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                                  SOFTPLUS INC.


                             1999 STOCK OPTION PLAN




         1. Purposes of the Plan. The purposes of this 1999 Stock Option Plan
are to attract and retain the best available personnel for positions of
substantial responsibility, to provide additional incentive to Employees and
Consultants of the Company and its Subsidiaries and to promote the success of
the Company's business. Options granted under the Plan may be Incentive Stock
Options (as defined under Section 422 of the Code) or Nonstatutory Stock
Options, as determined by the Administrator at the time of grant of an Option
and subject to the applicable provisions of Section 422 of the Code, as amended,
and the regulations promulgated thereunder.

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

         (a) "Administrator" means the Board or its Committee appointed pursuant
to Section 4 of the Plan.


         (b) "Affiliate" means an entity other than a Subsidiary in which the
Company owns an equity interest or which, together with the Company, is under
common control of a third person or entity.

         (c) "Applicable Laws" means the legal requirements relating to the
administration of stock option plans under applicable U.S. state corporate laws,
U.S. federal and applicable state securities laws, the Code, any Stock Exchange
rules and regulations and the applicable laws of any other country or
jurisdiction where Options are granted under the Plan, as such laws, rules,
regulations and requirements shall be in place from time to time.

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


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


         (f) "Committee" means one or more committees or subcommittees of the
Board appointed by the Board to administer the Plan in accordance with Section 4
below.

         (g) "Common Stock" means the Common Stock of the Company.


         (h) "Company" means SoftPlus Inc., a California corporation.

         (i) "Consultant" means any person, including an advisor, who renders
services to the Company, or any Parent, Subsidiary or Affiliate, and is
compensated for such services, and any director of the Company whether
compensated for such services or not; provided, however, that if and in the
event the Company registers any class of equity security pursuant to the
Exchange Act, the term Consultant shall thereafter not include directors who are
not compensated for their services or are paid only a director's fee by the
Company.
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         (j) "Continuous Service Status" means the absence of any interruption
or termination of service as an Employee or Consultant to the Company or a
Parent. Subsidiary or Affiliate. Continuous Service Status shall not be
considered interrupted in the case of (i) sick leave; (ii) military leave; (iii)
any other leave of absence approved by the Administrator, provided that such
leave is for a period of not more than 90 days, unless reemployment upon the
expiration of such leave is guaranteed by contract or statute, or unless
provided otherwise pursuant to Company policy adopted from time to time; or (iv)
in the case, of transfers between locations of the Company or between the
Company, its Parents, Subsidiaries or Affiliates or their respective successors.
Unless otherwise determined by the Administrator, a change in status from an
Employee to a Consultant or from a Consultant to an Employee will not constitute
an interruption of Continuous Service Status.

         (k) "Corporate Transaction" means a sale of all or substantially all of
the Company's assets, or a merger, consolidation or other capital reorganization
of the Company with or into another corporation.

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


         (m) "Employee" means any person, including officers and Directors,
employed by the Company or any Parent, Subsidiary or Affiliate of the Company.
The payment by the Company of a director's fee to a Director shall not be
sufficient to constitute "employment" of such Director by the Company.

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


         (o) "Fair Market Value" means, as of any date, the fair market value of
Common Stock determined as follows:


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

         (ii) If the Common Stock is quoted on the Nasdaq System (but not on the
National Market thereof) or regularly quoted by a recognized securities dealer
but selling prices are not reported, its Fair Market Value shall be the mean
between the high bid and low asked prices for the Common Stock for the last
market trading day prior to the time of determination, as reported in The Wall
Street Journal or such other source as the Administrator deems reliable; or
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         (iii) In the, absence of an established market for the Common Stock,
the Fair Market Value thereof shall be determined in good faith by the
Administrator.

         (p) "Incentive Stock Option" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code, as
designated in the applicable Option Agreement.

         (q) "Listed Security" means any security of the Company that is listed
or approved for listing on a national securities exchange or designated or
approved for designation as a national market system security on an interdealer
quotation system by the National Association of Securities Dealers, Inc.

         (r) "Nonstatutory Stock Option" means an Option not intended to qualify
as an Incentive Stock Option, as designated in the applicable Option Agreement.

