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                                EXHIBIT 10.32

                      CALIFORNIA CULINARY ACADEMY, INC.

                            1997 STOCK OPTION PLAN


     1.   PURPOSES OF THE PLAN.  The purposes of this Stock Option Plan are:

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

          -    to provide additional incentive to Employees and Consultants, and

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

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

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

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

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

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

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

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

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

          (g)  "Company" means California Culinary Academy, Inc., a 
California corporation.

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

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


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

          (k)  "Employee" means any person, including Officers and Directors, 
employed by the Company or any Parent or Subsidiary of the Company. A Service 
Provider shall not cease to be an Employee in the case of (i) any leave of 
absence approved by the Company or (ii) transfers between locations of the 
Company or between the Company, its Parent, any Subsidiary, or any successor. 
Neither service as a Director nor payment of a director's fee by the Company 
shall be sufficient to constitute "employment" by the Company.

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

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

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

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

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

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

          (o)  "Nonstatutory Stock Option" means an Option not intended to 
qualify as an incentive stock option within the meaning of Section 422 of the 
Code and the regulation promulgated thereunder.

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

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          (q)  "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.

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

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

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

          (u)  "Optioned Stock" means the Common Stock subject to an Option.

          (v)  "Optionee" means the holder of an outstanding Option granted 
under the Plan.

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

          (x)  "Plan" means this 1997 Stock Option Plan.

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

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

         (aa)  "Service Provider" means an Employee or Consultant.

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

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

     3.   STOCK SUBJECT TO THE PLAN.  Subject to the provisions of Section 13 
of the Plan, the maximum aggregate number of Shares which may be optioned and 
sold under the Plan is Six Hundred Thousand (600,000) Shares. The Shares may 
be authorized, but unissued, or reacquired Common Stock.

     If an Option expires or becomes unexercisable without having been 
exercised in full, or is surrendered pursuant to an Option Exchange Program, 
the unpurchased Shares which were subject thereto shall become available for 
future grant or sale under the Plan (unless the Plan has terminated); 
provided, however, that Shares that have actually been issued under the Plan, 
whether upon exercise of an Option, shall not be returned to the Plan and 
shall not become available for future distribution under the Plan.

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     4.   FORM OF OPTION.

          (a)  INCENTIVE OR NONSTATUTORY STOCK OPTIONS. Options issued under 
the Plan may be either Nonstatutory Stock Options or Incentive Stock Options 
or a combination of both.  Whether an Option or a portion thereof is a 
Nonstatutory Stock Option or an Incentive Stock Option shall be clearly 
stated in the Option Agreement.

          (b)  RECLASSIFICATION OF OPTIONS. Any Incentive Stock Option may be 
reclassified into a Nonstatutory Stock Option upon the written request of the 
Optionee and the consent of the Company (which consent may be withheld in the 
sole discretion of the Administrator) by the amendment of its designation and 
the deletion or modification of any provision which, under the terms of the 
Plan, is applicable only to Incentive Stock Options.  The number of shares 
which may be purchased pursuant to an Incentive Stock Option which is so 
reclassified into a Nonstatutory Stock Option may be increased by amendment 
but not in excess of the number of additional shares necessary to provide the 
Optionee with the same economic benefit after federal income taxes upon the 
exercise of the Option as a Nonstatutory Stock Option as the Optionee would 
have obtained upon the exercise of the Option as an Incentive Stock Option.  
In no event shall (i) the provisions of this subsection be interpreted or 
construed to grant any rights, powers or privileges to reclassify or 
otherwise amend an Incentive Stock Option to any person or body other than 
the Administrator; or (ii) any Option Agreement contain any provision which 
purports to grant any such rights, powers or privileges.

          (c)  CANCELLATION OF OPTIONS. With the Optionee's consent, the 
Administrator may cancel any Option issued under the Plan and issue a new 
Option to such Optionee.

     5.   ADMINISTRATION OF THE PLAN.

          (a)  PROCEDURE.

               (i)  MULTIPLE ADMINISTRATIVE BODIES.  The Plan may be 
administered by different Committees with respect to different groups of 
Service Providers.

