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                                                                    EXHIBIT 10.3


                            BACKWEB TECHNOLOGIES LTD.

                      1998 UNITED STATES STOCK OPTION PLAN

                  (AMENDED AND RESTATED AS OF JANUARY 1, 2002)

   1.  Purposes of the Plan.  The purposes of this 1998 United States Stock
Option Plan are:

    -   to attract and retain the best available personnel for positions of
        substantial responsibility,

    -   to provide additional incentive to Employees, Directors and Consultants,
        and

    -   to promote the success of the Company's business.

   Options granted under the Plan may be Incentive Stock Options or Nonstatutory
Stock Options, as determined by the Administrator at the time of grant. Stock
Purchase Rights may also be granted under the Plan.

   2.  Definitions.  As used herein, the following definitions shall apply:

      (a) "Administrator" means the Board or any of its Committees as shall be
   administering the Plan, in accordance with Section 4 of the Plan.

      (b) "Applicable Laws" means the requirements relating to the
   administration of stock option plans under U.S. state corporate laws, U.S.
   federal and state securities laws, the Code, any stock exchange or quotation
   system on which the Common Stock is listed or quoted and the applicable laws
   of any foreign country or jurisdiction where Options or Stock Purchase Rights
   are, or will be, granted under the Plan.

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

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

      (e) "Committee" means a committee of Directors appointed by the Board in
   accordance with Section 4 of the Plan.

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

      (g) "Company" means BackWeb Technologies Ltd., an Israeli corporation.

      (h) "Consultant" means any person, including an advisor, engaged by the
   Company or a Parent or Subsidiary to render services to such entity.

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


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      (j) "Disability" means total and permanent disability as defined in
   Section 22(e)(3) of the Code.

      (k) "Employee" means any person, including Officers and Directors,
   employed by the Company or any Parent or Subsidiary of the Company. A Service
   Provider shall not cease to be an Employee in the case of (i) any leave of
   absence approved by the Company or (ii) transfers between locations of the
   Company or between the Company, its Parent, any Subsidiary, or any successor.
   For purposes of Incentive Stock Options, no such leave may exceed ninety
   days, unless reemployment upon expiration of such leave is guaranteed by
   statute or contract. If reemployment upon expiration of a leave of absence
   approved by the Company is not so guaranteed, on the 181st day of such leave
   any Incentive Stock Option held by the Optionee shall cease to be treated as
   an Incentive Stock Option and shall be treated for tax purposes as a
   Nonstatutory Stock Option. Neither service as a Director nor payment of a
   director's fee by the Company shall be sufficient to constitute "employment"
   by the Company.

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

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

         (i) If the Common Stock is listed on any established stock exchange or
      a national market system, including without limitation the Nasdaq National
      Market or The Nasdaq Small Cap Market of The Nasdaq Stock Market, its Fair
      Market Value shall be the closing sales price for such stock (or the
      closing bid, if no sales were reported) as quoted on such exchange or
      system for the last market trading day prior to the time of determination,
      as reported in The Wall Street Journal or such other source as the
      Administrator deems reliable;

         (ii) If the Common Stock is regularly quoted by a recognized securities
      dealer but selling prices are not reported, the Fair Market Value of a
      Share of Common Stock shall be the mean between the high bid and low asked
      prices for the Common Stock on the last market trading day prior to the
      day of determination, as reported in The Wall Street Journal or such other
      source as the Administrator deems reliable; or

         (iii) In the absence of an established market for the Common Stock, the
      Fair Market Value shall be determined in good faith by the Administrator.

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

      (o) "Israeli Plan" means the Company's Israeli Employees Stock Option
   Plan.

      (p) "Nonstatutory Stock Option" means an Option not intended to qualify as
   an Incentive Stock Option.

      (q) "Notice of Grant" means a written or electronic notice evidencing
   certain terms and conditions of an individual Option or Stock Purchase Right
   grant. The Notice of Grant is part of the Option Agreement.

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

      (s) "Option" means a stock option granted pursuant to the Plan.

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      (t) "Option Agreement" means an agreement between the Company and an
   Optionee evidencing the terms and conditions of an individual Option grant.
   The Option Agreement is subject to the terms and conditions of the Plan.

      (u) "Option Exchange Program" means a program whereby outstanding Options
   are surrendered in exchange for Options with a lower exercise price.

