<PAGE>   1
                                                                Exhibit 10.9

                            THE CERPLEX GROUP, INC.
                        RESTATED 1993 STOCK OPTION PLAN
                   (RESTATED AND AMENDED AS OF JULY 16, 1996)


                                  ARTICLE ONE

                               GENERAL PROVISIONS


      I.         PURPOSES OF THE PLAN

                 A.       The Restated 1993 Stock Option Plan (the "Plan") is
intended to promote the interests of The Cerplex Group, Inc., a Delaware
corporation (the "Corporation"), by providing eligible individuals with the
opportunity to acquire a proprietary interest, or otherwise increase their
proprietary interest, in the Corporation as an incentive for them to remain in
the service of the Corporation (or its parent or subsidiary corporations).

     II.         STRUCTURE OF THE PLAN

                 A.       The Plan shall be divided into two separate equity
programs:

                                a.         the Discretionary Option Grant
         Program under which eligible persons may, at the discretion of the
         Plan Administrator, be granted options to purchase shares of Common
         Stock, and

                                b.         the Automatic Option Grant Program
         under which Eligible Directors shall automatically receive option
         grants at periodic intervals to purchase shares of Common Stock.

                 B.       The provisions of Articles One and Four shall apply
to both equity programs under the Plan and shall accordingly govern the
interests of all persons under the Plan.

    III.         DEFINITIONS

                 For purposes of the Plan, the following definitions shall be
in effect:

                 BOARD:  the Corporation's Board of Directors.

                 CHANGE IN CONTROL: a change in ownership or control of the
Corporation effected through either of the following transactions:





                                       1.
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                        a.        any person or related group of persons (other
         than the Corporation or a person that directly or indirectly controls,
         is controlled by, or is under common control with, the Corporation)
         directly or indirectly acquires beneficial ownership (within the
         meaning of Rule 13d-3 of the Exchange Act) of securities possessing
         more than fifty percent (50%) of the total combined voting power of
         the Corporation's outstanding securities pursuant to a tender or
         exchange offer made directly to the Corporation's stockholders which
         the Board does not recommend such stockholders to accept; or

                        b.        there is a change in the composition of the
         Board over a period of thirty-six (36) consecutive months or less such
         that a majority of the Board members (rounded up to the next whole
         number) ceases, by reason of one or more contested of individuals who
         either (A) have been Board members continuously since the beginning of
         such period or (B) have been elected or nominated for election as
         Board members during such period by at least a majority of the Board
         members described in clause (A) who were still in office at the time
         such election or nomination was approved by the Board.

                 CODE:  the Internal Revenue Code of 1986, as amended.

                 COMMITTEE:  the committee of two (2) or more non-employee
Board members appointed by the Board to administer the Plan.

                 COMMON STOCK:  shares of the Corporation's common stock.

                 CORPORATE TRANSACTION:  either of the following
stockholder-approved transactions to which the Corporation is a party:

                        a.        a merger or consolidation in which securities
         possessing more than fifty percent (50%) of the total combined voting
         power of the Corporation's outstanding securities are transferred to a
         person or persons different from those who held those securities
         immediately prior to such transaction, or

                        b.        the sale, transfer or other disposition of
         all or substantially all of the Corporation's assets in complete
         liquidation or dissolution of the Corporation.

                 EFFECTIVE DATE:  the first date on which the shares of the
Corporation's Common Stock were registered under Section 12(g) of the Exchange
Act.





                                       2.
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                 ELIGIBLE DIRECTOR:  a non-employee Board member eligible to
participate in the Automatic Option Grant Program in accordance with the
eligibility provisions of Article One.

                 EMPLOYEE:  an individual who is in the employ of the
Corporation or any Parent or Subsidiary, subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.

                 EXCHANGE ACT:  the Securities Exchange Act of 1934, as amended
from time to time.

                 FAIR MARKET VALUE:  the fair market value per share of Common
Stock determined in accordance with the following provisions:

                    a.            If the Common Stock is not at the time listed
         or admitted to trading on any national stock exchange but is traded on
         the Nasdaq National Market, the Fair Market Value shall be the closing
         selling price per share on the date in question, as such price is
         reported by the National Association of Securities Dealers on the
         Nasdaq National Market or any successor system.  If there is no
         reported closing selling price for the Common Stock on the date in
         question, then the closing selling price on the last preceding date
         for which such quotation exists shall be determinative of Fair Market
         Value.

                    b.            If the Common Stock is at the time listed or
         admitted to trading on any national stock exchange, then the Fair
         Market Value shall be the closing selling price per share on the date
         in question on the exchange determined by the Committee to be the
         primary market for the Common Stock, as such price is officially
         quoted in the composite tape of transactions on such exchange.  If
         there is no reported sale of Common Stock on such exchange on the date
         in question, then the Fair Market Value shall be the closing selling
         price on the exchange on the last preceding date for which such
         quotation exists.

