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                                                                  Exhibit 10.146

                           ONYX ACCEPTANCE CORPORATION
                      1996 STOCK OPTION/STOCK ISSUANCE PLAN

 (AS AMENDED AND RESTATED APRIL 23, 1998 AND SUBSEQUENTLY AMENDED AND RESTATED
                     MARCH 31, 2000 AND DECEMBER 30, 2003)

                                   ARTICLE ONE

                               GENERAL PROVISIONS

I.    PURPOSE OF THE PLAN

      This 1996 Stock Option/Stock Issuance Plan is intended to promote the
interests of Onyx Acceptance Corporation, a Delaware corporation, by providing
eligible persons with the opportunity to acquire a proprietary interest, or
otherwise increase their proprietary interest, in the Corporation as an
incentive for them to remain in the service of the Corporation.

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

II.   STRUCTURE OF THE PLAN

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

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

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

            (iii) the Automatic Option Grant Program under which Eligible
Directors shall automatically receive option grants at periodic intervals to
purchase shares of Common Stock.

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

III.  ADMINISTRATION OF THE PLAN

      A. The Primary Committee shall have sole and exclusive authority to
administer the Discretionary Option Grant and Stock Issuance Programs with
respect to Section 16 Insiders. Administration of the Discretionary Option Grant
and Stock Issuance Programs with respect to all other persons eligible to
participate in those programs may, at the Board's discretion, be vested in the
Primary Committee or a Secondary Committee, or the Board may retain the power to
administer those programs with respect to all such persons. The members of the
Secondary Committee may be Board members who are Employees eligible to receive
discretionary option grants or direct stock issuances


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under the Plan or any other stock option, stock appreciation, stock bonus or
other stock plan of the Corporation (or any Parent or Subsidiary).

      B. Members of the Primary Committee or any Secondary Committee shall serve
for such period of time as the Board may determine and may be removed by the
Board at any time. The Board may also at any time terminate the functions of any
Secondary Committee and reassume all powers and authority previously delegated
to such committee.

      C. Each Plan Administrator shall, within the scope of its administrative
functions under the Plan, have full power and authority to establish such rules
and regulations as it may deem appropriate for proper administration of the
Discretionary Option Grant and Stock Issuance Programs and to make such
determinations under, and issue such interpretations of, the provisions of such
programs and any outstanding options or stock issuances thereunder as it may
deem necessary or advisable. Decisions of the Plan Administrator within the
scope of its administrative functions under the Plan shall be final and binding
on all parties who have an interest in the Discretionary Option Grant or Stock
Issuance Program under its jurisdiction or any option or stock issuance
thereunder.

      D. Service on the Primary Committee or the Secondary Committee shall
constitute service as a Board member, and members of each such committee shall
accordingly be entitled to full indemnification and reimbursement as Board
members for their service on such committee. No member of the Primary Committee
or the Secondary Committee shall be liable for any act or omission made in good
faith with respect to the Plan or any option grants or stock issuances under the
Plan.

      E. Administration of the Automatic Option Grant Program shall be
self-executing in accordance with the terms of that program, and no Plan
Administrator shall exercise any discretionary functions with respect to option
grants made thereunder.

IV.   ELIGIBILITY

      A. The persons eligible to participate in the Discretionary Option Grant
and Stock Issuance Programs are as follows:

            (i) Employees,

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

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

      B. Each Plan Administrator shall, within the scope of its administrative
jurisdiction under the Plan, have full authority (subject to the provisions of
the Plan) to determine, (i) with respect to the option grants under the
Discretionary Option Grant Program, which eligible persons are to receive option
grants, the time or times when such option grants are to be made, the number of
shares to be covered by each such grant, the status of the granted option as
either an Incentive Option or a Non-Statutory Option, the time or times at which
each option is to become exercisable, the vesting schedule (if any) applicable
to the option shares and the maximum term for


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which the option is to remain outstanding and (ii) with respect to stock
issuances under the Stock Issuance Program, which eligible persons are to
receive stock issuances, the time or times when such issuances are to be made,
the number of shares to be issued to each Participant, the vesting schedule (if
any) applicable to the issued shares and the consideration to be paid for such
shares.

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

      D. The individuals eligible to participate in the Automatic Option Grant
Program shall be limited to those individuals who are serving as non-employee
Board members on the Automatic Option Grant Program Effective Date and those
individuals who first become non-employee Board members after such date, whether
through appointment by the Board or election by the Corporation's stockholders.

A non-employee Board member who has previously been in the employ of the
Corporation (or any Parent or Subsidiary) shall NOT be eligible to receive an
initial option grant under the Automatic Option Grant Program on the Automatic
Option Grant Program Effective Date or at the time he or she first becomes a
non-employee Board member, but such individual shall be eligible to receive
periodic option grants under the Automatic Option Grant Program upon his or her
continued service as a non-employee Board member after one or more Annual
Stockholders Meetings.

V.    STOCK SUBJECT TO THE PLAN

      A. The stock issuable under the Plan shall be shares of authorized but
unissued or reacquired Common Stock, including shares repurchased by the
Corporation on the open market. The maximum number of shares of Common Stock
which may be issued over the term of the Plan shall not exceed 1,703,769 shares.

Such authorized share reserve is comprised of (i) the initial share reserve of
600,000 shares approved for the Plan prior to the Section 12(g) Registration
Date, (ii) the number of shares which remained available for issuance, as of the
Section 12(g) Registration Date, under the Predecessor Plans as last approved by
the Corporation's stockholders, including the shares subject to the outstanding
options incorporated into the Plan and any other shares which would have been
available for future option grants under the Predecessor Plans (iii) an
additional increase of 200,000 shares authorized by the Board on April 23, 1998
and approved by the stockholders on May 20, 1998, (iv) the additional 185,131
shares by which the share reserve increased automatically on the first trading
day in January 1999 and (v) the additional 185,334 shares by which the share
reserve increased automatically on the first trading day in January 2000.

