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                                                                    EXHIBIT 10.3

                               BOFI HOLDING, INC.

                            2004 STOCK INCENTIVE PLAN

      1.    Purposes of the Plan. The purposes of this Plan are to attract and
retain the best available personnel, to provide additional incentives to
Employees, Directors and Consultants and to promote the success of the Company's
business.

      2.    Definitions. The following definitions shall apply as used herein
and in the individual Award Agreements except as defined otherwise in an
individual Award Agreement. In the event a term is separately defined in an
individual Award Agreement, such definition shall supercede the definition
contained in this Section 2.

            (a)   "Administrator" means the Board or any of the Committees
appointed to administer the Plan.

            (b)   "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 promulgated under the Exchange Act.

            (c)   "Applicable Laws" means the legal requirements relating to the
Plan and the Awards under applicable provisions of federal securities laws,
state corporate and securities laws, the Code, the rules of any applicable stock
exchange or national market system, and the rules of any non-U.S. jurisdiction
applicable to Awards granted to residents therein.

            (d)   "Assumed" means that pursuant to a Corporate Transaction
either (i) the Award is expressly affirmed by the Company or (ii) the
contractual obligations represented by the Award are expressly assumed (and not
simply by operation of law) by the successor entity or its Parent in connection
with the Corporate Transaction with appropriate adjustments to the number and
type of securities of the successor entity or its Parent subject to the Award
and the exercise or purchase price thereof which at least preserves the
compensation element of the Award existing at the time of the Corporate
Transaction as determined in accordance with the instruments evidencing the
agreement to assume the Award.

            (e)   "Award" means the grant of an Option, SAR, Dividend Equivalent
Right, Restricted Stock, Restricted Stock Unit or other right or benefit under
the Plan.

            (f)   "Award Agreement" means the written agreement evidencing the
grant of an Award executed by the Company and the Grantee, including any
amendments thereto.

            (g)   "Board" means the Board of Directors of the Company.

            (h)   "Cause" means, with respect to the termination by the Company
or a Related Entity of the Grantee's Continuous Service, that such termination
is for "Cause" as such term is expressly defined in a then-effective written
agreement between the Grantee and the Company or such Related Entity, or in the
absence of such then-effective written agreement and definition, is based on, in
the determination of the Administrator, the Grantee's: (i) performance of any
act or failure to perform any act in bad faith and to the detriment of the
Company or a Related Entity; (ii) dishonesty, intentional misconduct or material
breach of any agreement with

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the Company or a Related Entity; or (iii) commission of a crime involving
dishonesty, breach of trust, or physical or emotional harm to any person.

            (i)   "Change in Control" means a change in ownership or control of
the Company after the Registration Date effected through either of the following
transactions:

                  (i)   the direct or indirect acquisition by any person or
related group of persons (other than an acquisition from or by the Company or by
a Company-sponsored employee benefit plan or by a person that directly or
indirectly controls, is controlled by, or is under common control with, the
Company) of beneficial ownership (within the meaning of Rule 13d-3 of the
Exchange Act) of securities possessing more than fifty percent (50%) of the
total combined voting power of the Company's outstanding securities pursuant to
a tender or exchange offer made directly to the Company's stockholders which a
majority of the Continuing Directors who are not Affiliates or Associates of the
offeror do not recommend such stockholders accept, or

                  (ii)  a change in the composition of the Board over a period
of thirty-six (36) months or less such that a majority of the Board members
(rounded up to the next whole number) ceases, by reason of one or more contested
elections for Board membership, to be comprised of individuals who are
Continuing Directors.

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

            (k)   "Committee" means any committee composed of members of the
Board appointed by the Board to administer the Plan.

            (l)   "Common Stock" means the common stock of the Company.

            (m)   "Company" means BofI Holding, Inc., a Delaware corporation, or
any successor entity that adopts the Plan in connection with a Corporate
Transaction.

            (n)   "Consultant" means any person (other than an Employee or a
Director, solely with respect to rendering services in such person's capacity as
a Director) who is engaged by the Company or any Related Entity to render
consulting or advisory services to the Company or such Related Entity.

            (o)   "Continuing Directors" means members of the Board who either
(i) have been Board members continuously for a period of at least thirty-six
(36) months or (ii) have been Board members for less than thirty-six (36) months
and were elected or nominated for election as Board members by at least a
majority of the Board members described in clause (i) who were still in office
at the time such election or nomination was approved by the Board.

