Exhibit 10.2

                           MATTSON TECHNOLOGY, INC.

                          AMENDED AND RESTATED

                            1989 STOCK OPTION PLAN

                       (As Amended Effective May 2002)


1.    ESTABLISHMENT, PURPOSE AND TERM OF PLAN.
      ---------------------------------------

     1.1 Establishment. The Mattson Technology, Inc. 1989 Stock Option Plan was
initially established effective September 29, 1989 (the "Initial Plan"). The
Initial Plan is hereby amended and restated in its entirety as the Mattson
Technology, Inc. Amended and Restated 1989 Stock Option Plan (the "Plan")
effective as of the date of its approval by the stockholders of the Company (the
"Effective Date").

     1.2 Purpose. The purpose of the Plan is to advance the interests of the
Participating Company Group and its stockholders by providing an incentive to
attract, retain and reward persons performing services for the Participating
Company Group and by motivating such persons to contribute to the growth and
profitability of the Participating Company Group.

     1.3 Term of Plan. The Plan shall continue in effect until the earlier of
its termination by the Board or the date on which all of the shares of Stock
available for issuance under the Plan have been issued and all restrictions on
such shares under the terms of the Plan and the agreements evidencing Options
granted under the Plan have lapsed. However, all Incentive Stock Options shall
be granted, if at all, within ten (10) years from the earlier of the date the
Plan is adopted by the Board or the date the Plan is duly approved by the
stockholders of the Company.

2.    DEFINITIONS AND CONSTRUCTION.
      ----------------------------

     2.1 Definitions. Whenever used herein, the following terms shall have their
respective meanings set forth below:

          (a) "Board" means the Board of Directors of the Company. If one or
     more Committees have been appointed by the Board to administer the Plan,
     "Board" also means such Committee(s).


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          (b) "Code" means the Internal Revenue Code of 1986, as amended, and
     any applicable regulations promulgated thereunder.

          (c) "Committee" means the Compensation Committee or other committee of
     the Board duly appointed to administer the Plan and having such powers as
     shall be specified by the Board. Unless the powers of the Committee have
     been specifically limited, the Committee shall have all of the powers of
     the Board granted herein, including, without limitation, the power to amend
     or terminate the Plan at any time, subject to the terms of the Plan and any
     applicable limitations imposed by law.

          (d) "Company" means Mattson Technology, Inc., a Delaware corporation,
     or any successor corporation thereto.

          (e) "Consultant" means any person, including an advisor, engaged by a
     Participating Company to render services other than as an Employee or a
     Director.

          (f) "Director" means a member of the Board or of the board of
     directors of any other Participating Company.

          (g) "Disability" means the permanent and total disability of the
     Optionee within the meaning of Section 22(e)(3) of the Code.

          (h) "Employee" means any person treated as an employee (including an
     officer or a Director who is also treated as an employee) in the records of
     a Participating Company and, with respect to any Incentive Stock Option
     granted to such person, who is an employee for purposes of Section 422 of
     the Code; provided, however, that neither service as a Director nor payment
     of a director's fee shall be sufficient to constitute employment for
     purposes of the Plan.

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

          (j) "Fair Market Value" means, as of any date, the value of a share of
     Stock or other property as determined by the Board, in its sole discretion,
     or by the Company, in its sole discretion, if such determination is
     expressly allocated to the Company herein, subject to the following:

               (i) If, on such date, there is a public market for the Stock, the
          Fair Market Value of a share of Stock shall be the closing sale price
          of a share of Stock (or the mean of the closing bid and asked prices
          of a share of Stock if the Stock is so quoted instead) as quoted on
          the Nasdaq National Market, the Nasdaq Small-Cap Market or such other
          national or regional securities exchange or market system constituting
          the primary market for the Stock, as reported in the Wall Street
          Journal or such other source as the Company deems reliable. If the
          relevant date does not fall on a day on which the Stock has traded on
          such securities exchange or market system, the date on which the Fair
          Market Value shall be established shall be the last day on which the
          Stock was so traded prior to the relevant date, or such other
          appropriate day as shall be determined by the Board, in its sole
          discretion.

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               (ii) If, on such date, there is no public market for the Stock,
          the Fair Market Value of a share of Stock shall be as determined by
          the Board without regard to any restriction other than a restriction
          which, by its terms, will never lapse.


          (k) "Incentive Stock Option" means an Option intended to be (as set
     forth in the Option Agreement) and which qualifies as an incentive stock
     option within the meaning of Section 422(b) of the Code.

          (l) "Insider" means an officer or a Director of the Company or any
     other person whose transactions in Stock are subject to Section 16 of the
     Exchange Act.

          (m) "Nonemployee Director" means a Director of the Company who is not
     an Employee.

          (n) "Nonemployee Director Option" means a right to purchase Stock
     (subject to adjustment as provided in Section 4.2) granted to a Nonemployee
     Director pursuant to the terms and conditions of the Plan. Nonemployee
     Director Options shall be Nonstatutory Stock Options.

          (o) "Nonstatutory Stock Option" means an Option not intended to be (as
     set forth in the Option Agreement) or which does not qualify as an
     Incentive Stock Option.

          (p) "Option" means a right to purchase Stock (subject to adjustment as
     provided in Section 4.2) pursuant to the terms and conditions of the Plan,
     including a Nonemployee Director Option. An Option may be either an
     Incentive Stock Option or a Nonstatutory Stock Option.

          (q) "Option Agreement" means a written agreement between the Company
     and an Optionee setting forth the terms, conditions and restrictions of the
     Option granted to the Optionee and any shares acquired upon the exercise
     thereof.

          (r) "Optionee" means a person who has been granted one or more
     Options.

