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                                                                    Exhibit 10.4

                                  iMALL, INC.

                             1999 STOCK OPTION PLAN



     1.  PURPOSE.  The purpose of this Plan is to provide incentives to attract,
         -------
retain and motivate eligible persons whose present and potential contributions
are important to the success of the Company, its Parent and Subsidiaries, by
offering them an opportunity to participate in the Company's future performance
through awards of Options.  This Plan is intended to meet the "broadly based
plan" exemption from the stockholder approval requirement under the Nasdaq
National Market listing rules.  Capitalized terms not defined in the text are
defined in Section 21.

     2.  SHARES SUBJECT TO THE PLAN.
         --------------------------

         2.1  Number of Shares Available.  Subject to Sections 2.2 and 16, the
              --------------------------
total number of Shares reserved and available for grant and issuance pursuant to
this Plan will be 660,000 Shares.

         Subject to Sections 2.2 and 16 hereof, Shares that are subject to
issuance upon exercise of an Option granted under this Plan that cease to be
subject to such Option for any reason other than exercise of such Option will
again be available for grant and issuance in connection with future Options
under this Plan.

         At all times the Company shall reserve and keep available a sufficient
number of Shares as shall be required to satisfy the requirements of all
outstanding Options granted under this Plan.

         2.2  Adjustment of Shares.  In the event that the number of outstanding
              --------------------
Shares is changed by a stock dividend, recapitalization, stock split, reverse
stock split, subdivision, combination, reclassification or similar change in the
capital structure of the Company without consideration, then (a) the number of
Shares reserved for issuance under this Plan, and (b) the Exercise Prices of and
number of Shares subject to outstanding Options will be proportionately
adjusted, subject to any required action by the Board or the stockholders of the
Company and compliance with applicable securities laws; provided, however, that
                                                        --------  -------
fractions of a Share will not be issued but will either be replaced by a cash
payment equal to the Fair Market Value of such fraction of a Share or will be
rounded up to the nearest whole Share, as determined by the Committee.

     3.  ELIGIBILITY.  Options may be granted to employees, officers,
         -----------
consultants, independent contractors and advisors of the Company or any Parent
or Subsidiary of the Company; provided such consultants, contractors and
                              --------
advisors render bona fide services not in
<PAGE>

connection with the offer and sale of securities in a capital-raising
transaction. A person may be granted more than one Option under this Plan.

     4.  ADMINISTRATION.
         --------------

         4.1  Committee Authority.  This Plan will be administered by the
              -------------------
Committee or by the Board acting as the Committee. Subject to the general
purposes, terms and conditions of this Plan, and to the direction of the Board,
the Committee will have full power to implement and carry out this Plan. Without
limitation, the Committee will have the authority to:

              (a)  construe and interpret this Plan, any Option Agreement and
              any other agreement or document executed pursuant to this Plan;

              (b)  prescribe, amend and rescind rules and regulations relating
              to this Plan or any Option;

              (c)  select persons to receive Options;

              (d)  determine the form and terms of Options;

              (e)  determine the number of Shares or other consideration subject
              to Options;

              (f)  determine whether Options will be granted singly, in
              combination with, in tandem with, in replacement of, or as
              alternatives to, other awards under any other incentive or
              compensation plan of the Company or any Parent or Subsidiary of
              the Company;

              (g)  grant waivers of Plan or Option conditions;

              (h)  determine the vesting, exercisability and payment of Options;

              (i)  correct any defect, supply any omission or reconcile any
              inconsistency in this Plan, any Option or any Option Agreement;

              (j)  determine whether an Option has been earned; and

              (k)  make all other determinations necessary or advisable for the
              administration of this Plan.

         4.2  Committee Discretion.  Any determination made by the Committee
              --------------------
with respect to any Option will be made in its sole discretion at the time of
grant of the Option or, unless in contravention of any express term of this Plan
or Option, at any later time, and such determination will be final and binding
on the Company and on all persons having an interest in

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any Option under this Plan. The Committee may delegate to one or more officers
of the Company the authority to grant an Option under this Plan to Participants
who are not Insiders of the Company.