                 HOSTILE TAKE-OVER: a change in ownership of the Corporation
effected through the following transaction:

                    a.            any person or related group of persons (other
         than the Corporation or a person that directly or indirectly controls,
         is controlled by, or is under common control with, the Corporation)
         directly or indirectly acquires beneficial ownership (within the
         meaning of Rule 13d-3 of the Exchange Act) of securities possessing
         more than fifty percent (50%) of the total combined voting power of
         the Corporation's outstanding securities pursuant to a tender or
         exchange offer made directly to the Corporation's





                                       3.
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         stockholders which the Board does not recommend such stockholders to
         accept, and

                    b.            more than fifty percent (50%) of the
         securities so acquired in such tender or exchange offer are accepted
         from holders other than the officers and directors of the Corporation
         subject to the short-swing profit restrictions of Section 16 of the
         Exchange Act.

                 INCENTIVE OPTION:  a stock option which satisfies the
requirements of Code Section 422.

                 NON-STATUTORY OPTION:  a stock option not intended to meet the
requirements of Code Section 422.

                 OPTIONEE:  any person to whom an option is granted under the
Plan.

                 PARENT:  any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation, provided each such
corporation in the unbroken chain (other than the Corporation) owns, at the
time of the determination, stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.

                 PERMANENT DISABILITY OR PERMANENTLY DISABLED:  the inability
of the Optionee to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment expected to result in
death or to be of continuous duration of twelve (12) months or more.

                 SERVICE: the provision of services to the Corporation (or any
Parent or Subsidiary) by an individual in the capacity of an Employee, a
non-employee member of the board of directors or an independent consultant or
advisor, except to the extent otherwise specifically provided in the applicable
stock option agreement.

                 SUBSIDIARY:  each corporation (other than the Corporation) in
an unbroken chain of corporations beginning with the Corporation, provided each
such corporation (other than the last corporation) in the unbroken chain owns,
at the time of the determination, stock possessing fifty percent (50%) or more
of the total combined voting power of all classes of stock in one of the other
corporations in such chain.

                 TAKE-OVER PRICE: the greater of (a) the Fair Market Value per
share of Common Stock on the date the option is surrendered to the Corporation
in connection with a Hostile Take-Over or (b) the highest reported price per
share of Common Stock paid by the tender offeror in effecting such Hostile
Take-Over.  However, if the surrendered option is an incentive stock option
under the Federal tax laws, the Take-Over Price shall not exceed the clause (a)
price per share.





                                       4.
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                 10% STOCKHOLDER: the owner of stock (as determined under Code
Section 424(d)) possessing ten percent (10%) or more of the total combined
voting power of all classes of stock of the Corporation.

     IV.         ADMINISTRATION OF THE PLAN

                 A.       The Discretionary Option Grant Program shall be
administered by the Committee.  No Board member shall be eligible to serve on
the Committee if such individual has, within the twelve (12)-month period
immediately preceding the date of his or her appointment to the Committee,
received an option grant or stock issuance under this Plan or any other stock
plan of the Corporation (or any parent or subsidiary corporation) other than
pursuant to the Automatic Grant Program under Article IV.  Members of the
Committee shall serve for such period of time as the Board may determine and
shall be subject to removal by the Board at any time.

                 B.       The Committee shall have full power and authority
(subject to the express provisions of the Plan) to establish such rules and
regulations as it may deem appropriate for the proper administration of the
Plan and to make such determinations and interpretations concerning the
Discretionary Option Grant Program and any outstanding option as it may deem
necessary or advisable.  The Committee shall have the authority to make option
grants under the Discretionary Option Grant Program to any and all eligible
individuals.  The Committee shall have complete discretion to determine the
number of shares to be covered by each such option, the time or times at which
such option is to become exercisable and the maximum term for which the option
is to remain outstanding.  Decisions of the Committee shall be final and
binding on all parties with an interest in any outstanding option under the
Discretionary Option Grant Program.

                 C.       Administration of the Automatic Option Grant Program
shall be self-executing in accordance with the terms of that program, and the
Committee shall exercise no discretionary functions with respect to option
grants made thereunder.

      V.         ELIGIBILITY FOR OPTION GRANTS

                 A.       The persons eligible to participate in the
Discretionary Option Grant Program shall be limited to the following:

                               (i)         officers and other Employees of the
         Corporation (or its parent or subsidiary corporations) who render
         services which contribute to the management, growth and financial
         success of the Corporation (or its parent or subsidiary corporations);

                              (ii)         non-employee members of the Board,
         other than those who are serving on the Committee; and





                                       5.
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                             (iii)         those consultants or independent
         contractors who provide valuable services to the Corporation (or its
         parent or subsidiary corporations).

                 B.       The individuals eligible to participate in the
Automatic Option Grant Program shall be (i) those individuals who are first
elected or appointed as non-employee Board members on or after the 1995 Annual
Stockholders Meeting, whether through appointment by the Board or election by
the Corporation's stockholders, and (ii) those individuals who are reelected to
serve as non-employee Board members after one or more Annual Stockholders
Meetings beginning with the 1995 Annual Meeting.  A non-employee Board member
who has previously been in the employ of the Corporation (or any Parent or
Subsidiary) shall not be eligible to receive an option grant under the
Automatic Option Grant Program at the time he or she first becomes a
non-employee Board member, but such individual shall be eligible to receive
periodic option grants under the Automatic Option Grant Program upon his or her
reelection as a non-employee Board member at one or more Annual Stockholders
Meetings.