          (s) "Parent Corporation" means any present or future "parent
     corporation" of the Company, as defined in Section 424(e) of the Code.

          (t) "Participating Company" means the Company or any Parent
     Corporation or Subsidiary Corporation.

          (u) "Participating Company Group" means, at any point in time, all
     corporations collectively which are then Participating Companies.


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          (v) "Rule 16b-3" means Rule 16b-3 under the Exchange Act, as amended
     from time to time, or any successor rule or regulation.

          (w) "Section 162(m)" means Section 162(m) of the Code.

          (x) "Securities Act" means the Securities Act of 1933, as amended.

          (y) "Service" means an Optionee's employment or service with the
     Participating Company Group, whether in the capacity of an Employee, a
     Director or a Consultant. An Optionee's Service shall not be deemed to have
     terminated merely because of a change in the capacity in which the Optionee
     renders Service to the Participating Company Group or a change in the
     Participating Company for which the Optionee renders such Service, provided
     that there is no interruption or termination of the Optionee's Service.
     Furthermore, an Optionee's Service with the Participating Company Group
     shall not be deemed to have terminated if the Optionee takes any military
     leave, sick leave, or other bona fide leave of absence approved by the
     Company; provided, however, that if any such leave exceeds ninety (90)
     days, on the ninety-first (91st) day of such leave any Incentive Stock
     Option held by the Optionee shall cease to be treated as an Incentive Stock
     Option and instead shall be treated thereafter as a Nonstatutory Stock
     Option unless the Optionee's right to return to Service with the
     Participating Company Group is guaranteed by statute or contract.
     Notwithstanding the foregoing, unless otherwise designated by the Company
     or required by law, a leave of absence shall not be treated as Service for
     purposes of determining vesting under the Optionee's Option Agreement. An
     Optionee's Service shall be deemed to have terminated either upon an actual
     termination of Service or upon the corporation for which the Optionee
     performs Service ceasing to be a Participating Company. Subject to the
     foregoing, the Company, in its sole discretion, shall determine whether an
     Optionee's Service has terminated and the effective date of such
     termination.

          (z) "Stock" means the common stock of the Company, as adjusted from
     time to time in accordance with Section 4.2.

          (aa) "Subsidiary Corporation" means any present or future "subsidiary
     corporation" of the Company, as defined in Section 424(f) of the Code.

          (bb) "Ten Percent Owner Optionee" means an Optionee who, at the time
     an Option is granted to the Optionee, owns stock possessing more than ten
     percent (10%) of the total combined voting power of all classes of stock of
     a Participating Company within the meaning of Section 422(b)(6) of the
     Code.


     2.2 Construction. Captions and titles contained herein are for convenience
only and shall not affect the meaning or interpretation of any provision of the
Plan. Except when otherwise indicated by the context, the singular shall include
the plural and the plural shall include the singular. Use of the term "or" is
not intended to be exclusive, unless the context clearly requires otherwise.


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3.    ADMINISTRATION.
      --------------

     3.1 Administration by the Board. The Plan shall be administered by the
Board. All questions of interpretation of the Plan or of any Option shall be
determined by the Board, and such determinations shall be final and binding upon
all persons having an interest in the Plan or such Option. Any officer of a
Participating Company shall have the authority to act on behalf of the Company
with respect to any matter, right, obligation, determination or election which
is the responsibility of or which is allocated to the Company herein, provided
the officer has apparent authority with respect to such matter, right,
obligation, determination or election.

     3.2 Administration with Respect to Insiders. With respect to participation
by Insiders in the Plan, at any time that any class of equity security of the
Company is registered pursuant to Section 12 of the Exchange Act, the Plan shall
be administered in compliance with the requirements, if any, of Rule 16b-3.

     3.3 Committee Complying with Section 162(m). If a Participating Company is
a "publicly held corporation" within the meaning of Section 162(m), the Board
may establish a Committee of "outside directors" within the meaning of Section
162(m) to approve the grant of any Option which might reasonably be anticipated
to result in the payment of employee remuneration that would otherwise exceed
the limit on employee remuneration deductible for income tax purposes pursuant
to Section 162(m).

     3.4 Powers of the Board. In addition to any other powers set forth in the
Plan and subject to the provisions of the Plan, the Board shall have the full
and final power and authority, in its sole discretion:

          (a) to determine the persons to whom, and the time or times at which,
     Options shall be granted and the number of shares of Stock to be subject to
     each Option;

          (b) to designate Options as Incentive Stock Options or Nonstatutory
     Stock Options;

          (c) to determine the Fair Market Value of shares of Stock or other
     property;

          (d) to determine the terms, conditions and restrictions applicable to
     each Option (which need not be identical) and any shares acquired upon the
     exercise thereof, including, without limitation, (i) the exercise price of
     the Option, (ii) the method of payment for shares purchased upon the
     exercise of the Option, (iii) the method for satisfaction of any tax
     withholding obligation arising in connection with the Option or such
     shares, including by the withholding or delivery of shares of stock, (iv)
     the timing, terms and conditions of the exercisability of the Option or the
     vesting of any shares acquired upon the exercise thereof, (v) the time of
     the expiration of the Option, (vi) the effect of the Optionee's termination
     of Service with the Participating Company Group on any of the foregoing,
     and (vii) all other terms, conditions and restrictions applicable to the
     Option or such shares not inconsistent with the terms of the Plan;

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<PAGE>


          (e) to approve one or more forms of Option Agreement;