      (v) "Optioned Stock" means the Common Stock subject to an Option or Stock
   Purchase Right.

      (w) "Optionee" means the holder of an outstanding Option or Stock Purchase
   Right granted under the Plan.

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

      (y) "Plan" means this 1998 United States Stock Option Plan.

      (z) "Restricted Stock" means shares of Common Stock acquired pursuant to a
   grant of Stock Purchase Rights under Section 11 of the Plan.

      (aa) "Restricted Stock Purchase Agreement," means a written agreement
   between the Company and the Optionee evidencing the terms and restrictions
   applying to stock purchased under a Stock Purchase Right. The Restricted
   Stock Purchase Agreement is subject to the terms and conditions of the Plan
   and the Notice of Grant.

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

      (cc) "Section 16(b)" means Section 16(b) of the Exchange Act.

      (dd) "Service Provider" means an Employee, Director or Consultant.

      (ee) "Share" means a share of the Common Stock, as adjusted in accordance
   with Section 13 of the Plan.

      (ff) "Stock Purchase Right" means the right to purchase Common Stock
   pursuant to Section 11 of the Plan, as evidenced by a Notice of Grant.

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

   3. Stock Subject to the Plan. Subject to the provisions of Section 13 of the
Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is the sum of (a) 10,759,569 (after giving effect to the
three-for-one reverse stock split of the Company's Shares in connection with the
Company's initial public offering, and including additional Shares added to the
Plan from the Company's 1996 U.S. Stock Option Plan and from one-time increases
approved through and including July 1, 2001, but before giving effect to the

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"Evergreen Increase," as defined in this Section 3, effective July 1, 2000),
plus (b) those additional Shares added to the Plan pursuant to the "Evergreen
Increase," as defined in this Section 3. The Shares may be authorized, but
unissued, or reacquired Common Stock.

   On July 1st of each year beginning in 2000, the number of Shares which may be
optioned and sold under the Plan and the Israeli Plan shall automatically be
increased by the lesser of (a) an aggregate amount equal to 1,960,000 Shares,
(b) 5% of the outstanding Shares on such date, or (c) an amount to be determined
by the Board (the "Evergreen Increase"). The total annual increase will be
allocated 70% to the Plan and 30% to the Israeli Plan, unless the Board
determines a different allocation. Therefore, unless the Board determines a
different allocation for the Evergreen Increase or limits the Evergreen Increase
to a lesser amount, the amount of each Evergreen Increase will equal (i) for the
Israeli Plan, the lesser of (a) 588,000 Shares and (b) 1.5% of the outstanding
Shares on such date, and (ii) for the Plan, the lesser of (a) 1,372,000 Shares
and (b) 3.5% of the Shares outstanding on such date.

   If an Option or Stock Purchase Right expires or becomes unexercisable without
having been exercised in full, or is surrendered pursuant to an Option Exchange
Program, the unpurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated); provided, however, that Shares that have actually been issued under
the Plan, whether upon exercise of an Option or Right, shall not be returned to
the Plan and shall not become available for future distribution under the Plan,
except that if Shares of Restricted Stock are repurchased by the Trustee,
pursuant to Section 11 hereunder, at their original purchase price, such Shares
shall become available for future grant under the Plan.

   4.  Administration of the Plan.

   (a) Procedure.

      (i) Multiple Administrative Bodies. The Plan may be administered by
   different Committees with respect to different groups of Service Providers.

      (ii) Section 162(m). To the extent that the Administrator determines it to
   be desirable to qualify Options granted hereunder as "performance-based
   compensation" within the meaning of Section 162(m) of the Code, the Plan
   shall be administered by a Committee of two or more "outside directors"
   within the meaning of Section 162(m) of the Code.

      (iii) Rule 16b-3. To the extent desirable to qualify transactions
   hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder
   shall be structured to satisfy the requirements for exemption under Rule
   16b-3.

      (iv) Other Administration. Other than as provided above, the Plan shall be
   administered by (A) the Board or (B) a Committee, which committee shall be
   constituted to satisfy Applicable Laws.

