<PAGE>

                                                                    Exhibit 10.6

                                CYGNUS SOLUTIONS

                            1998 EXECUTIVE STOCK PLAN



         1. PURPOSES OF THE PLAN. The purposes of this 1998 Executive Stock Plan
are to attract and retain the best available personnel for positions of
substantial responsibility, to provide additional incentive to Employees and
Consultants of the Company, and its Subsidiaries and to promote the success of
the Company's business. Options granted under the Plan shall be Nonstatutory
Stock Options. Stock purchase rights may also be granted under the Plan.

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

            (a) "ADMINISTRATOR" means the Board or any of its Committees
appointed pursuant to Section 4 of the Plan.

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

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

            (d) "COMMITTEE" means the Committee appointed by the Board of
Directors in accordance with Section 4(a) of the Plan.

            (e) "COMMON STOCK" means the Common Stock of the Company.

            (f) "COMPANY" means Cygnus Solutions, a California corporation.

            (g) "CONSULTANT" means any person, including an advisor, who is
engaged by the Company or any Parent or Subsidiary to render services and is
compensated for such services, and any director of the Company whether
compensated for such services or not, provided that if and in the event the
Company registers any class of any equity security pursuant to the Exchange Act,
the term Consultant shall thereafter not include directors who are not
compensated for their services or are paid only a director's fee by the Company.

            (h) "CONTINUOUS STATUS AS AN EMPLOYEE OR CONSULTANT" means the
absence of any interruption or termination of service as an Employee or
Consultant. Continuous Status as an Employee or Consultant shall not be
considered interrupted in the case of: (i) sick leave; (ii) military leave;
(iii) any other leave of absence approved by the Administrator, provided than
such leave is for a period of not more than ninety (90) days, unless
reemployment upon the expiration of such leave is guaranteed by contract or
statute, or unless provided otherwise Pursuant to Company policy adopted from
time to time; or (iv) in the case of transfers between locations of the Company
or between the Company, its Subsidiaries or their respective successors. For
purposes of this Plan, a change in status from an Employee to a Consultant or
from a Consultant to an Employee will not constitute an interruption of
Continuous Status as an Employee or Consultant.

            (i) "EMPLOYEE" means any person including officers and directors,
employed by the Company or any Parent or Subsidiary of the Company, with the
status of employment

<PAGE>


                                      -2-


determined based upon such minimum number of hours or periods worked as shall be
determined by the Administrator in its discretion, subject to any requirements
of the Code. The payment by the Company of a director's fee to a Director shall
not be sufficient to constitute "employment" of such Director by the Company.

            (j) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

            (k) "FAIR MARKET VALUE" means, as any date, the fair market value of
Common Stock determined as follows:

                (i)    If the Common Stock is listed on any established stock
          exchange or a national market system including without limitation the
          National Market of the National Association of Securities Dealers,
          Inc. Automated Quotation ("NASDAQ") System, its Fair Market Value
          shall be the closing sales price for such stock (or the closing bid,
          if no sales were reported), as quoted on such system or exchange, or
          the exchange with the greatest volume of trading in Common Stock for
          the last market trading day prior to the time of determination, as
          reported in THE WALL STREET JOURNAL or such other source as the
          Administrator deems reliable;

                (ii)   If the Common Stock is quoted on the Nasdaq System (but
         not on the National Market thereof) or regularly quoted by a recognized
         securities dealer but selling prices are not reported, its Fair Market
         Value shall be the mean between the high bid and low asked prices for
         the Common Stock for the last market trading day prior to the time of
         determination, as reported in THE WALL STREET JOURNAL or such other
         source as the Administrator deems reliable; or

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

            (l) "NONSTATUTORY STOCK OPTION" means an Option not intended to
qualify as an Incentive Stock Option, as designated in the applicable written
option agreement.

            (m) "OPTION" means a stock option granted pursuant to the Plan.

            (n) "OPTIONED STOCK" means the Common Stock subject to an Option or
a Stock Purchase Right.

            (o) "OPTIONEE" means an Employee or Consultant who receives an
Option or a Stock Purchase Right.

            (p) "PARENT" means a "parent corporation", whether now or hereafter
existing, as defined in Section 424(e) of the Code, or any successor provision.