            (p)   "Continuous Service" means that the provision of services to
the Company or a Related Entity in any capacity of Employee, Director or
Consultant is not interrupted or terminated. In jurisdictions requiring notice
in advance of an effective termination as an Employee, Director or Consultant,
Continuous Service shall be deemed terminated upon the actual cessation of
providing services to the Company or a Related Entity notwithstanding any
required notice period that must be fulfilled before a termination as an
Employee, Director or

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Consultant can be effective under Applicable Laws. A Grantee's Continuous
Service shall be deemed to have terminated either upon an actual termination of
Continuous Service or upon the entity for which the Grantee provides services
ceasing to be a Related Entity. Continuous Service shall not be considered
interrupted in the case of (i) any approved leave of absence, (ii) transfers
among the Company, any Related Entity, or any successor, in any capacity of
Employee, Director or Consultant, or (iii) any change in status as long as the
individual remains in the service of the Company or a Related Entity in any
capacity of Employee, Director or Consultant (except as otherwise provided in
the Award Agreement). An approved leave of absence shall include sick leave,
military leave, or any other authorized personal leave.

            (q)   "Corporate Transaction" means any of the following
transactions, provided, however, that the Administrator shall determine under
parts (iv) and (v) whether multiple transactions are related, and its
determination shall be final, binding and conclusive:

                  (i)   a merger or consolidation in which the Company is not
the surviving entity, except for a transaction the principal purpose of which is
to change the state in which the Company is incorporated;

                  (ii)  the sale, transfer or other disposition of all or
substantially all of the assets of the Company;

                  (iii) the complete liquidation or dissolution of the Company;

                  (iv)  any reverse merger or series of related transactions
culminating in a reverse merger (including, but not limited to, a tender offer
followed by a reverse merger) in which the Company is the surviving entity but
(A) the shares of Common Stock outstanding immediately prior to such merger are
converted or exchanged by virtue of the merger into other property, whether in
the form of securities, cash or otherwise, or (B) in which securities possessing
more than forty percent (40%) of the total combined voting power of the
Company's outstanding securities are transferred to a person or persons
different from those who held such securities immediately prior to such merger
or the initial transaction culminating in such merger, but excluding any such
transaction or series of related transactions that the Administrator determines
shall not be a Corporate Transaction; or

                  (v)   acquisition in a single or series of related
transactions by any person or related group of persons (other than the Company
or by a Company-sponsored employee benefit plan) of beneficial ownership (within
the meaning of Rule 13d-3 of the Exchange Act) of securities possessing more
than fifty percent (50%) of the total combined voting power of the Company's
outstanding securities but excluding any such transaction or series of related
transactions that the Administrator determines shall not be a Corporate
Transaction.

            (r)   "Covered Employee" means an Employee who is a "covered
employee" under Section 162(m)(3) of the Code.

            (s)   "Director" means a member of the Board or the board of
directors of any Related Entity.

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            (t)   "Disability" means as defined under the long-term disability
policy of the Company or the Related Entity to which the Grantee provides
services regardless of whether the Grantee is covered by such policy. If the
Company or the Related Entity to which the Grantee provides service does not
have a long-term disability plan in place, "Disability" means that a Grantee is
unable to carry out the responsibilities and functions of the position held by
the Grantee by reason of any medically determinable physical or mental
impairment for a period of not less than ninety (90) consecutive days. A Grantee
will not be considered to have incurred a Disability unless he or she furnishes
proof of such impairment sufficient to satisfy the Administrator in its
discretion.

            (u)   "Dividend Equivalent Right" means a right entitling the
Grantee to compensation measured by dividends paid with respect to Common Stock.

            (v)   "Employee" means any person, including an Officer or Director,
who is in the employ of the Company or any Related Entity, subject to the
control and direction of the Company or any Related Entity as to both the work
to be performed and the manner and method of performance. The payment of a
director's fee by the Company or a Related Entity shall not be sufficient to
constitute "employment" by the Company.

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

            (x)   "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:

                  (i)   If the Common Stock is listed on one or more established
stock exchanges or national market systems, including without limitation The
Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market,
its Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on the principal exchange or
system on which the Common Stock is listed (as determined by the Administrator)
on the date of determination (or, if no closing sales price or closing bid was
reported on that date, as applicable, on the last trading date such closing
sales price or closing bid was reported), as reported in The Wall Street Journal
or such other source as the Administrator deems reliable;

                  (ii)  If the Common Stock is regularly quoted on an automated
quotation system (including the OTC Bulletin Board) or by a recognized
securities dealer, its Fair Market Value shall be the closing sales price for
such stock as quoted on such system on the date of determination, but if selling
prices are not reported, the Fair Market Value of a share of Common Stock shall
be the mean between the high bid and low asked prices for the Common Stock on
the date of determination (or, if no such prices were reported on that date, on
the last date such prices were reported), as reported in The Wall Street Journal
or such other source as the Administrator deems reliable; or

                  (iii) In the absence of an established market for the Common
Stock of the type described in (i) and (ii), above, the Fair Market Value
thereof shall be determined by the Administrator in good faith.

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            (y)   "Grantee" means an Employee, Director or Consultant who
receives an Award under the Plan.

            (z)   "Non-Qualified Stock Option" means an Option not intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code.