          (f) to amend, modify, extend, cancel, renew, or grant a new Option in
     substitution for, any Option or to waive any restrictions or conditions
     applicable to any Option or any shares acquired upon the exercise thereof;
     provided, however, that without the approval of the Company's stockholders,
     the Board may not (i) amend an Option to reduce the exercise price for such
     Option, (ii) replace an Option that is "out of the money" with restricted
     stock or other form of equity-based compensation in an exchange, buy-back
     or other similar program, (iii) replace an Option with a new Option having
     a lower exercise price or accelerated vesting schedule in an exchange,
     buy-back or other similar program, or (iv) implement any other option
     repricing, replacement or cancellation and regrant program or buy-back
     scheme which effectively reduces the exercise price of an Option (excluding
     any change to the exercise price of an Option required by Section 4.2
     and/or Section 9);

          (g) except as precluded under Section 3.4(f), to accelerate, continue,
     extend or defer the exercisability of any Option or the vesting of any
     shares acquired upon the exercise thereof, including with respect to the
     period following an Optionee's termination of Service with the
     Participating Company Group;

          (h) to delegate to any proper officer of the Company the authority to
     grant one or more Options, without further approval of the Board, to any
     person eligible pursuant to Section 5, other than a person who, at the time
     of such grant, is an Insider; provided, however, that (i) such Options
     shall not be granted to any one person within any fiscal year of the
     Company for more than twenty-five thousand (25,000) shares in the
     aggregate, (ii) the exercise price per share of each such Option shall be
     equal to the Fair Market Value per share of the Stock on the effective date
     of grant (or, if the Stock has not traded on such date, on the last day
     preceding the effective date of grant on which the Stock was traded), and
     (iii) each such Option shall be subject to the terms and conditions of the
     appropriate standard form of Option Agreement approved by the Board and
     shall conform to the provisions of the Plan and such other guidelines as
     shall be established from time to time by the Board;

          (i) to prescribe, amend or rescind rules, guidelines and policies
     relating to the Plan, or to adopt supplements to, or alternative versions
     of, the Plan, including, without limitation, as the Board deems necessary
     or desirable to comply with the laws of, or to accommodate the tax policy
     or custom of, foreign jurisdictions whose citizens may be granted Options;
     and

          (j) to correct any defect, supply any omission or reconcile any
     inconsistency in the Plan or any Option Agreement and to make all other
     determinations and take such other actions with respect to the Plan or any
     Option as the Board may deem advisable to the extent consistent with the
     Plan and applicable law.



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4.    SHARES SUBJECT TO INITIAL PLAN AND PLAN.
      ---------------------------------------

     4.1 Maximum Number of Shares Issuable. Subject to adjustment as provided in
Section 4.2, the maximum aggregate number of shares of Stock that may be issued
under the Initial Plan and the Plan shall be ten million four hundred
seventy-five thousand (10,475,000) and shall consist of authorized but unissued
or reacquired shares of Stock or any combination thereof. If an outstanding
Option for any reason expires or is terminated or canceled, or if shares of
Stock acquired, subject to repurchase, upon the exercise of an Option are
repurchased by the Company, the shares of Stock allocable to the unexercised
portion of such Option or such repurchased shares of Stock shall again be
available for issuance under the Plan.

     4.2 Adjustments for Changes in Capital Structure. In the event of any stock
dividend, stock split, reverse stock split, recapitalization, combination,
reclassification or similar change in the capital structure of the Company,
appropriate adjustments shall be made in the number and class of shares subject
to the Plan and to any outstanding Options, in the share limit set forth in
Section 3.4(h), in the Section 162(m) Grant Limit set forth in Section 5.4, to
the automatic Nonemployee Director Option grant provisions set forth in Section
7.1 and in the exercise price per share of any outstanding Options. If a
majority of the shares which are of the same class as the shares that are
subject to outstanding Options are exchanged for, converted into, or otherwise
become (whether or not pursuant to an Ownership Change Event, as defined in
Section 9.1) shares of another corporation (the "New Shares"), the Board may
unilaterally amend the outstanding Options to provide that such Options are
exercisable for New Shares. In the event of any such amendment, the number of
shares subject to, and the exercise price per share of, the outstanding Options
shall be adjusted in a fair and equitable manner as determined by the Board, in
its sole discretion. Notwithstanding the foregoing, any fractional share
resulting from an adjustment pursuant to this Section 4.2 shall be rounded up or
down to the nearest whole number, as determined by the Board, and in no event
may the exercise price of any Option be decreased to an amount less than the par
value, if any, of the stock subject to the Option. The adjustments determined by
the Board pursuant to this Section 4.2 shall be final, binding and conclusive.


5.    ELIGIBILITY AND OPTION LIMITATIONS.
      ----------------------------------

     5.1 Persons Eligible for Options. Options may be granted only to Employees,
Consultants and Directors. For purposes of the foregoing sentence, "Employees",
"Consultants" and "Directors" shall include prospective Employees, prospective
Consultants and prospective Directors to whom Options are granted in connection
with written offers of employment or other service relationship with the
Participating Company Group. Eligible persons may be granted more than one (1)
Option.

     5.2 Option Grant Restrictions. Any person who is not an Employee on the
effective date of the grant of an Option to such person may be granted only a
Nonstatutory Stock Option. An Incentive Stock Option granted to a prospective
Employee upon the condition that such person become an Employee shall be deemed
granted effective on the date such person commences service as an Employee with
a Participating Company, with an exercise price determined as of such date in
accordance with Section 6.1. Nonemployee Director Options may be granted only to
a person who at the time of grant is a Nonemployee Director.

