Document:

Exhibit 4.5

                                 GLOBESPAN, INC.

                   2000 STOCK OPTION PLAN FOR FRENCH EMPLOYEES

     1.   Purposes of the Plan. The purposes of this Plan are:

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

          o.   to provide additional incentive to French Employees, and

          o.   to promote the success of the Company's business and the business
               of its French subsidiary.

     This Plan is a sub-plan  created under and pursuant to the U.S. Plan, which
has been adopted by the Board and  approved by the  shareholders  of  GlobeSpan,
Inc. (the "Company"), and which provides that French employees may benefit under
this Plan.  Options  shall be granted  under the Plan at the  discretion  of the
Administrator  from the pool of available  shares under the U.S.  Plan,  and are
intended  to qualify  for  preferred  treatment  under  French tax laws.  Unless
otherwise defined herein, the terms defined in the U.S. Plan shall have the same
defined meanings in this Plan, and, except as otherwise provided herein, Options
granted under this Plan shall be subject to the terms and conditions of the U.S.
Plan. Except as otherwise  provided herein, the terms and provisions of the U.S.
Plan are hereby incorporated by reference.

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

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

          (b) "Disability"  means total and permanent  disability, as defined
under Applicable Laws.

          (c) "Employee"  means any person  employed by T.Sqware,  S.A. in a
salaried position, and who is a resident of the Republic of France.

          (d) "Fair Market Value" means,  as of any date,  the dollar value of
Common  Stock  determined  as follows:  (i) If the Common Stock is listed on any

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established  stock  exchange  or a national  market  system,  including  without
limitation  the  Nasdaq  National  Market or The Nasdaq  SmallCap  Market of the
Nasdaq Stock  Market,  its Fair Market Value shall be the average  closing price
for the last 20 days preceding the date of determination  for such stock (or the
average closing bid for such 20 day period, if no sales were reported) as quoted
on such exchange or system and reported in The Wall Street Journal or such other
source as the Administrator deems reliable;

               (ii)  If the  Common  Stock is  regularly  quoted by a recognized
securities  dealer,  but selling prices are not reported,  its Fair Market Value
shall be the mean between the high bid and low asked prices for the Common Stock
for the last 20 days preceding the date of determination; or

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

               (iv)  Notwithstanding  anything else herein to the contrary,  for
purposes of determining  the Option Price,  Fair Market Value shall mean 5% less
than  the  average  closing  price  for the last 20 days  preceding  the date of
determination for such stock (or the average closing bid for such 20 day period,
if no sales were  reported) as quoted on the  exchange or system  referred to in
(d)(i)  above,  and reported in The Wall Street  Journal or such other source as
the Administrator deems reliable;  provided, however, that the Fair Market Value
shall  never  be less  than 80% of the  average  closing  price  for such 20 day
period.

          (e) "Option Price" means the per share price for exercising an Option,
determined in accordance with subsection 5(a) of the Plan.

          (f) "Plan"  means this  GlobeSpan,  Inc.  2000 Stock  Option  Plan for
French Employees.

          (g) "Shares" means Common Stock of the Company.

          (h) "U.S.  Plan" means the  GlobeSpan,  Inc. 1999  Supplemental  Stock
Option Plan.

     3.   Stock Subject to the Plan. The maximum  aggregate  number of Shares
that may be issued as a result of options  granted and not yet exercised,  shall
not exceed one-third of the Company's share capital.  Such Shares optioned under
the Plan shall come from the available  pool of Shares under the U.S.  Plan. The
Shares may be  authorized,  but  unissued,  or reacquired  Common Stock.  If any
optioned stock is to consist of reacquired  Shares,  such optioned stock must be

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purchased by the Company prior to the date of grant of the corresponding  Option
and must be reserved and set aside for such purpose.

          If an Option  expires or becomes  unexercisable  without  having  been
exercised in full,  the  unpurchased  Shares which were  subject  thereto  shall
become  available  for  future  grant  under  the  Plan  (unless  the  Plan  has
terminated).

     4.   Eligibility. Options may be granted only to Employees who at the date
of  grant  do not own  more  than  10% of the  issued  capital  of the  Company;
provided,  however,  that the President Directeur General, the Directeur General
and other  directors  who are also  Employees of  T.Sqware,  S.A. may be granted
Options.

     5.   Option Exercise Price and Consideration.

          (a) Option  Price.  The  Option  Price  for the  Shares  to be issued
pursuant to exercise of an Option shall be determined by the Administrator  upon
the date of grant of the Option and  stated in the Option  Agreement,  but in no
event shall be lower than one hundred percent (100%) of the Fair Market Value on
the date the Option is granted. The Option Price shall not be modified while the
Option is outstanding.

          (b) Form of  Consideration.  The  Administrator  shall  determine  the
acceptable form of consideration for exercising an Option, including, the method
of payment. Such consideration may consist of:

               (i)   cash or check (denominated in U.S. Dollars);

               (ii)  wire transfer (denominated in U.S. Dollars),

               (iii) consideration  received  by the  Company  under a cashless
exercise  program  implemented  by the  Company  in  connection  with the  Plan;
provided that such cashless exercise is approved by the Administrator; or

               (iv)  any combination of the foregoing methods of payment.

     6.   Exercise of Option.

          (a)  Procedure  for  Exercise;  Rights as a  Stockholder.  Any  Option
granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the  Administrator and set
forth in the Option Agreement.  An Option may not be exercised for a fraction of
a Share. An Option shall be deemed exercised when the Subsidiary receives:

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               (i)   written  notice of exercise  (in  accordance  with the
Option  Agreement and in the form attached  hereto as Exhibit A) from the person
entitled to exercise the Option;

               (ii)  full payment for the Shares with respect to which the
Option is exercised; and

               (iii)  a  written  subscription   agreement  to  the  Shares  (in
accordance with the Option  Agreement and in the form attached hereto as Exhibit
B) from the person entitled to exercise the Option.