            (q) "PLAN" means this 1998 Executive Stock Plan.

<PAGE>


                                      -3-


            (r) "REPORTING PERSON" means on officer, director, or greater than
ten percent shareholder of the Company within the meaning of Rule 16a-2 under
the Exchange Act, who is required to file reports pursuant to Rule 16a-3 under
the Exchange Act.

            (s) "RESTRICTED STOCK" means shares of Common Stock acquired
pursuant to a grant of a Stock Purchase Right under Section 10 below.

            (t) "RULE 16b-3" means Rule 16b-3 promulgated under the Exchange
Act, as the same may be amended from time to time, or any successor provision.

            (u) "SHARE" means a share of the Common Stock, as adjusted in
accordance with Section 12 of the Plan.

            (v) "STOCK EXCHANGE" means any stock exchange or consolidated stock
price reporting system on which prices for the Common Stock are quoted at any
given time.

            (w) "STOCK PURCHASE RIGHTS" means the right to purchase Common Stock
pursuant to Section 10 below.

            (x) "SUBSIDIARY" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code, or any successor
provision.

         3. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section 12
of the Plan, the maximum aggregate number of Shares that may be optioned and
sold under the Plan shall be 609,882 shares. The Shares may be authorized, but
unissued, or reacquired Common Stock. If an Option should expire or become
unexercisable for any reason without having been exercised in full, the
unpurchased Shares that were subject thereto shall, unless the Plan shall have
been terminated, become available for future grant under the Plan. In addition,
any Shares of Common Stock which are retained by the Company upon exercise of an
Option or Stock Purchase Right in order to satisfy the exercise or purchase
price for such Option or Stock Purchase Right or any withholding taxes due with
respect to such exercise shall be treated as not issued and shall continue to be
available under the Plan. Shares repurchased by the Company pursuant to any
repurchase right which the Company may have shall be available for future grant
under the Plan.

         4. ADMINISTRATION OF THE PLAN.

            (a) INITIAL PLAN PROCEDURE. Prior to the date, if any, upon which
the Company becomes subject to the Exchange Act, the Plan shall be administered
by the Board or a committee appointed by the Board.

            (b) PLAN PROCEDURE AFTER THE DATE, IF ANY, UPON WHICH THE COMPANY
BECOMES SUBJECT TO THE EXCHANGE ACT.

                (i)    MULTIPLE ADMINISTRATIVE BODIES. If permitted by Rule
         16b-3, grants under the Plan may be made by different bodies with
         respect to directors, non-director officers and Employees or
         Consultants who are not Reporting Persons.


<PAGE>

                                      -4-


                (ii)   ADMINISTRATION WITH RESPECT TO REPORTING PERSONS. With
         respect to grants of Options or Stock Purchase Rights to Employees who
         are Reporting Persons, such grants shall be made by (A) the Board if
         the Board may make grants to Reporting Persons under the Plan in
         compliance with Rule 16b-3, or (B) a committee designated by the Board
         to make grants to Reporting Persons under the Plan, which committee
         shall be constituted in such a manner as to permit grants under the
         Plan to comply with Rule 16b-3. Once appointed, such committee shall
         continue to serve in its designated capacity until otherwise directed
         by the Board. From time to time the Board may increase the size of the
         committee am appoint additional members thereof, remove members (with
         or without cause) and appoint new members in substitution therefor,
         fill vacancies, however caused, and remove all members of the committee
         and thereafter directly make grants to Reporting Persons under the
         Plan, all to the extent permitted by Rule 16b-3.

                (iii)  ADMINISTRATION WITH RESPECT TO CONSULTANTS AND OTHER
         EMPLOYEES. With respect to grants of Options or Stock Purchase Rights
         to Employees or Consultants who are not Reporting Persons, the Plan
         shall be administered by (A) the Board or (B) a committee designated by
         the Board, which committee shall be constituted in such a manner as to
         satisfy the legal requirements relating to the administration of
         incentive stock option plans, if any, of California corporate and
         securities laws, of the Code and of any applicable Stock Exchange (the
         "APPLICABLE LAWS"). Once appointed, such Committee shall continue to
         serve in its designated capacity until otherwise directed by the Board.
         From time to time the Board may increase the size of the Committee and
         appoint additional members thereof, remove members (with or without
         cause) and appoint new members in substitution therefore fill
         vacancies, however caused, and remove all members of the Committee and
         thereafter directly administer the Plan, all to the extent Permitted by
         the Applicable Laws.

