Document:

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                                                                   EXHIBIT 10.10

                           CITIZENS FIRST SAVINGS BANK
                           CHANGE IN CONTROL AGREEMENT

          This Agreement as of this 1st day of January, 2005 by and among
Citizens First Savings Bank (the "Bank"), a state chartered savings institution,
with its principal administrative offices at 525 Water Street, Port Huron,
Michigan 48060, Richard Stafford ("Executive"), and Citizens First Bancorp, Inc.
(the "Holding Company"), a corporation organized under the laws of the State of
Delaware, which is the stock holding company of the Bank.

          WHEREAS, the Bank recognizes the substantial contribution Executive is
making to the Bank and wishes to protect Executive's position with the Bank for
the period provided in this Agreement; and

          WHEREAS, Executive has agreed to serve in the employ of a subsidiary
of the Bank.

          NOW, THEREFORE, in consideration of the contribution and
responsibilities of Executive, and upon the other terms and conditions
hereinafter provided, the parties hereto agree as follows:

1.   TERM OF AGREEMENT.

          The period of this Agreement shall be deemed to have commenced on
January 1, 2005, and shall continue for a period of 30 full calendar months
thereafter. Commencing on June 1, 2005 and continuing on each June 1st
thereafter, the Holding Company's Board of Directors (the "Board") may act to
extend the term of this Agreement for an additional year, such that the
remaining term of this Agreement would be three years, unless Executive elects
not to extend the term of this Agreement by giving written notice to the Bank,
in which case the term of this

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Agreement will expire on the third anniversary of this Agreement.

2.   CHANGE IN CONTROL.

          (a) Upon the occurrence of a Change in Control of the Bank or the
Holding Company (as herein defined) followed at any time during the term of this
Agreement by the termination of Executive's employment in accordance with the
terms of this agreement, other than Termination for Cause, as defined in Section
2(c) of this Agreement, the provisions of Section 3 of this Agreement shall
apply. Upon the occurrence of a Change in Control, Executive shall have the
right to elect to voluntarily terminate his employment at any time during the
term of this Agreement following any demotion, loss of title, office or
significant authority, material reduction in his annual compensation or
benefits, or relocation of his principal place of employment by more than fifty
(50) miles from its location immediately prior to the Change in Control;
provided, however, Executive may consent in writing to any such demotion, loss,
reduction or relocation. The effect of any written consent of Executive under
this Section 2(a) shall be strictly limited to the terms specified in such
written consent.

     (b) For purposes of this Agreement, a "Change in Control" shall mean an
event of a nature that: (i) would be required to be reported in response to Item
1 (a) of the current report on Form 8-K, as in effect on the date hereof,
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the
"Exchange Act"); or (ii) results in a Change in Control of the Bank or the
Holding Company within the meaning of the Bank Change in Control Act and the
Rules and Regulations promulgated by the Federal Deposit Insurance Corporation
("FDIC") at 12 C.F.R. 303.4(a) with respect to the Bank and the applicable
regulatory authority with respect to the Holding Company, as in effect on the
date hereof; or (iii) results in a transaction requiring prior FRB approval
under the Bank Holding Company Act of 1956 and the regulations

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promulgated thereunder by the FRB at 12. C.F.R. 225.11, as in effect on the
date hereof except for the Holding Company's acquisition of the Bank; or (iv)
without limitation such a Change in Control shall be deemed to have occurred at
such time as (A) any "person" (as the term is used in Sections 13(d) and 14(d)
of the Exchange Act) is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of the Bank
or the Holding Company representing 20% or more of the Bank's or the Holding
Company's outstanding securities except for any securities of the Bank purchased
by the Holding Company in connection with the conversion of the Bank to the
stock form and any securities purchased by any tax-qualified employee benefit
plan of the Bank; or (B) individuals who constitute the Board of Directors on
the date hereof (the "Incumbent Board") cease for any reason to constitute at
least a majority thereof, provided that any person becoming a director
subsequent to the date hereof whose election was approved by a vote of at least
three-quarters (3/4) of the directors comprising the Incumbent Board, or whose
nomination for election by the Holding Company's stockholders was approved by
the same Nominating Committee serving under an Incumbent Board, shall be, for
purposes of this clause (B), considered as though he were a member of the
Incumbent Board; or (C) a plan of reorganization, merger, consolidation, sale of
all or substantially all the assets of the Bank or the Holding Company or
similar transaction occurs in which the Bank or Holding Company is not the
resulting entity; or (D) solicitations of shareholders of the Holding Company,
by someone other than the current management of the Holding Company, seeking
stockholder approval of a plan of reorganization, merger or consolidation of the
Holding Company or Bank or similar transaction with one or more corporations as
a result of which the outstanding shares of the class of securities then subject
to the plan or transaction are exchanged for or converted

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into cash or property or securities not issued by the Bank or the Holding
Company shall be distributed; or (E) a tender offer is made for 20% or more of
the voting securities of the Bank or the Holding Company.

          (c) Executive shall not have the right to receive termination benefits
pursuant to Section 3 of this Agreement upon Termination for Cause. The term
"Termination for Cause" shall mean termination because of: 1) Executive's
personal dishonesty, willful misconduct, breach of fiduciary duty involving
personal profit, intentional failure to perform stated duties, willful violation
of any law, rule, regulation (other than traffic violations or similar
offenses), final cease and desist order or material breach of any provision of
this agreement which results in a material loss to the Bank or the Holding
Company, or 2) Executive's conviction of a crime or act involving moral
turpitude or a final judgment rendered against Executive based upon actions of
Executive which involve moral turpitude. For the purposes of this Section, no
act, or the failure to act, on executives part shall be "willful" unless done,
or omitted to be done, not in good faith and without reasonable belief that the
action or omission was in the best interests of the Bank or its affiliates.
Notwithstanding the foregoing, Executive shall not be deemed to have been
Terminated for Cause unless and until there shall have been delivered to him a
Notice of Termination which shall include a copy of a resolution duly adopted by
the affirmative vote of not less than a majority of the members of the Board at
a meeting of the Board called and held for that purpose (after reasonable notice
to Executive and an opportunity for him, together with counsel, to be heard
before the Board), finding that in the good faith opinion of the Board,
Executive was guilty of conduct justifying Termination for Cause and specifying
the particulars thereof in detail. Executive shall not have the right to receive
compensation or other benefits for

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any period after Termination for Cause. During the period beginning on the date
of the Notice of Termination for Cause pursuant to Section 4 of this Agreement
through the Date of Termination, stock options granted to Executive under any
stock option plan shall not be exercisable nor shall any unvested stock awards
granted to Executive under any stock-based incentive plan of the Bank, the
Holding Company or any subsidiary or affiliate thereof vest. At the Date of
Termination, such stock options and such unvested stock awards shall become null
and void and shall not be exercisable by or delivered to Executive at any time
subsequent to such Date of Termination for Cause.

3.   TERMINATION BENEFITS.

          (a) Upon the occurrence of a Change in Control, followed at any time
during the term of this Agreement by the involuntary termination of Executive's
employment (other than for Termination for Cause), or voluntary termination
during the term of this Agreement following any demotion, loss of title, office
or significant authority, material reduction in his annual compensation or
benefits, or relocation of his principal place of employment by more than fifty
(50) miles from its location immediately prior to the Change in Control (unless
Executive so consents), the Bank shall be obligated to pay Executive, or in the
event of his subsequent death, his beneficiary or beneficiaries, or his estate,
as the case may be, a sum equal to three (3) times Executive's average annual
compensation for the five most recent taxable years that Executive has been
employed by the Bank or such lesser number of years in the event that Executive
shall have been employed by the Bank for less than five years. For this purpose,
such annual compensation shall include base salary and any other taxable income,
including but not limited to amounts related to the granting, vesting or
exercise of restricted stock or stock option awards,

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commissions, bonuses, pension and profit sharing plan contributions or benefits
(whether or not taxable), severance payments, retirement benefits, and fringe
benefits paid or to be paid to Executive or paid for Executive's benefit during
any such year. At the election of Executive which election is to be made prior
to a Change in Control, such payment shall be made in a lump sum or on an annual
basis in approximately equal installments over a five (5) year period.