          (b)  Termination  of  Employment  Relationship.  In the event  that an
Optionee's  status as an Employee  terminates  (other  than upon the  Optionee's
death or  Disability),  the Optionee  may  exercise his or her Option,  but only
within  thirty (30) days (or such other period of time not  exceeding  three (3)
months as is determined by the  Administrator),  and only to the extent that the
Optionee was entitled to exercise it at the date of termination (but in no event
later than the  expiration of the term of such Option as set forth in the Option
Agreement).  If, at the date of  termination,  the  Optionee is not  entitled to
exercise  his or her  entire  Option,  the Shares  covered by the  unexercisable
portion of the Option  shall  revert to the Plan.  If,  after  termination,  the
Optionee  does not exercise his or her Option  within the time  specified by the
Administrator, the Option shall terminate, and the Shares covered by such Option
shall revert to the Plan.

          (c) Disability of Optionee.  In the event that an Optionee's status as
an Employee  terminates as a result of the Optionee's  Disability,  the Optionee
may  exercise  his or her Option at any time within six (6) months from the date
of such  termination,  but only to the extent that the  Optionee was entitled to
exercise  it at the date of such  termination  (and in no event  later  than the
Expiration of the term of such Option as set forth in the Option Agreement). If,
at the date of termination,  the Optionee is not entitled to exercise his or her
entire  Option,  the Shares covered by the  unexercisable  portion of the Option
shall revert to the Plan. If, after termination,  the Optionee does not exercise
his or her Option within the time specified herein,  the Option shall terminate,
and the Shares covered by such Option shall revert to the Plan.

          (d) Death of Optionee.  In the event of the death of an Optionee while
an  Employee,  the Option  may be  exercised  at any time  within six (6) months
following the date of death by the Optionee's estate or by a person who acquired
the right to  exercise  the Option by bequest  or  inheritance,  but only to the
extent that the  Optionee  was  entitled  to exercise  the Option at the date of

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death.  If, at the time of death,  the Optionee was not entitled to exercise his
or her entire  Option,  the Shares covered by the  unexercisable  portion of the
Option shall revert to the Plan.  If, after death,  the  Optionee's  estate or a
person who acquired  the right to exercise the Option by bequest or  inheritance
does not exercise the Option within the time specified herein,  the Option shall
terminate, and the Shares covered by such Option shall immediately revert to the
Plan.

          7. Term of Plan. The Plan shall become effective as of the date of its
adoption by the Board.  It shall continue in effect until the termination of the
U.S. Plan or the date ten (10) years from the date of its adoption, whichever is
sooner, unless terminated earlier under Section 12 of the U.S. Plan.

          8. Term of Option.  The term of each Option  shall be as stated in the
Option Agreement,  provided,  however,  that the maximum term of an Option shall
not exceed nine and one-half (9 1/2) years from the date of grant of the Option.

          9. Reporting  to  the  Shareholders'  Meeting.  In its  annual  proxy
statement to the shareholders, the Board shall inform the shareholders as to the
number  and  price  of the  Options  granted  hereunder,  and  as to the  Shares
subscribed upon exercise of such Options.

                                 GLOBESPAN, INC.

                   2000 STOCK OPTION PLAN FOR FRENCH EMPLOYEES

                             STOCK OPTION AGREEMENT

          Unless  otherwise  defined herein,  the terms defined in the U.S. Plan
and the 2000 Stock Option Plan For French Employees, shall have the same defined
meanings in this Option Agreement.

I.   NOTICE OF STOCK OPTION GRANT

Optionee's Name and Address:

          You have  been  granted  an  option to  purchase  Common  Stock of the
Company,  subject to the terms and  conditions of the Plan and this Stock Option
Agreement, as follows:

          Date of Grant

          Vesting Commencement Date

          Exercise Price per Share                $

          Total Number of Shares Granted

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          Total Exercise Price                    $

          Term/Expiration Date:

          Vesting Schedule:

          This Option may be exercised,  in whole or in part, in accordance with
the following schedule:

25% of the Shares  subject to this  Option  shall vest twelve  months  after the
Vesting  Commencement  Date (the "Initial Exercise Date") and 1/48 of the Shares
subject to this Option shall vest each month  thereafter,  subject to Optionee's
continuing status as an Employee on such dates.

          Termination Period:

          This Option may be exercised for thirty (30) days after termination of
the  employment  relationship,  or such longer period as may be applicable  upon
death or Disability of Optionee as provided in the Plan.

          Restriction on Exercise or Sale:

          The Shares  subject to this Option may not be exercised,  transferred,
assigned or hypothecated in any manner  otherwise than by will or by the laws of
descent or distribution  before the date three years after the Initial  Exercise
Date (the "Initial Sale Date").

II.  AGREEMENT

     1.  Grant of Option.  The Board of the Company hereby grants to the
Optionee  named in the Notice of Grant attached as Part I of this Agreement (the
"Optionee"), an option (the "Option") to purchase the number of Shares set forth
in the Notice of Grant, at the exercise price (the "Exercise Price"),  per share
set forth in the  Notice of Grant  subject  to the terms and  conditions  of the
Plan,  which is  incorporated  herein by  reference.  In the event of a conflict
between the terms and  conditions  of the Plan and the terms and  conditions  of
this Option Agreement, the terms and conditions of the Plan shall prevail.

     2.  Exercise of Option.

          (a) Right to Exercise.  This Option is exercisable  during its term in
accordance  with the  Vesting  Schedule  set out in the  Notice of Grant and the
applicable  provisions  of the Plan and this Option  Agreement.  In the event of
Optionee's  death,  Disability or other  termination  of  Optionee's  employment
relationship,  the  exercisability  of the Option is governed by the  applicable
provisions of the Plan and this Option Agreement.

