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                                                                     Exhibit 4.1

                                  NETGURU, INC.
                             2000 STOCK OPTION PLAN

         1. PURPOSE OF THE PLAN. The purpose of this 2000 Stock Option Plan (the
"Plan") of netGuru, Inc., a Delaware corporation (the "Company"), is to provide
the Company with a means of attracting and retaining the services of highly
motivated and qualified directors and key personnel. The Plan is intended to
advance the interests of the Company by affording to directors and key
employees, upon whose skill, judgment, initiative and efforts the Company is
largely dependent for the successful conduct of its business, an opportunity for
investment in the Company and the incentives inherent in stock ownership in the
Company. In addition, the Plan contemplates the opportunity for investment in
the Company by consultants of the Company and by employees of companies that do
business with the Company. For purposes of this Plan, the term "Company" shall
include subsidiaries of the Company.

         2. LEGAL COMPLIANCE. It is the intent of the Plan that all options
granted under it ("Options") shall be either "Incentive Stock Options" ("ISOs"),
as such term is defined in Section 422 of the Internal Revenue Code of 1986, as
amended ("Code"), or non-qualified stock options ("NQOs"); provided, however,
ISOs shall be granted only to employees of the Company. An Option shall be
identified as an ISO or an NQO in writing in the document or documents
evidencing the grant of the Option. All Options that are not so identified as
ISOs are intended to be NQOs. In addition, the Plan provides for the grant of
NQOs to consultants of the Company and to employees of companies that do
business with the Company. It is the further intent of the Plan that it conform
in all respects with the requirements of Rule 16b-3 of the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended ("Rule
16b-3"). To the extent that any aspect of the Plan or its administration shall
at any time be viewed as inconsistent with the requirements of Rule 16b-3 or, in
connection with ISOs, the Code, such aspect shall be deemed to be modified,
deleted or otherwise changed as necessary to ensure continued compliance with
such provisions.

         3. ADMINISTRATION OF THE PLAN.

                  3.1 PLAN COMMITTEE. The Plan shall be administered by a
committee ("Committee"). The members of the Committee shall be appointed from
time to time by the Board of Directors of the Company ("Board") and shall
consist of not less than two nor more than five persons. Such persons shall be
directors of the Company. Notwithstanding the foregoing, the Board may act as
the Committee at any time and from time to time.

                  3.2 GRANTS OF OPTIONS BY THE COMMITTEE. In accordance with the
provisions of the Plan, the Committee, by resolution, shall select those
eligible persons to whom Options shall be granted ("Optionees"); shall determine
the time or times at which each Option shall be granted, whether an Option is an
ISO or an NQO and the number of shares to be subject to each Option; and shall
fix the time and manner in which the Option may be exercised, the Option
exercise price, and the Option period. The Committee shall determine the form of
option agreement to evidence the foregoing terms and conditions of each Option,
which need not be identical, in the form provided for in SECTION 7. Such option
agreement may include such other provisions as the Committee may deem necessary
or desirable consistent with the Plan, the Code and Rule 16b-3.

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                  3.3 COMMITTEE PROCEDURES. The Committee from time to time may
adopt such rules and regulations for carrying out the purposes of the Plan as it
may deem proper and in the best interests of the Company. The Committee shall
keep minutes of its meetings and records of its actions. A majority of the
members of the Committee shall constitute a quorum for the transaction of any
business by the Committee. The Committee may act at any time by an affirmative
vote of a majority of those members voting. Such vote may be taken at a meeting
(which may be conducted in person or by any telecommunication medium) or by
written consent of Committee members without a meeting.

                  3.4 FINALITY OF COMMITTEE ACTION. The Committee shall resolve
all questions arising under the Plan and option agreements entered into pursuant
to the Plan. Each determination, interpretation, or other action made or taken
by the Committee shall be final and conclusive and binding on all persons,
including, without limitation, the Company, its stockholders, the Committee and
each of the members of the Committee, and the directors, officers and employees
of the Company, including Optionees and their respective successors in interest.

                  3.5 NON-LIABILITY OF COMMITTEE MEMBERS. No Committee member
shall be liable for any action or determination made by him or her in good faith
with respect to the Plan or any Option granted under it.

         4. BOARD POWER TO AMEND, SUSPEND, OR TERMINATE THE PLAN. The Board may,
from time to time, make such changes in or additions to the Plan as it may deem
proper and in the best interests of the Company and its stockholders. The Board
may also suspend or terminate the Plan at any time, without notice, and in its
sole discretion. Notwithstanding the foregoing, no such change, addition,
suspension, or termination by the Board shall (i) materially impair any Option
previously granted under the Plan without the express written consent of the
Optionee; or (ii) materially increase the number of shares subject to the Plan,
materially increase the benefits accruing to Optionees under the Plan,
materially modify the requirements as to eligibility to participate in the Plan
or alter the method of determining the Option exercise price described in
SECTION 8, without stockholder approval.

         5. SHARES SUBJECT TO THE PLAN. For purposes of the Plan, the Committee
is authorized to grant Options for up to 1,000,000 shares of the Company's
common stock ("Common Stock"), or the number and kind of shares of stock or
other securities which, in accordance with SECTION 13, shall be substituted for
such shares of Common Stock or to which such shares shall be adjusted. The
Committee is authorized to grant Options under the Plan with respect to such
shares. Any or all unsold shares subject to an Option which for any reason
expires or otherwise terminates (excluding shares returned to the Company in
payment of the exercise price for additional shares) may again be made subject
to grant under the Plan.

         6. OPTIONEES. Options shall be granted only to officers, directors or
key employees of the Company, consultants of the Company or employees of
companies that do business with the Company designated by the Committee from
time to time as Optionees. Any Optionee may hold more than one Option to
purchase Common Stock, whether such Option is an Option held pursuant to the
Plan or otherwise. An Optionee who is an employee of the Company ("Employee
Optionee") and who holds an Option must remain a continuous full or part-time
(working at least 30 hours per week) employee of the Company from the time of
grant of the Option to him until the time of its exercise, except as provided in
SECTION 10.3.