     5.  OPTIONS.  The Committee may grant Options to eligible persons and will
         -------
determine the number of Shares subject to the Option, the Exercise Price of the
Option, the period during which the Option may be exercised, and all other terms
and conditions of the Option, subject to the following:

         5.1  Form of Option Grant.  Each Option granted under this Plan will be
              --------------------
evidenced by a Stock Option Agreement (an "Option Agreement") which will be in
such form and contain such provisions (which need not be the same for each
Participant) as the Committee may from time to time approve, and which will
comply with and be subject to the terms and conditions of this Plan.  No Option
granted under this Plan will be an "incentive stock option" within the meaning
of Section 422 of the Code.

         5.2  Date of Grant.  The date of grant of an Option will be the date on
              -------------
which the Committee makes the determination to grant such Option, unless
otherwise specified by the Committee.  The Option Agreement and a copy of this
Plan will be delivered to the Participant within a reasonable time after the
granting of the Option.

         5.3  Exercise Period.  Options may be exercisable within the times or
              ---------------
upon the events determined by the Committee as set forth in the Option Agreement
governing such Option; provided, however, that no Option will be exercisable
                       --------  -------
after the expiration of ten (10) years from the date the Option is granted.  The
Committee also may provide for Options to become exercisable at one time or from
time to time, periodically or otherwise, in such number of Shares or percentage
of Shares as the Committee determines.

         5.4  Exercise Price.  The Exercise Price of an Option will be
              --------------
determined by the Committee when the Option is granted and may be not less than
85% of the Fair Market Value of the Shares on the date of grant. Payment for the
Shares purchased may be made in accordance with Section 6 of this Plan.

         5.5  Method of Exercise.  Options may be exercised only by delivery to
              ------------------
the Company of a written stock option exercise agreement (the "Exercise
Agreement") in a form approved by the Committee (which need not be the same for
each Participant), stating the number of Shares being purchased, the
restrictions imposed on the Shares purchased under such Exercise Agreement, if
any, and such representations and agreements regarding Participant's investment
intent and access to information and other matters, if any, as may be required
or desirable by the Company to comply with applicable securities laws, together
with payment in full of the Exercise Price for the number of Shares being
purchased.

         5.6  Termination.  Notwithstanding the exercise periods set forth in
              -----------
the Option Agreement, exercise of an Option will always be subject to the
following:

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              (a) If the Participant is Terminated for any reason except death
              or Disability, then the Participant may exercise such
              Participant's Options only to the extent that such Options would
              have been exercisable upon the Termination Date no later than
              three (3) months after the Termination Date (or such shorter or
              longer time period not exceeding five (5) years as may be
              determined by the Committee), but in any event, no later than the
              expiration date of the Options.

              (b) If the Participant is Terminated because of Participant's
              death or Disability (or the Participant dies within three (3)
              months after a Termination other than because of Participant's
              Disability or Cause), then Participant's Options may be exercised
              only to the extent that such Options would have been exercisable
              by Participant on the Termination Date and must be exercised by
              Participant (or Participant's legal representative or authorized
              assignee) no later than twelve (12) months after the Termination
              Date (or such shorter or longer time period not exceeding five (5)
              years as may be determined by the Committee), but in any event no
              later than the expiration date of the Options.

              (c) If a Participant is terminated for Cause, then the Participant
              may exercise such Participant Options only to the extent that such
              Options would have been exercisable upon the Termination Date no
              later than one (1) month after the Termination Date (or such
              shorter period as may be determined by the Committee), but in any
              event, no later than the expiration date of the Options. In making
              such determination, the Board shall give the Participant an
              opportunity to present to the Board evidence on his behalf. For
              the purpose of this paragraph, termination of service shall be
              deemed to occur on the date when the Company dispatches notice or
              advice to the Participant that his service is terminated.

         5.7  Limitations on Exercise.  The Committee may specify a reasonable
              -----------------------
minimum number of Shares that may be purchased on any exercise of an Option,
provided that such minimum number will not prevent Participant from exercising
the Option for the full number of Shares for which it is then exercisable.

         5.8  Modification, Extension or Renewal.  The Committee may modify,
              ----------------------------------
extend or renew outstanding Options and authorize the grant of new Options in
substitution therefor, provided that any such action may not, without the
written consent of a Participant, impair any of such Participant's rights under
any Option previously granted.  The Committee may reduce the Exercise Price of
outstanding Options without the consent of Participants affected by a written
notice to them; provided, however, that the Exercise Price may not be reduced
                --------  -------
below the minimum Exercise Price that would be permitted under Section 5.4 of
this Plan for Options granted on the date the action is taken to reduce the
Exercise Price.

