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                                                                   EXHIBIT 10.12

                              CSK AUTO CORPORATION

                        1996 EXECUTIVE STOCK OPTION PLAN
                             (Restated June 5, 1998)


1.    Purposes of the Plan.

      This stock option plan including Exhibit I hereto (the "Plan") is designed
to provide an incentive to employees (including directors and officers who are
employees) of and consultants to CSK AUTO CORPORATION, a Delaware corporation
(the "Company"), or any of its Subsidiaries or a Parent (as such terms are
defined in Paragraph 20), and to offer an additional inducement in obtaining the
services of such persons. The Plan provides for the grant of "incentive stock
options" ("ISOs") within the meaning of Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code"), and nonqualified stock options which do not
qualify as ISOs ("NQSOs"), but the Company makes no representation or warranty,
express or implied, as to the qualification of any option as an "incentive stock
option" under the Code.

2.    Stock Subject to the Plan.

      Subject to the provisions of Paragraph 12, the aggregate number of shares
of Common Stock, $.01 par value per share, of the Company ("Common Stock") which
may be issued under the Plan shall not exceed 684,200. Such shares of Common
Stock may, in the discretion of the Board of Directors of the Company (the
"Board of Directors"), consist either in whole, or in part of authorized but
unissued shares of Common Stock or shares of Common Stock held in the treasury
of the Company. Subject to the provisions of Paragraph 14, any shares of Common
Stock subject to an option which for any reason expires, is canceled or is
terminated unexercised or which ceases for any reason to be exercisable shall
again become available for the granting of options under the Plan. The Company
shall at all times during the term of the Plan reserve and keep available such
number of shares of Common Stock as will be sufficient to satisfy the
requirements of the Plan.

3.    Administration of the Plan.

      The Plan shall be administered by the Board of Directors or by a committee
of the Board of Directors consisting of not less than two directors (in either
case, the "Committee"). During such time as the Company has a class of equity
securities registered under Section 12 of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), each member of the Committee shall be a
"Non-Employee Director" within the meaning of Rule 16b-3 promulgated under the
Exchange Act (as the same may be in effect and interpreted from time to time,
"Rule 16b-3"). A majority of the members of the Committee shall constitute a
quorum, and the acts of a majority of the members present at any meeting at
which a quorum is present, and any acts approved in writing by all members
without a meeting, shall be the acts of the Committee.

      Subject to the express provisions of the Plan, the Committee shall have
the authority, in its sole discretion to construe the respective Contracts and
the Plan; with the consent of the
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optionee, to cancel or modify an option, provided, that the modified provision
is permitted to be included in an option granted under the Plan on the date of
the modification, and further, provided, that in the case of a modification
(within the meaning of Section 424(h) of the Code) of an ISO, such option as
modified would be permitted to be granted on the date of such modification under
the terms of the Plan; to prescribe, amend and rescind rules and regulations
relating to the Plan; to approve any provision which under Rule 16b-3 requires
approval by a committee of Non-Employee Directors to be exempt (unless otherwise
specifically provided herein); and to make all other determinations necessary or
advisable for granting options or administering the Plan, including: the
employees and consultants who shall be granted options; the times when options
shall be granted; whether an option shall be an ISO or a NQSO; the number of
shares of Common Stock to be subject to each option; the term of each option;
the date each option shall become exercisable; whether an option shall be
exercisable in whole, in part or in installments and, if in installments, the
number of shares of Common Stock to be subject to each installment, whether the
installments shall be cumulative, the date each installment shall become
exercisable and the term of each installment; whether to accelerate the date of
exercise of any option or installment; whether shares of Common Stock may be
issued upon the exercise of an option as partly paid and, if so, the dates when
future installments of the exercise price shall become due and the amounts of
such installments; the exercise price of each option; the form of payment of the
exercise price; whether to restrict the sale or other disposition of the shares
of Common Stock acquired upon the exercise of an option and, if so, whether to
waive any such restriction; whether to subject the grant or exercise of all or
any portion of an option to the fulfillment of contingencies as specified in the
contract referred to in Paragraph 11 (the "Contract"), including without
limitation, contingencies relating to entering into a covenant not to compete
with the Company, any of its Subsidiaries or a Parent, to financial objectives
for the Company, any of its Subsidiaries or a Parent, a division of any of the
foregoing, a product line or other category, and/or the period of continued
employment of the optionee with the Company, any of its Subsidiaries or a
Parent, and to determine whether such contingencies have been met; whether an
optionee is Disabled (as defined in Paragraph 20); the amount, if any, necessary
to satisfy the obligation of the Company, a Subsidiary or a Parent to withhold
taxes or other amounts; the fair market value of a share of Common Stock. Any
controversy or claim arising out of or relating to the Plan, any option granted
under the Plan or any Contract shall be determined unilaterally by the Committee
in its sole discretion. The determinations of the Committee on the matters
referred to in this Paragraph 3 shall be conclusive and binding on the parties.

