WORLD WASTE TECHNOLOGIES, INC.

       (formerly known as VOICE POWERED TECHNOLOGIES INTERNATIONAL, INC.)


                             2004 STOCK OPTION PLAN


      1.  PURPOSES OF THE PLAN.  The purposes of this 2004 Stock Option Plan are
to attract and retain the best available  personnel for positions of substantial
responsibility, to provide additional incentive to Employees and Consultants 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  of an  option  and  subject  to the
applicable  provisions  of  Section  422 of the  Code  and the  regulations  and
interpretations promulgated thereunder.

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

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

            (b) "AFFILIATE"  means an entity other than a Subsidiary (as defined
below)  which,  together  with the Company,  is under common  control of a third
person or entity.

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

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

            (e) "CAUSE" for  termination of a Participant's  Continuous  Service
Status will exist if the Participant is terminated by the Company for any of the
following reasons:  (i) Participant's  willful failure  substantially to perform
his or her duties and responsibilities to the Company or deliberate violation of
a  Company  policy;   (ii)  Participant's   commission  of  any  act  of  fraud,
embezzlement,  dishonesty or any other willful  misconduct that has caused or is
reasonably  expected  to  result  in  material  injury  to  the  Company;  (iii)
unauthorized use or disclosure by Participant of any proprietary  information or
trade secrets of the Company or any other party to whom the Participant  owes an
obligation  of  nondisclosure  as a result of his or her  relationship  with the
Company;  or (iv) Participant's  willful breach of any of his or her obligations
under any written  agreement or covenant with the Company.  The determination as
to whether a  Participant  is being  terminated  for Cause shall be made in good
faith by the  Company  and shall be final and  binding on the  Participant.  The
foregoing  definition  does  not in any  way  limit  the  Company's  ability  to
terminate a Participant's  employment or consulting  relationship at any time as
provided in Section 5(d) below,  and the term  "Company"  will be interpreted to
include any Subsidiary, Parent or Affiliate, as appropriate.

<PAGE>

            (f) "CHANGE OF CONTROL" means (1) a sale of all or substantially all
of the Company's  assets,  or (2) any merger,  consolidation  or other  business
combination transaction of the Company with or into another corporation,  entity
or person,  other than a transaction in which the holders of at least a majority
of the shares of voting  capital  stock of the Company  outstanding  immediately
prior to such  transaction  continue to hold  (either by such  shares  remaining
outstanding  or by their being  converted into shares of voting capital stock of
the surviving  entity) a majority of the total voting power  represented  by the
shares  of  voting  capital  stock  of the  Company  (or the  surviving  entity)
outstanding  immediately after such  transaction,  or (3) the direct or indirect
acquisition  (including by way of a tender or exchange offer) by any person,  or
persons  acting  as a group,  of  beneficial  ownership  or a right  to  acquire
beneficial  ownership of shares  representing  a majority of the voting power of
the then outstanding shares of capital stock of the Company.

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

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

            (i) "COMMON STOCK" means the Common Stock of the Company.

            (j) "COMPANY" means World Waste  Technologies,  Inc. (formerly known
as Voice Powered Technologies International, Inc.), a California corporation.

            (k)  "CONSULTANT"  means any person,  including  an advisor,  who is
engaged by the Company or any Parent, Subsidiary or Affiliate to render services
and is compensated  for such services,  and any director of the Company  whether
compensated for such services or not.

            (l)   "CONTINUOUS   SERVICE   STATUS"   means  the  absence  of  any
interruption or termination of service as an Employee or Consultant.  Continuous
Service Status as an Employee or Consultant shall not be considered  interrupted
in the case of: (i) sick leave;  (ii) military  leave;  (iii) any other leave of
absence approved by the Administrator,  provided that such leave is for a period
of not more than ninety (90) days,  unless  reemployment  upon the expiration of
such leave is guaranteed by contract or statute,  or unless  provided  otherwise
pursuant to Company  policy  adopted  from time to time;  or (iv) in the case of
transfers between locations of the Company or between the Company,  its Parents,
Subsidiaries, Affiliates or their respective successors. A change in status from
an  Employee  to a  Consultant  or from a  Consultant  to an  Employee  will not
constitute an interruption of Continuous Service Status.

