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                                                                    EXHIBIT 10.5

                           OPTIMARK TECHNOLOGIES, INC.

                                 1999 STOCK PLAN


       1.     Purposes of the Plan. The purposes of this Stock Plan are (i) to
attract and retain the best available personnel, (ii) to provide additional
incentive to Employees, Directors and Consultants, and (iii) to promote the
success of the Company's business. Options granted under the Plan may be
Incentive Stock Options or Nonstatutory Stock Options, as determined by the
Administrator at the time of grant. In addition, Stock Purchase Rights and
Common Stock Equivalents may also be granted or awarded under the Plan.

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

              (a)    "Administrator" means the Board or any of its Committees as
shall be administering the Plan, in accordance with Section 4 of the Plan.

              (b)    "Applicable Laws" means the requirements relating to the
administration of stock option plans under U. S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Awards are, or will be, granted under
the Plan.

              (c)    "Award" means an award of Options, Stock Purchase Rights or
Common Stock Equivalents pursuant to the terms of the Plan.

              (d)    "Board" means the Board of Directors of the Company.

              (e)    "Cause" means (i) any act of personal dishonesty taken by
the Optionee in connection with Optionee's responsibilities with the Company and
intended to result in substantial personal enrichment of the Optionee, (ii)
Optionee's conviction of or plea of nolo contendere to a felony, (iii) a willful
act by the Optionee which constitutes gross misconduct and which is injurious to
the successor corporation, and (iv) following delivery to the Optionee of a
written demand for performance from the successor corporation which describes
the basis for the successor corporation's belief that the Optionee has not
substantially performed his duties, continued violations by the Optionee of the
Optionee's obligations to the successor corporation which are demonstrably
willful and deliberate on the Optionee's part.

              (f)    "Change of Control" means the occurrence of any of the
following events:

                     (i)    Any "person" (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act) becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing fifty percent (50%) or more of the total voting power
represented by the Company's then outstanding voting securities; or

                     (ii)   A change in the composition of the Board occurring
within a two (2)-year period, as a result of which fewer than a majority of the
Directors are Incumbent Directors; or



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                     (iii)  The consummation of a merger or consolidation of the
Company with any other corporation, other than a merger or consolidation which
would result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity or its parent)
more than fifty percent (50%) of the total voting power represented by the
voting securities of the Company or such surviving entity or parent outstanding
immediately after such merger or consolidation; or

                     (iv)   The consummation of the sale or disposition by the
Company of all or substantially all of the Company's assets to an acquiror,
where immediately after such sale, the stockholders of the Company immediately
prior to such sale (other than any corporation or other person controlling,
controlled by or under common control with the acquiror) own, directly or
indirectly, in the aggregate, voting securities of the acquiror having less than
a majority of the voting power of the issued and outstanding voting securities
of the acquiror.

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

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

              (i)    "Common Stock" means the common stock of the Company.

              (j)    "Common Stock Equivalent" means an unfunded and unsecured
right to receive Shares in the future that may be granted to a Service Provider
pursuant to Section 12.

              (k)    "Common Stock Equivalent Agreement" means a written
agreement between the Company and a Service Provider evidencing the terms and
conditions of an individual Common Stock Equivalent grant.

              (l)    "Company" means OptiMark Technologies, Inc., a Delaware
corporation.

              (m)    "Consultant" means any person, including an advisor,
engaged by the Company or a Parent or Subsidiary to render services to such
entity.

              (n)    "Director" means a member of the Board.

              (o)    "Disability" means total and permanent disability as
defined in Section 22(e)(3) of the Code.

              (p)    "Employee" means any person, including Officers and
Directors, employed by the Company or any Parent or Subsidiary of the Company. A
Service Provider shall not cease to be an Employee in the case of (i) any leave
of absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor.
For purposes of Incentive Stock Options, no such leave may exceed ninety days,
unless reemployment upon expiration of such leave is guaranteed by statute or
contract. If reemployment upon expiration of a leave of absence approved by the
Company is not so guaranteed, then three (3)



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months following the 91st day of such leave any Incentive Stock Option held by
the Optionee shall cease to be treated as an Incentive Stock Option and shall be
treated for tax purposes as a Nonstatutory Stock Option. Neither service as a
Director nor payment of a director's fee by the Company shall be sufficient to
constitute "employment" by the Company.

