<PAGE>   1
                                                                    EXHIBIT 10.1

                                CYBERCASH, INC.

                            1995 STOCK OPTION PLAN,
                                   AS AMENDED


               Adopted by the Board of Directors on April 6, 1995
              and approved by the Stockholders on August 21, 1995,
                Amendment approved by the Board of Directors on
               December 20, 1995 and approved by the Stockholders
                              on February 1, 1996,
                Amendment approved by the Board of Directors on
                April 25, 1997 and approved by the Stockholders
                               on June 27, 1997.


1.       PURPOSES.

         (a)     The purpose of the Plan is to provide a means by which
selected Employees and Directors of and Consultants to the Company, and its
Affiliates, may be given an opportunity to purchase stock of the Company.

         (b)     The Company, by means of the Plan, seeks to retain the
services of persons who are now Employees or Directors of, or Consultants to,
the Company or its Affiliates, to secure and retain the services of new
Employees, Directors and Consultants, and to provide incentives for such
persons to exert maximum efforts for the success of the Company and its
Affiliates.

         (c)     The Company intends that the Options issued under the Plan
shall, in the discretion of the Board or any Committee to which responsibility
for administration of the Plan has been delegated pursuant to subsection 3(c),
be either Incentive Stock Options or Nonqualified Stock Options.  All Options
shall be separately designated Incentive Stock Options or Nonqualified Stock
Options at the time of grant, and in such form as issued pursuant to Section 6,
and a separate certificate or certificates will be issued for shares purchased
on exercise of each type of Option.

2.       DEFINITIONS.

         (a)     "AFFILIATE" means any parent corporation or subsidiary
corporation, whether now or hereafter existing, as those terms are defined in
Sections 424(e) and (f) respectively, of the Code.

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


                                     1.

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

         (d)     "COMMITTEE" means a Committee appointed by the Board in
accordance with subsection 3(c) of the Plan.

         (e)     "COMPANY" means CYBERCASH, INC., a Delaware corporation.

         (f)     "CONSULTANT" means any person, including an advisor, engaged
by the Company or an Affiliate to render consulting services and who is
compensated for such services, provided that the term "Consultant" shall not
include Directors who are paid only a director's fee by the Company or who are
not compensated by the Company for their services as Directors.

         (g)     "CONTINUOUS STATUS AS AN EMPLOYEE, DIRECTOR OR CONSULTANT"
means the employment or relationship as a Director or Consultant is not
interrupted or terminated.  The Board, in its sole discretion, may determine
whether Continuous Status as an Employee, Director or Consultant shall be
considered interrupted in the case of:  (i) any leave of absence approved by
the Board, including sick leave, military leave, or any other personal leave;
or (ii) transfers between locations of the Company or between the Company,
Affiliates or their successors.

         (h)     "COVERED EMPLOYEE" means the Chief Executive Officer and
the four (4) other highest compensated officers of the Company.

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

         (j)     "EMPLOYEE" means any person, including Officers and Directors,
employed by the Company or any Affiliate of the Company.  Neither service as a
Director nor payment of a director's fee by the Company shall be sufficient to
constitute "employment" by the Company.

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

         (l)     "FAIR MARKET VALUE" means, as of any date, the value of the
common stock of the Company determined as follows and in each case in a manner
consistent with Section 260.140.50 of Title 10 of the California Code of
Regulations:

                 (1)      If the common stock is listed on any established
stock exchange or a national market system, including without limitation the
National Market System of the National Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ") System, the Fair Market Value of a share of
common stock shall be the closing sales price for such stock (or the closing
bid, if no sales were reported) as quoted on such system or exchange (or the
exchange with the greatest volume of trading in common stock) on the last
market trading day prior to the day of





                                      2.


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determination, as reported in the Wall Street Journal or such other source as
the Board deems reliable;

                 (2)      If the common stock is quoted on the NASDAQ System
(but not on the National Market System thereof) or is regularly quoted by a
recognized securities dealer but selling prices are not reported, the Fair
Market Value of a share of common stock shall be the mean between the bid and
asked prices for the common stock on the last market trading day prior to the
day of determination, as reported in the Wall Street Journal or such other
source as the Board deems reliable;

                 (3)      In the absence of an established market for the
common stock, the Fair Market Value shall be determined in good faith by the
Board.