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     5.3 Fair Market Value Limitation. To the extent that options designated as
Incentive Stock Options (granted under all stock option plans of the
Participating Company Group, including the Plan) become exercisable by an
Optionee for the first time during any calendar year for stock having an
aggregate Fair Market Value greater than One Hundred Thousand Dollars
($100,000), the portion of such options which exceeds such amount shall be
treated as Nonstatutory Stock Options. For purposes of this Section 5.3, options
designated as Incentive Stock Options shall be taken into account in the order
in which they were granted, and the Fair Market Value of stock shall be
determined as of the time the option with respect to such stock is granted. If
the Code is amended to provide for a different limitation from that set forth in
this Section 5.3, such different limitation shall be deemed incorporated herein
effective as of the date and with respect to such Options as required or
permitted by such amendment to the Code. If an Option is treated as an Incentive
Stock Option in part and as a Nonstatutory Stock Option in part by reason of the
limitation set forth in this Section 5.3, the Optionee may designate which
portion of such Option the Optionee is exercising. In the absence of such
designation, the Optionee shall be deemed to have exercised the Incentive Stock
Option portion of the Option first. Separate certificates representing each such
portion shall be issued upon the exercise of the Option.

     5.4 Section 162(m) Grant Limit. Subject to adjustment as provided in
Section 4.2, at any such time as a Participating Company is a "publicly held
corporation" within the meaning of Section 162(m), no Employee shall be granted
one or more Options within any fiscal year of the Company which in the aggregate
are for the purchase of more than five hundred thousand (500,000) shares (the
"Section 162(m) Grant Limit").

     6. TERMS AND CONDITIONS OF OPTIONS. Options shall be evidenced by Option
Agreements specifying the number of shares of Stock covered thereby, in such
form as the Board shall from time to time establish. No Option or purported
Option shall be a valid and binding obligation of the Company unless evidenced
by a fully executed Option Agreement. Option Agreements may incorporate all or
any of the terms of the Plan by reference and, except as otherwise set forth in
Section 7 with respect to Nonemployee Director Options, shall comply with and be
subject to the following terms and conditions:

     6.1 Exercise Price. The exercise price for each Option shall be established
in the sole discretion of the Board; provided, however, that (a) the exercise
price per share for an Option shall be not less than the Fair Market Value of a
share of Stock on the effective date of grant of the Option, and (b) no
Incentive Stock Option granted to a Ten Percent Owner Optionee shall have an
exercise price per share less than one hundred ten percent (110%) of the Fair
Market Value of a share of Stock on the effective date of grant of the Option.
Notwithstanding the foregoing, an Option (whether an Incentive Stock Option or a
Nonstatutory Stock Option) may be granted with an exercise price lower than the
minimum exercise price set forth above if such Option is granted pursuant to an
assumption or substitution for another option in a manner qualifying under the
provisions of Section 424(a) of the Code.


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     6.2 Exercise Period. Options shall be exercisable at such time or times, or
upon such event or events, and subject to such terms, conditions, performance
criteria, and restrictions as shall be determined by the Board and set forth in
the Option Agreement evidencing such Option; provided, however, that (a) no
Incentive Stock Option shall be exercisable after the expiration of ten (10)
years after the effective date of grant of such Option, (b) no Incentive Stock
Option granted to a Ten Percent Owner Optionee shall be exercisable after the
expiration of five (5) years after the effective date of grant of such Option,
and (c) no Option granted to a prospective Employee, prospective Consultant or
prospective Director may become exercisable prior to the date on which such
person commences Service with a Participating Company. Subject to the foregoing,
unless otherwise specified by the Board in the grant of an Option, any Option
granted hereunder shall have a term of ten (10) years from the effective date of
the grant of the Option.

     6.3 Payment of Exercise Price.

          (a) Forms of Consideration Authorized. Except as otherwise provided
     below, payment of the exercise price for the number of shares of Stock
     being purchased pursuant to any Option shall be made (i) in cash, by check,
     or cash equivalent, (ii) by tender to the Company of shares of Stock owned
     by the Optionee having a Fair Market Value (as determined by the Company
     without regard to any restrictions on transferability applicable to such
     stock by reason of federal or state securities laws or agreements with an
     underwriter for the Company) not less than the exercise price, (iii) by the
     assignment of the proceeds of a sale or loan with respect to some or all of
     the shares being acquired upon the exercise of the Option (including,
     without limitation, through an exercise complying with the provisions of
     Regulation T as promulgated from time to time by the Board of Governors of
     the Federal Reserve System) (a "Cashless Exercise"), (iv) provided that the
     Optionee is an Employee, by the Optionee's promissory note in a form
     approved by the Company, (v) by such other consideration as may be approved
     by the Board from time to time to the extent permitted by applicable law,
     or (vi) by any combination thereof. The Board may at any time or from time
     to time, by adoption of or by amendment to the standard forms of Option
     Agreement described in Section 8, or by other means, grant Options which do
     not permit all of the foregoing forms of consideration to be used in
     payment of the exercise price or which otherwise restrict one or more forms
     of consideration.

          (b) Tender of Stock. Notwithstanding the foregoing, an Option may not
     be exercised by tender to the Company of shares of Stock to the extent such
     tender of Stock would constitute a violation of the provisions of any law,
     regulation or agreement restricting the redemption of the Company's stock.
     Unless otherwise provided by the Board, an Option may not be exercised by
     tender to the Company of shares of Stock unless such shares either have
     been owned by the Optionee for more than six (6) months or were not
     acquired, directly or indirectly, from the Company.

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          (c) Cashless Exercise. The Company reserves, at any and all times, the
     right, in the Company's sole and absolute discretion, to establish, decline
     to approve or terminate any program or procedures for the exercise of
     Options by means of a Cashless Exercise.