      No member or former member of the Committee shall be liable for any
action, failure to act or determination made in good faith with respect to the
Plan or any option hereunder. In addition, the Company shall indemnify and hold
harmless each member and former member of the Committee and their respective
successors, assigns, heirs and personal representatives from and against any
liability, loss, claim, damage and expense (including without limitation
attorneys fees and expenses) incurred in connection therewith by reason of any
action, failure to act or determination made in good faith under or in
connection with the Plan or any option hereunder to the fullest extent permitted
with respect to directors under the Company's certificate of incorporation,
by-laws or applicable law.


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4.    Eligibility.

      The Committee may from time to time, in its sole discretion, consistent
with the purposes of the Plan, grant options to employees (including officers
and directors who are employees) of, and to consultants to, the Company or any
of its Subsidiaries, or a Parent of the Company. Such options granted shall
cover such number of shares of Common Stock as the Committee may determine, in
its sole discretion; provided, however, that if the Company is a "publicly held
corporation" (within the meaning of Code Section 162(m)), the maximum number of
shares of Common Stock subject to options that may be granted to any employee
during any fiscal year of the Company under the Plan shall be 684,200 shares
(the "162(m) Maximum"); and further, provided, that the aggregate market value
(determined at the time the option is granted in accordance with Paragraph 5) of
the shares of Common Stock for which any eligible employee may be granted ISOs
under the Plan or any other plan of the Company, or of a Parent or a Subsidiary
of the Company, which are exercisable for the first time by such optionee during
any calendar year shall not exceed $100,000. Such ISO limitation shall be
applied by taking ISOs into account in the order in which they were granted. Any
option (or the portion thereof) granted in excess of such ISO limitation amount
shall be treated as a NQSO.

5.    Exercise Price.

      The exercise price of the shares of Common Stock under each option shall
be determined by the Committee in its sole discretion; provided, however, that
the exercise price of an ISO shall not be less than the fair market value of the
Common Stock subject to such option on the date of grant; and further, provided,
that if, at the time an ISO is granted, the optionee owns (or is deemed to own
under Section 424(d) of the Code) stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company, of any of its
Subsidiaries or of a Parent, the exercise price of such ISO shall not be less
than 110% of the fair market value of the Common Stock subject to such ISO on
the date of grant.

      The fair market value of a share of Common Stock on any day shall be (a)
if the principal market for the Common Stock is a national securities exchange,
the average of the highest and lowest sales prices per share of Common Stock on
such day as reported by such exchange or on a composite tape reflecting
transactions on such exchange, (b) if the principal market for the Common Stock
is not a national securities exchange and the Common Stock is quoted on The
Nasdaq Stock Market ("Nasdaq"), and (i) if actual sales price information is
available with respect to the Common Stock, the average of the highest and
lowest sales prices per share of Common Stock on such day on Nasdaq, or (ii) if
such information is not available, the average of the highest bid and lowest
asked prices per share of Common Stock on such day on Nasdaq, or (c) if the
principal market for the Common Stock is not a national securities exchange and
the Common Stock is not quoted on Nasdaq, the average of the highest bid and
lowest asked prices per share of Common Stock on such day as reported on the OTC
Bulletin Board Service or by National Quotation Bureau, Incorporated or a
comparable service; provided, however, that if clauses (a), (b) and (c) of this
Paragraph are all inapplicable, or if no trades have been made or no quotes are
available for such day, the fair market value of the Common Stock shall be
determined by the Board by any method consistent with applicable regulations
adopted by the Treasury Department relating to stock options.