     VI.         STOCK SUBJECT TO THE PLAN

                 A.       Shares of the Common Stock shall be available for
issuance under the Plan and shall be drawn from either the Corporation's
authorized but unissued shares of Common Stock or from reacquired shares of
Common Stock, including shares repurchased by the Corporation on the open
market.  The aggregate number of shares available for issuance under the Plan
from and after the Effective Date shall not exceed 2,000,000 shares of Common
Stock, subject to adjustment from time to time in accordance with the
provisions of this Section VI.  The maximum number of shares of Common Stock
for which any one participant on the Plan may be granted stock options or
separately exercisable stock appreciation rights in any calendar year shall not
exceed 500,000 shares.

                 B.       Should one or more outstanding options under this
Plan expire or terminate for any reason prior to exercise in full (including
any option cancelled in accordance with the cancellation-regrant provisions of
Section IV of Article Two of the Plan), the shares subject to the portion of
the option not so exercised shall be available for subsequent option grant
under the Plan.  Shares subject to any option or portion thereof surrendered or
cancelled in accordance with Section V of Article Two and all shares issued
under the Plan, whether or not repurchased by the Corporation pursuant to its
repurchase rights under the Plan, shall not be available for subsequent option
grant under the Plan.  Should the exercise price of an outstanding option under
the Plan be paid with shares of Common Stock or should shares of Common Stock
otherwise issuable under the Plan be withheld by the Corporation in
satisfaction of the withholding taxes incurred in connection with the exercise
of an outstanding option under the Plan, then the number of shares available
for issuance under the Plan shall be reduced by the gross number of shares for
which the option is exercised, and not by the net number of shares of Common
Stock issued to the option holder.





                                       6.
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                 C.       In the event any change is made to the Common Stock
issuable under the Plan by reason of any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or other change
affecting the outstanding Common Stock as a class without receipt of
consideration, then appropriate adjustments shall be made to (i) the maximum
number and/or class of shares issuable under the Plan, (ii) the maximum number
and/or class of shares for which any one participant may be granted stock
options or separately exercisable stock appreciation rights, (iii) the number
and/or class of securities for which automatic option grants are to be
subsequently made per Eligible Director under the Automatic Option Grant
Program and (iv) the number and/or class of shares and price per share in
effect under each outstanding option under the Plan.  Such adjustments to the
outstanding options shall preclude the enlargement or dilution of rights and
benefits under such options.  The adjustments determined by the Committee shall
be final, binding and conclusive.





                                       7.
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                                  ARTICLE TWO

                       DISCRETIONARY OPTION GRANT PROGRAM


        I.       TERMS AND CONDITIONS OF OPTIONS

                 Options granted pursuant to this Article Two shall be
authorized by action of the Committee and may, at the Committee's discretion,
be either Incentive Options or Non-Statutory Options.  Individuals who are not
Employees may only be granted Non-Statutory Options.  Each option granted shall
be evidenced by one or more instruments in the form approved by the Committee.
Each such instrument shall, however, comply with the terms and conditions
specified below, and each instrument evidencing an Incentive Option shall, in
addition, be subject to the applicable provisions of Section II of this Article
Two.

                 A.       Option Price.

                          1.      The option price per share shall be fixed by
the Committee.  In no event, however, shall the option price per share of an
Incentive Option be less than one hundred percent (100%) of the Fair Market
Value per share of Common Stock on the date of the option grant, and in no
event shall the option price per share of a Non-Statutory Option be less than
eighty-five percent (85%) of the Fair Market Value per share of Common Stock on
the date of the option grant.

                          2.      The option price shall become immediately due
upon exercise of the option and, subject to the provisions of Section VI of
this Article Two and the instrument evidencing the grant, shall be payable in
one of the following alternative forms:

                          -       cash or check made payable to the
         Corporation's order;

                          -       shares of Common Stock held by the optionee
         for the requisite period necessary to avoid a charge to the
         Corporation's earnings for financial reporting purposes and valued at
         Fair Market Value on the Exercise Date (as such term is defined
         below); or

                          -       through a broker-dealer sale and remittance
         procedure pursuant to which the optionee shall provide irrevocable
         written instructions (I) to a Corporation-designated brokerage firm to
         effect the immediate sale of the purchased shares and remit to the
         Corporation, out of the sale proceeds available on the settlement
         date, sufficient funds to cover the aggregate option price payable for
         the purchased shares plus all applicable Federal and State income and
         employment taxes required to be withheld by the Corporation in
         connection with such purchase and (II) to the Corporation





                                       8.
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         to deliver the certificates for the purchased shares directly to such
         brokerage firm in order to complete the sale transaction.

                          For purposes of this Section I.A.2, the Exercise Date
shall be the date on which written notice of the option exercise is delivered
to the Corporation.  Except to the extent the sale and remittance procedure is
used in connection with the exercise of the option, payment of the option price
for the purchased shares must accompany such notice.

                 B.       Term and Exercise of Options.

                          Each option granted under this Article Two shall be
exercisable at such time or times, during such period, and for such number of
shares as shall be determined by the Committee and set forth in the instrument
evidencing the option grant.  No such option, however, shall have a maximum
term in excess of ten (10) years from the grant date.  During the lifetime of
the optionee, the option shall be exercisable only by the optionee and shall
not be assignable or transferable by the optionee otherwise than by will or by
the laws of descent and distribution following the optionee's death.

                 C.       Termination of Service.

                          1.      Except to the extent otherwise provided
pursuant to Section I.C.3 below, the following provisions shall govern the
exercise period applicable to any options held by the optionee at the time of
cessation of Service or death.