          (b) Upon the occurrence of a Change in Control of the Bank or Holding
Company followed at any time during the term of this Agreement by Executive's
voluntary or involuntary termination of employment in accordance with paragraph
(a) of this Section 3, other than for Termination for Cause, the Bank shall
cause to be continued life, medical and disability coverage substantially
identical to the coverage maintained by the Bank or the Holding Company for
Executive immediately prior to his severance, except to the extent such coverage
may be changed in its application to all Bank or Holding Company employees on a
nondiscriminatory basis. Such coverage and payments shall cease upon the
expiration of thirty-six (36) full calendar months from the date of Termination.
Provided, however, that if Executive was not receiving any element of such
coverage immediately prior to his severance he may elect, at any time during
such 36 month period, to receive coverage during the remainder of such period.

          (c) Notwithstanding the provisions of this Section 3, in no event
shall the aggregate payments or benefits to be made or afforded to Executive
under said paragraphs (the "Termination Benefits") constitute an "excess
parachute payment" under Section 280G of the Internal Revenue Code of 1986, as
amended, or any successor thereto, and in order to avoid such a result,
Termination Benefits will be reduced, if necessary, to an amount (the
"Non-Triggering

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Amount"), the value of which is one dollar ($1.00) less than amount equal to
three (3) times Executive's "base amount", among the Termination benefits shall
be determined by Executive.

4.   NOTICE OF TERMINATION

          (a) Any purported termination by the Bank or by Executive in
connection with a Change in Control shall be communicated by a Notice of
Termination to the other party. For purposes of this Agreement, a "Notice of
Termination" shall mean a written notice which indicates the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive's employment under the provision so indicated.

          (b) "Date of Termination" shall mean the date specified in the Notice
of Termination; provided, however, that if a dispute regarding the Executive's
termination exists, the "Date of Termination" shall be determined in accordance
with Section 4(c) of this Agreement.

          (c) If, within thirty (30) days after any Notice of Termination is
given, the party receiving such Notice of Termination notifies the other party
that a dispute exists concerning the termination, the Date of Termination shall
be the date on which the dispute is finally determined, either by mutual written
agreement of the parties, by a binding arbitration award, or by a final
judgment, or order or decree of a court of competent jurisdiction (the time for
appeal therefrom having expired and no appeal having been perfected) and
provided further that the date of Termination shall be extended by a notice of
dispute only if such notice is given in good faith and the party giving such
notice pursues the resolution of such dispute with reasonable diligence.
Notwithstanding the pendency of any such dispute in connection with a Change in
Control, in the

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event that the Executive is terminated for reasons other than Termination for
Cause, the Bank will continue to pay Executive the payments and benefits due
under this Agreement in effect when the notice giving rise to the dispute was
given (including, not limited to his annual salary) until the earlier of: (1)
the resolution of the dispute in accordance with this Agreement; or (2) the
expiration of the remaining term of this Agreement as determined as of the Date
of Termination.

5.   SOURCE OF PAYMENTS

          It is intended by the parties hereto that all payments provided in
this Agreement shall be paid in cash or check from the general funds of the
Bank. Further, the Holding Company guarantees such payments and provision of all
amounts and benefits due hereunder to Executive and, if such amounts and
benefits due from the Bank are not timely paid or provided by the Bank, such
amounts and benefits shall be paid or provided by the Holding Company.

6.   EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFIT PLANS.

          This Agreement contains the entire understanding between the parties
hereto and supersedes any prior agreement between the bank and Executive, except
that this Agreement shall not affect or operate to reduce any benefit or
compensation inuring to Executive of a kind elsewhere provided. No provision of
this Agreement shall be interpreted to mean that Executive is subject to
receiving fewer benefits than those available to him without reference to this
Agreement.

          Nothing in this Agreement shall confer upon Executive the right to
continue in the employ of the Bank or shall impose on the Bank any obligation to
employ or retain executive in its employ for any period.

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7.   NO ATTACHMENT.

          (a) Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, commutation, or alienation, sale,
assignment, encumbrance, charge, pledge, or hypothecation, or to execution,
attachment, levy, or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to affect any such action shall be null,
void, and of no effect.

          (b) This Agreement shall be binding upon, and inure to the benefit of,
Executive, the Bank and their respective successors and assigns.

8.   MODIFICATION AND WAIVER.

          (a) This Agreement may not be modified or amended except by an
instrument in writing signed by the parties hereto.

          (b) No term or condition of this Agreement shall be deemed to have
been waived, nor shall there by any estoppel against the enforcement of any
provision of this Agreement, except by written instrument of the party charged
with such waiver or estopped. No such written waiver shall be deemed a
continuing waiver unless specifically stated therein, and each such waiver shall
operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future or as to any act
other than that specifically waived.

9.   REQUIRED REGULATORY PROVISIONS.

          Any payments made to Executive pursuant to this Agreement, or
otherwise, are subject to and conditioned upon compliance with 12 U.S.C. Section
1828(k) and any rules and regulations promulgated thereunder, including 12
C.F.R. Part 359.

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10.  SEVERABILITY.

          If, for any reason, any provision of this Agreement, or any part of
any provision, is held invalid, such invalidity shall not affect any other
provision of this Agreement or any part of such provision not held so invalid,
and each such other provision and part thereof shall, to the full extent
consistent with law, continue in full force and effect.

11.  HEADINGS FOR REFERENCE ONLY.

          The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.

12.  GOVERNING LAW.

          The validity, interpretation, performance, and enforcement of this
Agreement shall be governed by the laws of the State of Michigan.

13.  ARBITRATION.

          Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted before a panel
of three arbitrators sitting in a location selected by Executive within fifty
(50) miles from the location of the Bank's main office, in accordance with the
rules of the American Arbitration Association then in effect. Judgment may be
entered on the arbitrator's award in any court having jurisdiction; provided,
however, that Executive shall be entitled to seek specific performance of his
right to be paid until the Date of Termination during the pendency of any
dispute or controversy rising under or in connection with this Agreement.

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14.  PAYMENT OF COSTS AND LEGAL FEES.

          All reasonable costs and legal fees paid or incurred by Executive
pursuant to any dispute or question of interpretation relating to this Agreement
shall be paid or reimbursed by the Bank of Executive is successful with respect
to such dispute or question of interpretation pursuant to a legal judgment,
arbitration or settlement.

15.  INDEMNIFICATION.

          The Bank shall provide Executive (including his heirs, executors and
administrators) with coverage under a standard directors' liability insurance
policy at its expense and shall indemnify executive (and his heirs, executors
and administrators) to the fullest extent permitted under Michigan law against
all expenses and liabilities reasonably incurred by him in connection with or
arising out of any action, suit or proceeding in which he may be involved by
reason of having been a director or officer of the Bank (whether or not he
continues to be a director or officer at the time of incurring such expenses or
liabilities); such expenses and liabilities to include, but not to be limited
to, judgments, court costs and attorneys' fees and the cost of reasonable
settlements.

16.  SUCCESSORS AND PARTIES.

          (a) The Bank shall require any successor or assignee, whether direct
or indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Bank, to expressly and
unconditionally assume and agree to perform the Bank's obligations under this
Agreement in the same manner and to the same extent that the Bank would be
required to perform such obligations if no such successor assignment had taken
place.

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          (b) As used herein the terms "Bank" and "Holding Company" shall
include any affiliate of either, where the context so requires.

                                    SIGNATURE

          IN WITNESS WHEREOF, Citizens First Savings Bank and Citizens First
Bancorp, Inc. have caused this Agreement to be executed by their duly authorized
officers, and Executive has signed this Agreement as of the 1st day of January,
2005.

                                        CITIZENS FIRST SAVINGS BANK

                                        By: /s/ Marshall J. Campbell
                                            ------------------------------------
                                            Marshall J. Campbell, President

                                        CITIZENS FIRST BANCORP, INC.

                                        By: /s/ Marshall J. Campbell
                                            ------------------------------------
                                            Marshall J. Campbell, President

                                        EXECUTIVE

                                        By: /s/ Richard Stafford
                                            ------------------------------------
                                            Richard Stafford, Executive

                                       12<PAGE>

                                                                    EXHIBIT 10.1

                                  INNUITY, INC.

