Document:

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Exhibit 10.17

                             EMPLOYMENT AGREEMENT

   THIS EMPLOYMENT AGREEMENT (this "Agreement") is made as of December 6, 2001,
by and between Ziff Davis Publishing Inc., a Delaware corporation and Michael
Miller ("Executive"). Certain definitions are set forth in Section 9 of this
Agreement.

   Executive currently serves as the Executive Vice President and Editorial
Director of Publishing. Executive and Publishing are entering into this
Agreement to set forth the terms and conditions of Executive's continued
employment with Publishing, which terms shall replace and supercede any
existing terms and conditions of Executive's employment with Publishing.
Executive is party to an Executive Stock Agreement (the "Executive Stock
Agreement") dated as of August 15, 2000 among Ziff Davis Holdings, Inc., a
Delaware corporation (the "Company"), Publishing and Executive, pursuant to
which Executive, among other things, (i) purchased certain shares of capital
stock of the Company and (ii) agreed to refrain from competing with the Company
and its Affiliates under certain circumstances as set forth in the Executive
Stock Agreement. Except as expressly set forth in Section 11(b) below, the
Executive Stock Agreement shall continue in full force and effect in accordance
with its terms.

   NOW, THEREFORE, the parties hereto agree as follows:

   1.  Employment.  Publishing shall employ Executive, and Executive hereby
accepts employment with Publishing, upon the terms and conditions set forth in
this Agreement for the period beginning on the date hereof and ending as
provided in Section 4 hereof (the "Employment Period").

   2.  Position and Duties.

   (a) During the Employment Period, Executive shall serve as the Executive
Vice President and Editorial Director of Publishing and shall have the normal
duties, responsibilities and authority of an executive vice president and
editorial director.

   (b) Executive shall report to the Executive Vice Presidents, Business Media
Group of Publishing, or his designee, and Executive shall devote Executive's
best efforts and Executive's full business time and attention (except for
permitted vacation periods, periods of illness or other incapacity, reasonable
time spent with respect to civic and charitable activities and serving on the
boards of directors of other companies (provided that none of such activities
shall interfere with Executive's duties to Publishing), and other permitted
absences for which senior executive employees of Publishing are generally
eligible from time to time under Publishing's policies) to the business and
affairs of Publishing and its Affiliates. Executive shall perform Executive's
duties and responsibilities to the best of Executive's abilities in a diligent,
trustworthy, businesslike and efficient manner. Nothing herein shall prohibit
Executive from writing a book, outside business hours, provided that Executive
otherwise complies with the confidentiality and other provisions of this
agreement and the Executive Stock Agreement.

   3.  Base Salary; Benefits and Bonuses.

   (a) During the Employment Period, Executive's base salary shall be not less
than $333,000 per annum, subject to an annual cost of living increase at the
beginning of each fiscal year beginning January 1, 2002 at a rate equal to the
increase in the Consumer Price Index--All Urban for the New York area during
the prior year, or such higher rate as the Board of Publishing may designate
from time to time (the "Base Salary"), which salary shall be payable in regular
installments in accordance with Publishing's general payroll practices and
shall be subject to customary withholding. Effective April 1, 2002, Executive's
base salary shall be increased to $370,000 per annum.

   (b) In addition to the Base Salary, during the Employment Period, Executive
shall be eligible to receive an annual bonus (the "Bonus") in an amount
determined in accordance with Publishing's bonus plan, payable at the
discretion of the Board of the Company provided that Executive's annual bonus
shall not be less than $50,000 per fiscal year during the employment period.
Any such Bonus, if determined by the Board of the Company to be payable, shall
be payable within 90 days following the end of each fiscal year during the
Employment Period.

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   (c) During the Employment Period, Executive shall be entitled to participate
in all of Publishing's employee benefit plans and programs for which senior
executive employees of Publishing are generally eligible, which shall include,
but shall not be limited to, health insurance, dental insurance, life
insurance, disability insurance and participation in Publishing's 401(k) plan.
Executive's right to participate in any employee benefit plans or programs of
Publishing shall be subject to Publishing's right to amend, modify or terminate
any such plan or program in accordance with its terms and applicable law and
subject in each case to any applicable waiting periods or other restrictions
contained in such benefit plans or programs. During the Employment Period,
Executive shall be eligible for paid vacation in accordance with the policies
of Publishing for senior executive employees of Publishing.

   (d) Publishing shall reimburse Executive for all reasonable business
expenses incurred by Executive in the course of performing Executive's duties
under this Agreement which are consistent with Publishing's policies in effect
from time to time for senior executive employees of Publishing with respect to
travel, entertainment and other business expenses, subject to Publishing's
requirements with respect to reporting and documentation of such expenses.
   4.  Term; Termination; Severance.

   (a) The Employment Period shall be for a period of three years from the date
hereof; provided that (i) the Employment Period shall terminate prior to such
date upon Executive's death or Incapacity; (ii) the Employment Period may be
terminated by Publishing at any time prior to such date with Cause or without
Cause; and (iii) the Employment Period may be terminated by Executive at any
time for any reason (a "Voluntary Termination"). Any termination of the
Executive's employment with Publishing shall be a "Termination." The date of
any termination of Executive's employment with Publishing shall be the
"Termination Date."

   (b) Upon any Termination, Executive shall be entitled to receive Executive's
Base Salary earned through Executive's Termination Date, prorated on a daily
basis together with all accrued but unpaid vacation time earned by Executive
through Executive's Termination Date. Except as set forth in Section 4(d),
Executive shall not be entitled to receive Executive's Base Salary or any
bonuses or other benefits from Publishing for any period after the Termination
Date.

   (c) In the event Executive's employment is terminated by Publishing with
Cause, upon a Voluntary Termination or upon Executive's death or Incapacity,
Publishing shall have no obligation to make any severance or other similar
payment to or on behalf of Executive.

   (d) In the event that Executive's employment is terminated by Publishing
without Cause, following such Termination and upon execution by Executive of a
general release in favor of Publishing and its Affiliates, in form satisfactory
to Publishing, Publishing shall pay Executive his annual Base Salary (as in
effect on the Termination Date) until (i) the 18 month anniversary of the
Termination Date if Executive's employment is so terminated prior to the second
anniversary of the date hereof and (ii) one-year anniversary of the Termination
Date if Executive's employment is so terminated after the second anniversary of
the Employment Period and prior to the expiration of the Employment Period.
Each severance payment hereunder shall be payable in accordance with
Publishing's normal payroll procedures and cycles and shall be subject to
withholding of applicable taxes and governmental charges in accordance with
federal and state law. After payment of the severance amounts described in this
Section 4(d), Publishing shall have no obligation to make any further severance
or other payment to or on behalf of Executive except as otherwise expressly
contemplated hereby. Notwithstanding the foregoing, in the event that Executive
shall breach any of Executive's obligations under Sections 5, 6 or 7 of this
Agreement, then, in addition to any other rights that Publishing may have under
this Agreement or otherwise, Publishing shall be relieved from and shall have
no further obligation to pay Executive any amounts to which Executive would
otherwise be entitled pursuant to this Section 4.