            (m) "CORPORATE TRANSACTION" means a sale of all or substantially all
of  the  Company's  assets,   or  a  merger,   consolidation  or  other  capital
reorganization or business  combination  transaction of the Company with or into
another  corporation,  entity or person,  or the direct or indirect  acquisition
(including  by way of a tender or  exchange  offer) by any  person,  or  persons
acting as a group,  of  beneficial  ownership  or a right to acquire  beneficial
ownership  of shares  representing  a majority  of the voting  power of the then
outstanding shares of capital stock of the Company.

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


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<PAGE>

            (o)  "EMPLOYEE"  means any  person  employed  by the  Company or any
Parent,  Subsidiary or Affiliate, with the status of employment determined based
upon  such  factors  as  are  deemed  appropriate  by the  Administrator  in its
discretion,  subject to any requirements of the Code or the Applicable Laws. The
payment by the Company of a director's fee to a Director shall not be sufficient
to constitute "employment" of such Director by the Company.

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

            (q) "FAIR MARKET VALUE" means, as of any date, the fair market value
of the Common Stock,  as determined by the  Administrator  in good faith on such
basis  as  it  deems  appropriate  and  applied  consistently  with  respect  to
Participants. Whenever possible, the determination of Fair Market Value shall be
based upon the  closing  price for the  Shares as  reported  in the Wall  Street
Journal for the applicable date.

            (r) "INCENTIVE  STOCK OPTION" means an Option intended to qualify as
an  incentive  stock  option  within the meaning of Section 422 of the Code,  as
designated in the applicable Option Agreement.

            (s) "INVOLUNTARY  TERMINATION"  means termination of a Participant's
Continuous  Service Status under the following  circumstances:  (i)  termination
without  Cause  by  the  Company  or  a  Subsidiary,  Parent  or  Affiliate,  as
appropriate; or (ii) voluntary termination by the Participant within thirty (30)
days   following   (A)  a   material   reduction   in  the   Participant's   job
responsibilities,  provided  that  neither  a mere  change  in title  alone  nor
reassignment  following a Change of Control to a position that is  substantially
similar to the position held prior to the Change of Control  shall  constitute a
material reduction in job  responsibilities;  (B) relocation by the Company or a
Subsidiary,  Parent or Affiliate, as appropriate, of the Participant's work site
to  a  facility  or  location  more  than   seventy-five  (75)  miles  from  the
Participant's  principal  work site for the Company at the time of the Change of
Control;  or (C) a reduction  in  Participant's  then-current  base salary by at
least 33%,  provided that an  across-the-board  reduction in the salary level of
all other employees or consultants in positions  similar to the Participant's by
the same percentage amount as part of a general salary level reduction shall not
constitute such a salary reduction.

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

            (u) "NAMED  EXECUTIVE"  means any individual who, on the last day of
the Company's fiscal year, is the chief executive  officer of the Company (or is
acting in such capacity) or among the four most highly  compensated  officers of
the Company (other than the chief executive officer).  Such officer status shall
be determined pursuant to the executive compensation  disclosure rules under the
Exchange Act.

            (v)  "NONSTATUTORY  STOCK  OPTION"  means an Option not  intended to
qualify as an Incentive  Stock Option,  as designated in the  applicable  Option
Agreement.


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<PAGE>

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

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

            (y)  "OPTION  EXCHANGE  PROGRAM"  means a  program  approved  by the
Administrator whereby outstanding Options are exchanged for Options with a lower
exercise  price or are amended to decrease the  exercise  price as a result of a
decline in the Fair Market Value of the Common Stock.

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

            (aa)  "OPTIONEE"  means an Employee or  Consultant  who  receives an
Option.

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

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

            (dd) "PLAN" means this 2004 Stock Option Plan.

            (ee) "REPORTING PERSON" means an officer,  Director, or greater than
ten percent  shareholder  of the Company  within the meaning of Rule 16a-2 under
the Exchange  Act, who is required to file reports  pursuant to Rule 16a-3 under
the Exchange Act.

