VERTICA SOFTWARE, INC.

                           2000 EQUITY INCENTIVE PLAN

                         AS ADOPTED ON DECEMBER 15, 2000


     1.   PURPOSE. The purpose of the 2000 Equity Incentive Plan (the "Plan") of
          -------
Vertica Software, Inc., a Colorado corporation (the "Company"), is to provide
incentives to attract, retain and motivate eligible persons whose present and
potential contributions are important to the success of the Company (as defined
below), by offering them an opportunity to participate in the Company's future
performance through awards of Options, Restricted Stock and Stock Bonuses (as
defined below).

     2.   DEFINITIONS. As used in the Plan, the following terms shall have the
          -----------
following meanings:


          "AFFILIATE" means any corporation that directly, or indirectly through
one or more intermediaries, controls or is controlled by, or is under common
control with, another corporation, where "control" (including the terms
"controlled by" and "under common control with") means the possession, direct or
indirect, of the power to cause the direction of the management and policies of
the corporation, whether through the ownership of voting securities, by contract
or otherwise.

          "AWARD" means any award under the Plan, including any Option,
Restricted Stock or Stock Bonus.

          "AWARD AGREEMENT" means, with respect to each Award, the signed
written agreement between the Company and the Participant setting forth the
terms and conditions of the Award.

          "BOARD" means the Board of Directors of the Company.

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

          "COMMITTEE" means the committee appointed by the Board to administer
the Plan, or if no committee is so appointed, the Board.

          "COMPANY" means Vertica Software, Inc., a corporation organized under
the laws of the State of Colorado, or any successor corporation.

          "DISABILITY" means a disability, as determined by the Committee, which
results in a Participant's termination of employment with the Company and all
Affiliates.


                                       1

<PAGE>


          "EFFECTIVE DATE" means the date on which the Plan is adopted by the
Board of Directors.

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

          "EXERCISE PRICE" means the price at which a holder of an Option may
purchase the Shares issuable upon exercise of the Option.

          "FAIR MARKET VALUE" means, as of any date, the value of a share of the
Company's Common Stock determined as follows:

               (a)  if such Common Stock is then quoted on the Nasdaq National
                    Market, its last reported sale price on the Nasdaq National
                    Market or, if no such reported sale takes place on such
                    date, the average of the closing bid and asked prices;

               (b)  if such Common Stock is publicly traded and is then listed
                    on a national securities exchange, the last reported sale
                    price or, if no such reported sale takes place on such date,
                    the average of the closing bid and asked prices on the
                    principal national securities exchange on which the Common
                    Stock is listed or admitted to trading;

               (c)  if such Common Stock is publicly traded but is not quoted on
                    the Nasdaq National Market nor listed or admitted to trading
                    on a national securities exchange, the average of the
                    closing bid and asked prices on such date, as reported by
                    The Wall Street Journal, for the over-the-counter market; or

               (d)  if none of the foregoing is applicable, by the Board of
                    Directors of the Company in its sole discretion.

          "ISO" means an Option that is an incentive stock option, as defined in
section 422 of the Code and as described in Section 6 and the Stock Option
Agreement.

          "INSIDER" means an officer or director of the Company or any other
person whose transactions in the Company's Common Stock are subject to Section
16 of the Exchange Act.

          "NQSO" means an Option that is not an ISO, as described in Section 6
and the Stock Option Agreement.

          "OPTION" means an award of an option to purchase Shares pursuant to
Section 6.

          "Parent" means any corporation (other than the Company) in an unbroken
chain of corporations ending with the Company, if at the time of the granting of
an Award under the Plan, each of such corporations other than the Company owns
stock possessing fifty percent

                                       2

<PAGE>

(50%), or more, of the total combined voting power of all classes of stock in
one of the other corporations in such chain.

          "PARTICIPANT" means a person who receives an Award under the Plan.

          "PLAN" means this Vertica Software, Inc. 2000 Equity Incentive Plan,
as amended from time to time.

          "RESTRICTED STOCK AWARD" means an award of Shares pursuant to Section
7.

          "SEC" means the Securities and Exchange Commission.

          "SECURITIES ACT" means the Securities Act of 1933, as amended.

          "SHARES" means shares of the Company's Common Stock reserved for
issuance under the Plan, as adjusted pursuant to Sections 3 and 19, and any
successor security.

          "STOCK BONUS" means an award of Shares, or cash in lieu of Shares,
pursuant to Section 8.

          "STOCK OPTION AGREEMENT" means the Award Agreement that describes the
Option.

          "SUBSIDIARY" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if, at the time of
granting of the Award, each of the corporations other than the last corporation
in the unbroken chain owns stock possessing fifty percent (50%), or more, of the
total combined voting power of all classes of stock in one of the other
corporations in such claim.