          (d) Payment by Promissory Note. No promissory note shall be permitted
     if the exercise of an Option using a promissory note would be a violation
     of any law. Any permitted promissory note shall be on such terms as the
     Board shall determine at the time the Option is granted. The Board shall
     have the authority to permit or require the Optionee to secure any
     promissory note used to exercise an Option with the shares of Stock
     acquired upon the exercise of the Option or with other collateral
     acceptable to the Company. Unless otherwise provided by the Board, if the
     Company at any time is subject to the regulations promulgated by the Board
     of Governors of the Federal Reserve System or any other governmental entity
     affecting the extension of credit in connection with the Company's
     securities, any promissory note shall comply with such applicable
     regulations, and the Optionee shall pay the unpaid principal and accrued
     interest, if any, to the extent necessary to comply with such applicable
     regulations.


     6.4 Tax Withholding. The Company shall have the right, but not the
obligation, to deduct from the shares of Stock issuable upon the exercise of an
Option, or to accept from the Optionee the tender of, a number of whole shares
of Stock having a Fair Market Value, as determined by the Company, equal to all
or any part of the federal, state, local and foreign taxes, if any, required by
law to be withheld by the Participating Company Group with respect to such
Option or the shares acquired upon the exercise thereof. Alternatively or in
addition, in its sole discretion, the Company shall have the right to require
the Optionee, through payroll withholding, cash payment or otherwise, including
by means of a Cashless Exercise, to make adequate provision for any such tax
withholding obligations of the Participating Company Group arising in connection
with the Option or the shares acquired upon the exercise thereof. The Company
shall have no obligation to deliver shares of Stock until the Participating
Company Group's tax withholding obligations have been satisfied by the Optionee.


6.5   Effect of Termination of Service.

     (a) Option Exercisability. Subject to earlier termination of the Option as
otherwise provided herein, an Option shall be exercisable after an Optionee's
termination of Service as follows:

          (i) Disability. If the Optionee's Service with the Participating
     Company Group is terminated because of the Disability of the Optionee, the
     Option, to the extent unexercised and exercisable on the date on which the
     Optionee's Service terminated, may be exercised by the Optionee (or the
     Optionee's guardian or legal representative) at any time prior to the
     expiration of twelve (12) months (or such longer or shorter period of time
     as determined by the Board, in its sole discretion) after the date on which
     the Optionee's Service terminated, but in any event no later than the date
     of expiration of the Option's term as set forth in the Option Agreement
     evidencing such Option (the "Option Expiration Date").

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<PAGE>


          (ii) Death. If the Optionee's Service with the Participating Company
     Group is terminated because of the death of the Optionee, the Option, to
     the extent unexercised and exercisable on the date on which the Optionee's
     Service terminated, may be exercised by the Optionee's legal representative
     or other person who acquired the right to exercise the Option by reason of
     the Optionee's death at any time prior to the expiration of twelve (12)
     months (or such longer or shorter period of time as determined by the
     Board, in its sole discretion) after the date on which the Optionee's
     Service terminated, but in any event no later than the Option Expiration
     Date. The Optionee's Service shall be deemed to have terminated on account
     of death if the Optionee dies within three (3) months after the Optionee's
     termination of Service.


          (iii) Other Termination of Service. If the Optionee's Service with the
     Participating Company Group terminates for any reason, except Disability or
     death, the Option, to the extent unexercised and exercisable by the
     Optionee on the date on which the Optionee's Service terminated, may be
     exercised by the Optionee within three (3) months (or such longer or
     shorter period of time as determined by the Board, in its sole discretion)
     after the date on which the Optionee's Service terminated, but in any event
     no later than the Option Expiration Date.


     (b) Extension if Exercise Prevented by Law. Notwithstanding the foregoing,
if the exercise of an Option within the applicable time periods set forth in
Section 6.5(a) is prevented by the provisions of Section 12 below, the Option
shall remain exercisable until three (3) months after the date the Optionee is
notified by the Company that the Option is exercisable, but in any event no
later than the Option Expiration Date.


     (c) Extension if Optionee Subject to Section 16(b). Notwithstanding the
foregoing, if a sale within the applicable time periods set forth in Section
6.5(a) of shares acquired upon the exercise of the Option would subject the
Optionee to suit under Section 16(b) of the Exchange Act, the Option shall
remain exercisable until the earliest to occur of (i) the tenth (10th) day
following the date on which a sale of such shares by the Optionee would no
longer be subject to such suit, (ii) the one hundred and ninetieth (190th) day
after the Optionee's termination of Service, or (iii) the Option Expiration
Date.


     7. TERMS AND CONDITIONS OF NONEMPLOYEE DIRECTOR OPTIONS. Nonemployee
Director Options shall be evidenced by Option Agreements specifying the number
of shares of Stock covered thereby, in such form as the Board shall from time to
time establish. Such Option Agreements may incorporate all or any of the terms
of the Plan by reference and shall comply with and be subject to the following
terms and conditions:

     7.1 Automatic Grant. Subject to execution by a Nonemployee Director of an
appropriate Option Agreement, Nonemployee Director Options shall be granted
automatically and without further action of the Board, as follows:

          (a) Initial Option. A Nonemployee Director shall be granted a
     Nonemployee Director Option (an "Initial Option") as follows:

                                       11
<PAGE>

               (vi) On the Effective Date, each person listed on Attachment A
          attached hereto who remains on such date a Nonemployee Director shall
          be granted a Nonemployee Director Option to purchase the number of
          shares of Stock shown opposite his name on Attachment A.

               (vii) Each person who first became a Nonemployee Director after
          the Effective Date and prior to December 16, 1999, was granted on the
          date he or she first became a Nonemployee Director a Nonemployee
          Director Option to purchase twelve thousand five hundred (12,500)
          shares of Stock. Each person who first becomes a Nonemployee Director
          on or after December 16, 1999 shall be granted on the date he or she
          first becomes a Nonemployee Director a Nonemployee Director Option to
          purchase thirty thousand (30,000) shares of Stock. Notwithstanding
          anything herein to the contrary, an Initial Option shall not be
          granted to a Director who previously did not qualify as a Nonemployee
          Director but subsequently becomes a Nonemployee Director as a result
          of the termination of his or her status as an Employee.