            (ff) "RULE  16B-3" means Rule 16b-3  promulgated  under the Exchange
Act, as amended from time to time, or any successor provision.

            (gg)  "SHARE"  means a share of the Common  Stock,  as  adjusted  in
accordance with Section 14 of the Plan.

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

            (ii) "SUBSIDIARY" means a "subsidiary  corporation,"  whether now or
hereafter  existing,  as defined in Section 424(f) of the Code, or any successor
provision.

            (jj) "TEN PERCENT HOLDER" means a person who 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.


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<PAGE>

      3. STOCK SUBJECT TO THE PLAN.  Subject to the  provisions of Section 13 of
the Plan, the maximum aggregate number of Shares that may be sold under the Plan
is two million (2,000,000) Shares of Common Stock. The Shares may be authorized,
but unissued,  or reacquired  Common Stock.  If an award should expire or become
unexercisable  for any reason  without  having  been  exercised  in full,  or is
surrendered  pursuant to an Option Exchange Program, the unpurchased Shares that
were subject thereto shall,  unless the Plan shall have been terminated,  become
available  for future grant under the Plan.  In  addition,  any Shares of Common
Stock which are  retained by the Company  upon  exercise of an award in order to
satisfy the exercise or purchase price for such award or any  withholding  taxes
due with respect to such exercise or purchase shall be treated as not issued and
shall continue to be available under the Plan.  Shares issued under the Plan and
later  repurchased  by the Company  pursuant to any  repurchase  right which the
Company shall be available for future grant under the Plan.

      4. ADMINISTRATION OF THE PLAN.

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

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

            (c) POWERS OF THE  ADMINISTRATOR.  Subject to the  provisions of the
Plan and in the case of a Committee,  the specific duties delegated by the Board
to  such  Committee,   the  Administrator  shall  have  the  authority,  in  its
discretion:

                  (i) to determine the Fair Market Value of the Common Stock, in
accordance with Section 2(q) of the Plan, provided that such determination shall
be applied consistently with respect to Participants under the Plan;

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

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

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

                  (v) to  approve  the  form(s) of  agreement(s)  used under the
Plan;


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<PAGE>

                  (vi) to determine the terms and conditions,  not  inconsistent
with the terms of the Plan,  of any award  granted  hereunder,  which  terms and
conditions  include but are not limited to the exercise or purchase  price,  the
time or times when awards may be  exercised  (which may be based on  performance
criteria),  any vesting acceleration or waiver of forfeiture  restrictions,  any
pro rata adjustment to vesting as a result of a Participant's transitioning from
full- to part-time  service (or vice versa),  and any  restriction or limitation
regarding any Option, Optioned Stock or restricted stock issued upon exercise of
an Option, based in each case on such factors as the Administrator,  in its sole
discretion, shall determine;

                  (vii) to  determine  whether and under what  circumstances  an
Option may be settled in cash under Section 10(c) instead of Common Stock;

                  (viii) to implement an Option  Exchange  Program on such terms
and  conditions  as the  Administrator  in  its  discretion  deems  appropriate,
provided that no amendment or adjustment to an Option that would  materially and
adversely  affect the rights of any  Optionee  shall be made  without  the prior
written consent of the Optionee;

                  (ix) to adjust the vesting of an Option held by an Employee or
Consultant as a result of a change in the terms or  conditions  under which such
person is providing services to the Company;

                  (x) to construe and interpret the terms of the Plan and awards
granted under the Plan, which constructions, interpretations and decisions shall
be final and binding on all Participants; and

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

      5. ELIGIBILITY.

            (a) RECIPIENTS OF GRANTS.  Nonstatutory Stock Options may be granted
to Employees  and  Consultants.  Incentive  Stock Options may be granted only to
Employees,  provided  that  Employees  of  Affiliates  shall not be  eligible to
receive Incentive Stock Options.

            (b) TYPE OF OPTION.  Each Option shall be  designated  in the Option
Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.

