<PAGE>

                                                                     EXHIBIT 4.2

                               PRA HOLDINGS, INC.

                                STOCK OPTION PLAN
<PAGE>
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                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                             Page
                                                                             ----
<S>                                                                          <C>
 1.     PURPOSES OF THE PLAN.............................................     1
 2.     DEFINITIONS......................................................     1
 3.     STOCK SUBJECT TO THE PLAN........................................     4
 4.     ADMINISTRATION OF THE PLAN.......................................     4
 5.     ELIGIBILITY......................................................     6
 6.     LIMITATIONS......................................................     6
 7.     TERM OF PLAN.....................................................     7
 8.     TERM OF OPTION...................................................     7
 9.     OPTION EXERCISE PRICE AND CONSIDERATION..........................     7
10.     EXERCISE OF OPTION...............................................     8
11.     NON-TRANSFERABILITY OF OPTIONS...................................    11
12.     ADJUSTMENTS UPON CHANGES IN CAPITALIZATION,
        MERGER OR ASSET SALE.............................................    11
13.     TIME OF GRANTING OPTIONS.........................................    13
14.     AMENDMENT AND TERMINATION OF THE PLAN............................    13
15.     STOCKHOLDER APPROVAL.............................................    14
16.     INABILITY TO OBTAIN AUTHORITY....................................    14
17.     RESERVATION OF SHARES............................................    14
18.     INFORMATION TO HOLDERS AND PURCHASERS............................    14
19.     REPURCHASE PROVISIONS............................................    14
20.     INVESTMENT INTENT................................................    15
21.     GOVERNING LAW....................................................    16
</TABLE>

                                      i
<PAGE>

                               PRA HOLDINGS, INC.

                                STOCK OPTION PLAN

      1.    Purposes of the Plan. The purposes of the PRA Holdings, Inc. 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 Corporation's
business. Options granted under the Plan may be Incentive Stock Options or
Non-Qualified Stock Options, as determined by the Administrator at the time of
grant.

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

            (a)   "Acquisition" means (i) sale, transfer, consolidation or
merger of the Corporation with or into any other corporation or other entity or
person in which the stockholders of the Corporation prior to such consolidation
or merger own less than fifty percent (50%) of the Corporation's voting power
immediately after such consolidation or merger, excluding any consolidation or
merger effected exclusively to change the domicile of the Corporation and in
each instance, if following such transaction, Genstar Capital, L.P. and its
affiliates are no longer able to elect a majority of the Board or the surviving
entity in such transaction; or (ii) a sale of all or substantially all of the
assets of the Corporation.

            (b)   "Administrator" means the Board or the Committee responsible
for conducting the general administration of the Plan, as applicable, in
accordance with Section 4 hereof.

            (c)   "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 are granted under the Plan.

            (d)   "Board" means the Board of Directors of the Corporation.

            (e)   "Code" means the Internal Revenue Code of 1986, as amended, or
any successor statute or statutes thereto. Reference to any particular Code
section shall include any successor section.

            (f)   "Committee" means a committee appointed by the Board in
accordance with Section 4 hereof.

            (g)   "Common Stock" means the Common Stock of the Corporation, par
value $0.01 per share.

            (h)   "Corporation" means PRA Holdings, Inc., a Delaware
corporation.

            (i)   "Consultant" means any consultant or adviser if: (i) the
consultant or adviser renders bona fide services to the Corporation or any
Parent or Subsidiary of the Corporation; (ii) the services rendered by the
consultant or adviser are not in connection with the

<PAGE>

offer or sale of securities in a capital-raising transaction and do not directly
or indirectly promote or maintain a market for the Corporation's securities; and
(iii) the consultant or adviser is a natural person who has contracted directly
with the Corporation or any Parent or Subsidiary of the Corporation to render
such services.

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

            (k)   "Employee" means any person, including an Officer or Director,
who is an employee (as defined in accordance with Section 3401(c) of the Code)
of the Corporation or any Parent or Subsidiary of the Corporation. A Service
Provider shall not cease to be an Employee in the case of (i) any leave of
absence approved by the Corporation or (ii) transfers between locations of the
Corporation or between the Corporation, its Parent, any Subsidiary, or any
successor. For purposes of Incentive Stock Options, no such leave may exceed
ninety (90) days, unless reemployment upon expiration of such leave is
guaranteed by statute or contract. Neither service as a Director nor payment of
a director's fee by the Corporation shall be sufficient, by itself, to
constitute "employment" by the Corporation.