          (b) Annual Option. Prior to December 16,1999, except as otherwise
     provided in Attachment B, each Nonemployee Director (including any Director
     who previously had not qualified as a Nonemployee Director but who
     subsequently became a Nonemployee Director) was granted on the date of each
     annual meeting of the stockholders of the Company which occurred after the
     Effective Date (an "Annual Meeting") following which such person remained a
     Nonemployee Director an Option to purchase five thousand (5,000) shares of
     Stock (an "Annual Option"). Effective December 16, 1999, except as
     otherwise provided, each Nonemployee Director (including any Director who
     previously did not qualify as a Nonemployee Director but who subsequently
     becomes a Nonemployee Director) shall be granted on the date of each Annual
     Meeting following which such person remains a Nonemployee Director an
     Annual Option to purchase ten thousand (10,000) shares of Stock.
     Notwithstanding the foregoing, a Nonemployee Director who has not served
     continuously as a Director of the Company for at least six (6) months as of
     the date of such Annual Meeting shall not receive an Annual Option on such
     date.


          (c) Right to Decline Nonemployee Director Option. Notwithstanding the
     foregoing, any person may elect not to receive a Nonemployee Director
     Option by delivering written notice of such election to the Board no later
     than the day prior to the date such Nonemployee Director Option would
     otherwise be granted. A person so declining a Nonemployee Director Option
     shall receive no payment or other consideration in lieu of such declined
     Nonemployee Director Option. A person who has declined a Nonemployee
     Director Option may revoke such election by delivering written notice of
     such revocation to the Board no later than the day prior to the date such
     Nonemployee Director Option would be granted pursuant to Section 7.1(a) or
     (b), as the case may be.


     7.2 Exercise Price. The exercise price per share of Stock subject to a
Nonemployee Director Option shall be the Fair Market Value of a share of Stock
on the date the Nonemployee Director Option is granted.


                                       12
<PAGE>

     7.3 Exercise Period. Each Nonemployee Director Option shall terminate and
cease to be exercisable on the date ten (10) years after the date of grant of
the Nonemployee Director Option unless earlier terminated pursuant to the terms
of the Plan or the Option Agreement.

     7.4 Right to Exercise Nonemployee Director Options.

          (a) Initial Options.

               (i) An Initial Option granted pursuant to Section 7.1(a)(i) shall
          become vested and exercisable in accordance with the vesting
          provisions set forth opposite the Optionee's name in Attachment A,
          subject to the Optionee's continued Service.

               (ii) Except as otherwise provided in the Plan or in the Option
          Agreement and provided that the Optionee's Service has not terminated
          prior to the respective date set forth below,

                    (1) an Initial Option granted pursuant to Section 7.1(a)(ii)
               prior to December 16, 1999, shall become vested and exercisable
               cumulatively as follows: (A) no shares prior to the date
               occurring one (1) year after the date of grant; (B) 5,000 shares
               on and after the date occurring one (1) year after the date of
               grant; (C) 3,750 shares on and after the date occurring two (2)
               years after the date of grant; (D) 2,500 shares on and after the
               date occurring three (3) years after date of grant; and (E) 1,250
               shares on and after the date occurring four (4) years after the
               date of grant; and


                    (2) an Initial Option granted pursuant to Section 7.1(a)(ii)
               on or after December 16, 1999, shall become vested and
               exercisable cumulatively as follows: (A) no shares prior to the
               date occurring one (1) year after the date of grant; (B) 12,000
               shares on and after the date occurring one (1) year after the
               date of grant; (C) 9,000 shares on and after the date occurring
               two (2) years after the date of grant; (D) 6,000 shares on and
               after the date occurring three (3) years after date of grant; and
               (E) 3,000 shares on and after the date occurring four (4) years
               after the date of grant


               (b) Annual Options. Except as otherwise provided in the Plan or
          in the Option Agreement and provided the Optionee's Service has not
          terminated prior to the relevant date, each Annual Option shall become
          vested and exercisable cumulatively for 25% of the shares of Stock
          initially subject to the Option on each of the first four (4)
          anniversaries of the date on which the Annual Option was granted.


               (c) Adjustments for Changes in Capital Structure. The number of
          shares becoming vested and exercisable as set forth on Attachment A,
          on Attachment B, and in this Section 7.4 shall be adjusted
          proportionately pursuant to the provisions of Section 4.2 in the event
          of a change in the Company's capital structure.

                                       13
<PAGE>



8.    STANDARD FORMS OF OPTION AGREEMENT.
      ----------------------------------

     8.1 Incentive Stock Options. Unless otherwise provided by the Board at the
time the Option is granted, an Option designated as an "Incentive Stock Option"
shall comply with and be subject to the terms and conditions set forth in the
form of Incentive Stock Option Agreement adopted by the Board concurrently with
its adoption of the Plan and as amended from time to time.

     8.2 Nonstatutory Stock Options (Other than Nonemployee Director Option).
Unless otherwise provided by the Board at the time the Option is granted, an
Option designated as a "Nonstatutory Stock Option" (other than a Nonemployee
Director Option) shall comply with and be subject to the terms and conditions
set forth in the form of Nonstatutory Stock Option Agreement adopted by the
Board concurrently with its adoption of the Plan and as amended from time to
time.

     8.3 Nonemployee Director Option. Each Nonemployee Director Option shall
comply with and be subject to the terms and conditions set forth in the
appropriate form of Nonstatutory Stock Option Agreement (Nonemployee Director
Option) adopted by the Board concurrently with its adoption of the Plan and as
amended from time to time.