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

         (t) "Option Agreement" means a written document, the form(s) of which
shall be approved from time to time by the Administrator, reflecting the terms
of an Option granted under the Plan and includes any documents attached to or
incorporated into such Option Agreement, including, but not limited to, a notice
of stock option grant and a form of exercise notice.

         (u) "Option Exchange Program" means a program approved by the
Administrator whereby outstanding Options are exchanged for Options with a lower
exercise price.

         (v) "Optioned Stock" means the Common Stock subject to an Option.

         (w) "Optionee" means an Employee or Consultant who receives an Option.

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

         (y) "Participant" means any holder of one or more Options, or of the
Shares issuable or issued upon exercise of such Options, under the Plan.

         (z) "Plan" means this 1999 Stock Option Plan.

         (aa) "Reporting Person" means an officer, Director, or greater than 10%
shareholder of the Company within the meaning of Rule 16a-2 under the Exchange
Act, who is required to file reports pursuant to Rule 16a-3 under the Exchange
Act.

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

         (cc) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 11 of the Plan.

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

         (ee) "Subsidiary" means a "Subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code, or any successor
provision.
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         (ff) "Ten Percent Holder" means a person who owns stock representing
more than 10% of the voting power of all classes of stock of the Company or any
Parent or Subsidiary.

         3. Stock Subject to the Plan. Subject to the provisions of Section 12
of the Plan, the maximum aggregate number of Shares that may be sold under the
Plan is 4,000,000 Shares of Common Stock. The Shares may be authorized, but
unissued, or reacquired Common Stock. If an Option expires or becomes
unexercisable for any reason without having been exercised in full, or is
surrendered pursuant to an Option Exchange Program, the unpurchased Shares that
were subject thereto shall, unless the Plan shall have been terminated, become
available for future grant under the Plan. In addition, any Shares of Common
Stock that are retained by the Company upon exercise of an Option in order to
satisfy the exercise or purchase price for such Option or any withholding taxes
due with respect to such exercise shall be treated as not issued and shall
continue to be available under the Plan. Shares issued under the Plan and later
repurchased by the Company pursuant to any repurchase right that the Company may
have shall not be available for future grant under the Plan.

4.       Administration of the Plan

         (a) General. The Plan shall be administered by the Board or a
Committee, or a combination thereof, as determined by the Board. The Plan may be
administered by different administrative bodies with respect to different
classes of Optionees and, if permitted by the Applicable Laws, the Board may
authorize one or more officers to grant Options under the Plan.

         (b) Administration with Respect to Reporting Persons. With respect to
Options granted to Reporting Persons and Named Executives, the Plan may (but
need not) be administered so as to permit such Options to qualify for the
exemption set forth in Rule 16b-3 and to qualify as performance based
compensation under Section 162(m) of the Code.

         (c) Committee Composition. If a Committee has been appointed pursuant
to this Section 4, such Committee shall continue to serve in its designated
capacity until otherwise directed by the Board. From time to time the Board may
increase the size of any Committee and appoint additional members thereof,
remove members (with or without cause) and appoint new members in substitution
therefor, fill vacancies (however caused) and remove all members of a Committee
and thereafter directly administer the Plan, all to the extent permitted by the
Applicable Laws and, in the case of a Committee administering the Plan pursuant
to Section 4(b) above, to the extent permitted or required by Rule 16b-3 and
Section 162(m) of the Code.

         (d) Powers of the Administrator. Subject to the provisions of the Plan
and in the case of a Committee, the specific duties delegated by the Board to
such Committee, and subject to the approval of any relevant authorities,
including the approval, if required, of any Stock Exchange, the Administrator
shall have the authority, in its discretion:
<PAGE>

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

         (ii) to select the Consultants and Employees to whom Options may from
time to time be granted;

         (iii) to determine whether and to what extent Options are granted,

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

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

         (vi) to determine the terms and conditions, not inconsistent with the
terms of the Plan, of any Option granted hereunder, which terms and conditions
include but are not limited to the exercise price, the time or times when
Options may be exercised (which may be based on performance criteria), any
vesting acceleration or waiver of forfeiture restrictions, and any restriction
or limitation regarding any Option or any Optioned Stock, based in each case on
such factors as the Administrator, in its sole discretion, shall determine;

