ZAPWORLD.COM.

                            1999 INCENTIVE STOCK PLAN


1.       PURPOSES.

         a. The purpose of this Plan is to provide a means by which selected
Employees and Directors of and Consultants to ZAPWORLD.COM. (the "Company"), and
its Affiliates, may be given an opportunity to benefit from increases in value
of the stock of the Company through the granting of (i) Incentive Stock Options,
(ii) Nonstatutory Stock Options, (iii) stock bonuses, (iv) rights to purchase
restricted stock, and (v) stock appreciation rights, all as defined below.

         b. The Company intends that the Stock Awards issued under this Plan
shall, in the discretion of the Board or any Committee to which responsibility
for administration of this Plan has been delegated pursuant to subsection 3.c,
be either (i) Options granted pursuant to Section 6 hereof, including Incentive
Stock Options and Nonstatutory Stock Options, or (ii) stock bonuses or rights to
purchase restricted stock granted pursuant to Section 7 hereof, or (iii) Stock
Appreciation Rights granted pursuant to Section 8 hereof.

2.       DEFINITIONS.

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

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

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

         d. "Committee" means a committee of directors of the Company appointed
by the Board in accordance with subsection 3.c of this Plan.

         e.  "Company"  means ZAPWORLD.COM., a California corporation.

         f. "Concurrent Stock Appreciation Right" or "Concurrent Right" means a
right granted pursuant to subsection 8.b.ii of this Plan.

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

         h. "Continuous Status as an Employee, Director or Consultant" means
that the service of an individual to the Company, whether as an Employee,
Director or Consultant, is not


<PAGE>

interrupted or terminated. The Board or the chief executive officer of the
Company may determine, in that party's sole discretion, in its sole discretion,
may determine whether Continuous Status as an Employee, Director or Consultant
shall be considered interrupted in the case of: (i) any leave of absence
approved by the Board or the chief executive officer, including sick leave,
military leave, or any other personal leave; or (ii) transfers between the
Company, Affiliates or their successors.

         i. "Covered Employee" means the chief executive officer and the four
(4) other highest compensated officers of the Company for whom total
compensation is required to be reported to shareholders under the Exchange Act,
as determined for purposes of Section 162(m) of the Code.

         j.  "Director" means a member of the Board.

         k. "Employee" means any person, including Officers and Directors,
employed by the Company or any Affiliate of the Company. Neither service as a
Director nor payment of a director's fee by the Company shall be itself
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 the common
stock of the Company determined as follows:

                  i. If the common stock is listed on any national securities
exchange or traded on the NASDAQ National Market or the NASDAQ Small Cap Market,
the Fair Market Value of a share of common stock shall be the closing sales
price for such stock (or the closing bid, if no sales were reported) as quoted
on such exchange or market (or the exchange or market with the greatest volume
of trading in the Company's common stock) on the last market trading day prior
to the day of determination, as reported in The Wall Street Journal or such
other source as the Board deems reliable.

                  ii. In the absence of such markets for the common stock, the
Fair Market Value shall be determined in good faith by the Board.

         n. "Incentive Stock Option" means an Option intended to qualify as an
incentive stock option within the meaning of Section 421 of the Code and the
regulations promulgated thereunder.

         o. "Independent Stock Appreciation Right" or "Independent Right" means
a right granted pursuant to subsection 8.b.iii of this Plan.

         p. "Non-Employee Director" means a Director who: (i) is not a current
Employee or Officer of the Company or its parent or subsidiary; (ii) does not
receive compensation (directly or indirectly) from the Company or its parent or
subsidiary for services rendered as a consultant or in any capacity other than
as a Director; (iii) does not possess an interest in any

                                       2
<PAGE>

other transaction which the Company would be required to disclosure in filings
with the Securities and Exchange Commission; (iv) is not engaged in a business
relationship with the Company which the Company would be required to so disclose
under Regulation S-K; or (v) is otherwise considered a "non-employee director"
for purposes of Rule 16b-3.

         q. "Nonstatutory Stock Option" means an Option not intended to qualify
as an Incentive Stock Option.