   (b) Powers of the Administrator. Subject to the provisions of the Plan, and
in the case of a Committee, subject to the specific duties delegated by the
Board to such Committee, the Administrator shall have the authority, in its
discretion:

      (i) to determine the Fair Market Value;

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      (ii) to select the Service Providers to whom Options and Stock Purchase
   Rights may be granted hereunder;

      (iii) to determine the number of shares of Common Stock to be covered by
   each Option and Stock Purchase Right granted hereunder;

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

      (v) to determine the terms and conditions, not inconsistent with the terms
   of the Plan, of any Option or Stock Purchase Right granted hereunder. Such
   terms and conditions include, but are not limited to, the exercise price, the
   time or times when Options or Stock Purchase Rights may be exercised (which
   may be based on performance criteria), any vesting acceleration or waiver of
   forfeiture restrictions, and any restriction or limitation regarding any
   Option or Stock Purchase Right or the shares of Common Stock relating
   thereto, based in each case on such factors as the Administrator, in its sole
   discretion, shall determine;

      (vi) to reduce the exercise price of any Option or Stock Purchase Right to
   the then current Fair Market Value if the Fair Market Value of the Common
   Stock covered by such Option or Stock Purchase Right shall have declined
   since the date the Option or Stock Purchase Right was granted;

      (vii) to institute an Option Exchange Program;

      (viii) to construe and interpret the terms of the Plan and awards granted
   pursuant to the Plan;

      (ix) to prescribe, amend and rescind rules and regulations relating to the
   Plan, including rules and regulations relating to sub-plans established for
   the purpose of qualifying for preferred tax treatment under foreign tax laws;

      (x) to modify or amend each Option or Stock Purchase Right (subject to
   Section 15(c) of the Plan), including the discretionary authority to extend
   the post-termination exercisability period of Options longer than is
   otherwise provided for in the Plan;

      (xi) to allow Optionees to satisfy withholding tax obligations by electing
   to have the Company withhold from the Shares to be issued upon exercise of an
   Option or Stock Purchase Right that number of Shares having a Fair Market
   Value equal to the amount required to be withheld. The Fair Market Value of
   the Shares to be withheld shall be determined on the date that the amount of
   tax to be withheld is to be determined. All elections by an Optionee to have
   Shares withheld for this purpose shall be made in such form and under such
   conditions as the Administrator may deem necessary or advisable;

      (xii) to authorize any person to execute on behalf of the Company any
   instrument required to effect the grant of an Option or Stock Purchase Right
   previously granted by the Administrator;

      (xiii) to make all other determinations deemed necessary or advisable for
   administering the Plan.

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   (c) Effect of Administrator's Decision. The Administrator's decisions,
determinations and interpretations shall be final and binding on all Optionees
and any other holders of Options or Stock Purchase Rights.

   5. Eligibility. Nonstatutory Stock Options and Stock Purchase Rights may be
granted to Service Providers. Incentive Stock Options may be granted only to
Employees.

   6. Limitations.

   (a) Each Option shall be designated in the Option Agreement as either an
Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding
such designation, to the extent that the aggregate Fair Market Value of the
Shares with respect to which Incentive Stock Options are exercisable for the
first time by the Optionee during any calendar year (under all plans of the
Company and any Parent or Subsidiary) exceeds $100,000, such Options shall be
treated as Nonstatutory Stock Options. For purposes of this Section 6(a),
Incentive Stock Options shall be taken into account in the order in which they
were granted. The Fair Market Value of the Shares shall be determined as of the
time the Option with respect to such Shares is granted.

   (b) Neither the Plan nor any Option or Stock Purchase Right shall confer upon
an Optionee any right with respect to continuing the Optionee's relationship as
a Service Provider with the Company, nor shall they interfere in any way with
the Optionee's right or the Company's right to terminate such relationship at
any time, with or without cause.

   7. Term of Plan. Subject to Section 19 of the Plan, the Plan shall become
effective upon its adoption by the Board. It shall continue in effect for a term
of ten (10) years unless terminated earlier under Section 15 of the Plan.

   8. Term of Option. The term of each Option shall be stated in the Option
Agreement. In the case of an Incentive Stock Option, the term shall be ten (10)
years from the date of grant or such shorter term as may be provided in the
Option Agreement. Moreover, in the case of an Incentive Stock Option granted to
an Optionee who, at the time the Incentive Stock Option is granted, owns stock
representing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company or any Parent or Subsidiary, the term of the
Incentive Stock Option shall be five (5) years from the date of grant or such
shorter term as may be provided in the Option Agreement.