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

         (viii) to reduce the exercise price of any Option to the then current
Fair Market Value if the Fair Market Value of the Common Stock covered by such
Option has declined since the date the Option was granted and to make any other
amendments or adjustments to any Option that the Administrator determines, in
its discretion and under the authority granted to it under the Plan, to be
necessary or advisable, provided however that no amendment or adjustment to an
Option that would materially and adversely affect the rights of any Optionee
shall be made without the prior written consent of the Optionee;

         (ix) to initiate an Option Exchange Program;

         (x) to construe and interpret the terms of the Plan and Options granted
under the Plan; and

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

         (e) Effect of Administrator's Decision. All decisions, determinations
and interpretations of the Administrator shall be final and binding on all
Participants.
<PAGE>

         5. Eligibility.

         (a) Recipients of Grants. Nonstatutory Stock Options may be granted to
Employees and Consultants. Incentive Stock Options may be granted only to
Employees; provided however that Employees of Affiliates shall not be eligible
to receive Incentive Stock Options. An Employee or Consultant who has been
granted an Option may, if he or she is otherwise eligible, be granted additional
Options.

         (b) Type of Option. Each Option shall be designated in the Option
Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.
However, notwithstanding such designations, to the extent that the aggregate
Fair Market Value of Shares with respect to which Options designated as
Incentive Stock Options are exercisable for the first time by any Optionee
during any calendar year (under all plans of the Company or any Parent or
Subsidiary) exceeds $100,000, such excess Options shall be treated as
Nonstatutory Stock Options. For purposes of this Section 5(b), Incentive Stock
Options shall be taken into account in the order in which they were granted, and
the Fair Market Value of the Shares subject to an Incentive Stock Option shall
be determined as of the date of the grant of such Option.

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

         (d) Reserved.


         (e) Reserved.


         (f) Term of Option. The term of each Option shall be the term stated in
the Option Agreement; provided, however, that the term shall be no more than ten
years from the date of grant thereof or such shorter term as may be provided in
the Option Agreement. However, in the case of an Incentive Stock Option granted
to an Optionee who, at the time the Option is granted, is a Ten Percent Holder,
the term of such Option shall be five years from the date of grant thereof or
such shorter term as may be provided in the Option Agreement.

         6. Term of Plan. The Plan shall become effective upon its adoption by
the Board. It shall continue in effect for a term of ten years unless sooner
terminated under Section 14 of the Plan.
<PAGE>

         7. Reserved.

         8. Option Exercise Price and Consideration.

         (a) The per Share exercise price for the Shares to be issued pursuant
to exercise of an Option shall be such price as is determined by the
Administrator and set forth in the applicable Option Agreement, but shall be
subject to the following:

         (i) In the case of an Incentive Stock Option that is:

         (A) granted to an Employee who, at the time of grant is a Ten Percent
Holder, 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 Employee. 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 that is:

         (A) granted prior to the date, if any, on which the Common Stock
becomes a Listed Security to a person who at the time of grant is a Ten Percent
Holder, the per Share exercise price shall be no less than 110% of the Fair
Market Value per Share on the date of the grant if required by the Applicable
Laws and, if not so required, shall be such price as is determined by the
Administrator.

         (B) granted prior to the date, if any, on which the Common Stock
becomes a Listed Security to any other eligible person, the per Share exercise
price shall be no less than 85% of the Fair Market Value per Share on the date
of grant if required by the Applicable Laws and, if not so required, shall be
such price as is determined by the Administrator.