          "TERMINATION" or "TERMINATED" means, for purposes of the Plan with
respect to a Participant, that the Participant has ceased to provide services as
an employee, director, consultant or adviser, to the Company or a Parent,
Subsidiary or Affiliate of the Company, except in the case of sick leave,
military leave, or any other leave of absence approved by the Committee;
provided, however, that such leave is for a period of not more than ninety (90)
days, or reinstatement upon the expiration of such leave is guaranteed by
contract or statute. The Committee shall have sole discretion to determine
whether a Participant has ceased to provide services and the effective date on
which the Participant ceased to provide services (the "Termination Date").

     3.   SHARES SUBJECT TO THE PLAN.
          --------------------------

          3.1. NUMBER OF SHARES AVAILABLE. Subject to Sections 3.2 and 19, the
               --------------------------
total number of Shares reserved and available for grant and issuance pursuant to
the Plan shall be three million (3,000,000) Shares. Subject to Sections 3.2 and
19, Shares shall again be available for grant and issuance in connection with
future Awards under the Plan that: (a) are subject to issuance upon exercise of
an Option but cease to be subject to such Option for any reason other than
exercise of such Option; (b) are subject to an Award granted hereunder but are
forfeited; or

                                       3

<PAGE>

(c) are subject to an Award that otherwise terminates without
Shares being issued. In any given year, no Participant may receive awards
covering more than three million Shares. Such number of Shares shall be adjusted
in accordance with Sections 3.2 and 19.

          3.2. ADJUSTMENT OF SHARES. In the event that the number of outstanding
               --------------------
Shares is changed by a stock dividend, recapitalization, stock split, reverse
stock split, subdivision, combination, reclassification or similar change in the
capital structure of the Company without consideration, then (a) the number of
Shares reserved for issuance under the Plan; (b) the Exercise Prices of and
number of Shares subject to outstanding Options; and (c) the number of Shares
subject to other outstanding Awards shall be proportionately adjusted, subject
to any required action by the Board or the shareholders of the Company and
compliance with applicable securities laws; provided, however, that fractions of
a Share shall not be issued but shall either be paid in cash at Fair Market
Value or shall be rounded up to the nearest Share, as determined by the
Committee; and provided further, that, except as provided herein, no issuance by
the Company of shares of stock of any class or securities convertible into
shares of stock of any class will affect, and no adjustment by reason thereof
will be made with respect to, the number or price of Shares subject to an Award.

     4.   ELIGIBILITY. ISOs (as defined in Section 6 below) may be granted
          -----------
only to employees (including officers and directors who are also employees) of
the Company, its Parent or Subsidiaries. All other Awards may be granted to
employees, officers, directors, consultants and advisors of the Company or any
Parent, Subsidiary or Affiliate of the Company; provided, however, such
consultants and advisors render bona fide services not in connection with the
offer and sale of securities in a capital-raising transaction. A person may be
granted more than one Award under the Plan.

     5.   ADMINISTRATION.
          --------------

          5.1. COMMITTEE AUTHORITY. The Plan shall be administered by the
               -------------------
Committee or the Board acting as the Committee. Subject to the general purposes,
terms and conditions of the Plan, and to the direction of the Board, the
Committee shall have full power to implement and carry out the Plan. The
Committee shall have the authority to:

               (a)  construe and interpret the Plan, any Award Agreement and any
                    other agreement or document executed pursuant to the Plan;

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

               (c)  select persons to receive Awards;

               (d)  determine the form and terms of Awards;

               (e)  determine the number of Shares or other consideration
                    subject to Awards;

                                       4

<PAGE>


               (f)  determine whether Awards will be granted singly, in
                    combination, in tandem with, in replacement of, or as
                    alternatives to, other Awards under the Plan or any other
                    incentive or compensation plan of the Company or any Parent,
                    Subsidiary or Affiliate of the Company;

               (g)  grant waivers of Plan or Award conditions;

               (h)  determine the vesting, exercisability and payment of Awards;

               (i)  correct any defect, supply any omission, or reconcile any
                    inconsistency in the Plan, any Award or any Award Agreement;

               (j)  determine whether an Award has been earned;

               (k)  accelerate the exercisability of any Award; and

               (l)  make all other determinations necessary or advisable for the
                    administration of the Plan.

          5.2. COMMITTEE DISCRETION. Any determination made by the Committee
               -------------------
with respect to any Award shall be made in its sole discretion at the time of
grant of the Award or, unless in contravention of any express term of the Plan
or Award, at any later time, and such determination shall be final and binding
on the Company and all persons having an interest in any Award under the Plan.
The Committee may delegate to one or more officers of the Company some or all of
its power and authority hereunder; provided, however, that the Committee may not
delegate its authority with regard to any matter or action affecting an officer
who is subject to Section 16 of the Exchange Act.

          5.3  EXCHANGE ACT REQUIREMENTS. If the Company is subject to the
               -------------------------
Exchange Act, the Company will take appropriate steps to comply with the
non-employee director requirements of Section 16(b) of the Exchange Act, and
Rule 16b-3 thereunder, including but not limited to, the appointment by the
Board of a Committee consisting of not less than two (2) persons (who are
members of the Board), each of whom is a non-employee director.