   5.  Confidential Information.  Executive acknowledges that by reason of
Executive's duties to and association with the Publishing and its Affiliates,
Executive has had and will have access to and has and will

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become informed of Confidential Information (as defined in Section 9 below)
which is a competitive asset of Publishing and/or its Affiliates. Executive
agrees to keep in strict confidence and not, directly or indirectly, make
known, disclose, furnish, make available or use, any Confidential Information,
except for use in Executive's regular authorized duties on behalf of Publishing
and its Affiliates. Executive acknowledges that all documents and other
property including or reflecting Confidential Information furnished to
Executive by Publishing or any of its Affiliates or otherwise acquired or
developed by Publishing or any of its Affiliates or Executive or known by
Executive shall at all times be the property of the Publishing and its
Affiliates. Executive shall take all necessary and appropriate steps to
safeguard Confidential Information and protect it against disclosure,
misappropriation, misuse, loss and theft. Executive shall deliver to Publishing
at the termination of the Employment Period, or at any other time Publishing
may request, all memoranda, notes, plans, records, reports, computer tapes,
printouts and software and other documents and data (and copies thereof)
relating to the Confidential Information, Work Product (as defined in Section 9
below) or the business of Publishing or any of its Affiliates which Executive
may then possess or have under Executive's control.

6.  Inventions and Patents.

   (a) Executive acknowledges that all Work Product (as defined in Section 9
below) is the exclusive property of Publishing. Executive hereby assigns all
right, title and interest in and to all Work Product to Publishing. Any
copyrightable works that fall within the Work Product will be deemed "works
made for hire" under Section 201(b) of the 1976 Copyright Act, and Publishing
shall own all of the rights comprised in the copyright therein; provided,
however, that to the extent such works may not, by operation of law, constitute
"works made for hire," Executive hereby assigns to Publishing all right, title
and interest therein.

   (b) Executive shall promptly and fully disclose all Work Product to
Publishing and shall cooperate and perform all actions reasonably requested by
Publishing (whether during or after the Employment Period) to establish,
confirm and protect Publishing's right, title and interest in such Work
Product. Without limiting the generality of the foregoing, Executive agrees to
assist Publishing, at Publishing's expense, to secure Publishing's rights in
the Work Product in any and all countries, including the execution of all
applications and all other instruments and documents which Publishing shall
deem necessary in order to apply for and obtain rights in such Work Product and
in order to assign and convey to Publishing the sole and exclusive right, title
and interest in and to such Work Product. If Publishing is unable because of
Executive's mental or physical incapacity or for any other reason (including
Executive's refusal to do so after request therefor is made by Publishing) to
secure Executive's signature to apply for or to pursue any application for any
United States or foreign patents or copyright registrations covering Work
Product belonging to or assigned to Publishing pursuant to paragraph 6(a)
above, then Executive hereby irrevocably designates and appoints Publishing and
its duly authorized officers and agents as Executive's agent and
attorney-in-fact to act for and in Executive's behalf and stead to execute and
file any such applications and to do all other lawfully permitted acts to
further the prosecution and issuance of patents or copyright registrations
thereon with the same legal force and effect as if executed by Executive.
Executive agrees not to apply for or pursue any application for any United
States or foreign patents or copyright registrations covering any Work Product
other than pursuant to this paragraph in circumstances where such patents or
copyright registrations are or have been or are required to be assigned to
Publishing.

7.  Non-Compete, Non-Solicitation.

   (a) In further consideration of the compensation to be paid to Executive
hereunder, Executive acknowledges that in the course of Executive's employment
with the Publishing and its Affiliates, he has prior to the date of this
Agreement, and will during the Employment Period, become familiar with
Publishing's and its Affiliates' (and their predecessors') trade secrets,
business plans and business strategies and with other Confidential Information
concerning Publishing and its predecessors and its Affiliates and that
Executive's services have been and shall be of special, unique and
extraordinary value to the Publishing and its Affiliates. Therefore, Executive
agrees that, during the Employment Period and for a period of 18 months
thereafter (such period, the "Noncompete Period"), Executive shall not directly
or indirectly own any interest in, manage, control, participate in (whether as
an officer, director, employee, partner, agent, representative or otherwise),

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consult with, render services for, or in any other manner engage in, any of the
businesses (i) of International Data Group, Inc., CMP Media, Inc. (a subsidiary
of United News & Media PLC), or CNET Networks, Inc. (the "Restricted Persons"),
(ii) of any successor, assignee, partner, joint venture or collaboration
partner, subsidiary, division or Affiliate of any of the Restricted Persons, or
(iii) in which any of the Restricted Persons owns an interest or participates,
which any of the Restricted Persons manages or controls (whether as an officer,
director, employee, partner, agent, representative or otherwise), or with which
any of the Restricted Persons consults or to which any of the Restricted
Persons otherwise provides management or financial support. Nothing herein
shall prohibit Executive from being an owner, indirectly through a mutual fund
or other similar pooled investment vehicle, of a passive investment in the
stock of a corporation which is publicly traded, so long as Executive has no
other participation in the business of any such corporation. In addition, if
this Agreement is not renewed by Publishing at the end of the three year
Employment Period, the Noncompete Period shall end at the end of the Term of
this Agreement.

   (b) During the Employment Period and for a period of 18 months thereafter,
Executive shall not directly or indirectly through another Person (i) induce or
attempt to induce any employee of Publishing or any Affiliate to leave the
employ of Publishing or such Affiliate, or in any way interfere with the
relationship between Publishing or any Affiliate and any employee thereof, (ii)
hire any person who was an employee of Publishing or any Affiliate at any time
during the one year period prior to the termination of the Employment Period,
(iii) call on, solicit or service any customer, supplier, licensee, licensor,
franchisee or other business relation of Publishing or any Affiliate in order
to induce or attempt to induce such Person to cease or reduce doing business
with Publishing or such Affiliate, or in any way interfere with the
relationship between any such customer, supplier, licensee or business relation
and Publishing or any Affiliate (including, without limitation, making any
negative statements or communications about Publishing or its Affiliates) or
(iv) directly or indirectly acquire or attempt to acquire any business in the
United States of America to which Publishing or any of its Affiliates has made
an acquisition proposal prior to the Termination Date relating to the possible
acquisition of such business (an "Acquisition Target") by Publishing or any of
its Affiliates, or take any action to induce or attempt to induce any
Acquisition Target to consummate any acquisition, investment or other similar
transaction with any Person other than Publishing or any of its Affiliates.

   8.  Enforcement.  If, at the time of enforcement of Sections 5, 6 or 7 of
this Agreement, a court shall hold that the duration, scope, or area
restrictions stated herein are unreasonable under circumstances then existing,
the parties hereto agree that the maximum period, scope or geographical area
reason-able under such circumstances shall be substituted for the stated
period, scope or area and that the court shall be allowed and directed to
revise the restrictions contained herein to cover the maximum period, scope and
area permitted by law. Because Executive's services are unique and because
Executive has access to Confidential Information and Work Product, the parties
hereto agree that money damages would not be an adequate remedy for any breach
of this Agreement. Therefore, in the event a breach or threatened breach of
this Agreement, Publishing or its successors or assigns may, in addition to
other rights and remedies existing in their favor, apply to any court of
competent jurisdiction for specific performance and/or injunctive or other
relief in order to enforce, or prevent any violations of, the provisions hereof
(without posting a bond or other security). In addition, in the event of an
alleged breach or violation by Executive of Section 7, the Period set forth in
such Section shall be tolled until such breach or violation has been duly
cured. Executive agrees that the restrictions contained in Section 7 are
reason-able and that Executive has received consideration in exchange therefor.

   9.  Definitions.

   "Affiliate" of a Person means any other person, entity or investment fund
controlling, controlled by or under common control with the Person and, in the
case of a Person which is a partnership, any partner of the Person.

   "Board" means the board of directors of the specified Person.

