Document:

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                                                                   EXHIBIT 10.19

                          SOFTWARE TRANSITION AGREEMENT

         This Software Transition Agreement (this "Agreement"), dated January
30, 2004 (the "Effective Date") is between United Way of America, ("UWA"), a New
York not-for-profit corporation with a principal place of business located at
701 North Fairfax Street, Alexandria, Virginia 22314, and Blackbaud, Inc.,
("Blackbaud"), a South Carolina corporation with a place of business located at
2000 Daniel Island Drive, Charleston, South Carolina 29492.

                                   WITNESSETH

         WHEREAS, UWA owns all right, title, and interest in and to a computer
program known as the United Way Campaign Management System (the "Program"); and

         WHEREAS, the Program also incorporates certain know-how and technical
information ("Technology"); and

         WHEREAS, Blackbaud is the owner of a computer program known as
"Raiser's Edge"; and

         WHEREAS, UWA desires to discontinue supporting the Program, and further
desires for its customers to license Raiser's Edge (the "Transition"); and

         WHEREAS, Blackbaud desires to assist UWA with the Transition by
acquiring the Program and Technology from UWA and providing support for the
Program for a limited period of time in accordance with the terms and conditions
of this agreement.

         NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and more expressly set forth
herein, UWA and Blackbaud, intending to be legally bound, hereby agree as
follows:

                                    SECTION 1
                                SOFTWARE TRANSFER

         1.1      UWA hereby transfers, grants, conveys, assigns, and
relinquishes exclusively to Blackbaud all of UWA's right, title, and interest in
and to both the tangible and the intangible property constituting the Programs
and Technology, in perpetuity (or for the longest period of time otherwise
permitted by law), including, but not limited to the following corporeal and
incorporeal incidents to the Programs and Technology:

                  (i) title to and possession of the media, devices, and
documentation that constitute all copies of the Programs and Technology, their
component parts, and all documentation relating thereto, possessed or controlled
by UWA, which are to be delivered to Blackbaud pursuant to Section 2 of this
Agreement; and

                  (ii) all copyright interests owned or claimed by UWA
pertaining to the Program, including (without limitation) any U.S. Copyright
Registrations, together with all other copyright

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interests accruing by reason of international copyright conventions and any
moral rights pertaining thereto, including the right to sue for, settle, or
release any past, present, or future infringement thereof.

         1.2      UWA hereby transfers, grants, conveys, assigns, and
relinquishes exclusively to Blackbaud, in perpetuity (or for the longest period
of time otherwise permitted by law), all of UWA's right, title, and interest in
and to the trademark "Campaign Management System," accompanied by the goodwill
of all business connected with the use of and symbolized by such mark including
the right to sue for, settle, or release any past, present, or future
infringement thereof or unfair competition involving the same (the "Trademark
Interests"). UWA covenants not to use or display the Trademark Interests, or any
mark confusingly similar thereto, anywhere in the world except by authorization
of Blackbaud, and further covenants not to contest or challenge the validity of
the Trademark Interests, any applicable registrations thereof or the Ownership
of the Trademark Interests by Blackbaud.

                                    SECTION 2
                                    DELIVERY

         2.1      Within ten (10) business days after the Effective Date of this
Agreement, UWA will deliver to Blackbaud the following: (i) its entire inventory
of copies of the Programs in object code form; (ii) a master copy of the latest
version of the Programs and Technology (in both source and object code form),
which shall be in a form suitable for copying; (iii) all system and user
documentation pertaining to the latest version of the Programs and Technology,
including design or development specifications, error reports, and related
correspondence and memoranda; and (iv) related data and software schemas and
models, technical designs of applications with associated classes, methods and
properties, any scripts developed in conjunction with the customizations,
procedures for rebuilding and testing the latest version of the customizations,
including which tools and libraries are part of the build, any architecture
documents, development or testing databases and test plans.

                                    SECTION 3
                                   TRANSITION

         3.1      Blackbaud shall take such actions as it, in its sole
discretion, deems appropriate in connection with the transition of the Program's
current customers to Raiser's Edge. Such actions may include installing a toll
free phone line dedicated to current customers of the Program, configuring
support systems to include relevant local United Way information; developing
information for support systems including FAQ's, support case tracking and
knowledge base items, and training 2 to 3 support personnel.

         3.2      Blackbaud shall make available to UWA annual support
agreements (the "Support Agreements") for distribution to the Program's current
customers (the "Local United Ways"). The Support Agreements shall be between
Blackbaud and each Local United Way, and shall be in a form determined by
Blackbaud in its sole discretion. UWA shall, within five days of the Effective
Date, distribute the Support Agreements to each Local United Way. Such
distribution shall include a cover letter in a form mutually agreed upon by the
parties. UWA shall not have any right

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or authority to assume or create any obligation, express or implied, on behalf
of Blackbaud. No Support Agreement shall be binding upon Blackbaud until it is
executed by Blackbaud.

         3.3      UWA hereby agrees to make available the persons set forth
below (the "Designated Consultants") to provide the following transition
services (the "Transition Services"):

                  (i) make the existing [*] for the Software, [*], available to
Blackbaud on a full time basis for up to six continuous weeks following the
Effective Date, to perform tasks requested by UWA regarding the Programs and
Technology at Blackbaud's offices in Charleston, South Carolina.

                  (ii) make the Program's [*], [*], available to Blackbaud as
Blackbaud deems necessary for a period of one year following the Effective Date,
to provide remote support via telephone and email regarding the Programs and
Technology.

                  (iii) should [*] or [*] separate from UWA, UWA will use all
commercially reasonable efforts to replace them with individuals of equal
experience and skill.

         3.4      UWA shall be responsible for (i) the payment of, and shall
indemnify Blackbaud against, all federal, state, local and foreign taxes and
withholdings payable with respect to the wages of the Designated Consultants and
all other employer liabilities relating to such personnel as required by law to
be provided, (ii) the maintenance of workers' compensation insurance required by
applicable statutes with respect to the Designated Consultants, and (iii) the
maintenance, payment and provision of all applicable employee benefits for the
Designated Consultants. UWA shall be an independent contractor in connection
with the performance of the Transition Services and the Designated Consultants
shall not be deemed to be employees of Blackbaud.

         3.5      UWA hereby assigns and agrees to assign all right title and
interest including all copyrights, patents, trade secrets and other intellectual
property rights, in and to all inventions, works, materials and other
deliverables that result from the Transition Services. UWA agrees to cause each
Designated Consultant to enter into an Invention Assignment and Confidentiality
Agreement in form and substance acceptable to Blackbaud, which shall, among
other things, assign to Blackbaud all right title and interest, including all
copyrights, patents, trade secrets and other intellectual property rights, in
and to all Inventions, works, materials and other deliverables developed by such
Designated Consultant that result from the Transition performed by such
Designated Consultant.

