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                                                                    EXHIBIT 10.1

                           ISTA PHARMACEUTICALS, INC.

                                 2000 STOCK PLAN

                         (as amended December 16, 2002)

         1.       Purposes of the Plan. The purposes of this 2000 Stock Plan
                     are:

                  -     to attract and retain the best available personnel for
                        positions of substantial responsibility,

                  -     to provide additional incentive to Employees, Directors
                        and Consultants, and

                  -     to promote the success of the Company's business.

                  Options granted under the Plan may be Incentive Stock Options
or Nonstatutory Stock Options, as determined by the Administrator at the time of
grant. Stock Purchase Rights may also be granted under the Plan.

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

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

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

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

                  (d)      "Cause" means (i) any act of personal dishonesty
taken by the Optionee in connection with his responsibilities as an Employee
which is intended to result in personal enrichment of the Optionee, (ii) the
Optionee's conviction of a felony, (iii) any act by the Optionee that
constitutes misconduct, and (iv) continued violations by the Optionee of the
Optionee's obligations to the Company.

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

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

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                           (ii)     The consummation of the sale or disposition
by the Company of all or substantially all of the Company's assets; or

                           (iii)    The consummation of a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity or its parent) at least seventy percent (70%) of the total
voting power represented by the voting securities of the Company or such
surviving entity or its parent outstanding immediately after such merger or
consolidation.

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

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

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

                  (i)      "Company" means ISTA Pharmaceuticals, Inc., a
California corporation.

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

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

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

                  (m)      "Employee" means any person, including Officers and
Directors, employed by the Company or any Parent or Subsidiary of the Company. A
Service Provider shall not cease to be an Employee in the case of (i) any leave
of absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor.
For purposes of Incentive Stock Options, no such leave may exceed ninety days,
unless reemployment upon expiration of such leave is guaranteed by statute or
contract. If reemployment upon expiration of a leave of absence approved by the
Company is not so guaranteed, on the 181st day of such leave any Incentive Stock
Option held by the Optionee shall cease to be treated as an Incentive Stock
Option and shall be treated for tax purposes as a Nonstatutory Stock Option.
Neither service as a Director nor payment of a director's fee by the Company
shall be sufficient to constitute "employment" by the Company.

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

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

                           (i)      If the Common Stock is listed on any
established stock exchange or a national market system, including without
limitation the Nasdaq National Market or The Nasdaq

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SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall be the
closing sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such exchange or system 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;

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

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

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

                  (q)      "Inside Director" means a Director who is an
Employee.

                  (r)      "IPO Effective Date" means the date upon which the
Securities and Exchange Commission declares the initial public offering of the
Company's Common Stock as effective.

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

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

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

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

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

                  (x)      "Option Exchange Program" means a program whereby
outstanding Options are surrendered in exchange for Options with a lower
exercise price.

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

                  (z)      "Optionee" means the holder of an outstanding Option
or Stock Purchase Right granted under the Plan.

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                  (aa)     "Outside Director" means a Director who is not an
Employee.

                  (bb)     "Plan" means this 2000 Stock Option Plan, as amended
and restated.

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

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

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

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

                  (gg)     "Service Provider" means an Employee, Director or
Consultant.

                  (hh)     "Share" means a share of the Common Stock, as
adjusted in accordance with Section 14 of the Plan. All Share numbers set forth
herein have been adjusted for the 1-for-10 reverse stock split of Common Stock
that became effective as of 4:01 p.m. EST, November 13, 2002.

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

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

         3.       Stock Subject to the Plan. As of December 16, 2002, the date
of the most recent amendment to this 2000 Stock Plan, and subject to the
provisions of Section 14 of the Plan, the maximum aggregate number of Shares
which may be optioned and sold under the Plan is 2,560,000 Shares, which
includes the Shares available for future issuance under the Advanced Corneal
Systems, Inc. 1993 Stock Plan (the "1993 Stock Plan") on the date the Securities
and Exchange Commission declared the Company's registration statement effective,
as well as any Shares returned to the 1993 Stock Plan. The number of Shares
reserved for issuance under the Plan shall increase annually on the first day of
the Company's fiscal year beginning in 2003 by an amount of Shares equal to the
lesser of (i) 200,000 Shares, (ii) 1.5% of the outstanding Shares on such date
or (iii) an amount determined by the Board. The Shares may be authorized, but
unissued, or reacquired Common Stock.