         7. GRANTS OF OPTIONS. The Committee shall have the sole discretion to
grant Options under the Plan and to determine whether any Option shall be an ISO
or an NQO. The terms and conditions of Options granted under the Plan may differ
from one another as the Committee, in its absolute discretion, shall determine
as long as all Options granted under the Plan satisfy the requirements of the
Plan. Upon determination by the Committee that an Option is to be granted to an
Optionee, a written option agreement evidencing such Option shall be given to
the Optionee, specifying the number of shares subject to the Option, the Option
exercise price, whether the Option is an ISO or an NQO, and the other individual
terms and conditions of such Option. Such option agreement may incorporate

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generally applicable provisions from the Plan, a copy of which shall be provided
to all Optionees at the time of their initial grants under the Plan. The Option
shall be deemed granted as of the date specified in the grant resolution of the
Committee, and the option agreement shall be dated as of the date of such
resolution. Notwithstanding the foregoing, unless the Committee consists solely
of non-employee directors, any Option granted to an executive officer, director
or 10% beneficial owner for purposes of Section 16 of the Securities Exchange
Act of 1934, as amended ("Section 16 of the 1934 Act"), shall either be (a)
conditioned upon the Optionee's agreement not to sell the shares of Common Stock
underlying the Option for at least six months after the date of grant or (b)
approved by the entire Board or by the stockholders of the Company.

         8. OPTION EXERCISE PRICE. The price per share to be paid by the
Optionee at the time an ISO is exercised shall not be less than 100% of the Fair
Market Value (as hereinafter defined) of one share of the optioned Common Stock
on the date on which the Option is granted. No ISO may be granted under the Plan
to any person who, at the time of such grant, owns (within the meaning of
Section 424(d) of the Code) stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or of any parent thereof,
unless the exercise price of such ISO is at least equal to 110% of Fair Market
Value on the date of grant. The price per share to be paid by the Optionee at
the time an NQO is exercised shall not be less than 85% of the Fair Market Value
on the date on which the NQO is granted, as determined by the Committee. For
purposes of the Plan, the "Fair Market Value" of a share of the Company's Common
Stock as of a given date shall be: (i) the closing price of a share of the
Company's Common Stock on the principal exchange on which shares of the
Company's Common Stock are then trading, if any, on the day immediately
preceding such date, or, if shares were not traded on such date, then on the
next preceding trading day during which a sale occurred; or (ii) if the
Company's Common Stock is not traded on an exchange but is quoted on Nasdaq or a
successor quotation system, (1) the last sales price (if the Common Stock is
then listed as a National Market Issue under the Nasdaq National Market System)
or (2) the closing representative bid price (in all other cases) for the Common
Stock on the day immediately preceding such date as reported by Nasdaq or such
successor quotation system; or (iii) if the Company's Common Stock is not
publicly traded on an exchange and not quoted on Nasdaq or a successor quotation
system, the closing bid price for the Common Stock on such date as determined in
good faith by the Committee; or (iv) if the Company's Common Stock is not
publicly traded, the fair market value established by the Committee acting in
good faith. In addition, with respect to any ISO, the Fair Market Value on any
given date shall be determined in a manner consistent with any regulations
issued by the Secretary of the Treasury for the purpose of determining fair
market value of securities subject to an ISO plan under the Code.

         9. CEILING OF ISO GRANTS. The aggregate Fair Market Value (determined
at the time any ISO is granted) of the Common Stock with respect to which an
Optionee's ISOs, together with incentive stock options granted under any other
plan of the Company and any parent, are exercisable for the first time by such
Optionee during any calendar year shall not exceed $100,000. If an Optionee
holds such incentive stock options that become first exercisable (including as a
result of acceleration of exercisability under the Plan) in any one year for
shares having a Fair Market Value at the date of grant in excess of $100,000,
then the most recently granted of such ISOs, to the extent that they are
exercisable for shares having an aggregate Fair Market Value in excess of such
limit, shall be deemed to be NQOs.

         10. DURATION, EXERCISABILITY, AND TERMINATION OF OPTIONS.

                  10.1 OPTION PERIOD. The option period shall be determined by
the Committee with respect to each Option granted. In no event, however, may the
option period exceed ten years from the date on which the Option is granted, or
five years in the case of a grant of an ISO to an Optionee who is a 10%
stockholder at the date on which the Option is granted as described in SECTION
7.

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                  10.2 EXERCISABILITY OF OPTIONS. Each Option shall be
exercisable in whole or in consecutive installments, cumulative or otherwise,
during its term as determined in the discretion of the Committee.

                  10.3 TERMINATION OF OPTIONS DUE TO TERMINATION OF EMPLOYMENT,
DISABILITY, OR DEATH OF OPTIONEE; TERMINATION FOR "CAUSE," OR RESIGNATION IN
VIOLATION OF AN EMPLOYMENT AGREEMENT. All Options granted under the Plan to any
Employee Optionee shall terminate and may no longer be exercised if the Employee
Optionee ceases, at any time during the period between the grant of the Option
and its exercise, to be a full or part-time (working at least 30 hours per week)
employee of the Company; provided, however, that the Committee may alter the
termination date of the Option if the Optionee transfers to an affiliate of the
Company. Notwithstanding the foregoing, (i) if the Employee Optionee's
employment with the Company shall have terminated for any reason (other than
involuntary dismissal for "cause" or voluntary resignation in violation of any
agreement to remain in the employ of the Company, including, without limitation,
any such agreement pursuant to SECTION 14), he may, at any time before the
expiration of three months after such termination or before expiration of the
Option, whichever shall first occur, exercise the Option (to the extent that the
Option was exercisable by him on the date of the termination of his employment);
(ii) if the Employee Optionee's employment shall have terminated due to
disability (as defined in Section 22(e)(3) of the Code and subject to such proof
of disability as the Committee may require), such Option may be exercised by the
Employee Optionee (or by his guardian(s), or conservator(s), or other legal
representative(s)) before the expiration of twelve months after such termination
or before expiration of the Option, whichever shall first occur (to the extent
that the Option was exercisable by him on the date of the termination of his
employment); (iii) in the event of the death of an Optionee, an Option
exercisable by him at the date of his death shall be exercisable by his legal
representative(s), legatee(s), or heir(s), or by his beneficiary or
beneficiaries so designated by him, as the case may be, within twelve months
after his death or before the expiration of the Option, whichever shall first
occur (to the extent that the Option was exercisable by him on the date of his
death); and (iv) if the Employee Optionee's employment is terminated for "cause"
or in violation of any agreement to remain in the employ of the Company,
including, without limitation, any such agreement pursuant to SECTION 14, his
Option shall terminate immediately upon termination of employment, and such
Option shall be deemed to have been forfeited by the Optionee. For purposes of
the Plan, "cause" may include, without limitation, any illegal or improper
conduct (1) which injures or impairs the reputation, goodwill, or business of
the Company; (2) which involves the misappropriation of funds of the Company, or
the misuse of data, information, or documents acquired in connection with
employment by the Company; or (3) which violates any other directive or policy
promulgated by the Company. A termination for "cause" may also include any
resignation in anticipation of discharge for "cause" or resignation accepted by
the Company in lieu of a formal discharge for "cause."