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

            (d) NO  EMPLOYMENT  RIGHTS.  The  Plan  shall  not  confer  upon any
Participant  any  right  with  respect  to  continuation  of  an  employment  or
consulting relationship with the Company, nor shall it interfere in any way with
such  Participant's  right or the Company's right to terminate the employment or
consulting relationship at any time for any reason.


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<PAGE>

      6. TERM OF PLAN. The Plan shall become  effective upon its adoption by the
Board of  Directors.  It shall  continue  in effect for a term of ten (10) years
unless sooner terminated under Section 15 of the Plan.

      7. TERM OF OPTION. The term of each Option shall be the term stated in the
Option  Agreement;  provided  that the term shall be no more than ten years from
the date of grant  thereof or such shorter term as may be provided in the Option
Agreement and provided  further  that, in the case of an Incentive  Stock Option
granted to a person who at the time of such grant is a Ten Percent  Holder,  the
term of the Option  shall be five  years from the date of grant  thereof or such
shorter term as may be provided in the Option Agreement.

      8. [Reserved.]

      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 such price as is determined
by the Administrator and set forth in the Option Agreement, but shall be subject
to the following:

                  (i) In the case of an Incentive Stock Option

                        (A) granted to an Employee who at the time of grant is a
Ten Percent  Holder,  the per Share exercise price shall be no less than 110% of
the Fair Market Value per Share on the date of grant; or

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

                  (ii) In the case of a Nonstatutory Stock Option

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

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

                        (C)  granted on any date on which the Common  Stock is a
Listed  Security to any eligible  person,  the per share Exercise Price shall be
such price as  determined  by the  Administrator  provided that if such eligible
person is, at the time of the grant of such  Option,  a Named  Executive  of the
Company,  the per share  Exercise  Price  shall be no less than 100% of the Fair
Market  Value on the date of grant if such  Option is  intended  to  qualify  as
performance-based compensation under Section 162(m) of the Code.


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<PAGE>

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

            (b) PERMISSIBLE CONSIDERATION.  The consideration to be paid for the
Shares to be issued upon exercise of an Option, including the method of payment,
shall be determined by the Administrator (and, in the case of an Incentive Stock
Option,  shall be determined  at the time of grant) and may consist  entirely of
(1) cash; (2) check;  (3) subject to any  requirements  of the  Applicable  Laws
(including without  limitation  Section 153 of the Delaware General  Corporation
Law),  delivery of Optionee's  promissory  note having such recourse,  interest,
security  and  redemption  provisions  as  the  Administrator  determines  to be
appropriate after taking into account the potential  accounting  consequences of
permitting an Optionee to deliver a promissory  note; (5) other Shares that have
a Fair Market Value on the date of  surrender  equal to the  aggregate  exercise
price of the Shares as to which the Option is  exercised,  provided  that in the
case of Shares acquired,  directly or indirectly,  from the Company, such Shares
must have been  owned by the  Optionee  for more than six  months on the date of
surrender  (or such  other  period as may be  required  to avoid  the  Company's
incurring an adverse accounting  charge);  (6) if, as of the date of exercise of
an Option the  Company  then is  permitting  employees  to engage in a "same-day
sale" cashless brokered exercise program involving one or more brokers,  through
such a  program  that  complies  with the  Applicable  Laws  (including  without
limitation the  requirements  of Regulation T and other  applicable  regulations
promulgated by the Federal  Reserve  Board) and that ensures prompt  delivery to
the company of the amount  required to pay the exercise price and any applicable
withholding  taxes; or (7) any combination of the foregoing  methods of payment.
In making its  determination  as to the type of  consideration  to  accept,  the
Administrator  shall  consider  if  acceptance  of  such  consideration  may  be
reasonably  expected to benefit the  Company and the  Administrator  may, in its
sole discretion, refuse to accept a particular form of consideration at the time
of any Option exercise.

      10. EXERCISE OF OPTION.

            (a) GENERAL.