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

              (r)    "Fair Market Value" means, as of any date, the 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
Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market,
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 exchange or system on
the day of determination, as reported in The Wall Street Journal or such other
source as the Administrator deems reliable;

                     (ii)   If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, the Fair
Market Value of a Share of Common Stock shall be the mean between the high bid
and low asked prices for the Common Stock on the day of determination, as
reported in The Wall Street Journal or such other source as the Administrator
deems reliable; or

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

              (s)    "Incentive Stock Option" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code and the regulations promulgated thereunder.

              (t)    "Incumbent Directors" shall mean Directors who either (i)
are Directors as of September 21, 1998, or (ii) are elected, or nominated for
election, to the Board with the affirmative votes of at least a majority of the
Incumbent Directors at the time of such election or nomination (but shall not
include an individual whose election or nomination is in connection with an
actual or threatened proxy contest relating to the election of Directors to the
Company)

              (u)    "Nonstatutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.

              (v)    "Notice of Grant" means a written or electronic notice
evidencing certain terms and conditions of an individual Option or Stock
Purchase Right grant. The Notice of Grant is part of the Option Agreement and
Restricted Stock Purchase Agreement.

              (w)    "Officer" means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.



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              (x)    "Option" means a stock option granted pursuant to the Plan.

              (y)    "Option Agreement" means a written agreement between the
Company and an Optionee evidencing the terms and conditions of an individual
Option grant. The Option Agreement is subject to the terms and conditions of the
Plan and the Notice of Grant.

              (z)    "Optioned Stock" means the Common Stock subject to an
Option or Stock Purchase Right.

              (aa)   "Optionee" means the holder of an outstanding Award granted
under the Plan.

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

              (cc)   "Plan" means this 1999 Stock Plan.

              (dd)   "Predecessor Plan " means the Company's Stock Option Plan,
as amended, in effect immediately prior to the effective date of this Plan.

              (ee)   "Restricted Stock" means shares of Common Stock acquired
pursuant to a grant of Stock Purchase Rights under Section 11 of the Plan.

              (ff)   "Restricted Stock Purchase Agreement" means a written
agreement between the Company and the Optionee evidencing the terms and
restrictions applying to stock purchased under a Stock Purchase Right. The
Restricted Stock Purchase Agreement is subject to the terms and conditions of
the Plan and the Notice of Grant.

              (gg)   "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.

              (hh)   "Section 16(b)" means Section 16(b) of the Exchange Act.

              (ii)   "Service Provider" means an Employee, Director or
Consultant. In accordance with Section 4(b)(ii), a Service Provider shall not be
entitled to Awards under this Plan solely by reason of being an Employee,
Director or Consultant.

              (jj)   "Share" means a share of Common Stock, as adjusted in
accordance with Section 14 of the Plan.

              (kk)   "Stock Purchase Right" means the right to purchase Common
Stock pursuant to Section 11 of the Plan, as evidenced by a Notice of Grant.

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


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       3.     Stock Subject to the Plan.

              (a)    Subject to the provisions of Section 14 of the Plan, the
maximum aggregate number of Shares authorized for issuance under the Plan is
14,669,224 Shares, which consists of (i) 8,669,224 Shares available for future
issuance under the Predecessor Plan, including Shares subject to outstanding
options granted under the Predecessor Plan, as of the effective date of this
Plan, and (ii) an additional increase of 6,000,000 Shares. The Shares may be
authorized, but unissued, or reacquired Common Stock.

              (b)    For purposes of determining the number of Shares available
for issuance under this Plan, Shares subject to options granted under the
Predecessor Plan and included in Section 3(a)(i) above, shall be treated as
Shares subject to an Option granted under this Plan. Shares that are issued upon
the exercise of options granted under the Predecessor Plan that are included in
Section 3(a)(i) above shall reduce the number of Shares that are available for
issuance under this Plan; however, such Shares shall be governed by the terms of
the Predecessor Plan and the agreement evidencing such option and Shares. If an
Award expires or becomes unexercisable without having been exercised or
converted in full, the unpurchased or unissued Shares which were subject thereto
shall become available for future issuance under the Plan (unless the Plan has
terminated); provided, however, that Shares that have actually been issued under
the Plan, whether upon exercise of an Option or Stock Purchase Right or
conversion of a Common Stock Equivalent, shall not be returned to the Plan and
shall not become available for future issuance under the Plan, except that if
Shares of Restricted Stock are repurchased by the Company at their original
purchase price, such Shares shall become available for future award under the
Plan.

