<PAGE>

                                                                   Exhibit 10.7


                                  AMENDMENT #1 TO
                                  QCS CORPORATION
                               1997 STOCK OPTION PLAN


       1.     PURPOSE.

              This Stock Option Plan (this "Plan") is intended to provide to
officers, directors, key Employees and Consultants of the Corporation an
opportunity to acquire a proprietary interest in the Corporation, to
encourage such key individuals to remain in the employ of or to contract with
the Corporation, and to attract and retain new officers, directors, Employees
and Consultants with outstanding qualifications.  Pursuant to the Plan, the
Corporation may grant to officers, directors, Consultants and key Employees
of the Corporation options to purchase shares of Common Stock upon such terms
and conditions as provided herein.

       2.     DEFINITIONS.

              (a)    "AFFILIATE" shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations that includes the
Corporation if each of such corporations, other than the last corporation in
the chain, owns at least 50% of the total voting power of one of the other
corporations.

              (b)    "BOARD" shall mean the Board of Directors of the
Corporation.

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

              (d)    "COMMITTEE" shall mean the committee appointed by the
Board to administer the Plan (as further described in Section 3 hereof), or
if no such committee is appointed, the Board.

              (e)    "COMMON STOCK" shall mean the voting common stock of the
Corporation.

              (f)    "CONSULTANT" shall mean any person who, or any employee
of any firm which, is engaged by the Company or any Affiliate to render
consulting services and is compensated for such consulting services, and any
Non-employee Director of the Company whether compensated for such services or
not.

              (g)    "CORPORATION" shall mean QCS Corporation, a Delaware
corporation.

              (h)    "EFFECTIVE DATE" shall mean December 1, 1997.

              (i)    "EMPLOYEE" shall mean any individual who is employed,
within the meaning of Section 3401 of the Code and the regulations
thereunder, by the Corporation or by


                                       25
<PAGE>

any Affiliate.  For purposes of the Plan and only for purposes of the
Plan, and in regard to Non-statutory Stock Options but not for Incentive
Stock Options, a Consultant or director of the Corporation or any Affiliate
shall be deemed to be an Employee, and service as a Consultant or director
with the Corporation or any Affiliate shall be deemed to be employment, but
no Incentive Stock Option shall be granted to a Consultant or director who is
not an employee of the Corporation or any Affiliate within the meaning of
Section 3401 of the Code and the regulations thereunder.  In the case of a
Non-employee Director or Consultant, the provisions governing when a
termination of employment has occurred for purposes of the Plan shall be set
forth in the written stock option agreement between the Optionee and the
Corporation, or, if not so set forth, the Committee shall have the discretion
to determine when a termination of "employment" has occurred for purposes of
the Plan.

              (j)    "EXCHANGE ACT" shall mean the Securities Exchange Act of
1934, as amended.

              (k)    "EXERCISE PRICE" shall mean the price per Share at which
an Option may be exercised, as determined by the Committee and as specified
in the Optionee's stock option agreement.

              (l)    "FAIR MARKET VALUE" shall mean the value of one Share of
Common Stock, determined as follows: (i) if the Shares are traded on an
exchange or on the NASDAQ National Market System, the reported "closing
price" on the date of valuation or if no trading occurred on such date, the
next preceding day on which trading occurred; (ii) if the Shares are traded
over-the-counter on the NASDAQ System (other than on the NASDAQ National
Market System), the mean between the bid and the ask prices on said System at
the close of business on the date of valuation or if no trading occurred on
such date, the next preceding day on which trading occurred; and (iii) if
neither (i) nor (ii) applies, the fair market value as determined by the
Committee in good faith.  Such determination shall be conclusive and binding
on all persons.

              (m)    "INCENTIVE STOCK OPTION" shall mean an Option of the
type described in Section 422(b) of the Code.

              (n)    "JOINT ESCROW INSTRUCTIONS" means joint escrow
instructions entered into between an Optionee and the Corporation in such
form as may be approved by the Committee from time to time.