            (c) POWERS OF THE ADMINISTRATOR. Subject to the provisions of the
Plan and in the case of a Committee, the specific duties delegated by the Board
to such Committee, and subject to the approval of any relevant authorities.
including the approval, if required, of any Stock Exchange, the Administrator
shall have the authority, in its discretion:

                (i)    to determine the Fair Market Value of the Common Stock,
         in accordance with Section 2(k) of the Plan;

                (ii)   to select the Consultants and Employees to whom Options
         and Stock Purchase Rights may from time to time be granted hereunder,

                (iii)  to determine whether and to what extent Options and Stock
         Purchase Rights or any combination thereof are granted hereunder;

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

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

<PAGE>


                                      -5-


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

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

                (viii) to reduce the exercise price of any Option to the then
         current Fair Market Value if the Fair Market Value of the Common Stock
         covered by such Option shall have declined since the date the Option
         was granted;

                (ix)   to determine the terms and restrictions applicable to
         Stock Purchase Rights and the Restricted Stock purchased by exercising
         such Stock Purchase Rights; and

                (x)    to construe and interpret the terms of the Plan and
         awards granted pursuant to the Plan; and

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

            (d) EFFECT OF ADMINISTRATOR'S DECISION. All decisions,
determinations and interpretations of the Administrator shall be final and
binding on all holders of Options or Stock Purchase Rights.

         5. ELIGIBILITY.

            (a) RECIPIENTS OF GRANTS. Nonstatutory Stock Options and Stock
Purchase Rights may be granted to Employees and Consultants. An Employee or
Consultant who has been granted an Option or Stock Purchase Right may, if he or
she is otherwise eligible, be granted additional Options or Stock Purchase
Rights.

            (b) TYPE OF OPTION. Option shall be designated in the written option
agreement as a Nonstatutory Stock Option.

            (c) The Plan shall not confer upon any Optionee any right with
respect to continuation of employment or consulting relationship with the
Company, nor shall it interfere in any way with such Optionce's right or the
Company's right to terminate his or her employment or consulting relationship at
any time, with or without cause.

         6. TERM OF PLAN. The Plan shall become effective upon its adoption by
the Board of Directors. It shall continue in effect for a term of ten (10) years
unless sooner terminated under Section 15 of the Plan.

         7. TERM OF OPTION. The term of each Option shall be the term stated in
the Option Agreement.

<PAGE>


                                      -6-


         8. OPTION EXERCISE PRICE AND CONSIDERATION.

            (a) The per share exercise price for the Shares to be issued
pursuant to exercise of an Option shall be such price as is determined by the
Administrator.

            (b) The consideration to be paid for the Shares to be issued upon
exercise of in Option, including the method of payment shall be determined by
the Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant) and may consist entirely of (1) cash, (2)
check, (3) promissory note, (4) other Shares that (x) in the case of Shares
acquired upon exercise of an Option, have been owned by the Optionee for more
than six months on the date of surrender or such other period as may be required
to avoid a charge to the Company's earnings, and (y) have a Fair Market Value on
the date of surrender equal to the aggregate exercise price of the Shares as to
which such Option shall be exercised, (5) authorization for the Company to
retain from the total number of Shares as to which the Option is exercised that
number of Shares having a Fair Market Value an the date of exercise equal to the
exercise price for the total number of Shares as to which the Option is
exercised, (6) delivery of a properly executed exercise notice together with
such other documentation as the Administrator and the broker, if applicable,
shall require to effect an exercise of the Option and delivery to the Company of
the sale or loan proceeds required to pay the exercise price and any applicable
income or employment taxes, (7) delivery of an irrevocable subscription
agreement for the Shares that irrevocably obligates the option holder to take
and pay for the Shares not more than twelve months after the date of delivery of
the subscription agreement, (8) any combination of the foregoing methods of
payment, or (9) such other consideration and method of payment for the issuance
of Shares to the extent permitted under Applicable Laws. In making its
determination as to the type of consideration to accept, the Administrator shall
consider if acceptance of such consideration may be reasonably expected to
benefit the Company.