                                   SECTION 4.1
                                MARKETING SUPPORT

         4.1      For a period of two years following the Effective Date, UWA
will endorse and provide reasonable support to Blackbaud in connection with the
marketing of Blackbaud's product, "Raiser's Edge". Such support shall include,
but not be limited to those items set forth on Schedule A attached hereto.

[*] Confidential treatment requested; certain information omitted and filed
separately with the SEC.

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                                   SECTION 5.1
                               FINANCIAL STRUCTURE

         5.1      Upon the execution of this Agreement, UWA shall pay Blackbaud
a transition fee equal to $[*].

         5.2      On or before February 1, 2004 (the "Minimum Support Date"),
UWA shall pay Blackbaud all support fees it has collected, but in no event less
than $[*] (the "Minimum Support Threshold"). Monies received by Blackbaud from
Local United Ways in payment for Support Agreements during the first 12 month
period will be forwarded to UWA.

         5.3      After the Minimum Support Threshold, UWA shall continue to pay
Blackbaud all support fees that it collects from Local United Ways in excess of
$[*]. If UWA pays Blackbaud at least $[*] in support fees prior to April 1,
2004, Blackbaud shall pay UWA a one-time fee of $[*] to offset any setup
expenses incurred by UWA.

         5.4      For the first 12 month period, UWA will bill and collect from
Local United Ways Support Agreement fees at the current non-discounted UWCMS
Standard Fee Schedule based on the local United Way's metro size. For the final
12 month period, Blackbaud will bill Local United Ways directly for the final
12-month period of the Support Agreements at the same fee rate as the first
12-month period, adjusted for inflation. This inflation adjustment shall not
exceed [*]%. In addition, any Local United Way that desires to cancel
maintenance prior to the end of the twenty-four month term will be obligated to
pay Blackbaud a [*]% cancellation fee. Notwithstanding the foregoing, Blackbaud
may discontinue support in the final 12-month period of the Support Agreements
if the maintenance revenue for the final 12-month period falls below $[*]. This
amount shall include maintenance revenue from any Local United Way that converts
to Raiser's Edge. It shall also include any amount that UWA optionally elects to
pay directly to Blackbaud for the purpose of achieving the $[*] target.

         5.5      Blackbaud shall pay UWA a commission equal to: (i) [*]% of the
gross Conversion Fees (defined below) in excess of $[*] received by Blackbaud
from the Local United Ways during the period commencing on February 1, 2004 and
ending on February 1, 2006 (the "Commission Period") and (ii) [*]% of the gross
initial license fees and initial services fees (excluding maintenance and
renewal fees) received by Blackbaud during the Commission Period from other
member United Way organizations that are not licensees of the Program as of the
Effective Date. All commissions due to UWA pursuant to this Section 5.5 shall be
paid on a calendar quarter basis, 30 days following the end of the calendar
quarter in which the applicable fees are received. For the purposes of this
Agreement, "Conversion Fee" shall mean the fee that Blackbaud charges a Local
United Way to convert to Raiser's Edge, and does not include license and support
fees.

         5.6      As it pertains to the financial structure of this agreement,
upon reasonable notice and at their expense, each party shall have the right to
audit or to have audited and to copy the books and records of the other which in
any way relate to this agreement. When requested by a party, the other party
shall provide the requesting party's auditors with access to all property and
records and the cooperation of such party's personnel, if any, necessary to
effectuate the audit or audits hereunder. The requesting party's auditors shall
have the right to copy any or all documentation relating to the performance
under this agreement.

[*] Confidential treatment requested; certain information omitted and filed
separately with the SEC.

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         5.7      Blackbaud agrees to develop, within the 24-month Commission
Period, a United Way-version of Raiser's Edge software. This version will
incorporate UWCMS features for managing United Way corporate campaigns and donor
designations. Local United Ways can convert to the United Way-version of
Raiser's Edge software for approximately [*]% of the current UWCMS Standard Fee
Schedule based on local United Way metro size. This fee includes a standard
migration of UWCMS data over to the United Way version of Raiser's Edge and
initial training in the use of the software.

                                    SECTION 6
                                   WARRANTIES

         6.1      UWA represents and warrants that Blackbaud shall receive,
pursuant to this Agreement as of the Effective Date, complete and exclusive
right, title, and interest in and to all tangible and intangible property rights
existing in the Programs, Technology and Trademark Interests.

         6.2      UWA represents and warrants that the Programs, Technology and
Trademark Interests are free and clear of all liens, claims, encumbrances,
rights, or equities whatsoever of any third party.

         6.3      UWA represents and warrants that the execution, delivery, and
performance of this Agreement by UWA does not and will not violate any security
agreement, indenture, order, or other instrument to which UWA is a party or by
which it or any of its assets is bound.

         6.4      UWA represents and warrants that the consent of any person or
entity under any contract is not required for the execution, delivery and
performance by Buyer of this Agreement and the transactions contemplated hereby.

         6.5      UWA represents and warrants that the Programs and Technology
do not infringe any patent, copyright, or trade secret of any third party; that
the Programs and Technology are fully eligible for protection under applicable
copyright law and have not been forfeited to the public domain; and that the
source code and system specifications for the Programs and Technology have been
maintained in confidence.

         6.6      UWA represents and warrants that all personnel, including
employees, agents, consultants, and contractors, who have contributed to or
participated in the conception and development of the Programs and Technology
either (1) have been party to a for-hire relationship with UWA that has accorded
UWA full, effective, and exclusive original Ownership of all tangible and
intangible property thereby arising with respect to the Programs and Technology
or (2) have executed appropriate instruments of assignment in favor of UWA as
assignee that have conveyed to UWA full, effective, and exclusive Ownership of
all tangible and intangible property thereby arising with respect to the
Programs and Technology.

[*] Confidential treatment requested; certain information omitted and filed
separately with the SEC.

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         6.7      UWA represents and warrants that there are no agreements or
arrangements in effect with respect to the marketing, distribution, licensing,
or promotion of the Programs, Technology and Trademark Interests by any
independent salesperson, distributor, sublicensor, or other remarketer or sales
organization.

                                    SECTION 7
                               FURTHER ASSURANCES

         7.1      UWA shall execute and deliver such further conveyance
instruments and take such further actions as may be necessary or desirable to
evidence more fully the transfer of ownership of all of the Programs, Technology
and Trademark Interests to Blackbaud. UWA therefore agrees:

                  (i)      to execute, acknowledge, and deliver any affidavits
or documents of assignment and conveyance regarding the Programs and Technology;

                  (ii)     to provide testimony in connection with any
proceeding affecting the right, title, or interest of Blackbaud in the Programs
and Technology; and

                  (iii)    to perform any other acts deemed necessary to carry
out the intent of this Agreement.