                   AMENDED AND RESTATED 1999 STOCK OPTION PLAN

                               SECTION 1. PURPOSE

      The purpose of the Innuity, Inc. Amended and Restated 1999 Stock Option
Plan (the "Plan") is to enhance the long-term shareholder value of Innuity,
Inc., a Utah corporation (the "Company"), by offering opportunities to
employees, directors, officers, consultants, agents, advisors, and independent
contractors of the Company and its Subsidiaries (as defined in Section 2) to
participate in the Company's growth and success, and to encourage them to remain
in the service of the Company and its Subsidiaries and to acquire and maintain
stock ownership in the Company.

                             SECTION 2. DEFINITIONS

      For purposes of the Plan, the following terms shall be defined as set
forth below:

      2.1 BOARD

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

      2.2 CAUSE

      "Cause" means dishonesty, fraud, misconduct, unauthorized use or
disclosure of confidential information or trade secrets, or conviction or
confession of a crime punishable by law (except minor violations), in each case
as determined by the Plan Administrator, whose determination shall be conclusive
and binding.

      2.3 CODE

      "Code" means the Internal Revenue Code of 1986, as amended from time to
time.

      2.4 COMMON STOCK

      "Common Stock" means the common stock, no par value, of the Company.

      2.5 CORPORATE TRANSACTION

      "Corporate Transaction" means any of the following events:

            (a) Consummation of any merger or consolidation of the Company in
which the Company is not the continuing or surviving corporation, or pursuant to
which shares of Common Stock are converted into cash, securities, or other
property, if following such merger or consolidation the holders of the Company's
outstanding voting securities immediately prior to such merger or consolidation
own less than 66-2/3% of the outstanding voting securities of the surviving
corporation;

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            (b) Consummation of any sale, lease, exchange, or other transfer, in
one transaction or a series of related transactions, of all or substantially all
of the Company's assets, other than a transfer of the Company's assets to a
majority-owned subsidiary corporation (as the term "subsidiary corporation" is
defined in Section 8.3) of the Company; or

      (c) Approval by the holders of the Common Stock of any plan or proposal
for the liquidation or dissolution of the Company.

      Ownership of voting securities shall take into account and shall include
ownership as determined by applying Rule 13d-3(d)(1)(i) (as in effect on the
date of adoption of the Plan) under the Exchange Act.

      2.6 DISABILITY

      "Disability" means "permanent and total disability" as that term is
defined for purposes of Section 22(e)(3) of the Code.

      2.7 EXCHANGE ACT

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

      2.8 FAIR MARKET VALUE

      The "Fair Market Value" shall be as established in good faith by the Plan
Administrator or (a) if the Common Stock is listed on the Nasdaq National
Market, the average of the high and low per share sales prices for the Common
Stock as reported by the Nasdaq National Market for a single trading day or (b)
if the Common Stock is listed on the New York Stock Exchange or the American
Stock Exchange, the average of the high and low per share sales prices for the
Common Stock as such price is officially quoted in the composite tape of
transactions on such exchange for a single trading day. If there is no such
reported price for the Common Stock for the date in question, then such price on
the last preceding date for which such price exists shall be determinative of
the Fair Market Value.

      2.9 GOOD REASON

      "Good Reason" means the occurrence of any one of the following events, in
the event that the Optionee (i) has given the Successor Corporation written
notice of such occurrence and the Successor Corporation has failed to cure such
event within thirty (30) days, and (ii) Optionee resigns within sixty (60) days
following the expiration of such thirty-day period:

            (a) relocation of the Optionee to any place greater than fifty (50)
miles from his or her principal location prior to the occurrence of the
Corporate Transaction, except for reasonably required travel on the Successor
Corporation's business that is not materially greater than such travel
requirements prior to the Corporate Transaction; or

            (b) substantial reduction of the Optionee's compensation package,
unless such a reduction is made by the Company ratably with all other employees
at similar levels of responsibility.

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      2.10 GRANT DATE

      "Grant Date" means the date on which the Plan Administrator adopted the
granting resolution or a later date designated in a resolution of the Plan
Administrator as the date an Option is to be granted.

      2.11 INCENTIVE STOCK OPTION

      "Incentive Stock Option" means an Option to purchase Common Stock granted
under Section 7 with the intention that it qualify as an "incentive stock
option" as that term is defined in Section 422 of the Code.

      2.12 NONQUALIFIED STOCK OPTION

      "Nonqualified Stock Option" means an Option to purchase Common Stock
granted under Section 7 other than an Incentive Stock Option.

      2.13 OPTION

      "Option" means the right to purchase Common Stock granted under Section 7.

      2.14 OPTIONEE

      "Optionee" means (i) the person to whom an Option is granted; (ii) for an
Optionee who has died, the personal representative of the Optionee's estate, the
person(s) to whom the Optionee's rights under the Option have passed by will or
by the applicable laws of descent and distribution, or the beneficiary
designated in accordance with Section 9; or (iii) person(s) to whom an Option
has been transferred in accordance with Section 9.

      2.15 PLAN ADMINISTRATOR

      "Plan Administrator" means the Board or any committee of the Board
designated to administer the Plan under Section 3.1.

      2.16 RETIREMENT

      "Retirement" means retirement as of the individual's normal retirement
date as that term is defined by the Plan Administrator from time to time for
purposes of the Plan.

      2.17 SECURITIES ACT

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

      2.18 SUBSIDIARY

      "Subsidiary", except as provided in Section 8.3 in connection with
Incentive Stock Options, means any entity that is directly or indirectly
controlled by the Company or in which the Company has a significant ownership
interest, as determined by the Plan Administrator, and any entity that may
become a direct or indirect parent of the Company.

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      2.19 SUCCESSOR CORPORATION

      "Successor Corporation" has the meaning set forth under Section 10.2.

                           SECTION 3. ADMINISTRATION

      3.1 PLAN ADMINISTRATOR

      The Plan shall be administered by the Board or a committee or committees
(which term includes subcommittees) appointed by, and consisting of two or more
members of, the Board. If and so long as the Common Stock is registered under
Section 12(b) or 12(g) of the Exchange Act, the Board shall consider in
selecting the Plan Administrator and the membership of any committee acting as
Plan Administrator, with respect to any persons subject or likely to become
subject to Section 16 of the Exchange Act, the provisions regarding (a) "outside
directors" as contemplated by Section 162(m) of the Code and (b) "Non-Employee
Directors" as contemplated by Rule 16b-3 under the Exchange Act. The Board may
delegate the responsibility for administering the Plan with respect to
designated classes of eligible persons to different committees consisting of two
or more members of the Board, subject to such limitations as the Board deems
appropriate. Committee members shall serve for such term as the Board may
determine, subject to removal by the Board at any time.

      3.2 ADMINISTRATION AND INTERPRETATION BY THE PLAN ADMINISTRATOR

      Except for the terms and conditions explicitly set forth in the Plan, the
Plan Administrator shall have exclusive authority, in its discretion, to
determine all matters relating to Options under the Plan, including the
selection of individuals to be granted Options, the type of Options, the number
of shares of Common Stock subject to an Option, all terms, conditions,
restrictions and limitations, if any, of an Option and the terms of any
instrument that evidences the Option. The Plan Administrator shall also have
exclusive authority to interpret the Plan and may from time to time adopt, and
change, rules and regulations of general application for the Plan's
administration. The Plan Administrator's interpretation of the Plan and its
rules and regulations, and all actions taken and determinations made by the Plan
Administrator pursuant to the Plan, shall be conclusive and binding on all
parties involved or affected. The Plan Administrator may delegate administrative
duties to such of the Company's officers as it so determines.

                      SECTION 4. STOCK SUBJECT TO THE PLAN

      4.1 AUTHORIZED NUMBER OF SHARES

      Subject to adjustment from time to time as provided in Section 10.1, a
maximum of 2,440,466 shares of Common Stock shall be available for issuance
under the Plan. Shares issued under the Plan shall be drawn from authorized and
unissued shares or shares now held or subsequently acquired by the Company.

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      4.2 REUSE OF SHARES

      Any shares of Common Stock that have been made subject to an Option but
that cease to be subject to the Option (other than by reason of exercise of the
Option to the extent it is exercised for shares) shall again be available for
issuance in connection with future grants of Options under the Plan.