     6.   OPTIONS. The Committee may grant Options to eligible persons and shall
          -------
determine whether such Options shall be ISOs or NQSOs, the number of Shares
subject to the Option, the Exercise Price of the Option, the period during which
the Option may be exercised, and all other terms and conditions of the Option,
subject to the following:

          6.1. FORM OF OPTION GRANT. Each Option granted under the Plan shall be
               --------------------
evidenced by an Award Agreement which shall expressly identify the Option as an
ISO or NQSO ("Stock Option Agreement"), and be in such form and contain such
provisions (which need not be the same for each Participant) as the Committee
shall from time to time approve, and which shall comply with and be subject to
the terms and conditions of the Plan.

                                       5

<PAGE>


          6.2. DATE OF GRANT. The date of grant of an Option shall be the date
               -------------
on which the Committee makes the determination to grant such Option, unless
otherwise specified by the Committee. The Stock Option Agreement and a copy of
the Plan will be delivered to the Participant within a reasonable time after the
granting of the Option.


          6.3. EXERCISE PERIOD. Options shall be exercisable within the times or
               ---------------
upon the events determined by the Committee as set forth in the Stock Option
Agreement; provided, however, that no Option shall be exercisable after the
expiration of ten (10) years from the date the Option is granted, and provided
further that no ISO granted to a person who directly or by attribution owns more
than ten percent (10%) of the total combined voting power of all classes of
stock of the Company or any Parent or Subsidiary of the Company ("Ten Percent
Shareholder") shall be exercisable after the expiration of five (5) years from
the date the ISO is granted. The Committee also may provide for the exercise of
Options to become exercisable at one time or from time to time, periodically or
otherwise, in such number or percentage as the Committee determines.

          6.4. EXERCISE PRICE. The Exercise Price shall be determined by the
               --------------
Committee when the Option is granted and may not be less than eighty-five
percent (85%) of the Fair Market Value of the Shares on the date of grant;
provided that (i) the Exercise Price of an ISO shall be not less than one
hundred percent (100%) of the Fair Market Value of the Shares on the date of
grant; and (ii) the Exercise Price of any ISO and granted to a Ten Percent
Shareholder shall not be less than one hundred ten percent (110%) of the Fair
Market Value of the Shares on the date of grant. Payment for the Shares
purchased may be made in accordance with Section 9 of the Plan.

          6.5. METHOD OF EXERCISE. Options may be exercised only by delivery t
               ------------------
the principal office of the Company of a written stock option exercise agreement
(the "Exercise Agreement"), together with payment in full of the Exercise Price
for the number of Shares being purchased. The Exercise Agreement must be in a
form approved by the Committee (which need not be the same for each Participant)
and must state (a) the number of Shares being purchased, (b) the restrictions
imposed on the Shares, if any, and (c) such representations and agreements
regarding Participant's investment intent and access to information and other
matters, if any, as may be required or desirable by the Company to comply with
applicable securities laws.

          6.6. TERMINATION. Notwithstanding the exercise periods set forth in
               -----------
the Stock Option Agreement, exercise of an Option shall always be subject to the
following:

               (a)  If the Participant is Terminated for any reason except death
                    or Disability, then the Participant may exercise such
                    Participant's Options, only to the extent that such Options
                    would have been exercisable on the Termination Date,

                    (i)  with respect to an ISO, no later than three (3) months
                         after the Termination Date (or such shorter time period
                         as may

                                       6

<PAGE>

                         be specified in the Stock Option Agreement), but in any
                         event, no later than the expiration date of the
                         Options; and

                    (ii) with respect to a NQSO, no later than six (6) months
                         after the Termination Date (or such shorter time period
                         as may be specified in the Stock Option Agreement), but
                         in any event, no later than the expiration date of the
                         Options.

               (b)  If the Participant is terminated because of death or
                    Disability (or the Participant dies within three (3) months
                    of such termination), then the Participant's Options may be
                    exercised only to the extent that such Options would have
                    been exercisable by the Participant on the Termination Date
                    and must be exercised by the Participant (or the
                    Participant's legal representative or authorized assignee)
                    no later than twelve (12) months after the Termination Date
                    (or such shorter time period as may be specified in the
                    Stock Option Agreement), but in any event no later than the
                    expiration date of the Options; provided, however, that in
                    the event of termination due to Disability other than as
                    defined in Section 22(e)(3) of the Code, any ISO that
                    remains exercisable after ninety (90) days after the date of
                    termination shall be deemed a NQSO.

          6.7. LIMITATIONS ON EXERCISE. The Committee may specify a reasonable
               -----------------------
minimum number of Shares that may be purchased on any exercise of an Option;
provided, however, that such minimum number will not prevent Participant from
exercising the Option for the full number of Shares for which it is then
exercisable.