         (m)     "IMMEDIATE FAMILY MEMBERS" means the spouse, children and
grandchildren of the Optionee.

         (n)     "INCENTIVE STOCK OPTION" means an Option intended to qualify
as an incentive stock option within the meaning of Section 422 of the Code and
the regulations promulgated thereunder.

         (o)     "NON-EMPLOYEE DIRECTOR" means a Director who is considered to
be a "nonemployee director" in accordance with Rule 16b-3, or any other
applicable rules, regulations or interpretations of the Securities and Exchange
Commission.

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

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

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

         (s)     "OPTION AGREEMENT" means a written agreement between the
Company and an Optionee evidencing the terms and conditions of an individual
Option grant.  Each Option Agreement shall be subject to the terms and
conditions of the Plan.

         (t)     "OPTIONEE" means an Employee, Director or Consultant who holds
an outstanding Option.

         (u)     "OUTSIDE DIRECTOR" means a Director who either (i) is not a
current employee of the Company or an "affiliated corporation" (as defined in
the Treasury regulations promulgated under Section 162(m) of the Code), is not
a former employee of the Company or an affiliated corporation receiving
compensation for





                                      3.



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prior services (other than benefits under a tax qualified pension plan), was
not an officer of the Company or an affiliated corporation at any time, and is
not currently receiving compensation for personal services in any capacity
other than as a Director, or (ii) is otherwise considered an "outside director"
for purposes of Section 162(m) of the Code.

         (v)     "PLAN" means this 1995 Stock Option Plan.

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

3.       ADMINISTRATION.

         (a)     The Plan shall be administered by the Board unless and until
the Board delegates administration to a Committee, as provided in subsection
3(c).

         (b)     The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:

                 (1)      To determine from time to time which of the persons
eligible under the Plan shall be granted Options; when and how each Option
shall be granted; whether an Option will be an Incentive Stock Option or a
Nonqualified Stock Option; the provisions of each Option granted (which need
not be identical), including the time or times such Option may be exercised in
whole or in part; and the number of shares for which an Option shall be granted
to each such person.

                 (2)      To construe and interpret the Plan and Options
granted under it, and to establish, amend and revoke rules and regulations for
its administration.  The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any Option Agreement, in a
manner and to the extent it shall deem necessary or expedient to make the Plan
fully effective.

                 (3)      To amend the Plan as provided in Section 11.

         (c)     The Board may delegate administration of the Plan to a
committee composed of not fewer than two (2) members (the "Committee"), all of
the members of which Committee shall be Non-Employee Directors and may also be,
in the discretion of the Board, Outside Directors.  If administration is
delegated to a Committee, the Committee shall have, in connection with the
administration of the Plan, the powers theretofore possessed by the Board (and
references in this Plan to the Board shall thereafter be to the Committee),
subject, however, to such resolutions, not inconsistent with the provisions of
the Plan, as may be adopted from time to time by the Board.  The Board may
abolish the Committee at any time and revest in the Board the administration of
the Plan.  Additionally, prior to the date of the first registration of an
equity security of the Company under Section 12





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of the Exchange Act, and notwithstanding anything to the contrary contained
herein, the Board may delegate administration of the Plan to any person or
persons and the term "Committee" shall apply to any person or persons to whom
such authority has been delegated.  Notwithstanding anything in this Section 3
to the contrary, the Board or the Committee may delegate to a committee of one
or more members of the Board the authority to grant Options to eligible persons
who (1) are not then subject to Section 16 of the Exchange Act and/or (2) are
either (i) not then Covered Employees and are not expected to be Covered
Employees at the time of recognition of income resulting from such Option, or
(ii) not persons with respect to whom the Company wishes to comply with Section
162(m) of the Code.