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<PAGE>

     6.  PAYMENT FOR SHARE PURCHASES.
         ---------------------------

         6.1  Payment.  Payment for Shares purchased pursuant to this Plan may
              -------
be made in cash (by check) or, where expressly approved for the Participant by
the Committee and where permitted by law:

              (a)  by cancellation of indebtedness of the Company to the
              Participant;

              (b)  by surrender of shares that either: (1) have been owned by
              Participant for more than six (6) months and have been paid for
              within the meaning of SEC Rule 144 (and, if such shares were
              purchased from the Company by use of a promissory note, such note
              has been fully paid with respect to such shares); or (2) were
              obtained by Participant in the public market;

              (c)  by tender of a full recourse promissory note having such
              terms as may be approved by the Committee and bearing interest at
              a rate sufficient to avoid imputation of income under Sections 483
              and 1274 of the Code; provided, however, that Participants who are
                                    --------  -------
              not employees or directors of the Company will not be entitled to
              purchase Shares with a promissory note unless the note is
              adequately secured by collateral other than the Shares;

              (d)  by waiver of compensation due or accrued to the Participant
              for services rendered;

              (e)  provided that a public market for the Company's stock exists:

                   (1)  through a "same day sale" commitment from the
                   Participant and a broker-dealer that is a member of the
                   National Association of Securities Dealers (an "NASD Dealer")
                   whereby the Participant irrevocably elects to exercise the
                   Option and to sell a portion of the Shares so purchased to
                   pay for the Exercise Price, and whereby the NASD Dealer
                   irrevocably commits upon receipt of such Shares to forward
                   the Exercise Price directly to the Company; or

                   (2)  through a "margin" commitment from the Participant and a
                   NASD Dealer whereby the Participant irrevocably elects to
                   exercise the Option and to pledge the Shares so purchased to
                   the NASD Dealer in a margin account as security for a loan
                   from the NASD Dealer in the amount of the Exercise Price, and
                   whereby the NASD Dealer irrevocably commits upon receipt of
                   such Shares to forward the Exercise Price directly to the
                   Company; or

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<PAGE>

              (f)  by any combination of the foregoing.

         6.2  Loan Guarantees.  The Committee may help the Participant pay for
              ---------------
Shares purchased under this Plan by authorizing a guarantee by the Company of a
third-party loan to the Participant.

     7.  WITHHOLDING TAXES.
         -----------------

         7.1  Withholding Generally.  Whenever Shares are to be issued in
              ---------------------
satisfaction of Options granted under this Plan, the Company may require the
Participant to remit to the Company an amount sufficient to satisfy federal,
state and local withholding tax requirements prior to the delivery of any
certificate or certificates for such Shares.  Whenever, under this Plan,
payments in satisfaction of Options are to be made in cash, such payment will be
net of an amount sufficient to satisfy federal, state, and local withholding tax
requirements.

         7.2  Stock Withholding.  When, under applicable tax laws, a Participant
              -----------------
incurs tax liability in connection with the exercise or vesting of any Option
that is subject to tax withholding and the Participant is obligated to pay the
Company the amount required to be withheld, the Committee may in its sole
discretion allow the Participant to satisfy the minimum withholding tax
obligation by electing to have the Company withhold from the Shares to be issued
that number of Shares having a Fair Market Value equal to the minimum amount
required to be withheld, determined on the date that the amount of tax to be
withheld is to be determined.  All elections by a Participant to have Shares
withheld for this purpose will be made in accordance with the requirements
established by the Committee and be in writing in a form acceptable to the
Committee

     8.  PRIVILEGES OF STOCK OWNERSHIP.No Participant will have any of the
         -----------------------------
rights of a stockholder with respect to any Shares until the Shares are issued
to the Participant.  After Shares are issued to the Participant, the Participant
will be a stockholder and have all the rights of a stockholder with respect to
such Shares, including the right to vote and receive all dividends or other
distributions made or paid with respect to such Shares; provided, that the
                                                        --------
Participant will have no right to retain such stock dividends or stock
distributions with respect to Shares that are repurchased at the Participant's
Exercise Price pursuant to Section 10.