         11. MANNER OF OPTION EXERCISE; RIGHTS AND OBLIGATIONS OF OPTIONEES.

                  11.1 WRITTEN NOTICE OF EXERCISE. An Optionee may elect to
exercise an Option in whole or in part, from time to time, subject to the terms
and conditions contained in the Plan and in the agreement evidencing such
Option, by giving written notice of exercise to the Company at its principal
executive office.

                  11.2 CASH PAYMENT FOR OPTIONED SHARES. If an Option is
exercised for cash, such notice shall be accompanied by a cashier's or personal
check, or money order, made payable to the Company for the full exercise price
of the shares purchased.

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                  11.3 STOCK SWAP FEATURE. At the time of the Option exercise,
and subject to the discretion of the Committee to accept payment in cash only,
the Optionee may determine whether the total purchase price of the shares to be
purchased shall be paid solely in cash or by transfer from the Optionee to the
Company of previously acquired shares of Common Stock, or by a combination
thereof. If the Optionee elects to pay the total purchase price in whole or in
part with previously acquired shares of Common Stock, the value of such shares
shall be equal to their Fair Market Value on the date of exercise, determined by
the Committee in the same manner used for determining Fair Market Value at the
time of grant for purposes of SECTION 8.

                  11.4 INVESTMENT REPRESENTATION FOR NON-REGISTERED SHARES AND
LEGALITY OF ISSUANCE. The receipt of shares of Common Stock upon the exercise of
an Option shall be conditioned upon the Optionee (or any other person who
exercises the Option on his or her behalf as permitted by SECTION 10.3)
providing to the Committee a written representation that, at the time of such
exercise, it is the intent of such person(s) to acquire the shares for
investment only and not with a view toward distribution. The certificate for
unregistered shares issued for investment shall be restricted by the Company as
to transfer unless the Company receives an opinion of counsel satisfactory to
the Company to the effect that such restriction is not necessary under then
pertaining law. The providing of such representation and such restrictions on
transfer shall not, however, be required upon any person's receipt of shares of
Common Stock under the Plan in the event that, at the time of grant of the
Option relating to such receipt or upon such receipt, whichever is the
appropriate measure under applicable federal or state securities laws, the
shares subject to the Option shall be (i) covered by an effective and current
registration statement under the Securities Act of 1933, as amended, and (ii)
either qualified or exempt from qualification under applicable state securities
laws. The Company shall, however, under no circumstances be required to sell or
issue any shares under the Plan if, in the opinion of the Committee, (i) the
issuance of such shares would constitute a violation by the Optionee or the
Company of any applicable law or regulation of any governmental authority, or
(ii) the consent or approval of any governmental body is necessary or desirable
as a condition of, or in connection with, the issuance of such shares.

                  11.5 STOCKHOLDER RIGHTS OF OPTIONEE. Upon exercise, the
Optionee (or any other person who exercises the Option on his behalf as
permitted by SECTION 10.3) shall be recorded on the books of the Company as the
owner of the shares, and the Company shall deliver to such record owner one or
more duly issued stock certificates evidencing such ownership. No person shall
have any rights as a stockholder with respect to any shares of Common Stock
covered by an Option granted pursuant to the Plan until such person shall have
become the holder of record of such shares. Except as provided in SECTION 13, no
adjustments shall be made for cash dividends or other distributions or other
rights as to which there is a record date preceding the date such person becomes
the holder of record of such shares.

                  11.6 HOLDING PERIODS FOR TAX PURPOSES. The Plan does not
provide that an Optionee must hold shares of Common Stock acquired under the
Plan for any minimum period of time. Optionees are urged to consult with their
own tax advisors with respect to the tax consequences to them of their
individual participation in the Plan.

         12. SUCCESSIVE GRANTS. Successive grants of Options may be made to any
Optionee under the Plan.

         13. ADJUSTMENTS.

                        (a) If the outstanding Common Stock shall be hereafter
increased or decreased, or changed into or exchanged for a different number or
kind of shares or other securities of the Company or of another corporation, by
reason of a recapitalization, reclassification, reorganization, merger,
consolidation, share exchange, or other business combination in which the

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Company is the surviving parent corporation, stock split-up, combination of
shares, or dividend or other distribution payable in capital stock or rights to
acquire capital stock, appropriate adjustment shall be made by the Committee in
the number and kind of shares for which Options may be granted under the Plan.
In addition, the Committee shall make appropriate adjustment in the number and
kind of shares as to which outstanding and unexercised Options shall be
exercisable, to the end that the proportionate interest of the holder of the
Option shall, to the extent practicable, be maintained as before the occurrence
of such event. Such adjustment in outstanding Options shall be made without
change in the total price applicable to the unexercised portion of the Option
but with a corresponding adjustment in the exercise price per share.

                        (b) In the event of the dissolution or liquidation of
the Company, any outstanding and unexercised Options shall terminate as of a
future date to be fixed by the Committee.