                             SECTION 5. ELIGIBILITY

      Options may be granted under the Plan to those officers, directors, and
key employees of the Company and its Subsidiaries as the Plan Administrator from
time to time selects. Options may also be made to consultants, agents, advisors,
and independent contractors who provide services to the Company and its
Subsidiaries.

                               SECTION 6. AWARDS

      6.1 FORM AND GRANT OF OPTIONS

      The Plan Administrator shall have the authority, in its sole discretion,
to determine the type or types of awards to be made under the Plan. Such awards
may consist of Incentive Stock Options and/or Nonqualified Stock Options.
Options may be granted singly or in combination.

      6.2 ACQUIRED COMPANY OPTION AWARDS

      Notwithstanding anything in the Plan to the contrary, the Plan
Administrator may grant Options under the Plan in substitution for awards issued
under other plans, or assume under the Plan awards issued under other plans, if
the other plans are or were plans of other acquired entities ("Acquired
Entities") (or the parent of the Acquired Entity) and the new Option is
substituted, or the old award is assumed, by reason of a merger, consolidation,
acquisition of property or of stock, reorganization or liquidation (the
"Acquisition Transaction"). In the event that a written agreement pursuant to
which the Acquisition Transaction is completed is approved by the Board and said
agreement sets forth the terms and conditions of the substitution for or
assumption of outstanding awards of the Acquired Entity, said terms and
conditions shall be deemed to be the action of the Plan Administrator without
any further action by the Plan Administrator, except as may be required for
compliance with Rule 16b-3 under the Exchange Act, and the persons holding such
awards shall be deemed to be Optionees.

                   SECTION 7. TERMS AND CONDITIONS OF OPTIONS

      7.1 GRANT OF OPTIONS

      The Plan Administrator is authorized under the Plan, in its sole
discretion, to issue Options as Incentive Stock Options or as Nonqualified Stock
Options, which shall be appropriately designated.

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      7.2 OPTION EXERCISE PRICE

      The exercise price for shares purchased under an Option shall be as
determined by the Plan Administrator, but shall not be less than 100% of the
Fair Market Value of the Common Stock on the Grant Date with respect to
Incentive Stock Options.

      7.3 TERM OF OPTIONS

      The term of each Option shall be as established by the Plan Administrator
or, if not so established, shall be ten (10) years from the Grant Date.

      7.4 EXERCISE OF OPTIONS

      The Plan Administrator shall establish and set forth in each instrument
that evidences an Option the time at which or the installments in which the
Option shall become exercisable, which provisions may be waived or modified by
the Plan Administrator at any time. If not so established in the instrument
evidencing the Option, the Option will become exercisable according to the
following schedule, which may be waived or modified by the Plan Administrator at
any time:

Period of Holder's Continuous Employment or
Service With the Company or Its Subsidiaries     Percent of Total Option That Is
      From the Option Grant Date                           Exercisable
--------------------------------------------     -------------------------------

          After 6 months                                    25%

Each three-month period of continuous                 An additional 6.25%
     service completed thereafter

          After 3 1/2 years                                 100%

      To the extent that the right to purchase shares has accrued thereunder, an
Option may be exercised from time to time by written notice to the Company, in
accordance with procedures established by the Plan Administrator, setting forth
the number of shares with respect to which the Option is being exercised and
accompanied by payment in full as described in Section 7.5. Subject to the
provisions of this Plan, an Option may be exercised at different times for
portions of the total number of shares for which the right to purchase shall
have vested, provided that such portions are in multiples of ten (10) shares if
the Optionee holds vested Options for ninety-nine (99) or fewer shares and
otherwise in multiples of one hundred (100) shares.

      7.5 PAYMENT OF EXERCISE PRICE

      The exercise price for shares purchased under an Option shall be paid in
full to the Company by delivery of consideration equal to the product of the
Option exercise price and the number of shares purchased. Such consideration
must be paid in cash or by check or, unless the Plan Administrator in its sole
discretion determines otherwise, either at the time the Option is granted or at
any time before it is exercised, a combination of cash and/or check and one or
both of the following alternative forms: (a) tendering (either actually or, if
and so long as the

                                       6
<PAGE>

Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act, by
attestation) Common Stock already owned by the Optionee for at least six months
(or any shorter period necessary to avoid a charge to the Company's earnings for
financial reporting purposes) having a Fair Market Value on the day prior to the
exercise date equal to the aggregate Option exercise price or (b) if and so long
as the Common Stock is registered under Section 12(b) or 12(g) of the Exchange
Act, delivery of a properly executed exercise notice, together with irrevocable
instructions, to (i) a brokerage firm designated by the Company to deliver
promptly to the Company the aggregate amount of sale or loan proceeds to pay the
Option exercise price and any withholding tax obligations that may arise in
connection with the exercise and (ii) the Company to deliver the certificates
for such purchased shares directly to such brokerage firm, all in accordance
with the regulations of the Federal Reserve Board. In addition, the exercise
price for shares purchased under an Option may be paid, either singly or in
combination with one or more of the alternative forms of payment authorized by
this Section 7.5, by such other consideration as the Plan Administrator may
permit.

      7.6 POST-TERMINATION EXERCISES

      The Plan Administrator shall establish and set forth in each instrument
that evidences an Option whether the Option will continue to be exercisable, and
the terms and conditions of such exercise, if an Optionee ceases to be employed
by, or to provide services to, the Company or its Subsidiaries, which provisions
may be waived or modified by the Plan Administrator at any time. If not so
established in the instrument evidencing the Option, the Option will be
exercisable according to the following terms and conditions, which may be waived
or modified by the Plan Administrator at any time.

      In case of termination of the Optionee's employment or services other than
by reason of death or Cause, the Option shall be exercisable, to the extent of
the number of shares purchasable by the Optionee at the date of such
termination, only (a) within one year if the termination of the Optionee's
employment or services is coincident with Retirement or Disability or (b) within
three months after the date the Optionee ceases to be an employee, director,
officer, consultant, agent, advisor or independent contractor of the Company or
a Subsidiary if termination of the Optionee's employment or services is for any
reason other than Retirement or Disability, but in no event later than the
remaining term of the Option. Any Option exercisable at the time of the
Optionee's death may be exercised, to the extent of the number of shares
purchasable by the Optionee at the date of the Optionee's death, by the personal
representative of the Optionee's estate, the person(s) to whom the Optionee's
rights under the Option have passed by will or the applicable laws of descent
and distribution or the beneficiary designated pursuant to Section 9 at any time
or from time to time within one year after the date of death, but in no event
later than the remaining term of the Option. Any portion of an Option that is
not exercisable on the date of termination of the Optionee's employment or
services shall terminate on such date, unless the Plan Administrator determines
otherwise. In case of termination of the Optionee's employment or services for
Cause, the Option shall automatically terminate upon first notification to the
Optionee of such termination, unless the Plan Administrator determines
otherwise. If a Optionee's employment or services with the Company are suspended
pending an investigation of whether the Optionee shall be terminated for Cause,
all the Optionee's rights under any Option likewise shall be suspended during
the period of investigation.

                                       7
<PAGE>

      A transfer of employment or services between or among the Company and its
Subsidiaries shall not be considered a termination of employment or services.
The effect of a Company-approved leave of absence on the terms and conditions of
an Option shall be determined by the Plan Administrator, in its sole discretion.

                 SECTION 8. INCENTIVE STOCK OPTION LIMITATIONS

      To the extent required by Section 422 of the Code, Incentive Stock Options
shall be subject to the following additional terms and conditions:

      8.1 DOLLAR LIMITATION

      To the extent the aggregate Fair Market Value (determined as of the Grant
Date) of Common Stock with respect to which Incentive Stock Options are
exercisable for the first time during any calendar year (under the Plan and all
other stock option plans of the Company) exceeds $100,000, such portion in
excess of $100,000 shall be treated as a Nonqualified Stock Option. In the event
the Optionee holds two or more such Options that become exercisable for the
first time in the same calendar year, such limitation shall be applied on the
basis of the order in which such Options are granted.

      8.2 10% SHAREHOLDERS

      If an individual owns more than 10% of the total voting power of all
classes of the Company's stock, then the exercise price per share of an
Incentive Stock Option shall not be less than 110% of the Fair Market Value of
the Common Stock on the Grant Date and the Option term shall not exceed five
years. The determination of 10% ownership shall be made in accordance with
Section 422 of the Code.