         (d)     Any requirement that an administrator of the Plan be a
Non-Employee Director shall not apply (i) prior to the date of the first
registration of an equity security of the Company under Section 12 of the
Exchange Act, or (ii) if the Board or the Committee expressly declares that
such requirement shall not apply.  Any Non-Employee Director shall otherwise
comply with the requirements of Rule 16b-3.

4.       SHARES SUBJECT TO THE PLAN.

         (a)     Subject to the provisions of Section 10 relating to
adjustments upon changes in stock, the stock that may be sold pursuant to
Options shall not exceed in the aggregate Three Million Five Hundred Thousand
(3,500,000) shares of the Company's common stock.  If any Option shall for any
reason expire or otherwise terminate, in whole or in part, without having been
exercised in full, the stock not purchased under such Option shall revert to
and again become available for issuance under the Plan.

         (b)     The stock subject to the Plan may be unissued shares or
reacquired shares, bought on the market or otherwise.

5.       ELIGIBILITY.

         (a)     Incentive Stock Options may be granted only to Employees.
Nonqualified Stock Options may be granted only to Employees, Directors or
Consultants.  The Board or Committee may grant Options covering up to the
entire number of shares available for issuance under the Plan (as determined
under Section 4(a)) to any one participant or to several participants, in the
sole discretion of the Board or Committee.

         (b)     The Board shall comply with the requirements of Rule 16b-3.
This subsection 5(b) shall not apply (i) prior to the date of the first
registration of an equity security of the Company under Section 12 of the
Exchange Act, or (ii) if the Board or Committee expressly declares that it
shall not apply.

         (c)     No person shall be eligible for the grant of an Incentive
Stock Option 





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if, at the time of grant, such person owns (or is deemed to own pursuant to
Section 424(d) of the Code) stock possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company or of any of
its Affiliates unless the exercise price of such Option is at least one hundred
ten percent (110%) of the Fair Market Value of such stock at the date of grant
and the Option is not exercisable after the expiration of five (5) years from
the date of grant.

6.       OPTION PROVISIONS.

                 Each Option shall be in such form and shall contain such terms
and conditions as the Board shall deem appropriate.  The provisions of separate
Options need not be identical, but each Option shall include (through
incorporation of provisions hereof by reference in the Option or otherwise) the
substance of each of the following provisions:

         (a)     TERM.  No Option shall be exercisable after the expiration of
ten (10) years from the date it was granted.

         (b)     PRICE.  The exercise price of each Incentive Stock Option
shall be not less than one hundred percent (100%) of the Fair Market Value of
the stock subject to the Option on the date the Option is granted.  The
exercise price of each Nonqualified Stock Option shall be not less than
eighty-five percent (85%) of the Fair Market Value of the stock subject to the
Option on the date the Option is granted.

         (c)     CONSIDERATION.  The purchase price of stock acquired pursuant
to an Option shall be paid, to the extent permitted by applicable statutes and
regulations, either (i) in cash at the time the Option is exercised, or (ii) at
the discretion of the Board or the Committee, either at the time of the grant
or exercise of the Option, (A) by delivery to the Company of other common stock
of the Company, (B) according to a deferred payment or other arrangement (which
may include, without limiting the generality of the foregoing, the use of other
common stock of the Company) with the person to whom the Option is granted or
to whom the Option is transferred pursuant to subsection 6(d), or (C) in any
other form of legal consideration that may be acceptable to the Board.  Payment
in full of the exercise price need not accompany the written notice of exercise
provided the notice directs that the stock certificate or certificates for the
shares for which the Option is exercised be delivered to a licensed broker
acceptable to the Company as the agent for the individual exercising the Option
and, at the time such stock certificate or certificates are delivered, the
broker tenders to the Company cash (or cash equivalents acceptable to the
Corporation) equal to the exercise price plus the amount (if any) of federal
and/or other taxes which the Company may, in its judgment, be required to
withhold with respect to the exercise of the Option.

         In the case of any deferred payment arrangement, interest shall be
payable 





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at least annually and shall be charged at the minimum rate of interest
necessary to avoid the treatment as interest, under any applicable provisions
of the Code, of any amounts other than amounts stated to be interest under the
deferred payment arrangement.