                        (c) In the event of a Reorganization (as hereinafter
defined), then,

                           (i) If there is no plan or agreement with respect to
the Reorganization ("Reorganization Agreement"), or if the Reorganization
Agreement does not specifically provide for the adjustment, change, conversion,
or exchange of the outstanding and unexercised Options for cash or other
property or securities of another corporation, then any outstanding and
unexercised Options shall terminate as of a future date to be fixed by the
Committee; or

                           (ii) If there is a Reorganization Agreement, and the
Reorganization Agreement specifically provides for the adjustment, change,
conversion, or exchange of the outstanding and unexercised Options for cash or
other property or securities of another corporation, then the Committee shall
adjust the shares under such outstanding and unexercised Options, and shall
adjust the shares remaining under the Plan which are then available for the
issuance of Options under the Plan if the Reorganization Agreement makes
specific provisions therefor, in a manner not inconsistent with the provisions
of the Reorganization Agreement for the adjustment, change, conversion, or
exchange of such Options and shares.

                        (d) The term "reorganization" as used in this SECTION 13
shall mean any reorganization, merger, consolidation, share exchange, or other
business combination pursuant to which the Company is not the surviving parent
corporation after the effective date of the Reorganization, or any sale or lease
of all or substantially all of the assets of the Company. Nothing herein shall
require the Company to adopt a Reorganization Agreement, or to make provision
for the adjustment, change, conversion, or exchange of any options, or the
shares subject thereto, in any Reorganization Agreement which it does adopt.

                        (e) The Committee shall provide to each Optionee then
holding an outstanding and unexercised Option not less than 30 calendar days'
advanced written notice of any date fixed by the Committee pursuant to this
SECTION 13 and of the terms of any Reorganization Agreement providing for the
adjustment, change, conversion, or exchange of outstanding and unexercised
Options. Except as the Committee may otherwise provide, each Optionee shall have
the right during such period to exercise his Option only to the extent that the
Option was exercisable on the date such notice was provided to the Optionee.

                           Any adjustment to any outstanding ISO pursuant to
this SECTION 13, if made by reason of a transaction described in Section 424(a)
of the Code, shall be made so as to conform to the requirements of that Section
and the regulations thereunder. If any other transaction described in Section
424(a) of the Code affects the Common Stock subject to any unexercised ISO
theretofore granted under the Plan (hereinafter for purposes of this SECTION 13
referred to as the "old option"), the Board of Directors of the Company or of
any surviving or acquiring corporation may take such action as it deems
appropriate, in conformity with the requirements of that Code Section and the
regulations thereunder, to substitute a new option for the old option, in order
to make the new option, as nearly as may be practicable, equivalent to the old
option, or to assume the old option.

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                        (f) No modification, extension, renewal, or other change
in any Option granted under the Plan may be made, after the grant of such
Option, without the Optionee's consent, unless the same is permitted by the
provisions of the Plan and the option agreement. In the case of an ISO,
Optionees are hereby advised that certain changes may disqualify the ISO from
being considered as such under Section 422 of the Code, or constitute a
modification, extension, or renewal of the ISO under Section 424(h) of the Code.

                        (g) All adjustments and determinations under this
SECTION 13 shall be made by the Committee in good faith in its sole discretion.

         14. CONTINUED EMPLOYMENT. As determined in the sole discretion of the
Committee at the time of grant and if so stated in a writing signed by the
Company, each Option may have as a condition the requirement of an Employee
Optionee to remain in the employ of the Company, or of its affiliates, and to
render to it his or her exclusive service, at such compensation as may be
determined from time to time by it, for a period not to exceed the term of the
Option, except for earlier termination of employment by or with the express
written consent of the Company or on account of disability or death. The failure
of any Employee Optionee to abide by such agreement as to any Option under the
Plan may result in the termination of all of his or her then outstanding Options
granted pursuant to the Plan. Neither the creation of the Plan nor the granting
of Option(s) under it shall be deemed to create a right in an Employee Optionee
to continued employment with the Company, and each such Employee Optionee shall
be and shall remain subject to discharge by the Company as though the Plan had
never come into existence. Except as specifically provided by the Committee in
any particular case, the loss of existing or potential profit in Options granted
under this Plan shall not constitute an element of damages in the event of
termination of the employment of an employee even if the termination is in
violation of an obligation of the Company to the employee by contract or
otherwise.

         15. TAX WITHHOLDING. The exercise of any Option granted under the Plan
is subject to the condition that if at any time the Company shall determine, in
its discretion, that the satisfaction of withholding tax or other withholding
liabilities under any federal, state or local law is necessary or desirable as a
condition of, or in connection with, such exercise or a later lapsing of time or
restrictions on or disposition of the shares of Common Stock received upon such
exercise, then in such event, the exercise of the Option shall not be effective
unless such withholding shall have been effected or obtained in a manner
acceptable to the Company. When an Optionee is required to pay to the Company an
amount required to be withheld under applicable income tax laws in connection
with the exercise of any Option, the Optionee may, subject to the approval of
the Committee, which approval shall not have been disapproved at any time after
the election is made, satisfy the obligation, in whole or in part, by electing
to have the Company withhold shares of Common Stock having a value equal to the
amount required to be withheld. The value of the Common Stock withheld pursuant
to the election shall be determined by the Committee, in accordance with the
criteria set forth in SECTION 8, with reference to the date the amount of tax to
be withheld is determined. The Optionee shall pay to the Company in cash any
amount required to be withheld that would otherwise result in the withholding of
a fractional share. The election by an Optionee who is an officer of the Company
within the meaning of Section 16 of the 1934 Act, to be effective, must meet all
of the requirements of Section 16 of the 1934 Act.

         16. TERM OF PLAN.

                  16.1 EFFECTIVE DATE. Subject to stockholder approval, the Plan
shall become effective as of June 30, 2000.

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                  16.2 TERMINATION DATE. Except as to Options granted and
outstanding under the Plan prior to such time, the Plan shall terminate at
midnight on June 29, 2010, and no Option shall be granted after that time.
Options then outstanding may continue to be exercised in accordance with their
terms. The Plan may be suspended or terminated at any earlier time by the Board
within the limitations set forth in SECTION 4.

         17. NON-EXCLUSIVITY OF THE PLAN. Nothing contained in the Plan is
intended to amend, modify, or rescind any previously approved compensation
plans, programs or options entered into by the Company. This Plan shall be
construed to be in addition to and independent of any and all such other
arrangements. Neither the adoption of the Plan by the Board nor the submission
of the Plan to the stockholders of the Company for approval shall be construed
as creating any limitations on the power or authority of the Board to adopt,
with or without stockholder approval, such additional or other compensation
arrangements as the Board may from time to time deem desirable.