      8.3 ELIGIBLE EMPLOYEES

      Individuals who are not employees of the Company or one of its parent
corporations or subsidiary corporations may not be granted Incentive Stock
Options. For purposes of this Section 8.3, "parent corporation" and "subsidiary
corporation" shall have the meanings attributed to those terms for purposes of
Section 422 of the Code.

      8.4 TERM

      The term of an Incentive Stock Option shall not exceed 10 years.

      8.5 EXERCISABILITY

      To qualify for Incentive Stock Option tax treatment, an Option designated
as an Incentive Stock Option must be exercised within three months after
termination of employment for reasons other than death, except that, in the case
of termination of employment due to total disability, such Option must be
exercised within one year after such termination. Employment shall not be deemed
to continue beyond the first 90 days of a leave of absence unless the Optionee's
reemployment rights are guaranteed by statute or contract. For purposes of this
Section 8.5, "total disability" shall mean a mental or physical impairment of
the Optionee that is expected to

                                       8
<PAGE>

result in death or that has lasted or is expected to last for a continuous
period of 12 months or more and that causes the Optionee to be unable, in the
opinion of the Company and two independent physicians, to perform his or her
duties for the Company and to be engaged in any substantial gainful activity.
Total disability shall be deemed to have occurred on the first day after the
Company and the two independent physicians have furnished their opinion of total
disability to the Plan Administrator.

      8.6 TAXATION OF INCENTIVE STOCK OPTIONS

      In order to obtain certain tax benefits afforded to Incentive Stock
Options under Section 422 of the Code, the Optionee must hold the shares issued
upon the exercise of an Incentive Stock Option for two years after the Grant
Date of the Incentive Stock Option and one year from the date of exercise. An
Optionee may be subject to the alternative minimum tax at the time of exercise
of an Incentive Stock Option. The Plan Administrator may require an Optionee to
give the Company prompt notice of any disposition of shares acquired by the
exercise of an Incentive Stock Option prior to the expiration of such holding
periods.

                            SECTION 9. ASSIGNABILITY

      No Option granted under the Plan may be assigned, pledged, or
transferred by the Optionee other than by will or by the applicable laws of
descent and distribution, and, during the Optionee's lifetime, such Option may
be exercised only by the Optionee or a permitted assignee or transferee of the
Optionee (as provided below). Notwithstanding the foregoing, and to the extent
permitted by Section 422 of the Code, the Plan Administrator, in its sole
discretion, may permit such assignment, transfer, and exercisability and may
permit an Optionee to designate a beneficiary who may exercise the Option after
the Optionee's death; provided, however, that any Option so assigned or
transferred shall be subject to all the same terms and conditions contained in
the instrument evidencing the Option.

                            SECTION 10. ADJUSTMENTS

      10.1 ADJUSTMENT OF SHARES

      In the event that, at any time or from time to time, a stock dividend,
stock split, spin-off, combination or exchange of shares, reclassification,
recapitalization, merger, consolidation, distribution to shareholders other than
a normal cash dividend, or other change in the Company's corporate or capital
structure results in (a) the outstanding shares, or any securities exchanged
therefor or received in their place, being exchanged for a different number or
class of securities of the Company or of any other corporation or (b) new,
different or additional securities of the Company or of any other corporation
being received by the holders of shares of Common Stock of the Company, then the
Plan Administrator shall make proportional adjustments in (i) the maximum number
and kind of securities subject to the Plan as set forth in Section 4.1 and (ii)
the number and kind of securities that are subject to any outstanding Option and
the per share price of such securities, without any change in the aggregate
price to be paid therefor. The determination by the Plan Administrator as to the
terms of any of the foregoing adjustments shall be conclusive and binding.

                                       9
<PAGE>

      10.2 CORPORATE TRANSACTION

            10.2.1 ACCELERATION AND CONDITIONAL PURCHASE. Except as provided in
Section 10.2.2 hereof, and notwithstanding anything in the Plan to the contrary,
the Optionee may conditionally purchase the full number of shares for which
Options have been granted and not yet exercised, whether or not the vesting
requirements set forth in the Plan or the option agreement have been satisfied,
during the period commencing twenty-five (25) days and ending five (5) days
prior to the scheduled effective date of any Corporate Transaction. If the
Corporate Transaction, once commenced, is canceled or revoked, the conditional
purchase of shares for which the Option to purchase would not otherwise have
been exercisable at the time of said cancellation or revocation but for the
operation of this Section 10.2, shall automatically be deemed rescinded. With
respect to all other shares conditionally purchased, the Optionee may rescind
such a purchase at Optionee's option. If the Corporate Transaction does occur,
and the Optionee has not conditionally purchased the full number of shares for
which Options have been granted and not yet exercised, all unexercised Options,
which have not been assumed pursuant to Section 10.2.2, shall terminate on the
effective, termination, closing, or filing date, as applicable.

            10.2.2 PRECLUSION OF ACCELERATION. The Optionee shall have no right
to purchase shares conditionally in the event of a Corporate Transaction if:

                  (a) in the opinion of the Company's outside accountants, it
would render unavailable "pooling of interest" accounting for a Corporate
Transaction that would otherwise qualify for such accounting treatment; or

                  (b) such Option is, in connection with the Corporate
Transaction, either to be assumed by the successor corporation or parent thereof
(the "Successor Corporation") or to be replaced with a comparable award for the
purchase of shares of the capital stock of the Successor Corporation; or

                  (c) such Option is to be replaced with a cash incentive
program of the Successor Corporation that preserves the spread existing at the
time of the Corporate Transaction and provides for subsequent payout in
accordance with the same vesting schedule applicable to such Option.

The determination of Option comparability shall be made by the Plan
Administrator, and its determination shall be conclusive and binding. All such
Options shall terminate and cease to remain outstanding immediately following
the consummation of the Corporate Transaction, except to the extent assumed by
the Successor Corporation. Any such Options that are assumed or replaced in the
Corporate Transaction and are not available for conditional purchase under
Section 10.2.1 at that time shall be accelerated and available for immediate
exercise in the event that the Optionee's employment or services should
subsequently terminate within one year following such Corporate Transaction,
unless such employment or services are terminated by the Successor Corporation
for Cause or by the Optionee voluntarily without Good Reason.

      10.3 FURTHER ADJUSTMENT OF OPTIONS

Subject to Section 10.2, the Plan Administrator shall have the discretion,
exercisable at any time before a sale, merger, consolidation, reorganization,
liquidation, or change in control of the

                                       10
<PAGE>

Company, as defined by the Plan Administrator, to take such further action as it
determines to be necessary or advisable, and fair and equitable to Optionees,
with respect to Options. Such authorized action may include (but shall not be
limited to) establishing, amending or waiving the type, terms, conditions or
duration of, or restrictions on, Options so as to provide for earlier, later,
extended or additional time for exercise and other modifications, and the Plan
Administrator may take such actions with respect to all Optionees, to certain
categories of Optionees or only to individual Optionees. The Plan Administrator
may take such action before or after granting Options to which the action
relates and before or after any public announcement with respect to such sale,
merger, consolidation, reorganization, liquidation, or change in control that is
the reason for such action.

      10.4 LIMITATIONS

      The grant of Options will in no way affect the Company's right to adjust,
reclassify, reorganize, or otherwise change its capital or business structure or
to merge, consolidate, dissolve, liquidate or sell or transfer all or any part
of its business or assets.

                            SECTION 11. WITHHOLDING

      The Company may require the Optionee to pay to the Company the amount of
any withholding taxes that the Company is required to withhold with respect to
the grant or exercise of any Option. Subject to the Plan and applicable law, the
Plan Administrator may, in its sole discretion, permit the Optionee to satisfy
withholding obligations, in whole or in part, by paying cash, by electing to
have the Company withhold shares of Common Stock or by transferring shares of
Common Stock to the Company, in such amounts as are equivalent to the Fair
Market Value of the withholding obligation. The Company shall have the right to
withhold from any shares of Common Stock issuable pursuant to an Option or from
any cash amounts otherwise due or to become due from the Company to the Optionee
an amount equal to such taxes. The Company may also deduct from any Option any
other amounts due from the Optionee to the Company or a Subsidiary.