         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 this Plan.

         t. "Option Agreement" means a written agreement between the Company and
an Optionee evidencing the terms and conditions of an individual Option grant.
Each Option Agreement shall be subject to the terms and conditions of this Plan.

         u. "Optionee" means an Employee, Director or Consultant who holds an
outstanding Option.

         v. "Outside Director" means a Director who: (i) is not a current
employee of the Company or an "affiliated corporation" (within the meaning of
Treasury regulations promulgated under Section 162(m) of the Code); (ii) is not
a former employee of the Company or an "affiliated corporation" receiving
compensation for prior services (other than benefits under a tax qualified
pension plan); (iii) was not an officer of the Company or an "affiliated
corporation" at any time, and is not currently receiving direct or indirect
remuneration from the Company or an "affiliated corporation" for services in any
capacity other than as a Director, or (iv) is otherwise considered an "outside
director" for purposes of Section 162(m) of the Code.

         w.  "Plan"  means  this ZAPWORLD.COM. 1999 Stock Incentive Plan.

         x. "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
this Plan.

         y.  "Securities Act" means the Securities Act of 1933, as amended.

         z. "Stock" means, unless the context otherwise requires, the Common
Stock of the Company.

         aa. "Stock Appreciation Right" means any of the various types of rights
which may be granted under Section 8 of this Plan.

         bb. "Stock Award" means any right granted under this Plan, including
any Option, any stock bonus, any right to purchase restricted stock, and any
Stock Appreciation Right.


                                       3
<PAGE>

         cc. "Stock Award Agreement" means a written agreement between the
Company and a holder of a Stock Award evidencing the terms and conditions of an
individual Stock Award grant. Each Stock Award Agreement shall be subject to the
terms and conditions of this Plan.

         dd. "Tandem Stock Appreciation Right" or "Tandem Right" means a right
granted pursuant to subsection 8.b.i of this Plan.

3.       ADMINISTRATION.

         a. General Administration. This Plan shall be administered by the Board
unless and until the Board delegates administration to a Committee, as provided
in subsection 3.c.

         b. Powers of Board. The Board shall have the power, subject to, and
within the limitations of, the express provisions of this Plan:

                  i. To determine from time to time which of the persons
eligible under this Plan shall be granted Stock Awards; when and how each Stock
Award shall be granted; whether a Stock Award will be an Incentive Stock Option,
a Nonstatutory Stock Option, a stock bonus, a right to purchase restricted
stock, a Stock Appreciation Right, or a combination of the foregoing; the
provisions of each Stock Award granted (which need not be identical), including
the time or times when a person shall be permitted to receive stock pursuant to
a Stock Award; whether a person shall be permitted to receive stock upon
exercise of an Independent Stock Appreciation Right; and the number of shares
with respect to which a Stock Award shall be granted to each such person.

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

                  iii. To amend this Plan or a Stock Award as provided in
Section 12.

                  iv. Generally, to exercise such powers and to perform such
acts as the Board deems necessary or expedient which are not inconsistent with
the terms of this Plan to promote the best interests of the Company.

         c. The Committee. The Board may delegate administration of this Plan to
a committee of the Board composed of not fewer than two (2) members (the
"Committee"). No less than a majority of the members of the Committee shall be
Non-Employee Directors and/or Outside Directors. If administration is delegated
to a Committee, the Committee shall have, in connection with the administration
of this Plan, the powers theretofore possessed by the Board, including the power
to delegate to a subcommittee of two (2) or more Outside Directors any of the
administrative powers the Committee is authorized to exercise (and references in
this Plan to the Board shall thereafter be to the Committee or such a

                                       4
<PAGE>

subcommittee), subject, however, to such resolutions, not inconsistent with the
provisions of this Plan, as may be adopted from time to time by the Board. The
Board may abolish the Committee at any time and revest in the Board the
administration of this Plan. Notwithstanding anything in this Section 3 to the
contrary, the Board or the Committee may delegate to a committee of one or more
members of the Board the authority to grant Stock Awards to eligible persons who
(1) are not then subject to Section 16 of the Exchange Act and/or (2) are
either: (i) not then Covered Employees and are not expected to be Covered
Employees at the time of recognition of income resulting from such Stock Award;
or (ii) not persons with respect to whom the Company wishes to comply with
Section 162(m) of the Code.