              (o)    "NON-EMPLOYEE DIRECTOR" shall mean a member of the Board
who (i) is not currently an officer or Employee of the Corporation or a
parent or Subsidiary of the Corporation, (ii) has not received compensation
for serving as a Consultant or in any other non-director capacity or had an
interest in any transaction with the Corporation or a parent or Subsidiary of
the Corporation that would exceed the $60,000 threshold for which disclosure
would be required under Item 404(a) of Regulation S-K, or (iii) has not been
engaged through another party in a business relationship with the Corporation
which would be disclosable under Item 404(b) of Regulation S-K.  If the Board
determines that compliance with Section 162(m) of the Code is desirable, then
the term "Non-employee Director" shall also be interpreted to satisfy the


                                       26

<PAGE>

definition of "outside director" under Section 162(m) and applicable
regulations issued pursuant thereto.

              (p)    "NON-STATUTORY STOCK OPTION" shall mean an Option of the
type not described in Section 422(b) or 423(b) of the Code.

              (q)    "OPTION" shall mean an option to purchase shares of
Common Stock granted pursuant to the Plan.

              (r)    "OPTIONEE" shall mean any person who holds an Option
pursuant to the Plan.

              (s)    "OUTSIDE DIRECTOR" shall mean a member of the Board who
qualifies as an "outside director" pursuant to Internal Revenue Code Section
162(m) and the Regulations promulgated thereunder.

              (t)    "PLAN" shall mean this stock option plan, as amended
from time to time.

              (u)    "PURCHASE PRICE" shall mean at any particular time the
Exercise Price times the number of Shares for which an Option is being
exercised.

              (v)    "SHARE" shall mean one share of authorized Common Stock.

       3.     ADMINISTRATION.

              (a)    THE COMMITTEE.

              The Plan shall be administered by the Committee.  The Committee
shall consist only of Non-employee Directors of the Corporation who are also
Outside Directors, and shall have at least two members.  The Committee shall
meet such other requirements as may be established from time to time by the
Securities and Exchange Commission for plans intended to qualify for
exemption under Rule 16b-3 (or its successor) under the Exchange Act.   The
Board may appoint a separate committee of the Board, composed of one or more
directors of the Corporation who need not be Non-employee Directors, who may
administer the Plan with respect to Employees or Consultants who are not
officers or directors of the Corporation or incoming new directors of the
Corporation, may grant Options under the Plan to such persons and may
determine the timing, number of Shares subject to such Options and other
terms of such grants.

              (b)    POWERS OF THE COMMITTEE.

              Subject to the provisions of the Plan, the Committee shall have
the authority, in its discretion and on behalf of the Corporation:


                                       27


<PAGE>

                     (i)    to grant Options;

                     (ii)   to determine the Exercise Price per Share of
Options to be granted;

                     (iii)  to determine the Employees to whom, and the time
or times at which, Options shall be granted and the number of Shares for
which an Option will be exercisable;

                     (iv)   to interpret the Plan;

                     (v)    to prescribe, amend, and rescind rules and
regulations relating to the Plan;

                     (vi)   to determine the terms and provisions of each
Option granted and, with the consent of the holder thereof, modify or amend
each Option;

                     (vii)  to accelerate or defer, with the consent of the
Optionee, the exercise date of any Option;

                     (viii) to authorize any person to execute on behalf of
the Corporation any instrument required to effectuate the grant of an Option
previously granted by the Committee;

                     (ix)   with the consent of the Optionee, to re-price,
cancel and re-grant, or otherwise adjust the Exercise Price of an Option
previously granted by the Committee; and

                     (x)    to make all other determinations deemed necessary
or advisable for the administration of the Plan.

              (c)    BOARD'S DETERMINATION OF FAIR MARKET VALUE.

                     The Board shall have the authority to determine, upon
review of relevant information, the Fair Market Value of the Common Stock,
subject to the provisions of the Plan and irrespective of whether the Board
has appointed a Committee to administer the Plan.  The Board may delegate
this authority to the Committee.

              (d)    COMMITTEE'S INTERPRETATION OF THE PLAN.

                     The interpretation and construction by the Committee of
any provision of the Plan or of any Option granted hereunder shall be final
and binding on all parties claiming an interest in an Option granted under
the Plan. No member of the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any Option.

              (e)    COMMITTEE PROCEDURES.