                                    SECTION 8
                           PROTECTION OF TRADE SECRETS

         8.1      For purposes of this Agreement, "Program and Technology Trade
Secrets" means the whole or any portion or phase of any scientific or technical
information, design, process, procedure, formula, or improvement included in the
Programs and Technology that are valuable and not generally known to the
business concerns engaged in the development or marketing of products
competitive with the Programs and Technology. From and after the date of
execution hereof, and for so long thereafter as the data or information remains
the Programs and Technology Trade Secrets, UWA shall not use, disclose, or
permit any person not authorized by Blackbaud to obtain any Programs and
Technology Trade Secrets (whether or not the Programs and Technology Trade
Secrets are in written or tangible form), except as specifically authorized by
Blackbaud.

                                    SECTION 9
                            ACKNOWLEDGMENT OF RIGHTS

         9.1      In furtherance of this Agreement, UWA hereby acknowledges
that, from and after the Effective Date, Blackbaud has acceded to all of UWA's
right, title, and standing to:

                  (i)      receive all rights and benefits pertaining to the
Program, Technology and Trademark Interests;

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                  (ii)     institute and prosecute all suits and proceedings and
take all actions that Blackbaud, in its sole discretion, may deem necessary or
proper to collect, assert, or enforce any claim, right, or title of any kind in
and to any and all of the Program, Technology and Trademark Interests; and

                  (iii)    defend and compromise any and all such action, suits,
or proceedings relating to such transferred and assigned rights, title,
interest, and benefits, and perform all other such acts in relation thereto as
Blackbaud, in its sole discretion, deems advisable.

                                   SECTION 10
                                 INDEMNIFICATION

         10.1     UWA agrees to indemnify and hold harmless Blackbaud, its
successors and assigns, including their affiliates, officers, directors,
employees, agents, contractors, licensees, or customers, from and against any
loss, liability, claim, or damage (including court costs and reasonable attorney
fees) sustained by it or them as a result of: (i) a claim or allegation that the
Program and/or Technology infringe any patent, copyright, trade secret,
trademark, or other intellectual property right of any third party, (ii) a
breach of UWA' representations and warranties hereunder, or (iii) UWA's
ownership, use and marketing of the Software prior to the Effective Date.
Blackbaud agrees to indemnify and hold harmless UWA, its successors and assigns,
including their affiliates, officers, directors, employees, agents, contractors,
licensees, or customers, from and against any loss, liability, claim, or damage
(including court costs and reasonable attorney fees) sustained by it or them as
a result of: (i) a claim or allegation that The Raiser's Edge infringes any
patent, copyright, trade secret, trademark, or other intellectual property right
of any third party, (ii) a breach of Blackbaud's representations and warranties
hereunder, or (iii) Blackbaud's ownership, use and marketing of the Software
subsequent to and including to the Effective Date.

                                   SECTION 11
                             LIMITATION OF LIABILITY

         EXCEPT FOR CLAIMS FOR INDEMNIFICATION HEREUNDER, IN NO EVENT SHALL
EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR LOST PROFITS OR CONSEQUENTIAL,
INCIDENTAL OR SPECIAL DAMAGES.

                                   SECTION 12
                                  MISCELLANEOUS

         12.1     Each party shall bear its own expenses (including, but not
limited to, attorneys' fees) incurred in connection with the preparation and
consummation of the Closing and other transactions contemplated by this
Agreement, unless otherwise specifically provided.

         12.2     All notices and other communications required or permitted
under this Agreement shall be in writing and shall be deemed given (i) when
delivered personally or (ii) five (5) business days after being deposited in the
United States mail as certified mail, return receipt requested (whether or not
return receipt is actually received) or (iii) one (1) day after being deposited
with a

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reputable overnight delivery service, overnight delivery specified, prepaid and
addressed to the addresses set forth in the preamble to this Agreement or to
such other address as each party may designate in writing.

         12.3     This Agreement together with all exhibits and other related
documents that are incorporated herein by reference, embodies the entire
Agreement and except as otherwise contemplated herein, supersedes all prior
agreements, written and oral, relating to the subject matter hereof. In the
event of a conflict between the provisions of the main body of the Agreement and
any attached exhibits, the Agreement shall take precedence.

         12.4     Amendments to this Agreement, including any exhibit hereto,
shall be enforceable only if they are in writing and are signed by authorized
representatives of both parties.

         12.5     The descriptive headings in this Agreement are inserted for
convenience only and do not constitute a part of this Agreement.

         12.6     The failure of any party hereto to enforce any provision of
this Agreement, or any right with respect hereto, or failure to exercise any
election provided for herein, shall in no way be considered a waiver of such
provision, right, or election, or in any way affect the validity of this
Agreement. The failure of any party hereto to enforce any provision, right or
election shall not prejudice such party from later enforcing or exercising that
provision, right, or election which it has under this Agreement.

         12.7     In the event that any provision of the Agreement or any part
thereof is held by a court to be invalid, the remainder of this Agreement shall
be binding on the parties and construed as if the invalid provisions or parts
thereof have been deleted from this Agreement.

         12.8     This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original.

         12.9     This Agreement will be governed by the laws of the State of
North Carolina without regard to its conflicts of law provisions, provided that
matters affecting copyrights, patents and/or trademarks will be governed by U.S.
federal law. The parties agree that the judicial forum for any actions or
proceedings brought relating to this Agreement shall be the federal or state
courts located in the State of North Carolina.

         12.10    This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their successors and assigns. Nothing in this
Agreement, express or implied, is intended to confer upon any person not a party
to this Agreement any rights or remedies under or by reason of this Agreement.
Notwithstanding the foregoing, no party to this Agreement may assign or delegate
all or any portion of its rights, obligations or liabilities under this
Agreement without the prior written consent of the other party to this
Agreement.

                      [THE NEXT PAGE IS THE SIGNATURE PAGE]

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         IN WITNESS WHEREOF, the parties hereto have duly executed this Software
Transition Agreement as of the date first above written.

                               BLACKBAUD, INC.

                               By: /s/ CHARLIE CUMBAA
                                     -------------------------------------------
                               Name: Charlie Cumbaa
                                     -------------------------------------------
                               Title: Vice President of Services and Development
                                     -------------------------------------------

                               UNITED WAY OF AMERICA

                               By:   /s/ MICHAEL SCHREIBER
                                     -------------------------------------------
                               Name: Michael Schreiber
                                     -------------------------------------------
                               Title: Chief Technology Officer
                                     -------------------------------------------

                [SIGNATURE PAGE TO SOFTWARE TRANSITION AGREEMENT]

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                                   SCHEDULE A

                                Marketing Support

         1. Assisting with the establishment of a working task force comprised
of current program users. This task force shall conduct reviews of product
design and assist with the development of a Program conversion and training
program with the goal of developing "reference sites" for conversions.