4.       SHARES SUBJECT TO PLAN.

         a. Number of Shares. Subject to the provisions of Section 11 relating
to adjustments upon changes in stock, the Company may issue a maximum of
2,000,000 shares of its Common Stock under this Plan.

         b. Source of Stock. The stock subject to this Plan may be unissued
shares or reacquired shares bought on the market or otherwise.

5.       ELIGIBILITY.

         a. General. Incentive Stock Options and Stock Appreciation Rights
appurtenant thereto may be granted only to Employees. Stock Awards other than
Incentive Stock Options and Stock Appreciation rights appurtenant thereto may be
granted only to Employees, Directors or Consultants.

         b. Major Shareholders. An Incentive Stock Option or Nonstatutory Stock
Option granted to a person who owns stock possessing more than ten percent (10%)
of the total combined voting power of all classes of stock of the Company or of
any of its Affiliates must have an exercise price of at least one hundred ten
percent (110%) of the Fair Market Value of such stock at the date of grant. In
addition, an Incentive Stock Option granted to a person described in the
previous sentence may only be exercised for a period of five years after the
date of grant.


                                       5
<PAGE>
6.       OPTION PROVISIONS.

         Each Option shall be in the form of an agreement executed by the
Optionee. The Option agreement shall contain such terms and conditions as the
Board shall deem appropriate, provided that no terms may be contrary to the
provisions of this Plan. The provisions of separate Options need not be
identical, but each Option shall include (through incorporation of provisions
hereof by reference in the Option or otherwise) the substance of each of the
following provisions:

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

         b. Price. The exercise price of each Incentive Stock Option shall be
not less than one hundred percent (100%) of the Fair Market Value of the stock
subject to the Option on the date the Option is granted. The exercise price of
each Nonstatutory Stock Option shall be no less than eighty-five percent (85%)
of the Fair Market Value of the stock subject to the Option on the date of
grant. Notwithstanding the foregoing, an Option (whether an Incentive Stock
Option or a Nonstatutory Stock Option) may be granted with an exercise price
lower than that set forth in the preceding sentence if such Option is granted
pursuant to an assumption or substitution for another option in a manner
satisfying the provisions of Section 424(a) of the Code.

         c. Consideration. The purchase price of stock acquired pursuant to an
Option shall be paid, to the extent permitted by applicable statutes and
regulations, in cash at the time the Option is exercised. In addition, the Board
of Directors may allow for the Option to be exercised by means of any of the
following methods: (i) by delivery and surrender to the Company of other common
stock of the Company owned by the Optionee; (ii) by delivery of a promissory
note with a term of no more than four years and with an interest rate on the
unpaid balance accumulating at a rate of no less than the Applicable Federal
Rate announced by the Department of the Treasury as of the date the note is
issued; (iii) by surrender by the Optionee of the right to purchase that number
of shares under the Option with a fair market value equal to the exercise price;
(iv) such other methods of exercising the Option which are allowed under
applicable state and federal law.

         d. Transferability. An Incentive Stock Option shall not be transferable
except by Will or by the laws of descent and distribution, and shall be
exercisable during the lifetime of the person to whom the Incentive Stock Option
is granted only by such person. A Nonstatutory Stock Option shall only be
transferable by the Optionee upon such terms and conditions as are set forth in
the Option Agreement for such Nonstatutory Stock Option, as the Board or the
Committee shall determine in its discretion. Notwithstanding the foregoing, the
person to whom the Option is granted may, by delivering written notice to the
Company, in a form satisfactory to the Company, designate a third party who, in
the event of the death of the Optionee, shall thereafter be entitled to exercise
the Option.