   "Cause" means (i) the commission of a felony or a crime involving moral
turpitude or the commission of any other act or omission involving dishonesty
or fraud with respect to Publishing, any of its Affiliates or any of their
customers or suppliers, (ii) intentional or willful conduct which conduct
brings Publishing or any of its

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Affiliates into public disgrace or disrepute in any material respect, (iii)
substantial failure to perform (other than due to Incapacity) duties of the
office held by Executive as reasonably directed by the Chief Executive Officer
or Board of Publishing which is not cured within 15 days after notice thereof
to Executive or which is incapable of cure, (iv) gross negligence or willful
misconduct with respect to Publishing or any of its Affiliates, including but
not limited to claims of sexual harassment or inappropriate conduct for an
executive, or (v) any breach of this Agreement which is not cured within 15
days after notice thereof to Executive or which is incapable of cure.

   "Confidential Information" means all information of a confidential or
proprietary nature (whether or not specifically labeled or identified as
"confidential"), in any form or medium, that is or was disclosed to, or
developed or learned by, Executive in connection with Executive's relationship
with the Company or any of its Affiliates prior to the date hereof or during
the Employment Period and that relates to the business, products, services,
financing, research or development of the Company or any of its Affiliates or
their respective suppliers, distributors or customers. Confidential Information
includes, but is not limited to, the following: (i) internal business
information (including information relating to strategic and staffing plans and
practices, business, training, marketing, promotional and sales plans and
practices, cost, rate and pricing structures, accounting and business methods);
(ii) identities of, individual requirements of, specific contractual
arrangements with, and information about, any of the Company' or any of its
Affiliates' suppliers, distributors and customers and their confidential
information; (iii) trade secrets, know-how, compilations of data and analyses,
techniques, systems, formulae, research, records, reports, manuals,
documentation, models, data and data bases relating thereto; (iv) inventions,
innovations, improvements, developments, methods, designs, analyses, drawings,
reports and all similar or related information (whether or not patentable); and
(v) Acquisition Targets and potential acquisition candidates. Confidential
Information shall not include information that Executive can demonstrate: (a)
is or becomes publicly known through no wrongful act or breach of obligation of
confidentiality; (b) was rightfully received by Executive from a third party
(other than ZD, Inc. or any of its Affiliates) without a breach of any
obligation of confidentiality by such third party; (c) was known to Executive
prior to his employment with the Publishing and its Affiliates and prior to his
employment with ZD, Inc. or any of it Affiliates; or (d) is required to be
disclosed pursuant to any applicable law or court order; provided, however,
that Executive provides Publishing with prior written notice of the requirement
for disclosure that details the Confidential Information to be disclosed and
cooperates with Publishing to preserve the confidentiality of such information
to the extent possible.

   "Incapacity" means the disability of Executive caused by any physical or
mental injury, illness or incapacity as a result of which Executive is unable
to effectively perform the essential functions of Executive's duties as
determined by the Board of Publishing in good faith, for a period of 90
consecutive days or a period of 120 days during any 180-day period; provided
that any determination of Incapacity shall be made in compliance with the
provisions of the Family Medical Leave Act.

   "Person" means an individual or a corporation, partner-ship, limited
liability company, trust, unincorporated organization, association or other
entity.

   "Work Product" means all inventions, innovations, improvements,
developments, methods, processes, designs, analyses, drawings, reports and all
similar or related information (whether or not patentable or reduced to
practice or comprising Confidential Information) and any copyrightable work,
trade mark, trade secret or other intellectual property rights (whether or not
comprising Confidential Information) and any other form of Confidential
Information, any of which relate to Publishing's or any of its Affiliates'
actual or anticipated business, research and development or existing or future
products or services and which were or are conceived, reduced to practice,
contributed to, developed, made or acquired by Executive (whether alone or
jointly with others) while employed (both before and after the date hereof) by
Publishing (or its predecessors, successors or assigns) and its Affiliates.

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   10.  Notices.  Any notice provided for in this Agreement must be in writing
and must be either personally delivered, mailed by first class mail (postage
prepaid and return receipt requested) or sent by reputable overnight courier
service (charges prepaid) to the recipients at the address indicated below:

     If to Executive:     Michael Miller
                          68 Riverside Avenue
                          Westport, Connecticut 06880

     If to the Company:   c/o Ziff Davis Holdings Inc.
                          28 E. 28th Street
                          New York, New York 10016
                          Attention: Chief Executive Officer

     with a copy to:      Ziff Davis Holdings Inc.
                          28 East 28/th Street /
                          New York, New York 10016
                          Attn: General Counsel

     and                  Willis, Stein & Partners II, L.P.
                          227 West Monroe Street, Suite 4300
                          Chicago, IL 60606
                          Attn: Daniel H. Blumenthal

     and                  Kirkland & Ellis
                          200 East Randolph Drive
                          Chicago, IL 60601
                          Attn: David A. Breach

or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement shall be deemed to have been given when so
delivered or sent or, if mailed, five days after deposit in the U.S. mail.

   11.  General Provisions.

   (a) Severability.  Whenever possible, each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.

   (b) Complete Agreement; Executive Stock Agreement.  This Agreement, those
documents expressly referred to herein and other documents of even date
herewith embody the complete agreement and understanding among the parties and
supersede and preempt any prior under-standings, agreements or representations
by or among the parties, written or oral, which may have related to the subject
matter hereof. Notwithstanding anything in this Agreement to the contrary, the
Executive Stock Agreement shall continue in full force and effect in accordance
with its terms; provided, however that Section 11 of the Executive Stock
Agreement shall be deemed amended as of the date hereof such that its terms
shall be identical to the terms of Section 6 of this Agreement. The rights and
remedies of Publishing on the Company with respect to any breach or violation
of any of Executive's obligations hereunder are in addition to and not in lieu
of any rights or remedies that Publishing or the Company may have under the
Executive Stock Agreement.

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   (c) Counterparts.  This Agreement may be executed in separate counterparts,
each of which is deemed to be an original and all of which taken together
constitute one and the same agreement.

   (d) Successors and Assigns.  Except as otherwise provided herein, this
Agreement shall bind and inure to the benefit of and be enforceable by
Executive and Publishing and their respective successors and assigns; provided
that the rights and obligations of Executive under this Agreement shall not be
assignable.

   (e) Governing Law.  All issues concerning this Agreement shall be governed
by and construed in accordance with the laws of the State of New York without
giving effect to any choice of law or conflict of law provision or rule
(whether of the State of New York or any other jurisdiction) that would cause
the application of the law of any jurisdiction other than the State of New York.

   (f) Remedies.  Each of the parties to this Agreement shall be entitled to
enforce its rights under this Agreement specifically, to recover damages and
costs (including reasonable attorney's fees) caused by any breach of any
provision of this Agreement and to exercise all other rights existing in its
favor. The parties hereto agree and acknowledge that money damages would not be
an adequate remedy for any breach of the provisions of this Agreement and that
any party may in its sole discretion apply to any court of law or equity of
competent jurisdiction (without posting any bond or deposit) for specific
performance and/or other injunctive relief in order to enforce or prevent any
violations of the provisions of this Agreement.

   (g) Survival.  The provisions set forth in Sections 5 through 10 shall
survive and continue in full force and effect in accordance with their terms
notwithstanding any termination of the Employment Period.

   (h) Amendment and Waiver.  The provisions of this Agreement may be amended
and waived only with the prior written consent of Publishing and Executive.

   (i) Third-Party Beneficiary.  The parties hereto acknowledge and agree that
the Company is a third party beneficiary of this Agreement. This Agreement will
inure to the benefit of and be enforceable by the Company and its successors
and assigns, subject to amendment or waiver as provided in subparagraph (h)
foregoing.