         (iii) Notwithstanding the foregoing, Options may be granted with a per
Share exercise price other than as required above pursuant to a merger or other
corporate transaction.
<PAGE>

         (b) The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined by
the Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant) and may consist entirely of (1) cash; (2)
check; (3) delivery of Optionee's promissory note with such recourse, interest,
security and redemption provisions as the Administrator determines to be
appropriate (4) cancellation of indebtedness; (5) other Shares that (x) in the
case of Shares acquired upon exercise of an Option, either have been owned by
the Optionee for more than six months on the date of surrender or such other
period as may be required to avoid a charge to the Company's earnings or were
not acquired, directly or indirectly, from the Company, and (y) have a Fair
Market Value on the date of surrender equal to the aggregate exercise price of
the Shares as to which such Option shall be exercised; (6) authorization for the
Company to retain from the total number of Shares as to which the Option is
exercised that number of Shares having a Fair Market Value on the date of
exercise equal to the exercise price for the total number of Shares as to which
the Option is exercised; (7) delivery of a property executed exercise notice
together with such other documentation as the Administrator and the broker, if
applicable, shall require to effect exercise of the Option and prompt delivery
to the Company of the sale or loan proceeds required to pay the exercise price
and any applicable withholding taxes; (8) any combination of the foregoing
methods of payment; or (9) such other consideration and method of payment for
the issuance of Shares to the extent permitted under the Applicable Laws. In
making its determination as to the type of consideration to accept. the
Administrator shall consider if acceptance of such consideration may be
reasonably expected to benefit the Company, and the Administrator may refuse to
accept a particular form of consideration at the time of any Option exercise if,
in its sole discretion, acceptance of such form of consideration is not in the
best interests of the Company at such time.

         9. Exercise of Option.

         (a) Procedure for Exercise; Rights as a Shareholder. Any Option granted
hereunder shall be exercisable at such times and under such conditions as
determined by the Administrator, consistent with the term of the Plan and
reflected in the Option Agreement, including vesting requirements and/or
performance criteria with respect to the Company and/or the Optionee; provided
however, that, if required by the Applicable Laws, any Option granted prior to
the date, if any, upon which the Common Stock becomes a Listed Security shall
become exercisable at the rate of at least 20% per year over five years from the
date the Option is granted. In the event that any of the Shares issued upon
exercise of an Option (which exercise occurs prior to the date, if any, upon
which the Common Stock becomes a Listed Security) should be subject to a right
of repurchase in the Company's favor, such repurchase right shall, if required
by the Applicable Laws, lapse at the rate of at least 20% per year over five
years from the date the Option is granted. Notwithstanding the above, in the
case of an Option granted to an officer, Director or Consultant of the Company
or any Parent, Subsidiary or Affiliate of the Company, the Option may become
fully exercisable, or a repurchase right, if any, in favor of the Company shall
lapse, at any time or during any period established by the Administrator. The
Administrator shall have the discretion to determine whether and to what extent
the vesting of Options shall be tolled during any leave of absence; provided
however that in the absence of such determination, vesting of Options shall be
tolled during any such leave.

<PAGE>

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


         An Option shall be deemed exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and the Company has
received full payment for the Shares with respect to which the Option is
exercised. Full payment may, as authorized by the Administrator, consist of any
consideration and method of payment allowable under Section 8(b) of the Plan.
Until the issuance (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Optioned Stock,
not withstanding the exercise of the Option. The Company shall issue (or cause
to be issued) such stock certificate promptly upon exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 12 of the Plan.


         Exercise of an Option in any manner shall result in a decrease in the
number of Shares that thereafter may be available, both for purposes of the Plan
and for sale under the Option, by the number of Shares as to which the Option is
exercised.

         (b) Termination of Employment or Consulting Relationship.

         (i) Termination other than for Cause, Death or Disability. In the event
of the termination of an Optionee's Continuous Service Status with the Company,
other than a termination for Cause (as defined below), death (as provided for in
Section 9(d)), or disability (as provided for in Section 9(b)), such Optionee
may, but only within three months (or such other period of time, not less than
30 days, as is determined by the Administrator, with such determination in the
case of an Incentive Stock Option being made at the time of grant of the Option)
after the date of such termination (but in no event later than the expiration
date of the term of such Option as set forth in the Option Agreement), exercise
his or her Option to the extent that the Optionee was entitled to exercise it at
the date of such termination. To the extent that the Optionee was not entitled
to exercise the Option at the date of such termination, or if the Optionee does
not exercise the Option to the extent so entitled within the time specified
above, the Option shall terminate and the Optioned Stock underlying the
unexercised portion of the Option shall revert to the Plan. Unless otherwise
determined by the Administrator, no termination shall be deemed to occur and
this Section 9(b) shall not apply if (i) the Optionee is a Consultant who
becomes an Employee, or (ii) the Optionee is an Employee who becomes a
Consultant.