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<PAGE>

          (b) Method of Exercise.  This Option is  exercisable by delivery of an
exercise  notice  to the  Subsidiary,  in the form  attached  as  Exhibit A (the
"Exercise  Notice"),  which shall state the election to exercise the Option, the
number  of Shares  in  respect  of which  the  Option  is being  exercised  (the
"Exercised Shares"), by delivery of a subscription  agreement to the Subsidiary,
in the form attached as Exhibit B (the "Subscription  Agreement") and such other
representations  and  agreements  as  may be  required  by  the  Company  or the
Subsidiary.  Until such Shares are issued, no right to vote or receive dividends
or any other  rights as a  stockholder  shall exist with respect to the Optioned
Stock,  notwithstanding  the exercise of the Option.  The Company shall issue to
the Optionee (or cause to be issued)  such Shares  promptly  after the Option is
exercised.  No  adjustment  will be made for a dividend or other right for which
the record date is prior to the date of issuance,  except as provided in Section
8 of the U.S.  Plan. The Exercise  Notice and  Subscription  Agreement  shall be
signed by the Optionee and shall be delivered in person or by certified  mail to
the Secretary of the Subsidiary.  The Exercise Notice and Subscription Agreement
shall be  accompanied  by  payment  of the  aggregate  Exercise  Price as to all
Exercised  Shares.  This Option shall be deemed to be exercised  upon receipt by
the Subsidiary of such fully executed Exercise Notice and Subscription Agreement
accompanied by such aggregate Exercise Price.

          No Shares  shall be issued  pursuant  to the  exercise  of this Option
unless such issuance and exercise  complies with all relevant  provisions of law
and the  requirements  of any stock  exchange  upon  which the  Shares  are then
listed.  Assuming such compliance,  for income tax purposes the Exercised Shares
shall be  considered  transferred  to the  Optionee  on the date the  Option  is
exercised with respect to such Exercised Shares.

     3. Method of Payment.  Payment of the aggregate  Exercise Price shall be by
any of the following, or a combination thereof, at the election of the Optionee:

          (a) cash or check (denominated in U.S. Dollars);

          (b) wire transfer (denominated in U.S. Dollars);

          (c)  consideration  received  by the Company  under a formal  cashless
exercise  program adopted by the Company in connection  with the Plan,  provided
that such cashless exercise program is approved by the Administrator; or

     5.  Non-Transferability  of Option.  This  Option  may not be  transferred,
assigned or hypothecated in any manner  otherwise than by will or by the laws of
descent or  distribution  and may be  exercised  during the lifetime of Optionee
only by the Optionee.  The terms of the Plan and this Option  Agreement shall be

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binding upon the executors, administrators, heirs, successors and assigns of the
Optionee.

     6. Term of Option.  This Option may be  exercised  only within the term set
out in the  Notice  of  Grant,  and may be  exercised  during  such term only in
accordance with the Plan and the terms of this Option Agreement.

     7. No Guarantee of Employment.  The Optionee  acknowledges  and agrees that
nothing  in this  Agreement,  the  Plan,  nor the U.S.  Plan,  all of which  are
incorporated  herein by  reference,  shall  confer upon  Optionee any right with
respect to the continuation of employment by the Company or T.Sqware, S.A.

     By your signature and the signature of the Company's  representative below,
you and the Company  agree that this Option is granted under and governed by the
terms  and  conditions  of the Plan  and this  Option  Agreement.  Optionee  has
reviewed  the Plan and  this  Option  Agreement  in their  entirety,  has had an
opportunity  to obtain the  advice of counsel  prior to  executing  this  Option
Agreement and fully understands all provisions of the Plan and Option Agreement.
Optionee hereby agrees to accept as binding,  conclusive and final all decisions
or  interpretations of the Administrator upon any questions relating to the Plan
and Option Agreement.

OPTIONEE:                            GLOBESPAN, INC.

-------------------------------           -------------------------------
Signature                                 By:

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

Print Name                                Title:

                                       8Exhibit 4.6

                                 FIRST AMENDMENT

                                       OF

                         T.SQWARE, INC. 1997 STOCK PLAN

     THIS  INSTRUMENT is made as of the 30th of June,  2000,  by T.Sqware,  Inc.
(the "Company").

WITNESSETH

     WHEREAS,  the Company  maintains  the  T.Sqware,  Inc. 1997 Stock Plan (the
"Plan");

     WHEREAS,  pursuant  to Section  14(a) of the Plan,  the Plan may be amended
from time to time; and

     WHEREAS,  the Company wishes to amend the Plan, effective June 30, 2000, to
make certain administrative clarifications.

     NOW, THEREFORE, the Plan is amended effective, June 30, 2000, as follows:

     1.   Section 9 is amended by adding the following new section:

     (f) CONVERSION TO GLOBESPAN,  INC.  Notwithstanding anything else contained
herein to the contrary,  all options  granted under the Plan for Optioned  Stock
are hereby  converted  to options  for common  stock of  GlobeSpan,  Inc.,  at a
conversion  ratio of .067328  shares of  GlobeSpan,  Inc.  common stock for each
share of Optioned Stock to be received.

     2.   Section 14(a) is deleted and replaced as follows:

     (a)  Amendment  and  Termination.  The Board may at any time amend,  alter,
suspend or terminate the Plan or the  T.Sqware,  Inc. 1997 Stock Option Plan for
French Employees, which was created by the Board as a sub-plan under the Plan.

<PAGE>

     IN WITNESS WHEREOF, the Company has caused this Amendment to be executed as
of the date first noted above.

                                      T.SQWARE, INC.

                                By:    /s/ ARMANDO GEDAY
                                   ---------------------------------
                                     Armando Geday
                                     President and Chief Executive
                                     Officer

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                                 T.SQWARE, INC.

                                 1997 STOCK PLAN

     1.   PURPOSES OF THE PLAN. The purposes of this Stock Plan are to attract
and  retain  the  best   available   personnel  for  positions  of   substantial
responsibility,  to provide  additional  incentive to  Employees,  Directors and
Consultants  and to promote  the  success  of the  Company's  business.  Options
granted  under the Plan may be Incentive  Stock  Options or  Nonstatutory  Stock
Options, as determined by the Administrator at the time of grant. Stock Purchase
Rights may also be granted under the Plan.

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

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

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

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

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

          (e) "COMMITTEE" means a committee of Directors  appointed by the Board
in accordance with Section 4 hereof

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

          (g) "COMPANY" means T.SQWARE, INC., a Delaware corporation.