                        -         Should the optionee cease to remain in
         Service for any reason other than death or Permanent Disability, then
         the period during which each outstanding option held by such optionee
         is to remain exercisable shall be limited to the three (3)-month
         period following the date of such cessation of Service.

                        -         Should such Service terminate by reason of
         Permanent Disability, then the period during which each outstanding
         option held by the optionee is to remain exercisable shall be limited
         to the twelve (12)-month period following the date of such cessation
         of Service.

                        -         Should the optionee die while holding one or
         more outstanding options, then the period during which each such
         option is to remain exercisable shall be limited to the twelve
         (12)-month period following the date of the optionee's death.  During
         such limited period, the option may be exercised by the personal
         representative of the optionee's estate or by the person or persons to
         whom the option is transferred pursuant to the optionee's will or in
         accordance with the laws of descent and distribution.





                                       9.
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                        -         Under no circumstances, however, shall any
         such option be exercisable after the specified expiration date of the
         option term.

                        -         During the applicable post-Service exercise
         period, the option may not be exercised in the aggregate for more than
         the number of vested shares for which the option is exercisable on the
         date of the optionee's cessation of Service.  Upon the expiration of
         the applicable exercise period or (if earlier) upon the expiration of
         the option term, the option shall terminate and cease to be
         exercisable for any vested shares for which the option has not been
         exercised.  However, the option shall, immediately upon the optionee's
         cessation of Service, terminate and cease to be outstanding with
         respect to any option shares for which the option is not at that time
         exercisable or in which the optionee is not otherwise at that time
         vested.

                          2.      The Committee shall have discretion,
exercisable either at the time the option is granted or at any time while the
option remains outstanding, to permit one or more options held by the optionee
under this Article Two to be exercised, during the limited period of
exercisability provided under Section I.C.1 above, not only with respect to the
number of shares for which each such option is exercisable at the time of the
optionee's cessation of Service but also with respect to one or more subsequent
installments of purchasable shares for which the option would otherwise have
become exercisable had such cessation of Service not occurred.

                          3.      The Committee shall have discretion to extend
the period of time for which any option granted under this Article Two is to
remain exercisable following the optionee's cessation of Service or death from
the limited period in effect under Section I.C.1 of this Article Two to such
greater period of time as the Committee shall deem appropriate; provided,
however, that in no event shall such option be exercisable after the specified
expiration date of the option term.

                 D.       Stockholder Rights.

                          An optionee shall have no stockholder rights with
respect to any shares covered by the option until such individual shall have
exercised the option and paid the option price for the purchased shares.

                 E.       Repurchase Rights.  The shares of Common Stock
acquired upon the exercise of any option granted under this Plan may be subject
to repurchase by the Corporation in accordance with the following provisions:

                          a.      The Committee shall have the discretion to
         authorize the issuance of unvested shares of Common Stock under this
         Plan.  Should the Optionee cease Service while holding such unvested
         shares, the Corporation shall have the right to repurchase any or all
         of those unvested shares at the





                                      10.
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         option price paid per share.  The terms and conditions upon which such
         repurchase right shall be exercisable (including the period and
         procedure for exercise and the appropriate vesting schedule for the
         purchased shares) shall be established by the Committee and set forth
         in the instrument evidencing such repurchase right.

                          b.      All of the Corporation's outstanding
         repurchase rights under this Plan shall automatically terminate, and
         all shares subject to such terminated rights shall immediately vest in
         full, upon the occurrence of a Corporate Transaction, except to the
         extent: (i) any such repurchase right is expressly assigned to the
         successor corporation (or parent thereof) in connection with the
         Corporate Transaction or (ii) such accelerated vesting is precluded by
         other limitations imposed by the Committee at the time the repurchase
         right is issued.

                          c.      The Committee shall have discretion,
         exercisable either before or after the Optionee's cessation of
         Service, to cancel the Corporation's outstanding repurchase rights
         with respect to one or more shares purchased or purchasable by the
         Optionee under this Plan and thereby accelerate the vesting of such
         shares in whole or in part at any time.

         II.     INCENTIVE OPTIONS

                 The terms and conditions specified below shall be applicable
to all Incentive Options granted under this Article Two.  Incentive Options may
only be granted to individuals who are Employees.  Options which are
specifically designated as Non-Statutory Options when issued under the Plan
shall not be subject to such terms and conditions.

                 A.       Dollar Limitation.  The aggregate Fair Market Value
(determined as of the respective date or dates of grant) of the Common Stock
for which one or more options granted to any Employee under this Plan (or any
other option plan of the Corporation or its parent or subsidiary corporations)
may for the first time become exercisable as incentive stock options under the
Federal tax laws during any one calendar year shall not exceed the sum of One
Hundred Thousand Dollars ($100,000).  To the extent the Employee holds two or
more such options which become exercisable for the first time in the same
calendar year, the foregoing limitation on the exercisability of such options
as incentive stock options under the Federal tax laws shall be applied on the
basis of the order in which such options are granted.

                 B.       10% Stockholder.  If any individual to whom an
Incentive Option is granted is a 10% Stockholder, then the option price per
share shall not be less than one hundred and ten percent (110%) of the fair
market value per share of Common Stock on the grant date, and the option term
shall not exceed five (5) years measured from the grant date.