              The Committee shall designate one of its members as chairman.
The Committee


                                       28

<PAGE>

may hold meetings at such times and places as it shall determine.  The acts
of a majority of the Committee's members present at meetings at which a
quorum exists, or acts reduced to or approved in writing by all of the
Committee's members, shall be valid acts of the Committee.

       4.     PARTICIPATION.

              (a)    ELIGIBILITY.

                     The Optionees shall be such persons as the Committee may
select from among the Employees, provided that Consultants are not eligible
to receive Incentive Stock Options.

              (b)    TEN PERCENT STOCKHOLDERS.

                     Any Employee who owns more than 10% of the total
combined voting power of all classes of outstanding stock of the Corporation
or any Affiliate shall not be eligible to receive an Option unless:

                     (i)    the Exercise Price of the Shares subject to such
Option when granted is at least 110% of the Fair Market Value of such Shares,
and

                     (ii)   such Option by its terms is not exercisable after
the expiration of five years from the date of grant.

              (c)    STOCK OWNERSHIP.

                     For purposes of Section 4(b), in determining stock
ownership, an Employee shall be considered as owning the stock owned,
directly or indirectly, by or for his or her brothers and sisters, spouse,
ancestors, and lineal descendants.  Stock owned, directly or indirectly, by
or for a corporation, partnership, estate, or trust shall be considered as
being owned proportionately by or for its stockholders, partners, or
beneficiaries, respectively.  Stock with respect to which such Employee holds
an Option will be counted in the determination of stock ownership for
purposes of the above Section 4(b).

              (d)    OUTSTANDING STOCK.

                     For purposes of Section 4(b), the term "outstanding
stock" shall include all stock actually issued and outstanding immediately
after the grant of the Option to the Optionee but shall not include any share
for which an Option is exercisable by any person.

       5.     STOCK.

              (a)    SHARES SUBJECT TO THE PLAN.


                                       29

<PAGE>

                     The aggregate number of Shares which may be issued upon
exercise of Options under the Plan shall not exceed Four Million (4,000,000)
shares of Common Stock, subject to adjustment pursuant to Section 9 hereof.

              (b)    OPTIONS NOT TO EXCEED SHARES AVAILABLE.

                     The number of Shares for which an Option is exercisable
at any time shall not exceed the number of Shares remaining available for
issuance under the Plan.  If any Option expires or is terminated, the number
of Shares for which such Option was exercisable may be made exercisable
pursuant to other Options under the Plan.  The limitations established by
this Section 5(b) shall be subject to adjustment in the manner provided in
Section 9 hereof upon the occurrence of an event specified therein.

       6.     TERMS AND CONDITIONS OF OPTIONS.

              (a)    STOCK OPTION AGREEMENTS.

                     Options shall be evidenced by a written stock option
agreement between the Optionee and the Corporation either in the form of a
Non-statutory Stock Option Agreement (attached hereto as EXHIBIT A), in the
form of an Incentive Stock Option Agreement (attached hereto as EXHIBIT B) or
in such other form as the Committee shall from time to time determine.  No
Option or purported Option shall be a valid and binding obligation of the
Corporation unless so evidenced in writing.

              (b)    NUMBER OF SHARES.

                     Each stock option agreement shall state the number of
Shares for which the Option is exercisable and shall provide for the
adjustment thereof in accordance with Section 9 hereof.  Each stock option
agreement will also specify whether the option is a Non-statutory Stock
Option or an Incentive Stock Option.  The maximum number of shares with
respect to which options may be granted to any one Optionee, in the aggregate
in any calendar year, shall not exceed One Million (1,000,000) Shares.


                                       30

<PAGE>

              (c)    VESTING.

                     An Optionee may not exercise his or her Option for any
Shares until the Option, in regard to such Shares, has vested.  Each stock
option agreement shall include a vesting schedule which shall show when the
Option becomes exercisable, subject only to the requirement that each Option
granted under this Plan must vest at a rate of not less than 20% per year
(with the first 20% vesting not later than the first anniversary of the date
on which the Options in question were first granted (the "Grant Date"), and
the last 20% vesting not later than the fifth anniversary of said Grant
Date).  The vesting schedule shall not impose upon the Corporation or any
Affiliate any obligation to retain the Optionee in its employ or under
contract for any period or otherwise change the employment-at-will status of
an Optionee who is an Employee.