         e. Vesting. The total number of shares of stock subject to an Option
may, but need not, be allotted in periodic installments (which may, but need
not, be equal). The Option

                                       6
<PAGE>

Agreement may provide that from time to time during each of such installment
periods, the Option may become exercisable ("vest") with respect to some or all
of the shares allotted to that period, and may be exercised with respect to some
or all of the shares allotted to such period and/or any prior period as to which
the Option became vested but was not fully exercised. The Option may be subject
to such other terms and conditions on the time or times when it may be exercised
(which may be based on performance or other criteria) as the Board may deem
appropriate, provided that in no event will stock options vest at a rate of less
than 20% of the shares subject to the Option per annum.

         f. Termination of Employment or Relationship as a Director or
Consultant. In the event an Optionee's Continuous Status as an Employee,
Director or Consultant terminates (other than upon the Optionee's death or
disability), the Optionee may exercise his or her Option (to the extent that the
Optionee was entitled to exercise it at the date of termination) but only within
such period of time ending on the earlier of: (i) the date three (3) months
after the termination of the Optionee's Continuous Status as an Employee,
Director or Consultant (or such longer or shorter period specified in the Option
Agreement or by the Board of Directors), or (ii) the expiration of the term of
the Option as set forth in the Option Agreement. If, at the date of termination,
the Optionee is not entitled to exercise his or her entire Option, the shares
covered by the unexercisable portion of the Option shall revert to and again
become available for issuance under this Plan. If, after termination, the
Optionee does not exercise his or her Option within the time specified in the
Option Agreement, the Option shall terminate, and the shares covered by such
Option shall revert to and again become available for issuance under this Plan.

         g. Disability of Optionee. In the event an Optionee's Continuous Status
as an Employee, Director or Consultant terminates as a result of the Optionee's
disability, the Optionee may exercise his or her Option (to the extent that the
Optionee was entitled to exercise it at the date of termination), but only
within such period of time ending on the earlier of: (i) the date twelve (12)
months following such termination (or such longer or shorter period specified in
the Option Agreement; or (ii) the expiration of the term of the Option as set
forth in the Option Agreement. If, at the date of termination, the Optionee is
not entitled to exercise his or her entire Option, the shares covered by the
unexercisable portion of the Option shall revert to and again become available
for issuance under this Plan. If, after termination, the Optionee does not
exercise his or her Option within the time specified herein, the Option shall
terminate, and the shares covered by such Option shall revert to and again
become available for issuance under this Plan.

         h. Death of Optionee . In the event of the death of an Optionee during,
or within a period specified in the Option after the termination of, the
Optionee's Continuous Status as an Employee, Director or Consultant, the Option
may be exercised (to the extent the Optionee was entitled to exercise the Option
at the date of death) by the Optionee's estate, by a person who acquired the
right to exercise the Option by bequest or inheritance or by a person designated
to exercise the option upon the Optionee's death pursuant to subsection 6.d, but
only within the period ending on the earlier of (i) the date twelve (12) months
following the date of death; or (ii) the expiration of the term of such Option
as set forth in the Option Agreement. If, at the time of death, the Optionee was
not entitled to exercise his or her

                                       7
<PAGE>

entire Option, the shares covered by the unexercisable portion of the Option
shall revert to and again become available for issuance under this Plan. If,
after death, the Option is not exercised within the time specified herein, the
Option shall terminate, and the shares covered by such Option shall revert to
and again become available for issuance under this Plan.

         i. Early Exercise. The Option may, but need not, include a provision
whereby the Optionee may elect at any time while an Employee, Director or
Consultant to exercise the Option as to any part or all of the shares subject to
the Option prior to the full vesting of the Option. Any unvested shares so
purchased may be subject to a repurchase right in favor of the Company or to any
other restriction the Board determines to be appropriate.