         18. GOVERNING LAW. The Plan and all rights and obligations under it
shall be construed and enforced in accordance with the laws of the State of
California.

INFORMATION TO OPTIONEES. Optionees under the Plan who do not otherwise have
access to financial statements of the Company will receive the Company's
financial statements at least annually.

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                                                                     Exhibit 4.2

                            RESEARCH ENGINEERS, INC.
                             1997 STOCK OPTION PLAN

         1. PURPOSE OF THE PLAN. The purpose of this 1997 Stock Option Plan
("Plan") of Research Engineers, Inc., a Delaware corporation ("Company"), is to
provide the Company with a means of attracting and retaining the services of
highly motivated and qualified directors and key personnel. The Plan is intended
to advance the interests of the Company by affording to directors and key
employees, upon whose skill, judgment, initiative and efforts the Company is
largely dependent for the successful conduct of its business, an opportunity for
investment in the Company and the incentives inherent in stock ownership in the
Company. in addition, the Plan contemplates the opportunity for investment in
the Company by employees of companies that do business with the Company. For
purposes of this Plan, the term Company shall include subsidiaries, if any, of
the Company.

         2. LEGAL COMPLIANCE. It is the intent of the Plan that all options
granted under it ("Options") shall be either "Incentive Stock Options" ("ISOs"),
as such term is defined in Section 422 of the Internal Revenue Code of 1986, as
amended ("Code"), or non-qualified stock options ("NQOs"); provided, however,
ISOs shall be granted only to employees of the Company. An Option shall be
identified as an ISO or an NQO in writing in the document or documents
evidencing the grant of the Option. All Options that are not so identified as
ISOs are intended to be NQOs. In addition, the Plan provides for the grant of
NQOs to employees of companies that do business with the Company. It is the
further intent of the Plan that it conform in all respects with the requirements
of Rule 16b-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended ("Rule 16b-3"). To the extent that any aspect
of the Plan or its administration shall at any time be viewed as inconsistent
with the requirements of Rule 16b-3 or, in connection with ISOs, the Code, such
aspect shall be deemed to be modified, deleted or otherwise changed as necessary
to ensure continued compliance with such provisions.

         3. ADMINISTRATION OF THE PLAN.

                  3.1 PLAN COMMITTEE. The Plan shall be administered by a
         committee ("Committee"). The members of the Committee shall be
         appointed from time to time by the Board of Directors of the Company
         ("Board") and shall consist of not less than two (2) nor more than five
         (5) persons. Such persons shall be directors of the Company.

                  3.2 GRANTS OF OPTIONS BY THE COMMITTEE. In accordance with the
         provisions of the Plan, the Committee, by resolution, shall select
         those eligible persons to whom Options shall be granted ("Optionees");
         shall determine the time or times at which each Option shall be
         granted, whether an Option is an ISO or an NQO and the number of shares
         to be subject to each Option; and shall fix the time and manner in
         which the Option may be exercised, the Option exercise price, and the
         Option period. The Committee shall determine the form of option
         agreement to evidence the foregoing terms and conditions of each
         Option, which need not be identical, in the form provided for in
         Section 7. Such option agreement may include such other provisions as
         the Committee may deem necessary or desirable consistent with the Plan,
         the Code and Rule 16b-3.

                                      -1-

<PAGE>

                  3.3 COMMITTEE PROCEDURES. The Committee from time to time may
         adopt such rules and regulations for carrying out the purposes of the
         Plan as it may deem proper and in the best interests of the Company.
         The Committee shall keep minutes of its meetings and records of its
         actions. A majority of the members of the Committee shall constitute a
         quorum for the transaction of any business by the Committee. The
         Committee may act at any time by an affirmative vote of a majority of
         those members voting. Such vote may be taken at a meeting (which may be
         conducted in person or by any telecommunication medium) or by written
         consent of Committee members without a meeting.

                  3.4 FINALITY OF COMMITTEE ACTION. The Committee shall resolve
         all questions arising under the Plan and option agreements entered into
         pursuant to the Plan. Each determination, interpretation, or other
         action made or taken by the Committee shall be final and conclusive and
         binding on all persons, including, without limitation, the Company, its
         shareholders, the Committee and each of the members of the Committee,
         and the directors, officers and employees of the Company, including
         Optionees and their respective successors in interest.

                  3.5 NON-LIABILITY OF COMMITTEE MEMBERS. No Committee member
         shall be liable for any action or determination made by him or her in
         good faith with respect to the Plan or any Option granted under it.

         4. BOARD POWER TO AMEND, SUSPEND, OR TERMINATE THE PLAN. The Board may,
from time to time, make such changes in or additions to the Plan as it may deem
proper and in the best interests of the Company and its shareholders. The Board
may also suspend or terminate the Plan at any time, without notice, and in its
sole discretion. Notwithstanding the foregoing, no such change, addition,
suspension, or termination by the Board shall (i) materially impair any option
previously granted under the Plan without the express written consent of the
optionee; or (ii) materially increase the number of shares subject to the Plan,
materially increase the benefits accruing to optionees under the Plan,
materially modify the requirements as to eligibility to participate in the Plan
or alter the method of determining the option exercise price described in
Section 8, without shareholder approval.

         5. SHARES SUBJECT TO THE PLAN. For purposes of the Plan, the Committee
is authorized to grant Options for up to 300,000 shares of the Company's common
stock ("Common Stock"), or the number and kind of shares of stock or other
securities which, in accordance with Section 13, shall be substituted for such
shares of Common Stock or to which such shares shall be adjusted. The Committee
is authorized to grant Options under the Plan with respect to such shares. Any
or all unsold shares subject to an Option which for any reason expires or
otherwise terminates (excluding shares returned to the Company in payment of the
exercise price for additional shares) may again be made subject to grant under
the Plan.

         6. OPTIONEES. Options shall be granted only to officers, directors or
key employees of the Company or employees of companies that do business with the
Company designated by the Committee from time to time as Optionees. Any Optionee
may hold more than one option to purchase Common Stock, whether such option is
an Option held pursuant to the Plan or otherwise. An Optionee who is an employee
of the Company ("Employee Optionee") and who holds an Option must remain a
continuous full or part-time employee of the Company from the time of grant of
the Option to him until the time of its exercise, except as provided in Section
10.3.