                  (i)  EXERCISABILITY.  Any Option  granted  hereunder  shall be
exercisable  at such  times and  under  such  conditions  as  determined  by the
Administrator,  consistent with the term of the Plan and reflected in the Option
Agreement,  including  vesting  requirements  and/or  performance  criteria with
respect to the Company and/or the Optionee;  provided  however that, if required
under Applicable Laws, the Option (or Shares issued upon exercise of the Option)
shall comply with the requirements of Section 260.140.41(f) and (k) of the Rules
of the California Corporations Commissioner.


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<PAGE>

                  (ii)  LEAVE  OF  ABSENCE.  The  Administrator  shall  have the
discretion to determine  whether and to what extent the vesting of Options shall
be tolled  during any unpaid leave of absence;  provided,  however,  that in the
absence of such  determination,  vesting of Options  shall be tolled  during any
such unpaid leave (unless  otherwise  required by the Applicable  Laws).  In the
event of military  leave,  vesting shall toll during any unpaid  portion of such
leave, provided that, upon a Participant's  returning from military leave (under
conditions  that would entitle him or her to  protection  upon such return under
the Uniform Services Employment and Reemployment Rights Act), he or she shall be
given  vesting  credit with  respect to Options to the same extent as would have
applied  had the  Participant  continued  to  provide  services  to the  Company
throughout  the  leave on the same  terms  as he or she was  providing  services
immediately prior to such leave.

                  (iii)  MINIMUM  EXERCISE  REQUIREMENTS.  An Option  may not be
exercised  for a fraction of a Share.  The  Administrator  may  require  that an
Option  be  exercised  as to a  minimum  number of  Shares,  provided  that such
requirement  shall not prevent an Optionee  from  exercising  the full number of
Shares as to which the Option is then exercisable.

                  (iv)  PROCEDURES FOR AND RESULTS OF EXERCISE.  An Option shall
be deemed  exercised  when written notice of such exercise has been given to the
Company in  accordance  with the terms of the Option by the person  entitled  to
exercise  the Option and the Company has  received  full  payment for the Shares
with respect to which the Option is  exercised.  Full payment may, as authorized
by the  Administrator,  consist  of any  consideration  and  method  of  payment
allowable under Section 9(b) of the Plan,  provided that the Administrator  may,
in its sole  discretion,  refuse to accept any form of consideration at the time
of any Option exercise.

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

                  (v) RIGHTS AS  SHAREHOLDER.  Until the  issuance of the Shares
(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.  No adjustment will be made
for a dividend or other right for which the record date is prior to the date the
stock certificate is issued, except as provided in Section 14 of the Plan.

            (b) TERMINATION OF EMPLOYMENT OR CONSULTING RELATIONSHIP.  Except as
otherwise set forth in this Section 10(b), the Administrator shall establish and
set forth in the applicable Option Agreement the terms and conditions upon which
an Option shall  remain  exercisable,  if at all,  following  termination  of an
Optionee's Continuous Service Status, which provisions may be waived or modified
by the Administrator at any time. Unless the Administrator otherwise provides in
the Option Agreement,  to the extent that the Optionee is not vested in Optioned
Stock at the date of termination of his or her Continuous  Service Status, or if
the Optionee (or other person entitled to exercise the Option) does not exercise
the Option to the extent so  entitled  within the time  specified  in the Option
Agreement or below (as applicable),  the Option shall terminate and the Optioned
Stock underlying the unexercised portion of the Option shall revert to the Plan.
In no event may any Option be exercised  after the expiration of the Option term
as set forth in the Option Agreement (and subject to Section 7).


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<PAGE>

            The  following  provisions  (1) shall  apply to the extent an Option
Agreement does not specify the terms and  conditions  upon which an Option shall
terminate upon termination of an Optionee's  Continuous  Service Status, and (2)
establish the minimum post-termination exercise periods that may be set forth in
an Option Agreement:

                  (i)  TERMINATION  OTHER THAN UPON  DISABILITY OR DEATH. In the
event of  termination of Optionee's  Continuous  Service Status other than under
the  circumstances  set forth in  subsections  (ii) through  (iii)  below,  such
Optionee may exercise an Option for 30 days  following  such  termination to the
extent  the  Optionee  was vested in the  Optioned  Stock as of the date of such
termination.  No termination  shall be deemed to occur and this Section 10(b)(i)
shall not apply if (i) the Optionee is a Consultant who becomes an Employee,  or
(ii) the Optionee is an Employee who becomes a Consultant.