            (aa)  "Officer" means a person who is an officer of the Company or a
Related Entity within the meaning of Section 16 of the Exchange Act and the
rules and regulations promulgated thereunder.

            (bb)  "Option" means a Non-Qualified Stock Option to purchase Shares
pursuant to an Award Agreement granted under the Plan.

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

            (dd)  "Performance-Based Compensation" means compensation qualifying
as "performance-based compensation" under Section 162(m) of the Code.

            (ee)  "Plan" means this 2004 Stock Incentive Plan.

            (ff)  "Registration Date" means the first to occur of (i) the
closing of the first sale to the general public pursuant to a registration
statement filed with and declared effective by the Securities and Exchange
Commission under the Securities Act of 1933, as amended, of (A) the Common Stock
or (B) the same class of securities of a successor corporation (or its Parent)
issued pursuant to a Corporate Transaction in exchange for or in substitution of
the Common Stock; and (ii) in the event of a Corporate Transaction, the date of
the consummation of the Corporate Transaction if the same class of securities of
the successor corporation (or its Parent) issuable in such Corporate Transaction
shall have been sold to the general public pursuant to a registration statement
filed with and declared effective by the Securities and Exchange Commission
under the Securities Act of 1933, as amended, on or prior to the date of
consummation of such Corporate Transaction.

            (gg)  "Related Entity" means any Parent or Subsidiary of the Company
and any business, corporation, partnership, limited liability company or other
entity in which the Company or a Parent or a Subsidiary of the Company holds a
substantial ownership interest, directly or indirectly.

            (hh)  "Replaced" means that pursuant to a Corporate Transaction the
Award is replaced with a comparable stock award or a cash incentive program of
the Company, the successor entity (if applicable) or Parent of either of them
which preserves the compensation element of such Award existing at the time of
the Corporate Transaction and provides for subsequent payout in accordance with
the same (or a more favorable) vesting schedule applicable to such Award. The
determination of Award comparability shall be made by the Administrator and its
determination shall be final, binding and conclusive.

            (ii)  "Restricted Stock" means Shares issued under the Plan to the
Grantee for such consideration, if any, and subject to such restrictions on
transfer, rights of first refusal,

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repurchase provisions, forfeiture provisions, and other terms and conditions as
established by the Administrator.

            (jj)  "Restricted Stock Units" means an Award which may be earned in
whole or in part upon the passage of time or the attainment of performance
criteria established by the Administrator and which may be settled for cash,
Shares or other securities or a combination of cash, Shares or other securities
as established by the Administrator.

            (kk)  "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange
Act or any successor thereto.

            (ll)  "SAR" means a stock appreciation right entitling the Grantee
to Shares or cash compensation, as established by the Administrator, measured by
appreciation in the value of Common Stock.

            (mm)  "Share" means a share of the Common Stock.

            (nn)  "Subsidiary" means a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 424(f) of the Code.

      3.    Stock Subject to the Plan.

            (a)   Subject to the provisions of Section 10, below, the maximum
aggregate number of Shares which may be issued pursuant to (i) all Awards plus
(ii) awards under the Company's 1999 Stock Option Plan may not exceed 14.8% of
the number of Shares outstanding from time to time; provided, however, that the
maximum aggregate number of Shares which may be issued pursuant to Awards of
Restricted Stock under the Plan may not exceed 5.0% of the number of Shares
outstanding from time to time (subject to the overall maximum of 14.8% of
outstanding Shares); provided, further, that each Share of Restricted Stock that
is issued under the Plan and vests will be deemed to be the issuance of three
(3) Shares for purposes of calculating the overall maximum aggregate number of
Shares that may be issued under the Plan but not for purposes of calculating the
above 5.0% limit applicable to Awards of Restricted Stock.

            (b)   Any Shares covered by an Award (or portion of an Award) which
is forfeited, canceled or expires (whether voluntarily or involuntarily) shall
be deemed not to have been issued for purposes of determining the maximum
aggregate number of Shares which may be issued under the Plan. Shares that
actually have been issued under the Plan pursuant to an Award shall not be
returned to the Plan and shall not become available for future issuance under
the Plan, except that if unvested Shares are forfeited, or repurchased by the
Company at the lower of their original purchase price or their Fair Market Value
at the time of repurchase, such Shares shall become available for future grant
under the Plan. To the extent not prohibited by the listing requirements of The
Nasdaq National Market (or other established stock exchange or national market
system on which the Common Stock is traded) and Applicable Law, any Shares
covered by an Award which are surrendered (i) in payment of the Award exercise
or purchase price or (ii) in satisfaction of tax withholding obligations
incident to the exercise of an Award shall be deemed not to have been issued for
purposes of determining the maximum number of

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Shares which may be issued pursuant to all Awards under the Plan, unless
otherwise determined by the Administrator.

      4.    Administration of the Plan.

            (a)   Plan Administrator.