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6.    Term.

      The term of each option granted pursuant to the Plan shall be such term as
is established by the Committee, in its sole discretion; provided, however, that
the term of each ISO granted pursuant to the Plan shall be for a period not
exceeding 10 years from the date of grant thereof; and further, provided, that
if, at the time an ISO is granted, the optionee owns (or is deemed to own under
Section 424(d) of the Code) stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company, of any of its Subsidiaries
or of a Parent, the term of the ISO shall be for a period not exceeding five
years from the date of grant. Options shall be subject to earlier termination as
hereinafter provided.

7.    Exercise; Adjustment of Shares Subject to Options.

      Unless provided otherwise by the Committee, options granted hereunder
shall vest and become exercisable in accordance with Exhibit I to this Plan,
which is incorporated by reference herein and made a part hereof. In addition,
the number of shares of Common Stock subject to each option is subject to
automatic increase upon the terms and conditions described on Exhibit I to this
Plan.

      An option (or any part or installment thereof), to the extent then
exercisable, shall be exercised by giving written notice to the Company (in
advance as determined by the Committee) at its principal office stating which
option is being exercised, specifying the number of shares of Common Stock as to
which such option is being exercised and accompanied by payment in full of the
aggregate exercise price therefor (or the amount due on exercise if the Contract
permits installment payments) (a) in cash or by certified check or (b) if the
applicable Contract permits, with previously acquired shares of Common Stock
having an aggregate fair market value on the date of exercise (determined in
accordance with Paragraph 5) equal to the aggregate exercise price of all
options being exercised, or with any combination of cash, certified check or
shares of Common Stock having such value. The Company shall not be required to
issue any shares of Common Stock pursuant to any such option until all required
payments, including any required withholding, have been made.

      Notwithstanding the foregoing, the Committee may, in its sole discretion,
permit payment of the exercise price of an option by delivery by the optionee of
a properly executed notice, together with a copy of his irrevocable instructions
to a broker acceptable to the Committee to deliver promptly to the Company the
amount of sale or loan proceeds sufficient to pay such exercise price. In
connection therewith, the Company may enter into agreements for coordinated
procedures with one or more brokerage firms.

      A person entitled to receive Common Stock upon the exercise of an option
shall not have the rights of a stockholder with respect to such shares of Common
Stock until the date of issuance of a stock certificate to him for such shares;
provided, however, that until such stock certificate is issued, any optionee
using previously acquired shares of Common Stock in payment of an option
exercise price shall continue to have the rights of a stockholder with respect
to such previously acquired shares.


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      In no case may a fraction of a share of Common Stock be purchased or
issued under the Plan.

8.    Termination of Relationship.

      Except as may otherwise be expressly provided in the applicable Contract,
any optionee whose relationship with the Company, its Parent and Subsidiaries as
an employee or a consultant (a "Relationship") has terminated for any reason
(other than as a result of the death or Disability of the optionee) may exercise
such option, to the extent exercisable on the date of such termination, at any
time during the 30 days commencing six months after the date of such
termination, but not thereafter. Notwithstanding the foregoing, if such
Relationship is terminated (a) for cause, or (b) if at any time during the first
six months after termination of the Relationship the optionee shall be directly
or indirectly employed by, associated with, or affiliated with, a chain of
automotive after market stores which in the Board of Directors' judgment is a
competitor of the Company, such optionee shall have no rights to exercise such
option.