                  If an Option or Stock Purchase Right expires or becomes
unexercisable without having been exercised in full, or is surrendered pursuant
to an Option Exchange Program, the unpurchased Shares which were subject thereto
shall become available for future grant or sale under the Plan (unless the Plan
has terminated); provided, however, that Shares that have actually been issued
under the Plan, whether upon exercise of an Option or Right, shall not be
returned to the Plan

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and shall not become available for future distribution under the Plan, except
that if Shares of Restricted Stock are repurchased by the Company at their
original purchase price, such Shares shall become available for future grant
under the Plan.

         4.       Administration of the Plan.

                  (a)      Procedure.

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

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

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

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

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

                           (i)      to determine the Fair Market Value;

                           (ii)     to select the Service Providers to whom
Options and Stock Purchase Rights may be granted hereunder;

                           (iii)    to determine the number of shares of Common
Stock to be covered by each Option and Stock Purchase Right granted hereunder;

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

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

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                           (vi)     to reduce the exercise price of any Option
or Stock Purchase Right to the then current Fair Market Value if the Fair Market
Value of the Common Stock covered by such Option or Stock Purchase Right shall
have declined since the date the Option or Stock Purchase Right was granted;

                           (vii)    to institute an Option Exchange Program;

                           (viii)   to construe and interpret the terms of the
Plan and awards granted pursuant to the Plan;

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

                           (x)      to modify or amend each Option or Stock
Purchase Right (subject to Section 16(c) of the Plan), including the
discretionary authority to extend the post-termination exercisability period of
Options longer than is otherwise provided for in the Plan;

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

                           (xii)    to authorize any person to execute on behalf
of the Company any instrument required to effect the grant of an Option or Stock
Purchase Right previously granted by the Administrator;

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

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

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

         6.       Limitations.

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

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be taken into account in the order in which they were granted. The Fair Market
Value of the Shares shall be determined as of the time the Option with respect
to such Shares is granted.

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

                  (c)      The following limitations shall apply to grants of
Options:

                           (i)      No Service Provider shall be granted, in any
fiscal year of the Company, Options to purchase more than 100,000 Shares.

                           (ii)     In connection with his or her initial
service, a Service Provider may be granted Options to purchase up to an
additional 200,000 Shares, which shall not count against the limit, set forth in
subsection (i) above.

                           (iii)    The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 14.

                           (iv)     If an Option is cancelled in the same fiscal
year of the Company in which it was granted (other than in connection with a
transaction described in Section 14), the cancelled Option will be counted
against the limits set forth in subsections (i) and (ii) above. For this
purpose, if the exercise price of an Option is reduced, the transaction will be
treated as a cancellation of the Option and the grant of a new Option.

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

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

         9.       Option Exercise Price and Consideration.

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

                           (i)      In the case of an Incentive Stock Option

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

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

                           (ii)     In the case of a Nonstatutory Stock Option,
the per Share exercise price shall be determined by the Administrator. In the
case of a Nonstatutory Stock Option intended to qualify as "performance-based
compensation" within the meaning of Section 162(m) of the Code, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant.