                  (i)   Administration with Respect to Directors and Officers.
With respect to grants of Awards to Directors or Employees who are also Officers
or Directors of the Company, the Plan shall be administered by (A) the Board or
(B) a Committee designated by the Board, which Committee shall be constituted in
such a manner as to satisfy the Applicable Laws and to permit such grants and
related transactions under the Plan to be exempt from Section 16(b) of the
Exchange Act in accordance with Rule 16b-3. Once appointed, such Committee shall
continue to serve in its designated capacity until otherwise directed by the
Board.

                  (ii)  Administration With Respect to Consultants and Other
Employees. With respect to grants of Awards to Employees or Consultants who are
neither Directors nor Officers of the Company, the Plan shall be administered by
(A) the Board or (B) a Committee designated by the Board, which Committee shall
be constituted in such a manner as to satisfy the Applicable Laws. Once
appointed, such Committee shall continue to serve in its designated capacity
until otherwise directed by the Board. The Board may authorize one or more
Officers to grant such Awards and may limit such authority as the Board
determines from time to time.

                  (iii) Administration With Respect to Covered Employees.
Notwithstanding the foregoing, as of and after the date that the exemption for
the Plan under Section 162(m) of the Code expires, as set forth in Section 18
below, grants of Awards to any Covered Employee intended to qualify as
Performance-Based Compensation shall be made only by a Committee (or
subcommittee of a Committee) which is comprised solely of two or more Directors
eligible to serve on a committee making Awards qualifying as Performance-Based
Compensation. In the case of such Awards granted to Covered Employees,
references to the "Administrator" or to a "Committee" shall be deemed to be
references to such Committee or subcommittee.

                  (iv)  Administration Errors. In the event an Award is granted
in a manner inconsistent with the provisions of this subsection (a), such Award
shall be presumptively valid as of its grant date to the extent permitted by the
Applicable Laws.

            (b)   Powers of the Administrator. Subject to Applicable Laws and
the provisions of the Plan (including any other powers given to the
Administrator hereunder), and except as otherwise provided by the Board, the
Administrator shall have the authority, in its discretion:

                  (i)   to select the Employees, Directors and Consultants to
whom Awards may be granted from time to time hereunder;

                  (ii)  to determine whether and to what extent Awards are
granted hereunder;

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                  (iii) to determine the number of Shares or the amount of other
consideration to be covered by each Award granted hereunder;

                  (iv)  to approve forms of Award Agreements for use under the
Plan;

                  (v)   to determine the terms and conditions of any Award
granted hereunder;

                  (vi)  to amend the terms of any outstanding Award granted
under the Plan, provided that (A) any amendment that would adversely affect the
Grantee's rights under an outstanding Award shall not be made without the
Grantee's written consent, (B) the reduction of the exercise price of any Option
awarded under the Plan shall be subject to stockholder approval and (C)
canceling an Option at a time when its exercise price exceeds the Fair Market
Value of the underlying Shares, in exchange for another Option, Restricted
Stock, or other Award shall be subject to stockholder approval, unless the
cancellation and exchange occurs in connection with a Corporate Transaction;

                  (vii) to construe and interpret the terms of the Plan and
Awards, including without limitation, any notice of award or Award Agreement,
granted pursuant to the Plan;

                  (viii) to grant Awards to Employees, Directors and Consultants
employed outside the United States on such terms and conditions different from
those specified in the Plan as may, in the judgment of the Administrator, be
necessary or desirable to further the purpose of the Plan;

                  (ix)  to take such other action, not inconsistent with the
terms of the Plan, as the Administrator deems appropriate.

            (c)   Indemnification. In addition to such other rights of
indemnification as they may have as members of the Board or as Officers or
Employees of the Company or a Related Entity, members of the Board and any
Officers or Employees of the Company or a Related Entity to whom authority to
act for the Board, the Administrator or the Company is delegated shall be
defended and indemnified by the Company to the extent permitted by law on an
after-tax basis against all reasonable expenses, including attorneys' fees,
actually and necessarily incurred in connection with the defense of any claim,
investigation, 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 Award
granted hereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by the Company) or paid by them in
satisfaction of a judgment in any such claim, investigation, action, suit or
proceeding, except in relation to matters as to which it shall be adjudged in
such claim, investigation, action, suit or proceeding that such person is liable
for gross negligence, bad faith or intentional misconduct; provided, however,
that within thirty (30) days after the institution of such claim, investigation,
action, suit or proceeding, such person shall offer to the Company, in writing,
the opportunity at the Company's expense to defend the same.

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      5.    Eligibility. Awards may be granted to Employees, Directors and
Consultants. An Employee, Director or Consultant who has been granted an Award
may, if otherwise eligible, be granted additional Awards. Awards may be granted
to such Employees, Directors or Consultants who are residing in non-U.S.
jurisdictions as the Administrator may determine from time to time.