                  (ii) DISABILITY OF OPTIONEE. In the event of termination of an
Optionee's  Continuous  Service  Status  as a  result  of his or her  disability
(including  a  disability  within the meaning of Section  22(e)(3) of the Code),
such  Optionee  may  exercise an Option at any time within six months  following
such  termination to the extent the Optionee was vested in the Optioned Stock as
of the date of such termination.

                  (iii)  DEATH OF  OPTIONEE.  In the  event  of the  death of an
Optionee during the period of Continuous  Service Status since the date of grant
of the  Option,  or within  thirty  days  following  termination  of  Optionee's
Continuous  Service Status,  the Option may be exercised by Optionee's estate or
by a person  who  acquired  the  right to  exercise  the  Option by  bequest  or
inheritance  at any time within twelve months  following the date of death,  but
only to the extent the Optionee was vested in the Optioned  Stock as of the date
of death or, if  earlier,  the date the  Optionee's  Continuous  Service  Status
terminated.

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

      11. TAXES.

            (a) As a  condition  of the grant,  vesting or exercise of an Option
granted under the Plan,  the  Participant  (or in the case of the  Participant's
death,  the person  exercising the Option) shall make such  arrangements  as the
Administrator may require for the satisfaction of any applicable federal, state,
local or foreign  withholding tax obligations  that may arise in connection with
such grant,  vesting or exercise  of the Option or the  issuance of Shares.  The
Company  shall not be  required  to issue any  Shares  under the Plan until such
obligations  are  satisfied.  If the  Administrator  allows the  withholding  or
surrender of Shares to satisfy a Participant's tax withholding obligations under
this Section 11 (whether  pursuant to Section 11(c),  (d) or (e), or otherwise),
the  Administrator  shall not  allow  Shares to be  withheld  in an amount  that
exceeds  the  minimum  statutory  withholding  rates for  federal  and state tax
purposes, including payroll taxes.


                                       10
<PAGE>

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

            (c) This Section 11(c) shall apply only after the date, if any, upon
which the Common Stock  becomes a Listed  Security.  In the case of  Participant
other than an  Employee  (or in the case of an Employee  where the next  payroll
payment is not sufficient to satisfy such tax  obligations,  with respect to any
remaining tax  obligations),  in the absence of any other arrangement and to the
extent permitted under the Applicable  Laws, the Participant  shall be deemed to
have  elected to have the  Company  withhold  from the Shares to be issued  upon
exercise  of the  Option  that  number  of  Shares  having a Fair  Market  Value
determined as of the  applicable Tax Date (as defined below) equal to the amount
required to be withheld.  For purposes of this Section 11, the Fair Market Value
of the Shares to be withheld  shall be determined on the date that the amount of
tax to be  withheld  is to be  determined  under the  Applicable  Laws (the "Tax
Date").

            (d)  If  permitted  by  the  Administrator,  in  its  discretion,  a
Participant may satisfy his or her tax withholding  obligations upon exercise of
an Option by  surrendering  to the Company  Shares that have a Fair Market Value
determined  as of the  applicable  Tax Date equal to the amount  required  to be
withheld.  In the case of shares  previously  acquired from the Company that are
surrendered  under this Section  11(d),  such Shares must have been owned by the
Participant for more than six (6) months on the date of surrender (or such other
period  of time as is  required  for the  Company  to avoid  adverse  accounting
charges).

            (e) Any election or deemed  election by a Participant to have Shares
withheld to satisfy tax withholding obligations under Section 11(c) or (d) above
shall be  irrevocable  as to the  particular  Shares as to which the election is
made and shall be subject to the consent or  disapproval  of the  Administrator.
Any election by a Participant under Section 11(d) above must be made on or prior
to the applicable Tax Date.