   9. Option Exercise Price and Consideration.

   (a) Exercise Price. The per share exercise price for the Shares to be issued
pursuant to exercise of an Option shall be determined by the Administrator,
subject to the following:

      (i) In the case of an Incentive Stock Option

          (A) granted to an Employee who, at the time the Incentive Stock Option
      is granted, owns stock representing more than ten percent (10%) of the
      voting power of all classes of stock of the Company or any Parent or
      Subsidiary, the per Share exercise price shall be no less than 110% of the
      Fair Market Value per Share on the date of grant.

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         (B) granted to any Employee other than an Employee described in
      paragraph (A) immediately above, the per Share exercise price shall be no
      less than 100% of the Fair Market Value per Share on the date of grant.

      (ii) In the case of a Nonstatutory Stock Option, the per Share exercise
   price shall be determined by the Administrator. In the case of a Nonstatutory
   Stock Option intended to qualify as "performance-based compensation" within
   the meaning of Section 162(m) of the Code, the per Share exercise price shall
   be no less than 100% of the Fair Market Value per Share on the date of grant.

      (iii) Notwithstanding the foregoing, Options may be granted with a per
   Share exercise price of less than 100% of the Fair Market Value per Share on
   the date of grant pursuant to a merger or other corporate transaction.

   (b) Waiting Period and Exercise Dates. At the time an Option is granted, the
Administrator shall fix the period within which the Option may be exercised and
shall determine any conditions which must be satisfied before the Option may be
exercised.

   (c) Form of Consideration. The Administrator shall determine the acceptable
form of consideration for exercising an Option, including the method of payment.
In the case of an Incentive Stock Option, the Administrator shall determine the
acceptable form of consideration at the time of grant. Such consideration may
consist entirely of:

      (i) cash;

      (ii) check;

      (iii) promissory note;

      (iv) other Shares which (A) in the case of Shares acquired upon exercise
   of an option, have been owned by the Optionee for more than six months on the
   date of surrender, and (B) have a Fair Market Value on the date of surrender
   equal to the aggregate exercise price of the Shares as to which said Option
   shall be exercised;

      (v) consideration received by the Company under a cashless exercise
   program implemented by the Company in connection with the Plan;

      (vi) a reduction in the amount of any Company liability to the Optionee,
   including any liability attributable to the Optionee's participation in any
   Company-sponsored deferred compensation program or arrangement;

      (vii) any combination of the foregoing methods of payment; or

      (viii) such other consideration and method of payment for the issuance of
    Shares to the extent permitted by Applicable Laws.

10. Exercise of Option.

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   (a) Procedure for Exercise; Rights as a Shareholder. Any Option granted
hereunder shall be exercisable according to the terms of the Plan and at such
times and under such conditions as determined by the Administrator and set forth
in the Option Agreement. Unless the Administrator provides otherwise, vesting of
Options granted hereunder shall be tolled during any unpaid leave of absence. An
Option may not be exercised for a fraction of a Share.

   An Option shall be deemed exercised when the Company receives: (i) written or
electronic notice of exercise (in accordance with the Option Agreement) from the
person entitled to exercise the Option, and (ii) full payment for the Shares
with respect to which the Option is exercised. Full payment may consist of any
consideration and method of payment authorized by the Administrator and
permitted by the Option Agreement and the Plan. Shares issued upon exercise of
an Option shall be issued in the name of the Optionee or, if requested by the
Optionee, in the name of the Optionee and his or her spouse. Until the Shares
are issued (as evidenced by the appropriate entry on the books of the Company or
of a duly authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a shareholder shall exist with respect to the
Optioned Stock, notwithstanding the exercise of the Option. The Company shall
issue (or cause to be issued) such Shares promptly after the Option is
exercised. No adjustment will be made for a dividend or other right for which
the record date is prior to the date the Shares are issued, except as provided
in Section 13 of the Plan.

   Exercising an Option in any manner shall decrease the number of Shares
thereafter available, both for purposes of the Plan and for sale under the
Option, by the number of Shares as to which the Option is exercised.

   (b) Termination of Relationship as a Service Provider. If an Optionee ceases
to be a Service Provider, other than upon the Optionee's death or Disability,
the Optionee may exercise his or her Option within such period of time as is
specified in the Option Agreement to the extent that the Option is vested on the
date of termination (but in no event later than the expiration of the term of
such Option as set forth in the Option Agreement). In the absence of a specified
time in the Option Agreement, the Option shall remain exercisable for three (3)
months following the Optionee's termination. If, on the date of termination, the
Optionee is not vested as to his or her entire Option, the Shares covered by the
unvested portion of the Option shall revert to the Plan. If, after termination,
the Optionee does not exercise his or her Option within the time specified by
the Administrator, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.