            (l)   "Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor statute or statutes thereto. Reference to any
particular Exchange Act section shall include any successor section.

            (m)   "Fair Market Value" means, as of any date, the value of a
share 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 SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for a share of 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, its Fair Market Value
shall be the mean between the high bid and low asked prices for a share of the
Common Stock on the last market trading day prior to the day of determination;
or

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

            (n)   "Holder" means a person who has been granted or awarded an
Option or who holds Shares acquired pursuant to the exercise of an Option.

            (o)   "Immediate Family" means parents, siblings, spouse and issue,
spouses of such issue and any trust for the benefit of, or the legal
representative of, any of the preceding persons, or any partnership
substantially all of the partners of which are one or more of such persons or
the Service Provider or any limited liability Corporation substantially all of
the members of which are one or more of such persons or the Service Provider.

                                       2
<PAGE>

            (p)   "Incentive Stock Option" means an Option intended to qualify
as an incentive stock option within the meaning of Section 422 of the Code and
which is designated as an Incentive Stock Option by the Administrator.

            (q)   "Independent Director" means a Director who is not an Employee
of the Corporation.

            (r)   "Non-Qualified Stock Option" means an Option (or portion
thereof) that is not designated as an Incentive Stock Option by the
Administrator, or which is designated as an Incentive Stock Option by the
Administrator but fails to qualify as an incentive stock option within the
meaning of Section 422 of the Code.

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

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

            (u)   "Option Agreement" means a written agreement between the
Corporation and a Holder evidencing the terms and conditions of an individual
Option grant. The Option Agreement is subject to the terms and conditions of the
Plan.

            (v)   "Parent" means any corporation, whether now or hereafter
existing (other than the Corporation), in an unbroken chain of corporations
ending with the Corporation if each of the corporations other than the last
corporation in the unbroken chain owns stock possessing more than fifty percent
of the total combined voting power of all classes of stock in one of the other
corporations in such chain.

            (w)   "Plan" means the PRA Holdings, Inc. Stock Option Plan.

            (x)   "Public Trading Date" means the first date upon which Common
Stock of the Corporation is listed (or approved for listing) upon notice of
issuance on any securities exchange or designated (or approved for designation)
upon notice of issuance as a national market security on an interdealer
quotation system.

            (y)   "Restricted Stock" means Shares acquired pursuant to the
exercise of an unvested Option in accordance with Section 10(h) below.

            (z)   "Rule 16b-3" means that certain Rule 16b-3 under the Exchange
Act, as such Rule may be amended from time to time.

            (aa)  "Section 16(b)" means Section 16(b) of the Exchange Act, as
such Section may be amended from time to time.

            (bb)  "Securities Act" means the Securities Act of 1933, as amended,
or any successor statute or statutes thereto. Reference to any particular
Securities Act section shall include any successor section.

                                       3
<PAGE>

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

            (dd)  "Share" means a share of Common Stock, as adjusted in
accordance with Section 13 below.

            (ee)  "Subsidiary" means any corporation, whether now or hereafter
existing (other than the Corporation), in an unbroken chain of corporations
beginning with the Corporation if each of the corporations other than the last
corporation in the unbroken chain owns stock possessing more than fifty percent
of the total combined voting power of all classes of stock in one of the other
corporations in such chain.

      3.    Stock Subject to the Plan. Subject to the provisions of Section 13
of the Plan, the shares of stock subject to Options shall be Common Stock.
Subject to the provisions of Section 13 of the Plan, the maximum aggregate
number of Shares which may be issued upon exercise of such Options is 441,399
Shares. Shares issued upon exercise of Options may be authorized but unissued,
or reacquired Common Stock. If an Option expires or becomes unexercisable
without having been exercised in full, the unpurchased Shares which were subject
thereto shall become available for future grant or sale under the Plan (unless
the Plan has terminated). Shares which are delivered by the Holder or withheld
by the Corporation upon the exercise of an Option under the Plan, in payment of
the exercise price thereof or tax withholding thereon, may again be optioned,
granted or awarded hereunder, subject to the limitations of this Section 3. If
Shares of Restricted Stock are repurchased by the Corporation at their original
purchase price, such Shares shall become available for future grant under the
Plan. Notwithstanding the provisions of this Section 3, no Shares may again be
optioned, granted or awarded if such action would cause an Incentive Stock
Option to fail to qualify as an Incentive Stock Option under Code Section 422.