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   IN WITNESS WHEREOF, the parties hereto have executed this Executive
Agreement on the date first written above.

                                          ZIFF DAVIS PUBLISHING INC.

                                          By: _______________________________

                                          Its:  Chief Executive Officer
                                             -----------------------------------

                                          EXECUTIVE:

                                          --------------------------------------
                                          Michael Miller

                                      8<PAGE>

                                                                 Exhibit 10.29

                                  VSOURCE INC.

                     2001 STOCK OPTIONS/STOCK ISSUANCE PLAN

                                  ARTICLE ONE

                               GENERAL PROVISIONS

I.      PURPOSE  OF  THE  PLAN

     This 2001 Stock Option/Stock Issuance Plan is intended to promote the
interests of Vsource, Inc., a Delaware corporation (the "Corporation"), by
providing eligible persons in the Corporation's employ or service with the
opportunity to participate in the future performance of the Corporation as an
incentive for them to continue in such employ or service. Capitalized terms used
but not defined herein shall have the meanings assigned to such terms in Section
VIII of Article Four hereof.

II.     STRUCTURE  OF  THE  PLAN

        A. The Plan shall be divided into two separate equity programs
(collectively, the "Programs"):

                (i) a program under which eligible persons may, at the
discretion of the Plan Administrator, be granted options to purchase shares of
Common Stock (the "Option Grant Program"), and

                (ii) a program under which eligible persons may, at the
discretion of the Plan Administrator, be issued shares of Common Stock directly,
either through the immediate purchase of such shares or as a bonus for services
rendered to the Corporation or any Parent or Subsidiary (the "Stock Issuance
Program").

        B. The provisions of Articles One and Four hereof shall apply to both
Programs and shall govern the interests of all eligible persons under the Plan.

III.    ADMINISTRATION  OF  THE  PLAN

        A. The Plan shall be administered by the Board. However, any or all
administrative functions otherwise exercisable by the Board may be delegated to
the Committee. Members of the Committee shall serve for such period of time as
the Board may determine and shall be subject to removal by the Board at any
time. The Board may, at any time, terminate the functions of the Committee and
reassume all powers and authority previously delegated to the Committee.

        B. The Plan Administrator shall have full power and authority (subject
to the provisions of the Plan) to establish such rules and regulations as it may
deem appropriate for proper administration of the Plan and to make such
determinations regarding, and issue such interpretations of, the Plan and any
outstanding options or stock issuances thereunder as it may deem necessary or
advisable. Decisions of the Plan Administrator shall be final and binding on all
parties who have an interest in the Plan or any option grant or stock issuance
thereunder.

IV.     ELIGIBILITY

        A. The persons eligible to participate in the Plan are as follows:

                (i) Employees,

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                (ii) non-Employee members of the Board or the non-Employee
members of the board of directors of any Parent or Subsidiary, and

                (iii) consultants and other independent advisors who provide
services to the Corporation (or any Parent or Subsidiary).

        B. The Plan Administrator shall have full authority to determine (i)
with respect to option grants made under the Option Grant Program, which
eligible persons are to receive such grants, the time or times when those grants
are to be made, the number of shares to be covered by each such grant, the
status of the granted option as either an Incentive Option or a Non-Statutory
Option, the time or times when each option is to become exercisable, the vesting
schedule (if any) applicable to the option shares and the maximum term for which
the option is to remain outstanding and (ii) with respect to stock issuances
made under the Stock Issuance Program, which eligible persons are to receive
such issuances, the time or times when those issuances are to be made, the
number of shares to be issued to each Participant, the vesting schedule (if any)
applicable to the issued shares and the consideration to be paid by the
Participant for such shares.

        C. The Plan Administrator shall have the absolute discretion either to
grant options in accordance with the Option Grant Program or to effect stock
issuances in accordance with the Stock Issuance Program.

V.STOCK  SUBJECT  TO  THE  PLAN

        A. The stock issuable under the Plan shall be shares of authorized but
unissued or reacquired Common Stock. The maximum number of shares of Common
Stock which may be issued over the term of the Plan shall not exceed that number
of shares equal to 20% of the total shares of Common Stock (with all convertible
preferred stock, convertible debt securities, warrants, options and other
convertible securities that are exercisable, being counted on an as-converted
basis) which are issued and outstanding at the time the calculation is made;
provided, however, in no event shall the maximum number of shares of Common
Stock which may be issued over the term of the plan as Incentive Option exceed
20,000,000 shares; provided further, however, that at no time shall the total
number of shares issuable upon exercise of all outstanding options and the total
number of shares provided for under the Plan exceed the applicable percentage as
calculated in accordance with the conditions and exclusions of Section
260.140.45 of the California Code of Regulations, based on the shares of the
Corporation which are outstanding at the time the calculation is made.

        B. Shares of Common Stock subject to outstanding options shall be
available for subsequent issuance under the Plan to the extent (i) such options
expire or terminate for any reason prior to exercise in full or (ii) such
options are cancelled in accordance with the cancellation and regrant provisions
set forth in Section IV of Article Two hereof. Unvested shares issued under the
Plan and subsequently repurchased by the Corporation pursuant to the
Corporation's repurchase rights under the Plan shall be added back to the number
of shares of Common Stock reserved for issuance under the Plan and shall
accordingly be available for reissuance through one or more subsequent option
grants or direct stock issuances under the Plan.

        C. Should any change be made to the Common Stock by reason of any
stock split, stock dividend, recapitalization, combination of shares, exchange
of shares or other change affecting the outstanding Common Stock as a class
without the Corporation's receipt of consideration, appropriate adjustments
shall be made by the Plan Administrator to (i) the maximum number and/or class
of securities issuable under the Plan and (ii) the number and/or class of
securities and the exercise price per share in effect under each outstanding
option in order to prevent the dilution or enlargement of benefits thereunder.
Any such adjustments shall be final, binding and conclusive. In no event shall
any such adjustments be made in connection with the conversion of one or more

<PAGE>

outstanding shares of the Corporation's preferred stock into shares of Common
Stock.

VI.  PERFORMANCE-BASED  AWARDS

     Certain awards, options or issuances ("Benefits") granted under the Plan
may be granted in a manner such that the Benefits qualify for the performance
based compensation exemption of Section 162(m) of the Code ("Performance-Based
Awards"). As determined by the Plan Administrator in its sole discretion, either
the granting or vesting of such Performance-Based Awards are to be based upon
one or more of the following factors: net sales, pretax income before allocation
of corporate overhead and bonus, budget, earnings per share, net income,
division, group or financial goals, return on stockholders' equity, return on
assets, attainment of strategic and operational initiatives, appreciation in
and/or maintenance of the price of the Common Stock or any other publicly-traded
securities of the Company, market share, gross profits, earnings before interest
and taxes, earnings before interest, taxes, dividends and amortization, economic
value-added models and comparisons with various stock market indices, reductions
in costs or any combination of the foregoing. With respect to Performance-Based
Awards, (i) the Plan Administrator shall establish in writing (x) the objective
performance-based goals applicable to a given period and (y) the individual
employees or class of employees to which such performance-based goals apply no
later than 90 days after the commencement of such period (but in no event after
25% of such period has elapsed), (ii) no Performance-Based Awards shall be
payable to or vest with respect to, as the case may be, any participant for a
given period until the Plan Administrator certifies in writing that the
objective performance goals (and any other material terms) applicable to such
period have been satisfied, and (iii) in no event shall the aggregate number of
shares in respect of Performance-Based Awards granted under the Plan in any two
year period to each individual exceed 3,000,000 (without reduction for any
Options granted under Article Two which are not Performance-Based Awards). With
respect to any Benefits intended to qualify as Performance-Based Awards, after
establishment of a performance goal, the Plan Administrator shall not revise
such performance goal or increase the amount of compensation payable thereunder
(as determined in accordance with Section 162(m) of the Code) upon the
attainment of such performance goal. Notwithstanding the preceding sentence, the
Plan Administrator may reduce or eliminate the number of shares of Common Stock
or cash granted or the number of shares of Common Stock vested upon the
attainment of such performance goal.