         (d)     TRANSFERABILITY.  An Incentive Stock Option shall not be
transferable except by will or by the laws of descent and distribution, and
shall be exercisable during the lifetime of the person to whom the Incentive
Stock Option is granted only by such person.  Subject to the terms of the
applicable Option Agreement, an Optionee may transfer all or part of an Option
which is not an Incentive Stock Option to (i) any Immediate Family Member, (ii)
a trust or trusts for the exclusive benefit of any Immediate Family Member, or
(iii) a partnership in which Immediate Family Members are the only partners,
provided that (x) there may be no consideration for any such transfer, and (y)
subsequent transfers of transferred Options are prohibited except those in
accordance with this Section 6(d) or by will or the laws of descent and
distribution.  Following transfer, any such Option shall continue to be subject
to the same terms and conditions as were applicable immediately prior to
transfer, provided that for purposes of Section 6 hereof the term "Optionee"
shall be deemed to refer the transferee.  The events of termination of the
employment or relationship as a Director or Consultant of Section 6(g) hereof
shall continue to be applied with respect to the original Optionee, following
which the Option shall be exercisable by the transferee only to the extent, and
for the periods specified in the Option Agreement.  The person to whom the
Option is granted may, by delivering written notice to the Company, in a form
satisfactory to the Company, designate a third party who, in the event of the
death of the Optionee, shall thereafter be entitled to exercise the Option.

         (e)     VESTING.  The total number of shares of stock subject to an
Option may, but need not, be allotted in periodic installments (which may, but
need not, be equal).  The Option Agreement may provide that from time to time
during each of such installment periods, the Option may become exercisable
("vest") with respect to some or all of the shares allotted to that period, and
may be exercised with respect to some or all of the shares allotted to such
period and/or any prior period as to which the Option became vested but was not
fully exercised.  The Option may be subject to such other terms and conditions
on the time or times when it may be exercised (which may be based on
performance or other criteria) as the Board may deem appropriate.  The vesting
provisions of individual Options may vary but in each case will provide for
vesting of at least twenty percent (20%) per year of the total number of shares
subject to the Option.  The provisions of this subsection 6(e) are subject to
any Option provisions governing the minimum number of shares as to which an
Option may be exercised.

                 Notwithstanding the preceding paragraph, stock options
designated as "Performance Options" may vest as determined by the Board of
Directors; provided,





                                      7.



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however, that such option grants either are not subject to the requirement to
qualify securities under Section 25110 of the California Corporations Code
because no offer and sale is made in California or can rely upon an exemption
from the securities qualification requirements of the California Corporate
Securities Law of 1968, as amended.

         (f)     SECURITIES LAW COMPLIANCE.  The Company may require any
Optionee, or any person to whom an Option is transferred under subsection 6(d),
as a condition of exercising any such Option, (1) to give written assurances
satisfactory to the Company as to the Optionee's knowledge and experience in
financial and business matters and/or to employ a purchaser representative
reasonably satisfactory to the Company who is knowledgeable and experienced in
financial and business matters, and that he or she is capable of evaluating,
alone or together with the purchaser representative, the merits and risks of
exercising the Option; and (2) to give written assurances satisfactory to the
Company stating that such person is acquiring the stock subject to the Option
for such person's own account and not with any present intention of selling or
otherwise distributing the stock.  The foregoing requirements, and any
assurances given pursuant to such requirements, shall be inoperative if (i) the
issuance of the shares upon the exercise of the Option has been registered
under a then currently effective registration statement under the Securities
Act of 1933, as amended (the "Securities Act"), or (ii) as to any particular
requirement, a determination is made by counsel for the Company that such
requirement need not be met in the circumstances under the then applicable
securities laws.  The Company may, upon advice of counsel to the Company, place
legends on stock certificates issued under the Plan as such counsel deems
necessary or appropriate in order to comply with applicable securities laws,
including, but not limited to, legends restricting the transfer of the stock.