      4.    Administration of the Plan.

            (a)   Administrator. Unless and until the Board delegates
administration to a Committee as set forth below, the Plan shall be administered
by the Board. The Board may delegate administration of the Plan to a Committee
or Committees of one or more members of the Board, and the term "Committee"
shall apply to any person or persons to whom such authority has been delegated.
If administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore possessed
by the Board, including the power to delegate to a subcommittee 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 subcommittee),
subject, however, to such resolutions, not inconsistent with the provisions of
the Plan, as may be adopted from time to time by the Board. Notwithstanding the
foregoing, however, from and after the Public Trading Date, a Committee of the
Board shall administer the Plan and the Committee shall consist solely of two or
more Independent Directors each of whom is both an "outside director," within
the meaning of Section 162(m) of the Code, and a "non-employee director" within
the meaning of Rule 16b-3. Within the scope of such authority, the Board or the
Committee may (i) delegate to a committee of one or more members of the Board
who are not Independent Directors the authority to grant awards under the Plan
to eligible persons who are either (1) not then "covered employees," within the
meaning of Section 162(m) of the Code and are not expected to be "covered
employees" at the time of recognition of income resulting from such award or (2)
not persons with respect to whom the Corporation

                                       4
<PAGE>

wishes to comply with Section 162(m) of the Code and/or (ii) delegate to a
committee of one or more members of the Board who are not "non-employee
directors," within the meaning of Rule 16b-3, the authority to grant awards
under the Plan to eligible persons who are not then subject to Section 16 of the
Exchange Act. The Board may abolish the Committee at any time and revest in the
Board the administration of the Plan. Appointment of Committee members shall be
effective upon acceptance of appointment. Committee members may resign at any
time by delivering written notice to the Board. Vacancies in the Committee may
only be filled by the Board.

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

                  (i)   to determine the Fair Market Value;

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

                  (iii) to determine the number of Shares to be covered by each
such award granted hereunder;

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

                  (v)   to determine the terms and conditions 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 vest or 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 Common Stock relating thereto, based in each case on such factors as the
Administrator, in its sole discretion, shall determine);

                  (vi)  to determine whether to offer to buyout a previously .
granted Option as provided in subsection 10(i) and to determine the terms and
conditions of such offer and buyout (including whether payment is to be made in
cash or Shares);

                  (vii) 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;

                  (viii) to allow Holders to satisfy withholding tax obligations
by electing to have the Corporation withhold from the Shares to be issued upon
exercise of an Option that number of Shares having a Fair Market Value equal to
the minimum amount required to be withheld based on the statutory withholding
rates for federal and state tax purposes that apply to supplemental taxable
income. 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 Holders 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;

                                       5
<PAGE>

                  (ix)  to amend the Plan or any Option granted under the Plan
as provided in Section 17; and

                  (x)   to construe and interpret the terms of the Plan and
awards granted pursuant to the Plan and to exercise such powers and perform such
acts as the Administrator deems necessary or desirable to promote the best
interests of the Corporation which are not in conflict with the provisions of
the Plan.

            (c)   Effect of Administrator's Decision. All decisions,
determinations and interpretations of the Administrator shall be final and
binding on all Holders.

      5.    Eligibility. Non-Qualified Stock Options may be granted to any
Service Provider as selected by the Administrator. Incentive Stock Options may
be granted only to Employees. If otherwise eligible, an Employee or Consultant
who has been granted an Option may be granted additional Options.

      6.    Limitations.

            (a)   Each Option shall be designated by the Administrator in the
Option Agreement as either an Incentive Stock Option or a Non-Qualified Stock
Option. However, notwithstanding such designations, to the extent that the
aggregate Fair Market Value of Shares subject to a Holder's Incentive Stock
Options and other incentive stock options granted by the Corporation, any Parent
or Subsidiary, which become exercisable for the first time during any calendar
year (under all plans of the Corporation or any Parent or Subsidiary) exceeds
$100,000, such excess Options or other options shall be treated as Non-Qualified
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, and the Fair Market
Value of the Shares shall be determined as of the time of grant.

            (b)   Neither the Plan, or any Option shall confer upon a Holder any
right with respect to continuing the Holder's employment or consulting
relationship with the Corporation, nor shall they interfere in any way with the
Holder's right or the Corporation's right to terminate such employment or
consulting relationship at any time, with or without cause.