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

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

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

                           (i)      cash;

                           (ii)     check;

                           (iii)    promissory note;

                           (iv)     other Shares which (A) in the case of Shares
acquired upon exercise of an option, have been owned by the Optionee for more
than six months on the date of surrender, and (B) have a Fair Market Value on
the date of surrender equal to the aggregate exercise price of the Shares as to
which said Option shall be exercised;

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

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

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

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

         10.      Exercise of Option.

                  (a)      Procedure for Exercise; Rights as a Shareholder. Any
Option granted hereunder shall be exercisable according to the terms of the Plan
and at such times and under such conditions as determined by the Administrator
and set forth in the Option Agreement. Unless the Administrator provides
otherwise, vesting of Options granted hereunder shall be tolled during any
unpaid leave of absence. An Option may not be exercised for a fraction of a
Share.

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

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

                  (b)      Termination of Relationship as a Service Provider.
Subject to Section 14, if an Optionee ceases to be a Service Provider (but not
in the event of an Optionee's change of status from Employee to Consultant (in
which case an Employee's Incentive Stock Option shall automatically convert to a
Nonstatutory Stock Option on the ninety-first (91st) day following such change
of status) or from Consultant to Employee), such Optionee may, but only within
such period of time as is specified in the Option Agreement (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 Optionee was
entitled to exercise it at the date of such termination. In the absence of a
specified time in the Option Agreement, the Option shall remain exercisable for
three (3) months following the Optionee's termination. If, on the date of
termination, the Optionee is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall revert to the Plan.
If, after termination, the Optionee does not exercise his or her Option within
the time specified by the Administrator, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.

                  (c)      Disability of Optionee. If an Optionee ceases to be
a Service Provider as a result of the Optionee's Disability, the Optionee may,
but only within twelve (12) months from the

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date of such termination (and 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 Option is vested on the date of termination. If,
on the date of termination, the Optionee is not vested as to his or her entire
Option, the Shares covered by the unvested portion of the Option shall revert to
the Plan. If, after termination, the Optionee does not exercise his or her
Option within the time specified herein, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.

                  (d)      Death of Optionee. If an Optionee dies while a
Service Provider, the Option may be exercised at any time within twelve (12)
months following the date of death (but in no event later than the expiration of
the term of such Option as set forth in the Notice of Grant), by the Optionee's
estate or by a person who acquires the right to exercise the Option by bequest
or inheritance, but only to the extent that the Option is vested on the date of
death. If, at the time of death, the Optionee is not vested as to his or her
entire Option, the Shares covered by the unvested portion of the Option shall
immediately revert to the Plan. The Option may be exercised by the executor or
administrator of the Optionee's estate or, if none, by the person(s) entitled to
exercise the Option under the Optionee's will or the laws of descent or
distribution. If the Option is not so exercised within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.

                  (e)      Buyout Provisions. The Administrator may at any time
offer to buy out for a payment in cash or Shares an Option previously granted
based on such terms and conditions as the Administrator shall establish and
communicate to the Optionee at the time that such offer is made.

         11.      Stock Purchase Rights.

                  (a)      Rights to Purchase. Stock Purchase Rights may be
issued either alone, in addition to, or in tandem with other awards granted
under the Plan and/or cash awards made outside of the Plan. After the
Administrator determines that it will offer Stock Purchase Rights under the
Plan, it shall advise the offeree in writing or electronically, by means of a
Notice of Grant, of the terms, conditions and restrictions related to the offer,
including the number of Shares that the offeree shall be entitled to purchase,
the price to be paid, and the time within which the offeree must accept such
offer. The offer shall be accepted by execution of a Restricted Stock Purchase
Agreement in the form determined by the Administrator.

                  (b)      Repurchase Option. Unless the Administrator
determines otherwise, the Restricted Stock Purchase Agreement shall grant the
Company a repurchase option exercisable upon the voluntary or involuntary
termination of the purchaser's service with the Company for any reason
(including death or Disability). The purchase price for Shares repurchased
pursuant to the Restricted Stock Purchase Agreement shall be the original price
paid by the purchaser and may be paid by cancellation of any indebtedness of the
purchaser to the Company. The repurchase option shall lapse at a rate determined
by the Administrator.

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

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                  (d)      Rights as a Shareholder. Once the Stock Purchase
Right is exercised, the purchaser shall have the rights equivalent to those of a
shareholder, and shall be a shareholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 14
of the Plan.