          6.8. LIMITATIONS ON ISOS. The aggregate Fair Market Value (determined
               -------------------
as of the date of grant) of Shares with respect to which ISOs are exercisable
for the first time by a Participant during any calendar year (under the Plan or
under any other incentive stock option plan of the Company or any Affiliate,
Parent or Subsidiary of the Company) shall not exceed One Hundred Thousand
Dollars ($100,000). If the Fair Market Value of Shares on the date of grant with
respect to which ISOs are exercisable for the first time by a Participant during
any calendar year exceeds One Hundred Thousand Dollars ($100,000), the Options
for the first One Hundred Thousand Dollars ($100,000) worth of Shares to become
exercisable in such calendar year shall be ISOs and the Options for the amount
in excess of One Hundred Thousand Dollars ($100,000) that become exercisable in
that calendar year shall be NQSOs. In the event that the Code or the regulations
promulgated thereunder are amended after the Effective Date of the Plan to
provide for a different limit on the Fair Market Value of Shares permitted to be
subject to ISOs, such different limit shall be automatically incorporated herein
and shall apply to any Options granted after the effective date of such
amendment.

          6.9. MODIFICATION, EXTENSION OR RENEWAL. Subject to any required
               ----------------------------------
action by stockholders of the Company, the Committee may modify, extend or renew
outstanding Options and authorize the grant of new Options in substitution
therefor; provided, however, that any such

                                       7

<PAGE>

action may not, without the written consent of Participant, impair any of
Participant's rights under any Option previously granted. Any outstanding ISO
that is modified, extended, renewed or otherwise altered shall be treated in
accordance with Section 424(h) of the Code. The Committee may reduce the
Exercise Price of outstanding Options, without the consent of affected
Participants, by forwarding a written notice to them; provided, however, that
the Exercise Price may not be reduced below the minimum Exercise price that
would be permitted under Section 6.4 of the Plan for Options granted on the date
the action is taken to reduce the Exercise Price.

          6.10. NO DISQUALIFICATION. Notwithstanding any other provision in the
                -------------------
Plan, no term of the Plan relating to ISOs shall be interpreted, amended or
altered, nor shall any discretion or authority granted under the Plan be
exercised, so as to disqualify the Plan under Section 422 of the Code or,
without the consent of the Participant affected, to disqualify any ISO under
Section 422 of the Code.

     7.   RESTRICTED STOCK. A Restricted Stock Award is an offer by the
          ----------------
Company to sell to an eligible person Shares that are subject to restrictions.
The Committee shall determine to whom an offer will be made, the number of
Shares the person may purchase, the price to be paid (the "Purchase Price"), the
restrictions to which the Shares shall be subject, and all other terms and
conditions of the Restricted Stock Award, subject to the following:

          7.1. FORM OF RESTRICTED STOCK AWARD. All purchases under a Restricted
               ------------------------------
Stock Award made pursuant to the Plan shall be evidenced by an Award Agreement
("Restricted Stock Purchase Agreement") that shall be in such form (which need
not be the same for each Participant) as the Committee shall from time to time
approve, and shall comply with and be subject to the terms and conditions of the
Plan. The offer of Restricted Stock shall be accepted by the Participant's
execution and delivery of the Restricted Stock Purchase Agreement and full
payment for the shares to the Company within thirty (30) days from the date the
Restricted Stock Purchase Agreement is delivered to the person. If such person
does not execute and deliver the Restricted Stock Purchase Agreement along with
full payment for the Shares to the Company within thirty (30) days, then the
offer shall terminate, unless otherwise determined by the Committee.

          7.2. PURCHASE PRICE. The Purchase Price of Shares sold pursuant to a
               --------------
Restricted Stock Award shall be determined by the Committee and shall be at
least eighty-five percent (85%) of the Fair Market Value of the Shares on the
date the Restricted Stock Award is granted, except in the case of a sale to a
Ten Percent Shareholder, in which case the Purchase Price shall be one hundred
percent (110%) of the Fair Market Value. Payment of the Purchase Price may be
made in accordance with Section 9 of the Plan.

          7.3. RESTRICTIONS. Restricted Stock Awards shall be subject to such
               ------------
restrictions as the Committee may impose. The Committee may provide for the
lapse of such restrictions in installments and may accelerate or waive such
restrictions, in whole or in part, based on length of service, performance or
such other factors or criteria as the Committee may determine. Restricted Stock
Awards that the Committee intends to qualify under Code section 162(m) shall

                                       8

<PAGE>


be subject to a performance-based goal. Restrictions on such stock shall lapse
based on one or more of the following performance goals: stock price, market
share, sales increases, earnings per share, return on equity, cost reductions,
or any other similar performance measure established by the Committee. Such
performance measures shall be established by the Committee, in writing, no later
than the earlier of (a) ninety (90) days after the commencement of the
performance period with respect to which the Restricted Stock award is made and
(b) the date as of which twenty-five percent (25%) of such performance period
has elapsed.