         j. Re-Load Options. Without in any way limiting the authority of the
Board or Committee to make or not to make grants of Options hereunder, the Board
or Committee shall have the authority (but not an obligation) to include as part
of any Option Agreement a provision entitling the Optionee to a further Option
(a "Re-Load Option") in the event the Optionee exercises the Option evidenced by
the Option agreement, in whole or in part, by surrendering other shares of
Common Stock in accordance with this Plan and the terms and conditions of the
Option Agreement. Any such Re-Load Option (i) shall be for a number of shares
equal to the number of shares surrendered as part or all of the exercise price
of such Option; (ii) shall have an expiration date which is the same as the
expiration date of the Option the exercise of which gave rise to such Re-Load
Option; and (iii) shall have an exercise price which is equal to one hundred
percent (100%) of the Fair Market Value of the Common Stock subject to the
Re-Load Option on the date of exercise of the original Option. Notwithstanding
the foregoing, a Re-Load Option which is granted to a 10% stockholder (as
described in subsection 5.b ), shall have an exercise price which is equal to
one hundred ten percent (110%) of the Fair Market Value of the stock subject to
the Re-Load Option on the date of exercise of the original Option and shall have
a term which is no longer than five (5) years. Any such Re-Load Option may be an
Incentive Stock Option or a Nonstatutory Stock Option, as the Board or Committee
may designate at the time of the grant of the original Option; provided,
however, that the designation of any Re-Load Option as an Incentive Stock Option
shall be subject to the one hundred thousand dollar ($100,000) annual limitation
on exercisability of Incentive Stock Options described in subsection 10.d of
this Plan and in Section 422(d) of the Code. There shall be no Re-Load Options
on a Re-Load Option. Any such Re-Load Option shall be subject to the
availability of sufficient shares under this Plan and the limits on the grants
of Options as provided elsewhere under this Plan and shall be subject to such
other terms and conditions as the Board or Committee may determine which are not
inconsistent with the express provisions of this Plan regarding the terms of
Options.


                                       8
<PAGE>

7.       TERMS OF STOCK GRANTS

         Each stock bonus or restricted stock purchase agreement shall be in
such form and shall contain such terms and conditions as the Board or the
Committee shall deem appropriate. The terms and conditions of stock bonus or
restricted stock purchase agreements may change from time to time, and the terms
and conditions of separate agreements need not be identical, but each stock
bonus or restricted stock purchase agreement shall include (through
incorporation of provisions hereof by reference in the agreement or otherwise)
the substance of each of the following provisions
 as appropriate:

         a. Purchase Price. The purchase price under each restricted stock
purchase agreement shall be such amount as the Board or Committee shall
determine and designate in such agreement. In any event, the Board or the
Committee may determine that eligible participants in this Plan may be awarded
stock pursuant to a stock bonus agreement in consideration for past services
actually rendered to the Company or for its benefit.

         b. Transferability. No rights under a stock bonus or restricted stock
purchase agreement shall be transferable except by Will or the laws of descent
and distribution, or otherwise only upon such terms and conditions as are set
forth in the applicable Stock Award Agreement, as the Board or the Committee
shall determine in its discretion, so long as stock awarded under such agreement
remains subject to the terms of that agreement.

         c. Consideration. The purchase price of stock acquired pursuant to a
stock purchase agreement shall be paid either: (i) in cash at the time of
purchase; (ii) at the discretion of the Board or the Committee, according to a
deferred payment arrangement, or; ( iii) in any other form of legal
consideration that may be acceptable to the Board or the Committee in its
discretion. Notwithstanding the foregoing, the Board or the Committee may award
stock pursuant to a stock bonus agreement in consideration for past services
actually rendered to the Company or for its benefit.

         d. Vesting. Shares of stock sold or awarded under this Plan may, but
need not, be subject to a repurchase option in favor of the Company in
accordance with a vesting schedule to be determined by the Board or the
Committee.

         e. Termination of Employment or Relationship as a Director or
Consultant. In the event a Participant's Continuous Status as an Employee,
Director or Consultant terminates, the Company may repurchase or otherwise
reacquire, any or all of the shares of stock held by that person which have not
vested as of the date of termination under the terms of the stock bonus or
restricted stock purchase agreement between the Company and such person.