                                  ARTICLE TWO

                              OPTION GRANT PROGRAM

I.   OPTION  TERMS

     Each option shall be evidenced by one or more documents in the form
approved by the Plan Administrator; provided, however, that each such document
shall comply with the terms specified below; provided further, however, in no
event shall the aggregate number of shares in respect of Options granted under
the Plan in any two year period to each individual exceed 15,000,000. In
addition, each document evidencing an Incentive Option shall be subject to the
provisions of the Plan applicable to such options.

        A. EXERCISE PRICE.

           1. The exercise price per share under an Option shall be
fixed by the Plan Administrator and, in the case of an Incentive Option, shall
be in accordance with the following provisions:

                (i) The exercise price per share shall not be less than
100 percent of the Fair Market Value per share of Common Stock on the
option grant date.

<PAGE>

                (ii) If the Optionee is a 10% Stockholder, then the
exercise price per share shall not be less than 110 percent of the Fair
Market Value per share of Common Stock on the option grant date.

        2. The exercise price shall become immediately due upon
exercise of the option and shall, subject to the provisions of Section I of
Article Four hereof and the documents evidencing the option, be payable in cash
or check made payable to the Corporation. Should the Common Stock be registered
under Section 12 of the 1934 Act at the time the option is exercised, the
exercise price may also be paid as follows:

                (i) in shares of Common Stock held for the requisite
period necessary to avoid a charge to the Corporation's earnings for
financial reporting purposes and valued at Fair Market Value on the
Exercise Date, or

                (ii) to the extent the option is exercised for vested
shares of Common Stock, through a special sale and remittance procedure
pursuant to which the Optionee shall concurrently provide irrevocable
instructions (A) to a Corporation-designated brokerage firm to effect the
immediate sale of the purchased shares and remit to the Corporation, out of
the sale proceeds available on the settlement date, sufficient funds to
cover the aggregate exercise price payable for the purchased shares plus
all applicable federal, state and local income and employment taxes
required to be withheld by the Corporation by reason of such exercise and
(B) to the Corporation to deliver the certificates for the purchased shares
directly to such brokerage firm in order to complete the sale.

        Except to the extent such sale and remittance procedure is utilized,
payment of the exercise price for the purchased shares must be made on the
Exercise Date.

        B.  EXERCISE AND TERM OF OPTIONS. Each option shall be exercisable at
such time or times, during such period and for such number of shares as shall be
determined by the Plan Administrator and set forth in the documents evidencing
the option grant. However, no option shall have a term in excess of ten years
measured from the option grant date.

        C.  EFFECT  OF  TERMINATION OF SERVICE OR DEATH.

            1. The following provisions shall govern the exercise of any
options held by the Optionee at the time of cessation of Service or death:

              (i) Should the Optionee cease to remain in Service for
any reason other than death, Disability or Misconduct, then the Optionee
shall have a period of three months following the date of such cessation of
Service during which to exercise each outstanding option held by such
Optionee. Upon such cessation of Service, the option shall immediately
terminate and cease to be outstanding with respect to any and all option
shares which are not, at the time, exercisable or otherwise vested.

              (ii) Should Optionee's Service terminate by reason of
Disability while holding an outstanding option, the vesting of such option
will thereupon accelerate and all of the unvested option shares subject
thereto will immediately vest and become exercisable. The Optionee shall
have a period of 12 months following the date of such termination of
Service during which to exercise each outstanding option held by such
Optionee.

             (iii) If the Optionee dies while holding an outstanding
option, the vesting of such option will thereupon accelerate and all of the
unvested option shares subject thereto will immediately vest and become
exercisable. The personal representative of the Optionee's estate or the
person or persons to whom the option is transferred pursuant to the

<PAGE>

Optionee's will or the applicable laws of inheritance or the Optionee's
designated beneficiary or beneficiaries of that option shall have a period of 12
months following the date of the Optionee's death to exercise such option.

          (iv) Under no circumstances, however, shall any such option be
exercisable after the specified expiration of the option term.

          (v) Upon the expiration of the applicable exercise period or (if
earlier) upon the expiration of the option term, the option shall terminate and
cease to be outstanding for any vested shares for which the option has not been
exercised.

          (vi) Should Optionee's Service be terminated for Misconduct or should
the Optionee otherwise engage in Misconduct while holding one or more
outstanding options under the Plan, then all options held by such Optionee
(whether or not vested) shall terminate immediately and cease to remain
outstanding.

       2. The Plan Administrator shall have the discretion, exercisable either
at the time an option is granted or at any time while the option remains
outstanding, to:

          (i) extend the period of time during which such option will be
exercisable following the Optionee's cessation of Service (including death) from
the period otherwise in effect for that option to such greater period of time as
the Plan Administrator shall deem appropriate, but in no event beyond the
expiration of the option term, and/or

          (ii) permit the option to be exercised, during the applicable
post-Service exercise period, not only with respect to the number of vested
shares of Common Stock for which such option is exercisable at the time of the
Optionee's cessation of Service but also with respect to any unvested shares
which would have vested under the option had the Optionee continued in Service.

     D.  STOCKHOLDER RIGHTS. An Optionee shall have no stockholder rights
with respect to the shares subject to the option until such Optionee shall have
exercised the option with respect to such shares, paid the aggregate exercise
price therefor and become the record holder of such purchased shares.

     E.  UNVESTED SHARES. The Plan Administrator shall have the discretion to
grant options, which are exercisable for unvested shares of Common Stock. Should
the Optionee have exercised his or her right to purchase such unvested shares
("Exercised Unvested Shares") and then cease to remain in Service for any reason
other than death or Disability while holding such Exercised Unvested Shares, the
Corporation shall have the right to repurchase, at the exercise price paid per
share, any or all of those Exercised Unvested Shares. The terms upon which such
repurchase right shall be exercisable (including the period and procedure for
exercise and the appropriate vesting schedule for the purchased shares) shall be
established by the Plan Administrator and set forth in the document evidencing
such repurchase right. However, the number of Exercised Unvested Shares that may
be repurchased pursuant to such repurchase right shall be reduced at a rate not
less than 20 percent per year from the date of the grant. If the Corporation
elects to exercise this repurchase right, such right must be exercised within 90
days of the cessation of Service date or the Exercise Date, whichever is later.
With respect to options granted to Employees (other than officers of the
Corporation or any Parent or Subsidiary, as the case may be), the Plan
Administrator may not impose a vesting schedule upon any option grant or any
shares of Common Stock subject to that option which (i) restricts the number of
shares vesting per year to less than 20 percent of the total number of shares
subject to such option or (ii) provides that the initial vesting shall occur
later than one year after the option grant date.