         2. Supporting in-house marketing programs.

         3. Providing exclusive endorsement of Raiser's Edge as the solution for
Local United Way fundraising and constituent management software. Any public
communication concerning this endorsement shall be subject to the prior written
consent of Blackbaud. This consent shall not be unreasonably withheld.

         4. Inviting Blackbaud to the United Way National Conference in May 2004
and 2005 to promote the relationship between them to new Local United Ways and
feature Blackbaud as a favored technology partner

         5. Assisting with introducing Blackbaud to influential Local United
Ways and in targeting Local United Ways that use competitive solutions.

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                                                                   EXHIBIT 10.20

                                 BLACKBAUD, INC.

                                 2004 STOCK PLAN

         1.       Purpose. This 2004 Stock Plan (the "Plan") is intended to
provide incentives:

                  (a) to employees of Blackbaud, Inc. (the "Company"), or its
parent (if any) or any of its present or future subsidiaries (collectively,
"Related Corporations"), by providing them with opportunities to purchase Common
Stock (as defined below) of the Company pursuant to options granted hereunder
that qualify as "incentive stock options" ("ISOs") under Section 422 of the
Internal Revenue Code of 1986, as amended, or any successor statute (the
"Code");

                  (b) to directors, employees and consultants of the Company and
Related Corporations by providing them with opportunities to purchase Common
Stock (as defined below) of the Company pursuant to options granted hereunder
that do not qualify as ISOs (Nonstatutory Stock Options, or "NSOs");

                  (c) to employees and consultants of the Company and Related
Corporations by providing them with bonus awards of Common Stock (as defined
below) of the Company ("Stock Bonuses"); and

                  (d) to employees and consultants of the Company and Related
Corporations by providing them with opportunities to make direct purchases of
Common Stock (as defined below) of the Company ("Purchase Rights").

         Both ISOs and NSOs are referred to hereafter individually as "Options",
and Options, Stock Bonuses and Purchase Rights are referred to hereafter
collectively as "Stock Rights". As used herein, the terms "parent" and
"subsidiary" mean "parent corporation" and "subsidiary corporation",
respectively, as those terms are defined in Section 424 of the Code.

         2.       Administration of the Plan.

                  (a) The Plan shall be administered by (i) the Board of
Directors of the Company (the "Board") or (ii) a committee consisting of
directors or other persons appointed by the Board (the "Committee"). The
appointment of the members of, and the delegation of powers to, the Committee by
the Board shall be consistent with applicable laws and regulations (including,
without limitation, the Code, Rule 16b-3 promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or any successor rule
thereto ("Rule 16b-3"), and any applicable state law (collectively, the
"Applicable Laws"). Once appointed, such Committee shall continue to serve in
its designated capacity until otherwise directed by the Board. From time to
time, the Board may increase the size of the Committee and appoint additional
members thereof, remove members (with or without cause) and appoint new members
in substitution therefor, fill vacancies, however caused, and remove all members
of the Committee and thereafter directly administer the Plan, all to the extent
permitted by the Applicable Laws.

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                  (b)      Subject to ratification of the grant or authorization
of each Stock Right by the Board (if so required by an Applicable Law), and
subject to the terms of the Plan, the Committee, if so appointed, shall have the
authority, in its discretion, to:

                  (i) determine the employees of the Company and Related
Corporations (from among the class of employees eligible under Section 3 to
receive ISOs) to whom ISOs may be granted, and to determine (from among the
classes of individuals and entities eligible under Section 3 to receive NSOs,
Stock Bonuses and Purchase Rights) to whom NSOs, Stock Bonuses and Purchase
Rights may be granted;

                  (ii) determine the time or times at which Options, Stock
Bonuses or Purchase Rights may be granted (which may be based on performance
criteria);

                  (iii) determine the number of shares of Common Stock subject
to any Stock Right granted by the Committee;

                  (iv) determine the option price of shares subject to each
Option, which price shall not be less than the minimum price specified in
Section 6 hereof, as appropriate, and the purchase price of shares subject to
each Purchase Right and to determine the form of consideration to be paid to the
Company for exercise of such Option or purchase of shares with respect to a
Purchase Right;

                  (v) determine whether each Option granted shall be an ISO or
NSO;

                  (vi) determine (subject to Section 7) the time or times when
each Option shall become exercisable and the duration of the exercise period;

                  (vii) determine whether restrictions such as repurchase
options are to be imposed on shares subject to Options, Stock Bonuses and
Purchase Rights and the nature of such restrictions, if any;

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

                  (ix) determine the fair market value of a Stock Right or the
Common Stock underlying a Stock Right;

                  (x) accelerate vesting on any Stock Right or to waive any
forfeiture restrictions, or to waive any other limitation or restriction with
respect to a Stock Right;

                  (xi) reduce the exercise price of any Stock Right if the fair
market value of the Common Stock covered by such Stock Right shall have declined
since the date the Stock Right was granted; provided, however, that any
reduction of the exercise price pursuant to this paragraph shall be subject to
stockholder approval (and stockholder approval shall be required for any
amendment to this Plan to eliminate the requirement of stockholder approval for
such repricings);

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                  (xii) institute a program whereby outstanding Options can be
surrendered in exchange for Options with a lower exercise price; provided,
however, that any exchange of Options pursuant to this paragraph shall be
subject to stockholder approval (and stockholder approval shall be required for
any amendment to this Plan to eliminate the requirement of stockholder approval
for such exchanges);

                  (xiii) modify or amend each Stock Right (subject to Section
8(d) of the Plan) including the discretionary authority to extend the
post-termination exercisability period of Stock Rights longer than is otherwise
provided for by terms of the Plan or the Stock Right;

                  (xv) construe and interpret the Plan and Stock Rights granted
hereunder and prescribe and rescind rules and regulations relating to the Plan;
and

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

                  If the Committee determines to issue a NSO, it shall take
whatever actions it deems necessary, under Section 422 of the Code and the
regulations promulgated thereunder, to ensure that such Option is not treated as
an ISO. The interpretation and construction by the Committee of any provisions
of the Plan or of any Stock Right granted under it shall be final unless
otherwise determined by the Board. The Committee may from time to time adopt
such rules and regulations for carrying out the Plan as it may deem best. No
member of the Board or the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any Stock Right
granted under it.