                                       9
<PAGE>

8.       STOCK APPRECIATION RIGHTS.

         a. General. The Board or Committee shall have full power and authority,
exercisable in its sole discretion, to grant Stock Appreciation Rights under
this Plan to Employees or Directors of or Consultants to the Company or its
Affiliates. To exercise any outstanding Stock Appreciation Right, the holder
must provide written notice of exercise to the Company in compliance with the
terms of the Stock Award Agreement evidencing such right. No limitation shall
exist on the aggregate amount of cash payments the Company may make under this
Plan in connection with the exercise of a Stock Appreciation Right.

         b. Types of Stock Appreciation Rights. Three types of Stock
Appreciation Rights shall be authorized for issuance under this Plan:

                  i. Tandem Stock Appreciation Rights. Tandem Stock Appreciation
Rights will be granted appurtenant to an Option, and shall, except as
specifically set forth in this Section 8, be subject to the same terms and
conditions applicable to the particular Option grant to which it pertains.
Tandem Stock Appreciation Rights will require the holder to elect between the
exercise of the underlying Option for shares of stock and the surrender, in
whole or in part, of such Option for an appreciation distribution. The
appreciation distribution payable on the exercised Tandem Right shall be in cash
(or, if so provided, in an equivalent number of shares of stock based on the
Fair Market Value (on the date of the Option surrender) in an amount up to the
excess of (A) the Fair Market Value (on the date of the Option surrender) of the
amount of shares of stock covered by that portion of the surrendered Option in
which the Optionee is vested over (B) the aggregate exercise price payable for
such vested shares.

                  ii. Concurrent Stock Appreciation Rights. Concurrent Rights
will be granted appurtenant to an Option and may apply to all or any portion of
the shares of stock subject to the underlying Option and shall, except as
specifically set forth in this Section 8, be subject to the same terms and
conditions applicable to the particular Option grant to which the Concurrent
Right pertains. A Concurrent Right shall be exercised automatically at the same
time the underlying Option is exercised with respect to the particular shares of
stock to which the Concurrent Right pertains. The appreciation distribution
payable on an exercised Concurrent Right shall be in cash (or, if so provided,
in an equivalent number of shares of stock based on the Fair Market Value on the
date of exercise of the Concurrent Right) in an amount equal to such portion as
shall be determined by the Board or the Committee at the time of the grant of
the excess of (A) the aggregate Fair Market Value (on the date of the exercise
of the Concurrent Right) of the vested shares of stock purchased under the
underlying Option which have Concurrent Rights appurtenant to them over (B) the
aggregate exercise price paid for such shares.

                  iii. Independent Stock Appreciation Rights. Independent Rights
will be granted independently of any Option and shall, except as specifically
set forth in this Section 8, be subject to the same terms and conditions
applicable to Nonstatutory Stock Options. Independent Rights will be denominated
in share equivalents. The appreciation distribution payable on the exercised
Independent Right shall be not greater than an amount equal to the excess of (A)
the aggregate Fair Market Value (on the date of the exercise of the Independent


                                       10
<PAGE>

Right) of a number of shares of Company stock equal to the number of share
equivalents in which the holder is vested under such Independent Right, and with
respect to which the holder is exercising the Independent Right on such date,
over (B) the aggregate Fair Market Value (on the date of the grant of the
Independent Right) of such number of shares of Company stock. The appreciation
distribution payable on the exercised Independent Right shall be in cash or, if
so provided, in an equivalent number of shares of stock based on the Fair Market
Value on the date of the exercise of the Independent Right.