         7. GRANTS OF OPTIONS. The Committee shall have the sole discretion to
grant Options under the Plan and to determine whether any Option shall be an ISO
or an NQO. The terms and conditions of Options granted under the Plan may differ
from one another as the Committee, in its absolute discretion, shall determine
as long as all Options granted under the Plan satisfy the requirements of the
Plan. Upon determination by the Committee that an Option is to be granted to an
Optionee, a written option agreement evidencing such Option shall be given to
the Optionee, specifying the number of shares subject to the Option, the Option

                                      -2-

<PAGE>

exercise price, whether the Option is an ISO or an NQO, and the other individual
terms and conditions of such Option. Such option agreement may incorporate
generally applicable provisions from the Plan, a copy of which shall be provided
to all Optionees at the time of their initial grants under the Plan. The Option
shall be deemed granted as of the date specified in the grant resolution of the
Committee, and the option agreement shall be dated as of the date of such
resolution. Notwithstanding the foregoing, unless the Committee consists solely
of non-employee directors, any Option granted to an executive officer, director
or 10% beneficial owner for purposes of Section 16 of the Securities Exchange
Act of 1 934, as amended ("Section 16 of the 1934 Act"), shall either be (a)
conditioned upon the Optionee's agreement not to sell the shares of Common Stock
underlying the Option for at least six (6) months after the date of grant or (b)
approved by the entire Board or by the shareholders of the Company.

         8. OPTION EXERCISE PRICE. The price per share to be paid by the
Optionee at the time an ISO is exercised shall not be less than one hundred
percent (100/o) of the Fair Market Value (as hereinafter defined) of one share
of the optioned Common Stock on the date on which the Option is granted. No ISO
may be granted under the Plan to any person who, at the time of such grant, owns
(within the meaning of Section 424(d) of the Code) stock possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Company or of any parent thereof, unless the exercise price of such ISO is
at least equal to one hundred and ten percent (110%) of Fair Market Value on the
date of grant. The price per share to be paid by the Optionee at the time an NQO
is exercised shall not be less than eighty-five percent (85%) of the Fair Market
Value on the date on which the NQO is granted, as determined by the Committee.
For purposes of the Plan, the "Fair Market Value" of a Share of the Company's
Common Stock as of a given date shall be: (i) the closing price of a share of
the Company's Common Stock on the principal exchange on which shares of the
Company's Common Stock are then trading, if any, on the day immediately
preceding such date, or, if shares were not traded on such date, then on the
next preceding trading day during which a sale occurred; or (ii) if the
Company's Common Stock is not traded on an exchange but is quoted on Nasdaq or a
successor quotation system, (1) the last sales price (if the Common Stock is
then listed as a National Market Issue under the Nasdaq National Market System)
or (2) the closing representative bid price (in all other cases) for the Common
Stock on the day immediately preceding such date as reported by Nasdaq or such
successor quotation system; or (iii) if the Company's Common Stock is not
publicly traded on an exchange and not quoted on Nasdaq or a successor quotation
system, the closing bid price for the Common Stock on such date as determined in
good faith by the Committee; or (iv) if the Company's Common Stock is not
publicly traded, the fair market value established by the Committee acting in
good faith. In addition, with respect to any ISO, the Fair Market Value on any
given date shall be determined in a manner consistent with any regulations
issued by the Secretary of the Treasury for the purpose of determining fair
market value of securities subject to an ISO plan under the Code.

         9. CEILING OF ISO GRANTS. The aggregate Fair Market Value (determined
at the time any ISO is granted) of the Common Stock with respect to which an
Optionee's ISOs, together with incentive stock options granted under any other
plan of the Company and any parent, are exercisable for the first time by such
Optionee during any calendar year shall not exceed $100,000. If an Optionee
holds such incentive stock options that become first exercisable (including as a
result of acceleration of exercisability under the Plan) in any one year for
shares having a Fair Market Value at the date of grant in excess of $100,000,
then the most recently granted of such ISOs, to the extent that they are
exercisable for shares having an aggregate Fair Market Value in excess of such
limit, shall be deemed to be NQOs.

         10. DURATION, EXERCISABILITY, AND TERMINATION OF OPTIONS.

                  10.1 OPTION PERIOD. The option period shall be determined by
         the Committee with respect to each Option granted. In no event,
         however, may the option period exceed ten (10) years from the date on
         which the Option is granted, or five (5) years in the case of a grant
         of an ISO to an Optionee who is a ten percent (10%) shareholder at the
         date on which the Option is granted as described in Section 8.

                                      -3-

<PAGE>

                  10.2 EXERCISABILITY OF OPTIONS. Each Option shall be
         exercisable in whole or in consecutive installments, cumulative or
         otherwise, during its term as determined in the discretion of the
         Committee.