                  (c)      The Committee may select one of its members as its
chairman, and shall hold meetings at such times and places as it may determine.
Acts by a majority of the Committee, approved in person at a meeting or in
writing, shall be the valid acts of the Committee. All references in this Plan
to the Committee shall mean the Board if no Committee has been appointed. From
time to time the Board may increase the size of the Committee and appoint
additional members thereof, remove members (with or without cause) and appoint
new members in substitution therefor, fill vacancies however caused, or remove
all members thereof and thereafter directly administer the Plan.

                  (d)      Those provisions of the Plan that make express
reference to Rule 16b-3 shall apply to the Company only at such time as the
Company's Common Stock is registered under the Exchange Act, and then only to
such persons as are required to file reports under Section 16(a) of the Exchange
Act (a "Reporting Person").

                  (e)      To the extent that Stock Rights are to be qualified
as "performance-based" compensation within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a committee consisting of two or more
"outside directors" as determined under Section 162(m) of the Code.

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         3.       Eligible Employees and Others.

                  (a)      ISOs may be granted to any employee of the Company or
any Related Corporation. Those officers of the Company who are not employees may
not be granted ISOs under the Plan. NSOs, Stock Bonuses and Purchase Rights may
be granted to any director, employee or consultant of the Company or any Related
Corporation. Granting of any Stock Right to any individual or entity shall
neither entitle that individual or entity to, nor disqualify him or her from,
participation in any other grant of Stock Rights.

                  (b)      Special Rule for Grant of Stock Rights to Reporting
Persons. The selection of a director or an officer who is a Reporting Person (as
the terms "director" and "officer" are defined for purposes of Rule 16b-3) as a
recipient of a Stock Right, the timing of the Stock Right grant, the exercise
price, if any, of the Stock Right and the number of shares subject to the Stock
Right shall be determined either (i) by the Board, or (ii) by a committee of the
Board that is composed solely of two or more Non-Employee Directors having full
authority to act in the matter. For the purposes of the Plan, a director shall
be deemed to be a "Non-Employee Director" only if such person is defined as such
under Rule 16b-3(b)(3), as interpreted from time to time.

         4.       Stock. The stock subject to Stock Rights shall be authorized
but unissued shares of Common Stock of the Company, par value $0.001 per share,
or such shares of the Company's capital stock into which such class of shares
may be converted pursuant to any reorganization, recapitalization, merger,
consolidation or the like (the "Common Stock"), or shares of Common Stock
reacquired by the Company in any manner. The aggregate number of shares that may
be issued pursuant to the Plan is One Million Eight Hundred Fifty Thousand
(1,850,000) shares of Common Stock, subject to adjustment as provided herein.
Any such shares may be issued as ISOs, NSOs or Stock Bonuses, or to persons or
entities making purchases pursuant to Purchase Rights, so long as the number of
shares so issued does not exceed such aggregate number, as adjusted. If any
Option granted under the Plan shall expire or terminate for any reason without
having been exercised in full or shall cease for any reason to be exercisable in
whole or in part, or if the Company shall reacquire any shares issued pursuant
to Stock Rights, the unpurchased shares subject to such Options and any shares
so reacquired by the Company shall again be available for grants of Stock Rights
under the Plan.

         5.       Granting of Stock Rights. Stock Rights may be granted under
the Plan at any time after the Effective Date, as set forth in Section 16, and
prior to 10 years thereafter. The date of grant of a Stock Right under the Plan
will be the date specified by the Board or Committee at the time it grants the
Stock Right; provided, however, that such date shall not be prior to the date on
which the Board or Committee acts. The Board or Committee shall have the right,
with the consent of the optionee, to convert an ISO granted under the Plan to an
NSO pursuant to Section 17 hereof.

                                       4
<PAGE>

         6.       Minimum Price; ISO Limitations.

                  (a)      The price per share specified in the agreement
relating to each NSO, Stock Bonus or Purchase Right granted under the Plan shall
be established by the Board or Committee, taking into account any noncash
consideration to be received by the Company from the recipient of Stock Rights;
provided that such price per share shall not be less than the fair market value
of the Common Stock on the date of grant.

                  (b)      The price per share specified in the agreement
relating to each ISO granted under the Plan shall not be less than the fair
market value per share of Common Stock on the date of such grant. In the case of
an ISO to be granted to an employee owning stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company or any
Related Corporation, the price per share specified in the agreement relating to
such ISO shall not be less than 110% of the fair market value per share of
Common Stock on the date of the grant.

                  (c)      To the extent that the aggregate fair market value
(determined at the time an ISO is granted) of Common Stock for which ISOs
granted to any employee are exercisable for the first time by such employee
during any calendar year (under all stock option plans of the Company and any
Related Corporation) exceeds $100,000; or such higher value as permitted under
Code Section 422 at the time of determination, such Options will be treated as
NSOs, provided that this Section shall have no force or effect to the extent
that its inclusion in the Plan is not necessary for Options issued as ISOs to
qualify as ISOs pursuant to Section 422 of the Code. The rule of this Section
6(c) shall be applied by taking Options in the order in which they were granted.

                  (d)      If, at the time a Stock Right is granted under the
Plan, the Company's Common Stock is publicly traded, "fair market value" shall
be determined as of the last business day for which the prices or quotes
discussed in this sentence are available prior to the time such a Stock Right is
granted and shall mean:

                  (i) if the Common Stock is then traded on a national
securities exchange; or on the Nasdaq National Market (the "NASDAQ/NMS") or the
Nasdaq SmallCap Market, the closing sale price for such stock (or the closing
bid, if no sales were reported as quoted on such exchange or market); or

                  (ii) the closing bid price or average of bid prices last
quoted on that date by an established quotation service, if the Common Stock is
not reported on National Securities Exchange, the NASDAQ/NMS or the Nasdaq
SmallCap Market.

         However, if the Common Stock is not publicly traded at the time a Stock
Right is granted under the Plan, "fair market value" shall be deemed to be the
fair value of the Common Stock as determined by the Board or Committee after
taking into consideration all factors that it deems appropriate.

                                       5
<PAGE>

         7.       Option Duration. Subject to earlier termination as provided in
Sections 9, 10 and 13, each Option shall expire on the date specified by the
Board or Committee, but not more than:

                  (a) 10 years from the date of grant in the case of NSOs;

                  (b) 10 years from the date of grant in the case of ISOs
generally; and

                  (c) 5 years from the date of grant in the case of ISOs granted
to an employee owning stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or any Related Corporation.

                  Subject to earlier termination as provided in Sections 9, 10
and 13, the term of each ISO shall be the term set forth in the original
instrument granting such ISO, except with respect to any part of such ISO that
is converted into an NSO pursuant to Section 17.