      For the purposes of the Plan, an employment relationship shall be deemed
to exist between an individual and a corporation if, at the time of the
determination, the individual was an employee of such corporation for purposes
of Section 422(a) of the Code. As a result, an individual on military, sick
leave or other bona fide leave of absence shall continue to be considered an
employee for purposes of the Plan during such leave if the period of the leave
does not exceed 90 days, or, if longer, so long as the individual's right to
reemployment with the Company (or a related corporation) is guaranteed either by
statute or by contract. If the period of leave exceeds 90 days and the
individual's right to reemployment is not guaranteed by statute or by contract,
the employment relationship shall be deemed to have terminated on the 91st day
of such leave.

      Except as may otherwise be expressly provided in the applicable Contract,
options granted under the Plan shall not be affected by any change in the status
of the optionee so long as the optionee continues to be an employee of, or a
consultant to, the Company, or any of its Subsidiaries or a Parent (regardless
of having changed from one to the other or having been transferred from one
corporation to another).

      Nothing in the Plan or in any option granted under the Plan shall confer
on any optionee any right to continue in the employ of, or as a consultant to,
the Company, any of its Subsidiaries or a Parent, or interfere in any way with
any right of the Company, any of its Subsidiaries or a Parent to terminate the
optionee's relationship at any time for any reason whatsoever without liability
to the Company, its Subsidiaries or Parent.

      For purposes of this Plan, "cause" shall mean fraud or embezzlement by the
optionee, gross negligence by the optionee in the performance or nonperformance
of his duties for the Company, its Subsidiaries or Parent, or the optionee's
material failure or refusal to perform his duties at any time as an employee of
or consultant to the Company, a Subsidiary or Parent.


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9.    Death or Disability of an Optionee.

      Except as may otherwise be expressly provided in the applicable Contract,
if an optionee dies while he or she is an employee of, or consultant to, the
Company, any of its Subsidiaries or a Parent, or his or her Relationship
terminates by reason of his or her Disability, the option may be exercised, to
the extent exercisable on the date of his or her death or in the event of his or
her Disability, upon the effective date of such termination, by his or her Legal
Representative (as defined in Paragraph 20) at any time within 90 days after the
date of death or the effective date of such termination, but not thereafter.

10.   Compliance with Securities Laws.

      The Committee may require, in its sole discretion, as a condition to any
option being exercisable that either (a) a Registration Statement under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
shares of Common Stock to be issued upon such exercise shall be effective and
current at the time of exercise, or (b) there is an exemption from registration
under the Securities Act for the issuance of the shares of Common Stock upon
such exercise. Nothing herein shall be construed as requiring the Company to
register shares subject to any option under the Securities Act or to keep any
Registration Statement effective or current.

      The Committee may require, in its sole discretion, as a condition to the
exercise of any option that the optionee execute and deliver to the Company his
representations and warranties, in form, substance and scope satisfactory to the
Committee, which the Committee determines are necessary or convenient to
facilitate the perfection of an exemption from the registration requirements of
the Securities Act, applicable state securities laws or other legal requirement,
including without limitation that (a) the shares of Common Stock to be issued
upon the exercise of the option are being acquired by the optionee for his own
account, for investment only and not with a view to the resale or distribution
thereof, and (b) any subsequent resale or distribution of shares of Common Stock
by such optionee will be made only pursuant to (i) a Registration Statement
under the Securities Act which is effective and current with respect to the
shares of Common Stock being sold, or (ii) a specific exemption from the
registration requirements of the Securities Act, but in claiming such exemption,
the optionee shall prior to any offer of sale or sale of such shares of Common
Stock provide the Company with a favorable written opinion of counsel
satisfactory to the Company, in form, substance and scope satisfactory to the
Company, as to the applicability of such exemption to the proposed sale or
distribution.

      In addition, if at any time the Committee shall determine, in its sole
discretion, that the listing or qualification of the shares of Common Stock
subject to such option on any securities exchange, Nasdaq or under any
applicable law, or the consent or approval of any governmental authority or
regulatory body, is necessary or desirable as a condition to, or in connection
with, the granting of an option or the issue of shares of Common Stock
thereunder, such option may not be exercised in whole or in part unless such
listing, qualification, consent or approval shall have been effected or obtained
free of any conditions not acceptable to the Committee.