              (d)    LAPSE OF OPTIONS.

                     Each stock option agreement shall state the time or
times when the Option covered thereby lapses and becomes unexercisable in
part or in full.  An Option shall lapse on the earliest of the following
events (unless otherwise determined by the Committee and reflected in an
option agreement):

                     (i)    The tenth anniversary of the date of grant of the
Option;

                     (ii)   The first anniversary of the Optionee's death;

                     (iii)  The first anniversary of the date when the
Optionee ceases to be an Employee due to total and permanent disability,
within the meaning of Section 22(e)(3) of the Code;

                     (iv)   On the date provided in Section 6(h)(i), unless
with respect to a Non-statutory Stock Option, the Committee otherwise extends
such period before the applicable expiration date;

                     (v)    On the date provided in Section 9 for a
transaction described in such Section;

                     (vi)   The date the Optionee files or has filed against
him or her a petition in bankruptcy; or

                     (vii)  The expiration date specified in the Optionee's
stock option agreement.

              (e)    EXERCISE PRICE.

                     Each stock option agreement shall state the Exercise
Price for the Shares for which the Option is exercisable.  Subject to Section
4(b), the Exercise Price of an Incentive Stock Option and a Non-statutory
Stock Option shall, when granted, be not less than 100% and


                                       31

<PAGE>

85% of the Fair Market Value of the Shares for which the Option is
exercisable, respectively, and not less than the par value of the Shares.

              (f)    MEDIUM AND TIME OF PAYMENT.

                     The Purchase Price shall be payable in full in cash upon
the exercise of an Option, provided, however, that the Committee may instead
allow the Optionee to pay the Purchase Price:

                     (i)    by surrendering Shares in good form for transfer,
owned by the Optionee for more than 12 months, and having a Fair Market Value
on the date of exercise equal to the Purchase Price;  or

                     (ii)   by delivery of a full recourse promissory note
("Note") made by the Optionee in the amount of the Purchase Price, bearing
interest, compounded semiannually, at a rate not less than the rate
determined under Section 7872 of the Code to insure that no "foregone
interest", as defined in such section, will accrue, together with the
delivery of a duly executed standard form security agreement securing the
Note by a pledge of the Shares purchased;  or

                     (iii)  in any combination of such consideration, or such
other consideration and method of payment for the issuance of Shares
permitted under applicable law, so long as the Fair Market Value of the
consideration so paid is not less than the Purchase Price.

                     The Committee or a stock option agreement may prescribe
requirements with respect to the exercise of Options, including the
submission by the Optionee of such forms and documents as the Committee may
require and the delivery by the Optionee of cash sufficient to satisfy
applicable withholding requirements.  The Committee may vary the exercise
requirements and procedures from time to time to facilitate, for example, the
broker-assisted exercise of Options.

              (g)    NON-TRANSFERABILITY OF OPTIONS.

                     During the lifetime of the Optionee, the Option shall be
exercisable only by the Optionee or the Optionee's conservator or legal
representative and shall not be assignable or transferable except pursuant to
a qualified domestic relations order as defined by the Code.  In the event of
the Optionee's death, the Option shall not be transferable by the Optionee
other than by will or the laws of descent and distribution.

              (h)    TERMINATION OF EMPLOYMENT OTHER THAN BY DEATH OR
DISABILITY.

                     (i)    If an Optionee ceases to be an Employee for any
reason other than his or her death or disability, the Optionee shall have the
right, subject to the provisions of this Section 6, to exercise any Option
held by the Optionee at any time within ninety (90) days after his or her
termination of employment, but not beyond the otherwise applicable term of
the


                                       32

<PAGE>

Option and only to the extent that on such date of termination of employment
the Optionee's right to exercise such Option had vested.

                     (ii)   For purposes of this Section 6(h), the employment
relationship shall be treated as continuing intact while the Optionee is an
active employee of the Corporation or any Affiliate, or is on military leave,
sick leave, or other bona fide leave of absence to be determined in the sole
discretion of the Committee.  The preceding sentence notwithstanding, in the
case of an Incentive Stock Option, employment shall be deemed to terminate on
the date that the Optionee ceases active employment with the Corporation or
any Affiliate, unless the Optionee's reemployment rights are guaranteed by
statute or contract.