         12.      Non-Transferability of Options and Stock Purchase Rights.
Unless determined otherwise by the Administrator, an Option or Stock Purchase
Right may not be sold, pledged, assigned, hypothecated, transferred, or disposed
of in any manner other than by will or by the laws of descent or distribution
and may be exercised, during the lifetime of the Optionee, only by the Optionee.
If the Administrator makes an Option or Stock Purchase Right transferable, such
Option or Stock Purchase Right shall contain such additional terms and
conditions as the Administrator deems appropriate.

         13.      Formula Option Grants to Outside Directors. Outside Directors
shall be granted Options in accordance with the following provisions:

                  (a)      All Options granted pursuant to this Section shall be
Nonstatutory Stock Options and, except as otherwise provided herein, shall be
subject to the other terms and conditions of the Plan.

                  (b)      Except as provided in subsection (d) below, each
person who becomes an Outside Director on or after the IPO Effective Date,
whether through election by the stockholders of the Company or appointment by
the Board to fill a vacancy shall be automatically granted an Option to purchase
up to 32,500 Shares (the "First Option") on the date he or she becomes an
Outside Director; provided, however, that an Inside Director who ceases to be an
Inside Director but who remains a Director shall not receive a First Option;
provided, further, that if a person becomes an Outside Director after having
previously served as an Outside Director, (i) such person shall only be granted
another First Option if his or her previous service as an Outside Director was
terminated for bona fide reasons, as determined in good faith by the Board, and
(ii) such person shall not be granted another First Option by virtue of
re-election as a director at an annual meeting of stockholders.

                  (c)      Except as provided in subsection (d) below, each
Outside Director shall be automatically granted an Option to purchase up to
16,250 Shares (a "Subsequent Option") following each annual meeting of the
stockholders of the Company occurring after the end of the Company's fiscal year
2003, if immediately after such meeting, he or she shall continue to serve on
the Board and shall have served on the Board for at least the preceding six (6)
months; provided, however, that each Outside Director shall only be granted one
Subsequent Option in each fiscal year of the Company.

                  (d)      Notwithstanding the provisions of subsections (b) and
(c) hereof, any exercise of an Option granted before the Company has obtained
stockholder approval of the Plan in accordance with Section 20 hereof shall be
conditioned upon obtaining such stockholder approval of the Plan in accordance
with Section 20 hereof.

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                  (e)      The terms of each First Option granted pursuant to
this Section shall be as follows:

                           (i)      the term of the Option shall be ten (10)
years;

                           (ii)     the exercise price per Share shall be at
least 100% of the Fair Market Value per Share on the date of grant of the
Option; and

                           (iii)    one third (1/3) of the Shares subject to the
Option shall vest on the first anniversary after the date of grant and one-third
(1/3) of the Shares subject to the Option shall vest on each anniversary
thereafter so that the Option shall be fully vested on the third anniversary
after the date of grant, provided that in each case the Outside Director shall
continue to serve on the Board on such dates.

                  (f)      The terms of each Subsequent Option granted pursuant
to this Section shall be as follows:

                           (i)      the term of the Option shall be ten (10)
years.

                           (ii)     the exercise price per Share shall be at
least 100% of the Fair Market Value per Share on the date of grant of the
Option.

                           (iii)    the Option shall vest and become exercisable
in full on the first anniversary after the date of grant, provided that the
Outside Director shall continue to serve on the Board on such date.

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

                  (a)      Changes in Capitalization. Subject to any required
action by the stockholders of the Company, the number of shares of Common Stock
covered by each outstanding Option or Stock Purchase Right, and the number of
shares of Common Stock which have been authorized for issuance under the Plan
but as to which no Options or Stock Purchase Rights have yet been granted or
which have been returned to the Plan upon cancellation or expiration of an
Option or Stock Purchase Right, as well as the price per share of Common Stock
covered by each such outstanding Option or Stock Purchase Right, 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 or reclassification of the Common Stock, or any other
increase or decrease in the number of issued shares of Common Stock effected
without receipt of consideration by the Company. The conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option or Stock
Purchase Right.