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

      12. NON-TRANSFERABILITY OF OPTIONS.

            (a) GENERAL. Except as set forth in this Section 12, Options may not
be sold,  pledged,  assigned,  hypothecated,  transferred  or disposed of in any
manner  other  than by  will or by the  laws of  descent  or  distribution.  The
designation of a beneficiary  by an Optionee will not constitute a transfer.  An
Option may be exercised, during the lifetime of the holder of an Option, only by
such holder or a transferee permitted by this Section 12.

            (b) LIMITED TRANSFERABILITY RIGHTS. Notwithstanding anything else in
this Section 12, the  Administrator  may in its  discretion  grant  Nonstatutory
Stock  Options  that may be  transferred  by  instrument  to an  inter  vivos or
testamentary  trust in which the Options are to be passed to beneficiaries  upon
the death of the trustor (settlor) or by gift or pursuant to domestic  relations


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<PAGE>

orders to  "Immediate  Family  Members"  (as  defined  below)  of the  Optionee.
"Immediate Family" means any child, stepchild,  grandchild,  parent, stepparent,
grandparent,  spouse,  former spouse,  sibling,  niece,  nephew,  mother-in-law,
father-in-law,  son-in-law,  daughter-in-law,  brother-in-law,  or sister-in-law
(including  adoptive  relationships),  a trust in which these  persons have more
than fifty  percent of the  beneficial  interest,  a  foundation  in which these
persons (or the Optionee) control the management of assets, and any other entity
in which these  persons  (or the  Optionee)  own more than fifty  percent of the
voting interests.

      13.  ADJUSTMENTS UPON CHANGES IN  CAPITALIZATION,  MERGER OR CERTAIN OTHER
TRANSACTIONS.

            (a) CHANGES IN CAPITALIZATION.  Subject to any action required under
Applicable  Laws by the  shareholders  of the  Company,  the number of Shares of
Common Stock  covered by each  outstanding  Option,  and the number of Shares of
Common Stock that have been  authorized  for  issuance  under the Plan but as to
which no Options  have yet been  granted or that have been  returned to the Plan
upon  cancellation or expiration of an Option, as well as the price per Share of
Common Stock covered by each such outstanding  Option,  shall be proportionately
adjusted for any  increase or decrease in the number of issued  Shares of Common
Stock  resulting  from a stock  split,  reverse  stock  split,  stock  dividend,
combination,  recapitalization  or  reclassification of the Common Stock, or any
other  increase  or  decrease  in the  number of issued  Shares of Common  Stock
effected  without receipt of consideration  by the Company;  provided,  however,
that conversion of any convertible securities of the Company shall not be deemed
to have been "effected without receipt of consideration."  Such adjustment shall
be made by the  Administrator,  whose  determination  in that  respect  shall be
final, binding and conclusive.  Except as expressly provided herein, no issuance
by the Company of shares of stock of any class, or securities  convertible  into
shares of stock of any class,  shall affect, and no adjustment by reason thereof
shall be made with  respect  to, the  number or price of Shares of Common  Stock
subject to an Option.

            (b) DISSOLUTION OR  LIQUIDATION.  In the event of the dissolution or
liquidation of the Company,  each Option will terminate immediately prior to the
consummation of such action, unless otherwise determined by the Administrator.

            (c) CORPORATE  TRANSACTION.  In the event of a Corporate Transaction
(including  without  limitation a Change of Control),  each  outstanding  Option
shall be assumed or an equivalent  option or right shall be  substituted by such
successor  corporation or a parent or subsidiary of such  successor  corporation
(the "Successor  Corporation"),  unless the Successor Corporation does not agree
to assume the award or to  substitute an  equivalent  option or right,  in which
case such Option shall terminate upon the consummation of the transaction.