9.       CANCELLATION AND RE-GRANT OF OPTIONS.

         a. Change in Terms. The Board or the Committee shall have the authority
to effect, at any time and from time to time with the consent of the Optionee or
holder of the Stock Appreciation Rights, to (i) reprice any outstanding Options
and/or Stock Appreciation Rights under this Plan and/or (ii) cancel any
outstanding Options and/or Stock Appreciation Rights and grant in substitution
therefor new Options and/or Stock Appreciation Rights covering the same or
different numbers of shares of stock, but having an exercise price per share not
less than one hundred percent (100%) of the Fair Market Value in the case of an
Incentive Stock Option or, in the case of a 10% stockholder (as described in
subsection 5.b) receiving a new grant of an Incentive Stock Option, not less
than one hundred ten percent (110%) of the Fair Market Value) per share of stock
on the new grant date. Notwithstanding the foregoing, the Board or the Committee
may grant an Option and/or Stock Appreciation Right with an exercise price lower
than that set forth above if such Option and/or Stock Appreciation Right is
granted as part of a transaction to which Section 424(a) of the Code applies.

         b. Effect of Cancellation. Shares subject to an Option or Stock
Appreciation Right canceled under this Section 9 shall continue to be counted
against the maximum award of Options or Stock Appreciation Rights permitted to
be granted pursuant to this Plan. The repricing of an Option or Stock
Appreciation Right under this Section 9, resulting in a reduction of the
exercise price, shall be deemed to be a cancellation of the original Option or
Stock Appreciation Right and the grant of a substitute Option and/or Stock
Appreciation Right. In the event of such repricing, both the original and the
substituted Options shall be counted against the maximum awards of Options and
Stock Appreciation Rights permitted to be granted pursuant to this Plan, if any.
The provisions of this subsection 9.b) shall be applicable only to the extent
required by Section 162(m) of the Code.

10.      MISCELLANEOUS.

         a. Acceleration. The Board shall have the power to accelerate the time
at which a Stock Award may first be exercised or the time during which a Stock
Award or any part thereof will vest, notwithstanding the provisions in the Stock
Award stating the time at which it may first be exercised or the time during
which it will vest.

         b. No Rights as Shareholder. Neither an Employee, Director or
Consultant, nor any person to whom a Stock Award is transferred shall be deemed
to be the holder of, or to have any of the rights of a holder with respect to,
any shares subject to such Stock Award unless

                                       12
<PAGE>

and until such person has satisfied all requirements for exercise of the Stock
Award pursuant to its terms.

         c. No Agreement for Employment. Nothing in this Plan, or any instrument
executed or Stock Award granted pursuant hereto, shall confer upon any Employee,
Director or Consultant or other holder of Stock Awards any right to continue in
the employ of the Company or any Affiliate (or to continue acting as a Director
of or Consultant) or shall affect the right of the Company or any Affiliate to
terminate the employment of any Employee with or without cause, the right of the
Company's Board and or the Company's shareholders to remove any Director
pursuant to the terms of the Company's ByLaws and the laws of the State of
California, or the right to terminate the relationship of any Consultant
pursuant to the terms of such Consultant's agreement with the Company or
Affiliate.

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

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

         f. Tax Payments. To the extent provided by the terms of a Stock Award
Agreement, the person to whom a Stock Award is granted may satisfy any federal,
state or local tax withholding obligation relating to the exercise or
acquisition of stock under a Stock Award by any of the following means or by a
combination of such means: (i) tendering a cash payment; (ii) authorizing the
Company to withhold shares from the shares of the common stock otherwise
issuable to the participant as a result of the exercise or acquisition of stock
under the


                                       12
<PAGE>

Stock Award; or (iii) delivering to the Company owned and unencumbered shares of
the common stock of the Company.