          (h) "CONSULTANT" means any person who is engaged by the Company or any
Parent or Subsidiary to render consulting or advisory services to such entity.

          (i) "DIRECTOR"  means a  member  of the  Board  of  Directors  of the
Company.

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          (j) "EMPLOYEE"  means any person,  including  Officers and Directors,
employed by the Company or any Parent or  Subsidiary  of the Company.  A Service
Provider  shall  not  cease to be an  Employee  in the case of (i) any  leave of
absence  approved  by the Company or (ii)  transfers  between  locations  of the
Company or between the Company,  its Parent,  any Subsidiary,  or any successor.
For purposes of Incentive  Stock Options,  no such leave may exceed ninety days,
unless  reemployment  upon  expiration of such leave is guaranteed by statute or
contract.  If reemployment upon expiration of a leave of absence approved by the
Company is not so guaranteed, on the 181st day of such leave any Incentive Stock
Option  held by the  Optionee  shall cease to be treated as an  Incentive  Stock
Option and shall be treated for tax  purposes as a  Nonstatutory  Stock  Option.
Neither  service as a Director  nor payment of a  director's  fee by the Company
shall be sufficient to constitute "employment" by the Company.

          (k) "EXCHANGE  ACT" means the  Securities  Exchange  Act of 1934,  as
amended.

          (l) "FAIR MARKET  VALUE"  means,  as of any date,  the value of Common
Stock determined as follows:

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

               (ii) If the  Common  Stock is  regularly  quoted by a  recognized
securities  dealer but selling  prices are not  reported,  its Fair Market Value
shall be the mean between the high bid and low asked prices for the Common Stock
on the last market trading day prior to the day of determination; or

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

          (m) "INCENTIVE STOCK OPTION" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code.

          (n) "NONSTATUTORY  STOCK  OPTION"  means an Option  not  intended  to
qualify as an Incentive Stock Option.

          (o) "OFFICER"  means a person who is an officer of the Company  within
the  meaning  of  Section  16 of the  -------  Exchange  Act and the  rules  and
regulations  promulgated  thereunder.

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          (p) "OPTION"  means a stock option  granted  pursuant to the Plan.

          (q) "OPTION AGREEMENT" means a written or electronic agreement between
the Company and an Optionee evidencing the terms and conditions of an individual
Option grant. The Option Agreement is subject to the terms and conditions of the
Plan.

          (r) "OPTION  EXCHANGE  PROGRAM"  means a program  whereby  outstanding
Options are exchanged for Options with a lower exercise price.

          (s) "OPTIONED  STOCK" means the Common Stock subject to an Option or a
Stock Purchase Right.

          (t) "OPTIONEE"  means the  holder of an  outstanding  Option or Stock
Purchase Right granted under the Plan.

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

          (v) "PLAN" means this 1997 Stock Plan.

          (w) "RESTRICTED  STOCK" means shares of Common Stock acquired pursuant
to a grant of a Stock Purchase Right under Section 11 below.

          (x) "SECTION 16(b)" means Section 16(b) of the Securities Exchange Act
of 1934, as amended.

          (y) "SERVICE PROVIDER" means an Employee, Director or Consultant.

          (z) "SHARE"  means  a share  of the  Common  Stock,  as  adjusted  in
accordance with Section 12 below.

          (aa) "STOCK  PURCHASE  RIGHT"  means a right to purchase  Common Stock
pursuant to Section 11 below.

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

     3.   STOCK  SUBJECT TO THE PLAN.  Subject to the  provisions of Section 12
of the Plan,  the  maximum  aggregate  number of Shares  which may be subject to
option and sold under the Plan is 1,320,715 Shares. The Shares may be authorized
but unissued, or reacquired Common Stock.

          If an Option or Stock Purchase Right expires or becomes  unexercisable
without having been  exercised in full, or is surrendered  pursuant to an Option
Exchange Program, the unpurchased Shares which were subject thereto shall become

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available  for  future  grant  or sale  under  the  Plan  (unless  the  Plan has
terminated). However, Shares that have actually been issued under the Plan, upon
exercise of either an Option or Stock Purchase  Right,  shall not be returned to
the Plan and shall not become available for future  distribution under the Plan,
except  that if Shares of  Restricted  Stock are  repurchased  by the Company at
their original  purchase  price,  such Shares shall become  available for future
grant under the Plan.

     4.   Administration of the Plan.

          (a) The  Plan  shall  be  administered  by the  Board  or a  Committee
appointed by the Board,  which  Committee  shall be  constituted  to comply with
Applicable Laws.

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

               (i) to determine the Fair Market Value;

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

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

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

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

               (vi) to determine whether and under what circumstances an Option
may be settled in cash under subsection 9(f) instead of Common Stock;

               (vii) to  reduce  the  exercise  price of any  Option to the then
current Fair Market  Value if the Fair Market Value of the Common Stock  covered

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by such Option has declined since the date the Option was granted;

               (viii) to initiate an Option Exchange Program;

               (ix) to  prescribe,  amend  and  rescind  rules  and  regulations
relating to the Plan,  including  rules and  regulations  relating to  sub-plans
established  for the purpose of qualifying  for  preferred  tax treatment  under
foreign tax laws;

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

               (xi) to construe and  interpret  the terms of the Plan and awards
granted pursuant to the Plan.

          (c) EFFECT OF ADMINISTRATOR'S DECISION. All decisions,  determinations
and  interpretations  of the  Administrator  shall be final and  binding  on all
Optionees.

     5.   ELIGIBILITY.

          (a)  Nonstatutory  Stock  Options  and Stock  Purchase  Rights  may be
granted to Service  Providers.  Incentive  Stock  Options may be granted only to
Employees.