   (c) Disability of Optionee. If an Optionee ceases to be a Service Provider as
a result of the Optionee's Disability, the Optionee may exercise his or her
Option within such period of time as is specified in the Option Agreement to the
extent the Option is vested on the date of termination (but in no event later
than the expiration of the term of such Option as set forth in the Option
Agreement). In the absence of a specified time in the Option Agreement, the
Option shall remain exercisable for twelve (12) months following the Optionee's
termination. If, on the date of termination, the Optionee is not vested as to
his or her entire Option, the Shares covered by the unvested portion of the
Option shall revert to the Plan. If, after termination, the Optionee does not
exercise his or her Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.

   (d) Death of Optionee. If an Optionee dies while a Service Provider, the
Option may be exercised within such period of time as is specified in the Option
Agreement (but in no event later than the expiration of the term of such Option
as set forth in the Notice of Grant), by the Optionee's estate or by a person
who acquires the

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right to exercise the Option by bequest or inheritance, but only to the extent
that the Option is vested on the date of death. In the absence of a specified
time in the Option Agreement, the Option shall remain exercisable for twelve
(12) months following the Optionee's termination. If, at the time of death, the
Optionee is not vested as to his or her entire Option, the Shares covered by the
unvested portion of the Option shall immediately revert to the Plan. The Option
may be exercised by the executor or administrator of the Optionee's estate or,
if none, by the person(s) entitled to exercise the Option under the Optionee's
will or the laws of descent or distribution. If the Option is not so exercised
within the time specified herein, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.

   (e) Buyout Provisions. The Administrator may at any time offer to buy out for
a payment in cash or Shares an Option previously granted based on such terms and
conditions as the Administrator shall establish and communicate to the Optionee
at the time that such offer is made.

   11. Stock Purchase Rights.

   (a) For the purposes of this Section 11, the Company shall appoint a trustee
(the "Trustee"), which shall act according to a Trust Agreement, in the form
determined by the Administrator and according to the provisions set forth
hereunder.

   (b) Rights to Purchase. Stock Purchase Rights may be issued either alone, in
addition to, or in tandem with other awards granted under the Plan and/or cash
awards made outside of the Plan. After the Administrator determines that it will
offer Stock Purchase Rights under the Plan, it shall advise the offeree in
writing or electronically, by means of a Notice of Grant, of the terms,
conditions and restrictions related to the offer, including the number of Shares
that the offeree shall be entitled to purchase, the price to be paid, and the
time within which the offeree must accept such offer. The offer shall be
accepted by execution of a Restricted Stock Purchase Agreement in the form
determined by the Administrator.

   (c) Repurchase Option. Unless the Administrator determines otherwise, the
Restricted Stock Purchase Agreement shall grant the Trustee a repurchase option
exercisable upon the voluntary or involuntary termination of the purchaser's
service with the Company for any reason (including death or Disability), in
accordance with the provisions of the Trust Agreement. The purchase price for
Shares repurchased pursuant to the Restricted Stock Purchase Agreement
("Repurchased Share") shall be the original price paid by the purchaser. The
repurchase option shall lapse at a rate determined by the Administrator. The
Repurchased Shares shall be held by the Trustee for future grant under the Plan,
as shall be instructed by the Administrator.

   (d) Other Provisions. The Restricted Stock Purchase Agreement shall contain
such other terms, provisions and conditions not inconsistent with the Plan as
may be determined by the Administrator in its sole discretion.

   (e) Rights as a Shareholder. Once the Stock Purchase Right is exercised, the
purchaser shall have the rights equivalent to those of a shareholder, and shall
be a shareholder when his or her purchase is entered upon the records of the
duly authorized transfer agent of the Company. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the Stock
Purchase Right is exercised, except as provided in Section 13 of the Plan.

   12. Non-Transferability of Options and Stock Purchase Rights. Unless
determined otherwise by the Administrator, an Option or Stock Purchase Right may
not be sold, pledged, assigned, hypothecated,

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transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee. If the Administrator makes an Option or Stock
Purchase Right transferable, such Option or Stock Purchase Right shall contain
such additional terms and conditions as the Administrator deems appropriate.

