stock issuances
outstanding at the time of a clause (i) termination event shall continue to have
full force and effect in accordance with the provisions of the documents
evidencing those options or issuances.

         III.     AMENDMENT OF THE PLAN

                  A. The Board shall have complete and exclusive power and
authority to amend or modify the Plan in any or all respects. However, no such
amendment or modification shall adversely affect the rights and obligations with
respect to options or unvested stock issuances at the time outstanding under the
Plan unless the Optionee or the Participant consents to such amendment or
modification. In addition, certain amendments may require stockholder approval
pursuant to applicable laws and regulations.

                  B. Options may be granted under the Option Grant Program and
shares may be issued under the Stock Issuance Program which are in each instance
in excess of the number of shares of Common Stock then available for issuance
under the Plan, provided any excess shares actually issued under those programs
shall be held in escrow until there is obtained stockholder approval of an
amendment sufficiently increasing the number of shares of Common Stock available
for issuance under the Plan. If such stockholder approval is not obtained within
twelve (12) months after the date the first such excess grants or issuances are
made, then (i) any unexercised options granted on the basis of such excess
shares shall terminate and cease to be outstanding and (ii) the Corporation
shall promptly refund to the Optionees and the Participants the exercise or
purchase price paid for any excess shares issued under the Plan and held in
escrow, together with interest (at the applicable Short Term Federal Rate) for
the period the shares were held in escrow, and such shares shall thereupon be
automatically cancelled and cease to be outstanding.

         IV.      USE OF PROCEEDS

                  Any cash proceeds received by the Corporation from the sale of
shares of Common Stock under the Plan may be used for any appropriate corporate
purposes.

         V.       WITHHOLDING

                  The Corporation's obligation to deliver shares of Common Stock
upon the exercise of any options or upon the issuance or vesting of any shares
issued under the Plan shall be subject to the satisfaction of all applicable
Federal, state and local income and employment tax withholding requirements.

         VI.      REGULATORY APPROVALS

                  The implementation of the Plan, the granting of any options
under the Plan and the issuance of any shares of Common Stock (i) upon the
exercise of any option or (ii) under the

<PAGE>

Stock Issuance Program shall be subject to the Corporation's procurement of all
approvals and permits required by regulatory authorities having jurisdiction
over the Plan, the options granted under it and the shares of Common Stock
issued pursuant to it.

         VII.     NO EMPLOYMENT OR SERVICE RIGHTS

                  Nothing in the Plan shall confer upon the Optionee or the
Participant any right to continue in Service for any period of specific duration
or interfere with or otherwise restrict in any way the rights of the Corporation
(or any Parent or Subsidiary employing or retaining such person) or of the
Optionee or the Participant, which rights are hereby expressly reserved by each,
to terminate such person's Service at any time for any reason, with or without
cause, but subject to any applicable bilateral written employment agreement.

         VIII.    FINANCIAL REPORTS

                  The Corporation shall deliver a balance sheet and an income
statement at least annually to each individual holding an outstanding option
under the Plan, unless such individual is a key Employee whose duties in
connection with the Corporation (or any Parent or Subsidiary) assure such
individual access to equivalent information.

<PAGE>

                                    APPENDIX


         The following definitions shall be in effect under the Plan:

         A. BOARD shall mean the Corporation's Board of Directors.

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

         C. COMMITTEE shall mean a committee of two or more Board members
appointed by the Board to exercise one or more administrative functions under
the Plan.

         D. COMMON STOCK shall mean the Corporation's Common Stock; provided,
that when and if (before April 10, 2000) the Corporation has Class B Common
Stock authorized, the meaning of "Common Stock" shall be changed to mean the
Corporation's Class B Common Stock in all contexts referring to shares issuable
under the Stock Issuance Program or upon the exercise of options under the
Option Grant Program.

         E. CORPORATE TRANSACTION shall mean either of the following
stockholder-approved transactions to which the Corporation is a party:

                                    (i) a merger or consolidation in which
         securities possessing more than fifty percent (50%) of the total
         combined voting power of the Corporation's outstanding securities are
         transferred to a person or persons different from the persons holding
         those securities immediately prior to such transaction, or

                                    (ii) the sale, transfer or other disposition
         of all or substantially all of the Corporation's assets in complete
         liquidation or dissolution of the Corporation.

         F. CORPORATION shall mean Path 1 Network Technologies Inc., a Delaware
corporation, and any successor corporation to all or substantially all of the
assets or voting stock of Path 1 Network Technologies Inc. which shall by
appropriate action adopt the Plan.