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                  (b)      Dissolution or Liquidation. In the event of the
proposed dissolution or liquidation of the Company, the Administrator shall
notify each Optionee as soon as practicable prior to the effective date of such
proposed transaction. The Administrator in its discretion may provide for an
Optionee to have the right to exercise his or her Option or Stock Purchase Right
until fifteen (15) days prior to such transaction as to all of the Optioned
Stock covered thereby, including Shares as to which the Option or Stock Purchase
Right would not otherwise be exercisable. In addition, the Administrator may
provide that any Company repurchase option applicable to any Shares purchased
upon exercise of an Option or Stock Purchase Right shall lapse as to all such
Shares, provided the proposed dissolution or liquidation takes place at the time
and in the manner contemplated. To the extent it has not been previously
exercised, an Option or Stock Purchase Right will terminate immediately prior to
the consummation of such proposed action.

                  (c)      Merger or Asset Sale. Subject to Section 15 below, in
the event of a merger of the Company with or into another corporation, or the
sale of substantially all of the assets of the Company (a "Merger"), each
outstanding Option and Stock Purchase Right shall be assumed or an equivalent
option or right substituted by the successor corporation or a Parent or
Subsidiary of the successor corporation (the "Successor Corporation"). In the
event that the Successor Corporation refuses to assume or substitute for the
Option or Stock Purchase Right, the Optionee shall fully vest in and have the
right to exercise the Option or Stock Purchase Right as to all of the Optioned
Stock, including Shares as to which it would not otherwise be vested or
exercisable. If an Option or Stock Purchase Right becomes fully vested and
exercisable in lieu of assumption or substitution in the event of a Merger, the
Administrator shall notify the Optionee in writing or electronically that the
Option or Stock Purchase Right shall be fully vested and exercisable for a
period of fifteen (15) days from the date of such notice, and the Option or
Stock Purchase Right shall terminate upon the expiration of such period. For the
purposes of this Section 14(c), the Option or Stock Purchase Right shall be
considered assumed if, following the Merger, the option or right confers the
right to purchase or receive, for each Share of Optioned Stock subject to the
Option or Stock Purchase Right immediately prior to the Merger, the
consideration (whether stock, cash, or other securities or property) received in
the Merger by holders of Common Stock for each Share held on the effective date
of the transaction (and if holders were offered a choice of consideration, the
type of consideration chosen by the holders of a majority of the outstanding
Shares); provided, however, that if such consideration received in the Merger is
not solely common stock of the Successor Corporation or its Parent, the
Administrator may, with the consent of the Successor Corporation, provide for
the consideration to be received upon the exercise of the Option or Stock
Purchase Right, for each Share of Optioned Stock subject to the Option or Stock
Purchase Right, to be solely common stock of the Successor Corporation or its
Parent equal in fair market value to the per share consideration received by
holders of Common Stock in the Merger.

         15.      Change of Control. In the event of a Change of Control, each
outstanding Option held by an Outside Director shall vest and become exercisable
in full as to all of the Optioned Stock, including Shares as to which the
Outside Director would not otherwise be vested or exercisable. If an Option
becomes fully vested and exercisable as provided in this paragraph, the
Administrator shall notify the Optionee in writing or electronically that the
Option shall be fully vested and exercisable for a period of fifteen (15) days
from the date of such notice, and the Option shall terminate upon the expiration
of such period.

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

         17.      Amendment and Termination of the Plan.

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

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

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

         18.      Conditions Upon Issuance of Shares.

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

                  (b)      Investment Representations. As a condition to the
exercise of an Option or Stock Purchase Right, the Company may require the
person exercising such Option or Stock Purchase Right to represent and warrant
at the 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.

         19.      Inability to Obtain Authority. The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.

         20.      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.

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

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