         9. EXERCISE OF OPTION.

            (a) PROCEDURE FOR EXERCISE; RIGHTS AS A SHAREHOLDER. Any Option
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Administrator, and reflected in the written option
agreement, which may include vesting requirements and/or performance criteria
with respect to the Company and/or the Optionee.

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

            An Option shall be deemed to be exercised when written notice of
such exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and the Company has
received full payment for the Shares with respect to which the Option is
exercised. Full payment may, as authorized by the Administrator, consist of any
consideration and method of payment allowable under Section 8(b) of the Plan.
Until the issuance (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Optioned Stock,
not withstanding the exercise of the Option. The Company shall issue (or cause
to be issued) such stock certificate promptly upon exercise of the Option. No
adjustment

<PAGE>


                                      -7-


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 12 of
the Plan.

            Exercise of an Option in any manner shall result in a decrease in
the number of Shares that 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.

            (b) TERMINATION OF EMPLOYMENT OR CONSULTING RELATIONSHIP. Subject to
Section 9(c), in the event of termination of an Optionce's Continuous Status as
an Employee or Consultant with the Company, such Optionee may, but only within
three (3) months (or such other period of time not less than thirty (30) days as
is determined by the Administrator) after the date of such termination (but in
no event later than the expiration date of the term of such Option as set forth
in the Option Agreement), exercise his or her Option to the extent that the
Optionee was entitled to exercise it at the date of such termination. To the
extent that Optionee was not entitled to exercise the Option at the date of such
termination, or if Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate. No
termination shall be deemed to occur and this Section 9(b) shall not apply if
(i) the Optionee is a Consultant who becomes an Employee; or (ii) the Optionee
is an Employee who becomes a Consultant.

            (c) DISABILITY OF OPTIONEE. Notwithstanding Section 9(b) above, in
the event of termination of an Optionee's Continuous Status as an Employee or
Consultant as a result of his or her total and permanent disability (within the
meaning of Section 22(e)(3) of the Code), Optionee may, but only within twelve
(12) months from the date of such termination (but in no event later than the
expiration date of the term of such Option as ret forth in the Option
Agreement), exercise the Option to the extent otherwise entitled to exercise it
at the date of such termination. To the Optionee does not exercise such Option
to the extent so entitled within the time specified herein, the Option shall
terminate.

            (d) DEATH OF OPTIONEE. In the event of the death of an Optionee
during the period of Continuous Status as an Employee or Consultant since the
date of grant of the Option, or within thirty (30) days following termination of
Optionce's Continuous Status as an Employee or Consultant, the Option may be
exercised, at any time within six (6) months following the date of death (but in
no event later than the expiration date of the term of such Option as set forth
in the Option Agreement), by 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 had accrued at the date of death or, if earlier,
the date of termination of Optionce's Continuous Status as an Employee or
Consultant. To the extent that Optionee was not entitled to exercise the Option
at the date of death or termination, as the case may be, or if Optionee does not
exercise such Option to the extent so entitled within the time specified herein,
the Option shall terminate.

            (e) RULE 16b-3. Options granted to Reporting Persons shall comply
with Rule 16b-3 and shall contain such additional conditions or restrictions as
may be required thereunder to qualify for the maximum exemption for Plan
transactions.

            (f) BUYOUT PROVISIONS. The Administrator may at any time offer to
buy out for a payment in cash or Shares. an Option previously granted, based on
such terms and

<PAGE>


                                      -8-


conditions as the Administrator shall establish and communicate to the Optionee
at the time that such offer is made.