       4.     Administration of the Plan.

              (a)    Procedure.

                     (i)    Multiple Administrative Bodies. The Plan may be
administered by different Committees with respect to different groups of Service
Providers.

                     (ii)   Section 162(m). To qualify Options granted hereunder
as "performance-based compensation" within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a Committee of two or more "outside
directors" within the meaning of Section 162(m) of the Code.

                     (iii)  Rule 16b-3. To qualify transactions hereunder as
exempt under Rule 16b-3, the transactions shall be structured to satisfy the
requirements for exemption under Rule 16b-3.

                     (iv)   Other Administration. Other than as provided above,
the Plan shall be administered by (A) the Board or (B) a Committee, which
committee shall be constituted to satisfy Applicable Laws.



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              (b)    Powers of the Administrator. Subject to the provisions of
the Plan, and in the case of a Committee, subject to the specific duties
delegated by the Board to such Committee, the Administrator shall have the
authority, in its discretion:

                     (i)    to determine the Fair Market Value;

                     (ii)   to select the Service Providers to whom Awards may
be granted hereunder;

                     (iii)  to determine the number of Shares to be covered by
each Award granted hereunder;

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

                     (v)    to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any Award granted hereunder. Such
terms and conditions include, but are not limited to, the exercise price, the
time or times when Options or Stock Purchase Rights may be exercised (which may
be based on performance criteria), the time or times when Common Stock
Equivalents may be converted to Shares, any vesting acceleration or waiver of
forfeiture restrictions, and any restriction or limitation regarding any Awards
or the Shares relating thereto, based in each case on such factors as the
Administrator, in its sole discretion, shall determine;

                     (vi)   to construe and interpret the terms of the Plan and
Awards granted pursuant to the Plan;

                     (vii)  to prescribe, amend and rescind rules and
regulations relating to the Plan, including rules and regulations relating to
sub-plans established for the purpose of qualifying for preferred treatment
under foreign laws;

                     (viii) to modify or amend each Award (subject to Section
16(c) of the Plan), including (without limitation) the discretionary authority
to extend the post-termination exercisability period of Options longer than is
otherwise provided for in the Plan;

                     (ix)   to allow Optionees to satisfy withholding tax
obligations by electing to have the Company withhold from the Shares to be
issued upon exercise of an Option or Stock Purchase Right or upon the conversion
of a Common Stock Equivalent that number of Shares having a Fair Market Value
equal to (or less than) the minimum amount required to be withheld. 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. All elections by an
Optionee to have Shares withheld for this purpose shall be made in such form and
under such conditions as the Administrator may deem necessary or advisable;

                     (x)    to authorize any person to execute on behalf of the
Company any instrument required to effect an Award previously granted by the
Administrator; and



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                     (xi)   to make all other determinations deemed necessary or
advisable for administering the Plan.

              (c)    Effect of Administrator's Decision. The Administrator's
decisions, determinations and interpretations shall be final and binding on all
Optionees and any other holders of Awards.

       5.     Eligibility. Nonstatutory Stock Options, Stock Purchase Rights and
Common Stock Equivalents may be granted to Service Providers. Incentive Stock
Options may be granted only to Employees.

       6.     Limitations.

              (a)    Each Option shall be designated in the Option Agreement as
either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 6(a), Incentive Stock Options shall be taken into account in the order
in which they were granted. The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is granted.

              (b)    Neither the Plan nor any Award shall confer upon an
Optionee any right with respect to continuing the Optionee's relationship as a
Service Provider with the Company, nor shall they interfere in any way with the
Optionee's right or the Company's right to terminate such relationship at any
time, with or without Cause.

       7.     Term of Plan. Subject to Section 20 of the Plan, the Plan shall
become effective upon its adoption by the Board. It shall continue in effect for
a term of ten (10) years unless terminated earlier under Section 16 of the Plan.