         (g)     TERMINATION OF EMPLOYMENT OR RELATIONSHIP AS A DIRECTOR OR
CONSULTANT.  In the event an Optionee's Continuous Status as an Employee,
Director or Consultant terminates (other than upon the Optionee's death or
disability), the Optionee may exercise his or her Option (to the extent that
the Optionee was entitled to exercise it at the date of termination) but only
within such period of time ending on the earlier of (i) the date three (3)
months after the termination of the Optionee's Continuous Status as an
Employee, Director or Consultant (or such longer or shorter period, which in no
event shall be less than thirty (30) days, specified in the Option Agreement),
or (ii) the expiration of the term of the Option as set forth in the Option
Agreement.  If, after termination, the Optionee does not exercise his or her
Option within the time specified in the Option Agreement, the Option shall
terminate, and the shares covered by such Option shall revert to and again
become available for issuance under the Plan.

         (h)     DISABILITY OF OPTIONEE.  In the event an Optionee's Continuous
Status as an Employee, Director or Consultant terminates as a result of the





                                      8.



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Optionee's disability, the Optionee may exercise his or her Option (to the
extent that the Optionee was entitled to exercise it at the date of
termination), but only within such period of time ending on the earlier of (i)
the date twelve (12) months following such termination (or such longer or
shorter period, which in no event shall be less than six (6) months, specified
in the Option Agreement), or (ii) the expiration of the term of the Option as
set forth in the Option Agreement.  If, at the date of termination, the
Optionee is not entitled to exercise his or her entire Option, the shares
covered by the unexercisable portion of the Option shall revert to and again
become available for issuance under the Plan.  If, after termination, the
Optionee does not exercise his or her Option within the time specified herein,
the Option shall terminate, and the shares covered by such Option shall revert
to and again become available for issuance under the Plan.

         (i)     DEATH OF OPTIONEE.  In the event of the death of an Optionee
during, or within a period specified in the Option after the termination of,
the Optionee's Continuous Status as an Employee, Director or Consultant, the
Option may be exercised (to the extent the Optionee was entitled to exercise
the Option at the date of death) by the Optionee's estate, by a person who
acquired the right to exercise the Option by bequest or inheritance or by a
person designated to exercise the option upon the Optionee's death pursuant to
subsection 6(d), but only within the period ending on the earlier of (i) the
date eighteen (18) months following the date of death (or such longer or
shorter period, which in no event shall be less than six (6) months, specified
in the Option Agreement), or (ii) the expiration of the term of such Option as
set forth in the Option Agreement.  If, at the time of death, the Optionee was
not entitled to exercise his or her entire Option, the shares covered by the
unexercisable portion of the Option shall revert to and again become available
for issuance under the Plan.  If, after death, the Option is not exercised
within the time specified herein, the Option shall terminate, and the shares
covered by such Option shall revert to and again become available for issuance
under the Plan.

         (j)     EARLY EXERCISE.  The Option may, but need not, include a
provision whereby the Optionee may elect at any time while an Employee,
Director or Consultant to exercise the Option as to any part or all of the
shares subject to the Option prior to the full vesting of the Option.  Any
unvested shares so purchased may be subject to a repurchase right in favor of
the Company, with the repurchase price to be equal to the original purchase
price of the stock, or to any other restriction the Board determines to be
appropriate, provided, however, that (i) the right to repurchase at the
original purchase price shall lapse at a minimum rate of twenty percent (20%)
per year over five (5) years from the date the Option was granted, and
(ii) such right shall be exercisable only within (A) the ninety (90) day period
following the termination of employment or relationship as a Director or
Consultant or (B) such longer period as may be agreed to by the Company and the
Optionee (for example, for purposes of satisfying the requirements of Section
1202(c)(3) of the Code (regarding "qualified small business stock")), and (iii)
such





                                      9.



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right shall be exercisable only for cash or cancellation of purchase money
indebtedness for the shares.  Should the right of repurchase be assigned by the
Company, the assignee shall pay the Company cash equal to the difference
between the original purchase price and the stock's Fair Market Value if the
original purchase price is less than the stock's Fair Market Value.