         8.       Exercise of Options. Subject to the provisions of Section 9
through Section 12 of the Plan, each Option granted under the Plan shall be
exercisable as follows:

                  (a)      the Option shall either be fully exercisable on the
date of grant or shall become exercisable thereafter in such installments as the
Board or Committee may specify;

                  (b)      once an installment becomes exercisable it shall
remain exercisable until expiration or termination of the Option, unless
otherwise specified by the Board or Committee;

                  (c)      each Option or installment may be exercised at any
time or from time to time, in whole or in part, for up to the total number of
shares with respect to which it is then exercisable; and

                  (d)      the Board or Committee shall have the right to
accelerate the date of exercise of any installment of any Option, provided that
the Board or Committee shall not accelerate the exercise date of any installment
of any ISO granted to any employee (and not previously converted into an NSO
pursuant to Section 17) without the prior consent of such employee if such
acceleration would violate the annual vesting limitation contained in Section
422 of the Code, as described in Section 6(c).

         9.       Termination of Employment. If a grantee ceases to be employed
by the Company and all Related Corporations, other than by reason of death or
disability as defined in Section 10 or by reason of a termination "For Cause" as
defined in this Section 9, unless otherwise specified in the instrument granting
such Stock Right, the grantee shall have the continued right to exercise any
Stock Right held by him or her, to the extent of the number of shares with
respect to which he or she could have exercised it on the date of termination
until the Stock Right's specified expiration date; provided, however, in the
event the grantee exercises any ISO after the date that is three months
following the date of termination of employment, such ISO will automatically be
converted into an NSO subject to the terms of the Plan. Employment shall be
considered as continuing uninterrupted during any bona fide leave of absence
(such as those attributable to

                                       6
<PAGE>

illness, military obligations or governmental service) provided that the period
of such leave does not exceed 90 days or, if longer, any period during which
such grantee's right to reemployment with the Company is guaranteed by statute
or by contract. A bona fide leave of absence with the written approval of the
Company shall not be considered an interruption of employment under the Plan,
provided that such written approval contractually obligates the Company or any
Related Corporation to continue the employment of the grantee after the approved
period of absence; provided that the foregoing approval requirement shall not
apply to a leave of absence guaranteed by statute or contract. ISOs granted
under the Plan shall not be affected by any change of employment within or among
the Company and Related Corporations, so long as the optionee continues to be an
employee of the Company or any Related Corporation. For purposes of this Plan, a
change in status from employee to a consultant, or from a consultant to
employee, will not constitute a termination of employment, provided that a
change in status from an employee to consultant may cause an ISO to become an
NSO under the Code.

         In the event of a termination "For Cause," the right of a grantee to
exercise a Stock Right shall terminate as of the date of termination. For
purposes of this Plan, "For Cause" shall mean (i) "Cause" as defined in any
employment or other agreement to which the applicable grantee is a party, or
(ii) if there is no such agreement or if it does not define Cause: (A)
conviction of the grantee for committing a felony under federal law or the law
of the state in which such action occurred, (B) dishonesty in the course of
fulfilling the grantee's employment duties, (C) willful and deliberate failure
on the part of the grantee to perform his or her employment duties in any
material respect, or (D) such other events as shall be determined by the
Committee. The Committee shall, unless otherwise provided in an employment or
other agreement to which the applicable grantee is a party, have the sole
discretion to determine whether "Cause" exists, and its determination shall be
final.

         NOTHING IN THE PLAN SHALL BE DEEMED TO GIVE ANY GRANTEE OF ANY STOCK
RIGHT THE RIGHT TO BE RETAINED IN EMPLOYMENT OR OTHER SERVICE BY THE COMPANY OR
ANY RELATED CORPORATION FOR ANY PERIOD OF TIME OR TO AFFECT THE AT-WILL NATURE
OF ANY EMPLOYEE'S EMPLOYMENT.

10.      Death; Disability.

                  (a)      If a grantee ceases to be employed by the Company and
all Related Corporations by reason of death, or if a grantee dies within three
months of the date his or her employment or other affiliation with the Company
has been terminated, any Stock Right held by him or her may be exercised to the
extent of the number of shares with respect to which he or she could have
exercised said Stock Right on the date of death, by his or her estate, personal
representative or beneficiary who has acquired the Stock Right by will or by the
laws of descent and distribution (the "Successor Grantee"), unless otherwise
specified in the instrument granting such Stock Right, prior to the earlier of
(i) one year after the date of termination or (ii) the Stock Right's specified
expiration date; provided, however, that a Successor Grantee shall be entitled
to ISO treatment under Section 421 of the Code only if the deceased optionee
would have been entitled to like treatment had he or she exercised such Option
on the date of his or her death; provided further in the event the Successor
Grantee exercises an ISO after the date that is one

                                       7
<PAGE>

year following the date of termination by reason of death, such ISO will
automatically be converted into a NSO subject to the terms of the Plan.

                  (b)      If a grantee ceases to be employed by the Company and
all Related Corporations by reason of disability, he or she shall continue to
have the right to exercise any Stock Right held by him or her on the date of
termination until, unless otherwise specified in the instrument granting such
Stock Right, the earlier of (i) one year after the date of termination or (ii)
the Stock Right's specified expiration date; provided, however, in the event the
grantee exercises an ISO after the date that is one year following the date of
termination by reason of disability, such ISO will automatically be converted
into a NSO subject to the terms of the Plan. For the purposes of the Plan, the
term "disability" shall mean "permanent and total disability" as defined in
Section 22(e)(3) of the Code.

                  (c)      The provisions of subsections (a) and (b) of this
Section 10 regarding the exercise period of a Stock Right may be waived,
extended or further limited, in the discretion of the Board or Committee, in an
instrument granting a Stock Right that is not an ISO.

         11.      Transferability and Assignability of Stock Rights. No Stock
Right granted under this Plan shall be assignable or otherwise transferable by
the grantee except by will or by the laws of descent and distribution. An ISO
may be exercised during the lifetime of the optionee only by the optionee.

         12.      Terms and Conditions of Stock Rights. Stock Rights shall be
evidenced by instruments (which need not be identical) in such forms as the
Board or Committee may from time to time approve. Such instruments shall conform
to the terms and conditions set forth in Sections 6 through 11 hereof and may
contain such other provisions as the Board or Committee deems advisable that are
not inconsistent with the Plan, including restrictions (or other conditions
deemed by the Board or Committee to be in the best interests of the Company)
applicable to the exercise of Options or to shares of Common Stock issuable upon
exercise of Options. In granting any NSO, the Board or Committee may specify
that such NSO shall be subject to the restrictions set forth herein with respect
to ISOs, or to such other termination and cancellation provisions as the Board
or Committee may determine. The Board or Committee may from time to time confer
authority and responsibility on one or more of its own members and/or one or
more officers of the Company to execute and deliver such instruments. The proper
officers of the Company are authorized and directed to take any and all action
necessary or advisable from time to time to carry out the terms of such
instruments.