     8.   STOCK BONUSES.
          -------------

          8.1. AWARDS OF STOCK BONUSES. A Stock Bonus is an award of
               -----------------------
Shares (which may consist of Restricted Stock) for services rendered to the
Company or any Parent, Subsidiary or Affiliate of the Company. A Stock Bonus may
be awarded for past services already rendered to the Company, or any Parent,
Subsidiary or Affiliate of the Company pursuant to an Award Agreement (the
"Stock Bonus Agreement") that shall be in such form (which need not be the same
for each Participant) as the Committee shall from time to time approve, and
shall comply with and be subject to the terms and conditions of the Plan subject
to Section 8.2 herein, a Stock Bonus may be awarded upon satisfaction of such
performance goals as are set out in advance in Participant's individual Award
Agreement (the "Performance Stock Bonus Agreement") that shall be in such form
(which need not be the same for each Participant) as the Committee shall from
time to time approve, and shall comply with and be subject to the terms and
conditions of the Plan. Stock Bonuses may vary from Participant to Participant
and between groups of Participants, and may be based upon such other criteria as
the Committee may determine.

          8.2. CODE SECTION 162(M). A Stock Bonus that the Committee intends to
               -------------------
qualify for the performance-based exception under Code section 162(m) shall only
be awarded based upon the attainment of one or more of the following performance
goals: stock price, market share, sales increases, earning per share, return on
equity, cost reductions, or any other similar performance measure established by
the Committee. Such performance measures shall be established by the Committee,
in writing, no later than the earlier of: (a) ninety (90) days after the
commencement of the performance period with respect to which the Stock Bonus
award is made; and (b) the date as of which twenty-five percent (25%) of such
performance period has elapsed.

          8.3. TERMS OF STOCK BONUSES. The Committee shall determine the number
               ----------------------
of Shares to be awarded to the Participant and whether such Shares shall be
Restricted Stock. If the Stock Bonus is being earned upon the satisfaction of
performance goals pursuant to a Performance Stock Bonus Agreement, then the
Committee shall determine: (a) the nature, length and starting date of any
period during which performance is to be measured (the "Performance Period") for
each Stock Bonus; (b) the performance goals and criteria to be used to measure
the performance, if any; (c) the number of Shares that may be awarded to the
Participant; and (d) the extent to which such Stock Bonuses have been earned.
Performance Periods may overlap and Participants may participate simultaneously
with respect to Stock Bonuses that are subject to different Performance Periods
and different performance goals and other criteria. The number of Shares may be
fixed or may vary in accordance with such performance goals and criteria as may

                                       9

<PAGE>

be determined by the Committee. The Committee may adjust the performance goals
applicable to the Stock Bonuses to take into account changes in law and
accounting or tax rules and to make such adjustments as the Committee deems
necessary or appropriate to reflect the impact of extraordinary or unusual
items, events or circumstances to avoid windfalls or hardships.

          8.4. FORM OF PAYMENT. The earned portion of a Stock Bonus may be paid
               ---------------
currently or on a deferred basis with such interest or dividend equivalent, if
any, as the Committee may determine. Payment may be made in the form of cash,
whole Shares, including Restricted Stock, or a combination thereof, either in a
lump sum payment or in installments, all as the Committee shall determine.

          8.5. TERMINATION DURING PERFORMANCE PERIOD. If a Participant is
               -------------------------------------
Terminated during a Performance Period for any reason, then such Participant
shall be entitled to payment (whether in Shares, cash or otherwise) with respect
to the Stock Bonus only to the extent earned as of the date of Termination in
accordance with the Performance Stock Bonus Agreement, unless the Committee
shall determine otherwise.

     9.   PAYMENT FOR SHARE PURCHASES.
          ---------------------------

          9.1. PAYMENT. Payment for Shares purchased pursuant to the Plan may be
               -------
made in cash (by check) or, where expressly approved for the Participant by the
Committee and where permitted by law:

               (a)  by cancellation of indebtedness of the Company to the
                    Participant;

               (b)  unless the Committee determines that such method of payment
                    would result in liability to the Participant under Section
                    16 of the Exchange Act and subject to such other limitations
                    and prohibitions as the Committee shall deem appropriate, by
                    surrender of Shares previously owned by the Participant that
                    have no restriction on their transfer;

               (c)  by tender of a full recourse promissory note having such
                    terms as may be approved by the Committee and bearing
                    interest at a rate sufficient to avoid imputation of income
                    under Sections 483 and 1274 of the Code; provided, however,
                    that Participants who are not employees of the Company shall
                    not be entitled to purchase Shares with a promissory note
                    unless the note is adequately secured by collateral other
                    than the Shares.