         (k)     WITHHOLDING.  To the extent provided by the terms of an Option
Agreement, the Optionee may satisfy any federal, state or local tax withholding
obligation relating to the exercise of such Option by any of the following
means or by a combination of such means:  (1) tendering a cash payment; (2)
authorizing the Company to withhold shares from the shares of the common stock
otherwise issuable to the participant as a result of the exercise of the
Option; or (3) delivering to the Company owned and unencumbered shares of the
common stock of the Company.

7.       COVENANTS OF THE COMPANY.

         (a)     During the terms of the Options, the Company shall keep
available at all times the number of shares of stock required to satisfy such
Options.

         (b)     The Company shall seek to obtain from each regulatory
commission or agency having jurisdiction over the Plan such authority as may be
required to issue and sell shares of stock upon exercise of the Options;
provided, however, that this undertaking shall not require the Company to
register under the Securities Act either the Plan, any Option or any stock
issued or issuable pursuant to any such Option.  If, after reasonable efforts,
the Company is unable to obtain from any such regulatory commission or agency
the authority which counsel for the Company deems necessary for the lawful
issuance and sale of stock under the Plan, the Company shall be relieved from
any liability for failure to issue and sell stock upon exercise of such Options
unless and until such authority is obtained.

8.       USE OF PROCEEDS FROM STOCK.

         Proceeds from the sale of stock pursuant to Options shall constitute
general funds of the Company.

9.       MISCELLANEOUS.

         (a)     Neither an Optionee nor any person to whom an Option is
transferred under subsection 6(d) shall be deemed to be the holder of, or to
have any of the rights of a holder with respect to, any shares subject to such
Option unless and until such person has satisfied all requirements for exercise
of the Option pursuant to its terms.

         (b)     Throughout the term of any Option, the Company shall deliver
to the 





                                      10.



<PAGE>   11
holder of such Option, not later than one hundred twenty (120) days after the
close of each of the Company's fiscal years during the Option term, a balance
sheet and an income statement.  This section shall not apply when issuance is
limited to key employees whose duties in connection with the Company assure
them access to equivalent information.

         (c)     Nothing in the Plan or any instrument executed or Option
granted pursuant thereto shall confer upon any Employee, Director, Consultant
or Optionee any right to continue in the employ of the Company or any Affiliate
(or to continue acting as a Director or Consultant) or shall affect the right
of the Company or any Affiliate to terminate the employment or relationship as
a Director or Consultant of any Employee, Director, Consultant or Optionee with
or without cause.

         (d)     To the extent that the aggregate Fair Market Value (determined
at the time of grant) of stock with respect to which Incentive Stock Options
granted after 1986 are exercisable for the first time by any Optionee during
any calendar year under all plans of the Company and its Affiliates exceeds one
hundred thousand dollars ($100,000), the Options or portions thereof which
exceed such limit (according to the order in which they were granted) shall be
treated as Nonqualified Stock Options.

         (e)     (1)      The Board or the Committee shall have the authority
to effect, at any time and from time to time (i) the repricing of any
outstanding Options under the Plan and/or (ii) with the consent of the affected
holders of Options, the cancellation of any outstanding Options and the grant
in substitution therefor of new Options under the Plan covering the same or
different numbers of shares of Common Stock, but having an exercise price per
share not less than eighty-five percent (85%) of the Fair Market Value (one
hundred percent (100%) of the Fair Market Value in the case of an Incentive
Stock Option or, in the case of a ten percent (10%) stockholder (as defined in
subsection 5(c)), not less than one hundred and ten percent (110%) of the Fair
Market Value) per share of Common Stock on the new grant date.

                 (2)      Shares subject to an Option canceled under this
subsection 9(e) shall continue to be counted against the maximum award of
Options permitted to be granted pursuant to the Plan.  The repricing of an
Option under this subsection 9(e), resulting in a reduction of the exercise
price, shall be deemed to be a cancellation of the original Option and the
grant of a substitute Option; in the event of such repricing, both the original
and the substituted Options shall be counted against the maximum awards of
Options permitted to be granted pursuant to the Plan.  The provisions of this
subsection 9(e) shall be applicable only to the extent required by Section
162(m) of the Code.





                                      11.



<PAGE>   12
10.      ADJUSTMENTS UPON CHANGES IN STOCK.