      B. The number of shares of Common Stock available for issuance under the
Plan shall automatically increase on the first trading day of each calendar year
during the term of the Plan, beginning with the 1999 calendar year, by an amount
equal to three percent (3%) of the shares of Common Stock outstanding on the
last trading day of the immediately preceding calendar year. In no event shall
any such annual increase exceed 375,000 shares of Common Stock.


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      C. No one person participating in the Plan may receive options, separately
exercisable stock appreciation rights and direct stock issuances for more than
2,000,000 shares of Common Stock in the aggregate over the term of the Plan. The
increase in such limit from 500,000 shares to 2,000,000 shares is subject to
stockholder approval at the 2000 Annual Meeting.

      D. Shares of Common Stock subject to outstanding options shall be
available for subsequent issuance under the Plan to the extent (i) the options
(including any options incorporated from the Predecessor Plans) expire or
terminate for any reason prior to exercise in full or (ii) the options are
cancelled in accordance with the cancellation-regrant provisions of Article Two.
Unvested shares issued under the Plan and subsequently cancelled or repurchased
by the Corporation, at the original issue price paid per share, pursuant to the
Corporation's repurchase rights under the Plan shall be added back to the number
of shares of Common Stock reserved for issuance under the Plan and shall
accordingly be available for reissuance through one or more subsequent option
grants or direct stock issuances under the Plan. However, should the exercise
price of an option under the Plan (including any option incorporated from the
Predecessor Plans) be paid with shares of Common Stock or should shares of
Common Stock otherwise issuable under the Plan be withheld by the Corporation in
satisfaction of the withholding taxes incurred in connection with the exercise
of an option or the vesting of a stock issuance under the Plan, then the number
of shares of Common Stock available for issuance under the Plan shall be reduced
by the gross number of shares for which the option is exercised or which vest
under the stock issuance, and not by the net number of shares of Common Stock
issued to the holder of such option or stock issuance.

      E. Should any change be made to the Common Stock by reason of any stock
split, stock dividend, recapitalization, combination of shares, exchange of
shares or other change affecting the outstanding Common Stock as a class without
the Corporation's receipt of consideration, appropriate adjustments shall be
made to (i) the maximum number and/or class of securities issuable under the
Plan, (ii) the number and/or class of securities for which any one person may be
granted options, separately exercisable stock appreciation rights and direct
stock issuances over the term of the Plan, (iii) the number and/or class of
securities for which automatic option grants are to be made subsequently per
Eligible Director under the Automatic Option Grant Program, (iv) the number
and/or class of securities and the exercise price per share in effect under each
outstanding option (including any option incorporated from the Predecessor
Plans) and (v) the maximum number and/or class of securities by which the share
reserve is to increase automatically each calendar year pursuant to the
provisions of Section V.B of this Article One in order to prevent the dilution
or enlargement of benefits thereunder. The adjustments determined by the Plan
Administrator shall be final, binding and conclusive.

                                   ARTICLE TWO

                       DISCRETIONARY OPTION GRANT PROGRAM

I.    OPTION TERMS

      Each option shall be evidenced by one or more documents in the form
approved by the Plan Administrator; provided, however, that each such document
shall comply with the terms specified below. Each document


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evidencing an Incentive Option shall, in addition, be subject to the provisions
of the Plan applicable to such options.

      A. Exercise Price.

            1. The exercise price per share shall be fixed by the Plan
      Administrator but shall not be less than eighty-five percent (85%) of the
      Fair Market Value per share of Common Stock on the option grant date.

            2. The exercise price shall become immediately due upon exercise of
      the option and shall, subject to the provisions of Section I of Article
      Five and the documents evidencing the option, be payable in one or more of
      the forms specified below:

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

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

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

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

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

      C. Effect of Termination of Service.

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

                  (i) Any option outstanding at the time of the Optionee's
            cessation of Service for any reason shall remain exercisable for
            such period of time thereafter as shall be determined by the Plan
            Administrator and set forth in the documents evidencing the


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            option, but no such option shall be exercisable after the expiration
            of the option term.

                  (ii) Any option exercisable in whole or in part by the
            Optionee at the time of death may be exercised subsequently 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.

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

                  (iv) Should the Optionee's Service be terminated for
            Misconduct, then all outstanding options held by the Optionee shall
            terminate immediately and cease to be outstanding.

                  (v) In the event of an Involuntary Termination following a
            Corporate Transaction, the provisions of Section III of this Article
            Two shall govern the period for which the outstanding options are to
            remain exercisable following the Optionee's cessation of Service and
            shall supersede any provisions to the contrary in this section.

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

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

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

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


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      E. Repurchase Rights. The Plan Administrator shall have the discretion to
grant options which are exercisable for unvested shares of Common Stock. Should
the Optionee cease Service while holding such unvested shares, the Corporation
shall have the right to repurchase, at the exercise price paid per share, any or
all of those unvested shares. The terms upon which such repurchase right shall
be exercisable (including the period and procedure for exercise and the
appropriate vesting schedule for the purchased shares) shall be established by
the Plan Administrator and set forth in the document evidencing such repurchase
right.

      F. Limited Transferability of Options. During the lifetime of the
Optionee, the option shall be exercisable only by the Optionee and shall not be
assignable or transferable other than by will or by the laws of descent and
distribution following the Optionee's death. However, a Non-Qualified Option
may, in connection with the Optionee's estate plan, be assigned in whole or in
part during the Optionee's lifetime to one or more members of the Optionee's
immediate family or to a trust established exclusively for one or more such
family members. The assigned portion may only be exercised by the person or
persons who acquire a proprietary interest in the option pursuant to the
assignment. The terms applicable to the assigned portion shall be the same as
those in effect for the option immediately prior to such assignment and shall be
set forth in such documents issued to the assignee as the Plan Administrator may
deem appropriate.