<PAGE>

     F.  LIMITED TRANSFERABILITY OF OPTIONS. An Incentive Option shall be
exercisable only by the Optionee during his or her lifetime and shall not be
assignable or transferable, other than by will or by the applicable laws of
inheritance following the Optionee's death. A Non-Statutory Option may be
assigned in whole or in part during the Optionee's lifetime to one or more
members of the Optionee's family or to a trust established exclusively for one
or more such family members or to an Optionee's former spouse, to the extent
such assignment is in connection with the Optionee's estate plan or pursuant to
a domestic relations order. The assigned portion of a Non-Statutory Option may
only be exercised by the person or persons who acquire a proprietary interest in
such Non-Statutory Option pursuant to the assignment. The terms applicable to
the assigned portion of a Non-Statutory Option shall be the same as those in
effect for the option immediately prior to such assignment and shall be set
forth in such documents issued to the assignee as the Plan Administrator may
deem appropriate. Notwithstanding the foregoing, the Optionee may also designate
one or more persons as the beneficiary or beneficiaries of his or her
outstanding options under the Plan, and those options shall, in accordance with
such designation, automatically be transferred to such beneficiary or
beneficiaries upon the Optionee's death. Such beneficiary or beneficiaries shall
take the transferred options subject to all the terms and conditions of the
applicable agreement evidencing each such transferred option, including (without
limitation) the limited time period during which the option may be exercised
following the Optionee's death (as discussed above).

     G.  OPTIONS AND RIGHTS IN SUBSTITUTION FOR STOCK OPTIONS GRANTED BY OTHER
CORPORATIONS. Options may be granted under the Plan from time to time in
substitution for stock options held by individuals employed by, or otherwise
provided services to, corporations if such individuals become eligible persons
under the Plan as a result of a merger or consolidation of any such corporation
with the Corporation or any Subsidiary, or the acquisition by the Corporation or
a Subsidiary of the assets of any such corporation, or the acquisition by the
Corporation or a Subsidiary of stock of any such corporation with the result
that such corporation becomes a Subsidiary.

II.  INCENTIVE  OPTIONS

     The terms specified below shall be applicable to all Incentive Options.
Except as modified by the provisions of this Section II, all the provisions of
Articles One, Two and Four hereof shall be applicable to Incentive Options.
Options which are not designated by the Board, or which do not otherwise
qualify, as Incentive Options shall not be subject to the terms of this Section
II.

     A.  ELIGIBILITY. Incentive Options may only be granted to Employees.

     B.  EXERCISE PRICE. The exercise price per share of Common Stock that
may be acquired under an Incentive Option shall not be less than 100 percent of
the Fair Market Value per share of Common Stock on the option grant date.

     C.  DOLLAR LIMITATION. The aggregate Fair Market Value of the shares of
Common Stock (determined as of the respective date or dates of grant) for which
one or more options granted to any Employee under the Plan (or any other option
plan of the Corporation or any Parent or Subsidiary) may for the first time
become exercisable as Incentive Options during any one calendar year shall not
exceed the sum of $100,000. To the extent the Employee holds two or more such
options which become exercisable for the first time in the same calendar year,
the foregoing limitation on the exercisability of such options as Incentive
Options shall be applied on the basis of the order in which such options are
granted.

     D.  10% STOCKHOLDER. If any Employee to whom an Incentive Option is granted
is a 10% Stockholder, then the option term shall not exceed five years measured
from the option grant date.

<PAGE>

III. CORPORATE  TRANSACTION

     A. In the event of a Corporate Transaction, any or all outstanding options
under the Plan may be assumed, converted or replaced by the successor
corporation, or parent thereof, in the Corporate Transaction (the "Successor
Corporation"), which assumption, conversion or replacement will be binding on
all Optionees. In the alternative, the Successor Corporation may substitute
equivalent options or provide substantially similar consideration to Optionees
as was provided to stockholders of the Corporation in the Corporate Transaction
(after taking into account the existing provisions of the options under the
Plan). The Successor Corporation may also issue, in place of outstanding shares
of Common Stock held by the Optionee, substantially similar shares or other
property subject to repurchase restrictions and other provisions no less
favorable to the Optionee than those which applied to such outstanding shares
immediately prior to the Corporate Transaction. In the event the Successor
Corporation does not assume the options under the Plan or substitute new options
therefor, as provided above, then, notwithstanding any other provision in this
Plan to the contrary, in addition to the number of shares then vested with
respect to any outstanding option, the vesting of such option will accelerate
and all of the unvested option shares subject thereto will vest and become
exercisable, prior to the consummation of such Corporate Transaction, at such
times and subject to such terms and conditions as the Plan Administrator shall
determine and, if such options are not exercised prior to the consummation of
the Corporate Transaction, they shall terminate upon such consummation in
accordance with the provisions of this Plan.

     B. Subject to any rights granted to Optionees under the foregoing
provisions of this Plan, in the event of the occurrence of a Corporate
Transactio, any outstanding options will be treated as provided in the
definitive agreement or agreements applicable to the Corporate Transaction.

     C. The portion of any Incentive Option accelerated in connection with a
Corporate Transaction shall remain exercisable as an Incentive Option only to
the extent the dollar limitation discussed in Section IIC of Article Two above
is not exceeded. To the extent such dollar limitation is exceeded, the
accelerated portion of such option shall be exercisable as a Non-Statutory
Option.

     D. The grant of options under the Plan shall in no way affect the right of
the Corporation 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.

IV.  CANCELLATION  AND  REGRANT  OF  OPTIONS

     The Plan Administrator shall have the authority to effect, at any time and
from time to time, with the consent of the affected option holders, the
cancellation of any or all outstanding options under the Plan and to grant, in
substitution therefor, new options covering the same or a different number of
shares of Common Stock but with an exercise price per share based on the Fair
Market Value per share of Common Stock on the new option grant date.

                                 ARTICLE THREE

                             STOCK ISSUANCE PROGRAM

I. STOCK  ISSUANCE  TERMS

     Shares of Common Stock may be issued under the Stock Issuance Program
through direct and immediate issuances without any intervening option grants.
Each such stock issuance shall be evidenced by a Stock Issuance Agreement, which
complies with the terms specified below.

<PAGE>

     A. PURCHASE PRICE.

     Subject to the provisions of Section I of Article Four hereof, shares of
Common Stock may be issued under the Stock Issuance Program for any of the
following forms of consideration to the extent that the Plan Administrator shall
deem it appropriate in each applicable instance:

          (i) cash or check made payable to the Corporation or

          (ii) past services rendered to the Corporation (or any Parent or
Subsidiary).

     B. VESTING PROVISIONS.

               1. Shares of Common Stock issued under the Stock Issuance Program
may, in the discretion of the Plan Administrator, be fully and immediately
vested upon issuance or may vest in one or more installments over the
Participant's period of Service or upon attainment of specified performance
objectives; provided, however, that with respect to such shares issued to
Employees (other than officers of the Corporation or any Parent or Subsidiary,
as the case may be), the Plan Administrator may not impose a vesting schedule
which (i) restricts the number of shares vesting per year to less than 20
percent of the total number of shares relating to such issuance or (ii) provides
that the initial vesting shall occur later than one year after the issuance
date.

               2. Any new, substituted or additional securities or other
property (including money paid other than as a regular cash dividend) which the
Participant may have the right to receive with respect to the Participant's
unvested shares of Common Stock by reason of any stock dividend, stock split,
recapitalization, combination of shares, exchange of shares or other change
affecting the outstanding Common Stock, as a class, without the Corporation's
receipt of consideration shall be issued subject to (i) the same vesting
requirements applicable to the Participant's unvested shares of Common Stock and
(ii) such escrow arrangements as the Plan Administrator shall deem appropriate.