      6.    Terms and Conditions of Awards.

            (a)   Types of Awards. The Administrator is authorized under the
Plan to award any type of arrangement to an Employee, Director or Consultant
that is not inconsistent with the provisions of the Plan and that by its terms
involves or might involve the issuance of (i) Shares, (ii) cash or (iii) an
Option, a SAR, or similar right with a fixed or variable price related to the
Fair Market Value of the Shares and with an exercise or conversion privilege
related to the passage of time, the occurrence of one or more events, or the
satisfaction of performance criteria or other conditions. Such awards include,
without limitation, Options, SARs, sales or bonuses of Restricted Stock,
Restricted Stock Units or Dividend Equivalent Rights, and an Award may consist
of one such security or benefit, or two (2) or more of them in any combination
or alternative.

            (b)   Designation of Award. Each Award shall be designated in the
Award Agreement.

            (c)   Conditions of Award. Subject to the terms of the Plan, the
Administrator shall determine the provisions, terms, and conditions of each
Award including, but not limited to, the Award vesting schedule, repurchase
provisions, rights of first refusal, forfeiture provisions, form of payment
(cash, Shares, or other consideration) upon settlement of the Award, payment
contingencies, and satisfaction of any performance criteria. The performance
criteria established by the Administrator may be based on any one of, or
combination of, the following: (i) increase in share price, (ii) earnings per
share, (iii) total stockholder return, (iv) operating margin, (v) gross margin,
(vi) return on equity, (vii) return on assets, (viii) return on investment, (ix)
operating income, (x) net operating income, (xi) pre-tax profit, (xii) cash
flow, (xiii) revenue, (xiv) expenses, (xv) earnings before interest, taxes and
depreciation, (xvi) economic value added, (xvii) market share and (xviii)
personal management objectives. The performance criteria may be applicable to
the Company, Related Entities and/or any individual business units of the
Company or any Related Entity. Partial achievement of the specified criteria may
result in a payment or vesting corresponding to the degree of achievement as
specified in the Award Agreement.

            (d)   Acquisitions and Other Transactions. The Administrator may
issue Awards under the Plan in settlement, assumption or substitution for,
outstanding awards or obligations to grant future awards in connection with the
Company or a Related Entity acquiring another entity, an interest in another
entity or an additional interest in a Related Entity whether by merger, stock
purchase, asset purchase or other form of transaction.

            (e)   Deferral of Award Payment. The Administrator may establish one
or more programs under the Plan to permit selected Grantees the opportunity to
elect to defer receipt of consideration upon exercise of an Award, satisfaction
of performance criteria, or other event that absent the election would entitle
the Grantee to payment or receipt of Shares or other

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consideration under an Award. The Administrator may establish the election
procedures, the timing of such elections, the mechanisms for payments of, and
accrual of interest or other earnings, if any, on amounts, Shares or other
consideration so deferred, and such other terms, conditions, rules and
procedures that the Administrator deems advisable for the administration of any
such deferral program.

            (f)   Separate Programs. The Administrator may establish one or more
separate programs under the Plan for the purpose of issuing particular forms of
Awards to one or more classes of Grantees on such terms and conditions as
determined by the Administrator from time to time.

            (g)   Individual Limitations on Awards. Following the date that the
exemption from application of Section 162(m) of the Code described in Section 18
(or any exemption having similar effect) ceases to apply to Awards, the
following limitations shall apply.

                  (i)   Individual Limit for Options and SARs. The maximum
number of Shares with respect to which Options and SARs may be granted to any
Grantee in any fiscal year of the Company shall be 100,000 Shares. In connection
with a Grantee's commencement of Continuous Service, a Grantee may be granted
Options or SARs for up to an additional 100,000 Shares which shall not count
against the limit set forth in the previous sentence. The foregoing limitations
shall be adjusted proportionately in connection with any change in the Company's
capitalization pursuant to Section 10, below. To the extent required by Section
162(m) of the Code or the regulations thereunder, in applying the foregoing
limitations with respect to a Grantee, if any Option or SAR is canceled, the
canceled Option or SAR shall continue to count against the maximum number of
Shares with respect to which Options and SARs may be granted to the Grantee. For
this purpose, the repricing of an Option (or in the case of a SAR, the base
amount on which the stock appreciation is calculated is reduced to reflect a
reduction in the Fair Market Value of the Common Stock) shall be treated as the
cancellation of the existing Option or SAR and the grant of a new Option or SAR.

                  (ii)  Individual Limit for Restricted Stock and Restricted
Stock Units. For awards of Restricted Stock and Restricted Stock Units that are
intended to be Performance-Based Compensation, the maximum number of Shares with
respect to which such Awards may be granted to any Grantee in any fiscal year of
the Company shall be 100,000 Shares. The foregoing limitation shall be adjusted
proportionately in connection with any change in the Company's capitalization
pursuant to Section 10, below. In connection with a Grantee's commencement of
Continuous Service, a Grantee may be granted Restricted Stock and Restricted
Stock Units for up to an additional 100,000 Shares which shall not count against
the limit set forth in the previous sentence.