         (a)     If any change is made in the stock subject to the Plan, or
subject to any Option (through merger, consolidation, reorganization,
recapitalization, stock dividend, dividend in property other than cash, stock
split, liquidating dividend, combination of shares, exchange of shares, change
in corporate structure or otherwise), the Plan will be appropriately adjusted
in the class(es) and maximum number of shares subject to the Plan pursuant to
subsection 4(a), and the outstanding Options will be appropriately adjusted in
the class(es) and number of shares and price per share of stock subject to such
outstanding Options.

         (b)     In the event of:  (1) a merger or consolidation in which the
Company is not the surviving corporation or (2) a reverse merger in which the
Company is the surviving corporation but the shares of the Company's common
stock outstanding immediately preceding the merger are converted by virtue of
the merger into other property, whether in the form of securities, cash or
otherwise then to the extent permitted by applicable law:  (i) any surviving
corporation shall assume any Options outstanding under the Plan or shall
substitute similar Options for those outstanding under the Plan, or (ii) such
Options shall continue in full force and effect.  In the event any surviving
corporation refuses to assume or continue such Options, or to substitute
similar options for those outstanding under the Plan, then such Options shall
be terminated if not exercised prior to such event.  In the event of a
dissolution or liquidation of the Company, any Options outstanding under the
Plan shall terminate if not exercised prior to such event.

11.      AMENDMENT OF THE PLAN.

         (a)     The Board at any time, and from time to time, may amend the
Plan.  However, except as provided in Section 10 relating to adjustments upon
changes in stock, no amendment shall be effective unless approved by the
stockholders of the Company within twelve (12) months before or after the
adoption of the amendment, where the amendment will:

                 (1)      Increase the number of shares reserved for Options
under the Plan;

                 (2)      Modify the requirements as to eligibility for
participation in the Plan (to the extent such modification requires stockholder
approval in order for the Plan to satisfy the requirements of Section 422 of
the Code); or

                 (3)      Modify the Plan in any other way if such modification
requires stockholder approval in order for the Plan to satisfy the requirements
of Section 422 of the Code or to comply with the requirements of Rule 16b-3.

         (a)     The Board may in its sole discretion submit any other
amendment to 





                                      12.



<PAGE>   13
the Plan for stockholder approval, including, but not limited to, amendments to
the Plan intended to satisfy the requirements of Section 162(m) of the Code and
the regulations promulgated thereunder regarding the exclusion of
performance-based compensation from the limit on corporate deductibility of
compensation paid to certain executive officers.

         (c)     It is expressly contemplated that the Board may amend the Plan
in any respect the Board deems necessary or advisable to provide Optionees with
the maximum benefits provided or to be provided under the provisions of the
Code and the regulations promulgated thereunder relating to Incentive Stock
Options and/or to bring the Plan and/or Incentive Stock Options granted under
it into compliance therewith.

         (d)     Rights and obligations under any Option granted before
amendment of the Plan shall not be altered or impaired by any amendment of the
Plan unless (i) the Company requests the consent of the person to whom the
Option was granted and (ii) such person consents in writing.

12.      TERMINATION OR SUSPENSION OF THE PLAN.

         (a)     The Board may suspend or terminate the Plan at any time.
Unless sooner terminated, the Plan shall terminate on April 5, 2005, which
shall be within ten (10) years from the date the Plan is adopted by the Board
or approved by the stockholders of the Company, whichever is earlier.  No
Options may be granted under the Plan while the Plan is suspended or after it
is terminated.

         (b)     Rights and obligations under any Option granted while the Plan
is in effect shall not be altered or impaired by suspension or termination of
the Plan, except with the consent of the person to whom the Option was granted.

13.      EFFECTIVE DATE OF PLAN.

         The Plan shall become effective as determined by the Board, but no
Options granted under the Plan shall be exercised unless and until the Plan has
been approved by the stockholders of the Company, which approval shall be
within twelve (12) months before or after the date the Plan is adopted by the
Board, and, if required, an appropriate permit has been issued by the
Commissioner of Corporations of the State of California.





                                      13.