      No Optionee shall transfer any shares of Common Stock, except pursuant to
an effective registration Statement under the Securities Act or pursuant to Rule
144 under the Securities Act.


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11.   Stock Option Contracts.

      Each option shall be evidenced by an appropriate Contract which shall be
duly executed by the Company and the optionee, and shall contain such terms,
provisions and conditions not inconsistent herewith as may be determined by the
Committee.

12.   Adjustments upon Changes in Common Stock.

      Notwithstanding any other provision of the Plan, in the event of a stock
dividend, spin-off, split-up, combination, reclassification, recapitalization,
merger in which the Company is the surviving corporation, or exchange of shares
or the like which results in a change in the number or kind of shares of Common
Stock which are authorized for issuance or which are outstanding immediately
prior to such event, the aggregate number and kind of shares subject to the
Plan, the aggregate number and kind of shares subject to each outstanding option
and the exercise price thereof, and the 162(m) Maximum shall be adjusted
accordingly by the Board of Directors, whose determination shall be conclusive
and binding on all parties.

13.   Certain Sales of the Company.

      a) In the event that, at any time during the term of an option, there
shall be (i) a sale of shares of capital stock by one or more stockholders,
which results in shares of capital stock having an aggregate of 80% of the
voting power of all outstanding shares of capital stock being owned, directly or
indirectly, by one or more related persons, or (ii) the sale of 80% or more of
the Company's assets in any one transaction or series of related transactions,
in either case to parties which at the time of such sales were not stockholders
or affiliates of any stockholder of the Company (collectively, "Sales" and the
final such sale being the "Triggering Sale"), the portion of such option which
remains unvested at the time of the Triggering Sale shall vest upon the
occurrence of the Triggering Sale.

      b) Notwithstanding anything to the contrary contained herein, until an
optionee is notified in writing by the Company that all provisions of the
Stockholders' Agreement, dated as of October 30, 1996, among the Company and
certain of its stockholders (the "Stockholders' Agreement") relating to the
purchase and sale of the Company's securities (other than in a public offering)
have terminated, all shares of Common Stock issued upon the exercise of options
granted hereunder shall be subject to the following restrictions and have the
following rights:

            (i) If, pursuant to the terms of the Stockholders' Agreement in
      connection with an arm's-length sale to an unaffiliated third party
      pursuant to a written offer to purchase at least all of the securities of
      the Company held by the stockholders party to the Stockholders' Agreement,
      certain of the stockholders party to the Stockholders' Agreement (the
      "Moving Group") have the right to require the other holders of securities
      bound by the terms of the Stockholders' Agreement (the "Selling
      Stockholders") to sell all of their equity securities of the Company
      either to the third party or to the Moving Stockholders and/or the Company
      (the "Purchaser") for consideration per share having at least the same
      value as the consideration proposed to be paid by the third party, the
      Moving Group shall also have the right to require each optionee to sell,
      and each optionee

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      shall sell and deliver free and clear of all liens, claims and
      encumbrances, all of each optionee's Common Stock in the same transaction
      to the Purchaser, provided, however, that such optionee receives the same
      terms, including, without limitation, the same consideration per share of
      Common Stock, as is received in such transactions by the Selling
      Stockholders.