            Notwithstanding  the above, in the event (i) of a Change of Control,
and (ii) a Participant holding an Option assumed or substituted by the Successor
Corporation in the Change of Control,  or holding  restricted  stock issued upon
exercise  of an Option  with  respect  to which the  Successor  Corporation  has
succeeded  to a  repurchase  right as a result  of the  Change  of  Control,  is
Involuntarily  Terminated by the Successor Corporation without Cause at the time
of, or within twelve months following consummation of, the transaction, then any
assumed or substituted Option held by the terminated  Participant at the time of
termination shall accelerate and become  exercisable in full, and any repurchase


                                       12
<PAGE>


right  applicable  to any  Shares  shall  lapse  as to all  of the  Shares.  The
acceleration  of vesting  and lapse of  repurchase  rights  provided  for in the
previous  sentence  shall  occur  immediately  prior  to the  effective  date of
termination of the Participant's Continuous Service Status.

            For purposes of this Section  13(c),  an Option shall be  considered
assumed,  without limitation,  if, at the time of issuance of the stock or other
consideration upon a Corporate  Transaction or a Change of Control,  as the case
may be, each holder of an Option would be entitled to receive  upon  exercise of
the award  the same  number  and kind of  shares of stock or the same  amount of
property,  cash or securities as such holder would have been entitled to receive
upon the occurrence of the transaction if the holder had been, immediately prior
to such transaction,  the holder of the number of Shares of Common Stock covered
by the award at such time (after giving effect to any  adjustments in the number
of Shares  covered by the Option as provided for in this  Section 13);  provided
that if such  consideration  received in the  transaction  is not solely  common
stock of the Successor  Corporation,  the Administrator may, with the consent of
the Successor  Corporation,  provide for the  consideration  to be received upon
exercise of the award to be solely  common  stock of the  Successor  Corporation
equal to the  Fair  Market  Value of the per  Share  consideration  received  by
holders of Common Stock in the transaction.

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

      15. AMENDMENT AND TERMINATION OF THE PLAN.

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

            (b) EFFECT OF  AMENDMENT  OR  TERMINATION.  Except as to  amendments
which the Administrator  has the authority under the Plan to make  unilaterally,
no amendment or  termination of the Plan shall  materially and adversely  affect
Options already granted,  unless mutually agreed otherwise  between the Optionee
and the  Administrator,  which  agreement  must be in writing  and signed by the
Optionee or holder and the Company.


                                       13
<PAGE>


      16.  CONDITIONS  UPON  ISSUANCE  OF  SHARES.   Notwithstanding  any  other
provision of the Plan or any agreement  entered into by the Company  pursuant to
the Plan,  the Company shall not be  obligated,  and shall have no liability for
failure,  to issue or deliver any Shares under the Plan unless such  issuance or
delivery would comply with the Applicable Laws, with such compliance  determined
by the Company in  consultation  with its legal  counsel.  As a condition to the
exercise of an Option,  the Company may require the person  exercising the award
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  by law.  Shares  issued  upon  exercise of Options
granted  prior to the date on which the Common Stock  becomes a Listed  Security
shall be subject to a right of first refusal in favor of the Company pursuant to
which the  Participant  will be required to offer  Shares to the Company  before
selling or  transferring  them to any third  party on such terms and  subject to
such conditions as is reflected in the applicable Option Agreement.

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

      19. SHAREHOLDER APPROVAL. If required by the Applicable Laws,  continuance
of the Plan shall be subject to  approval  by the  shareholders  of the  Company
within  twelve  (12) months  before or after the date the Plan is adopted.  Such
shareholder  approval shall be obtained in the manner and to the degree required
under the Applicable Laws.

      20.  INFORMATION AND DOCUMENTS TO OPTIONEES AND  PURCHASERS.  Prior to the
date,  if any,  upon which the Common  Stock  becomes a Listed  Security  and if
required by the Applicable Laws, the Company shall provide financial  statements
at least annually to each Optionee and to each  individual  who acquired  Shares
pursuant to the Plan,  during the period such  Optionee or purchaser  has one or
more Options  outstanding,  and in the case of an individual who acquired Shares
pursuant to the Plan,  during the period such individual  owns such Shares.  The
Company  shall not be required to provide  such  information  if the issuance of
Options  under the Plan is limited to key  employees  whose duties in connection
with the Company assure their access to equivalent information.


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