            (c)   No Service Provider shall be granted, in any calendar year,
Options or Stock Purchase Rights to purchase more than 220,700 Shares; provided,
however, that the foregoing limitation shall not apply prior to the Public
Trading Date and, following the Public Trading Date, the foregoing limitation
shall not apply until the earliest of: (i) the first material modification of
the Plan (including any increase in the number of shares reserved for issuance
under the Plan in accordance with Section 3); (ii) the issuance of all of the
shares of Common Stock reserved for issuance under the Plan; (iii) the
expiration of the Plan; (iv) the first meeting of stockholders at which
Directors of the Corporation are to be elected that occurs after the close of
the third calendar year following the calendar year in which occurred the first
registration of an equity security of the Corporation under Section 12 of the
Exchange Act; or (v) such other date required by Section 162(m) of the Code and
the rules and regulations promulgated thereunder. The foregoing limitation shall
be adjusted proportionately in connection with any change in the Corporation's
capitalization as described in Section 13. For purposes of this

                                       6
<PAGE>

Section 6(c), if an Option is canceled in the same calendar year it was granted
(other than in connection with a transaction described in Section 13), the
canceled Option will be counted against the limit set forth in this Section
6(c). For this purpose, if the exercise price of an Option is reduced, the
transaction shall be treated as a cancellation of the Option and the grant of a
new Option.

      7.    Term of Plan. The Plan shall become effective upon its initial
adoption by the Board and shall continue in effect until it is terminated under
Section 15 of the Plan. No Options may be issued under the Plan after the tenth
(10th) anniversary of the earlier of (i) the date upon which the Plan is adopted
by the Board or (ii) the date the Plan is approved by the stockholders.

      8.    Term of Option. The term of each Option shall be stated in the
Option Agreement; provided, however, that the term shall be no more than ten
(10) years from the date of grant thereof. In the case of an Incentive Stock
Option granted to a Holder who, at the time the Option is granted, owns (or is
treated as owning under Code Section 424) stock representing more than ten
percent (10%) of the voting power of all classes of stock of the Corporation or
any Parent or Subsidiary, the term of the 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)   Except as provided in Section 13, the per share exercise price
for the Shares to be issued upon exercise of an Option shall be such price as is
determined by the Administrator, but shall be subject to the following:

                  (i)   In the case of an Incentive Stock Option

                        (A)   granted to an Employee who, at the time of grant
of such Option, owns (or is treated as owning under Code Section 424) stock
representing more than ten percent (10%) of the voting power of all classes of
stock of the Corporation or any Parent or Subsidiary, the per Share exercise
price shall be no less than one hundred ten percent (110%) of the Fair Market
Value per Share on the date of grant.

                        (B)   granted to any other Employee, the per Share
exercise price shall be no less than one hundred percent (100%) of the Fair
Market Value per Share on the date of grant.

                  (ii)  In the case of a Non-Qualified Stock Option

                        (A)   granted to a Service Provider who, at the time of
grant of such Option, owns stock representing more than ten percent (10%) of the
voting power of all classes of stock of the Corporation or any Parent or
Subsidiary, the exercise price shall be no less than one hundred ten percent
(110%) of the Fair Market Value per Share on the date of the grant.

                        (B)   granted to any other Service Provider, the per
Share exercise price shall be no less than eighty-five percent (85%) of the Fair
Market Value per Share on the date of grant.

                                       7
<PAGE>

                  (iii) Notwithstanding the foregoing, Options may be granted
with a per Share exercise price other than as required above pursuant to a
merger or other corporate transaction.

            (b)   The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined by
the Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant). Such consideration may consist of (1) cash,
(2) check, (3) with the consent of the Administrator, a full recourse promissory
note bearing interest (at no less than such rate as shall then preclude the
imputation of interest under the Code) and payable upon such terms as may be
prescribed by the Administrator, (4) with the consent of the Administrator,
other Shares which (x) in the case of Shares acquired from the Corporation, have
been owned by the Holder for more than six (6) months on the date of surrender,
and (y) have a Fair Market Value on the date of surrender equal to the aggregate
exercise price of the Shares as to which such Option shall be exercised, (5)
with the consent of the Administrator, surrendered Shares then issuable upon
exercise of the Option having a Fair Market Value on the date of exercise equal
to the aggregate exercise price of the Option or exercised portion thereof, (6)
property of any kind which constitutes good and valuable consideration, (7) with
the consent of the Administrator, delivery of a notice that the Holder has
placed a market sell order with a broker with respect to Shares then issuable
upon exercise of the Options and that the broker has been directed to pay a
sufficient portion of the net proceeds of the sale to the Corporation in
satisfaction of the Option exercise price, provided, that payment of such
proceeds is then made to the Corporation upon settlement of such sale, or (8)
with the consent of the Administrator, any combination of the foregoing methods
of payment.