                  (iii) Deferral. If the vesting or receipt of Shares under an
Award is deferred to a later date, any amount (whether denominated in Shares or
cash) paid in addition to the original number of Shares subject to such Award
will not be treated as an increase in the number of Shares subject to the Award
if the additional amount is based either on a reasonable rate of interest or on
one or more predetermined actual investments such that the amount payable by the
Company at the later date will be based on the actual rate of return of a
specific investment (including any decrease as well as any increase in the value
of an investment).

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            (h)   Early Exercise. The Award Agreement may, but need not, include
a provision whereby the Grantee may elect at any time while an Employee,
Director or Consultant to exercise any part or all of the Award prior to full
vesting of the Award. Any unvested Shares received pursuant to such exercise may
be subject to a repurchase right in favor of the Company or a Related Entity or
to any other restriction the Administrator determines to be appropriate.

            (i)   Term of Award. The term of each Award shall be the term stated
in the Award Agreement. The specified term of any Award shall not include any
period for which the Grantee has elected to defer the receipt of the Shares or
cash issuable pursuant to the Award.

            (j)   Transferability of Awards. Awards shall be transferable (i) by
will and by the laws of descent and distribution and (ii) during the lifetime of
the Grantee, to the extent and in the manner authorized by the Administrator.
Notwithstanding the foregoing, the Grantee may designate one or more
beneficiaries of the Grantee's Award in the event of the Grantee's death on a
beneficiary designation form provided by the Administrator.

            (k)   Time of Granting Awards. The date of grant of an Award shall
for all purposes be the date on which the Administrator makes the determination
to grant such Award, or such other date as is determined by the Administrator.

      7.    Award Exercise or Purchase Price, Consideration and Taxes.

            (a)   Exercise or Purchase Price. The exercise or purchase price, if
any, for an Award shall be as follows:

                  (i)   In the case of an Option, the per Share exercise price
shall be not less than eighty-five percent (85%) of the Fair Market Value per
Share on the date of grant unless otherwise determined by the Administrator.

                  (ii)  In the case of Options or SARs intended to qualify as
Performance-Based Compensation, the exercise or base appreciation amount shall
be not less than one hundred percent (100%) of the Fair Market Value per Share
on the date of grant.

                  (iii) In the case of other Awards, such price as is determined
by the Administrator.

                  (iv)  Notwithstanding the foregoing provisions of this Section
7(a), in the case of an Award issued pursuant to Section 6(d), above, the
exercise or purchase price for the Award shall be determined in accordance with
the provisions of the relevant instrument evidencing the agreement to issue such
Award.

            (b)   Consideration. Subject to Applicable Laws, the consideration
to be paid for the Shares to be issued upon exercise or purchase of an Award
including the method of payment, shall be determined by the Administrator. In
addition to any other types of consideration the Administrator may determine,
the Administrator is authorized to accept as consideration for Shares issued
under the Plan the following, provided that the portion of the consideration
equal to the par value of the Shares must be paid in cash or other legal
consideration permitted by the Delaware General Corporation Law:

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<PAGE>

                  (i)   cash;

                  (ii)  check;

                  (iii) if the exercise or purchase occurs on or after the
Registration Date, surrender of Shares or delivery of a properly executed form
of attestation of ownership of Shares as the Administrator may require which
have a Fair Market Value on the date of surrender or attestation equal to the
aggregate exercise price of the Shares as to which said Award shall be
exercised, provided, however, that Shares acquired under the Plan or any other
equity compensation plan or agreement of the Company must have been held by the
Grantee for a period of more than six (6) months (and not used for another Award
exercise by attestation during such period);

                  (iv)  with respect to Options, if the exercise occurs on or
after the Registration Date, payment through a broker-dealer sale and remittance
procedure pursuant to which the Grantee (A) shall provide written instructions
to a Company designated brokerage firm to effect the immediate sale of some or
all of the purchased Shares and remit to the Company sufficient funds to cover
the aggregate exercise price payable for the purchased Shares and (B) shall
provide written directives to the Company to deliver the certificates for the
purchased Shares directly to such brokerage firm in order to complete the sale
transaction; or

                  (v)   any combination of the foregoing methods of payment.

The Administrator may at any time or from time to time, by adoption of or by
amendment to the standard forms of Award Agreement described in Section
4(b)(iv), or by other means, grant Awards which do not permit all of the
foregoing forms of consideration to be used in payment for the Shares or which
otherwise restrict one or more forms of consideration.

            (c)   Taxes. No Shares shall be delivered under the Plan to any
Grantee or other person until such Grantee or other person has made arrangements
acceptable to the Administrator for the satisfaction of any non-U.S., federal,
state, or local income and employment tax withholding obligations, including,
without limitation, obligations incident to the receipt of Shares. Upon exercise
or vesting of an Award the Company shall withhold or collect from Grantee an
amount sufficient to satisfy such tax obligations, including, but not limited
too, by surrender of the whole number of Shares covered by the Award sufficient
to satisfy the minimum applicable tax withholding obligations incident to the
exercise or vesting of an Award.