               (d)  by waiver of compensation due or accrued to Participant for
                    services rendered;

               (e)  by tender of property;

                                       10

<PAGE>


               (f)  with respect only to purchases upon exercise of an Option,
                    and provided that a public market for the Company's stock
                    exists:

                    i)   through a "same day sale" commitment from Participant
                         and a broker-dealer that is a member of the National
                         Association of Securities Dealers (an "NASD Dealer")
                         whereby the Participant irrevocably elects to exercise
                         the Option and to sell a portion of the Shares so
                         purchased to pay for the Exercise Price, and whereby
                         the NASD Dealer irrevocably commits upon receipt of
                         such Shares to forward the Exercise Price directly to
                         the Company; or

                    ii)  through a "margin" commitment from Participant and an
                         NASD Dealer whereby Participant irrevocably elects to
                         exercise the Option and to pledge the Shares so
                         purchased to the NASD Dealer in a margin account as
                         security for a loan from the NASD Dealer in the amount
                         of the Exercise Price, and whereby the NASD Dealer
                         irrevocably commits upon receipt of such Shares to
                         forward the exercise price directly to the Company; or

               (g)  by any combination of the foregoing.


          9.2. LOAN GUARANTIES. The Committee may help the Participant pay for
               ---------------
Shares purchased under the Plan by authorizing a guaranty by the Company of a
third-party loan to the Participant.

     10.  WITHHOLDING TAXES.
          -----------------

          10.1. WITHHOLDING GENERALLY. Whenever Shares are to be issued in
                ---------------------
satisfaction of Awards granted under the Plan, the Company may require the
Participant to remit to the Company an amount sufficient to satisfy federal,
FICA, state and local withholding tax requirements prior to the delivery of any
certificate or certificates for such Shares. Whenever, under the Plan, payments
in satisfaction of Awards are to be made in cash, such payment shall be net of
an amount sufficient to satisfy federal, FICA, state, and local withholding tax
requirements.

          10.2. STOCK WITHHOLDING. When, under applicable tax laws, a
                -----------------
Participant incurs tax liability in connection with the exercise or vesting of
any Award that is subject to tax withholding and the Participant is obligated to
pay the Company the amount required to be withheld, the Committee may allow the
Participant to satisfy the minimum withholding tax obligation by electing to
have the Company withhold from the Shares to be issued that number of Shares
having a Fair Market Value equal to the minimum amount required to be withheld,
determined on the date that the amount of tax to be withheld is to be determined
(the "Tax Date"). All

                                       11

<PAGE>

elections by a Participant to have Shares withheld for this purpose shall be
made in writing in a form acceptable to the Committee and shall be subject to
the following restrictions:

               (a)  the election must be made on or prior to the applicable Tax
                    Date;

               (b)  once made, then except as provided below, the election shall
                    be irrevocable as to the particular Shares as to which the
                    election is made;

               (c)  unless the Stock Option Agreement or Award Agreement
                    specifically provides the Participant with the right to
                    surrender or deliver shares, all elections shall be subject
                    to the prior consent of the Committee;

               (d)  if the Participant is an Insider who is subject to Section
                    16(b) of the Exchange Act, then stock withholding may occur
                    in accordance with the provisions of SEC Rule 16b-3 under
                    the Exchange Act.

               (e)  in the event that the Tax Date is deferred until six (6)
                    months after the delivery of Shares under Section 83(b) of
                    the Code, the Participant shall receive the full number of
                    Shares with respect to which the exercise occurs, but such
                    Participant shall be unconditionally obligated to tender
                    back to the Company the proper number of Shares on the Tax
                    Date.

     11.  PRIVILEGES OF STOCK OWNERSHIP.
          -----------------------------

          11.1. VOTING AND DIVIDENDS. No Participant shall have any of the
                --------------------
rights of a shareholder with respect to any Shares until the Shares are issued
to the Participant. After Shares are issued to the Participant, the Participant
shall be a shareholder and have all the rights of a shareholder with respect to
such Shares, including the right to vote and receive all dividends or other
distributions made or paid thereafter with respect to such Shares; provided,
however, that if such Shares are Restricted Stock, then any new, additional or
different securities the Participant may become entitled to receive with respect
to such Shares by virtue of a stock dividend, stock split or any other change in
the corporate or capital structure of the Company shall be subject to the same
restrictions as the Restricted Stock.

          11.2. FINANCIAL STATEMENTS. The Company shall provide financial
                --------------------
statements to each Participant prior to such Participant's purchase of Shares
under the Plan, and to each Participant annually during the period such
Participant has Awards outstanding; provided, however, the Company shall not be
required to provide such financial statements to Participants whose services in
connection with the Company assure them access to equivalent information.

     12.  TRANSFERABILITY. Awards granted under the Plan, and any interest
          ---------------
therein, shall not be transferable or assignable by Participant, and may not be
made subject to execution,

                                       12

<PAGE>

attachment or similar process, otherwise than by will or by the laws of descent
and distribution or as consistent with the specific Plan and Award Agreement
provisions relating thereto. During the lifetime of the Participant an Award
shall be exercisable only by the Participant, and any elections with respect to
an Award, may be made only by the Participant (except in the event of the
Participant's Disability, in which event the exercise and elections may be made
by his legal guardian or representative).

     13.  RESTRICTIONS ON SHARES. At the discretion of the Committee, the
          ----------------------
Company may reserve to itself and/or its assignee(s) in the Award Agreement a
right of first refusal to purchase all Shares that a Participant (or a
subsequent transferee) may propose to transfer to a third party.