                                      11.
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                 Except as modified by the preceding provisions of this Section
II, the provisions of the Plan shall apply to all Incentive Options granted
hereunder.

     III.        CORPORATE TRANSACTION/CHANGE IN CONTROL

                 A.       In the event of a Corporate Transaction, the
exercisability of each option outstanding under this Article Two shall
automatically accelerate so that each such option shall, immediately prior to
the specified effective date for the Corporate Transaction, become fully
exercisable with respect to the total number of shares of Common Stock at the
time subject to such option and may be exercised for all or any portion of such
shares.  However, an outstanding option under this Article Two shall not so
accelerate if and to the extent: (i) such option is, in connection with the
Corporate Transaction, either to be assumed by the successor corporation or
parent thereof or be replaced with a comparable option to purchase shares of
the capital stock of the successor corporation or parent thereof or (ii) the
acceleration of such option is subject to other limitations imposed by the
Committee at the time of grant.  The determination of comparability under
clause (i) above shall be made by the Committee, and its determination shall be
final, binding and conclusive.

                 B.       Immediately following the consummation of the
Corporate Transaction, all outstanding options under this Article Two shall
terminate and cease to be outstanding, except to the extent assumed by the
successor corporation or its parent company.

                 C.       The Committee shall have the discretionary authority,
exercisable either at the time the option is granted or at any time while the
option remains outstanding, to provide for the automatic acceleration of one or
more outstanding options under this Article Two upon the occurrence of a
Corporate Transaction, whether or not those options are to be assumed or
replaced in the Corporate Transaction, or alternatively to provide for the
subsequent acceleration of any outstanding options under this Article Two which
do not otherwise accelerate at the time of the Corporate Transaction, should
the Optionee's Service terminate within a designated period following the
effective date of such Corporate Transaction.  The Committee shall also have
the authority to provide for the immediate termination of any of the
Corporation's outstanding repurchase rights under this Article Two which do not
otherwise terminate at the time of the Corporate Transaction, upon the
subsequent termination of the Optionee's Service within a designated period
following the effective date of such Corporate Transaction.

                 D.       Each outstanding option under this Article Two which
is assumed in connection with the Corporate Transaction or is otherwise to
continue in effect shall be appropriately adjusted, immediately after such
Corporate Transaction, to apply and pertain to the number and class of
securities which would have been issuable, in consummation of such Corporate
Transaction, to an actual holder of the same number of shares of Common Stock
as are subject to such option immediately prior to such Corporate Transaction.
Appropriate adjustments shall also be made to the option price payable per
share, provided





                                      12.
<PAGE>   13
the aggregate option price payable for such securities shall remain the same.
In addition, the class and number of securities available for issuance under
the Plan following the consummation of the Corporate Transaction shall be
appropriately adjusted.

                 D.       The Committee shall have the discretionary authority,
exercisable either in advance of any actually-anticipated Change in Control or
at the time of an actual Change in Control, to provide for the automatic
acceleration of one or more outstanding options under this Article Two (and the
immediate termination of the Corporation's outstanding repurchase rights under
this Article Two) upon the occurrence of the Change in Control.  The Committee
shall also have full power and authority to condition any such option
acceleration (and the termination of outstanding repurchase rights) upon the
subsequent termination of the optionee's Service within a specified period
following the Change in Control.  Any options accelerated in connection with
the Change in Control shall remain fully exercisable until the expiration or
sooner termination of the option term.

                 E.       Any options accelerated in connection with the Change
in Control shall remain fully exercisable until the expiration or sooner
termination of the option term.

                 F.       The grant of options under this Article Two shall in
no way affect the right of the Corporation to adjust, reclassify, reorganize or
otherwise change its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or
assets.

                 G.       The exercisability as incentive stock options under
the Federal tax laws of any options accelerated under this Section III in
connection with a Corporate Transaction or Change in Control shall remain
subject to the dollar limitation of Section II.

       IV.       CANCELLATION AND REGRANT OF OPTIONS

                 The Committee shall have the authority to effect, at any time
and from time to time, with the consent of the affected optionees, the
cancellation of any or all outstanding options under this Article Two and to
grant in substitution new options under the Plan covering the same or different
numbers of shares of Common Stock but with an option price per share not less
than (i) Fair Market Value of the Common Stock on the new grant date in the
case of an Incentive Option (ii) eighty-five percent (85%) of such Fair Market
Value in the case of a Non-Statutory Option, or (iii) one hundred ten percent
(110%) of such Fair Market Value in the case of an Incentive Option granted to
a 10% Stockholder.

       V.        STOCK APPRECIATION RIGHTS

                 A.       Provided and only if the Committee determines in its
discretion to implement the stock appreciation right provisions of this Section
V, one or more optionees may be granted the right, exercisable upon such terms
and conditions as the Committee may establish, to surrender all or part of an
unexercised option under this Article Two in





                                      13.
<PAGE>   14
exchange for a distribution from the Corporation in an amount equal to the
excess of (i) the Fair Market Value (on the option surrender date) of the
number of shares in which the optionee is at the time vested under the
surrendered option (or surrendered portion thereof) over (ii) the aggregate
option price payable for such vested shares.