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

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

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

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

               (i)  to grant Incentive Stock Options, in accordance with 
Section 422 of the Code or Nonstatutory Stock Options;

              (ii)  to determine the Fair Market Value;

             (iii)  to select the Service Providers to whom Options may be 
granted hereunder;

              (iv)  to determine the number of shares of Common Stock to be 
covered by each Option granted hereunder;

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

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

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

            (viii)  to institute an Option Exchange Program;

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

               (x)  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;

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

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

            (xiii)  to authorize any person to execute on behalf of the 
Company any instrument required to effect the grant of an Option previously 
granted by the Administrator;

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

          (c)  EFFECT OF ADMINISTRATOR'S DECISION.  The Administrator's 
decisions, determinations and interpretations shall be final and binding on 
all Optionees and any other holders of Options.

     5.   ELIGIBILITY.

          (a)  INCENTIVE AND NONSTATUTORY STOCK OPTIONS.  Options may be 
granted only to Employees and Consultants.  Incentive Stock Options may be 
granted only to Employees. Nonstatutory Stock Options may be granted to 
Employees and Consultants. An Employee or Consultant who has been granted an 
Option may, if he is otherwise eligible, be granted additional Options.

          (b)  INCENTIVE STOCK OPTIONS TO PROSPECTIVE EMPLOYEES.  No 
Incentive Stock Option shall be granted to any prospective employee prior to 
the date upon which such person becomes an Employee; provided, however, that 
the Administrator may grant an Incentive Stock Option to a prospective 
employee prior to such person's employment, subject to the condition that 
such person become an Employee, in which case, the date of grant shall be the 
date upon which such person becomes an Employee (unless a later date shall be 
specified in the Notice of Grant).

     6.   LIMITATIONS.

          (a)  INCENTIVE STOCK OPTIONS. Each Option shall be designated in 
the Notice of Grant as either an Incentive Stock Option or a Nonstatutory 
Stock Option. However, notwithstanding such designations, to the extent that 
the aggregate Fair Market Value: (i) of Shares subject to an Optionee's 
incentive stock options granted by the Company, any Parent or Subsidiary, 
which (ii) become exercisable for the first time during any calendar year 
(under all plans of the Company and any Parent or Subsidiary) exceeds 
$100,000, such excess Options shall be treated as Nonstatutory Stock Options. 
For purposes of this Section 7(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.

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          (b)  NO RIGHT TO CONTINUED STATUS AS A SERVICE PROVIDER. Neither 
the Plan nor any Option shall confer upon an Optionee any right with respect 
to continuing the Optionee's relationship as a Service Provider with the 
Company, nor shall they interfere in any way with the Optionee's right or the 
Company's right to terminate such relationship at any time, with or without 
cause.

          (c)  NUMERICAL LIMITATIONS. The following limitations shall apply 
to grants of all Options under the Plan:

               (i)  No Service Provider shall be granted, in any fiscal year 
of the Company, Options to purchase more than 100,000 Shares.

              (ii)  In connection with his or her initial service, a Service 
Provider may be granted Options to purchase up to an additional 100,000 
Shares which shall not count against the limit set forth in subsection (i) 
above.

             (iii)  The foregoing limitations shall be adjusted 
proportionately in connection with any change in the Company's capitalization 
as described in Section 13.

              (iv)  If an Option is cancelled in the same fiscal year of the 
Company in which it was granted (other than in connection with a transaction 
described in Section 13), the cancelled Option will be counted against the 
limits set forth in subsections (i) and (ii) above. For this purpose, if the 
exercise price of an Option is reduced, the transaction will be treated as a 
cancellation of the Option and the grant of a new Option.

     7.   TERM OF PLAN.  Subject to Section 20 of the Plan, the Plan shall 
become effective upon the earlier to occur of its adoption by the Board or 
its approval by the shareholders of the Company. It shall continue in effect 
for a term of ten (10) years unless terminated earlier under Section 15 of 
the Plan.

     8.   TERM OF OPTION. The term of each Option shall be stated in the 
Notice of Grant; provided, however, that in the case of an Incentive Stock 
Option, the term shall be ten (10) years from the date of grant or such 
shorter term as may be provided in the Notice of Grant. However, in the case 
of an Incentive Stock Option granted to an Optionee who, at the time the 
Option is granted, owns stock representing more than ten percent (10%) of the 
voting power of all classes of stock of the Company or any Parent or 
Subsidiary, the term of the Option shall be five (5) years from the date of 
grant or such shorter term as may be provided in the Notice of Grant.