      10.   Exercise of Option.

            (a)   Vesting; Fractional Exercises. Except as provided in Section
13, Options granted hereunder shall be vested and exercisable according to the
terms hereof at such times and under such conditions as determined by the
Administrator and set forth in the Option Agreement; provided, however, that,
except with regard to Options granted to Officers, Directors or Consultants, in
no event shall an Option granted hereunder become vested and exercisable at a
rate of less than twenty percent (20%) per year over five (5) years from the
date the Option is granted, subject to reasonable conditions, such as continuing
to be a Service Provider. An Option may not be exercised for a fraction of a
Share.

            (b)   Deliveries upon Exercise. All or a portion of an exercisable
Option shall be deemed exercised upon delivery of all of the following to the
Secretary of the Corporation or his or her office:

                  (i)   A written or electronic notice complying with the
applicable rules established by the Administrator stating that the Option, or a
portion thereof, is exercised. The notice shall be signed by the Holder or other
person then entitled to exercise the Option or such portion of the Option;

                  (ii)  Such representations and documents as the Administrator,
in its sole discretion, deems necessary or advisable to effect compliance with
Applicable Laws. The Administrator may, in its sole discretion, also take
whatever additional actions it deems

                                       8
<PAGE>

appropriate to effect such compliance, including, without limitation, placing
legends on share certificates and issuing stop transfer notices to agents and
registrars;

                  (iii) Upon the exercise of all or a portion of an unvested
Option pursuant to Section 10(h), a Restricted Stock purchase agreement in a
form determined by the Administrator and signed by the Holder or other person
then entitled to exercise the Option or such portion of the Option; and

                  (iv)  In the event that the Option shall be exercised pursuant
to Section 10(f) by any person or persons other than the Holder, appropriate
proof of the right of such person or persons to exercise the Option.

            (c)   Conditions to Delivery of Share Certificates. The Corporation
shall not be required to issue or deliver any certificate or certificates for
Shares purchased upon the exercise of any Option or portion thereof prior to
fulfillment of all of the following conditions:

                  (i)   The admission of such Shares to listing on all stock
exchanges on which such class of stock is then listed;

                  (ii)  The completion of any registration or other
qualification of such Shares under any state or federal law, or under the
rulings or regulations of the Securities and Exchange Commission or any other
governmental regulatory body which the Administrator shall, in its sole
discretion, deem necessary or advisable;

                  (iii) The obtaining of any approval or other clearance from
any state or federal governmental agency which the Administrator shall, in its
sole discretion, determine to be necessary or advisable;

                  (iv)  The lapse of such reasonable period of time following
the exercise of the Option as the Administrator may establish from time to time
for reasons of administrative convenience; and

                  (v)   The receipt by the Corporation of full payment for such
Shares, including payment of any applicable withholding tax, which in the sole
discretion of the Administrator may be in the form of consideration used by the
Holder to pay for such Shares under Section 9(b).

            (d)   Termination of Relationship as a Service Provider. If a Holder
ceases to be a Service Provider other than by reason of the Holder's disability
or death, such Holder 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; provided, however, that prior to the Public Trading
Date, such period of time shall not be less than thirty (30) days (but in no
event later than the expiration of the term of the 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 Holder's
termination. If, on the date of termination, the Holder is not vested as to his
or her entire Option, the Shares covered by the unvested portion of the Option
immediately cease to be issuable under the Option and shall again become
available for issuance under the Plan. If, after termination, the Holder does
not exercise his or her Option

                                       9
<PAGE>

within the time period specified herein, the Option shall terminate, and the
Shares covered by such Option shall again become available for issuance under
the Plan.

            (e)   Disability of Holder. If a Holder ceases to be a Service
Provider as a result of the Holder's disability, the Holder 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; provided, however,
that prior to the Public Trading Date, such period of time shall not be less
than six (6) months (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 Holder's termination. If such disability is not a
"disability" as such term is defined in Section 22(e)(3) of the Code, in the
case of an Incentive Stock Option such Incentive Stock Option shall
automatically cease to be treated as an Incentive Stock Option and shall be
treated for tax purposes as a Non-Qualified Stock Option from and after the day
which is three (3) months and one (1) day following such termination. If, on the
date of termination, the Holder is not vested as to his or her entire Option,
the Shares covered by the unvested portion of the Option shall immediately cease
to be issuable under the Option and shall again become available for issuance
under the Plan. If, after termination, the Holder does not exercise his or her
Option within the time specified herein, the Option shall terminate, and the
Shares covered by such Option shall again become available for issuance under
the Plan.