II.   INCENTIVE OPTIONS

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

      A. Eligibility. Incentive Options may only be granted to Employees.

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

      C. Dollar Limitation. The aggregate Fair Market Value of the shares of
Common Stock (determined as of the respective date or dates of grant) for which
one or more options granted to any Employee under the Plan (or any other option
plan of the Corporation or any Parent or Subsidiary) may for the first time
become exercisable as Incentive Options during any one (1) calendar year shall
not exceed the sum of One Hundred Thousand Dollars ($100,000). To the extent the
Employee holds two (2) or more such options which become exercisable for the
first time in the same calendar year, the foregoing limitation on the
exercisability of such options as Incentive Options shall be applied on the
basis of the order in which such options are granted.

      D. 10% Stockholder. If any Employee to whom an Incentive Option is granted
is a 10% Stockholder, then the exercise price per share shall not be less than
one hundred ten percent (110%) of the Fair Market Value per share of Common
Stock on the option grant date, and the option term shall not exceed five (5)
years measured from the option grant date.


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III.  CORPORATE TRANSACTION/CHANGE IN CONTROL

      A. In the event of any Corporate Transaction, each outstanding option
shall automatically accelerate so that each such option shall, immediately prior
to the effective date of the Corporate Transaction, become fully exercisable for
all of the shares of Common Stock at the time subject to such option and may be
exercised for any or all of those shares as fully-vested shares of Common Stock.

However, an outstanding option shall NOT so accelerate if and to the extent: (i)
such option is, in connection with the Corporate Transaction, either to be
assumed by the successor corporation (or parent thereof) or to be replaced with
a comparable option to purchase shares of the capital stock of the successor
corporation (or parent thereof), (ii) such option is to be replaced with a cash
incentive program of the successor corporation which preserves the spread
existing on the unvested option shares at the time of the Corporate Transaction
and provides for subsequent payout in accordance with the same vesting schedule
applicable to such option or (iii) the acceleration of such option is subject to
other limitations imposed by the Plan Administrator at the time of the option
grant. The determination of option comparability under clause (i) above shall be
made by the Plan Administrator, and its determination shall be final, binding
and conclusive.

      B. All outstanding repurchase rights shall also terminate automatically,
and the shares of Common Stock subject to those terminated rights shall
immediately vest in full, in the event of any Corporate Transaction, except to
the extent: (i) those repurchase rights are to be assigned to the successor
corporation (or parent thereof) in connection with such Corporate Transaction or
(ii) such accelerated vesting is precluded by other limitations imposed by the
Plan Administrator at the time the repurchase right is issued.

      C. The Plan Administrator shall have the discretion, exercisable either at
the time the option is granted or at any time while the option remains
outstanding, to provide for the automatic acceleration of one or more
outstanding options (and the automatic termination of one or more outstanding
repurchase rights with the immediate vesting of the shares of Common Stock
subject to those rights) upon the occurrence of a Corporate Transaction, whether
or not those options are to be assumed or replaced in the Corporate Transaction.

The Plan Administrator shall also have the discretion to grant options which do
not accelerate whether or not such options are assumed (and to provide for
repurchase rights that do not terminate whether or not such rights are assigned)
in connection with a Corporate Transaction.

      D. Immediately following the consummation of the Corporate Transaction,
all outstanding options shall terminate and cease to be outstanding, except to
the extent assumed by the successor corporation (or parent thereof).

      E. Each option which is assumed in connection with a Corporate Transaction
shall be appropriately adjusted, immediately after such Corporate Transaction,
to apply to the number and class of securities which would have been issuable to
the Optionee in consummation of such Corporate Transaction had the option been
exercised immediately prior to such Corporate Transaction.


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Appropriate adjustments shall also be made to (i) the number and class of
securities available for issuance under the Plan following the consummation of
such Corporate Transaction, (ii) the exercise price payable per share under each
outstanding option, provided the aggregate exercise price payable for such
securities shall remain the same, (iii) the maximum number of securities and/or
class of securities for which any one person may be granted stock options,
separately exercisable stock appreciation rights and direct stock issuances
under the Plan per calendar year and (iv) the maximum number and/or class of
securities by which the share reserve is to increase automatically each calendar
year pursuant to the provisions of Section V.B of this Article One.

      F. Any options which are assumed or replaced in the Corporate Transaction
and do not otherwise accelerate at that time shall automatically accelerate (and
any of the Corporation's outstanding repurchase rights which do not otherwise
terminate at the time of the Corporate Transaction shall automatically terminate
and the shares of Common Stock subject to those terminated rights shall
immediately vest in full) in the event the Optionee's Service should
subsequently terminate by reason of an Involuntary Termination within eighteen
(18) months following the effective date of such Corporate Transaction. Any
options so accelerated shall remain exercisable for fully-vested shares until
the earlier of (i) the expiration of the option term or (ii) the expiration of
the one (1)-year period measured from the effective date of the Involuntary
Termination.

      G. The Plan Administrator shall have the discretion, exercisable either at
the time the option is granted or at any time while the option remains
outstanding, to (i) provide for the automatic acceleration of one or more
outstanding options (and the automatic termination of one or more outstanding
repurchase rights with the immediate vesting of the shares of Common Stock
subject to those rights) upon the occurrence of a Change in Control or (ii)
condition any such option acceleration (and the termination of any outstanding
repurchase rights) upon the subsequent Involuntary Termination of the Optionee's
Service within a specified period following the effective date of such Change in
Control. Any options accelerated in connection with a Change in Control shall
remain fully exercisable until the expiration or sooner termination of the
option term.