          (b) Each Option shall be designated in the Option  Agreement as either
an  Incentive   Stock  Option  or  a   Nonstatutory   Stock   Option.   However,
notwithstanding  such designation,  to the extent that the aggregate Fair Market
Value  of  the  Shares  with  respect  to  which  Incentive  Stock  Options  are
exercisable  for the first time by the Optionee  during any calendar year (under
all plans of the Company and any Parent or Subsidiary)  exceeds  $100,000,  such
Options shall be treated as  Nonstatutory  Stock  Options.  For purposes of this
Section 5(b),  Incentive  Stock Options shall be taken into account in the order
in witch  they  were  granted.  The Fair  Market  Value of the  Shares  shall be
determined as of the time the Option with respect to such Shares is granted.

          (c)  Neither  the Plan nor any Option or Stock  Purchase  Right  shall
confer upon any  Optionee any right with respect to  continuing  the  Optionee's
relationship as a Service  Provider with the Company,  nor shall it interfere in
any  way  with  his or her  right  or the  Company's  right  to  terminate  such

                                       5

<PAGE>

relationship at any time, with or without cause.

     6. TERM OF PLAN.  The Plan shall become  effective upon its adoption by the
Board.  It shall  continue in effect  ------------  for a term of ten (10) years
unless sooner terminated under Section 14 of the Plan.

     7. TERM OF OPTION.  The term of each  Option  shall be stated in the Option
Agreement;  provided, however, that the term shall be no more than ten (10)years
from the date of grant thereof. In the case of an Incentive Stock Option granted
to an Optionee who, at the time the Option is granted,  owns stock  representing
more than ten percent  (10%) of the voting  power of all classes of stock of the
Company or any Parent or  Subsidiary,  the term of the Option  shall be five (5)
years  from the date of grant or such  shorter  term as may be  provided  in the
Option Agreement.

     8. OPTION EXERCISE PRICE AND CONSIDERATION.

          (a) The per  share  exercise  price for the  Shares to be issued  upon
exercise of an Option shall be such price as is determined by the Administrator,
but shall be subject to the following:

               (i)  In the case of an Incentive Stock Option

                    (A) granted to an Employee who, at the time of grant of such
Option,  owns stock  representing  more than ten percent (10%) of the voting
power of all  classes of stock of the Company or any Parent or  Subsidiary,  the
exercise  price shall be no less than I I 0% of the Fair Market  Value per Share
on the date of grant.

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

               (ii) In the case of a Nonstatutory Stock Option

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

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

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

                                       6

<PAGE>

          (b) The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined by
the Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant). Such consideration may consist of (1) cash,
(2) check, (3) promissory note, (4) other Shares which (x) in the case of Shares
acquired upon exercise of an Option, have been owned by the Optionee for more
than six months on the date of surrender, and (y) have a Fair Market Value on
the date of surrender equal to the aggregate exercise price of the Shares as to
which such Option shall be exercised, (5) consideration received by the Company
under a cashless exercise program implemented by the Company in connection with
the Plan, or (6) any combination of the foregoing methods of payment. In making
its determination as to the type of consideration to accept, the Administrator
shall consider if acceptance of such consideration may be reasonably expected to
benefit the Company.

     9.   EXERCISE OF OPTION.

          (a)  PROCEDURE  FOR  EXERCISE:  RIGHTS AS A  STOCKHOLDER.  Any  Option
granted  hereunder  shall be  exercisable  according to the terms hereof at such
times and under such conditions as determined by the Administrator and set forth
in the Option Agreement, but in no case at a rate of less than 20% per year over
five (5) years from the date the  Option is  granted.  Unless the  Administrator
provides otherwise,  vesting of Options granted hereunder shall be tolled during
any unpaid leave of absence.  An Option may not be exercised for a fraction of a
Share.

          An Option shall be deemed  exercised  when the Company  receives:  (i)
written  or  electronic  notice  of  exercise  (in  accordance  with the  Option
Agreement)  from the person  entitled  to  exercise  the  Option,  and (ii) full
payment  for the Shares  with  respect to which the  Option is  exercised.  Full
payment may consist of any consideration and method of payment authorized by the
Administrator  and permitted by the Option Agreement and the Plan. Shares issued
upon  exercise of an Option  shall be issued in the name of the  Optionee or, if
requested  by the  Optionee,  in the name of the Optionee and his or her spouse.
Until the Shares are issued (as evidenced by the appropriate  entry on the books
of the Company or of a duly authorized transfer agent of the Company),  no right
to vote or receive  dividends or any other rights as a  Stockholder  shall exist
with  respect to the Shares,  notwithstanding  the  exercise of the Option.  The
Company  shall  issue (or cause to be issued)  such  Shares  promptly  after the
Option is exercised.  No  adjustment  will be made for a dividend or other right
for which the record date is prior to the date the Shares are issued,  except as
provided in Section 12 of the Plan.

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

                                       7

<PAGE>

          (b) TERMINATION OF RELATIONSHIP AS A SERVICE PROVIDER.  If an Optionee
ceases to be a Service  Provider,  such  Optionee may exercise his or her Option
within such period of time as is specified in the Option  Agreement (of at least
thirty  (30)  days) to the  extent  that the  Option  is  vested  on the date of
termination (but in no event later than the expiration of the term of the Option
as set forth in the Option Agreement). In the absence of a specified time in the
Option  Agreement,  the Option  shall  remain  exercisable  for three (3) months
following  the  Optionee's  termination.  If,  on the date of  termination,  the
Optionee is not vested as to his or her entire Option, the Shares covered by the
unvested portion of the Option shall revert to the Plan. If, after  termination,
the Optionee  does not exercise his or her Option  within the time  specified by
the  Administrator,  the Option shall terminate,  and the Shares covered by such
Option shall revert to the Plan.

          (c) DISABILITY  OF  OPTIONEE.  If an Optionee  ceases to be a Service
Provider as a result of the Optionee's Disability, the Optionee may exercise his
or her Option within such period of time as is specified in the Option Agreement
to the extent the Option is vested on the date of  termination  (but in no event
later than the  expiration of the term of such Option as set forth in the Option
Agreement).  In the absence of a  specified  time in the Option  Agreement,  the
Option shall remain  exercisable for twelve (12) months following the Optionee's
termination. If such disability is not a "disability" as such term is defined in
Section  22(e)(')) of the Code,  in the case of an  Incentive  Stock Option such
Incentive Stock Option shall  automatically  cease to be treated as an Incentive
Stock  Option and shall be treated  for tax  purposes  as a  Nonstatutory  Stock
Option on the day three months and one day following  such  termination.  If, on
the date of  termination,  the  Optionee  is not  vested as to his or her entire
Option, the Shares covered by the unvested portion of the Option shall revert to
the Plan.  If,  after  termination,  the  Optionee  does not exercise his or her
Option within the time specified  herein,  the Option shall  terminate,  and the
Shares covered by such Option shall revert to the Plan.