       8.     Term of Option. The term of each Option shall be stated in the
Option Agreement. In the case of an Incentive Stock Option, the term shall be
ten (10) years from the date of grant or such shorter term as may be provided in
the Option Agreement. Moreover, in the case of an Incentive Stock Option granted
to an Optionee who, at the time the Incentive Stock Option is granted, owns
stock representing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or any Parent or Subsidiary, the
term of the Incentive Stock Option shall be five (5) years from the date of
grant or such shorter term as may be provided in the Option Agreement.

       9.     Option Exercise Price and Consideration.

              (a)    Exercise Price. The per share exercise price for the Shares
to be issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:

                     (i)    In the case of an Incentive Stock Option



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                            (A)    granted to an Employee who, at the time the
Incentive Stock Option is granted, owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any Parent
or Subsidiary, the per Share exercise price shall be no less than 110% of the
Fair Market Value per Share on the date of grant.

                            (B)    granted to any Employee other than an
Employee described in paragraph (A) immediately above, the per Share exercise
price shall be no less than 100% of the Fair Market Value per Share on the date
of grant.

                     (ii)   In the case of a Nonstatutory Stock Option

                            (A)    granted to a Service Provider who, at the
time of grant of such Option, owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any Parent
or Subsidiary, the per Share exercise price shall be no less than 110% of the
Fair Market Value per Share on the date of grant.

                            (B)    granted to any other Service Provider, the
per Share exercise price shall be no less than 85% of the Fair Market Value per
Share on the date of grant. However, the per Share exercise price of a
Nonstatutory Stock Option intended to qualify as "performance-based
compensation" within the meaning of Section 162(m) of the Code, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant.

                     (iii)  Notwithstanding the foregoing, Options may be
granted with a per Share exercise price of less than 100% of the Fair Market
Value per Share on the date of grant pursuant to a merger or other corporate
transaction.

              (b)    Waiting Period and Exercise Dates. At the time an Option is
granted, the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions that must be satisfied before the
Option may be exercised.

              (c)    Form of Consideration. The Administrator shall determine
the acceptable form of consideration for exercising an Option, including the
method of payment. In the case of an Incentive Stock Option, the Administrator
shall determine the acceptable form of consideration at the time of grant. Such
consideration may consist entirely of:

                     (i)    cash;

                     (ii)   check;

                     (iii)  other Shares which (A) 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, and (B) have a Fair Market Value on
the date of surrender equal to the aggregate exercise price of the Shares as to
which said Option shall be exercised;

                     (iv)   consideration received by the Company under a
cashless exercise program implemented by the Company in connection with the
Plan;



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                     (v)    a reduction in the amount of any Company liability
to the Optionee, including any liability attributable to the Optionee's
participation in any Company-sponsored deferred compensation program or
arrangement;

                     (vi)   any combination of the foregoing methods of payment;
or

                     (vii)  such other consideration and method of payment for
the issuance of Shares to the extent permitted by Applicable Laws.

       Notwithstanding any of the forgoing, the Administrator may permit an
Option to be exercised by delivery of a full-recourse promissory note secured by
the purchased Shares. All other terms of such promissory note shall be
determined by the Administrator in its sole discretion.

       10.    Exercise of Option.

              (a)    Procedure for Exercise; Rights as a Stockholder. Any Option
granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Administrator and set
forth in the Option Agreement. Except in the case of Options granted to
Officers, Directors and Consultants, Options shall become exercisable at a rate
of no less than 20% per year over five (5) years from the date the Options are
granted. Unless the Administrator provides in writing otherwise, vesting of
Options granted hereunder shall be tolled during any unpaid leave of absence. An
Option may not be exercised for a fraction of a Share.

                     An Option shall be deemed exercised when the Company
receives: (i) written or electronic notice of exercise (in accordance with the
Option Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his or her spouse.
Until the Shares are issued (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company), no right
to vote or receive dividends or any other rights as a stockholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option.
The Company shall issue (or cause to be issued) such Shares promptly after the
Option is exercised. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the Shares are issued, except as
provided in Section 14 of the Plan.