      H. The portion of any Incentive Option accelerated in connection with a
Corporate Transaction or Change in Control shall remain exercisable as an
Incentive Option only to the extent the applicable One Hundred Thousand Dollar
($100,000) limitation is not exceeded. To the extent such dollar limitation is
exceeded, the accelerated portion of such option shall be exercisable as a
Non-Statutory Option under the Federal tax laws.

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

IV.   CANCELLATION AND REGRANT OF OPTIONS

      The Plan Administrator shall have the authority to effect, at any time and
from time to time, with the consent of the affected option holders, the
cancellation of any or all outstanding options under the Discretionary Option


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Grant Program (including outstanding options incorporated from the Predecessor
Plan) and to grant in substitution new options covering the same or different
number of shares of Common Stock but with an exercise price per share based on
the Fair Market Value per share of Common Stock on the new grant date.

V.    STOCK APPRECIATION RIGHTS

      A. The Plan Administrator shall have full power and authority to grant to
selected Optionees tandem stock appreciation rights and/or limited stock
appreciation rights.

      B. The following terms shall govern the grant and exercise of tandem stock
appreciation rights:

            (i) One or more Optionees may be granted the right, exercisable upon
      such terms as the Plan Administrator may establish, to elect between the
      exercise of the underlying option for shares of Common Stock and the
      surrender of that option in exchange for a distribution from the
      Corporation in an amount equal to the excess of (a) the Fair Market Value
      (on the option surrender date) of the number of shares in which the
      Optionee is at the time vested under the surrendered option (or
      surrendered portion thereof) over (b) the aggregate exercise price payable
      for such shares.

            (ii) No such option surrender shall be effective unless it is
      approved by the Plan Administrator. If the surrender is so approved, then
      the distribution to which the Optionee shall be entitled may be made in
      shares of Common Stock valued at Fair Market Value on the option surrender
      date, in cash, or partly in shares and partly in cash, as the Plan
      Administrator shall in its sole discretion deem appropriate.

            (iii) If the surrender of an option is rejected by the Plan
      Administrator, then the Optionee shall retain whatever rights the Optionee
      had under the surrendered option (or surrendered portion thereof) on the
      option surrender date and may exercise such rights at any time prior to
      the LATER of (a) five (5) business days after the receipt of the rejection
      notice or (b) the last day on which the option is otherwise exercisable in
      accordance with the terms of the documents evidencing such option, but in
      no event may such rights be exercised more than ten (10) years after the
      option grant date.

      C. The following terms shall govern the grant and exercise of limited
stock appreciation rights:

            (i) One or more Section 16 Insiders may be granted limited stock
      appreciation rights with respect to their outstanding options.

            (ii) Upon the occurrence of a Hostile Take-Over, each such
      individual holding one or more options with such a limited stock
      appreciation right shall have the unconditional right (exercisable for a
      thirty (30)-day period following such Hostile Take-Over) to surrender each
      such option to the Corporation, to the extent the option is at the time
      exercisable for vested shares of Common Stock. In return for the
      surrendered option, the Optionee shall receive a cash distribution from
      the Corporation in an amount equal to the excess of (a) the Take-Over


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      Price of the shares of Common Stock which are at the time vested under
      each surrendered option (or surrendered portion thereof) over (b) the
      aggregate exercise price payable for such shares. Such cash distribution
      shall be paid within five (5) days following the option surrender date.

            (iii) The Plan Administrator shall pre-approve, at the time the
      limited right is granted, the subsequent exercise of that right in
      accordance with the terms of the grant and the provisions of this Section
      V. No additional approval of the Plan Administrator or the Board shall be
      required at the time of the actual option surrender and cash distribution.

            (iv) The balance of the option (if any) shall continue in full force
      and effect in accordance with the documents evidencing such option.

                                  ARTICLE THREE

                             STOCK ISSUANCE PROGRAM

I.    STOCK ISSUANCE TERMS

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

      A.    Purchase Price.

            1. The purchase price per share shall be fixed by the Plan
      Administrator, but shall not be less than eighty-five percent (85%) of the
      Fair Market Value per share of Common Stock on the issuance date.

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

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

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

      B.    Vesting Provisions.

            1. Shares of Common Stock issued under the Stock Issuance Program
      may, in the discretion of the Plan Administrator, be fully and immediately
      vested upon issuance or may vest in one or more installments over the
      Participant's period of Service or upon attainment of specified
      performance objectives. The elements of the vesting schedule applicable to
      any unvested shares of Common Stock issued under the Stock Issuance
      Program, namely:

                  (i) the Service period to be completed by the Participant or
            the performance objectives to be attained,


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                  (ii) the number of installments in which the shares are to
            vest,

                  (iii) the interval or intervals (if any) which are to lapse
            between installments, and

                  (iv) the effect which death, Permanent Disability or other
            event designated by the Plan Administrator is to have upon the
            vesting schedule, shall be determined by the Plan Administrator and
            incorporated into the Stock Issuance Agreement.

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

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

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

            5. The Plan Administrator may in its discretion waive the surrender
      and cancellation of one or more unvested shares of Common Stock (or other
      assets attributable thereto) which would otherwise occur upon the
      cessation of the Participant's Service or the non-attainment of the
      performance objectives applicable to those shares. Such waiver shall
      result in the immediate vesting of the Participant's interest in the
      shares of Common Stock as to which the waiver applies. Such waiver may be
      effected at any time, whether before or after the Participant's cessation
      of Service or the attainment or non-attainment of the applicable
      performance objectives.