              (i)    DEATH OF OPTIONEE.

                     If an Optionee dies while an Employee, or after ceasing
to be an Employee but during the period while he or she could have exercised
an Option under Section 6(h), any Option granted to the Optionee may be
exercised, to the extent it had vested at the time of death and subject to
the Plan, at any time within 12 months after the Optionee's death, by the
executors or administrators of his or her estate or by any person or persons
who acquire the Option by will or the laws of descent and distribution, but
not beyond the otherwise applicable term of the Option.

              (j)    DISABILITY OF OPTIONEE.

                     If an Optionee ceases to be an Employee due to becoming
totally and permanently disabled within the meaning of Section 22(e)(3) of
the Code, any Option granted to the Optionee may be exercised to the extent
it had vested at the time of cessation and, subject to the Plan, at any time
within 12 months after the Optionee's termination of employment, but not
beyond the otherwise applicable term of the Option.

              (k)    RIGHTS AS A STOCKHOLDER.

                     An Optionee, or a transferee of an Optionee, shall have
no rights as a stockholder of the Corporation with respect to any Shares for
which his or her Option is exercisable until the date of the issuance of a
stock certificate for such Shares.  No adjustment shall be made for
dividends, ordinary or extraordinary or whether in currency, securities, or
other property, distributions, or other rights for which the record date is
prior to the date such stock certificate is issued, except as provided in
Section 9 hereof.

              (l)    MODIFICATION, EXTENSION, AND RENEWAL OF OPTIONS.

                     Within the limitations of the Plan, the Committee may
modify, extend or renew outstanding Options or accept the cancellation of
outstanding Options for the granting of new Options in substitution therefor.
Notwithstanding the preceding sentence, no modification of an Option shall,
without the consent of the Optionee, alter or impair any rights or
obligations under any Option previously granted.


                                       33

<PAGE>

              (m)    RULE 16b-3.

                     Options granted to persons who are subject to Section 16
of the Exchange Act shall comply with the applicable provisions of Rule 16b-3
promulgated thereunder and shall contain such additional conditions or
restrictions as may be required thereunder to qualify for the maximum
exemption from Section 16 of the Exchange Act with respect to the Plan's
transactions; provided, however, that this provision shall not apply if, at
the time of such option grant, the Plan, as it relates to such grant, is not
administered by a Committee consisting solely of Non-employee Directors.

              (n)    OTHER PROVISIONS.

                     The stock option agreements authorized under the Plan
may contain such other provisions which are not inconsistent with the terms
of the Plan, including, without limitation, restrictions upon the exercise of
the Option, as the Committee shall deem advisable.

       7.     $100,000 PER YEAR LIMITATION ON VESTING OF ISOs.

              To the extent that the Fair Market Value of Shares (determined
for each Share as of the date of grant of the Option covering such Share)
subject to Options granted under the Plan (or any other plan of the
Corporation or any Affiliate) which are designated as Incentive Stock Options
and which become exercisable by an Optionee for the first time during a
single calendar year exceeds $100,000, the Option(s) (or portion thereof)
covering such Shares shall be re-characterized (to the extent of such excess
over $100,000) as a Non-statutory Stock Option.  In determining which
Option(s) shall be treated as Non-statutory Stock Options under the preceding
sentence, the Options shall be taken into account in the order granted, with
the result that a later granted Option shall be re-characterized as a
Non-statutory Stock Option prior to such re-characterization of a previously
granted Option.

       8.     TERM OF PLAN.

              Options may be granted pursuant to the Plan until a date no
later than ten years following the Effective Date, and all Options which are
outstanding on such date shall remain in effect until they are exercised or
expire by their respective terms.  The Plan shall expire for all purposes on
the date that is 20 years following the Effective Date.


                                       34

<PAGE>

       9.     RECAPITALIZATION, TAKEOVERS, AND LIQUIDATIONS.

              (a)    REORGANIZATIONS.