               3. The Participant shall have full stockholder rights with
respect to any shares of Common Stock issued to the Participant under the Stock
Issuance Program, whether or not the Participant's interest in those shares is
vested. Accordingly, the Participant shall have the right to vote such shares
and to receive any regular cash dividends paid on such shares.

               4. Should the Participant cease to remain in Service for any
reason other than death or Disability while holding one or more unvested shares
of Common Stock issued under the Stock Issuance Program or should the
performance objectives not be attained with respect to one or more such unvested
shares of Common Stock, then those shares shall be immediately surrendered to
the Corporation for cancellation, and the Participant shall have no further
stockholder rights with respect to those shares. To the extent the surrendered
shares were previously issued to the Participant for consideration paid in cash
or cash equivalents (including purchase-money indebtedness), the Corporation
shall repay to the Participant an amount equal to the consideration paid in cash
or cash equivalents for the surrendered shares and shall cancel the unpaid
principal balance of any outstanding purchase-money indebtedness of the
Participant attributable to such surrendered shares.

               5. Should the Participant cease to remain in Service due to death
or Disability while holding one or more unvested shares of Common Stock issued
under the Stock Issuance Program, then upon such cessation vesting of those
shares will accelerate and all of the unvested shares will immediately vest.

               6. The Plan Administrator may, in its discretion, waive

<PAGE>

the surrender and cancellation of one or more unvested shares of Common Stock
(or other assets attributable thereto) which would otherwise occur upon the
non-completion of the vesting schedule applicable to those shares. Such waiver
shall result in the immediate vesting of the Participant's interest in the
shares of Common Stock as to which the waiver applies. Such waiver may be
effected at any time, whether before or after the Participant's cessation of
Service or the attainment or non-attainment of the applicable performance
objectives.

II.  CORPORATE TRANSACTION

        Upon the occurrence of a Corporate Transaction, all outstanding
repurchase rights of the Corporation under the Stock Issuance Program shall
terminate automatically, and the shares of Common Stock subject to those
terminated rights shall immediately vest in full, except to the extent that: (i)
those repurchase rights are assigned to the successor corporation (or parent
thereof) in connection with such Corporate Transaction or (ii) such accelerated
vesting is precluded by other limitations imposed by the Plan Administrator at
the time such repurchase rights are acquired by the Corporation.

III. SHARE ESCROW/LEGENDS

        Unvested shares may, in the Plan Administrator's discretion, be held
in escrow by the Corporation until the Participant's interest in such shares
vests or may be issued directly to the Participant with restrictive legends on
the certificates evidencing those unvested shares.

                                  ARTICLE FOUR

                                 MISCELLANEOUS

I.   FINANCING

        The Plan Administrator may permit any Optionee or Participant to pay
the option exercise price under the Option Grant Program or the purchase price
for shares issued under the Stock Issuance Program by delivering a
full-recourse, interest bearing promissory note payable in one or more
installments and secured by the purchased shares. However, any promissory note
delivered by a consultant must be secured by collateral other than the purchased
shares of Common Stock. In no event may the principal amount of any such
promissory note exceed the sum of (i) the aggregate option exercise price or
purchase price payable for the purchased shares plus (ii) any federal, state and
local income and employment tax liability incurred by the Optionee or the
Participant in connection with the option exercise or share purchase.

II.  EFFECTIVE  DATE  AND  TERM  OF  PLAN

        A.  The Plan shall become effective when adopted by the Board, but no
option granted under the Plan may be exercised, and no shares shall be issued
under the Plan, until the Plan is approved by the Corporation's stockholders. If
such stockholder approval is not obtained within 12 months after the date of the
Board's adoption of the Plan, then all options previously granted under the Plan
shall terminate and cease to be outstanding, and no further options shall be
granted and no shares shall be issued under the Plan. Subject to such
limitation, the Plan Administrator may grant options and issue shares under the
Plan at any time after the effective date of the Plan and before the date fixed
herein for termination of the Plan.

        B.  The Plan shall terminate upon the earliest of (i) the expiration of
the ten-year period measured from the date the Plan is adopted by the Board,
(ii) the date on which all shares available for issuance under the Plan shall
have been issued as vested shares or (iii) the termination of all outstanding
options in connection with a Corporate Transaction. All options and unvested
stock issuances outstanding at the time of a clause (i) termination event shall

<PAGE>

continue to have full force and effect in accordance with the provisions of the
documents evidencing those options or issuances.

III. AMENDMENT  OF  THE  PLAN

        A.  The Board shall have complete and exclusive power and authority to
amend or modify the Plan in any or all respects; provided, however, that no such
amendment or modification shall adversely affect the rights and obligations with
respect to any option or unvested stock issuance, at the time outstanding under
the Plan, unless the Optionee holding such option or the Participant holding
such stock consents to such amendment or modification. In addition, certain
amendments may require stockholder approval pursuant to applicable laws and
regulations.

        B.  Options may be granted under the Option Grant Program and shares
may be issued under the Stock Issuance Program which are, in each instance, in
excess of the number of shares of Common Stock then available for issuance under
the Plan; provided, however, that any excess shares actually issued under such
Programs shall be held in escrow until stockholder approval of an amendment to
the Plan, which sufficiently increases the number of shares of Common Stock
available for issuance under the Plan, is obtained. If such stockholder approval
is not obtained within 12 months after the date the first such excess grant or
issuance is made, then (i) any unexercised options granted on the basis of such
excess shares shall terminate and cease to be outstanding and (ii) the
Corporation shall promptly refund to the Optionees and the Participants the
exercise or purchase price paid for any excess shares issued under the Plan and
held in escrow, together with interest (at the applicable short-term federal
rate) for the period the shares were held in escrow, and such shares shall
thereupon be automatically cancelled and cease to be outstanding.

IV.  WITHHOLDING  AND  REPORTING

        The Corporation's obligation to deliver shares of Common Stock upon
the exercise of any options granted under the Plan or upon the issuance or
vesting of any shares issued under the Plan shall be subject to the satisfaction
of all applicable Federal, state and local income and employment tax withholding
and reporting requirements.

V.   SECURITIES  LAW  AND  OTHER  REGULATORY  COMPLIANCE

        The Plan is intended to comply with Section 25102(o) of the California
Corporations Code, although grants pursuant to Section 25102(f) of such Code, or
any other exemption provided by such Code or the regulations thereunder, may be
made under the Plan. Any provision of the Plan which is inconsistent with
Section 25102(o) shall, without further act or amendment by the Corporation or
the Board, be reformed to comply with the requirements of Section 25102(o). The
Plan is also intended to be a written compensatory benefit plan within the
meaning of Rule 701 promulgated under the Securities Act of 1933, as amended;
however, grants pursuant to any other exemption available under such Act or the
other rules or regulations promulgated thereunder may be made under the Plan. An
award under the Plan will not be effective unless such award is made in
compliance with all applicable federal and state securities laws, rules and
regulations of any governmental body, and the requirements of any stock exchange
or automated quotation system upon which the Common Stock may then be listed or
quoted, as they are in effect on the date of grant of such award and also on the
date of exercise or other issuance relating thereto. Notwithstanding any other
provision in the Plan, the Corporation will have no obligation to issue or
deliver certificates for shares of Common Stock issued under the Plan prior to
(i) obtaining any approvals from governmental agencies that the Corporation
determines are necessary or advisable and (ii) compliance with any exemption,
completion of any registration or other qualification of such shares under any
state or federal law or ruling of any governmental body that the Corporation
determines to be necessary or advisable. The Corporation will be under no
obligation to register the shares under federal securities laws or to effect

<PAGE>

compliance with the exemption, registration, qualification or listing
requirements of any state securities laws, stock exchange or automated quotation
system, and the Corporation will have no liability for any inability or failure
to do so.