                                      -12-
<PAGE>
II.   CORPORATE TRANSACTION/CHANGE IN CONTROL

      A. All outstanding cancellation rights under the Stock Issuance Program
shall terminate automatically, and all the shares of Common Stock subject to
those terminated rights shall immediately vest in full, in the event of any
Corporate Transaction, except to the extent (i) those repurchase/cancellation
rights are assigned to the successor corporation (or parent thereof) in
connection with such Corporate Transaction or (ii) such accelerated vesting is
precluded by other limitations imposed in the Stock Issuance Agreement.

      B. Any cancellation rights that are assigned in the Corporate Transaction
shall automatically terminate, and the shares of Common Stock subject to those
terminated rights shall immediately vest in full, in the event the Participant's
Service should subsequently terminate by reason of an Involuntary Termination
within eighteen (18) months following the effective date of such Corporate
Transaction.

      C. The Plan Administrator shall have the discretion to provide for
cancellation rights with terms different from those in effect under this Section
II in connection with a Corporate Transaction.

      D. The Plan Administrator shall have the discretion, exercisable either at
the time the unvested shares are issued or at any time while the Corporation's
cancellation right remains outstanding, to (i) provide for the automatic
termination of one or more outstanding cancellation rights and the immediate
vesting of the shares of Common Stock subject to those rights upon the
occurrence of a Change in Control or (ii) condition any such accelerated vesting
upon the subsequent Involuntary Termination of the Participant's Service within
a specified period following the effective date of such Change in Control.

III.  SHARE ESCROW/LEGENDS

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

                                  ARTICLE FOUR

                         AUTOMATIC OPTION GRANT PROGRAM

I.    OPTION TERMS

      A. Grant Dates. Option grants shall be made on the dates specified below:

            1. Each individual who is first elected or appointed as a
      non-employee Board member after the 1998 Annual Stockholders Meeting shall
      automatically be granted, on the date of such initial election or
      appointment (as the case may be), a Non-Statutory Option to purchase
      10,000 shares of Common Stock.

            2. On the date of each Annual Stockholders Meeting during the period
      beginning on the date of the 1999 Annual Meeting and ending on the date of
      the 2003 Annual Meeting, each individual who is re-elected to serve as a
      non-employee Board member at such meeting shall


                                      -13-
<PAGE>
      automatically be granted a Non-Statutory Option to purchase 7,000
      additional shares of Common Stock, provided such individual has served as
      a non-employee Board member for at least six (6) months. There shall be no
      limit on the number of such 7,000-share option grants any one Eligible
      Director may receive over his or her period of Board service.

            The Plan was amended and restated by the Board, effective April 23,
      1998 (the "1998 Restatement"), and approved by the Company's stockholders
      at the 1998 Annual Stockholders Meeting. The stockholders' approval
      constituted approval of each option subsequently granted on or after the
      date of such Annual Meeting pursuant to the express terms of this
      Automatic Option Grant Program and the subsequent exercise of that option
      in accordance with its terms.

            3. On the first day of each January on which the Company's Common
      Stock is quoted for trading on the Nasdaq National Market (or another
      national quotation system or stock exchange), beginning in January 2004,
      each non-employee Board member who will continue to serve as a
      non-employee Board member after such date shall automatically be granted
      an option to purchase 5,000 additional shares of the Company's Common
      Stock, provided such individual has served as a Board member for a period
      of at least six (6) months. There shall be no limit on the number of such
      5,000-share option grants any one Eligible Director may receive over his
      or her period of Board service.

      B. Exercise Price.

            1. The exercise price per share shall be equal to one hundred
      percent (100%) of the Fair Market Value per share of Common Stock on the
      option grant date.

            2. The exercise price shall be payable in one or more of the
      alternative forms authorized under the Discretionary Option Grant Program.

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

      C. Option Term. Each option shall have a term of ten (10) years measured
from the option grant date.

      D. Exercise and Vesting of Options. Each option shall be immediately
exercisable for any or all of the option shares. However, any shares purchased
under the option shall be subject to repurchase by the Corporation, at the
exercise price paid per share, upon the Optionee's cessation of Board service
prior to vesting in those shares. Each initial grant shall vest, and the
Corporation's repurchase right shall lapse, in a series of twenty-four (24)
successive equal monthly installments upon the Optionee's completion of each
month of Board service over the twenty-four (24)-month period measured from the
option grant date. Each annual grant shall vest, and the Corporation's
repurchase right shall lapse, in a series of twelve (12) successive equal
monthly installments upon the Optionee's completion of each month of Board
service over the twenty-twelve (12)-month period measured from the option grant
date.


                                      -14-
<PAGE>
      E. Effect of Termination of Board Service. The following provisions shall
govern the exercise of any options held by the Optionee at the time the Optionee
ceases to serve as a Board member:

            (i) The Optionee (or, in the event of Optionee's death, the personal
      representative of the Optionee's estate or 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) shall have a twelve (12)-month
      period following the date of such cessation of Board service in which to
      exercise each such option.

            (ii) During the twelve (12)-month exercise period, the option may
      not be exercised in the aggregate for more than the number of vested
      shares of Common Stock for which the option is exercisable at the time of
      the Optionee's cessation of Board service.

            (iii) Should the Optionee cease to serve as a Board member by reason
      of death or Permanent Disability, then all shares at the time subject to
      the option shall immediately vest so that such option may, during the
      twelve (12)-month exercise period following such cessation of Board
      service, be exercised for all or any portion of those shares as
      fully-vested shares of Common Stock.

            (iv) In no event shall the option remain exercisable after the
      expiration of the option term. Upon the expiration of the twelve
      (12)-month exercise period or (if earlier) upon the expiration of the
      option term, the option shall terminate and cease to be outstanding for
      any vested shares for which the option has not been exercised. However,
      the option shall, immediately upon the Optionee's cessation of Board
      service for any reason other than death or Permanent Disability, terminate
      and cease to be outstanding to the extent the option is not otherwise at
      that time exercisable for vested shares.