                   SECTION 12. COMPANY'S OPTION TO REPURCHASE

      12.1 OPTION TO REPURCHASE

      Subject to the provisions of Section 12.3 below, and unless otherwise
specified by the Board, if an Optionee ceases to be employed by or provide
services to, the Company or its Subsidiaries, the Company shall have the right
to repurchase all Common Stock purchased upon the exercise of Options granted
while the Optionee was an employee, director, officer, consultant, agent,
advisor or independent contractor of the Company or a Subsidiary, as the case
may be, at its then-current Fair Market Value, as determined by the Board. The
Company shall give written notice to the Optionee of its intention to repurchase
within sixty (60) days after the date of termination. The purchase price for the
Common Stock to be repurchased shall be payable at any time within one year
after the day the notice is given and shall be offset against any amounts that
may be due and owing to the Company. For purposes of this Section 12.1, "Fair
Market Value" shall be determined by the Board in the same manner as utilized in

                                       11
<PAGE>

determining the Fair Market Value for purposes of Option grants at such time.
The Board's determination of Fair Market Value shall be final.

      12.2 RIGHT OF FIRST REFUSAL

      Subject to the provisions of Section 12.3 below, and unless otherwise
specified by the Board, the Optionee (or his personal representative) shall not
at any time sell or encumber the Common Stock purchased hereunder unless he or
she has first offered to sell such Common Stock to the Company, as follows: If
the Optionee proposes to encumber or transfer such Common Stock, he or she shall
advise the Company of the name of the proposed recipient, the number of shares
of Common Stock and the proposed price and terms. The Company shall have an
option, which option must be exercised in writing within sixty (60) days after
receipt of written notice of the proposed transfer, to purchase such Common
Stock upon the same terms and conditions as are stated in the notice or at their
then-current Fair Market Value, whichever is lower. The purchase price shall be
paid by the Company within sixty (60) days of the giving of its notice of intent
to repurchase. Fair Market Value shall be determined by the Board as provided in
Section 12.1 above. In the event the Company does not elect to repurchase
hereunder, the Optionee shall have the right to encumber or transfer such Common
Stock in accordance with the price and terms and to the recipient stated in the
notice for a period of ninety (90) days; but, if such Common Stock is not
encumbered or transferred within said ninety (90) days, the Optionee shall not
thereafter encumber or transfer such Common Stock without again complying with
the requirements of this Section 12.2.

      12.3 TERMINATION OF COMPANY'S RIGHTS

      The Company's repurchase rights stated in Sections 12.1 and 12.2 above
shall terminate in the event the Company successfully concludes a registered
public offering of its Common Stock under the Securities Act.

        SECTION 13. SPECIAL PROVISIONS RELATING TO CALIFORNIA RESIDENTS

      Notwithstanding anything to the contrary herein, the following provisions
shall govern all options granted under the Plan to residents of the State of
California (referred to herein as "California Options"). The following
provisions are intended to comply with Rule 260.140.41 of the Regulations of the
Department of Corporations of the State of California (the "California
Regulations"). When issuing California options, the Company shall indicate on
the options that they are issued subject to these special provisions.

                  (a) The total number of shares granted pursuant to the Plan is
as set forth in Section 4.1 of the Plan.

                  (b) The option price or purchase price of each share optioned
under the Plan under a California Option shall be determined by the Board at the
time of the action for the granting of the option but shall not, in any event,
be less than eighty-five percent (85%) of the Fair Market Value of the Common
Stock on the date of grant. With respect to any California Option granted to any
person who owns stock possessing more than ten percent (10%) of the total
combined voting power or value of all classes of stock of the Company, the
option price

                                       12
<PAGE>

shall be at least one hundred ten percent (110%) of the Fair Market Value of the
Common Stock on the date of grant.

                  (c) The exercise period with respect to California Options
shall not exceed one hundred twenty (120) months from the date of grant.

                  (d) California Options shall not be transferable other than by
will or the laws of descent and distribution, by instrument to an inter vivos or
testamentary trust in which the options are to be passed to beneficiaries upon
the death of the trustor (settlor), or by gift to "immediate family" as that
term is defined in 17 C.F.R. 240.16a-l(e).

                  (e) In the event of a stock split, reverse stock split, stock
dividend, recapitalization, combination or reclassification of the Company's
stock, the number of shares subject to a California Option shall be adjusted in
accordance with the provision of Section 10.1 of the Plan.

                  (f) California Options shall, at a minimum, be exercisable at
a rate of twenty percent (20%) per year from the date of grant.

                  (g) Unless employment is terminated for cause as defined by
applicable law, the terms of the Plan or option grant or a contract of
employment, the right to exercise a California Option in the event of
termination of employment with the Company, to the extent that the California
Option is exercisable on the date of such termination of employment, is as
follows: at least six (6) months from the date of termination if termination was
caused by death or disability and at least thirty (30) days from the date of
termination if termination was caused by other than death or disability.

                  (h) There shall be no California Options granted under the
Plan later than ten (10) years from the date the Plan was adopted or the date
the Plan is approved by the shareholders, whichever is earlier.

                  (i) The Plan shall be approved by the shareholders within
twelve (12) months after the date of adoption of the Plan by the Board of
Directors. No Option may be exercised before shareholder approval is obtained.
(j) The Company will comply with Section 260.140.46 of the California Code of
Regulations regarding information required to be received by employees of the
Company residing in the State of California.

      The provisions of subsection 10.2.1 of the Plan shall not apply to
California Options with the effect that there shall be no reference in the Plan
to the acceleration of the exercise period for California Options in relation to
mergers, consolidations and takeovers in which the Company is not the surviving
entity.

                                       13
<PAGE>

                  SECTION 14. AMENDMENT AND TERMINATION OF PLAN

      14.1 AMENDMENT OF PLAN

      The Plan may be amended only by the Board in such respects as it shall
deem advisable; however, to the extent required for compliance with Section 422
of the Code or any applicable law or regulation, shareholder approval will be
required for any amendment that will (a) increase the total number of shares as
to which Options may be granted under the Plan, (b) modify the class of persons
eligible to receive Options, or (c) otherwise require shareholder approval under
any applicable law or regulation.

      14.2 TERMINATION OF PLAN

      The Board may suspend or terminate the Plan at any time. The Plan will
have no fixed expiration date; provided, however, that no Incentive Stock
Options may be granted more than 10 years after the earlier of the Plan's
adoption by the Board and approval by the shareholders.

      14.3 CONSENT OF OPTIONEE

      The amendment or termination of the Plan shall not, without the consent of
the Optionee, impair or diminish any rights or obligations under any Option
theretofore granted under the Plan.

      Any change or adjustment to an outstanding Incentive Stock Option shall
not, without the consent of the Optionee, be made in a manner so as to
constitute a "modification" that would cause such Incentive Stock Option to fail
to continue to qualify as an Incentive Stock Option.

                              SECTION 15. GENERAL

      15.1 OPTION AGREEMENTS

      Options granted under the Plan shall be evidenced by a written agreement
that shall contain such terms, conditions, limitations and restrictions as the
Plan Administrator shall deem advisable and that are not inconsistent with the
Plan.

      15.2 CONTINUED EMPLOYMENT OR SERVICES; RIGHTS IN OPTIONS

      None of the Plan, participation in the Plan, or any action of the Plan
Administrator taken under the Plan shall be construed as giving any person any
right to be retained in the employ of the Company or limit the Company's right
to terminate the employment or services of any person.

      15.3 REGISTRATION

      The Company shall be under no obligation to any Optionee to register for
offering or resale or to qualify for exemption under the Securities Act, or to
register or qualify under state securities laws, any shares of Common Stock,
security, or interest in a security paid or issued under, or created by, the
Plan, or to continue in effect any such registrations or qualifications if made.
The Company may issue certificates for shares with such legends and subject to
such

                                       14
<PAGE>

restrictions on transfer and stop-transfer instructions as counsel for the
Company deems necessary or desirable for compliance by the Company with federal
and state securities laws.

      Inability of the Company to obtain, from any regulatory body having
jurisdiction, the authority deemed by the Company's counsel to be necessary for
the lawful issuance and sale of any shares hereunder or the unavailability of an
exemption from registration for the issuance and sale of any shares hereunder
shall relieve the Company of any liability in respect of the nonissuance or sale
of such shares as to which such requisite authority shall not have been
obtained.