     9.  TRANSFERABILITY. Options granted under this Plan, and any interest
         ---------------
therein, will not be transferable or assignable by Participant, and may not be
made subject to execution, attachment or similar process, otherwise than by will
or by the laws of descent and distribution or as determined by the Committee and
set forth in the Option Agreement.  During the lifetime of the Participant an
Option will be exercisable only by the Participant, and any elections with
respect to an Option may be made only by the Participant unless otherwise
determined by the Committee and set forth in the Option Agreement.

     10.  RESTRICTIONS ON SHARES.  At the discretion of the Committee, the
          ----------------------
Company may reserve to itself and/or its assignee(s) in the Option Agreement a
right to

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<PAGE>

repurchase a portion of or all Unvested Shares held by a Participant following
such Participant's Termination at any time within ninety (90) days after the
later of Participant's Termination Date and the date Participant purchases
Shares under this Plan, for cash and/or cancellation of purchase money
indebtedness, at the Participant's Exercise Price.

     11.  CERTIFICATES.  All certificates for Shares or other securities
          ------------
delivered under this Plan will be subject to such stock transfer orders, legends
and other restrictions as the Committee may deem necessary or advisable,
including restrictions under any applicable federal, state or foreign securities
law, or any rules, regulations and other requirements of the SEC or any stock
exchange or automated quotation system upon which the Shares may be listed or
quoted.

     12.  ESCROW; PLEDGE OF SHARES.  To enforce any restrictions on a
          ------------------------
Participant's Shares, the Committee may require the Participant to deposit all
certificates representing Shares, together with stock powers or other
instruments of transfer approved by the Committee, appropriately endorsed in
blank, with the Company or an agent designated by the Company to hold in escrow
until such restrictions have lapsed or terminated, and the Committee may cause a
legend or legends referencing such restrictions to be placed on the
certificates.  Any Participant who is permitted to execute a promissory note as
partial or full consideration for the purchase of Shares under this Plan will be
required to pledge and deposit with the Company all or part of the Shares so
purchased as collateral to secure the payment of Participant's obligation to the
Company under the promissory note; provided, however, that the Committee may
                                   --------  -------
require or accept other or additional forms of collateral to secure the payment
of such obligation and, in any event, the Company will have full recourse
against the Participant under the promissory note notwithstanding any pledge of
the Participant's Shares or other collateral.  In connection with any pledge of
the Shares, Participant will be required to execute and deliver a written pledge
agreement in such form as the Committee will from time to time approve.  The
Shares purchased with the promissory note may be released from the pledge on a
pro rata basis as the promissory note is paid.

     13.  EXCHANGE AND BUYOUT OF OPTIONS.  The Committee may, at any time or
          ------------------------------
from time to time, authorize the Company, with the consent of the respective
Participants, to issue new Options in exchange for the surrender and
cancellation of any or all outstanding Options.  The Committee may at any time
buy from a Participant an Option previously granted with payment in cash, Shares
or other consideration, based on such terms and conditions as the Committee and
the Participant may agree.


     14.  SECURITIES LAW AND OTHER REGULATORY COMPLIANCE.  An Option will not be
          ----------------------------------------------
effective unless such Option is in compliance with all applicable federal and
state securities laws, rules and regulations of any governmental body, and the
requirements of any stock exchange or automated quotation system upon which the
Shares may then be listed or quoted, as they are in effect on the date of grant
of the Option and also on the date of exercise or other issuance.
Notwithstanding any other provision in this Plan, the Company will have no
obligation to issue or deliver certificates for Shares under this Plan prior to:
(a) obtaining any

                                       7
<PAGE>

approvals from governmental agencies that the Company determines are necessary
or advisable; and/or (b) completion of any registration or other qualification
of such Shares under any state or federal law or ruling of any governmental body
that the Company determines to be necessary or advisable. The Company will be
under no obligation to register the Shares with the SEC or to effect compliance
with the registration, qualification or listing requirements of any state
securities laws, stock exchange or automated quotation system, and the Company
will have no liability for any inability or failure to do so.

     15.  NO OBLIGATION TO EMPLOY.  Nothing in this Plan or any Option granted
          -----------------------
under this Plan will confer or be deemed to confer on any Participant any right
to continue in the employ of, or to continue any other relationship with, the
Company or any Parent or Subsidiary of the Company or limit in any way the right
of the Company or any Parent or Subsidiary of the Company to terminate
Participant's employment or other relationship at any time, with or without
cause.