II.   CORPORATE TRANSACTION/CHANGE IN CONTROL/HOSTILE TAKE-OVER

      A. In the event of any Corporate Transaction, the shares of Common Stock
at the time subject to each outstanding option but not otherwise vested shall
automatically vest in full so that each such option shall, immediately prior to
the effective date of the Corporate Transaction, become fully exercisable for
all of the shares of Common Stock at the time subject to such option and may be
exercised for all or any portion of those shares as fully-vested shares of
Common Stock. Immediately following the consummation of the Corporate
Transaction, each automatic option grant shall terminate and cease to be
outstanding, except to the extent assumed by the successor corporation (or
parent thereof).

      B. In connection with any Change in Control, the shares of Common Stock at
the time subject to each outstanding option but not otherwise vested shall
automatically vest in full so that each such option shall, immediately prior to
the effective date of the Change in Control, become fully exercisable for all of
the shares of Common Stock at the time subject to such option and may be
exercised for all or any portion of those shares as fully-vested shares of
Common Stock. Each such option shall remain exercisable for such fully-vested
option shares until the expiration or sooner termination of the option term or
the surrender of the option in connection with a Hostile Take-Over.


                                      -15-
<PAGE>
      C. Upon the occurrence of a Hostile Take-Over, the Optionee shall have a
thirty (30)-day period in which to surrender to the Corporation each automatic
option held by him or her at that time. The Optionee shall in return be entitled
to a cash distribution from the Corporation in an amount equal to the excess of
(i) the Take-Over Price of the shares of Common Stock at the time subject to the
surrendered option (whether or not the Optionee is otherwise at the time vested
in those shares) over (ii) the aggregate exercise price payable for such shares.

Such cash distribution shall be paid within five (5) days following the
surrender of the option to the Corporation. Stockholder approval of the 1998
Restatement at the 1998 Annual Meeting constituted approval of each option
granted with such a surrender right under this Automatic Option Grant Program on
or after the date of that Annual Meeting and the subsequent exercise of such
right in accordance with the terms and provisions of this Section II.C. No
additional approval or consent of the Plan Administrator or the Board shall be
required at the time of the actual option surrender and cash distribution.

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

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

III.  REMAINING TERMS

      The remaining terms of each option granted under the Automatic Option
Grant Program shall be the same as the terms in effect for option grants made
under the Discretionary Option Grant Program.

                                  ARTICLE FIVE

                                  MISCELLANEOUS

I.    FINANCING

      A. The Plan Administrator may permit any Optionee or Participant to pay
the option exercise price under the Discretionary Option Grant Program or the
purchase price for shares issued under the Stock Issuance Program by delivering
a promissory note payable in one or more installments. The terms of any such
promissory note (including the interest rate and the terms of repayment) shall
be established by the Plan Administrator in its sole discretion. Promissory
notes may be authorized with or without security or collateral. In all events,
the maximum credit available to the Optionee or Participant may not exceed the
sum of (i) the aggregate option exercise price or purchase price payable for the
purchased shares plus (ii) any Federal,


                                      -16-
<PAGE>
state and local income and employment tax liability incurred by the Optionee or
the Participant in connection with the option exercise or share purchase.

      B. The Plan Administrator may, in its discretion, determine that one or
more such promissory notes shall be subject to forgiveness by the Corporation in
whole or in part upon such terms as the Plan Administrator may deem appropriate.

II.   TAX WITHHOLDING

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

      B. The Plan Administrator may, in its discretion, provide any or all
holders of Non-Statutory Options or unvested shares of Common Stock under the
Plan (other than the options granted or the shares issued under the Automatic
Option Grant Program) with the right to use shares of Common Stock in
satisfaction of all or part of the Taxes incurred by such holders in connection
with the exercise of their options or the vesting of their shares. Such right
may be provided to any such holder in either or both of the following formats:

            (i) Stock Withholding: The election to have the Corporation
      withhold, from the shares of Common Stock otherwise issuable upon the
      exercise of such Non-Statutory Option or the vesting of such shares, a
      portion of those shares with an aggregate Fair Market Value equal to the
      percentage of the Taxes (not to exceed one hundred percent (100%))
      designated by the holder.

            (ii) Stock Delivery: The election to deliver to the Corporation, at
      the time the Non-Statutory Option is exercised or the shares vest, one or
      more shares of Common Stock previously acquired by such holder (other than
      in connection with the option exercise or share vesting triggering the
      Taxes) with an aggregate Fair Market Value equal to the percentage of the
      Taxes (not to exceed one hundred percent (100%)) designated by the holder.

III.  EFFECTIVE DATE AND TERM OF THE PLAN

      A. The Discretionary Option Grant and Stock Issuance Programs became
effective on the Plan Effective Date. The Automatic Option Grant Program became
effective on the Automatic Option Grant Program Effective Date. The Plan serves
as the successor to the Predecessor Plans, and no further option grants or
direct stock issuances shall be made under the Predecessor Plans after the
Section 12(g) Registration Date. All options outstanding under the Predecessor
Plans as of such date were incorporated into the Plan at that time and shall be
treated as outstanding options under the Plan. However, each outstanding option
so incorporated shall continue to be governed solely by the terms of the
documents evidencing such option, and no provision of the Plan shall be deemed
to affect or otherwise modify the rights or obligations of the holders of such
incorporated options with respect to their acquisition of shares of Common
Stock.