                     The number of Shares covered by the Plan, as provided in
Section 5 hereof, and the number of Shares for which each Option is
exercisable shall be proportionately adjusted for any increase or decrease in
the number of issued Shares resulting from a stock split, a reverse stock
split, the payment of a stock dividend, re-capitalization, combination or
reclassification of the Corporation's stock or any other event which results
in an increase or decrease in the number of issued Shares effected without
receipt of consideration by the Corporation, and the Exercise Price shall be
proportionately increased in the event the number of Shares subject to such
Option are decreased and shall be proportionately decreased in the event the
number of Shares subject to such Option are increased.  For the purposes of
this Section 9(a), the conversion of any convertible securities of the
Corporation shall not be deemed to have been "effected without receipt of
consideration."  Adjustments shall be made by the Board, whose determination
in that respect shall be final, binding and conclusive.  Except as expressly
provided herein, no issuance by the Corporation of shares of stock of any
class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of Shares subject to an Option.

              (b)    LIQUIDATION.

                     In the event of the dissolution or liquidation of the
Corporation, each Option shall terminate immediately prior to the
consummation of such action.  The Committee shall notify the Optionee not
less than 15 days prior to the proposed consummation of a pending dissolution
or liquidation, and such Option shall be exercisable as to all Shares which
are vested prior to expiration until immediately prior to the consummation of
such action.

              (c)    MERGER.

                     In the event of (i) a proposed merger of the Corporation
with or into another corporation, as a result of which the Corporation is not
the surviving corporation and (ii) the Option is not assumed or an equivalent
option substituted by the successor corporation or a parent or subsidiary of
the successor corporation, then in such case the Option shall terminate
immediately prior to the consummation of such transaction.  The Committee
shall notify the Optionee not less than 15 days prior to the proposed
consummation of such transaction, and the Option shall be exercisable as to
all Shares which are vested prior to expiration and until immediately prior
to the consummation of such transaction.

              (d)    DETERMINATION BY COMMITTEE.

                     All adjustments described in this Section 9 shall be
made by the Committee, whose determination shall be conclusive and binding on
all persons.


                                       35

<PAGE>

              (e)    LIMITATION ON RIGHTS OF OPTIONEE.

                     Except as expressly provided in this Section 9, no
Optionee shall have any rights by reason of any payment of any stock
dividend, stock split or reverse stock split or any other increase or
decrease in the number of shares of stock of any class, or by reason of any
reorganization, consolidation, dissolution, liquidation, merger, exchange,
split-up or reverse split-up, or spin-off of assets or stock of another
corporation.  Any issuance by the Corporation of Shares, Options or
securities convertible into Shares or Options shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number or
Exercise Price of the Shares for which an Option is exercisable.
Notwithstanding the foregoing, if the Corporation enters into a transaction
affecting the Corporation's capital stock or distributions to the holders of
its capital stock for which a revision in the terms of each Option is not
required pursuant to this Section 9, the Committee shall have the right, but
not the obligation, to revise the terms of each Option in a manner that the
Committee, in its sole discretion, deems fair and reasonable given the
transaction involved.  If necessary or appropriate in connection with such
transaction, the Committee may declare that any Option shall terminate as of
a date fixed by the Committee and give each Optionee the right to exercise
his or her Option in whole or in part, including exercise as to Shares to
which the Option would not otherwise be exercisable.

              (f)    NO RESTRICTION ON RIGHTS OF CORPORATION.

                     The grant of an Option shall not affect or restrict in
any way the right or power of the Corporation to make adjustments,
reclassifications, reorganizations, or changes of its capital or business
structure, or to merge or consolidate, or to dissolve, liquidate, sell, or
transfer all or any part of its business or assets.

       10.    SECURITIES LAW REQUIREMENTS.

              (a)    LEGALITY OF ISSUANCE.

                     No Shares shall be issued upon the exercise of any
Option unless and until the Corporation has determined that: (i) the
Corporation and the Optionee have taken all actions required to exempt the
issuance of the Shares from the registration requirements under the
Securities Act of 1933, as amended (the "Act"), or the Corporation and the
Optionee will determine that the registration requirements of the Act do not
apply to such exercise or issuance; (ii) any applicable listing requirement
of any stock exchange on which the Common Stock is listed has been satisfied;
and (iii) any other applicable provision of state or Federal law has been
satisfied.