                 B.       No surrender of an option shall be effective
hereunder unless it is approved by the Committee.  If the surrender is so
approved, then the distribution to which the optionee shall accordingly become
entitled under this Section V may be made in shares of Common Stock valued at
Fair Market Value on the option surrender date, in cash, or partly in shares
and partly in cash, as the Committee shall in its sole discretion deem
appropriate.

                 C.       If the surrender of an option is rejected by the
Committee, then the optionee shall retain whatever rights the optionee had
under the surrendered option (or surrendered portion thereof) on the option
surrender date and may exercise such rights at any time prior to the later of
(i) five (5) business days after the receipt of the rejection notice or (ii)
the last day on which the option is otherwise exercisable in accordance with
the terms of the instrument evidencing such option, but in no event may such
rights be exercised more than ten (10) years after the date of the option
grant.

                 D.       One or more officers of the Corporation subject to
the short-swing profit restrictions of the Federal securities laws may be
granted limited stock appreciation rights in tandem with their outstanding
options under this Article Two.  Upon the occurrence of a Hostile Take-Over,
each outstanding option with such a limited stock appreciation right in effect
for at least six (6) months shall automatically be cancelled and the optionee
shall in return be entitled to a cash distribution from the Corporation in an
amount equal to the excess of (i) the Take-Over Price of the shares of Common
Stock at the time subject to the cancelled option (whether or not the option is
otherwise at the time exercisable for such shares) over (ii) the aggregate
option price payable for such shares.  The cash distribution payable upon such
cancellation shall be made within five (5) days following the consummation of
the Hostile Take-Over.  Neither the approval of the Committee nor the consent
of the Board shall be required in connection with such option cancellation and
cash distribution.

                 E.       No stock appreciation right granted under this
Section V shall be assignable or transferable by the optionee and shall be
exercisable only by the optionee.  The shares of Common Stock subject to any
option surrendered or cancelled for an appreciation distribution pursuant to
this Section V shall NOT be available for subsequent option grant under the
Plan.

       VI.       LOANS OR INSTALLMENT PAYMENTS

                 The Committee may assist any optionee (including any officer)
in the exercise of one or more outstanding options under this Article Two,
including the satisfaction of any





                                      14.
<PAGE>   15
Federal and State income and employment tax obligations arising therefrom, by
(a) authorizing the extension of a loan to such optionee from the Corporation
or (b) permitting the optionee to pay the option price for the purchased Common
Stock in installments over a period of years.  The terms of any loan or
installment method of payment (including the interest rate and terms of
repayment) will be established by the Committee in its sole discretion.  Loans
and installment payments may be granted with or without security or collateral,
but the maximum credit available to the optionee shall not exceed the sum of
(i) the aggregate option price (less par value) of the purchased shares plus
(ii) any federal and state income and employment tax liability incurred by the
optionee in connection with the exercise of the option.





                                      15.
<PAGE>   16
                                 ARTICLE THREE

                         AUTOMATIC OPTION GRANT PROGRAM
                         ------------------------------

       I.        OPTION TERMS

                 A.       GRANT DATES.  Option grants shall be made on the
dates specified below:

                          1.      Each Eligible Director who is first elected
or appointed as a non-employee Board member on or after the 1995 Annual
Stockholders Meeting shall automatically be granted, on the date of such
initial election or appointment, a Non-Statutory Option to purchase 20,000
shares of Common Stock.

                          2.      On the date of each Annual Stockholders
Meeting, beginning with the 1995 Annual Meeting, each individual who is
reelected to serve as an Eligible Director after such meeting, shall
automatically be granted a Non-Statutory Option to purchase 10,000 shares of
Common Stock, provided such individual has served as a non-employee Board
member for at least six (6) months prior to the date of such Annual Meeting.
There shall be no limit on the number of such 10,000-share option grants any
one Eligible Director may receive over his or her period of Board service.

                 B.       EXERCISE PRICE.

                          1.      The exercise price per share shall be equal
to one hundred percent (100%) of the Fair Market Value per share of Common
Stock on the option grant date.

                          2.      The exercise price shall be payable in one or
more of the alternative forms authorized under the Discretionary Option Grant
Program.  Except to the extent the sale and remittance procedure specified
thereunder is utilized, payment of the exercise price for the purchased shares
must accompany the written notice of exercise delivered to the Corporation.

                 C.       OPTION TERM.  Each option shall have a term of ten
(10) years measured from the option grant date.

                 D.       EXERCISE AND VESTING OF OPTIONS.  Each option shall
be immediately exercisable for any or all of the option shares.  However, any
shares purchased under the option shall be subject to repurchase by the
Corporation, at the exercise price paid per share, upon the Optionee's
cessation of Board service prior to vesting in those shares.  Each grant shall
vest, and the Corporation's repurchase right shall lapse, in a series of
forty-eight





                                      16.
<PAGE>   17
(48) equal and successive monthly installments over the Optionee's period of
continued service as a Board member, with the first such installment to vest
upon the Optionee's completion of one (1) month of Board service measured from
the option grant date.

                 E.       EFFECT OF TERMINATION OF BOARD SERVICE.  The
following provisions shall govern the exercise of any options held by the
Optionee at the time the Optionee ceases to serve as a Board member:

                          (i)     The Optionee (or, in the event of Optionee's
         death, the personal representative of the Optionee's estate or the
         person or persons to whom the option is transferred pursuant to the
         Optionee's will or in accordance with the laws of descent and
         distribution) shall have a twelve (12)-month period following the date
         of such cessation of Board service in which to exercise each such
         option.

