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                              KOSAN BIOSCIENCES, INC.

                               1996 STOCK OPTION PLAN

                (as amended and restated effective September, 2000)


       1.     PURPOSES OF THE PLAN.  The purposes of this 1996 Stock Option 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.

       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 are, or will be, granted under
the Plan.

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

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

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

              (f)    "COMMON STOCK" means the common stock of the Company.

              (g)    "COMPANY" means Kosan Biosciences, Inc., a Delaware
corporation.

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

              (i)    "DIRECTOR" means a member of the Board.

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

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              (k)    "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.

              (l)    "EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended.

              (m)    "FAIR MARKET VALUE" means, as of any date, the value of
Common Stock determined as follows:

                     (i)    If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation the
Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market,
its Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system 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.

              (n)    "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.

              (o)    "NONSTATUTORY STOCK OPTION" means an Option not intended to
qualify as an Incentive Stock Option.

              (p)    "NOTICE OF GRANT" means a written or electronic notice
evidencing certain terms and conditions of an individual Option grant.  The
Notice of Grant is part of the Option Agreement.

              (q)    "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.

              (r)    "OPTION" means a stock option granted pursuant to the Plan.

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              (s)    "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.

              (t)    "OPTION EXCHANGE PROGRAM" means a program whereby
outstanding Options are surrendered in exchange for Options with a lower
exercise price.

              (u)    "OPTIONED STOCK" means the Common Stock subject to an
Option.

              (v)    "OPTIONEE" means the holder of an outstanding Option
granted under the Plan.

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

              (x)    "PLAN" means this Kosan Biosciences, Inc. 1996 Stock Option
Plan.

              (y)    "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.

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

              (aa)   "SERVICE PROVIDER" means an Employee, Director or
Consultant.

              (bb)   "SHARE" means a share of the Common Stock, as adjusted in
accordance with Section 12 of the Plan.

              (cc)   "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.  Subject to the provisions of Section
12 of the Plan, the maximum aggregate number of Shares that may be optioned and
sold under the Plan is 1,700,000 Shares plus an annual increase to be added on
January 1 of each year (beginning in 2001), equal to the lesser of (i) 375,000
Shares, (ii) 5% of the outstanding Shares on such date or (iii) such lesser
number of Shares as approved by the Board of Directors.  The Shares may be
authorized, but unissued, or reacquired Common Stock.

              If an Option 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 upon exercise
of an Option, shall not be returned to the Plan 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.

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       4.     ADMINISTRATION OF THE PLAN.

              (a)    PROCEDURE.

                     (i)    MULTIPLE ADMINISTRATIVE BODIES.  Different
Committees with respect to different groups of Service Providers may administer
the Plan.

                     (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 may
be granted hereunder;

                     (iii)  to determine the number of shares of Common Stock to
be covered by each Option 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 granted hereunder.  Such
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 the shares of Common Stock
relating thereto, based in each case on such factors as the Administrator, in
its sole discretion, shall determine;

                     (vi)   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 shall have declined since the date the Option was
granted;

                     (vii)  to institute an Option Exchange Program;

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                     (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 (subject to Section
14(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 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 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.

       5.     ELIGIBILITY.  Nonstatutory Stock Options may be granted to Service
Providers.  Incentive Stock Options may be granted only to Employees.

       6.     LIMITATIONS.

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

              (b)    Neither the Plan nor any Option 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.

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              (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 1,000,000 Shares.

                     (ii)   In connection with his or her initial service, a
Service Provider may be granted Options to purchase up to an additional
1,000,000 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 12.

                     (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 12), 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 18 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 14 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

                            (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.

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                     (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

                     (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

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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 12 of the Plan.

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

              (b)    TERMINATION OF RELATIONSHIP AS A SERVICE PROVIDER.  If an
Optionee ceases to be a Service Provider, other than upon the Optionee's death
or Disability, the Optionee may exercise his or her Option within such period of
time as is specified in the Option Agreement to the extent that the Option is
vested on the date of termination (but in no event later than the expiration of
the term of such Option as set forth in the Option Agreement).  In the absence
of a specified time in the Option Agreement, the Option shall remain exercisable
for 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
exercise his or her Option within such period of time as is specified in the
Option Agreement to the extent the Option is vested on the date of termination
(but in no event later than the expiration of the term of such Option as set
forth in the Option Agreement).  In the absence of a specified time in the
Option Agreement, the Option shall remain exercisable for twelve (12) 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
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.

              (d)    DEATH OF OPTIONEE.  If an Optionee dies while a Service
Provider, the Option may be exercised within such period of time as is specified
in the Option Agreement (but in no event later than the expiration of the term
of such Option as set forth in the Notice of Grant), by the

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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.  In the absence of a specified time in the Option Agreement,
the Option shall remain exercisable for twelve (12) months following the
Optionee's termination.  If, at the time of death, the Optionee is not vested as
to his or her entire Option, the Shares covered by the unvested portion of the
Option shall immediately revert to the Plan.  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.    NON-TRANSFERABILITY OF OPTIONS.  Unless determined otherwise by
the Administrator, an Option 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
transferable, such Option shall contain such additional terms and conditions as
the Administrator deems appropriate.

       12.    ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, MERGER OR
ASSET SALE.

              (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 which have
been authorized for issuance under the Plan but as to which no Options have yet
been granted or which 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 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; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration."  Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option.

              (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 until ten (10) days prior to such
transaction as to all of the Optioned Stock covered thereby, including Shares as
to which the Option would not otherwise be exercisable.  In addition, the
Administrator may provide that any Company repurchase option applicable to any
Shares purchased upon exercise of an Option shall lapse as to all such Shares,
provided the proposed dissolution or liquidation takes place at the time

<PAGE>

and in the manner contemplated.  To the extent it has not been previously
exercised, an Option will terminate immediately prior to the consummation of
such proposed action.

              (c)    MERGER OR ASSET SALE.  In the event of a merger of the
Company with or into another corporation, or the sale of substantially all of
the assets of the Company, each outstanding Option shall be assumed or an
equivalent option or right substituted by the successor corporation or a Parent
or Subsidiary of the successor corporation. If, in such event, the Option is not
assumed or substituted, the Option shall terminate as of the date of the closing
of the merger.  For the purposes of this paragraph, the Option shall be
considered assumed if, following the merger or sale of assets, the option or
right confers the right to purchase or receive, for each Share of Optioned Stock
subject to the Option immediately prior to the merger or sale of assets, the
consideration (whether stock, cash, or other securities or property) received in
the merger or sale of assets by holders of Common Stock for each Share held on
the effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding Shares); provided, however, that if such consideration received
in the merger or sale of assets is not solely common stock of the successor
corporation or its Parent, the Administrator may, with the consent of the
successor corporation, provide for the consideration to be received upon the
exercise of the Option, for each Share of Optioned Stock subject to the Option,
to be solely common stock of the successor corporation or its Parent equal in
fair market value to the per share consideration received by holders of Common
Stock in the merger or sale of assets.

       13.    DATE OF GRANT.  The date of grant of an Option shall be, for all
purposes, the date on which the Administrator makes the determination granting
such Option, 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.

       14.    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.

       15.    CONDITIONS UPON ISSUANCE OF SHARES.

              (a)    LEGAL COMPLIANCE.  Shares shall not be issued pursuant to
the exercise of an Option unless the exercise of such Option 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.

<PAGE>

              (b)    INVESTMENT REPRESENTATIONS.  As a condition to the exercise
of an Option, the Company may require the person exercising such Option 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.

       16.    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.

       17.    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.

       18.    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.