                                       36

<PAGE>

              (b)    RESTRICTIONS ON TRANSFER; REPRESENTATIONS OF OPTIONEE;
LEGENDS.

                     Regardless of whether the offering and sale of Shares
has been registered under the Act or has been registered or qualified under
the securities laws of any state, the Corporation may impose restrictions
upon the sale, pledge, or other transfer of such Shares, including the
placement of appropriate legends on stock certificates, if, in the judgment
of the Corporation and its counsel, such restrictions are necessary or
desirable in order to achieve compliance with the provisions of the Act, the
securities laws of any state, or any other law.  If the sale of Shares is not
registered under the Act and the Corporation will determine that the
registration requirements of the Act apply to such sale, but an exemption is
available which requires an investment representation or other
representation, the Optionee will be required, as a condition to purchasing
Shares by exercise of his or her Option, to represent that such Shares are
being acquired for investment, and not with a view to the sale or
distribution thereof, except in compliance with the Act, and to make such
other representations as are deemed necessary or appropriate by the
Corporation and its counsel.  Stock certificates evidencing Shares acquired
pursuant to an unregistered transaction to which the Act applies will bear a
restrictive legend substantially in the following form and such other
restrictive legends as are required or deemed advisable under the Plan or the
provisions of any applicable law.

       "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR QUALIFIED UNDER
THE SECURITIES LAWS OF ANY STATE.  THESE SHARES HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO OR FOR SALE IN CONNECTION WITH ANY
DISTRIBUTION THEREOF, AND MAY NOT BE SOLD, MORTGAGED, PLEDGED, HYPOTHECATED
OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION UNDER THE ACT
AND/OR QUALIFICATION UNDER ANY APPLICABLE STATE SECURITIES LAWS, OR WITHOUT
AN OPINION OF COUNSEL ACCEPTABLE TO THE CORPORATION AND ITS COUNSEL THAT SUCH
REGISTRATION OR QUALIFICATION IS NOT REQUIRED."

                     Any determination by the Corporation and its counsel in
connection with any of the matters set forth in this Section 10 will be
conclusive and binding on all persons:

              (c)    REGISTRATION OR QUALIFICATION OF SECURITIES.

                     The Corporation may, but will not be obligated to,
register or qualify the sale of Shares under the Act or any other applicable
law.  In connection with any such registration or qualification, the
Corporation will provide each Optionee with such information required
pursuant to all applicable laws and regulations.

              (d)    EXCHANGE OF CERTIFICATES.

                     If, in the opinion of the Corporation and its counsel,
any legend placed on a stock certificate representing Shares issued hereunder
is no longer required, the Optionee or the holder of such certificate will be
entitled to exchange such certificate for a certificate


                                       37

<PAGE>

representing the same number of Shares but without such legend.

              (e)    MARKET STANDOFF AGREEMENT.

                     By acceptance of an Option, each Optionee agrees that if
so requested by the Corporation or any representative of the underwriters in
connection with any registration of any securities of the Corporation under
the Act, Optionee shall not sell or otherwise transfer any of the Shares or
other securities of the Corporation during the period requested by the
Corporation or the representative of the underwriters, as the case may be.
Each Optionee agrees that the Corporation may impose stop-transfer
instructions with respect to the securities subject to the foregoing
restrictions.

       11.    EXERCISE OF UNVESTED OPTIONS.

              The Committee may grant to any Optionee the right to exercise
any Option prior to the complete vesting of such Option.  Without limiting
the generality of the foregoing, the Committee may provide that if an Option
is exercised prior to having completely vested, the Shares issued upon such
exercise shall remain subject to vesting at the same rate as under the Option
so exercised and shall be subject to a right, but not an obligation, of
repurchase by the Corporation with respect to all unvested Shares if the
Optionee ceases to be an Employee for any reason.  For the purposes of
facilitating the enforcement of any such right of repurchase, at the request
of the Committee, the Optionee shall enter into the Joint Escrow Instructions
with the Corporation and deliver every certificate for his or her unvested
Shares with a stock power executed in blank by the Optionee and by the
Optionee's spouse, if required for transfer.