     14.  CERTIFICATES. All certificates for Shares or other securities
          ------------
delivered under the Plan shall be subject to such stock transfer orders, legends
and other restrictions as the Committee may deem necessary or advisable,
including restrictions under any applicable federal, state or foreign securities
law, or any rules, regulations and other requirements of the SEC or any stock
exchange or automated quotation system upon which the Shares may be listed.

     15.  ESCROW; PLEDGE OF SHARES. To enforce any restrictions on a
          ------------------------
Participant's Shares, the Committee may require the Participant to deposit all
certificates representing Shares, together with stock powers or other
instruments of transfer approved by the Committee, appropriately endorsed in
blank, with the Company or an agent designated by the Company to hold in escrow
until such restrictions have lapsed or terminated, and the Committee may cause a
legend or legends referencing such restrictions to be placed on the
certificates. Any Participant who is permitted to execute a promissory note as
partial or full consideration for the purchase of Shares under the Plan shall be
required to place and deposit with the Company all or part of the Shares so
purchased as collateral to secure the payment of Participant's obligation to the
Company under the promissory note; provided, however, that the Committee may
require or accept other or additional forms of collateral to secure the payment
of such obligation and, in any event, the Company shall have full recourse
against the Participant under the promissory note notwithstanding any pledge of
the Participant's Shares or other collateral. In connection with any pledge of
the Shares, Participant shall be required to execute and deliver a written
pledge agreement in such form as the Committee shall from time to time approve.
The Shares purchased with the promissory note may be released from the pledge on
a pro rata basis as the promissory note is paid.

     16.  EXCHANGE AND BUYOUT OF AWARDS. The Committee may, at any time or
          -----------------------------
from time to time, authorize the Company, with the consent of the respective
Participants, to issue new Awards in exchange for the surrender and cancellation
of any or all outstanding Awards. The Committee may at any time buy from a
Participant an Award previously granted with payment in cash, Shares (including
Restricted Stock) or other consideration, based on such terms and conditions as
the Committee and the Participant shall agree.

     17.  SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. An Award shall not be
          ----------------------------------------------
effective unless such Award is in compliance with all applicable federal and
state securities laws, rules and regulations of any governmental body, and the
requirements of any stock exchange or

                                       13
<PAGE>

automated quotation system upon which the Shares may then be listed, as they are
in effect on the date of grant of the Award and also on the date of exercise or
other issuance. Notwithstanding any other provision in the Plan, the Company
shall have no obligation to issue or deliver certificates for Shares under the
Plan prior to (a) obtaining any approvals from governmental agencies that the
Company determines are necessary or advisable, and/or (b) completion of any
registration or other qualification of such shares under any state or federal
law or ruling of any governmental body that the Company determines to be
necessary or advisable. The Company shall be under no obligation to register the
Shares with the SEC or to effect compliance with the registration, qualification
or listing requirements of any state securities laws, stock exchange or
automated quotation system, and the Company shall have no liability for any
inability or failure to do so.

     18.  NO OBLIGATION TO EMPLOY. Nothing in the Plan or any Award granted
          -----------------------
under the Plan shall confer or be deemed to confer on any Participant any right
to continue in the employ of, or to continue any other relationship with, the
Company or any Parent, Subsidiary or Affiliate of the Company or limit in any
way the right of the Company or any Parent, Subsidiary or Affiliate of the
Company to terminate Participant's employment or other relationship at any time,
with or without cause.

     19.  CORPORATE TRANSACTIONS.
          ----------------------

          19.1. ASSUMPTION OR REPLACEMENT OF AWARDS BY SUCCESSOR. In the event
                ------------------------------------------------
of (a) a merger or consolidation in which the Company is not the surviving
corporation (other than a merger or consolidation with a wholly-owned
subsidiary, a reincorporation of the Company in a different jurisdiction, or
other transaction in which there is no substantial change in the shareholders of
the company and the Awards granted under the Plan are assumed or replaced by the
successor corporation, which assumption shall be binding on all Participants);
(b) a dissolution or liquidation of the Company; (c) the sale of substantially
all of the assets of the Company; or (d) any other transaction which qualifies
as a "corporate transaction" under Section 424(a) of the Code wherein the
shareholders of the Company give up all of their equity interest in the Company
(except for the acquisition, sale or transfer of all or substantially all of the
outstanding shares of the Company), any or all outstanding Awards may be assumed
or replaced by the successor corporation (if any), which assumption or
replacement shall be binding on all Participants. In the alternative, the
successor corporation may substitute equivalent Awards or provide substantially
similar consideration to Participants as was provided to shareholders (after
taking into account the existing provisions of the Awards). The successor
corporation may also issue, in place of outstanding Shares of the Company held
by the Participant, substantially similar shares or other property subject to
repurchase restrictions no less favorable to the Participant.

     In the event such successor corporation (if any) refuses to assume or
substitute Options, as provided above, pursuant to a transaction described in
this Subsection 19.1, such Options shall expire on such transaction at such time
and on such conditions as the Board shall determine.