            (f)   Death of Holder. If a Holder dies while a Service Provider,
the Option may be exercised within such period of time as is specified in the
Option Agreement provided, however, that prior to the Public Trading Date, such
period of time shall not be less than six (6) months (but in no event later than
the expiration of the term of such Option as set forth in the Notice of Grant),
by the Holder's estate or by a person who acquires the 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 Holder's termination. If, at the time of death, the Holder is not vested as
to his or her entire Option, the Shares covered by the unvested portion of the
Option shall immediately cease to be issuable under the Option and shall again
become available for issuance under the Plan. The Option may be exercised by the
executor or administrator of the Holder's estate or, if none, by the person(s)
entitled to exercise the Option under the Holder'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
again become available for issuance under the Plan.

            (g)   Regulatory Extension. A Holder's Option Agreement may provide
that if the exercise of the Option following the termination of the Holder's
status as a Service Provider (other than upon the Holder's death or Disability)
would be prohibited at any time solely because the issuance of shares would
violate the registration requirements under the Securities Act, then the Option
shall terminate on the earlier of (i) the expiration of the term of the Option
set forth in Section 8 or (ii) the expiration of a period of three (3) months
after the termination of the Holder's status as a Service Provider during which
the exercise of the Option would not be in violation of such registration
requirements.

                                       10
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            (h)   Early Exercisability. The Administrator may provide in the
terms of a Holder's Option Agreement that the Holder may, at any time before the
Holder's status as a Service Provider terminates, exercise the Option in whole
or in part prior to the full vesting of the Option; provided, however, that
subject to Section 20, Shares acquired upon exercise of an Option which has not
fully vested may be subject to any forfeiture, transfer or other restrictions as
the Administrator may determine in its sole discretion.

            (i)   Buyout Provisions. The Administrator may at any time offer to
buyout 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 Holder at the time that such offer is made.

      11.   Non-Transferability of Options. Options may not be sold, pledged,
assigned, hypothecated, 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 Holder, only by the Holder. Notwithstanding the foregoing
provisions of this Section 11, the Committee may, provide that Options or
Restricted Stock may be transferred to any Immediate Family member of the
Service Provider; provided, however, that any such transfer is without payment
of any consideration whatsoever, that no such transfer shall be valid unless
first approved by the Committee, acting in its sole discretion, and that any
Option or Restricted Stock so transferred shall remain subject to the terms and
conditions of the Option or Restricted Stock purchase agreement.

      12.   Adjustments upon Changes in Capitalization, Merger or Asset Sale.

            (a)   In the event that the Administrator determines that any
dividend or other distribution (whether in the form of cash, Common Stock, other
securities, or other property), recapitalization, reclassification, stock split,
reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, liquidation, dissolution, or sale, transfer, exchange
or other disposition of all or substantially all of the assets of the
Corporation, or exchange of Common Stock or other securities of the Corporation,
issuance of warrants or other rights to purchase Common Stock or other
securities of the Corporation, or other similar corporate transaction or event,
in the Administrator's sole discretion, affects the Common Stock such that an
adjustment is determined by the Administrator to be appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits intended
by the Corporation to be made available under the Plan or with respect to any
Option or Restricted Stock, then the Administrator shall, in such manner as it
may deem equitable, adjust any or all of:

                  (i)   the number and kind of shares of Common Stock (or other
securities or property) with respect to which Options may be granted or awarded
(including, but not limited to, adjustments of the limitations in Section 3 on
the maximum number and kind of shares which may be issued and adjustments of the
maximum number of Shares that may be purchased by any Holder in any calendar
year pursuant to Section 6(c));

                  (ii)  the number and kind of shares of Common Stock (or other
securities or property) subject to outstanding Options or Restricted Stock; and

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                  (iii) the grant or exercise price with respect to any Option.