          (d) DEATH OF OPTIONEE.  If an Optionee dies while a Service  Provider,
the Option may be  exercised  within such period of time as is  specified in the
Option  Agreement (but in no event later than the expiration of the term of such
Option as set forth in the Notice of Grant),  by the  Optionee's  estate or by a
person who acquires the night to exercise the Option by bequest or  inheritance,
but only to the extent  that the  Option is vested on the date of death.  In the
absence of a specified  time in the Option  Agreement,  the Option  shall remain
exercisable for twelve (12) months following the Optionee's termination.  If, at
the time of death,  tile Optionee is not vested as to his or her entire  Option,

                                       8

<PAGE>

the Shares  covered by the  unvested  portion  of the Option  shall  immediately
revert to the Plan. The Option may be exercised by the executor or administrator
of the Optionee's estate or, if none, by the person(s)  entitled to exercise the
Option under the Optionee's will or the laws of descent or distribution.  If the
Option Is not so exercised  within the time specified  herein,  the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.

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

     10.  NON-TRANSFERABILITY  OF OPTIONS AND STOCK PURCHASE RIGHTS. Options and
Stock  Purchase  Rights  may  not be  sold,  pledged,  assigned,  hypothecated,
transferred,  or disposed of in any manner  other than by will or by the laws of
descent  or  distribution  and may be  exercised,  during  the  lifetime  of the
Optionee, only by the Optionee.

     11.  STOCK PURCHASE RIGHTS.

          (a) RIGHTS TO PURCHASE.  Stock  Purchase  Rights may be issued  either
alone,  in addition to, or in tandem with other awards  (,ranted  under the Plan
and/or cash awards made outside of the Plan. After the Administrator  determines
that it will offer Stock  Purchase  Rights  under the Plan,  it shall advise the
offeree in writing or electronically  of the terms,  conditions and restrictions
related to the offer,  including  the number of Shares that such person shall be
entitled  to  purchase,  the price to be paid,  and the time  within  which such
person  must  accept  such  offer.  The terms of the offer  shall  comply in all
respects  with  Section  260.140.42  of  Title  10 of  the  California  Code  of
Regulations.  The offer shall be accepted by  execution  of a  Restricted  Stock
purchase agreement in the form determined by the Administrator.

          (b) REPURCHASE OPTION. Unless the Administrator  determines otherwise,
the  Restricted  Stock purchase  agreement  shall grant the Company a repurchase
option  exercisable  upon  the  voluntary  or  involuntary  termination  of  the
purchaser's  service  with  the  Company  for any  reason  (including  death  or
disability).   The  purchase  price  for  Shares  repurchased  pursuant  to  the
Restricted  Stock  purchase  agreement  shall be the original  price paid by the
purchaser and may be paid by cancellation  of any  indebtedness of the purchaser
to  the  Company.  The  repurchase  option  shall  lapse  at  such  rate  as the
Administrator may determine,  but in no case at a rate of less than 20% per year
over five years from the date of purchase.

          (c) OTHER  PROVISIONS.  The Restricted Stock purchase  agreement shall
contain such other terms,  provisions and conditions not  inconsistent  with the
Plan as may be  determined  by the  Administrator  in its sole  discretion.

                                       9

<PAGE>

          (d) RIGHTS AS A STOCKHOLDER.   Once  the  Stock  Purchase  Right  is
exercised,  the purchaser shall have fights equivalent to those of a stockholder
and shall be a stockholder  when his or her purchase is entered upon the records
of the duly  authorized  transfer agent of the Company.  No adjustment  shall be
made for a dividend  or other  right for which the  record  date is prior to the
date the Stock Purchase Right is exercised,  except as provided in Section 12 of
the Plan.

     12.  ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, MERGER OR ASSET SALE.

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

          (b) DISSOLUTION  OR  LIQUIDATION.   In  the  event  of  the  proposed
dissolution or liquidation of the Company,  the Administrator  shall notify each
Optionee as soon as  practicable  prior to the  effective  date of such proposed
transaction.  The Administrator in its discretion may provide for an Optionee to
have the fight to exercise  his or her Option  until  fifteen (15) days prior to
such  transaction  as to all of the Optioned  Stock covered  thereby,  including
Shares as to which the Option would not otherwise be  exercisable.  In addition,
the Administrator  may provide that any Company  repurchase option applicable to
any Shares  purchased  upon exercise of an Option or Stock  Purchase Right shall
lapse as to all such Shares,  provided the proposed  dissolution  or liquidation
takes place at the time and in the manner contemplated. To the extent it has not
been  previously  exercised,  an Option or Stock  Purchase  Fight will terminate
immediately prior to the consummation of such proposed action.