         10. STOCK PURCHASE RIGHTS.

            (a) RIGHTS TO PURCHASE. Stock Purchase Rights may be issued either
alone, in addition to, or in tandem with other awards granted under the Plan
and/or Cash awards made outside of the Plan. After the Administrator determines
that it will offer Stock Purchase Rights under the Plan, it shall advise the
offeree in writing of the terms, conditions and restrictions related to the
offer, including the number of Shares that such person shall be entitled to
purchase, the price to be paid, and the time within which such person must
accept such offer, which shall in no event exceed thirty (30) days from the date
upon which the Administrator made the determination to grant the Stock Purchase
Right. The offer shall be accepted by execution of a Restricted Stock purchase
agreement in the form determined by the Administrator. Shares purchased pursuant
to the grant of a Stock Purchase Right shall be referred to herein as
"RESTRICTED STOCK."

            (b) REPURCHASE OPTION. Unless the Administrator determines
otherwise, the Restricted Stock purchase agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's employment with the Company for any reason (including death or
disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock purchase agreement shall be the original purchase price paid by
the purchaser and may be paid by cancellation of any indebtedness of the
purchaser to the Company. The repurchase option shall lapse at such rate as the
Administrator may determine.

            (c) OTHER PROVISIONS. The Restricted Stock purchase agreement shall
contain other terms, provisions and conditions not inconsistent with the Plan as
may be determined by the Administrator in its sole discretion. In addition, the
provisions of Restricted Stock purchase agreements need not be the same with
respect to each purchaser.

            (d) RIGHTS AS A SHAREHOLDER. Once the Stock Purchase Right is
exercised, the purchaser shall have the rights equivalent to those of a
shareholder, and shall be a shareholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock c Right is exercised, except as provided in Section 12 of the
Plan.

         11. STOCK WITHHOLDING TO SATISFY WITHHOLDING TAX OBLIGATIONS. At the
discretion of the Administrator, Optionees may satisfy withholding obligations
as provided in this paragraph. When an Optionee incurs tax liability in
connection with an Option or Stock Purchase Right, which tax liability is
subject to tax withholding under applicable tax laws, and the Optionee is
obligated to pay the Company an amount required to be withheld under applicable
tax laws, the Optionee may satisfy the withholding tax obligation by one or some
combination of the following methods: (a) by cash payment, or (b) out of
Optionee's current compensation, (c) if permitted by the Administrator, in its
on, by surrendering to the Company Shares that (i) in the case of Shares
previously acquired from the Company, have been owned by the Optionee for more
than six months on the date of surrender, and (ii) have a fair market value

<PAGE>


                                      -9-


on the date of surrender equal to or less than Optionce's marginal tax rate
times the ordinary income recognized, or (d) by electing to have the Company
withhold from the Shares to be issued upon exercise of the Option, or the Shares
to be issued in connection with the Stock Purchase Right, if any, that number of
Shares having a fair market value equal to the amount required to be withheld.
For this purpose, the fair market value of the Shares to be withheld shall be
determined on the date that the amount of tax to be withheld is to be determined
(the "TAX DATE").

         Any surrender by a Reporting Person of previously owned Shares to
satisfy tax withholding obligations arising upon exercise of this Option must
comply with the applicable provisions of Rule 16b-3.

         All elections by an Optionee to have Shares withheld to satisfy tax
withholding obligations shall be made in writing in a form acceptable to the
Administrator and shall be subject to the following restrictions:

            (a) the election must be made on or prior to the applicable Tax
Date;

            (b) once made, the election shall be irrevocable as to the
Particular Shares Of the Option or Stock Purchase Right as to which the election
is made; and

            (c) all elections shall be subject to the consent or disapproval of
the Administrator.

         In the event the election to have Shares withheld is made by an
Optionee and the Tax Date is deferred under Section 83 of the Code because no
election is filed under Section 83(b) of the Code, the Optionee shall receive
the full number of Shares with respect to which the Option or Stock Purchase
Right is exercised but such Optionee shall be unconditionally obligated to
tender back to the Company the proper number of Shares on the Tax Date.

         12. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, MERGER OR CERTAIN OTHER
TRANSACTIONS.