     9.   OPTION EXERCISE PRICE AND CONSIDERATION.

          (a)  EXERCISE PRICE.  The per Share exercise price for the Shares 
to be issued pursuant to exercise of an Option shall be such price as 
determined by the Administrator, but shall be subject to the following:

               (i)  INCENTIVE STOCK OPTIONS.  In the case of an Incentive 
Stock Option:

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

                    (B)  granted to any 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)  NONSTATUTORY STOCK OPTIONS.  In the case of a 
Nonstatutory Stock Option granted to any person, 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.

             (iii)  PERFORMANCE-BASED COMPENSATION.  In the case of an Option 
intended to qualify as "performance-based compensation" within the meaning of 
Section 162(m) of the Code, the per Share exercise price shall be no less 
than 100% of the Fair Market Value per Share on the date of grant.

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

          (b)  WAITING PERIOD AND EXERCISE DATES.  At the time an Option is 
granted, the Administrator shall fix the period within which the Option may 
be exercised and shall determine any conditions which must be satisfied 
before the Option may be exercised.

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

               (i)  cash;

              (ii)  check;

             (iii)  promissory note;

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

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

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

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

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

     10.  EXERCISE OF OPTION.

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

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

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

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

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

          (d)  DEATH OF OPTIONEE.

               (i)  WHILE A SERVICE PROVIDER.  If an Optionee dies while a 
Service Provider, the Option may be exercised within such period of time as 
is specified in the Option Agreement (but in no event later than the 
expiration of the term of such Option as set forth in the Notice of Grant) by 
the Optionee's estate or by a person who acquires the right to exercise the 
Option by bequest or inheritance, but only to the extent that the Option 
would have vested had the Optionee remained a Service Provider for six (6) 
months after the date of death. In the absence of a specified time in the 
Option Agreement, the Option shall remain exercisable for twelve (12) months 
following the Optionee's termination.

     If, at the time of death, the Optionee is not vested (or is not deemed 
vested by this Section 10(d)(i)) as to his or her entire Option, the Shares 
covered by the unvested portion of the Option shall immediately revert to the 
Plan. The Option may be exercised by the executor or administrator of the 
Optionee's estate or, if none, by the person(s) entitled to exercise the 
Option under the Optionee's will or the laws of descent or distribution. If 
the Option is not so exercised within the time specified herein, the Option 
shall terminate, and the Shares covered by such Option shall revert to the 
Plan.

              (ii)  WITHIN THREE MONTHS OF TERMINATION AS A SERVICE PROVIDER. 
If an Optionee dies within three (3) months of ceasing to be a Service 
Provider, the Option may be exercised within such period of time as is 
specified in the Option Agreement (but in no event later than the expiration 
of the term of such Option as set forth in the Notice of Grant), by the 
Optionee's estate or by a person who acquires the right to exercise the 
Option by bequest or inheritance, but only to the extent that the Option 
vested on the date of death. In the absence of a specified time in the Option 
Agreement, the Option shall remain exercisable for twelve (12) months 
following the Optionee's termination. If, at the time of death, the Optionee 
is not vested as to his or her entire Option, the Shares covered by the 
unvested portion of the Option shall immediately revert to the Plan. The 
Option may be exercised by the executor or administrator of the Optionee's 
estate or, if none, by the person(s) entitled to exercise the Option under 
the Optionee's will or the laws of descent or distribution. If the Option is 
not so exercised within the time specified herein, the Option shall 
terminate, and the Shares covered by such Option shall revert to the Plan.

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

     12.  NON-TRANSFERABILITY OF OPTIONS. Unless determined otherwise by the 
Administrator, an Option 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 
Optionee, only by the Optionee. If the Administrator makes an Option 
transferable, such Option shall contain such additional terms and conditions 
as the Administrator deems appropriate.

     13.  ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, MERGER OR 
ASSET SALE.