                     Exercising an Option in any manner shall decrease the
number of Shares thereafter 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 Relationship as a Service Provider. If an
Optionee ceases to be a Service Provider, other than upon the Optionee's
Disability or death, the Optionee may exercise his or her Option within such
period of time as is specified in the Option Agreement of at least thirty (30)
days to the extent that the Option is vested on the date of termination (but in
no event later than



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the expiration of the term of such Option as set forth in the Option Agreement).
In the absence of a specified time in the Option Agreement, the Option shall
remain exercisable for thirty (30) days following the Optionee's termination.
If, on the date of termination, the Optionee is not vested as to his or her
entire Option, the Shares covered by the unvested portion of the Option shall
revert to the Plan. If, after termination, the Optionee does not exercise his or
her Option within the time specified by the Administrator, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.

              (c)    Disability of Optionee. If an Optionee ceases to be a
Service Provider as a result of the Optionee's Disability, the Optionee may
exercise his or her Option within such period of time as is specified in the
Option Agreement of at least six (6) months to the extent the Option is vested
on the date of termination (but in no event later than the expiration of the
term of such Option as set forth in the Option Agreement). In the absence of a
specified time in the Option Agreement, the Option shall remain exercisable for
one (1) year following the Optionee's termination. If, on the date of
termination, the Optionee is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall revert to the Plan.
If, after termination, the Optionee does not exercise his or her Option within
the time specified herein, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.

              (d)    Death of Optionee. If an Optionee dies while a Service
Provider, the Option may be exercised within such period of time as is specified
in the Option Agreement of at least six (6) months (but in no event later than
the expiration of the term of such Option as set forth in the Notice of Grant),
by the Optionee's designated beneficiary, provided such beneficiary has been
designated prior to Optionee's death in a form acceptable by the Administrator.
If no such beneficiary has been designated by the Optionee, then such Option may
be exercised by the personal representative of the Optionee's estate or by the
person or persons to whom the Option is transferred pursuant to the Optionee's
will or in accordance with the laws of descent and distribution. In the absence
of a specified time in the Option Agreement, the Option shall remain exercisable
for six (6) months following the Optionee's termination. If, at the time of
death, the Optionee is not vested as to his or her entire Option, the Shares
covered by the unvested portion of the Option shall immediately revert to the
Plan. If the Option is not so exercised within the time specified herein, the
Option shall terminate, and the Shares covered by such Option shall revert to
the Plan.

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

       11.    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 or electronically, by means of a Notice of Grant,
of the terms, conditions and restrictions related to the offer, including the
number of Shares that the offeree shall be entitled to purchase, the price to be
paid, and the time within which the offeree must accept



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such offer. The terms of the offer shall comply in all respects with Section
260.140.42 of Title 10 of the California Code of Regulations. The offer shall be
accepted by execution of a Restricted Stock Purchase Agreement in the form
determined by the Administrator.

              (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 service with the Company for any reason (including Disability or
death). The purchase price for Shares repurchased pursuant to the Restricted
Stock Purchase Agreement shall be the original 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 a rate determined by the Administrator.
Except with respect to Shares purchased by Officers, Directors and Consultants,
the repurchase option shall in on case lapse at a rate of less than 20% per year
over five (5) years from the date of purchase.

              (c)    Other Provisions. The Restricted Stock Purchase Agreement
shall contain such other terms, provisions and conditions not inconsistent with
the Plan as may be determined by the Administrator in its sole discretion.

              (d)    Rights as a Stockholder. Once the Stock Purchase Right is
exercised, the purchaser shall have the rights equivalent to those of a
stockholder, and shall be a stockholder 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 Purchase Right is exercised, except as provided in Section 14
of the Plan.

       12.    Common Stock Equivalents.

              (a)    Award of Common Stock Equivalents. Common Stock Equivalents
may be awarded to Service Providers either alone, in addition to, or in tandem
with other awards granted under the Plan and/or cash awards made outside of the
Plan. An Award of Common Stock Equivalents shall be made pursuant to a Common
Stock Equivalent Agreement in such form as is determined by the Administrator.

              (b)    Bookkeeping Accounts; Nontransferability. The number of
Common Stock Equivalents awarded pursuant to Section 12(a) to each Service
Provider shall be credited to a bookkeeping account established in the name of
the Service Provider. The Company's obligation with respect to such Common Stock
Equivalents shall not be funded or secured in any manner. A Service Provider's
right to receive Common Stock Equivalents may not be assigned or transferred,
voluntarily or involuntarily, except as expressly provided herein.