VI.  NO  EMPLOYMENT  OR  SERVICE  RIGHTS

        Nothing in the Plan shall confer upon the Optionee or the Participant
any right to continue in Service for any period of specific duration or
interfere with or otherwise restrict in any way the rights of the Corporation
(or any Parent or Subsidiary employing or retaining such person) to terminate
such person's Service at any time for any reason, with or without cause.

VII.  FINANCIAL  REPORTS

        The Corporation shall deliver a balance sheet and an income statement
at least annually to each individual holding an outstanding option under the
Plan, unless such individual is a key Employee whose duties in connection with
the Corporation (or any Parent or Subsidiary) assure such individual access to
equivalent information.

VIII.  CHANGES  IN  COMMON  STOCK

        In the event that the number of outstanding shares of Common Stock is
changed by a stock dividend, recapitalization, stock split, reverse stock split,
subdivision, combination or similar change in the capital structure of the
Corporation without consideration, then the limitations on the number of shares
that may be granted pursuant to this Plan shall be appropriately adjusted as
determined by the Plan Administrator. Notwithstanding the foregoing, no
adjustments shall be made in connection with the reverse stock split being
considered at the Corporation's 2001 annual stockholders' meeting.

IX.  DEFINITIONS

        The following terms shall have the following meanings under the Plan:

        "BOARD" shall mean the Corporation's Board of Directors.

        "CODE" shall mean the Internal Revenue Code of 1986, as amended.

        "COMMITTEE" shall mean a committee of two or more Board members
appointed by the Board to exercise one or more administrative functions under
the Plan.

        "COMMON STOCK" shall mean the Corporation's common stock, par value
$0.01 per share.

        "CORPORATE TRANSACTION" shall mean any of the following transactions
to which the Corporation is a party:

                (i) a merger or consolidation as a result of which
        stockholders of the Corporation immediately prior to such merger or
        consolidation hold less than a majority of the voting power of the
        surviving corporation of such merger or consolidation, or

                (ii) the sale or transfer of at least a majority of the
        voting power of the Corporation in a single transaction or a series of
        related transactions, or

                (iii) the sale, transfer or other disposition of all or
        substantially all of the assets of the Corporation as a going concern in
        a single transaction or series of related transactions.

        "CORPORATION" shall mean Vsource, Inc., a Delaware corporation, and

<PAGE>

any successor corporation thereto which shall, by appropriate action, adopt the
Plan.

        "DISABILITY" shall mean the inability of the Optionee or the
Participant, in the opinion of a qualified physician acceptable to the
Corporation, to perform the major duties of the Optionee's position with the
Corporation because of the sickness or injury of the Optionee.

        "EMPLOYEE" shall mean an individual who is in the employ of the
Corporation (or any Parent or Subsidiary).

        "EXERCISE DATE" shall mean the date on which the Optionee shall have
executed and delivered an appropriate stock purchase agreement, paid the
applicable aggregate exercise price and delivered such other items as may be
requested by the Plan Administrator in connection with any exercise of an
option.

        "FAIR MARKET VALUE" per share of Common Stock on any relevant date
shall be determined in accordance with the following provisions:

        (i)  If the Common Stock is at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be the closing sales price per
share of Common Stock on the date in question, as such price is reported by the
National Association of Securities Dealers on the Nasdaq National Market. If
there is no closing sales price for the Common Stock on the date in question,
then the Fair Market Value shall be the closing sales price on the last
preceding date for which such quotation exists.

        (ii)  If the Common Stock is at the time listed on any Stock
Exchange, then the Fair Market Value shall be the closing sales price per share
of Common Stock on the date in question on the Stock Exchange determined by the
Plan Administrator to be the primary market for the Common Stock, as such price
is officially quoted in the composite tape of transactions on such exchange. If
there is no closing sales price for the Common Stock on the date in question,
then the Fair Market Value shall be the closing sales price on the last
preceding date for which such quotation exists.

        (iii)  If the Common Stock is at the time neither listed on
any Stock Exchange nor traded on the Nasdaq National Market, then the Fair
Market Value shall be determined by the Plan Administrator after taking into
account such factors as the Plan Administrator shall deem appropriate.

        "INCENTIVE  OPTION"  shall  mean  an  option  that  satisfies  the
requirements  of  Code  Section  422.

        "INVOLUNTARY TERMINATION" shall mean the termination of the Service of
any  individual  which  occurs  by  reason  of:

        (i)  such individual's involuntary dismissal or discharge for
reasons other than Misconduct, or

        (ii)  such individual's voluntary resignation following (A) a
change in such individual's reporting relationships, titles, or offices
representing a material reduction in his or her position and status, (B) a
reduction in his or her level of compensation (including base salary, fringe
benefits and target bonus under any corporate-performance based bonus or
incentive programs) by more than 15 percent or (C) a relocation of such
individual's place of employment by more than 50 miles (if in each of cases (A),
(B), and (C) and only if, such change, reduction or relocation is effected
without the individual's consent).

        "MISCONDUCT" shall mean the commission of any act of fraud,
embezzlement or dishonesty by an Optionee or a Participant, any unauthorized use
or disclosure by such person of confidential information or trade secrets of the

<PAGE>

Corporation (or any Parent or Subsidiary), or any other intentional misconduct
by such person which has a material adverse effect on the business or affairs of
the Corporation (or any Parent or Subsidiary). The foregoing definition shall
not be deemed to be inclusive of all the acts or omissions which the Corporation
(or any Parent or Subsidiary) may consider as grounds for the dismissal or
discharge of any Optionee, Participant or other person in the Service of the
Corporation (or any Parent or Subsidiary).

        "1934 ACT" shall mean the Securities Exchange Act of 1934, as amended.

        "NON-STATUTORY OPTION" shall mean an option not intended to satisfy
the requirements of Code Section 422.

        "OPTIONEE" shall mean any person to whom an option is granted under
the Plan.

        "PARENT" shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation if each of such
corporations (other than the Corporation) owns, at the time of the
determination, stock possessing 50 percent or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain.

        "PARTICIPANT" shall mean any person who is issued shares of Common
Stock under the Stock Issuance Program.

        "PLAN" shall mean the Corporation's 2001 Stock Option/Stock Issuance
Plan, as described in this document.

        "PLAN ADMINISTRATOR" shall mean either the Board or the Committee
acting in its capacity as administrator of the Plan.

        "SERVICE" shall mean the provision of services to the Corporation (or
any Parent or Subsidiary) by a person in the capacity of an Employee, a
non-employee member of the Board or a consultant or independent advisor, except
to the extent otherwise specifically provided in the documents evidencing the
option grant.

        "STOCK EXCHANGE" shall mean the American Stock Exchange or the New
York Stock Exchange.

        "STOCK ISSUANCE AGREEMENT" shall mean the agreement entered into by
the Corporation and the Participant at the time of issuance of shares of Common
Stock under the Stock Issuance Program.

        "SUBSIDIARY" shall mean any corporation (other than the Corporation)
in an unbroken chain of corporations beginning with the Corporation, if each of
such corporations other than the last corporation in the such chain owns, at the
time of the determination, stock possessing 50 percent or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

        "10%  STOCKHOLDER"  shall mean the owner of stock (as determined under
Code  Section  424(d))  possessing  more  than ten percent of the total combined
voting  power  of  all  classes  of  stock  of the Corporation (or any Parent or
Subsidiary).

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