         13.      Adjustments. Upon the occurrence of any of the following
events, the rights of a recipient of a Stock Right granted hereunder shall be
adjusted as hereinafter provided, unless otherwise provided in the written
agreement between the recipient and the Company relating to such Stock Right.

                  (a)      In the event of any change in corporate
capitalization (including, but not limited to, a change in the number of shares
of Common Stock outstanding), such as a stock dividend, stock split, reverse
stock split, share combination, recapitalization, merger,

                                       8
<PAGE>

consolidation, acquisition of property or shares, separation, spinoff,
reorganization, stock rights offering, liquidation, disaffiliation of a Related
Corporation, or similar event of or by the Company, the Committee or Board may
in its discretion make such substitution or adjustments as it deems appropriate
and equitable under the Plan. Adjustments pursuant to this Section 13(a) may
include, without limitation, (i) adjustments to (A) the aggregate number and
kind of shares reserved for issuance and delivery under the Plan; (B) the
various maximum limitations upon certain types of Stock Rights and upon the
grants to individuals of certain types of Stock Rights; (C) the number and kind
of shares subject to outstanding Stock Rights; and (D) the exercise price of
outstanding Stock Rights; (ii) the cancellation of outstanding Stock Rights in
exchange for payments of cash, property or a combination thereof having an
aggregate value equal to the value of such Stock Rights, (iii) the substitution
of other property (including, without limitation, other securities of the
Company and securities of entities other than the Company) for the shares of
capital stock subject to outstanding Stock Rights, and (iv) in connection with
any disaffiliation of a Related Corporation, arranging for the assumption, or
replacement with new awards based on other property (including, without
limitation, other securities of the Company and securities of entities other
than the Company) for the shares of capital stock covered by outstanding Stock
Rights based on other securities or other property or cash, by the affected
Related Corporation or division by the entity that controls such Related
Corporation or division following such disaffiliation (as well as any
corresponding adjustments to Stock Rights that remain based upon Company
securities).

                  (b)      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 subject to Stock
Right. No adjustments shall be made for dividends paid in cash or in property
other than Common Stock of the Company.

                  (c)      No fractional shares shall be issued under the Plan
and any optionee who would otherwise be entitled to receive a fraction of a
share upon exercise of a Stock Right shall receive from the Company cash in lieu
of such fractional shares in an amount equal to the fair market value of such
fractional shares, as determined in the sole discretion of the Board or
Committee.

                  (d)      Upon the happening of any of the foregoing events
described in subsection (a) above, the class and aggregate number of shares set
forth in Section 4 hereof that are subject to Stock Rights that previously have
been or subsequently may be granted under the Plan shall also be appropriately
adjusted to reflect the events described. The Board or Committee or the
Successor Board shall determine the specific adjustments to be made under this
Section 13 and, subject to Section 2, its determination shall be conclusive.

         14.      Means of Exercising Stock Rights. Except as otherwise provided
in this Plan or the instrument evidencing the Stock Right, a Stock Right (or any
part or installment thereof) shall be exercised by giving written notice to the
Company at its principal office address to the attention of its President. Such
notice shall identify the Stock Right being exercised and specify the number of
shares as to which such Stock Right is being exercised, accompanied by full

                                       9
<PAGE>

payment of the exercise price therefor, if any, payable as follows (a) in United
States dollars in cash or by check, (b) at the discretion of the Board or
Committee, through the delivery of already-owned shares of Common Stock having a
fair market value equal as of the date of the exercise to the cash exercise
price of the Stock Right and, in the case of such already-owned shares of Common
Stock, having been owned by the participant for more than six months from the
date of surrender, or (c) at the discretion of the Board or Committee, by
delivery of the grantee's personal recourse note bearing interest payable not
less than annually at a market rate that is no less than 100% of the lowest
applicable Federal rate, as defined in Section 1274(d) of the Code, (d) at the
discretion of the Board or Committee, through the surrender of shares of Common
Stock then issuable upon exercise of the Stock Right having a fair market value
on the date of exercise equal to the aggregate exercise price of the Stock
Right, (e) at the discretion of the Board or Committee, delivery of a notice
that the grantee has placed a market sell order with a broker with respect to
shares of Common Stock then issuable upon exercise of the Stock Right and that
the broker has been directed to pay a sufficient portion of the net proceeds of
the sale to the Company in satisfaction of the Stock Right Exercise Price,
provided that payment of such proceeds is then made to the Company upon
settlement of the sale or (f) at the discretion of the Board or Committee, by
any combination of (a), (b), (c), (d), and (e) or such other consideration and
method of payment for the issuance of shares to the extent permitted by
applicable law or the Plan. If the Board or Committee exercises its discretion
to permit payment of the exercise price of an ISO by means of the methods set
forth in clauses (b), (c) or (d) of the preceding sentence, such discretion
shall be exercised in writing at the time of the grant of the ISO in question
and such exercise shall also be governed by any terms set forth in the written
agreement evidencing the grant of the Stock Right. The holder of a Stock Right
shall not have the rights of a stockholder with respect to the shares covered by
the Stock Right until the date of issuance of a stock certificate for such
shares. Except as expressly provided above in Section 13 with respect to changes
in capitalization and stock dividends, no adjustment shall be made for dividends
or similar rights for which the record date is before the date such stock
certificate is issued.

         15.      Surrender of Stock Rights for Cash or Stock. The Board or
Committee may, in its sole and absolute discretion and subject to such terms and
conditions as it deems appropriate, accept the surrender by an optionee or
grantee of a Stock Right granted to him under the Plan and authorize payment in
consideration therefor of an amount equal to the difference between the purchase
price payable for the shares of Common Stock under the instrument granting the
Option and the fair market value of the shares subject to the Stock Right
(determined as of the date of such surrender of the Stock Right). Such payment
shall be made in shares of Common Stock valued at fair market value on the date
of such surrender, or in cash, or partly in such shares of Common Stock and
partly in cash as the Board or Committee shall determine. The surrender shall be
permitted only if the Board or Committee determines that such surrender is
consistent with the purpose set forth in Section 1, and only to the extent that
the Stock Right is exercisable under Section 8 on the date of surrender. In no
event shall an optionee or grantee surrender his Stock Right under this Section
if the fair market value of the shares on the date of such surrender is less
than the purchase price payable for the shares of Common Stock subject to the
Stock Right. Any ISO surrendered pursuant to the provisions of this Section 15
shall be deemed to have been converted into a NSO immediately prior to such
surrender.