     16.  CORPORATE TRANSACTIONS.
          ----------------------

         16.1  Assumption or Replacement of Options by Successor.  In the event
               -------------------------------------------------
of (a) a dissolution or liquidation of the Company, (b) a merger or
consolidation in which the Company is not the surviving corporation (other than
a merger or consolidation with a wholly-owned subsidiary, a reincorporation of
the Company in a different jurisdiction, or other transaction in which there is
no substantial change in the stockholders of the Company or their relative stock
holdings and the Options granted under this Plan are assumed, converted or
replaced by the successor corporation, which assumption will be binding on all
Participants), (c) a merger in which the Company is the surviving corporation
but after which the stockholders of the Company immediately prior to such merger
(other than any stockholder that merges, or which owns or controls another
corporation that merges, with the Company in such merger) cease to own their
shares or other equity interest in the Company, (d) the sale of substantially
all of the assets of the Company, or (e) the acquisition, sale, or transfer of
more than 50% of the outstanding shares of the Company by tender offer or
similar transaction, any or all outstanding Options may be assumed, converted or
replaced by the successor corporation (if any), which assumption, conversion or
replacement will be binding on all Participants. In the alternative, the
successor corporation may substitute equivalent Options or provide substantially
similar consideration to Participants as was provided to stockholders (after
taking into account the existing provisions of the Options). The successor
corporation may also issue, in place of outstanding Shares of the Company held
by the Participant, substantially similar shares or other property subject to
repurchase restrictions no less favorable to the Participant. In the event such
successor corporation (if any) refuses to assume or substitute Options, as
provided above, pursuant to a transaction described in this Subsection 16.1, the
Options will become exercisable in full prior to the consummation of such event
at such times and on such conditions as the Committee determines, and if such
Options are not exercised prior to the consummation of the corporate
transaction, they shall terminate in accordance with the provisions of this
Plan.

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<PAGE>

         16.2  Other Treatment of Options.  Subject to any greater rights
               --------------------------
granted to Participants under the foregoing provisions of this Section 16, in
the event of the occurrence of any transaction described in Section 16.1, any
outstanding Options will be treated as provided in the applicable agreement or
plan of merger, consolidation, dissolution, liquidation, or sale of assets.

         16.3  Assumption of Options by the Company.  The Company, from time to
               ------------------------------------
time, also may substitute or assume outstanding awards granted by another
company, whether in connection with an acquisition of such other company or
otherwise, by either; (a) granting an Option under this Plan in substitution of
such other company's award; or (b) assuming such award as if it had been granted
under this Plan if the terms of such assumed award could be applied to an Option
granted under this Plan.  Such substitution or assumption will be permissible if
the holder of the substituted or assumed award would have been eligible to be
granted an Option under this Plan if the other company had applied the rules of
this Plan to such grant.  In the event the Company assumes an award granted by
another company, the terms and conditions of such award will remain unchanged
(except that the exercise price and the number and nature of Shares issuable
-------
upon exercise of any such option will be adjusted appropriately pursuant to
Section 424(a) of the Code).  In the event the Company elects to grant a new
Option rather than assuming an existing option, such new Option may be granted
with a similarly adjusted Exercise Price.

     17.  EFFECTIVE DATE.  This Plan will become effective on the date on which
          --------------
it is adopted by the Board (the "Effective Date").  Upon the Effective Date, the
Committee may grant Options pursuant to this Plan.

     18.  TERM OF PLAN/GOVERNING LAW.  Unless earlier terminated as provided
          --------------------------
herein, this Plan will terminate ten (10) years from the date this Plan is
adopted by the Board or, if earlier, the date of stockholder approval.  This
Plan and all agreements thereunder shall be governed by and construed in
accordance with the laws of the State of California.

     19.  AMENDMENT OR TERMINATION OF PLAN.  The Board may at any time terminate
          --------------------------------
or amend this Plan in any respect, including without limitation amendment of any
form of Option Agreement or instrument to be executed pursuant to this Plan;
provided, however, that the Board will not, without the approval of the
--------  -------
stockholders of the Company, amend this Plan in any manner that requires such
stockholder approval.