          19.2. OTHER TREATMENT OF AWARDS. Subject to any greater rights granted
                -------------------------
to Participants under the foregoing provisions of this Section 19, in the event
of the occurrence of

                                       14
<PAGE>

any transaction described in Section 19.1, any outstanding Awards shall be
treated as provided in the applicable agreement or plan of merger,
consolidation, dissolution, liquidation, sale of assets or other "corporate
transaction."

          19.3. ASSUMPTION OF AWARDS BY THE COMPANY. The Company, from
                -----------------------------------
time to time, also may substitute or assume outstanding awards granted by
another company, whether in connection with an acquisition of such other company
or otherwise, by either (a) granting an Award under the Plan in substitution of
such other company's award; or (b) assuming such award as if it had been granted
under the Plan if the terms of such assumed award could be applied to an Award
granted under the Plan. Such substitution or assumption shall be permissible if
the holder of the substituted or assumed award would have been eligible to be
granted an Award under the Plan if the other company had applied the rules of
the Plan to such grant. In the event the Company assumes an award granted by
another company, the terms and conditions of such award shall remain unchanged
(except that the exercise price and the number and nature of Shares issuable
upon exercise of any such option will be adjusted approximately pursuant to
Section 424(a) of the Code). In the event the Company elects to grant a new
Option rather than assuming an existing option, such new Option may be granted
with a similarly adjusted Exercise Price.

     20.  ADOPTION AND SHAREHOLDER APPROVAL. The Plan shall become effective o
          ---------------------------------
the Effective Date. The Plan shall be approved by the shareholders of the
Company (excluding Shares issued pursuant to this Plan), consistent with
applicable laws, within twelve months before or after the Effective Date. On the
Effective Date, the Board may grant Awards pursuant to the Plan; provided,
however, that: (a) no Option may be exercised prior to initial shareholder
approval of the Plan; (b) no Option granted pursuant to an increase in the
number of Shares approved by the Board shall be exercised prior to the time such
increase has been approved by the shareholders of the Company; and (c) in the
event that shareholder approval is not obtained within the time period provided
herein, all Awards granted hereunder shall be canceled, any Shares issued
pursuant to any Award shall be canceled and any purchase of Shares hereunder
shall be rescinded.

     21.  TERM OF PLAN. The Plan will terminate ten (10) years from the
          ------------
Effective Date or, if earlier, the date of shareholder approval of the Plan.

     22.  AMENDMENT OR TERMINATION OF PLAN. The Board may at any time terminate
          --------------------------------
or amend the Plan in any respect, including without limitation amendment of any
form of Award Agreement or instrument to be executed pursuant to the Plan;
provided, however, that the Board shall not, without the approval of the
shareholders of the Company, amend the Plan in any manner that requires such
shareholder approval pursuant to the Code or the regulations promulgated
thereunder as such provisions apply to ISO plans or pursuant to the Exchange Act
or Rule s of any national securities exchange or automated quotation system
applicable to the Company.

     23.  NONEXCLUSIVITY OF THE PLAN. Neither the adoption of the Plan by the
          --------------------------
Board, the submission of the Plan to the shareholders of the Company for
approval, nor any provision of the Plan shall be construed as creating any
limitations on the power of the Board to adopt such

                                       15

<PAGE>

additional compensation arrangements as it may deem desirable, including,
without limitation, the granting of stock options and bonuses otherwise than
under the Plan, and such arrangements may be either generally applicable or
applicable only in specific cases.

     24.  APPLICATION OF FUNDS. The proceeds received from the Company for the
          --------------------
sale of Shares pursuant to the exercise of Options and Restricted Stock Awards
shall be used for general corporate purposes.

     25.  RESERVATION OF SHARES. During the term of this Plan, the Company shall
          ---------------------
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan. The Company shall use its
best efforts to obtain from appropriate regulatory agencies authorization in
order to issue and sell such number of Shares as shall be sufficient to satisfy
the requirements of the Plan. The inability of the Company to obtain such
authorization(s) deemed by the Company's counsel to be necessary for the lawful
issuance and sale of any Shares hereunder, or the inability of the Company to
confirm to its satisfaction that any issuance and sale of any Shares hereunder
will meet applicable legal requirements, 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.

     26.  OTHER AGREEMENTS. The Committee may, from time to time, require such
          ----------------
other agreements in connection with Awards as it, in its sole discretion, deems
advisable.

     27.  INVALID PROVISIONS. If any provision of this Plan is found to be
          ------------------
invalid or otherwise unenforceable under any applicable law, such invalidity or
unenforceability shall not be construed as rendering any other provisions herein
as invalid or unenforceable, and all such other provisions shall be given full
force and effect to the same extent as though the invalid or unenforceable
provision was not contained herein.

     28.  APPLICABLE LAW. This Plan shall be governed by and construed in
          --------------
accordance with the laws of the State of California.

                                       16

<PAGE>