            (a) CHANGES IN CAPITALIZATION. Subject to any required action by the
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option or Stock Purchase Rights and the number of shares of
Common Stock that have been authorized for issuance under the Plan but as to
which no Options or Stock Purchase Rights have yet been granted or that have
been returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Fight, as well as the price per share of Common Stock covenant by each
such outstanding Option or Stock Purchase Right, shall be proportionately
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 of Common Stock resulting from a stock split, reverse stock split, stock
dividend, combination, recapitalization or reclassification of the Common Stock,
or any other increase or decrease in the number of issued shares of Common Stock
effected without receipt of consideration by the Company; provided, however,
that conversion of any convertible securities of the Company 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

<PAGE>


                                      -10-


expressly provided herein, no issuance by the Company of shares of stock of any
class, or securities convertible into 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 of Common Stock subject to an Option or Stock Purchase
Right.

            (b) DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, the Board shall notify the Optionee
at least fifteen (15) days prior to such proposed action. To the extent it has
not been previously exercised, the Option or Stock Purchase Right will terminate
immediately prior to the consummation of such proposed action.

            (e) MERGER OR SALE OF ASSETS. In the event of a proposed sale of all
or substantially all of the Company's assets or a merger of the Company with or
into another corporation where the successor corporation issues its securities
to the Company's shareholders, each outstanding Option or Stock Purchase Right
shall be assumed or an equivalent option or right shall be substituted by such
successor corporation or a parent or subsidiary of such successor corporation,
unless the successor corporation does not agree to assume the Option or Stock
Purchase Right or to substitute an equivalent option or right, in which case
such Option or Stock Purchase Right shall terminate upon the consummation of the
merger or sale of assets.

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

         13. NON-TRANSFERABILITY OF OPTIONS AND STOCK PURCHASE RIGHTS. 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 or purchased during the lifetime of
the Optionee or Stock Purchase Rights Holder only by the Optionee or Stock
Purchase Rights Holder.

         14. TIME OF GRANTING OPTIONS AND STOCK PURCHASE RIGHTS. The date of
grant of an Option or Stock Purchase Right shall, for all purposes, be the date
on which the Administrator makes the dot on granting such Option or Stock
Purchase Right or such other date as is determined by the Board, provided
however that in the case of any Incentive Stock Option, the grant date shall be
the later of the date on which the Administrator makes the determination
granting such Incentive Stock Option or the date of commencement of the
Optionee's employment relationship with the Company. Notice of the determination
shall be given to each Employee or Consultant to whom an Option or Stock
Purchase Right is so granted within a reasonable time after the date of such
grant.

         15. AMENDMENT AND TERMINATION OF THE PLAN.

            (a) AUTHORITY TO AMEND OR TERMINATE. The Board may at any time
amend, alter, suspend or discontinue the Plan, but no amendment, alteration,
suspension or discontinuation shall be made that would impair the rights of any
Optionee under any grant theretofore made, without his or her consent. In
addition, to the extent necessary and desirable to

<PAGE>


                                      -11-


comply with Rule 16b-3 or with Section 422 of the Code (or any other applicable
law or regulation, including the requirements of any Stock Exchange), the
Company shall obtain shareholder approval of any Plan amendment in such a manner
and to such a degree as required.

            (b) EFFECT OF AMENDMENT OR TERMINATION. No amendment or termination
of the Plan shall adversely affect Options already granted, unless mutually
agreed otherwise between the Optionee and the Board, which agreement must be in
writing and signed by the Optionee and the Company.

         16. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued
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. As a condition to the exercise of an option,
the Company may require the person exercising such Option to 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 if, in the opinion of counsel for the Company, such a representation is
required by law.

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

         18. AGREEMENTS. Options and Stock Purchase Rights shall be evidenced by
written agreements in such form as the Administrator shall approved from time to
time.

         19. INFORMATION AND DOCUMENTS TO OPTIONEES AND PURCHASERS. The Company
shall provide financial statements at least annually to each Optionee and to
each individual who acquired Shares pursuant to the Plan, during the period such
Optionee or purchaser has one or more Options or Stock Purchase Rights
outstanding, and in the case of an individual who acquired Shares pursuant to
the Plan, during the period such individual owns such Shares. The Company shall
not be required to provide such information if the issuance of Options or Stock
Purchase Rights under the Plan is limited to key employees whose duties in
connection with the Company assure their access to equivalent information. In
addition, at the time of issuance of any securities under the Plan the Company
shall provide to the Optionee or the Purchaser a copy of the Plan and a copy of
the agreement(s) pursuant to which securities under the Plan are issued.