     8.4 Authority to Vary Terms. The Board shall have the authority from time
to time to vary the terms of any of the standard forms of Option Agreement
described in this Section 8 either in connection with the grant or amendment of
an individual Option or in connection with the authorization of a new standard
form or forms; provided, however, that the terms and conditions of any such new,
revised or amended standard form or forms of Option Agreement are not
inconsistent with the terms of the Plan. Such authority shall include, but not
by way of limitation, the authority to grant Options which are immediately
exercisable subject to the Company's right to repurchase any unvested shares of
Stock acquired by an Optionee upon the exercise of an Option in the event such
Optionee's Service with the Participating Company Group is terminated for any
reason, with or without cause.



9.    CHANGE IN CONTROL.
      -----------------

     9.1 Definitions.

          (a) An "Ownership Change Event" shall be deemed to have occurred if
     any of the following occurs with respect to the Company:

               (i) the direct or indirect sale or exchange in a single or series
          of related transactions by the stockholders of the Company of more
          than fifty percent (50%) of the voting stock of the Company;

               (ii) a merger or consolidation in which the Company is a party;

                                       14

<PAGE>

               (iii) the sale, exchange, or transfer of all or substantially all
          of the assets of the Company; or


               (iv) a liquidation or dissolution of the Company.


          (b) A "Change in Control" shall mean an Ownership Change Event or a
     series of related Ownership Change Events (collectively, the "Transaction")
     wherein the stockholders of the Company immediately before the Transaction
     do not retain immediately after the Transaction, in substantially the same
     proportions as their ownership of shares of the Company's voting stock
     immediately before the Transaction, direct or indirect beneficial ownership
     of more than fifty percent (50%) of the total combined voting power of the
     outstanding voting stock of the Company or the corporation or corporations
     to which the assets of the Company were transferred (the "Transferee
     Corporation(s)"), as the case may be. For purposes of the preceding
     sentence, indirect beneficial ownership shall include, without limitation,
     an interest resulting from ownership of the voting stock of one or more
     corporations which, as a result of the Transaction, own the Company or the
     Transferee Corporation(s), as the case may be, either directly or through
     one or more subsidiary corporations. The Board shall have the right to
     determine whether multiple sales or exchanges of the voting stock of the
     Company or multiple Ownership Change Events are related, and its
     determination shall be final, binding and conclusive.


     9.2 Effect of Change in Control on Options. In the event of a Change in
Control, the surviving, continuing, successor, or purchasing corporation or
parent corporation thereof, as the case may be (the "Acquiring Corporation"),
may either assume the Company's rights and obligations under outstanding Options
or substitute for outstanding Options substantially equivalent options for the
Acquiring Corporation's stock. For purposes of this Section 9.2, an Option shall
be deemed assumed if, following the Change in Control, the Option confers the
right to purchase in accordance with its terms and conditions, for each share of
Stock subject to the Option immediately prior to the Change in Control, the
consideration (whether stock, cash or other securities or property) to which a
holder of a share of Stock on the effective date of the Change in Control was
entitled. In the event the Acquiring Corporation elects not to assume or
substitute for outstanding Options in connection with a Change in Control, any
unexercisable or unvested portion of the outstanding Options shall be
immediately exercisable and vested in full as of the date ten (10) days prior to
the date of the Change in Control. The exercise or vesting of any Option that
was permissible solely by reason of this Section 9.2 shall be conditioned upon
the consummation of the Change in Control. Any Options which are neither assumed
or substituted for by the Acquiring Corporation in connection with the Change in
Control nor exercised as of the date of the Change in Control shall terminate
and cease to be outstanding effective as of the date of the Change in Control.
Furthermore, notwithstanding the foregoing, if the corporation the stock of
which is subject to the outstanding Options immediately prior to an Ownership
Change Event described in Section 9.1(a)(i) constituting a Change in Control is
the surviving or continuing corporation and immediately after such Ownership
Change Event less than fifty percent (50%) of the total combined voting power of
its voting stock is held by another corporation or by other corporations that
are members of an affiliated group within the meaning of Section 1504(a) of the
Code without regard to the provisions of Section 1504(b) of the Code, the
outstanding Options shall not terminate unless the Board otherwise provides in
its sole discretion.

                                       15
<PAGE>


     10. PROVISION OF INFORMATION. Each Optionee shall be given access to
information concerning the Company equivalent to that information generally made
available to the Company's common stockholders.

     11. TRANSFERABILITY OF OPTIONS. During the lifetime of the Optionee, an
Option shall be exercisable only by the Optionee or the Optionee's guardian or
legal representative. No Option shall be assignable or transferable by the
Optionee, except by will or by the laws of descent and distribution.
Notwithstanding the foregoing, a Nonstatutory Stock Option shall be assignable
or transferable to the extent permitted by the Board and set forth in the Option
Agreement evidencing such Option.

     12. COMPLIANCE WITH SECURITIES LAW. The grant of Options and the issuance
of shares of Stock upon exercise of Options shall be subject to compliance with
all applicable requirements of federal, state or foreign law with respect to
such securities. Options may not be exercised if the issuance of shares of Stock
upon exercise would constitute a violation of any applicable federal, state or
foreign securities laws or other law or regulations or the requirements of any
stock exchange or market system upon which the Stock may then be listed. In
addition, no Option may be exercised unless (a) a registration statement under
the Securities Act shall at the time of exercise of the Option be in effect with
respect to the shares issuable upon exercise of the Option or (b) in the opinion
of legal counsel to the Company, the shares issuable upon exercise of the Option
may be issued in accordance with the terms of an applicable exemption from the
registration requirements of the Securities Act. The inability of the Company to
obtain from any regulatory body having jurisdiction the authority, if any,
deemed by the Company's legal counsel to be necessary to the lawful issuance and
sale of any shares hereunder shall relieve the Company of any liability in
respect of the failure to issue or sell such shares as to which such requisite
authority shall not have been obtained. As a condition to the exercise of any
Option, the Company may require the Optionee to satisfy any qualifications that
may be necessary or appropriate, to evidence compliance with any applicable law
or regulation and to make any representation or warranty with respect thereto as
may be requested by the Company.