         G. DISABILITY shall mean the inability of the Optionee or the
Participant to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment and shall be determined by
the Plan Administrator on the basis of such medical evidence as the Plan
Administrator deems warranted under the circumstances.

         H. EMPLOYEE shall mean an individual who is in the employ of the
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.

         I. EXERCISE DATE shall mean the date on which the Corporation shall
have received written notice of the option exercise.

         J. FAIR MARKET VALUE per share of Common Stock on any relevant date
shall be determined in accordance with the following provisions:


                                      A-1
<PAGE>

                                    (i) If the Common Stock is at the time
         traded on the Nasdaq National Market, then the Fair Market Value shall
         be the closing selling price per share of Common Stock on the date in
         question, as such price is reported by the National Association of
         Securities Dealers on the Nasdaq National Market. If there is no
         closing selling price for the Common Stock on the date in question,
         then the Fair Market Value shall be the closing selling price on the
         last preceding date for which such quotation exists.

                                    (ii) If the Common Stock is at the time
         listed on any Stock Exchange, then the Fair Market Value shall be the
         closing selling price per share of Common Stock on the date in question
         on the Stock Exchange determined by the Plan Administrator to be the
         primary market for the Common Stock, as such price is officially quoted
         in the composite tape of transactions on such exchange. If there is no
         closing selling price for the Common Stock on the date in question,
         then the Fair Market Value shall be the closing selling price on the
         last preceding date for which such quotation exists.

                                    (iii) If the Common Stock is at the time
         neither listed on any Stock Exchange nor traded on the Nasdaq National
         Market (including all cases in which the security for which a fair
         market value is required is Class B Common Stock), then the Fair Market
         Value shall be determined by the Plan Administrator after taking into
         account such factors as the Plan Administrator shall deem appropriate.

         K. INCENTIVE OPTION shall mean an option which satisfies the
requirements of Code Section 422.

         L. MISCONDUCT shall mean the commission of any act of fraud,
embezzlement or dishonesty by the Optionee or Participant, any unauthorized use
or disclosure by such person of confidential information or trade secrets of the
Corporation (or any Parent or Subsidiary), or any other intentional misconduct
by such person adversely affecting the business or affairs of the Corporation
(or any Parent or Subsidiary) in a material manner. The foregoing definition
shall not be deemed to be inclusive of all the acts or omissions which the
Corporation (or any Parent or Subsidiary) may consider as grounds for the
dismissal or discharge of any Optionee, Participant or other person in the
Service of the Corporation (or any Parent or Subsidiary).

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

         N. NON-STATUTORY OPTION shall mean an option not intended to satisfy
the requirements of Code Section 422.

         O. OPTION GRANT PROGRAM shall mean the option grant program in effect
under the Plan.

         P. OPTIONEE shall mean any person to whom an option is granted under
the Plan.

         Q. PARENT shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent


                                      A-2
<PAGE>

(50%) or more of the total combined voting power of all classes of stock in one
of the other corporations in such chain.

         R. PARTICIPANT shall mean any person who is issued shares of Common
Stock under the Stock Issuance Program.

         S. PLAN shall mean the Corporation's 1999 Stock Option/Stock Issuance
Plan, as set forth in this document.

         T. PLAN ADMINISTRATOR shall mean either the Board or the Committee
acting in its capacity as administrator of the Plan.

         U. SERVICE shall mean the provision of services to the Corporation (or
any Parent or Subsidiary) by a person in the capacity of an Employee, a
non-employee member of the board of directors or a consultant or independent
advisor, except to the extent otherwise specifically provided in the documents
evidencing the option grant.

         V. STOCK EXCHANGE shall mean either the American Stock Exchange or the
New York Stock Exchange.

         W. STOCK ISSUANCE AGREEMENT shall mean the agreement entered into by
the Corporation and the Participant at the time of issuance of shares of Common
Stock under the Stock Issuance Program.

         X. STOCK ISSUANCE PROGRAM shall mean the stock issuance program in
effect under the Plan.

         Y. SUBSIDIARY shall mean any corporation (other than the Corporation)
in an unbroken chain of corporations beginning with the Corporation, provided
each corporation (other than the last corporation) in the unbroken chain owns,
at the time of the determination, stock possessing fifty percent (50%) or more
of the total combined voting power of all classes of stock in one of the other
corporations in such chain.

         A@. 10% STOCKHOLDER shall mean the owner of stock (as determined
under Code Section 424(d)) possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Corporation (or
any Parent or Subsidiary).

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