                  10.3 TERMINATION OF OPTIONS DUE TO TERMINATION OF EMPLOYMENT,
         DISABILITY, OR DEATH OF OPTIONEE; TERMINATION FOR "CAUSE", OR
         RESIGNATION IN VIOLATION OF AN EMPLOYMENT AGREEMENT. All Options
         granted under the Plan to any Employee Optionee shall terminate and may
         no longer be exercised if the Employee Optionee ceases, at any time
         during the period between the grant of the Option and its exercise, to
         be an employee of the Company; provided, however, that the Committee
         may alter the termination date of the Option if the Optionee transfers
         to an affiliate of the Company. Notwithstanding the foregoing, (i) if
         the Employee Optionee's employment with the Company shall have
         terminated for any reason (other than involuntary dismissal for "cause"
         or voluntary resignation in violation of any agreement to remain in the
         employ of the Company, including, without limitation, any such
         agreement pursuant to Section 15), he may, at any time before the
         expiration of three (3) months after such termination or before
         expiration of the Option, whichever shall first occur, exercise the
         Option (to the extent that the Option was exercisable by him on the
         date of the termination of his employment); (ii) if the Employee
         Optionee's employment shall have terminated due to disability (as
         defined in Section 22(e)(3) of the Code and subject to such proof of
         disability as the Committee may require), such Option may be exercised
         by the Employee Optionee (or by his guardian(s), or conservator(s), or
         other legal representative(s)) before the expiration of twelve (12)
         months after such termination or before expiration of the Option,
         whichever shall first occur (to the extent that the Option was
         exercisable by him on the date of the termination of his employment);
         (iii) in the event of the death of the Employee Optionee, an Option
         exercisable by him at the date of his death shall be exercisable by his
         legal representative(s), legatee(s), or heir(s), or by his beneficiary
         or beneficiaries so designated by him, as the case may be, within
         twelve (12) months after his death or before the expiration of the
         Option, whichever shall first occur (to the extent that the Option was
         exercisable by him on the date of his death); and (iv) if the Employee
         Optionee's employment is terminated for "cause" or in violation of any
         agreement to remain in the employ of the Company, including, without
         limitation, any such agreement pursuant to Section 14, his Option shall
         terminate immediately upon termination of employment, and such Option
         shall be deemed to have been forfeited by the Optionee. For purposes of
         the Plan, "cause" may include, without limitation, any illegal or
         improper conduct (1) which injures or impairs the reputation, goodwill,
         or business of the Company; (2) which involves the misappropriation of
         funds of the Company, or the misuse of data, information, or documents
         acquired in connection with employment by the Company; or (3) which
         violates any other directive or policy promulgated by the Company. A
         termination for "cause" may also include any resignation in
         anticipation of discharge for "cause" or resignation accepted by the
         Company in lieu of a formal discharge for "cause."

         11. MANNER OF OPTION EXERCISE; RIGHTS AND OBLIGATIONS OF OPTIONEES.

                  11.1 WRITTEN NOTICE OF EXERCISE. An Optionee may elect to
         exercise an Option in whole or in part, from time to time, subject to
         the terms and conditions contained in the Plan and in the agreement
         evidencing such Option, by giving written notice of exercise to the
         Company at its principal executive office.

                                      -4-

<PAGE>

                  11.2 CASH PAYMENT FOR OPTIONED SHARES. If an Option is
         exercised for cash, such notice shall be accompanied by a cashier's or
         personal check, or money order, made payable to the Company for the
         full exercise price of the shares purchased.

                  11.3 STOCK SWAP FEATURE. At the time of the Option exercise,
         and subject to the discretion of the Committee to accept payment in
         cash only, the Optionee may determine whether the total purchase price
         of the shares to be purchased shall be paid solely in cash or by
         transfer from the Optionee to the Company of previously acquired shares
         of Common Stock, or by a combination thereof. If the Optionee elects to
         pay the total purchase price in whole or in part with previously
         acquired shares of Common Stock, the value of such shares shall be
         equal to their Fair Market Value on the date of exercise, determined by
         the Committee in the same manner used for determining Fair Market Value
         at the time of grant for purposes of Section 8.

                  11.4 INVESTMENT REPRESENTATION FOR NON-REGISTERED SHARES AND
         LEGALITY OF ISSUANCE. The receipt of shares of Common Stock upon the
         exercise of an Option shall be conditioned upon the Optionee (or any
         other person who exercises the Option on his or her behalf as permitted
         by Section 10.3) providing to the Committee a written representation
         that, at the time of such exercise, it is the intent of such person(s)
         to acquire the shares for investment only and not with a view toward
         distribution. The certificate for unregistered shares issued for
         investment shall be restricted by the Company as to transfer unless the
         Company receives an opinion of counsel satisfactory to the Company to
         the effect that such restriction is not necessary under then pertaining
         law. The providing of such representation and such restrictions on
         transfer shall not, however, be required upon any person's receipt of
         shares of Common Stock under the Plan in the event that, at the time of
         grant of the Option relating to such receipt or upon such receipt,
         whichever is the appropriate measure under applicable federal or state
         securities laws, the shares subject to the Option shall be (i) covered
         by an effective and current registration statement under the Securities
         Act of 1933, as amended, and (ii) either qualified or exempt Com
         qualification under applicable state securities laws. The Company
         shall, however, under no circumstances be required to sell or issue any
         shares under the Plan if, in the opinion of the Committee, (i) the
         issuance of such shares would constitute a violation by the Optionee or
         the Company of any applicable law or regulation of any governmental
         authority, or (ii) the consent or approval of any governmental body is
         necessary or desirable as a condition of, or in connection with, the
         issuance of such shares.

                  11.5 SHAREHOLDER RIGHTS OF OPTIONEE. Upon exercise, the
         Optionee (or any other person who exercises the Option on his behalf as
         permitted by Section 10.3) shall be recorded on the books of the
         Company as the owner of the shares, and the Company shall deliver to
         such record owner one or more duly issued stock certificates evidencing
         such ownership. No person shall have any rights as a shareholder with
         respect to any shares of Common Stock covered by an Option granted
         pursuant to the Plan until such person shall have become the holder of
         record of such shares. Except as provided in Section 13, no adjustments
         shall be made for cash dividends or other distributions or other rights
         as to which there is a record date preceding the date such person
         becomes the holder of record of such shares.

                  11.6 HOLDING PERIODS FOR TAX PURPOSES. The Plan does not
         provide that an Optionee must hold shares of Common Stock acquired
         under the Plan for any minimum period of time. Optionees are urged to
         consult with their own tax advisors with respect to the tax
         consequences to them of their individual participation in the Plan.

         12. SUCCESSIVE GRANTS. Successive grants of Options may be made to any
Optionee under the Plan.

                                      -5-

<PAGE>

         13. ADJUSTMENTS.

         (a) If the outstanding Common Stock shall be hereafter increased or
decreased, or changed into or exchanged for a different number or kind of shares
or other securities of the Company or of another corporation, by reason of a
recapitalization, reclassification, reorganization, merger, consolidation, share
exchange, or other business combination in which the Company is the surviving
parent corporation, stock split-up, combination of shares, or dividend or other
distribution payable in capital stock or rights to acquire capital stock,
appropriate adjustment shall be made by the Committee in the number and kind of
shares for which options may be granted under the Plan. In addition, the
Committee shall make appropriate adjustment in the number and kind of shares as
to which outstanding and unexercised options shall be exercisable, to the end
that the proportionate interest of the holder of the option shall, to the extent
practicable, be maintained as before the occurrence of such event. Such
adjustment in outstanding options shall be made without change in the total
price applicable to the unexercised portion of the option but with a
corresponding adjustment in the exercise price per share.