11.      ADJUSTMENTS UPON CHANGES IN STOCK.

         a. General. If any change is made in the stock subject to this Plan, or
subject to any Stock Award (through merger, consolidation, reorganization,
recapitalization, stock dividend, dividend in property other than cash, stock
split, liquidating dividend, combination of shares, exchange of shares, change
in corporate structure or other transaction not involving the receipt of
consideration by the Company), this Plan will be appropriately adjusted in the
type(s) and maximum number of securities subject to this Plan, and the
outstanding Stock Awards will be appropriately adjusted in the type(s) and
number of securities and price per share of stock subject to such outstanding
Stock Awards. Such adjustments shall be made by the Board or the Committee, the
determination of which shall be final, binding and conclusive. (The conversion
of any convertible securities of the Company shall not be treated as a
"transaction not involving the receipt of consideration by the Company.")

         b. Reorganization. If the Company enters into an Acquisition
Transaction (as defined below) and the surviving or acquiring business entity
agrees to assume the obligations of the Company with respect to Stock Awards,
the recipients of Stock Awards under this Plan will be entitled to receive
substitute Stock Awards from the acquiring or surviving business entity which
provide similar rights to those which they possessed in the Company. If the
surviving or acquiring business entity does not agree to assume or continue such
Stock Awards, or to substitute similar options for such Stock Awards outstanding
under this Plan, then, with respect to Stock Awards held by persons then
performing services as Employees, Directors or Consultants, the time during
which such Stock Awards may be exercised shall be accelerated and the Stock
Awards terminated if not exercised after such acceleration and at or prior to
such event. For the purposes of this subsection 11.b, an "Acquisition
Transaction" shall be defined as: (i) a sale of all or substantially all of the
Company's assets other than in the ordinary course of business, followed by a
liquidation of the Company's assets to its shareholders; (ii) a merger of the
Company into or consolidation of the Company with another business entity in
which the Corporation is not the surviving entity (other than a merger or
consolidation for the purposes of reincorporating the Company in another
jurisdiction or if the existing shareholders of the Company prior to the merger
or consolidation own over 50% of the voting securities of the surviving business
entity after the transaction); or (iii) a reverse merger in which the Company is
the surviving entity but the shares of the Company's Common Stock are converted
by virtue of the merger into other property.

12.      AMENDMENT OF THE PLAN AND STOCK AWARDS.

         a. Authority to Amend. The Board at any time, and from time to time,
may amend this Plan. However, except as provided in Section 11 relating to
adjustments upon changes in stock, no amendment shall be effective unless
approved by the shareholders of the Company within twelve (12) months before or
after the adoption of the amendment, where the amendment will:


                                       13
<PAGE>

               i. Increase the number of shares reserved for Stock Awards under
this Plan;

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

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

         b. Shareholder Approval. The Board may in its sole discretion submit
any other amendment to this Plan for stockholder approval, including, but not
limited to, amendments to this Plan intended to satisfy the requirements of
Section 162(m) of the Code and the regulations promulgated thereunder regarding
the exclusion of performance-based compensation from the limit on corporate
deductibility of compensation paid to certain executive officers.

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

         d. No Impairment of Rights. The Board at any time, and from time to
time, may amend the terms of any one or more Stock Award; provided, however,
that the rights and obligations under any Stock Award shall not be impaired by
any such amendment unless: (i) the Company requests the consent of the person to
whom the Stock Award was granted and (ii) such person consents in writing to the
amendment.

13.      TERMINATION OR SUSPENSION OF PLAN.

         a. Date of Termination/Suspension. The Board may suspend or terminate
this Plan any time. Unless sooner terminated, this Plan shall terminate on the
tenth anniversary date after which this Plan was adopted by the Board. No Stock
Awards may be granted under this Plan while this Plan is suspended or after it
is terminated.

         b. Existing Rights Not Impaired. Rights and obligations under any Stock
Award granted while this Plan is in effect shall not be impaired by suspension
or termination of this Plan, except with the consent of the person to whom the
Stock Award was granted.

14.      EFFECTIVE DATE OF PLAN.

         This Plan shall become effective upon the date adopted by the Board,
provided that this Plan shall terminate and be of no further effect if the
shareholders do not approve this Plan within 12 months of the date it is
adopted. No Stock Awards granted under this Plan shall be exercised unless and
until this Plan has been approved by the shareholders, and all Stock Awards
granted under this Plan shall immediately terminate and be rescinded if such
approval is not obtained within that time.


                                       14