              (c)    Dividends. If the Company pays a cash dividend with respect
to the Shares at any time while Common Stock Equivalents are credited to a
Service Provider's account, there shall be credited to the Service Provider's
account additional Common Stock Equivalents equal to (a) the dollar amount of
the cash dividend the Service Provider would have received had he or she been
the actual owner of the Shares to which the Common Stock Equivalents then
credited to the Service Provider's account relate, divided by (b) the Fair
Market Value of one Share of the dividend



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payment date. The Company will pay the Service Provider a cash payment in lieu
of fractional Common Stock Equivalents on the date of such dividend payment.

              (d)    Conversion. The Company shall deliver to the Service
Provider (or his or her designated beneficiary or estate) a number of Shares
equal to the whole number of Common Stock Equivalents then credited to the
Service Provider's account, at such time or times as specified in the Service
Provider's Common Stock Equivalent Agreement, or as otherwise provided herein.

              (e)    Stockholder Rights. A Service Provider (or his or her
designated beneficiary or estate) shall not be entitled to any voting or other
stockholder rights as a result of the credit of Common Stock Equivalents to the
Service Provider's account, until certificates representing Shares are delivered
to the Service Provider (or his or her designated beneficiary or estate) upon
conversion of the Service Provider's Common Stock Equivalents pursuant to
Section 12(d).

       13.    Non-Transferability of Awards. Unless determined otherwise by the
Administrator, an Award may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee. If the Administrator makes an Award
transferable, such Award shall contain such additional terms and conditions as
the Administrator deems appropriate and shall comply with Section 260.140.41 of
Title 10 of the California Code of Regulations.

       14.    Adjustments Upon Changes in Capitalization, Dissolution, Merger or
Asset Sale.

              (a)    Changes in Capitalization. Subject to any required action
by the stockholders of the Company, the number of Shares covered by each
outstanding Award, the number of Common Stock Equivalents credited to a Service
Provider's account under Section 12(b), and the number of Shares which have been
authorized for issuance under the Plan but as to which no Awards have yet been
granted or which have been returned to the Plan upon cancellation, forfeiture or
expiration of an Award, as well as the price per Share covered by each such
outstanding Award, shall be proportionately adjusted for any increase or
decrease in the number of issued Shares resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification of the Common
Stock, or any other increase or decrease in the number of issued Shares 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 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 subject to an Award.

              (b)    Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator may, in its discretion, provide: (i) for an
Optionee to have the right to exercise his or her Option until fifteen (15) days



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<PAGE>   13

prior to such transaction as to all of the Optioned Stock covered thereby,
including Shares as to which the Option would not otherwise be exercisable, (ii)
that any Company repurchase option applicable to any Shares purchased upon
exercise of an Option or Stock Purchase Right shall lapse as to all such Shares,
provided the proposed dissolution or liquidation takes place at the time and in
the manner contemplated; and (iii) that any Common Stock Equivalents credited to
a Service Provider's account under Section 12 (b) shall convert into Shares (as
provided in Section 12(d)) immediately prior to the consummation of any such
dissolution or liquidation. To the extent it has not been previously exercised
or converted, an Award will terminate immediately prior to the consummation of
such proposed action.