            (b)   In the event of any transaction or event described in Section
12(a), the Administrator, in its sole discretion, and on such terms and
conditions as it deems appropriate, either by the terms of the Option or
Restricted Stock or by action taken prior to the occurrence of such transaction
or event and either automatically or upon the Holder's request, is hereby
authorized to take any one or more of the following actions whenever the
Administrator determines that such action is appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended by the
Corporation to be made available under the Plan or with respect to any Option or
Restricted Stock granted or issued under the Plan or to facilitate such
transaction or event:

                  (i)   To provide for either the purchase of any such Option or
Restricted Stock for an amount of cash equal to the amount that could have been
obtained upon the exercise of such Option or realization of the Holder's rights
had such Option or Restricted Stock been currently exercisable or payable or
fully vested or the replacement of such Option or Restricted Stock with other
rights or property selected by the Administrator in its sole discretion;

                  (ii)  To provide that such Option shall be exercisable as to
all shares covered thereby, notwithstanding anything to the contrary in the Plan
or the provisions of such Option;

                  (iii) To provide that such Option or Restricted Stock be
assumed by the successor or survivor corporation, or a parent or subsidiary
thereof, or shall be substituted for by similar options, rights or awards
covering the stock of the successor or survivor corporation, or a parent or
subsidiary thereof, with appropriate adjustments as to the number and kind of
shares and prices;

                  (iv)  To make adjustments in the number and type of shares of
Common Stock (or other securities or property) subject to outstanding Options,
and/or in the terms and conditions of (including the grant or exercise price),
and the criteria included in, outstanding Options or Restricted Stock or Options
or Restricted Stock which may be granted in the future; and

                  (v)   To provide that immediately upon the consummation of
such event, such Option shall not be exercisable and shall terminate; provided,
that for a specified period of time prior to such event, such Option shall be
exercisable as to all Shares covered thereby, and the restrictions imposed under
an Option Agreement or Restricted Stock purchase agreement upon some or all
Shares may be terminated and, in the case of Restricted Stock, some or all
shares of such Restricted Stock may cease to be subject to repurchase,
notwithstanding anything to the contrary in the Plan or the provisions of such
Option or Restricted Stock purchase agreement.

            (c)   Subject to Section 3, the Administrator may, in its sole
discretion, include such further provisions and limitations in any Option or
Restricted Stock agreement or certificate, as it may deem equitable and in the
best interests of the Corporation.

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            (d)   If the Corporation undergoes an Acquisition, then any
surviving corporation or entity or acquiring corporation or entity, or affiliate
of such corporation or entity, may assume any Options or Restricted Stock
outstanding under the Plan or may substitute similar stock awards (including an
award to acquire the same consideration paid to the stockholders in the
transaction described in this subsection 12(d)) for those outstanding under the
Plan.

            (e)   Notwithstanding the foregoing, in the event that the
Corporation becomes a party to a transaction that is intended to qualify for
"pooling of interests" accounting treatment and, but for one or more of the
provisions of this Plan or any Option Agreement or any Restricted Stock purchase
agreement would so qualify, then this Plan and any such agreement shall be
interpreted so as to preserve such accounting treatment, and to the extent that
any provision of the Plan or any such agreement would disqualify the transaction
from pooling of interests accounting treatment (including, if applicable, an
entire Option Agreement or Restricted Stock purchase agreement), then such
provision shall be null and void. All determinations to be made in connection
with the preceding sentence shall be made by the independent accounting firm
whose opinion with respect to "pooling of interests" treatment is required as a
condition to the Corporation's consummation of such transaction.

            (f)   The existence of the Plan, any Option Agreement or Restricted
Stock purchase agreement and the Options granted hereunder shall not affect or
restrict in any way the right or power of the Corporation or the stockholders of
the Corporation to make or authorize any adjustment, recapitalization,
reorganization or other change in the Corporation's capital structure or its
business, any merger or consolidation of the Corporation, any issue of stock or
of options, warrants or rights to purchase stock or of bonds, debentures,
preferred or prior preference stocks whose rights are superior to or affect the
Common Stock or the rights thereof or which are convertible into or exchangeable
for Common Stock, or the dissolution or liquidation of the Corporation, or any
sale or transfer of all or any part of its assets or business, or any other
corporate act or proceeding, whether of a similar character or otherwise.

      13.   Time of Granting Options. The date of grant of an Option shall, for
all purposes, be the date on which the Administrator makes the determination
granting such Option, or such other date as is determined by the Administrator.
Notice of the determination shall be given to each Employee or Consultant to
whom an Option is so granted within a reasonable time after the date of such
grant.

      14.   Amendment and Termination of the Plan. (a) Amendment and
Termination. The Board may at any time wholly or partially amend, alter, suspend
or terminate the Plan. However, without approval of the Corporation's
stockholders given within twelve (12) months before or after the action by the
Board, no action of the Board may, except as provided in Section 12, increase
the limits imposed in Section 3 on the maximum number of Shares which may be
issued under the Plan or extend the term of the Plan under Section 7.

            (b)   Stockholder Approval. The Board shall obtain stockholder
approval of any Plan amendment to the extent necessary and desirable to comply
with Applicable Laws.