      As a condition to the exercise of an Option, the Company may require the
Optionee to represent and warrant at the time of any such exercise or receipt
that such shares are being purchased or received only for the Optionee's own
account 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 by
any relevant provision of the aforementioned laws. At the option of the Company,
a stop-transfer order against any such shares may be placed on the official
stock books and records of the Company, and a legend indicating that such shares
may not be pledged, sold or otherwise transferred, unless an opinion of counsel
is provided (concurred in by counsel for the Company) stating that such transfer
is not in violation of any applicable law or regulation, may be stamped on stock
certificates to ensure exemption from registration. The Plan Administrator may
also require such other action or agreement by the Optionee as may from time to
time be necessary to comply with the federal and state securities laws.

      15.4 NO RIGHTS AS A SHAREHOLDER

      No Option shall entitle the Optionee to any dividend, voting, or other
right of a shareholder unless and until the date of issuance under the Plan of
the shares that are the subject of such Option, free of all applicable
restrictions.

      15.5 COMPLIANCE WITH LAWS AND REGULATIONS

      Notwithstanding anything in the Plan to the contrary, the Board, in its
sole discretion, may bifurcate the Plan so as to restrict, limit, or condition
the use of any provision of the Plan to Optionees who are officers or directors
subject to Section 16 of the Exchange Act without so restricting, limiting, or
conditioning the Plan with respect to other Optionees. Additionally, in
interpreting and applying the provisions of the Plan, any Option granted as an
Incentive Stock Option pursuant to the Plan shall, to the extent permitted by
law, be construed as an "incentive stock option" within the meaning of Section
422 of the Code.

      15.6 NO TRUST OR FUND

      The Plan is intended to constitute an "unfunded" plan. Nothing contained
herein shall require the Company to segregate any monies or other property, or
shares of Common Stock, or to create any trusts, or to make any special deposits
for any immediate or deferred amounts payable to any Optionee, and no Optionee
shall have any rights that are greater than those of a general unsecured
creditor of the Company.

                                       15
<PAGE>

      15.7 COSTS AND EXPENSES

      Except as provided herein with respect to the payment of taxes, all costs
and expenses of administering the Plan shall be borne by the Company and shall
not be charged to any grant nor any employee receiving a grant.

      15.8 GOLDEN PARACHUTE TAXES

      In the event that any amounts paid or deemed paid to an employee under
this Plan are deemed to constitute "excess parachute payments" as defined in
Section 280G of the Code (taking into account any other payments made under this
Plan and any other compensation paid or deemed paid to an employee), or if any
employee is deemed to receive an "excess parachute payment" by reason of his or
her vesting of Options pursuant to Section 10 hereof, the amount of such
payments or deemed payments shall be reduced (or, alternatively the provisions
of Section 10 shall not act to vest options to such employee), so that no such
payments or deemed payments shall constitute excess parachute payments. The
determination of whether a payment or deemed payment constitutes an excess
parachute payment shall be in the sole discretion of the Plan Administrator.

      15.9 FOREIGN EMPLOYEES

      Without amending the Plan, the Board may authorize the Plan Administrator
to grant options to eligible employees who are foreign nationals on such terms
and conditions different from those specified in this Plan as may in the
judgment of the Board be necessary or desirable to foster and promote
achievement of the purposes of the Plan, and, in furtherance of such purposes
the Board may make such modifications, amendments, procedures, subplans, and the
like as may be necessary or advisable to comply with the provisions of the laws
in other countries in which the Company operates or has employees.

      15.10 GOVERNING LAW

      This Plan shall be governed by and construed in accordance with the laws
of the State of Washington.

      15.11 SEVERABILITY

      If any provision of the Plan or any Option is determined to be invalid,
illegal or unenforceable in any jurisdiction, or as to any person, or would
disqualify the Plan or any Option under any law deemed applicable by the Plan
Administrator, such provision shall be construed or deemed amended to conform to
applicable laws, or, if it cannot be so construed or deemed amended without, in
the Plan Administrator's determination, materially altering the intent of the
Plan or the Option, such provision shall be stricken as to such jurisdiction,
person or Option, and the remainder of the Plan and any such Option shall remain
in full force and effect.

                        SECTION 16. Shareholder Approval

      This Plan or any increase in the maximum aggregate number of shares of
Common Stock issuable thereunder as provided in Section 4.1 (the "Authorized
Shares") shall be approved by

                                       16
<PAGE>

security holders of a majority of the outstanding securities of the Company
entitled to vote within twelve (12) months before or after the date of adoption
thereof by the Board. Awards granted prior to security holder approval of the
Plan or in excess of the Authorized Shares previously approved by the security
holders shall become exercisable no earlier than the date of security holder
approval of the Plan or such increase in the Authorized Shares, as the case may
be.

                                       17
<PAGE>

                                  INNUITY, INC.

                          OPTION FOR PURCHASE OF STOCK

              UNDER THE AMENDED AND RESTATED 1999 STOCK OPTION PLAN

      FOR VALUABLE CONSIDERATION, Innuity, Inc. (the "Company"), does hereby
grant to the individual named below (the "Optionee"), the Option ("Option"), to
purchase the number of shares of common stock of the Company (the "Option
Shares") for the exercise price per share set forth below, and the right to
purchase the Option Shares under this Option shall accrue and vest according to
the vesting schedule described below, all subject to the terms and conditions of
the Company's Amended and Restated 1999 Stock Option Plan (the "Plan"). By
Optionee's signature below, Optionee acknowledges receipt of a copy of the Plan.
The Terms and Conditions attached hereto summarize certain basic terms of the
Plan, but in the event of any inconsistency between the Terms and Conditions and
the Plan, Optionee agrees that the Plan shall control.

OPTIONEE:

TYPE OF OPTION                       - INCENTIVE STOCK OPTION

                                     - NONQUALIFIED STOCK OPTION
NUMBER OF OPTION SHARES:

EXERCISE PRICE PER SHARE:            $
                                      -------------

DATE OF OPTION GRANT:
                                     ---------- ---,-------

TERM OF OPTION:                      10 YEARS FROM DATE OF GRANT

VESTING SCHEDULE:                    AS PROVIDED IN SECTION 7.4 OF THE PLAN

      EXECUTED as of the Date of Option Grant.

                                          Innuity, Inc.

                                          By
                                             -----------------------------------

                                          Its
                                              ----------------------------------

                                          OPTIONEE

                                          --------------------------------------

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                      TERMS AND CONDITIONS OF OPTION GRANT

          OPTIONS ARE SUBJECT TO THE TERMS HEREOF AND OF THE COMPANY'S
              AMENDED AND RESTATED 1999 STOCK OPTION PLAN ("PLAN").

                                  STOCK OPTION

      1.    a. Any Option Shares that become purchasable ("vest") but are not
purchased on a vesting date, may be purchased on any subsequent date, provided
all Options for the purchase of Option Shares must be exercised within the time
periods specified in Section 2 below.

            b. Optionees may have conditional purchase rights for Option Shares,
whether vested or unvested, in the event of any Corporate Transaction (which
includes certain changes of control of the Company), as described in the Plan.

      2. All unvested Options shall expire upon any termination of Optionee's
employment with or provision of services to the Company, whether voluntary or
involuntary, or upon the death or disability of Optionee. Subject to the terms
hereof, all vested Options (i.e., Options for which the right to purchase has
accrued) shall expire at the earliest of the following:

            a. The earlier of the end of the Term of Option specified above or
ten (10) years from the date hereof;

            b. Ninety (90) days after voluntary or involuntary termination of
Optionee's employment, other than termination as described in subsection (c) or
(d) below;

            c. Immediately, upon termination of Optionee for Cause as defined in
the Plan;

            d. Twelve (12) months after Optionee's death or Disability, or, in
the case of Nonqualified Stock Options only, Retirement; or

            e. Immediately, upon the effective date of a Corporate Transaction
as described in the Plan. However, if the Corporate Transaction does not occur,
as described in the Plan, all Options that are terminated pursuant to this
subsection (e) shall be reinstated as if no action with respect to any of said
events had been contemplated or taken by any party thereto and all Options shall
be returned to their position on the date of termination.