         (ii) Termination for Cause. In the event of the termination for Cause
of an Optionee's Continuous Service Status with the Company, the Option will
expire on Participant's Termination Date, or at such later time and on such
conditions as are determined by the Committee.
<PAGE>

         (iii) Definition of Cause. For the purposes of this Agreement, "Cause"
for Optionee's termination shall include (A) Optionee's misconduct or negligence
in performance of his or her duties hereunder as determined by the Company; (B)
dishonest or fraudulent conduct, a deliberate attempt to do an injury to the
Company, or conduct that discredits the Company or is detrimental to the
reputation of the Company, including conviction of a felony; (C) Optionee's
violation of the Company's policies and prohibitions on discrimination and
harassment, or (D) Optionee's material breach of any element of the Company's
Confidential Information and Invention Assignment Agreement, including without
limitation, Optionee's theft or other misappropriation of the Company's
proprietary information.

         (c) Disability of Optionee.

         (i) Notwithstanding Section 9(b) above, in the event of termination of
an Optionee's Continuous Service Status as a result of his or her total and
permanent disability (within the meaning of Section 22(e)(3) of the Code), such
Optionee may, but only within twelve months (or such other period of time as is
determined by the Administrator, with such determination in the case of an
Incentive Stock Option made at the time of grant of the Option) from the date of
such termination (but in no event later than the expiration date of the term of
such Option as set forth in the Option Agreement), exercise the Option to the
extent otherwise entitled to exercise it at the date of such termination. To the
extent that the Optionee was not entitled to exercise the Option at the date of
termination, or if the Optionee does not exercise. Such Option to the extent so
entitled within the time specified above, the Option shall terminate and the
Optioned Stock underlying the unexercised portion of the Option shall revert to
the Plan.

         (ii) In the event of termination of an Optionee's Continuous Service
Status as a result of a disability which does not fall within the meaning of
total and permanent disability (as set forth in Section 22(e)(3) of the Code),
such Optionee may, but only within twelve months (or such other period of time
as is determined by the Administrator, with such determination in the case of an
Incentive Stock Option made at the time of grant of the Option) from the date of
such termination (but in no event later than the expiration date of the term of
such Option as set forth in the Option Agreement), exercise the Option to the
extent otherwise entitled to exercise it at the date of such termination.
However, to the extent that such Optionee falls to exercise an Option that is an
Incentive Stock Option (within the meaning of Section 422 of the Code) within
three months of the date of such termination, the Option will not qualify for
incentive Stock Option treatment under the Code. To the extent that the Optionee
was not entitled to exercise the Option at the date of termination, or if the
Optionee does not exercise such Option to the extent so entitled within the time
period specified above, the Option shall terminate and the Optioned Stock
underlying the unexercised portion of the Option shall revert to the Plan.
<PAGE>

         (d) Death of Optionee. In the event of the death of an Optionee during
the period of Continuous Service Status since the date of grant of the Option,
or within thirty (30) days following termination of the Optionee's Continuous
Service Status, the Option may be exercised, at any time within twelve months
following the date of death (but in no event later than the expiration date of
the term of such Option as set forth in the Option Agreement), by such
Optionee's estate or by a person who acquired the right to exercise the Option
by bequest or inheritance, but only to the extent of the right to exercise that
had accrued at the date of death or, if earlier, the date of termination of the
Optionee's Continuous Service Status. To the extent that the Optionee was not
entitled to exercise the Option at the date of death or termination, as the case
may be, or if the Optionee does not exercise such Option to the extent so
entitled within the time specified above, the Option shall terminate and the
Optioned Stock underlying the unexercised portion of the Option shall revert to
the Plan.

         (e) Extension of Exercise Period. The Administrator shall have full
power and authority to extend the period of time for which an Option is to
remain exercisable following termination of an Optionee's Continuous Status as
an Employee or Consultant from the periods set forth in Sections 9(b), 9(c) and
9(d) above or in the Option Agreement to such greater time as the Board shall
deem appropriate, provided, that in no event shall such Option be exercisable
later than the date of expiration of the term of such Option as set forth in the
Option Agreement.