      8.    Exercise of Award.

            (a)   Procedure for Exercise; Rights as a Stockholder.

                  (i)   Any Award granted hereunder shall be exercisable at such
times and under such conditions as determined by the Administrator under the
terms of the Plan and specified in the Award Agreement.

                  (ii)  An Award shall be deemed to be exercised when written
notice of such exercise has been given to the Company in accordance with the
terms of the Award by the

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<PAGE>

person entitled to exercise the Award and full payment for the Shares with
respect to which the Award is exercised, including, to the extent selected, use
of the broker-dealer sale and remittance procedure to pay the purchase price as
provided in Section 7(b)(iv).

            (b)   Exercise of Award Following Termination of Continuous Service.

                  (i)   An Award may not be exercised after the termination date
of such Award set forth in the Award Agreement and may be exercised following
the termination of a Grantee's Continuous Service only to the extent provided in
the Award Agreement.

                  (ii)  Where the Award Agreement permits a Grantee to exercise
an Award following the termination of the Grantee's Continuous Service for a
specified period, the Award shall terminate to the extent not exercised on the
last day of the specified period or the last day of the original term of the
Award, whichever occurs first.

      9.    Conditions Upon Issuance of Shares.

            (a)   Shares shall not be issued pursuant to the exercise of an
Award unless the exercise of such Award and the issuance and delivery of such
Shares pursuant thereto shall comply with all Applicable Laws, and shall be
further subject to the approval of counsel for the Company with respect to such
compliance.

            (b)   As a condition to the exercise of an Award, the Company may
require the person exercising such Award to represent and warrant at the time of
any such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required by any
Applicable Laws.

      10.   Adjustments Upon Changes in Capitalization. Subject to any required
action by the stockholders of the Company, the number of Shares covered by each
outstanding Award, and the number of Shares which have been authorized for
issuance under the Plan but as to which no Awards have yet been granted or which
have been returned to the Plan, the exercise or purchase price of each such
outstanding Award, the maximum number of Shares with respect to which Awards may
be granted to any Grantee in any fiscal year of the Company, as well as any
other terms that the Administrator determines require adjustment shall be
proportionately adjusted for (i) any increase or decrease in the number of
issued Shares resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Shares, or similar transaction affecting
the Shares, (ii) any other increase or decrease in the number of issued Shares
effected without receipt of consideration by the Company, or (iii) as the
Administrator may determine in its discretion, any other transaction with
respect to Common Stock including a corporate merger, consolidation, acquisition
of property or stock, separation (including a spin-off or other distribution of
stock or property), reorganization, liquidation (whether partial or complete) or
any similar transaction; provided, however that conversion of any convertible
securities of the Company shall not be deemed to have been "effected without
receipt of consideration." Such adjustment shall be made by the Administrator
and its determination shall be final, binding and conclusive. Except as the
Administrator determines, no issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall
affect, and no

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<PAGE>

adjustment by reason hereof shall be made with respect to, the number or price
of Shares subject to an Award.

      11.   Corporate Transactions and Changes in Control.

            (a)   Termination of Award to Extent Not Assumed in Corporate
Transaction. Effective upon the consummation of a Corporate Transaction, all
outstanding Awards under the Plan shall terminate. However, all such Awards
shall not terminate to the extent they are Assumed in connection with the
Corporate Transaction.

            (b)   Acceleration of Award Upon Corporate Transaction or Change in
Control. The Administrator shall have the authority, exercisable either in
advance of any actual or anticipated Corporate Transaction or Change in Control
or at the time of an actual Corporate Transaction or Change in Control and
exercisable at the time of the grant of an Award under the Plan or any time
while an Award remains outstanding, to provide for the full or partial automatic
vesting and exercisability of one or more outstanding unvested Awards under the
Plan and the release from restrictions on transfer and repurchase or forfeiture
rights of such Awards in connection with a Corporate Transaction or Change in
Control, on such terms and conditions as the Administrator may specify. The
Administrator also shall have the authority to condition any such Award vesting
and exercisability or release from such limitations upon the subsequent
termination of the Continuous Service of the Grantee within a specified period
following the effective date of the Corporate Transaction or Change in Control.
The Administrator may provide that any Awards so vested or released from such
limitations in connection with a Change in Control, shall remain fully
exercisable until the expiration or sooner termination of the Award.

      12.   Effective Date and Term of Plan. The Plan shall become effective
upon its approval by the stockholders of the Company. It shall continue in
effect for a term of ten (10) years unless sooner terminated. Subject to Section
17, below, and Applicable Laws, Awards may be granted under the Plan upon its
becoming effective.