                                       10
<PAGE>

          (c) MERGER OR ASSET SALE. In the event of a merger of the Company with
or into another  corporation,  or the sale of substantially all of the assets of
the Company,  each outstanding  Option and Stock Purchase Right shall be assumed
or an equivalent option or right  substituted by the successor  corporation or a
Parent  or  Subsidiary  of the  successor  corporation.  In the  event  that the
successor  corporation  refuses to assume or substitute  for the Option or Stock
Purchase Right,  the Optionee shall fully vest in and have the right to exercise
the Option or Stock  Purchase Right as to all of the Optioned  Stock,  including
Shares as to which it would not otherwise be vested or exercisable. If an Option
or  Stock  Purchase  Right  becomes  fully  vested  and  exercisable  in lieu of
assumption  or  substitution  in the  event of a merger or sale of  assets,  the
Administrator  shall notify the Optionee in writing or  electronically  that the
Option  or Stock  Purchase  Right  shall be fully  exercisable  for a period  of
fifteen  (I 5) days  from  the  date of such  notice,  and the  Option  or Stock
Purchase  Right shall  terminate  upon the  expiration  of such period.  For the
purposes  of this  paragraph,  the  Option  or  Stock  Purchase  Right  shall be
considered  assumed if,  following  the merger or sale of assets,  the option or
right confers the right to purchase or receive, for each Share of Optioned Stock
subject to the Option or Stock Purchase Right immediately prior to the merger or
sale of assets,  the consideration  (whether stock, cash, or other securities or
property)  received  in the merger or sale of assets by holders of Common  Stock
for each Share held on the  effective  date of the  transaction  (and if holders
were offered a choice of consideration,  the type of consideration chosen by the
holders of a majority of tile outstanding Shares),  provided,  however,  that if
such consideration received in the merger or sale of assets is not solely common
stock of the successor  corporation or its Parent,  the Administrator  may, with
the consent of the successor  corporation,  provide for the  consideration to be
received upon the exercise of the Option or Stock Purchase Right, for each Share
of Optioned  Stock subject to the Option or Stock Purchase  Right,  to be solely
common  stock of the  successor  corporation  or its Parent equal in fair market
value to the per share consideration  received by holders of Common Stock in the
merger or sale of assets.

     13.  TIME OF GRANTING OPTIONS AND STOCK PURCHASE  RIGHTS.  The date of
grant of an Option or Stock Purchase Right shall, for all purposes,  be the date
on which the Administrator makes the determination granting such Option or Stock
Purchase Right, or such other date as is determined by the Administrator. Notice
of the  determination  shall be given to each  Employee or Consultant to whom an
Option or Stock Purchase Right is so granted within a reasonable  time after the
date of such grant.

     14.  AMENDMENT AND TERMINATION OF THE PLAN.

                                       11

<PAGE>

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

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

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

     15.  CONDITIONS UPON ISSUANCE OF SHARE.

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

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

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

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

     18.  STOCKHOLDER  APPROVAL.  The Plan shall be subject to  approval  by the
stockholders of the Company within twelve (12) months after the date the Plan is
adopted.  Such  stockholder  approval shall be obtained in the degree and manner
required under Applicable Laws.

     19.  INFORMATION TO OPTIONEES AND PURCHASERS.  The Company shall provide to
each Optionee and to each  individual who acquires  Shares pursuant to the Plan,

                                       12

<PAGE>

not less  frequently  than annually during the period such Optionee or purchaser
has one or more Options or Stock Purchase Rights  outstanding,  and, in the case
of an individual  who acquires  Shares  pursuant to the Plan,  during the period
such individual owns such Shares,  copies of annual  financial  statements.  The
Company shall not be required to provide such  statements to key employees whose
duties  in  connection  with the  Company  assure  their  access  to  equivalent
information.

                                       13

<PAGE>

                             1997 STOCK OPTION PLAN

                             STOCK OPTION AGREEMENT

     Unless otherwise  defined herein,  the terms defined in the Plan shall have
the same defined meanings in this Option Agreement.

I.   NOTICE OF STOCK OPTION GRANT

[Optionee's Name and Address]

     The  undersigned  Optionee  has been  granted an Option to purchase  Common
Stock of the Company,  subject to the terms and  conditions of the Plan and this
Option Agreement, as follows:

     Grant Number                       _____________________________________

     Date of Grant                      _____________________________________

     Vesting Commencement Date          _____________________________________

     Exercise Price per Share           _____________________________________

     Total Number of Shares Granted     _____________________________________

     Total Exercise Price               _____________________________________

     Type of Option:                    ____ Incentive Stock Option
                                        ____ Nonstatutory Stock Option

     Term/Expiration Date:                      _____________________________

     VESTING SCHEDULE:

     This Option  shall be  exercisable,  in whole or in part,  according to the
following vesting schedule:

     [25% of the Shares subject to the Option shall vest twelve months after the
Vesting  Commencement  Date,  and 1/48 of the Shares subject to the Option shall
vest each month  thereafter,  subject to  Optionee's  continuing to be a Service
Provider on such dates.]

     [25% of the Shares  subject to the  Option  shall be vested on the  Vesting
Commencement  Date,  none of the Shares  subject to the Option shall vest during
the twelve months following the Vesting Commencement Date, and 1/48 of the

                                       1

<PAGE>

Shares  subject  to the  Option  shall  vest on the  date  thirteen  months
following the Vesting  Commencement Date and each month  thereafter,  subject to
Optionee's continuing to be a Service Provider on such dates.]

     TERMINATION PERIOD:

     This Option shall be exercisable  for [_____] months after Optionee  ceases
to be a Service Provider.  Upon Optionee's death or disability,  this Option may
be  exercised  for such longer  period as provided in the Plan.  In no event may
Optionee exercise this Option after the Term/Expiration Date as provided above.

II.  AGREEMENT

     1.   GRANT OF OPTION.  The Plan Administrator of the Company hereby grants
to the Optionee  named in the Notice of Grant (the  "Optionee"),  an option (the
"Option") to purchase the number of Shares set forth in the Notice of Grant,  at
the  exercise  price per Share set forth in the Notice of Grant  (the  "Exercise
Price"),  and  subject  to the  terms  and  conditions  of the  Plan,  which  is
incorporated  herein by reference.  Subject to Section 13(c) of the Plan, in the
event of a conflict between the terms and conditions of the Plan and this Option
Agreement, the terms and conditions of the Plan shall prevail.

          If  designated  in the Notice of Grant as an  Incentive  Stock  Option
("ISO"),  this  Option is intended to qualify as an  Incentive  Stock  Option as
defined in Section 422 of the Code. Nevertheless,  to the extent that it exceeds
the $1 00,000 rule of Code  Section  422(d),  this Option  shall be treated as a
Nonstatutory Stock Option ("NSO").