   13. Adjustments Upon Changes in Capitalization, Dissolution, Merger or Asset
Sale.

   (a) Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option and Stock Purchase Right, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options or Stock Purchase Rights have yet been granted or which have
been returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per share of Common Stock covered by each
such outstanding Option or Stock Purchase Right, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option or Stock
Purchase Right.

   (b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Administrator shall notify each Optionee as soon
as practicable prior to the effective date of such proposed transaction. The
Administrator in its discretion may provide for an Optionee to have the right to
exercise his or her Option until ten (10) days prior to such transaction as to
all of the Optioned Stock covered thereby, including Shares as to which the
Option would not otherwise be exercisable. In addition, the Administrator may
provide that any Company repurchase option applicable to any Shares purchased
upon exercise of an Option or Stock Purchase Right shall lapse as to all such
Shares, provided the proposed dissolution or liquidation takes place at the time
and in the manner contemplated. To the extent it has not been previously
exercised, an Option or Stock Purchase Right will terminate immediately prior to
the consummation of such proposed action.

   (c) Merger or Asset Sale. In the event of a merger of the Company with or
into another corporation, or the sale of substantially all of the assets of the
Company, each outstanding Option and Stock Purchase Right shall be assumed or an
equivalent option or right substituted by the successor corporation or a Parent
or Subsidiary of the successor corporation. In the event that the successor
corporation refuses to assume or substitute for the Option or Stock Purchase
Right, the Optionee shall fully vest in and have the right to exercise the
Option or Stock Purchase Right as to all of the Optioned Stock, including Shares
as to which it would not otherwise be vested or exercisable. If an Option or
Stock Purchase Right becomes fully vested and exercisable in lieu of assumption
or substitution in the event of a merger or sale of assets, the Administrator
shall notify the Optionee in writing or electronically that the Option or Stock
Purchase Right shall be fully vested and exercisable for a period of fifteen
(15) days from the date of such notice, and the Option or Stock Purchase Right
shall terminate upon the expiration of such period. For the purposes of this
paragraph, the Option or Stock Purchase Right shall be considered assumed if,
following the merger or sale of assets, the option or right confers the right to

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purchase or receive, for each Share of Optioned Stock subject to the Option or
Stock Purchase Right immediately prior to the merger or sale of assets, the
consideration (whether stock, cash, or other securities or property) received in
the merger or sale of assets by holders of Common Stock for each Share held on
the effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding Shares); provided, however, that if such consideration received
in the merger or sale of assets is not solely common stock of the successor
corporation or its Parent, the Administrator may, with the consent of the
successor corporation, provide for the consideration to be received upon the
exercise of the Option or Stock Purchase Right, for each Share of Optioned Stock
subject to the Option or Stock Purchase Right, to be solely common stock of the
successor corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the merger or sale of
assets.

   14. Date of Grant. The date of grant of an Option or Stock Purchase Right
shall be, for all purposes, the date on which the Administrator makes the
determination granting such Option or Stock Purchase Right, or such other later
date as is determined by the Administrator. Notice of the determination shall be
provided to each Optionee within a reasonable time after the date of such grant.

   15. Amendment and Termination of the Plan.

   (a) Amendment and Termination. The Board may at any time amend, alter,
suspend or terminate the Plan.

   (b) Shareholder Approval. The Company shall obtain shareholder approval of
any Plan amendment to the extent necessary and desirable to comply with
Applicable Laws.

   (c) Effect of Amendment or Termination. No amendment, alteration, suspension
or termination of the Plan shall impair the rights of any Optionee, unless
mutually agreed otherwise between the Optionee and the Administrator, which
agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator's ability to exercise
the powers granted to it hereunder with respect to Options granted under the
Plan prior to the date of such termination.

   16. Conditions Upon Issuance of Shares.

   (a) Legal Compliance. Shares shall not be issued pursuant to the exercise of
an Option or Stock Purchase Right unless the exercise of such Option or Stock
Purchase Right and the issuance and delivery of such Shares shall comply with
Applicable Laws and shall be further subject to the approval of counsel for the
Company with respect to such compliance.

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

   17. Inability to Obtain Authority. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful

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<PAGE>

issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.

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

   19. Shareholder Approval. The Plan shall be subject to approval by the
shareholders of the Company within twelve (12) months after the date the Plan is
adopted. Such shareholder approval shall be obtained in the manner and to the
degree required under Applicable Laws.

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