            (ii) If, pursuant to the terms of the Stockholders' Agreement in
      connection with a proposed sale of more than 25% of the outstanding equity
      securities of the Company by certain of the stockholders party to the
      Stockholders' Agreement (the "Transferring Stockholders"), such sale by
      such Transferring Stockholders cannot be consummated unless (y) prior to
      such sale each of the other stockholders party to the Stockholders'
      Agreement (the "Other Stockholders") and the Company shall have been given
      notice of the proposed transaction, which notice shall specify the number
      of shares that the Transferring Stockholders desire to sell, the identity
      of the prospective purchaser (the "Buyer"), and the proposed terms thereof
      and shall also include a copy of the written offer from the Buyer, and (z)
      each of the Other Stockholders shall have been provided a firm irrevocable
      right, which right shall be exercisable by written notice (which shall
      specify the number of shares (up to the total number of shares held by the
      Transferring Stockholders) that the Other Stockholders desire to sell)
      within 60 days after giving notice to the Other Stockholders, to sell to
      the Buyer, at the same time and upon the same terms and conditions offered
      to the Transferring Stockholders by the Buyer, the number of shares of
      Common Stock of the Other Stockholders (the "Proportionate Amount") that
      bears the same ratio to the total number of shares of Common Stock held by
      the Other Stockholders as the total number of shares of Common Stock
      proposed to be sold by the Transferring Stockholders to the Buyer bears to
      the total number of shares of Common Stock held by all of the Transferring
      Stockholders, the Company will not register the transfer of securities
      from the Transferring Stockholders to the Buyer unless the Transferring
      Stockholders and the Buyer shall have extended to each optionee the rights
      described above which are required to be extended to Other Stockholders in
      connection with such a sale.

14.   Amendments and Termination of the Plan.

      The Plan was adopted by the Board of Directors on February 10, 1997. No
option may be granted under the Plan after October 30, 2006. The Board of
Directors, without further approval of the Company's stockholders, may at any
time suspend or terminate the Plan, in whole or in part, or amend it from time
to time in such respects as it may deem advisable, including, without
limitation, in order that ISOs granted hereunder meet the requirements for
"incentive stock options" under the Code, to comply with the provisions of Rule
16b-3, Section 162(m) of the Code, or any change in applicable law, regulations,
rulings or interpretations of administrative agencies; provided, however, that
no amendment shall be effective without the prior or subsequent stockholder
approval required under applicable law or the Code which would (a) except as
contemplated in Paragraph 12, increase the maximum number of shares of Common
Stock for which options may be granted under the Plan or the 162(m) Maximum, or
(b) change the eligibility requirements to receive options hereunder. No
termination, suspension or amendment of the Plan shall, without the consent of
the holder of an existing and outstanding


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option affected thereby, adversely affect his rights under such option. The
power of the Committee to construe and administer any options granted under the
Plan prior to the termination or suspension of the Plan nevertheless shall
continue after such termination or during such suspension.

15.   Non-transferability of Options.

      No option granted under the Plan shall be transferable otherwise than by
will or the laws of descent and distribution, and options may be exercised,
during the lifetime of the optionee, only by the optionee or his Legal
Representatives. Except to the extent provided above, options may not be
assigned, transferred, pledged, hypothecated or disposed of in any way (whether
by operation of law or otherwise) and shall not be subject to execution,
attachment or similar process, and any such attempted assignment, transfer,
pledge, hypothecation or disposition shall be null and void ab initio and of no
force or effect.

16.   Withholding Taxes.

      The Company may withhold (a) cash, (b) subject to any limitations under
Rule 16b-3, shares of Common Stock to be issued with respect thereto having an
aggregate fair market value on the exercise date (determined in accordance with
Paragraph 5), or (c) any combination thereof, in an amount equal to the amount
which the Committee determines is necessary to satisfy the obligation of the
Company, a Subsidiary or a Parent to withhold Federal, state and local income
taxes or other amounts incurred by reason of the grant or exercise of an option,
its disposition, or the disposition of the underlying shares of Common Stock.
Alternatively, the Company may require the holder to pay to the Company such
amount, in cash, promptly upon demand.

17.   Legends; Payment of Expenses.

      The Company may endorse such legend or legends upon the certificates for
shares of Common Stock issued upon exercise of an option under the Plan and may
issue such "stop transfer" instructions to its transfer agent in respect of such
shares as it determines, in its discretion, to be necessary or appropriate to
(a) prevent a violation of, or to perfect an exemption from, the registration
requirements of the Securities Act and any applicable state securities laws, (b)
implement the provisions of the Plan or any agreement between the Company and
the optionee with respect to such shares of Common Stock, or (c) permit the
Company to determine the occurrence of a "disqualifying disposition," as
described in Section 421(b) of the Code, of the shares of Common Stock issued or
transferred upon the exercise of an ISO granted under the Plan.