     20.  NONEXCLUSIVITY OF THE PLAN.  Neither the adoption of this Plan by the
          --------------------------
Board nor any provision of this Plan will be construed as creating any
limitations on the power of the Board to adopt such additional compensation
arrangements as it may deem desirable, including, without limitation, the
granting of stock options and bonuses otherwise than under this Plan, and such
arrangements may be either generally applicable or applicable only in specific
cases.

                                       9
<PAGE>

     21.  DEFINITIONS.  As used in this Plan, the following terms will have the
          -----------
following meanings:

          "Board" means the Board of Directors of the Company.

          "Cause" means the commission of an act of theft, embezzlement, fraud,
dishonesty or a breach of fiduciary duty to the Company or a Parent or
Subsidiary of the Company.

          "Code" means the Internal Revenue Code of 1986, as amended.

          "Committee" means the Compensation Committee of the Board.

          "Company" means iMall, Inc. or any successor corporation.

          "Disability" means a disability, whether temporary or permanent,
partial or total, within the meaning of Section 22(e)(3) of the Code, as
determined by the Committee.

          "Exchange Act" means the Securities Exchange Act of 1934, as amended.

          "Exercise Price" means the price at which a holder of an Option may
purchase the Shares issuable upon exercise of the Option.

          "Fair Market Value" means, as of any date, the value of a share of the
Company's common stock, par value $.001 per share (the "Common Stock"),
determined as follows:

              (a)  if such Common Stock is then quoted on the Nasdaq National
              Market, its closing price on the Nasdaq National Market on the
              date of determination (or, if no trading takes place on such date,
              the closing price on the last trading date immediately preceding
              the date of determination) as reported in The Wall Street Journal;
                                                        -----------------------

              (b)  if such Common Stock is publicly traded and is then listed on
              a national securities exchange, its closing price on the date of
              determination on the principal national securities exchange on
              which the Common Stock is listed or admitted to trading as
              reported in The Wall Street Journal;
                          -----------------------

              (c)  if such Common Stock is publicly traded but is not quoted on
              the Nasdaq National Market nor listed or admitted to trading on a
              national securities exchange, the average of the closing bid and
              asked prices on the date of determination as reported in The Wall
                                                                       --------
              Street Journal;
              --------------

                                       10
<PAGE>

              (d)  if none of the foregoing is applicable, by the Committee in
              good faith.

          "Insider" means an officer or director of the Company or any other
person whose transactions in the Company's Common Stock are subject to Section
16 of the Exchange Act.

          "Option" means an award of an option to purchase Shares pursuant to
Section 5.

          "Option Agreement" means, with respect to each Option, the signed
written agreement between the Company and the Participant setting forth the
terms and conditions of the Option.

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

          "Participant" means a person who receives an Option under this Plan.

          "Plan" means this iMall, Inc. 1999 Stock Option Plan, as amended from
time to time.

          "SEC" means the Securities and Exchange Commission.

          "Securities Act" means the Securities Act of 1933, as amended.

          "Shares" means shares of the Company's Common Stock reserved for
issuance under this Plan or any other compensatory arrangement of the Company,
as adjusted pursuant to Sections 2 and 16, and any successor security.

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

          "Termination" or "Terminated" means, for purposes of this Plan with
respect to a Participant, that the Participant has for any reason ceased to
provide services as an employee, officer, director, consultant, independent
contractor, or advisor to the Company or a Parent or Subsidiary of the Company.
An employee will not be deemed to have ceased to provide services in the case of
(i) sick leave, (ii) military leave, or (iii) any other leave of absence
approved by the Committee, provided, that such leave is for a period of not more
than 90 days, unless reemployment upon the expiration of such leave is
guaranteed by contract or statute or unless provided otherwise pursuant to
formal policy adopted from time to time by the Company and issued and
promulgated to employees in writing. In the case of any employee on an approved

                                       11
<PAGE>

leave of absence, the Committee may make such provisions respecting suspension
of vesting of the Option while on leave from the employ of the Company or a
Subsidiary as it may deem appropriate, except that in no event may an Option be
exercised after the expiration of the term set forth in the Option Agreement.
The Committee will have sole discretion to determine whether a Participant has
ceased to provide services and the effective date on which the Participant
ceased to provide services (the "Termination Date").

          "Unvested Shares" means "Unvested Shares" as defined in the Option
Agreement.

                                       12