                          (ii)    During the twelve (12)-month exercise period,
         the option may not be exercised in the aggregate for more than the
         number of vested shares of Common Stock for which the option is
         exercisable at the time of the Optionee's cessation of Board service.

                          (iii)   In no event shall the option remain
         exercisable after the expiration of the option term.  Upon the
         expiration of the twelve (12)-month exercise period or (if earlier)
         upon the expiration of the option term, the option shall terminate and
         cease to be outstanding for any vested shares for which the option has
         not been exercised.  However, the option shall, immediately upon the
         Optionee's cessation of Board service, terminate and cease to be
         outstanding to the extent it is not exercisable for vested shares on
         the date of such cessation of Board service.

     II.         CORPORATE TRANSACTION/CHANGE IN CONTROL/HOSTILE TAKE-OVER

                 A.       In the event of any Corporate Transaction, the shares
of Common Stock at the time subject to each outstanding option but not
otherwise vested shall automatically vest in full so that each such option
shall, immediately prior to the effective date of the Corporate Transaction,
become fully exercisable for all of the shares of Common Stock at the time
subject to such option and may be exercised for all or any portion of such
shares as fully-vested shares of Common Stock.  Immediately following the
consummation of the Corporate Transaction, each automatic option grant shall
terminate and cease to be outstanding, except to the extent assumed by the
successor corporation (or parent thereof).

                 B.       In connection with any Change in Control, the shares
of Common Stock at the time subject to each outstanding option but not
otherwise vested shall automatically vest in full so that each such option
shall, immediately prior to the effective date of the





                                      17.
<PAGE>   18
Change in Control, become fully exercisable for all of the shares of Common
Stock at the time subject to such option and may be exercised for all or any
portion of such shares as fully-vested shares of Common Stock.  Each such
option shall remain exercisable for such fully-vested option shares until the
expiration or sooner termination of the option term or the surrender of the
option in connection with a Hostile Take-Over.

                 C.       Upon the occurrence of a Hostile Take-Over, the
Optionee shall have a thirty (30)-day period in which to surrender to the
Corporation each automatic option held by him or her for a period of at least
six (6) months.  The Optionee shall in return be entitled to a cash
distribution from the Corporation in an amount equal to the excess of (i) the
Take-Over Price of the shares of Common Stock at the time subject to the
surrendered option (whether or not the Optionee is otherwise at the time vested
in those shares) over (ii) the aggregate exercise price payable for such
shares.  Such cash distribution shall be paid within five (5) days following
the surrender of the option to the Corporation.  No approval or consent of the
Board shall be required in connection with such option surrender and cash
distribution.

                 D.       The grant of options under the Automatic Option Grant
Program shall in no way affect the right of the Corporation to adjust,
reclassify, reorganize or otherwise change its capital or business structure or
to merge, consolidate, dissolve, liquidate or sell or transfer all or any part
of its business or assets.

     III.        AMENDMENT OF THE AUTOMATIC OPTION GRANT PROGRAM

                 The provisions of this Automatic Option Grant Program,
together with the option grants outstanding thereunder, may not be amended at
intervals more frequently than once every six (6) months, other than to the
extent necessary to comply with applicable Federal income tax laws and
regulations.

     IV.         REMAINING TERMS

                 The remaining terms of each option granted under the Automatic
Option Grant Program shall be the same as the terms in effect for option grants
made under the Discretionary Option Grant Program.





                                      18.
<PAGE>   19
                                  ARTICLE FOUR

                                 MISCELLANEOUS


     I.          AMENDMENT OF THE PLAN

                 The Board shall have complete and exclusive power and
authority to amend or modify the Plan in any or all respects whatsoever.
However, (i) no such amendment or modification shall, without the consent of
the holders, adversely affect rights and obligations with respect to options at
the time outstanding under the Plan and (ii) any amendment made to the
Automatic Option Grant Program (or any options outstanding thereunder) shall be
in compliance with the limitations of that program.  In addition, the Board
shall not, without the approval of the Corporation's stockholders, (i)
materially increase the maximum number of shares issuable under the Plan,
except for permissible adjustments under Section VI.C of Article One, (ii)
materially modify the eligibility requirements for the grant of options under
the Plan or (iii) otherwise materially increase the benefits accruing to
participants under the Plan.

     II.         TAX WITHHOLDING

                 A.       The Corporation's obligation to deliver shares or
cash upon the exercise of stock options or stock appreciation rights granted
under the Discretionary Option Grant Program shall be subject to the
satisfaction of all applicable Federal, State and local income and employment
tax withholding requirements.

                 B.       The Committee may, in its discretion and upon such
terms and conditions as it may deem appropriate (including the applicable
safe-harbor provisions of Rule 16b-3 of the Exchange Act) provide any or all
holders of outstanding option grants under Article Two with the election to
have the Corporation withhold, from the shares of Common Stock otherwise
issuable upon the exercise of such options, a portion of such shares with an
aggregate Fair Market Value equal to the designated percentage (any multiple of
5% specified by the optionee) of the Federal, State and local income and
employment taxes ("Taxes") incurred in connection with the acquisition of such
shares.  In lieu of such direct withholding, one or more optionees may also be
granted the right to deliver shares of Common Stock to the Corporation in
satisfaction of such Taxes.  The withheld or delivered shares shall be valued
at the Fair Market Value on the applicable determination date for such Taxes.