       12.    AMENDMENT OF THE PLAN.

              The Board or the Committee may, from time to time, terminate,
suspend or discontinue the Plan, in whole or in part, or revise or amend the
Plan in any respect whatsoever including, but not limited to, the adoption of
any amendment(s) deemed necessary or advisable to qualify the Options under
rules and regulations promulgated by the Securities and Exchange Commission
with respect to Employees who are subject to the provisions of Section 16 of
the Exchange Act or to correct any defect or supply any omission or reconcile
any inconsistency in the Plan or in any Option granted thereunder, without
approval of the stockholders of the Corporation, but without the approval of
the Corporation's stockholders, no such revision or amendment shall:

              (a)    Increase the number of Shares subject to the Plan, other
than any increase pursuant to Section 9;

              (b)    Materially modify the requirements as to eligibility for
participation in the Plan;


                                       38

<PAGE>

              (c)    Materially increase the benefits accruing to Optionees
under the Plan;

              (d)    Extend the term of the Plan; or

              (e)    Amend this Section to defeat its purpose.

No amendment, termination or modification of the Plan shall affect any Option
theretofore granted in any material adverse way without the consent of the
Optionee.

       13.    APPLICATION OF FUNDS.

              The proceeds received by the Corporation from the sale of
Common Stock pursuant to the exercise of an Option shall be used for general
corporate purposes.

       14.    APPROVAL OF STOCKHOLDERS.

              The Plan shall be subject to approval by the affirmative vote
of the holders of a majority of all classes of the outstanding shares present
and entitled to vote at the first meeting of stockholders of the Corporation
following the adoption of the Plan or by written consent, and in no event
later than one (1) year following the Effective Date.  Prior to such
approval, Options may be granted but shall not be exercisable.  Any amendment
described in Section 12(a) to (d) shall also be subject to approval by the
Corporation's stockholders.

       15.    WITHHOLDING OF TAXES.

              In the event the Corporation or an Affiliate determines that it
is required to withhold Federal, state, or local taxes in connection with the
exercise of an Option or the disposition of Shares issued pursuant to the
exercise of an Option, the Optionee or any person succeeding to the rights of
the Optionee, as a condition to such exercise or disposition, may be required
to make arrangements satisfactory to the Corporation or the Affiliate to
enable it to satisfy such withholding requirements.

              Alternatively, the Corporation may issue or transfer Shares net
of the number of Shares sufficient to satisfy withholding tax requirements.
For withholding tax purposes, the Shares will be valued on the date the
withholding obligation is incurred.


                                       39

<PAGE>

       16.    RIGHTS AS AN EMPLOYEE.

              Neither the Plan nor any Option granted pursuant thereto shall
be construed to give any person the right to remain in the employ of the
Corporation or any Affiliate, or to affect the right of the Corporation or
any Affiliate to terminate such individual's employment at any time with or
without cause.  The grant of an Option shall not entitle the Optionee to, or
disqualify the Optionee from, participation in the grant of any other Option
under the Plan or participation in any other benefit plan maintained by the
Corporation or any Affiliate.

       17.    DISAVOWAL OF REPRESENTATIONS, UNDERTAKINGS OR CREATION OF
IMPLIED RIGHTS.

              In adopting and maintaining the Plan and granting options
hereunder, neither the Corporation nor any Affiliate makes any
representations or undertakings with respect to the initial qualification or
treatment of Options under Federal or state tax or securities laws.  The
Corporation and each Affiliate expressly disavows the creation of any rights
in Employees, Optionees, or beneficiaries of any obligations on the part of
the Corporation, any Affiliate or the Committee, except as expressly provided
herein.


       18.    INSPECTION OF RECORDS.

              Copies of the Plan, records reflecting each Optionee's Option,
and any other documents and records which an Optionee is entitled by law to
inspect shall be open to inspection by the Optionee and his or her duly
authorized representative at the office of the Committee at any reasonable
business hour.

       19.    INFORMATION TO OPTIONEES.

              Each Optionee shall be provided with such information regarding
the Corporation as the Committee from time to time deems necessary or
appropriate; provided, however, that each Optionee shall at all times be
provided with such information as is required to be provided from time to
time pursuant to applicable regulatory requirements, including, but not
limited to, any applicable requirements of the Securities and Exchange
Commission, the California Department of Corporations and other state
securities agencies.


                                       40