      The Company shall pay all issuance taxes with respect to the issuance of
shares of Common Stock upon the exercise of an option granted under the Plan, as
well as all fees and expenses incurred by the Company in connection with such
issuance.


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18.   Use of Proceeds.

      The cash proceeds from the sale of shares of Common Stock pursuant to the
exercise of options under the Plan shall be added to the general funds of the
Company and used for such corporate purposes as the Board of Directors may
determine.

19.   Substitutions and Assumptions of Options of Certain Constituent
      Corporations.

      Anything in this Plan to the contrary notwithstanding, the Board of
Directors may, without further approval by the stockholders, substitute new
options for prior options of a Constituent Corporation (as defined in Paragraph
20) or assume the prior options of such Constituent Corporation.

20.   Definitions.

      For purposes of the Plan, the following terms shall be defined as set
forth below:

      a) Constituent Corporation. The term "Constituent Corporation" shall mean
any corporation which engages with the Company, any of its Subsidiaries or a
Parent in a transaction to which Section 424(a) of the Code applies (or would
apply if the option assumed or substituted were an ISO), or any Parent or any
Subsidiary of such corporation.

      b) Disability. The term "Disability" shall mean a permanent and total
disability within the meaning of Section 22(e)(3) of the Code.

      c) Legal Representative. The term "Legal Representative" shall mean the
executor, administrator or other person who at the time is entitled by law to
exercise the rights of a deceased or incapacitated optionee with respect to an
option granted under the Plan.

      d) Parent. The term "Parent" shall have the same definition as "parent
corporation" in Section 424(e) of the Code.

      e) Subsidiary. The term "Subsidiary" shall have the same definition as
"subsidiary corporation" in Section 424(f) of the Code.

21.   Governing Law; Construction.

      The Plan, such options as may be granted hereunder and all related matters
shall be governed by, and construed in accordance with, the laws of the State of
Delaware, without regard to conflict of law provisions.

      Neither the Plan nor any Contract shall be construed or interpreted with
any presumption against the Company by reason of the Company causing the Plan or
Contract to be drafted. Whenever from the context it appears appropriate, any
term stated in either the singular or plural shall include the singular and
plural, and any term stated in the masculine, feminine or neuter gender shall
include the masculine, feminine and neuter.


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22.   Partial Invalidity.

      The invalidity, illegality or unenforceability of any provision in the
Plan or any Contract shall not affect the validity, legality or enforceability
of any other provision, all of which shall be valid, legal and enforceable to
the fullest extent permitted by applicable law.

23.   Stockholder Approval.

      The Plan was originally approved by the Board as of February 10, 1997, and
by the unanimous written consent of the stockholders of the Corporation as of
February 9, 1998. Certain amendments to the plan requiring stockholder approval
were approved by the Board and the stockholders as of February 9, 1998. This
amendment and restatement became effective on June 5, 1998, the date of its
adoption by the Board.


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                                    EXHIBIT I

               VESTING OF OPTIONS AND AUTOMATIC OPTION ADJUSTMENTS


      Each option granted under the Plan to optionees to purchase shares of
Common Stock will vest as follows:

      (a) 28% of the shares of Common Stock (rounded up or down to the nearest
whole share of Common Stock) subject to such option will vest on the second
anniversary date of the grant of the option and an additional 28% (rounded up or
down to the nearest whole share of Common Stock) will vest, on each of the third
and fourth anniversary dates of grant.