                                      19.
<PAGE>   20
     III.        EFFECTIVE DATE AND TERM OF PLAN

                 1.       The Plan was adopted as an amendment and restatement
of the 1993 Stock Option Plan originally adopted as of December 17, 1993 and
became effective on   the Effective Date.

                 A.       On January 13, 1995, the Board adopted an amendment
to the Plan to increase the number of shares issuable thereunder by 500,000
shares to 1,000,000 shares and to implement the Automatic Option Grant Program,
subject to stockholder approval at the 1995 Annual Stockholders Meeting.  The
Company's stockholders approved such amendment at the 1995 Annual Meeting of
Stockholders held on May 18, 1995.

                 B.       On October 2, 1995, the Board adopted an amendment to
the Plan to increase the total number of shares of Common Stock for which any
one individual may be granted stock options or separately exercisable stock
appreciation rights in any calendar year from 300,000 to 500,000.  In addition,
on December 4, 1995 the Board adopted an amendment to the Plan to increase the
number of shares issuable thereunder by 500,000 shares to 1,500,000 shares and
on July 16, 1996 the Board adopted an additional amendment to further increase
the number of shares issuable thereunder by an additional 500,000 shares to
2,000,000 shares.  No options granted on the basis of such 1,000,000-share
increase or the 200,000-share increase shall become exercisable in whole or in
part unless and until such stockholder approval is obtained.  If such
stockholder approval is not obtained, then any unexercised options granted on
the basis of such increases shall terminate and cease to be outstanding.

                 C.       The provisions of each restatement of, and amendment
to, the Plan shall apply only to options granted under the Plan from and after
the effective date of such restatement or amendment.  All options issued and
outstanding under the Plan immediately prior to the adoption of each
restatement or amendment shall continue to be governed by the terms and
conditions of the Plan (and the instrument evidencing each such option) as in
effect on the date each such option was previously granted, and nothing in a
subsequent restatement or amendment shall be deemed to affect or otherwise
modify the rights or obligations of the holders of such options with respect to
the acquisition of shares of Common Stock thereunder.

                 D.       The Plan shall terminate upon the earliest of (i) the
expiration of the ten (10) year period measured from the date the Plan was
originally adopted by the Board, (ii) the date on which all shares available
for issuance under the Plan have been issued pursuant to the exercise of
outstanding options and stock appreciation rights, or (iii) the termination of
all outstanding options in connection with a Corporate Transaction.  If the
date of termination is determined under clause (i) above, then no options
outstanding on such date shall be affected by the termination of the Plan, and
such securities shall thereafter continue to have force and effect in
accordance with the provisions of the instruments evidencing such options.





                                      20.
<PAGE>   21
                 E.       Options may be granted under this Plan to purchase
shares of Common Stock in excess of the number of shares then available for
issuance under the Plan, provided each option granted is not to become
exercisable, in whole or in part, at any time prior to stockholder approval of
an amendment authorizing a sufficient increase in the number of shares issuable
under the Plan.

     IV.         USE OF PROCEEDS

                 Any cash proceeds received by the Corporation from the sale of
shares pursuant to options granted under the Plan shall be used for general
corporate purposes.

     V.          REGULATORY APPROVALS

                 A.       The implementation of the Plan, the granting of any
option hereunder, and the issuance of stock upon the exercise or surrender of
any such option shall be subject to the procurement by the Corporation of all
approvals and permits required by regulatory authorities having jurisdiction
over the Plan, the options granted under it and the stock issued pursuant to
it.

                 B.       No shares of Common Stock or other assets shall be
issued or delivered under the Plan unless and until there shall have been
compliance with all applicable requirements of Federal and state securities
laws, including the filing and effectiveness of a Form S-8 registration
statement for the shares of Common Stock issuable under the Plan, and all
applicable listing requirements of any securities exchange on which stock of
the same class is then listed.

     VI.         NO EMPLOYMENT/SERVICE RIGHTS

                 Neither the action of the Corporation in establishing the
Plan, nor any action taken by the Committee hereunder, nor any provision of the
Plan shall be construed so as to grant any individual the right to remain in
the employ or service of the Corporation (or any parent or subsidiary
corporation) for any period of specific duration, and the Corporation (or any
parent or subsidiary corporation retaining the services of such individual) may
terminate such individual's employment or service at any time and for any
reason, with or without cause.

     VII.        MISCELLANEOUS PROVISIONS

                 A.       Except as otherwise expressly authorized under the
Plan, the right to acquire Common Stock or other assets under the Plan may not
be assigned, encumbered or otherwise transferred by any optionee.





                                      21.
<PAGE>   22
                 B.       The provisions of the Plan governing the vesting and
exercise of options and shares issued under the Plan shall be governed by the
laws of the State of California, as such laws are applied to contracts entered
into and performed in such State.

                 C.       The provisions of the Plan shall inure to the benefit
of, and be binding upon, the Corporation and its successors or assigns, whether
by Corporate Transaction or otherwise, and the optionees, the legal
representatives of their respective estates, their respective heirs or legatees
and their permitted assignees.





                                      22.