     13. INDEMNIFICATION. In addition to such other rights of indemnification as
they may have as members of the Board or officers or employees of the
Participating Company Group, members of the Board and any officers or employees
of the Participating Company Group to whom authority to act for the Board or the
Company is delegated shall be indemnified by the Company against all reasonable
expenses, including attorneys' fees, actually and necessarily incurred in
connection with the defense of any action, suit or proceeding, or in connection
with any appeal therein, to which they or any of them may be a party by reason
of any action taken or failure to act under or in connection with the Plan, or
any right granted hereunder, and against all amounts paid by them in settlement
thereof (provided such settlement is approved by independent legal counsel
selected by the Company) or paid by them in satisfaction of a judgment in any
such action, suit or proceeding, except in relation to matters as to which it
shall be adjudged in such action, suit or proceeding that such person is liable
for gross negligence, bad faith or intentional misconduct in duties; provided,
however, that within sixty (60) days after the institution of such action, suit
or proceeding, such person shall offer to the Company, in writing, the
opportunity at its own expense to handle and defend the same.

                                       16
<PAGE>


     14. TERMINATION OR AMENDMENT OF PLAN. The Board may terminate or amend the
Plan at any time. However, subject to changes in applicable law, regulations or
rules that would permit otherwise (except as to (c) and (d) below), without the
approval of the Company's stockholders, there shall be (a) no increase in the
maximum aggregate number of shares of Stock that may be issued under the Plan
(except by operation of the provisions of Section 4.2), (b) no change in the
class of persons eligible to receive Incentive Stock Options, (c) no amendment
of Sections 3.4(f) or (g) with respect to the matters referenced therein that
require stockholder approval, (d) no amendment of Section 6.1(a) which will
allow the grant of an Option with an exercise price per share that is less than
the Fair Market Value of a share of Stock on the effective date of grant of the
Option, and (e) no other amendment of the Plan that would require approval of
the Company's stockholders under any applicable law, regulation or rule. In any
event, no termination or amendment of the Plan may adversely affect any then
outstanding Option or any unexercised portion thereof, without the consent of
the Optionee, unless such termination or amendment is required to enable an
Option designated as an Incentive Stock Option to qualify as an Incentive Stock
Option or is necessary to comply with any applicable law, regulation or rule.

     15. CONTINUATION OF INITIAL PLAN AS TO OUTSTANDING OPTIONS. Any other
provision of the Plan to the contrary notwithstanding, the Initial Plan shall
remain in effect and apply to all Options granted under the Initial Plan.



                                       17



<PAGE>

                                  ATTACHMENT A

                      NONEMPLOYEE DIRECTOR OPTIONS GRANTED

                       EFFECTIVE AS OF THE EFFECTIVE DATE*

============================================================================

         Name        Number of Shares   Vesting of Shares Subject to Option
----------------------------------------------------------------------------
Stephen J. Ciesinski        11,500      4,000 shares will vest 1 year
                                        after the date of grant, 3,750
                                        shares will vest 2 years after
                                        the date of grant, 2,500 shares
                                        will vest 3 years after the
                                        date of grant and 1,250 shares
                                        will vest 4 years after the
                                        date of grant
-------------------------------------------------------------------------
John C. Savage              10,500      3,000 shares will vest 1 year
                                        after the date of grant, 3,750
                                        shares will vest 2 years after
                                        the date of grant, 2,500 shares
                                        will vest 3 years after the
                                        date of grant and 1,250 shares
                                        will vest 4 years after the
                                        date of grant
-------------------------------------------------------------------------
Kenneth G. Smith            13,125      7,500 shares will be vested as
                                        of the date of grant, 1,875
                                        shares will vest 2 years after
                                        the date of grant, 2,500 shares
                                        will vest 3 years after the
                                        date of grant and 1,250 shares
                                        will vest 4 years after the
                                        date of grant
=========================================================================


*    The number of shares of Stock set forth in this Attachment A shall be
     adjusted pursuant to Section 4.2 of the Plan to reflect changes in the
     capital structure of the Company. Vesting of the shares subject to the
     Nonemployee Director Options set forth in this Attachment A shall be
     subject to the Optionee's continued Service.



<PAGE>



                                  ATTACHMENT B

                               1998 ANNUAL OPTION

                              FOR SHIGERU NAKAYAMA*


===========================================================================

   Number of Shares     Vesting of Shares Subject to Option
---------------------------------------------------------------------------
       3,855            105 Shares will vest 2 years after the date of
                        grant, 2,500 shares will vest 3 years after the
                        date of grant and 1,250 shares will vest 4 years
                        after the date of grant.
===========================================================================


*    Notwithstanding the provisions of Section 7.1(b), the Annual Option, if
     any, granted to Shigeru Nakayama following the 1998 Annual Meeting shall be
     an Option to purchase the number of shares set forth in this Attachment B
     and such shares shall vest and become exercisable as described above. The
     number of shares of Stock set forth in this Attachment B shall be adjusted
     pursuant to Section 4.2 of the Plan to reflect changes in the capital
     structure of the Company. Vesting of the shares subject to the Nonemployee
     Director Option set forth in this Attachment B shall be subject to the
     Optionee's continued Service.