                                      -17-
<PAGE>
      B. The 1998 Restatement effected the following revisions to the Plan: (i)
increased the maximum number of shares of Common Stock authorized for issuance
over the term of the Plan by 200,000 shares, from 1,133,304 shares to 1,333,304
shares, (ii) implemented an automatic share increase feature pursuant to which
the number of shares available for issuance over the term of the Plan is
automatically increased on the first trading day of each calendar year,
beginning with the 1999 calendar year, by an amount equal to three percent (3%)
of the total number of shares of Common Stock outstanding on the last trading
day of the immediately preceding calendar year, (iii) increased the number of
shares subject to the automatic option grants to the non-employee Board members
under the Automatic Option Grant Program from 8,000 shares to 10,000 shares for
the initial automatic grants and from 2,000 shares to 7,000 shares for the
annual automatic grants, (iv) rendered the non-employee Board members serving on
the Primary Committee eligible to receive option grants under the Discretionary
Option Grant Program and direct stock issuances under the Stock Issuance
Program, (v) allowed unvested shares issued under the Plan and subsequently
repurchased by the Corporation at the option exercise or direct issue price paid
per share to be reissued under the Plan, (vi) removed certain restrictions on
the eligibility of non-employee Board members to serve as Plan Administrator and
(vii) effected a series of additional changes to the provisions of the Plan
(including the stockholder approval requirements) in order to take advantage of
amendments to Rule 16b-3 of the Securities and Exchange Commission which exempt
certain officer and director transactions under the Plan from the short-swing
liability provisions of the federal securities laws. The 1998 Restatement was
approved by the stockholders at the 1998 Annual Meeting. All option grants made
under the Plan prior to the 1998 Restatement remained outstanding in accordance
with the terms and conditions of the respective instruments evidencing those
options, and nothing in the 1998 Restatement modified or in any way affected
those outstanding options.

      C. The Plan was amended and restated by the Board on March 31, 2000 (the
"March 2000 Amendment") to increase the limitation on the maximum number of
shares of Common Stock for which any one individual may be granted stock
options, separately-exercisable stock appreciation rights and direct stock
issuances in the aggregate under the Plan from 500,000 shares to 2,000,000
shares in the aggregate. Such amendment is subject to stockholder approval at
the 2000 Annual Meeting. Should such stockholder approval not be obtained, then
any options granted on the basis of that increase shall terminate without
becoming exercisable for any of the shares of Common Stock subject to those
options, and no further options shall be granted on the basis of such increase.
The Plan shall, however, continue to remain in effect, and option grants and
direct stock issuances may continue to be made pursuant to the provisions of the
Plan in effect prior to the March 2000 Amendment, until the available reserve of
Common Stock as last approved by the stockholders has been issued pursuant to
option grants made under the Plan.

      D. One or more provisions of the Plan, including (without limitation) the
option/vesting acceleration provisions of Article Two relating to Corporate
Transactions and Changes in Control, may, in the Plan Administrator's
discretion, be extended to one or more options incorporated from the Predecessor
Plans which do not otherwise contain such provisions.

      E. The Plan shall terminate upon the earliest of (i) February 27, 2006,
(ii) the date on which all shares available for issuance under the Plan shall
have been issued pursuant to the exercise of the options or the issuance of
shares (whether vested or unvested) under the Plan or (iii) the


                                      -18-
<PAGE>
termination of all outstanding options in connection with a Corporate
Transaction. Upon such Plan termination, all outstanding options and unvested
stock issuances shall continue to have force and effect in accordance with the
provisions of the documents evidencing such options or issuances.

IV.   AMENDMENT OF THE PLAN

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

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

V.    USE OF PROCEEDS

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

VI.   REGULATORY APPROVALS

      A. The implementation of the Plan, the granting of any option or stock
appreciation right under the Plan and the issuance of any shares of Common Stock
(i) upon the exercise of any option or stock appreciation right or (ii) under
the Stock Issuance Program shall be subject to the Corporation's procurement of
all approvals and permits required by regulatory authorities having jurisdiction
over the Plan, the options and stock appreciation rights granted under it and
the shares of Common Stock issued pursuant to it.

      B. No shares of Common Stock or other assets shall be issued or delivered
under the Plan unless and until there shall have been compliance with all
applicable requirements of Federal and state securities laws, including the
filing and effectiveness of the Form S-8 registration statement for the shares
of Common Stock issuable under the Plan, and all applicable listing requirements
of any stock exchange (or the Nasdaq National Market, if applicable) on which
Common Stock is then listed for trading.


                                      -19-
<PAGE>
VII.  NO EMPLOYMENT/SERVICE RIGHTS

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

                                    APPENDIX

      The following definitions shall be in effect under the Plan:

      A. AUTOMATIC OPTION GRANT PROGRAM shall mean the automatic option grant
program in effect under the Plan.

      B. AUTOMATIC OPTION GRANT PROGRAM EFFECTIVE DATE shall mean the date on
which the underwriting agreement was executed and the offering price of the
Common Stock was established for the Company's initial public offering.

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

      D. CHANGE IN CONTROL shall mean a change in ownership or control of the
Corporation effected through either of the following transactions:

            (i) the acquisition, directly or indirectly, by any person or
      related group of persons (other than the Corporation or a person that
      directly or indirectly controls, is controlled by, or is under common
      control with, the Corporation), of beneficial ownership (within the
      meaning of Rule 13d-3 of the 1934 Act) of securities possessing more than
      fifty percent (50%) of the total combined voting power of the
      Corporation's outstanding securities pursuant to a tender or exchange
      offer made directly to the Corporation's stockholders which the Board does
      not recommend such stockholders to accept, or

            (ii) a change in the composition of the Board over a period of
      thirty-six (36) consecutive months or less such that a majority of the
      Board members ceases, by reason of one or more contested elections for
      Board membership, to be comprised of individuals who either (A) have been
      Board members continuously since the beginning of such period or (B) have
      been elected or nominated for election as Board members during such period
      by at least a majority of the Board members described in clause (A) who
      were still in office at the time the Board approved such election or
      nomination.