     2.   EXERCISE OF OPTION.

          (a) RIGHT TO  EXERCISE.  This Option shall be  exercisable  during its
term in accordance with the Vesting  Schedule set out in the Notice of Grant and
with the applicable provisions of the Plan and this Option Agreement.

          (b) METHOD OF EXERCISE.  This Option shall be  exercisable by delivery
of an exercise notice in the form attached as Exhibit A (the "Exercise  Notice")
which shall state the election to exercise the Option, the number of Shares with
respect to which the Option is being exercised,  and such other  representations
and agreements as may be required by the Company.  The Exercise  Notice shall be
accompanied  by  payment of the  aggregate  Exercise  Price as to all  Exercised
Shares.  This Option shall be deemed to be exercised upon receipt by the Company
of such fully executed  Exercise  Notice  accompanied by the aggregate  Exercise
Price.

                                       2

<PAGE>

          No Shares shall be issued pursuant to the exercise of an Option unless
such issuance and such exercise  complies with  Applicable  laws.  Assuming such
compliance,  for in come tax purposes the Shares shall be considered transferred
to the  Optionee on the date on which the Option is  exercised  with  respect to
such Shares.

     3.   OPTIONEE'S  REPRESENTATION. In the  event  the  Shares  have not been
registered under the Securities Act of 1933, as amended, at the time this Option
is exercised, the Optionee shall, if required by the Company,  concurrently with
the exercise of all or any portion of this Option, deliver to the Company his or
her Investment  Representation  Statement in the form attached hereto as Exhibit
B, and shall  read the  applicable  rules of the  Commissioner  of  Corporations
attached to such Investment Representation Statement.

     4.   LOCK-UP  PERIOD.  Optionee  hereby  agrees  that,  if so requested the
Company or any  representative of the underwriters (the "Managing  Underwriter")
in connection  with any  registration  of the offering of any  securities of the
Company under the Securities Act, Optionee shall not sell or otherwise  transfer
any Shares or other securities of the Company during the 180-day period (or such
other  period as may be requested  in writing by the  Managing  Underwriter  and
agreed to in writing by the Company) (the "Market  Standoff  Period")  following
the effective  date of a  registration  statement of the Company filed under the
Securities  Act.  Such  restriction  shall apply only to the first  registration
statement  of the  Company to become  effective  under the  Securities  Act that
includes  securities  to be sold oh behalf of the  Company  to the  public in an
underwritten  public  offering under the Securities  Act. The Company may impose
stop-transfer  instructions with respect to securities  subject to the foregoing
restrictions until the end of such Market Standoff Period.

     5.   METHOD OF PAYMENT.  Payment of the aggregate  Exercise Price shall be
by any of the  following,  or a  combination  thereof,  at the  election  of the
Optionee:

          (a)  cash or check;

          (b)  consideration  received  by the Company  under a formal  cashless
exercise program adopted by the Company in connection with the Plan; or

          (c)  surrender  of  other  Shares  which,  (i) in the  case of  Shares
acquired  upon  exercise of an option,  have been owned by the Optionee for more
than six (6) months on the date of surrender,  and (ii) have a Fair Market Value
on the date of surrender equal to the aggregate  Exercise Price of the Exercised
Shares.

     6.   RESTRICTIONS  ON EXERCISE.  This Option may not be exercised until
such time as the Plan has been approved by the stockholders of the Company,  or
if the issuance of such Shares upon such exercise or the method of payment of

                                       3

<PAGE>

consideration  for such shares would  constitute  a violation of any  Applicable
Law.

     7.   NON-TRANSFERABILITY OF OPTION. This Option may not be transferred in
any manner  otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by Optionee.  The terms of
the  Plan  and this  Option  Agreement  shall  be  binding  upon the  executors,
administrators, heirs, successors and assigns of the Optionee.

     8.   TERM OF OPTION.  This Option may be  exercised  only within the term
set out in the Notice of Grant,  and may be  exercised  during such term only in
accordance with the Plan and the terms of this Option.

     9.   TAX  CONSEQUENCES.  Set forth below is a brief summary as of the date
of this  Option of some of the  federal  tax  consequences  of  exercise of this
Option and  disposition of the Shares.  THIS SUMMARY IS NECESSARILY  INCOMPLETE,
AND THE TAX LAWS AND  REGULATIONS  ARE SUBJECT TO CHANGE.  THE  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  NONSTATUTORY  STOCK  OPTION.  There may be a regular
federal income tax liability  upon the exercise of a Nonstatutory  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 tile 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 tile 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.

          (c) DISPOSITION OF SHARES.  In the case of an NSO, 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 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 one year after  exercise or two years after the Date of
Grant,  any gain realized on such  disposition  will be treated as  compensation

                                       4

<PAGE>

income (taxable at ordinary 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 tile 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.

          (d) 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.

     10. ENTIRE AGREEMENT; GOVERNMENTAL LAW. The Plan is incorporated herein by
reference. The Plan and this Option Agreement constitute the entire agreement of
the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee's interest except by means of a writing signed by the Company and
Optionee. This agreement is governed by the internal substantive laws but not
the choice of law rules of California.

     11. NO GUARANTEE OF CONTINUED SERVICE. OPTIONEE ACKNOWLEDGES AND AGREES
THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED
ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (NOT THROUGH
THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES
HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE
TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO
NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A
SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL
NOT INTERFERE IN ANY WAY WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO
TERMINATE OPTIONEE'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR
WITHOUT CAUSE.

     Optionee acknowledges receipt of a copy of the Plan and represents that he
or she is familiar with the terms and provisions thereof, and hereby accepts
this Option subject to all of the terms and provisions thereof Optionee has
reviewed the Plan and this Option in their entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Option and fully
understands all provisions of the Option. Optionee hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the

                                       5

<PAGE>

Administrator upon any questions arising under the Plan or this Option. Optionee
further agrees to notify the Company upon any change in the residence address
indicated below.

OPTIONEE:                               T.SQWARE, INC.

___________________________             _____________________________
Signature                               By

___________________________             _____________________________
Print Name                              Title

___________________________
___________________________
Residence Address

                                       6

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