      Optionee agrees that all vested and unvested Options granted pursuant to
this Option shall expire in accordance with the provisions of this paragraph 2
following involuntary or voluntary termination of Optionee's employment with,
engagement by or services to the Company, as applicable, for any reason.
Optionee hereby waives the right to recover as damages any vested or unvested
stock options which expire according to this paragraph 2. This waiver shall
include, but not be limited to, damages related to any claims Optionee may have
against the Company to which Optionee may be entitled by virtue of employment
with the Company or the termination of Optionee's employment, such as claims
relating to employment rights and/or benefits.

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      3. This Option may be exercised at different times for portions of the
total number of Option Shares for which the right to purchase shall have accrued
and vested hereunder, provided that such portions are in multiples of ten (10)
shares if the Optionee holds vested portions for ninety-nine (99) or fewer
shares and otherwise in multiples of one hundred (100) shares.

      4. This Option shall be adjusted for recapitalizations, stock splits,
stock dividends, and the like as described in the Plan.

      5. This is not an employment contract and while the benefits, if any, of
this Option are an incident of the Optionee's employment with the Company or
provision of services to the Company, the terms and conditions of such
employment or provision of services are otherwise wholly independent hereof.

      6. This Option is not assignable, and may be exercised only by the
Optionee or a person to whom the rights under the Option shall pass by will or
the laws of descent and distribution.

      7. The Optionee shall indicate Optionee's intention to exercise the Option
hereby granted by notifying the Company in writing of such intention, indicating
the number of shares Optionee intends to purchase and, within ten (10) days
thereafter, paying to the Company an amount sufficient to cover the total Option
price of such shares. Payment of the purchase price provided in this Option
shall be made in cash or in accordance with such procedures for a "cashless
exercise" as may be established from time to time by the Company and the
brokerage firm, if any, designated by the Company to facilitate the exercise of
options and sales of shares under the Plan.

      8. If the Optionee, immediately prior to the grant of an Incentive Stock
Option hereunder, owns stock in the Company representing more than ten percent
(10%) of the voting power of all classes of stock of the Company, the per share
option price specified by the Board for the Incentive Stock Options granted
hereunder shall be one hundred ten percent (110%) of the fair market value of
the Company's stock on the date of grant and such Option shall not be
exercisable after the expiration of five (5) years from the date such Option is
granted, and notwithstanding any pricing or vesting terms hereof which appear at
variance with the foregoing, all pricing and vesting terms hereof shall be
deemed hereby to conform with the foregoing limitations. In lieu of the
foregoing, the Optionee may elect to have this Option treated as a non-qualified
stock Option pursuant to the original terms hereof

      9. Notwithstanding the foregoing, no Option shall be exercisable unless
and until all requirements imposed by or pursuant to Section 15.3 of the Plan
are satisfied.

      SECTION 15.3 OF THE 1999 STOCK OPTION PLAN ("PLAN") DESCRIBES CERTAIN
IMPORTANT CONDITIONS RELATING TO FEDERAL AND STATE SECURITIES LAWS THAT MUST BE
SATISFIED BEFORE THIS OPTION CAN BE EXERCISED AND BEFORE THE COMPANY CAN ISSUE
ANY OPTION SHARES TO THE OPTIONEE. AT THE PRESENT TIME THE PLAN IS NOT
REGISTERED AND THE SHARES ISSUED UPON EXERCISE ARE NOT FREELY TRADABLE. THERE
CAN BE NO ASSURANCE THAT THE SHARES WILL BE REGISTERED OR THAT ONCE

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REGISTERED. THE REGISTRATION WILL BE MAINTAINED. IF THE SHARES ARE NOT
REGISTERED OR THE REGISTRATION IS NOT MAINTAINED, THE OPTIONEE WILL NOT BE ABLE
TO EXERCISE THIS OPTION UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE. AT
THE PRESENT TIME, EXEMPTIONS FROM REGISTRATION UNDER FEDERAL AND STATE
SECURITIES LAWS ARE VERY LIMITED AND MIGHT BE UNAVAILABLE TO THE OPTIONEE PRIOR
TO THE EXPIRATION OF THIS OPTION. CONSEQUENTLY, THE OPTIONEE MIGHT NOT HAVE AN
OPPORTUNITY TO EXERCISE THIS OPTION AND TO RECEIVE OPTION SHARES UPON SUCH
EXERCISE.

      10. Set forth below is a brief summary as of the date of this Option of
some of the federal and Washington tax consequences of exercise of an Incentive
Stock Option ("ISO") or Nonqualified Stock Option and disposition of the Shares.
THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE
SUBJECT TO CHANGE. OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS
OPTION OR DISPOSING OF THE SHARES.

            a. Exercise of ISO. If this Option qualifies as an ISO, there will
be no regular federal income tax liability upon the exercise of the Option,
although the excess, if any, of the Fair Market Value of the Shares on the date
of exercise over the Exercise Price will be treated as an adjustment to the
alternative minimum tax for federal tax purposes and may subject the Optionee to
the alternative minimum tax in the year of exercise.

            b. Exercise of ISO Following Disability. If the Optionee's
Continuous Status as an Employee terminates as a result of disability that is
not total and permanent disability as defined in Section 22(e)(3) of the Code,
to the extent permitted on the date of termination, the Optionee must exercise
an ISO within three months of such termination for the ISO to be qualified as an
ISO.

            c. Exercise of Nonqualified Stock Option. There may be a regular
federal income tax liability upon the exercise of a Nonqualified Stock Option.
The Optionee will be treated as having received compensation income (taxable at
ordinary income tax rates) equal to the excess, if any, of the Fair Market Value
of the Shares on the date of exercise over the Exercise Price. If Optionee is an
Employee or a former Employee, the Company will be required to withhold from
Optionee's compensation or collect from Optionee and pay to the applicable
taxing authorities an amount in cash equal to a percentage of this compensation
income at the time of exercise, and may refuse to honor the exercise and refuse
to deliver Shares if such withholding amounts are not delivered at the time of
exercise.

            d. Disposition of Shares. In the case of an Nonqualified Stock
Option, if Shares are held for at least one year, any gain realized on
disposition of the Shares will be treated as long-term capital gain for federal
income tax purposes. In the case of an ISO, if Shares transferred pursuant to
the Option are held for at least one year after exercise and are disposed of at
least two years after the Date of Grant, any gain realized on disposition of the
Shares will also be treated as long-term capital gain for federal income tax
purposes. If Shares purchased under an ISO are disposed of within such one-year
period or within two years after the Date of Grant, any gain realized on such
disposition will be treated as compensation income (taxable at ordinary

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<PAGE>

income rates) to the extent of the difference between the Exercise Price and the
lesser of (1) the Fair Market Value of the Shares on the date of exercise, or
(2) the sale price of the Shares. Any additional gain will be taxed as capital
gain, short-term or long-term depending on the period that the ISO Shares were
held.

            e. Notice of Disqualifying Disposition of ISO Shares. If the Option
granted to Optionee herein is an ISO, and if Optionee sells or otherwise
disposes of any of the Shares acquired pursuant to the ISO on or before the
later of (1) the date two years after the Date of Grant, or (2) the date one
year after the date of exercise, the Optionee shall immediately notify the
Company in writing of such disposition. Optionee agrees that Optionee may be
subject to income tax withholding by the Company on the compensation income
recognized by the Optionee.

      11. This Option is granted pursuant to and is controlled by the Plan of
the Company. Optionee, by execution hereof, acknowledges receipt of the Plan and
acceptance of the terms and conditions of the Plan and of this document.

      12. FOR CALIFORNIA RESIDENTS ONLY: IT IS UNLAWFUL TO CONSUMMATE A SALE OR
TRANSFER OF THIS SECURITY, OR ANY INTEREST THEREIN, OR TO RECEIVE ANY
CONSIDERATION THEREFOR, WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMMISSIONER OF
CORPORATIONS OF THE STATE OF CALIFORNIA, EXCEPT AS PERMITTED IN THE
COMMISSIONER'S RULES.

      13. If any provision of this Option is held to be unenforceable for any
reason, it shall be modified rather than voided, if possible, in order to
achieve the intent of the parties to this Option to the extent possible. In any
event, all other provisions of this Option shall be deemed valid and enforceable
to the full extent.

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