                                       10
<PAGE>

         16.      Term and Amendment of Plan. This Plan was adopted by the Board
on March 23, 2004 (the "Effective Date"), subject (with respect to the
validation of ISOs granted under the Plan) to approval of the Plan by the
stockholders of the Company. The Plan will be approved by the stockholders of
the Company within one year of the Effective Date. The Plan shall expire 10
years after the Effective Date (except as to Stock Rights outstanding on that
date). Subject to the provisions of Section 5 above, Stock Rights may be granted
under the Plan prior to the date of stockholder approval of the Plan. The Board
may terminate or amend the Plan in any respect at any time, except that without
the approval of the stockholders obtained within 12 months before or after the
Board adopts a resolution authorizing any of the following actions:

                  (a) the total number of shares that may be issued under the
Plan may not be increased (except by adjustment pursuant to Section 13);

                  (b) the provisions of Section 3 regarding eligibility for
grants of ISOs may not be modified;

                  (c) the provisions of Section 6(b) regarding the exercise
price at which shares may be offered pursuant to ISOs may not be modified
(except by adjustment pursuant to Section 13); and

                  (d) the expiration date of the Plan may not be extended.

         Except as provided in Section 13(a) and the fifth sentence of this
Section 16, in no event may action of the Board or stockholders adversely alter
or impair the rights of a grantee, without his or her consent, under any Stock
Right previously granted.

         17.      Conversion of ISOs into NSOs; Termination of ISOs. The Board
or Committee, with the consent of any optionee, may in its discretion take such
actions as may be necessary to convert an optionee's ISOs (or any installments
or portions of installments thereof) that have not been exercised on the date of
conversion into NSOs at any time prior to the expiration of such ISOs. These
actions may include, but not be limited to, accelerating the exercisability,
extending the exercise period or reducing the exercise price of the appropriate
installments of optionee's Options. At the time of such conversion, the Board or
Committee (with the consent of the optionee) may impose these conditions on the
exercise of the resulting NSOs as the Board or Committee in its discretion may
determine, provided that the conditions shall not be inconsistent with the Plan.
Nothing in the Plan shall be deemed to give any optionee the right to have such
optionee's ISOs converted into NSOs, and no conversion shall occur until and
unless the Board or Committee takes appropriate action. The Board or Committee,
with the consent of the optionee, may also terminate any portion of any ISO that
has not been exercised at the time of termination.

         18.      Governmental Regulation. The Company's obligation to sell and
deliver shares of the Common Stock under the Plan is subject to the approval of
any governmental authority required in connection with the authorization,
issuance or sale of such shares.

                                       11
<PAGE>

         19.      Withholding of Additional Income Taxes.

                  (a)      Upon the exercise of an NSO, or the grant of a Stock
Bonus or Purchase Right for less than the fair market value of the Common Stock,
the making of a Disqualifying Disposition (as defined in Section 20), the
vesting of restricted Common Stock acquired on the exercise of a Stock Right
hereunder or the surrender of an Option pursuant to Section 15, the Company, in
accordance with Section 3402(a) of the Code and any applicable state statute or
regulation, may require the optionee, Stock Bonus recipient or purchaser to pay
to the Company additional withholding taxes in respect of the amount that is
considered compensation includable in such person's gross income. With respect
to (a) the exercise of an Option, (b) the grant of a Stock Bonus, (c) the grant
of a Purchase Right of Common Stock for less than its fair market value, (d) the
vesting of restricted Common Stock acquired by exercising a Stock Right, or (e)
the acceptance of a surrender of an Option, the Committee in its discretion may
condition such event on the payment by the optionee, Stock Bonus recipient or
purchaser of any such additional withholding taxes.

                  (b)      At the sole and absolute discretion of the Committee,
the holder of Stock Rights may pay all or any part of the total estimated
federal and state income tax liability arising out of the exercise or receipt of
such Stock Rights, the making of a Disqualifying Disposition, or the vesting of
restricted Common Stock acquired on the exercise of a Stock Right hereunder
(each of the foregoing, a "Tax Event") by tendering already-owned shares of
Common Stock or (except in the case of a Disqualifying Disposition) by directing
the Company to withhold shares of Common Stock otherwise to be transferred to
the holder of such Stock Rights as a result of the exercise or receipt thereof
in an amount equal to the estimated federal and state income tax liability
arising out of such event, provided that no more shares may be withheld than are
necessary to satisfy the holder's actual minimum withholding obligation with
respect to the exercise of Stock Rights. In such event, the holder of Stock
Rights must, however, notify the Committee of his or her desire to pay all or
any part of the total estimated federal and state income tax liability arising
out of a Tax Event by tendering already-owned shares of Common Stock or having
shares of Common Stock withheld prior to the date that the amount of federal or
state income tax to be withheld is to be determined. For purposes of this
Section 19(b), shares of Common Stock shall be valued at their fair market value
on the date that the amount of the tax withholdings is to be determined.

         20.      Notice to Company of Disqualifying Disposition. Each employee
who receives an ISO must agree to notify the Company in writing immediately
after the employee makes a Disqualifying Disposition (as defined below) of any
Common Stock acquired pursuant to the exercise of an ISO. A "Disqualifying
Disposition" is any disposition (including any sale) of such Common Stock before
either (a) two years after the date the employee was granted the ISO, or (b) one
year after the date the employee acquired Common Stock by exercising the ISO. If
the employee has died before such stock is sold, these holding period
requirements do not apply and no Disqualifying Disposition can occur thereafter.

         21.      Governing Law; Construction. The validity and construction of
the Plan and the instruments evidencing Stock Rights shall be governed by the
laws of the State of Delaware. In

                                       12
<PAGE>

construing this Plan, the singular shall include the plural and the masculine
gender shall include the feminine and neuter, unless the context otherwise
requires.

         22.      Lock-up Agreement. Each recipient of securities hereunder
agrees, if requested by the Board or Committee, in connection with the
registration with the United States Securities and Exchange Commission under the
Securities Act of 1933, as amended, of the public sale of the Company's Common
Stock, not to sell, make any short sale of, loan, grant any option for the
purchase of or otherwise dispose of any securities of the Company (other than
those included in the registration) without the prior written consent of the
Company or such underwriters, as the case may be, for such period of time (not
to exceed 180 days) from the effective date of such registration as the Company
or the underwriters, as the case may be, shall specify. Each such recipient
agrees that the Company may instruct its transfer agent to place stop-transfer
notations in its records to enforce this Section 22. Each such recipient agrees
to execute a form of agreement reflecting the foregoing restrictions as
requested by the underwriters managing such offering.

                                       13

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