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

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

          (c)  MERGER OR ASSET SALE.  In the event of a merger of the Company 
with or into another corporation, or the sale of substantially all of the 
assets of the Company, each outstanding Option shall be assumed or an 
equivalent option or right substituted by the successor corporation or a 
Parent or Subsidiary of the successor corporation. In the event that the 
successor

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corporation refuses to assume or substitute for the Option, the Optionee 
shall fully vest in and have the right to exercise the Option as to all of 
the Optioned Stock, including Shares as to which it would not otherwise be 
vested or exercisable. If an Option becomes fully vested and exercisable in 
lieu of assumption or substitution in the event of a merger or sale of 
assets, the Administrator shall notify the Optionee in writing or 
electronically that the Option shall be fully vested and exercisable for a 
period of fifteen (15) days from the date of such notice, and the Option 
shall terminate upon the expiration of such period. For the purposes of this 
paragraph, the Option shall be considered assumed if, following the merger or 
sale of assets, the option or right confers the right to purchase or receive, 
for each Share of Optioned Stock subject to the Option immediately prior to 
the merger or sale of assets, the consideration (whether stock, cash, or 
other securities or property) received in the merger or sale of assets by 
holders of Common Stock for each Share held on the effective date of the 
transaction (and if holders were offered a choice of consideration, the type 
of consideration chosen by the holders of a majority of the outstanding 
Shares); provided, however, that if such consideration received in the merger 
or sale of assets is not solely common stock of the successor corporation or 
its Parent, the Administrator may, with the consent of the successor 
corporation, provide for the consideration to be received upon the exercise 
of the Option, for each Share of Optioned Stock subject to the Option, to be 
solely common stock of the successor corporation or its Parent equal in fair 
market value to the per share consideration received by holders of Common 
Stock in the merger or sale of assets.

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

     15.  AMENDMENT AND TERMINATION OF THE PLAN.

          (a)  AMENDMENT AND TERMINATION.  The Board may at any time amend, 
alter, suspend or terminate the Plan.

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

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

     16.  CONDITIONS UPON ISSUANCE OF SHARES.

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

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

     17.  INABILITY TO OBTAIN AUTHORITY.  The inability of the Company to 
obtain authority from any regulatory body having jurisdiction, which 
authority is deemed by the Company's counsel to be necessary to the lawful 
issuance and sale of any Shares hereunder, shall relieve the Company of any 
liability in respect of the failure to issue or sell such Shares as to which 
such requisite authority shall not have been obtained.

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

     19.  GRANTS EXCEEDING ALLOTTED SHARES.  If the Shares covered by an 
Option exceeds, as of the date of grant, the number of Shares that may be 
issued under the Plan without additional shareholder approval, such Option 
shall be void with respect to such excess Shares, unless shareholder approval 
of an amendment sufficiently increasing the number of Shares subject to the 
Plan is timely obtained in accordance with Section 15(b) of the Plan.

     20.  SHAREHOLDER APPROVAL.  Shareholder approval of the Plan shall be 
obtained in the manner and to the degree required under Applicable Laws.

     21.  INFORMATION TO OPTIONEES.  The Company shall provide each Optionee, 
while such Optionee has one or more Options outstanding, with copies of all 
annual reports and other information that are provided to all shareholders of 
the Company. The Company shall not be required to provide such information if 
the issuance of Options under the Plan is limited to key employees whose 
duties in connection with the Company assure their access to equivalent 
information.

     22.  OTHER PROVISIONS.  Notwithstanding the express provisions of the 
Plan, any Option may be granted on such additional or more restrictive terms 
as the Administrator shall deem advisable consistent with the Plan.

     23.  REGISTRATION AND RESALE.  The Plan, the shares of Common Stock 
subject thereto, and the Options granted thereunder may, in the discretion of 
the Board, be registered under the Securities Act of 1933, as amended, or 
qualified for sale under the securities laws of any state. As a condition to 
the grant of any Option under the Plan or the issuance of Shares upon the 
exercise thereof, the Board may require that the Optionee agree to comply 
with such provisions of federal and state securities laws as may be 
applicable to such grant or issuance or to the sale of Shares acquired 
thereby and deliver to the Company a written agreement in form and substance 
satisfactory to the Company and its counsel implementing such agreement.

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     24.  EFFECTIVE DATE AND TERM OF PLAN.

          (a)  EFFECTIVE DATE.  The Plan is effective as of March 15, 1997, 
subject to receipt of shareholder approval, to the extent required by 
Applicable Laws.

          (b)  TERM.  The Administrator may terminate the Plan at any time. 
The Plan will, in all events, terminate on the earlier of (i) March 15, 2007 
or (ii) the date all shares available for issuance are issued or cancelled. 
Each Option outstanding at the time of such termination will remain in force 
in accordance with the provisions of the instruments evidencing such grant.

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