              (c)    Merger or Asset Sale. In the event of a merger of the
Company with or into another corporation, or the sale of substantially all of
the assets of the Company, each outstanding Award shall be assumed or an
equivalent award substituted by the successor corporation or a Parent or
Subsidiary of the successor corporation. In the event that the successor
corporation refuses to assume or substitute such Awards: (i) each Optionee shall
fully vest in and have the right to exercise the Option or Stock Purchase Right
as to all of the Optioned Stock, including Shares as to which it would not
otherwise be vested or exercisable; (ii) any Company repurchase option
applicable to any Shares acquired upon exercise of an Option or Stock Purchase
Right shall lapse as to all such Shares; and (iii) Common Stock Equivalents
credited to a Service Provider's account under Section 12(b) shall convert into
Shares (as provided in Section 12(d)) immediately prior to the merger or sale of
assets. If an Option or Stock Purchase Right becomes fully vested and
exercisable in lieu of assumption or substitution in the event of a merger or
sale of assets, the Administrator shall notify the Optionee in writing or
electronically that the Option or Stock Purchase Right shall be fully vested and
exercisable for a period of fifteen (15) days from the date of such notice, and
the Option or Stock Purchase Right shall terminate upon the expiration of such
period. If a Common Stock Equivalent converts to Shares in such event, the
Administrator shall notify the Optionee at least fifteen (15) days prior to the
consummation of the proposed transaction. For the purposes of this paragraph, an
Award shall be considered assumed if, following the merger or sale of assets,
the award confers the right to purchase or receive, for each Share of Optioned
Stock subject to an Option or Stock Purchase Right or for each Common Stock
Equivalent immediately prior to the merger or sale of assets, the consideration
(whether stock, cash, or other securities or property) received in the merger or
sale of assets by holders of Common Stock for each Share held on the effective
date of the transaction (and if holders were offered a choice of consideration,
the type of consideration chosen by the holders of a majority of the outstanding
Shares); provided, however, that if such consideration received in the merger or
sale of assets is not solely common stock of the successor corporation or its
Parent, the Administrator may, with the consent of the successor corporation,
provide for the consideration to be received upon the exercise of an Option or
Stock Purchase Right, for each Share of Optioned Stock subject to the Option or
Stock Purchase Right or upon conversion of each Common Stock Equivalent, to be
solely common stock of the successor corporation or its Parent equal in fair
market value to the per share consideration received by holders of Common Stock
in the merger or sale of assets.

              (d)    Termination without Cause Following Change of Control. In
the event of a Change of Control, if an Optionee is terminated by the Company
(or the successor entity) without Cause within one (1) year following such
Change of Control, Optionee shall fully vest in and have



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<PAGE>   14

the right to exercise his or her Option or Stock Purchase Right as to all of the
Shares subject to each such Option or Stock Purchase Right and any of Optionee's
Common Stock Equivalents shall automatically convert into Shares (as provided in
Section 12(d)), including Shares as to which such Award would not otherwise be
vested, exercisable or convertible.

       15.    Date of Grant. The date of grant of an Award shall be, for all
purposes, the date on which the Administrator makes the determination granting
such Award, or such other later date as is determined by the Administrator.
Notice of the determination shall be provided to each Optionee within a
reasonable time after the date of such grant.

       16.    Amendment and Termination of the Plan.

              (a)    Amendment and Termination. The Board may at any time amend,
alter, suspend or terminate the Plan.

              (b)    Stockholder Approval. The Company shall obtain stockholder
approval of any Plan amendment to the extent necessary and desirable to comply
with Applicable Laws.

              (c)    Effect of Amendment or Termination. No amendment,
alteration, suspension or termination of the Plan shall impair the rights of any
Optionee, unless mutually agreed otherwise between the Optionee and the
Administrator, which agreement must be in writing and signed by the Optionee and
the Company. Termination of the Plan shall not affect the Administrator's
ability to exercise the powers granted to it hereunder with respect to Awards
granted under the Plan prior to the date of such termination.

       17.    Conditions Upon Issuance of Shares.

              (a)    Legal Compliance. Shares shall not be issued pursuant to
the exercise or conversion of an Award unless the exercise or conversion of such
Award and the issuance and delivery of such Shares shall comply with Applicable
Laws and shall be further subject to the approval of counsel for the Company
with respect to such compliance.

              (b)    Investment Representations. As a condition to the exercise
or conversion of an Award, the Company may require the person exercising or
converting such Award to represent and warrant at the time of any such exercise
or conversion that the Shares are being purchased or issued 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.

       18.    Inability to Obtain Authority. 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.



                                      -14-

<PAGE>   15

       19.    Reservation of Shares. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

       20.    Stockholder Approval. The Plan shall be subject to approval by the
stockholders of the Company within twelve (12) months after the date the Plan is
adopted. Such stockholder approval shall be obtained in the manner and to the
degree required under Applicable Laws.

       21.    Information to Optionees and Purchasers. The Company shall provide
to each Optionee and to each individual who acquires Shares pursuant to the
Plan, not less frequently than annually 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 acquires Shares pursuant to the Plan, during the
period such individual owns such Shares, copies of annual financial statements.
The Company shall not be required to provide such statements to key employees
whose duties in connection with the Company assure their access to equivalent
information.



                                      -15-