         (f) Buy-Out Provisions. The Administrator may at any time offer to buy
out for a payment in cash or Shares an Option previously granted under the Plan,
based on such terms and conditions as the Administrator shall establish and
communicate to the Optionee at the time such offer is made.

         10. Taxes.

         (a) As a condition of the exercise of an Option granted under the Plan,
the Participant (or in the case of the Participant's death. the person
exercising the Option) shall make such arrangements as the Administrator may
require for the satisfaction of any applicable federal, state, local or foreign
withholding tax obligations that may arise in connection with the exercise of an
Option and the issuance of Shares. The Company shall not be required to issue
any Shares under the Plan until such obligations are satisfied.

         (b) In the case of an Employee and in the absence of any other
arrangement, the Employee shall be deemed to have directed the Company to
withhold or collect from his or her compensation an amount sufficient to satisfy
such tax obligations from the next payroll payment otherwise payable after the
date of an exercise of the Option.
<PAGE>

         (c) This Section 10(c) shall apply only after the date, if any, upon
which the Common Stock becomes a Listed Security. In the case of a Participant
other than an Employee (or in the case of an Employee where the next payroll
payment is not sufficient to satisfy such tax obligations, with respect to any
remaining tax obligations), in the absence of any other arrangement and to the
extent permitted under the Applicable Laws, the Participant shall be deemed to
have elected to have the Company withhold from the Shares to be issued upon
exercise of the Option that number of Shares having a Fair Market Value
determined as of the applicable Tax Date (as defined below) equal to the amount
required to be withheld. For purposes of this Section 10, 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 under the Applicable Laws (the "Tax
Date").

         (d) If permitted by the Administrator, in its discretion, a Participant
may satisfy his or her tax withholding obligations upon exercise of an Option by
surrendering to the Company Shares that (i) in the case of Shares previously
acquired from the Company, have been owned by the Participant for more than six
months on the date of surrender, and (ii) have a Fair Market Value determined as
of the applicable Tax Date equal to the amount required to be withheld.

         (e) Any election or deemed election by a Participant to have Shares
withheld to satisfy tax withholding obligations under Section 10(c) or (d) above
shall be irrevocable as to the particular Shares as to which the election is
made and shall be subject to the consent or disapproval of the Administrator.
Any election by a Participant under Section 10(d) above must be made on or prior
to the applicable Tax Date.

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

         11. Non-Transferability of Options. Options 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; provided however that, after the
date, if any. upon which the Common Stock becomes a Listed Security, the
Administrator may in its discretion grant transferable Nonstatutory Stock
Options pursuant to Option Agreements specifying (1) the manner in which such
Nonstatutory Stock Options are transferable and (ii) that any such transfer
shall be subject to the Applicable Laws. The designation of a beneficiary by an
Optionee will not constitute a transfer. An Option may be exercised, during the
lifetime of the holder of the Option, only by such holder or a transferee
permitted by this Section 11.
<PAGE>

         12. Adjustments Upon Changes in Capitalization, Corporate Transactions
and Certain Other Transactions.

         (a) Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option, and the number of shares of Common Stock that have been
authorized for issuance under the Plan but as to which no Options have yet been
granted or that have been returned to the Plan upon cancellation or expiration
of an Option, as well as the price per Share of Common Stock covered by each
such outstanding Option, shall be proportionately adjusted for any increase or
decrease in the number of issued Shares of Common Stock resulting from a stock
split, reverse stock split, stock dividend, combination, recapitalization or
reclassification of the Common Stock (including any change in the number of
Shares of Common Stock effected in connection with a change of domicile of the
Company), or any other increase or decrease in the number of issued shares of
Common Stock effected without receipt of consideration by the Company; provided
however that conversion of any convertible securities of the Company shall not
be deemed to have been "effected without receipt of consideration." Such
adjustment shall be made by the Administrator, 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 of Common Stock subject to an Option.

         (b) Dissolution or Liquidation. In the event of the dissolution or
liquidation of the Company, each outstanding Option will terminate immediately
prior to the consummation of such action, unless otherwise provided by the
Administrator.