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

      F. COMMON STOCK shall mean the Corporation's common stock.

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

            (i) a merger or consolidation in which securities possessing more
      than fifty percent (50%) of the total combined voting power of the
      Corporation's outstanding securities are transferred to a person or


                                      -20-
<PAGE>
      persons different from the persons holding those securities immediately
      prior to such transaction; or

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

      H. CORPORATION shall mean Onyx Acceptance Corporation, a Delaware
corporation, and any corporate successor to all or substantially all of the
assets or voting stock of Onyx Acceptance Corporation which shall by appropriate
action adopt the Plan.

      I. DISCRETIONARY OPTION GRANT PROGRAM shall mean the discretionary option
grant program in effect under the Plan.

      J. DOMESTIC RELATIONS ORDER shall mean any judgment, decree or order
(including approval of a property settlement agreement) which provides or
otherwise conveys, pursuant to applicable State domestic relations laws
(including community property laws), marital property rights to any spouse or
former spouse of the Optionee.

      K. ELIGIBLE DIRECTOR shall mean a non-employee Board member eligible to
participate in the Automatic Option Grant Program in accordance with the
eligibility provisions of Article One.

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

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

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

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

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


                                      -21-
<PAGE>
      O. HOSTILE TAKE-OVER shall mean a change in ownership of the Corporation
effected through the acquisition, directly or indirectly, by any person or
related group of persons (other than the Corporation or a person that directly
or indirectly controls, is controlled by, or is under common control with, the
Corporation) of beneficial ownership (within the meaning of Rule 13d-3 of the
1934 Act) of securities possessing more than fifty percent (50%) of the total
combined voting power of the Corporation's outstanding securities pursuant to a
tender or exchange offer made directly to the Corporation's stockholders which
the Board does not recommend such stockholders to accept.

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

      Q. INVOLUNTARY TERMINATION shall mean the termination of the Service of
any individual which occurs by reason of:

            (i) such individual's involuntary dismissal or discharge by the
      Corporation for reasons other than Misconduct, or

            (ii) such individual's voluntary resignation following (A) a change
      in his or her position with the Corporation which materially reduces his
      or her level of responsibility, (B) a reduction in his or her level of
      compensation (including base salary, fringe benefits and participation in
      corporate-performance based bonus or incentive programs) by more than
      fifteen percent (15%) or (C) a relocation of such individual's place of
      employment by more than fifty (50) miles, provided and only if such
      change, reduction or relocation is effected by the Corporation without the
      individual's consent.

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

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

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

      U. OPTIONEE shall mean any person to whom an option is granted under the
Discretionary Option Grant or Automatic Option Grant Program.

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


                                      -22-
<PAGE>
      W. PARTICIPANT shall mean any person who is issued shares of Common Stock
under the Stock Issuance Program.

      X. PERMANENT DISABILITY OR PERMANENTLY DISABLED shall mean the inability
of the Optionee or the Participant to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment expected
to result in death or to be of continuous duration of twelve (12) months or
more.

However, solely for the purposes of the Automatic Option Grant Program,
Permanent Disability or Permanently Disabled shall mean the inability of the
non-employee Board member to perform his or her usual duties as a Board member
by reason of any medically determinable physical or mental impairment expected
to result in death or to be of continuous duration of twelve (12) months or
more.

      Y. PLAN shall mean the Corporation's 1996 Stock Option/Stock Issuance
Plan, as set forth in this document.

      Z. PLAN ADMINISTRATOR shall mean the particular entity, whether the
Primary Committee, the Board or the Secondary Committee, which is authorized to
administer the Discretionary Option Grant and Stock Issuance Programs with
respect to one or more classes of eligible persons, to the extent such entity is
carrying out its administrative functions under those programs with respect to
the persons under its jurisdiction.

      AA. PLAN EFFECTIVE DATE shall mean February 28, 1996, the date on which
the Plan was adopted by the Board.

      BB. PREDECESSOR PLANS shall mean the Corporation's 1994 Stock Option Plan
and the 1994 Special Performance Option Grant Plan.

      CC. PRIMARY COMMITTEE shall mean the committee of two (2) or more
non-employee Board members appointed by the Board to administer the
Discretionary Option Grant and Stock Issuance Programs with respect to Section
16 Insiders.

      DD. QUALIFIED DOMESTIC RELATIONS ORDER shall mean a Domestic Relations
Order which substantially complies with the requirements of Code Section 414(p).
The Plan Administrator shall have the sole discretion to determine whether a
Domestic Relations Order is a Qualified Domestic Relations Order.

      EE. SECONDARY COMMITTEE shall mean a committee of two (2) or more Board
members appointed by the Board to administer the Discretionary Option Grant and
Stock Issuance Programs with respect to eligible persons other than Section 16
Insiders.

      FF. SECTION 16 INSIDER shall mean an officer or director of the
Corporation subject to the short-swing profit liabilities of Section 16 of the
1934 Act.

      GG. SECTION 12(g) REGISTRATION DATE shall mean the first date on which the
Common Stock is registered under Section 12(g) of the 1934 Act.


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

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

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

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

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

      MM. TAKE-OVER PRICE shall mean the greater of (i) the Fair Market Value
per share of Common Stock on the date the option is surrendered to the
Corporation in connection with a Hostile Take-Over or (ii) the highest reported
price per share of Common Stock paid by the tender offeror in effecting such
Hostile Take-Over. However, if the surrendered option is an Incentive Option,
the Take-Over Price shall not exceed the clause (i) price per share.

      NN. TAXES shall mean the Federal, state and local income and employment
withholding taxes to which the holder of Non-Statutory Options or unvested
shares of Common Stock may become subject in connection with the exercise of
those options or the vesting of those shares.

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


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