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

      15.   Stockholder Approval. The Plan will be submitted for the approval of
the Corporation's stockholders within twelve (12) months after the date of the
Board's initial adoption of the Plan. Options may be granted or awarded prior to
such stockholder approval, provided that such Options shall not be exercisable,
shall not vest and the restrictions thereon shall not lapse prior to the time
when the Plan is approved by the stockholders, and provided further that if such
approval has not been obtained at the end of said twelve-month period, all
Options previously granted under the Plan shall thereupon be canceled and become
null and void.

      16.   Inability to Obtain Authority. The inability of the Corporation to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Corporation's counsel to be necessary to the lawful issuance
and sale of any Shares hereunder, shall relieve the Corporation 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.

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

      18.   Information to Holders and Purchasers. Prior to the Public Trading
Date and to the extent required by Section 260.140.46 of Title 10 of the
California Code of Regulations, the Corporation shall provide to each Holder and
to each individual who acquires Shares pursuant to the Plan, not less frequently
than annually during the period such Holder or purchaser has one or more Options
or Stock Purchase Rights outstanding, and, in the case of an individual who
acquires Shares pursuant to the Plan, during the period such individual owns
such Shares, copies of annual financial statements. Notwithstanding the
preceding sentence, the Corporation shall not be required to provide such
statements to key employees whose duties in connection with the Corporation
assure their access to equivalent information.

      19.   Repurchase Provisions. The Administrator in its sole discretion may
provide that the Corporation may repurchase Shares acquired upon exercise of an
Option upon the occurrence of certain specified events, including, without
limitation, a Holder's termination as a Service Provider, divorce, bankruptcy or
insolvency; provided, however, that any such repurchase right shall be set forth
in the applicable Option Agreement or Restricted Stock purchase agreement or in
another agreement referred to in such agreement and, provided further, that to
the extent required by Section 260.140.41 and Section 260.140.42 of Title 10 of
the California Code of Regulations, any such repurchase right set forth in an
Option granted prior to the Public Trading Date to a person who is not an
Officer, Director or Consultant shall be upon the following terms: (i) if the
repurchase option gives the Corporation the right to repurchase the shares upon
termination as a Service Provider at not less than the Fair Market Value of the
shares to be

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purchased on the date of termination of status as a Service Provider, then (A)
the right to repurchase shall be exercised for cash or cancellation of purchase
money indebtedness for the shares within ninety (90) days of termination of
status as a Service Provider (or in the case of shares issued upon exercise of
Options or Stock Purchase Rights after such date of termination, within ninety
(90) days after the date of the exercise) or such longer period as may be agreed
to by the Administrator and the Plan participant and (B) the right terminates
when the shares become publicly traded; and (ii) if the repurchase option gives
the Corporation the right to repurchase the Shares upon termination as a Service
Provider at the original purchase price for such Shares, then (A) the right to
repurchase at the original purchase price shall lapse at the rate of at least
twenty percent (20%) of the shares per year over five (5) years from the date
the Option or Stock Purchase Right is granted (without respect to the date the
Option or Stock Purchase Right was exercised or became exercisable) and (B) the
right to repurchase shall be exercised for cash or cancellation of purchase
money indebtedness for the shares within ninety (90) days of termination of
status as a Service Provider (or, in the case of shares issued upon exercise of
Options, after such date of termination, within ninety (90) days after the date
of the exercise) or such longer period as may be agreed to by the Corporation
and the Plan participant.

      20.   Investment Intent. The Corporation may require a Plan participant,
as a condition of exercising or acquiring stock under any Option, (i) to give
written assurances satisfactory to the Corporation as to the participant's
knowledge and experience in financial and business matters and/or to employ a
purchaser representative reasonably satisfactory to the Corporation 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 Option or Stock Purchase
Right; and (ii) to give written assurances satisfactory to the Corporation
stating that the participant is acquiring the stock subject to the Option for
the participant'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 (A) the issuance of
the shares upon the exercise or acquisition of stock under the applicable Option
has been registered under a then currently effective registration statement
under the Securities Act or (B) as to any particular requirement, a
determination is made by counsel for the Corporation that such requirement need
not be met in the circumstances under the then applicable securities laws. The
Corporation may, upon advice of counsel to the Corporation, place legends on
stock certificates issued under the 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.

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      21.   Governing Law. The validity and enforceability of this Plan shall be
governed by and construed in accordance with the laws of the State of Delaware
without regard to otherwise governing principles of conflicts of law.

                                  * * * * * * *