      13.   Amendment, Suspension or Termination of the Plan.

            (a)   The Board may at any time amend, suspend or terminate the
Plan; provided, however, that no such amendment shall be made without the
approval of the Company's stockholders to the extent such approval is required
by Applicable Laws, or if such amendment would change any of the provisions of
Section 4(b)(vi) or this Section 13(a).

            (b)   No Award may be granted during any suspension of the Plan or
after termination of the Plan.

            (c)   No suspension or termination of the Plan (including
termination of the Plan under Section (a), above) shall adversely affect any
rights under Awards already granted to a Grantee.

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<PAGE>

      14.   Reservation of Shares.

            (a)   The Company, during the term of the Plan, will at all times
reserve and keep available such number of Shares as shall be sufficient to
satisfy the requirements of the Plan.

            (b)   The inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company's
counsel to be necessary to the lawful issuance and sale of any Shares hereunder,
shall relieve the Company of any liability in respect of the failure to issue or
sell such Shares as to which such requisite authority shall not have been
obtained.

      15.   No Effect on Terms of Employment/Consulting Relationship. The Plan
shall not confer upon any Grantee any right with respect to the Grantee's
Continuous Service, nor shall it interfere in any way with his or her right or
the right of the Company or any Related Entity to terminate the Grantee's
Continuous Service at any time, with or without Cause, and with or without
notice. The ability of the Company or any Related Entity to terminate the
employment of a Grantee who is employed at will is in no way affected by its
determination that the Grantee's Continuous Service has been terminated for
Cause for the purposes of this Plan.

      16.   No Effect on Retirement and Other Benefit Plans. Except as
specifically provided in a retirement or other benefit plan of the Company or a
Related Entity, Awards shall not be deemed compensation for purposes of
computing benefits or contributions under any retirement plan of the Company or
a Related Entity, and shall not affect any benefits under any other benefit plan
of any kind or any benefit plan subsequently instituted under which the
availability or amount of benefits is related to level of compensation. The Plan
is not a "Retirement Plan" or "Welfare Plan" under the Employee Retirement
Income Security Act of 1974, as amended.

      17.   Stockholder Approval. The Plan shall be subject to approval by the
stockholders of the Company. Such stockholder approval shall be obtained in the
degree and manner required under Applicable Laws.

      18.   Effect of Section 162(m) of the Code. Section 162(m) of the Code
does not apply to the Plan prior to the Registration Date. Following the
Registration Date, the Plan, and all Awards issued thereunder, are intended to
be exempt from the application of Section 162(m) of the Code, which restricts
under certain circumstances the Federal income tax deduction for compensation
paid by a public company to named executives in excess of $1 million per year.
The exemption is based on Treasury Regulation Section 1.162-27(f), in the form
existing on the effective date of the Plan, with the understanding that such
regulation generally exempts from the application of Section 162(m) of the Code
compensation paid pursuant to a plan that existed before a company becomes
publicly held. Under such Treasury Regulation, this exemption is available to
the Plan for the duration of the period that lasts until the earlier of (i) the
expiration of the Plan, (ii) the material modification of the Plan, (iii) the
exhaustion of the maximum number of shares of Common Stock available for Awards
under the Plan, as set forth in Section 3(a), (iv) the first meeting of
shareholders at which directors are to be elected that occurs after the close of
the third calendar year following the calendar year in which the Company first
becomes subject to the reporting obligations of Section 12 of the Exchange Act,
or (v) such other

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<PAGE>

date required by Section 162(m) of the Code and the rules and regulations
promulgated thereunder. To the extent that the Administrator determines as of
the date of grant of an Award that (i) the Award is intended to qualify as
Performance-Based Compensation and (ii) the exemption described above is no
longer available with respect to such Award, such Award shall not be effective
until any stockholder approval required under Section 162(m) of the Code has
been obtained.

      19.   Unfunded Obligation. Grantees shall have the status of general
unsecured creditors of the Company. Any amounts payable to Grantees pursuant to
the Plan shall be unfunded and unsecured obligations for all purposes,
including, without limitation, Title I of the Employee Retirement Income
Security Act of 1974, as amended. Neither the Company nor any Related Entity
shall be required to segregate any monies from its general funds, or to create
any trusts, or establish any special accounts with respect to such obligations.
The Company shall retain at all times beneficial ownership of any investments,
including trust investments, which the Company may make to fulfill its payment
obligations hereunder. Any investments or the creation or maintenance of any
trust or any Grantee account shall not create or constitute a trust or fiduciary
relationship between the Administrator, the Company or any Related Entity and a
Grantee, or otherwise create any vested or beneficial interest in any Grantee or
the Grantee's creditors in any assets of the Company or a Related Entity. The
Grantees shall have no claim against the Company or any Related Entity for any
changes in the value of any assets that may be invested or reinvested by the
Company with respect to the Plan.

      20.   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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