      (b) The remaining 16% of the shares of Common Stock subject to such option
will vest as follows:

            (i) 6%, 5% and 5%, respectively, of the shares of Common Stock
      (rounded up or down to the nearest whole share of Common Stock) subject to
      such option will vest, on each of the first, second and third April 30th
      to occur after the second anniversary of the date of grant (each a
      "Business Plan Vest Date"), if at least 95% of the Option Target ("Option
      Target") applicable to such optionee as set forth in the Company's
      Management Business Plan attached hereto shall be achieved for the
      immediately preceding full fiscal year (each, a "Target Year") or, with
      respect to the first Business Plan Vest Date, for the immediately
      preceding two full fiscal years on a cumulative basis; or

            (ii) In the event that between 75% and 95% of an Option Target shall
      be achieved for a Target Year or, with respect to the first Business Plan
      Vest Date for the first two Target Years on a cumulative basis, then (I)
      with respect to such first two Target Years, for each whole percent above
      75% (and with respect to the last whole percent between 94% and 95%, 94.99
      shall be considered a whole percentage point for purposes of this
      calculation) of an Option Target that shall be achieved, an additional
      3.0% of the shares of Common Stock subject to such option shall vest in
      respect of such Target Years (rounded up or down to the nearest whole
      share of Common Stock) and (II) with respect to each subsequent Target
      Year, for each whole percent above 75% (and with respect to the last whole
      percent between 94% and 95%, 94.99 shall be considered a whole percentage
      point for purposes of this calculation) of an Option Target that shall be
      achieved, an additional 2.5% of the shares of Common Stock subject to such
      option shall vest in respect of such Target Year (rounded up or down to
      the nearest whole share of Common Stock); or

            (iii) In the event that 75% or less of an Option Target shall be
      achieved for a Target Year or, with respect to the first Business Plan
      Vest Date for the first two Target Years on a cumulative basis, then no
      additional shares of Common Stock subject to such option shall vest in
      respect of such Target Year or Target Years.

                                       I-1
<PAGE>   13
            (iv) Notwithstanding clauses (ii) and (iii) above, if the Option
      Target for such optionee shall not have been achieved for any Target Year,
      but at least 95% of the sum of the Option Targets for (a) the first two
      Target Years and the third Target Year, (b) the third Target Year and the
      fourth Target Year, or (c) the first two Target Years, the third Target
      Year and the fourth Target Year, shall have been achieved as at the end of
      any such period, then the shares of Common Stock that would have vested if
      100% of the Option Target had been achieved for each such Target Year in
      the applicable period, but did not so vest, shall nevertheless vest on the
      first Business Plan Vest Date thereafter. The Option Target for each
      Target Year following the date of grant of an option shall be appended to
      the Contract between the Company and the optionee.

            (v) Any of the shares of Common Stock subject to such option which
      shall not have vested pursuant to clauses (i), (ii), (iii) and (iv) above,
      shall automatically vest 90 days prior to the end of such option's term.

      (c) In the event that the Option Target applicable to an optionee shall be
achieved with respect to any Target Year represented by each of the first four
full fiscal years during an option's term, and exceeded by at least 10% (the
number of percentage points of such excess over 10% being referred to as the
"Excess"), then, in addition to the shares of Common Stock that shall vest in
accordance with the preceding clauses above in subparagraph (b), the optionee
shall automatically be granted on the first Business Plan Vest Date after the
applicable Target Year (or with respect to the first two Target Years, for each
of such two Target Years on the first Business Plan Vest Date) an additional
option (the "Additional Option") to purchase shares of Common Stock (rounded up
or down to the nearest whole share of Common Stock) equal to the product of (i)
5% of the aggregate number of shares of Common Stock originally subject to stock
options granted to such optionee and (ii) a fraction, the numerator of which is
the Excess (rounded up or down to the nearest one-tenth of a percent) and the
denominator of which is 10; provided, however, that the maximum number of shares
of Common Stock subject to the Additional Options granted with respect to any
single Target Year shall not exceed 5% of the number of shares of Common Stock
subject to the original Option granted prior thereto. Additional Options shall
be 100% vested upon their grant. The exercise price of the shares of Common
stock under each Additional Option shall be equal to the fair market value of
the Common Stock on the grant date of the original option.


                                       I-2