         (c) Corporate Transactions. In the event of a Corporate Transaction,
each outstanding Option shall be assumed or an equivalent option shall be
substituted by the successor corporation (or a Parent or Subsidiary of such
successor corporation), unless the successor corporation does not agree to
assume the outstanding Options or substitute equivalent options, in which case
the outstanding Options shall terminate upon the consummation of the
transaction.

<PAGE>

         For purposes of this Section 12(c), an Option shall be considered
assumed, without limitation, if, at the time of issuance of the stock or other
consideration upon a Corporate Transaction, each Optionee would be entitled to
receive upon exercise of an Option the same number and kind of shares of stock
or the same amount of property, cash or securities as the Optionee would have
been entitled to receive upon the occurrence of such transaction if the Optionee
had been, immediately prior to the transaction, the holder of the number of
Shares of Common Stock covered by the Option at Such time (after giving effect
to any adjustments in the number of Shares covered by the Option as provided for
In this Section 12); provided however that if such consideration received in the
transaction 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 exercise of the Option to be
solely common stock of the successor corporation or its Parent equal to the Fair
Market Value of the per Share consideration received by holders of Common Stock
in the transaction.

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

         13. Time of Granting Options. The date of grant of an Option shall, for
all purposes, be the date on which the Administrator makes the determination
granting such Option, or such other date as is determined by the Administrator;
provided however that in the case of any Incentive Stock Option, the grant date
shall be the later of the date on which the Administrator makes the
determination granting such Incentive Stock Option or the date of commencement
of the Optionee's employment relationship with the Company. Notice of the
determination shall be given to each Employee or Consultant to whom an Option is
so granted within a reasonable time after the date of such grant.

         14. Amendment and Termination of the Plan.

         (a) Authority to Amend or Terminate. The Board may at any time amend,
alter, suspend, discontinue or terminate the Plan, but no amendment, alteration,
suspension, discontinuation or termination (other than an adjustment made
pursuant to Section 13 above) shall be made that would materially and adversely
affect the rights of any Optionee under any outstanding grant, without his or
her consent. In addition, to the extent necessary and desirable to comply with
the Applicable Laws, the Company shall obtain shareholder approval of any Plan
amendment in such a manner and to such a degree as required.

         (b) Effect of Amendment or Termination. No amendment or termination of
the Plan shall materially and adversely affect Options already granted, unless
mutually agreed otherwise between the Optionee and the Administrator, which
agreement must be in writing and signed by the Optionee and the Company.
<PAGE>

         15. Conditions Upon Issuance of Shares. Notwithstanding any other
provision of the Plan or any agreement entered into by the Company pursuant to
the Plan, the Company shall not be obligated, and shall have no liability for,
failure to issue or deliver any Shares under the Plan unless such issuance or
delivery would comply with the Applicable Laws, with such compliance determined
by the Company in consultation with its legal counsel.


         As a condition to the exercise of an Option the Company may require the
person exercising such Option to represent and warrant at tile time of any such
exercise that the Shares are being purchased only for investment and without any
present intention to sell or distribute such Shares if, in the opinion of
counsel for the Company, Such a representation is required by law.

         16. 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.

         17. Option Agreements. Options shall be evidenced by Option Agreements
in such form(s) as the Administrator shall from time to time approve.

         18. Shareholder Approval. If required by the Applicable Laws,
continuance of the Plan shall be subject to approval by the shareholders of the
Company within twelve months before or after the date the Plan is adopted. Such
shareholder approval shall be obtained in the degree and manner required under
the Applicable Laws.

         19. Information and Documents to Optionees. Prior to the date, if any,
upon which the Common Stock becomes a Listed Security and if required by the
Applicable Laws, the Company shall provide financial statements at least
annually to each Optionee during the period such Optionee has one or more
Options outstanding, and in the case of an individual who acquired Shares
pursuant to the Plan, during the period such individual owns such Shares. The
Company shall not be required to provide such information if the issuance of
Options under the Plan is limited to key employees whose duties in connection
with the Company assure their access to equivalent information. In addition, at
the time of issuance of any securities under the Plan, the Company shall provide
to the Optionee a copy of the Plan and any agreement(s) pursuant to which
securities granted under the Plan are issued.