         (b) In the event of the dissolution or liquidation of the Company, any
outstanding and unexercised options shall terminate as of a future date to be
fixed by the Committee.

         (c) In the event of a Reorganization (as hereinafter defined), then,

                  (i) If there is no plan or agreement with respect to the
         Reorganization ("Reorganization Agreement"), or if the Reorganization
         Agreement does not specifically provide for the adjustment, change,
         conversion, or exchange of the outstanding and unexercised options for
         cash or other property or securities of another corporation, then any
         outstanding and unexercised options shall terminate as of a future date
         to be fixed by the Committee; or

                  (ii) If there is a Reorganization Agreement, and the
         Reorganization Agreement specifically provides for the adjustment,
         change, conversion, or exchange of the outstanding and unexercised
         options for cash or other property or securities of another
         corporation, then the Committee shall adjust the shares under such
         outstanding and unexercised options, and shall adjust the shares
         remaining under the Plan which are then available for the issuance of
         options under the Plan if the Reorganization Agreement makes specific
         provisions therefor, in a manner not inconsistent with the provisions
         of the Reorganization Agreement for the adjustment, change, conversion,
         or exchange of such options and shares.

         (d) The term "Reorganization" as used in this Section 13 shall mean any
reorganization, merger, consolidation, share exchange, or other business
combination pursuant to which the Company is not the surviving parent
corporation after the effective date of the Reorganization, or any sale or lease
of all or substantially all of the assets of the Company. Nothing herein shall
require the Company to adopt a Reorganization Agreement, or to make provision
for the adjustment, change, conversion, or exchange of any options, or the
shares subject thereto, in any Reorganization Agreement which it does adopt.

         (e) The Committee shall provide to each optionee then holding an
outstanding and unexercised option not less than thirty (30) calendar days'
advanced written notice of any date fixed by the Committee pursuant to this
Section 13 and of the terms of any Reorganization Agreement providing for the
adjustment, change, conversion, or exchange of outstanding and unexercised
options. Except as the Committee may otherwise provide, each optionee shall have
the right during such period to exercise his option only to the extent that the
option was exercisable on the date such notice was provided to the optionee.

                                      -6-

<PAGE>

                  Any adjustment to any outstanding ISO pursuant to this Section
         13, if made by reason of a transaction described in Section 424(a) of
         the Code, shall be made so as to conform to the requirements of that
         Section and the regulations thereunder. If any other transaction
         described in Section 424(a) of the Code affects the Common Stock
         subject to any unexercised ISO theretofore granted under the Plan
         (hereinafter for purposes of this Section 13 referred to as the "old
         option"), the Board of Directors of the Company or of any surviving or
         acquiring corporation may take such action as it deems appropriate, in
         conformity with the requirements of that Code Section and the
         regulations thereunder, to substitute a new option for the old option,
         in order to make the new option, as nearly as may be practicable,
         equivalent to the old option, or to assume the old option.

                  (f) No modification, extension, renewal, or other change in
         any option granted under the Plan may be made, after the grant of such
         option, without the Optionee's consent, unless the same is permitted by
         the provisions of the Plan and the option agreement. In the case of an
         ISO, optionees are hereby advised that certain changes may disqualify
         the ISO from being considered as such under Section 422 of the Code, or
         constitute a modification, extension, or renewal of the ISO under
         Section 424(h) of the Code.

                  (g) All adjustments and determinations under this Section 13
         shall be made by the Committee in good faith in its sole discretion.

         14. CONTINUED EMPLOYMENT. As determined in the sole discretion of the
Committee at the time of grant and if so stated in a writing signed by the
Company, each Option may -have as a condition the requirement of an Employee
Optionee to remain in the employ of the Company, or of its affiliates, and to
render to it his or her exclusive service, at such compensation as may be
determined from time to time by it, for a period not to exceed the term of the
Option, except for earlier termination of employment by or with the express
written consent of the Company or on account of disability or death. The failure
of any Employee Optionee to abide by such agreement as to any Option under the
Plan may result in the termination of all of his or her then outstanding Options
granted pursuant to the Plan. Neither the creation of the Plan nor the granting
of Option(s) under it shall be deemed to create a right in an Employee Optionee
to continued employment with the Company, and each such Employee Optionee shall
be and shall remain subject to discharge by the Company as though the Plan had
never come into existence. Except as specifically provided by the Committee in
any particular case, the loss of existing or potential profit in options granted
under this Plan shall not constitute an element of damages in the event of
termination of the employment of an employee even if the termination is in
violation of an obligation of the Company to the employee by contract or
otherwise.

         15. TAX WITHHOLDING. The exercise of any Option granted under the Plan
is subject to the condition that if at any time the Company shall determine, in
its discretion, that the satisfaction of withholding tax or other withholding
liabilities under any federal, state or local law is necessary or desirable as a
condition of, or in connection with, such exercise or a later lapsing of time or
restrictions on or disposition of the shares of Common Stock received upon such
exercise, then in such event, the exercise of the Option shall not be effective
unless such withholding shall have been effected or obtained in a manner
acceptable to the Company. When an Optionee is required to pay to the Company an
amount required to be withheld under applicable income tax laws in connection
with the exercise of any Option, the Optionee may, subject to the approval of
the Committee, which approval shall not have been disapproved at any time after
the election is made, satisfy the obligation, in whole or in part, by electing
to have the Company withhold shares of Common Stock having a value equal to the

                                      -7-

<PAGE>

amount required to be withheld. The value of the Common Stock withheld pursuant
to the election shall be determined by the Committee, in accordance with the
criteria set forth in Section 8, with reference to the date the amount of tax to
be withheld is determined. The Optionee shall pay to the Company in cash o y
amount required to be withheld that would otherwise result in the withholding of
a fractional share. The election by an Optionee who is an officer of the Company
within the meaning of Section 16 of the 1934 Act, to be effective, must meet all
of the requirements of Section 16 of the 1934 Act.

         16. Term of Plan.

                  16.1 EFFECTIVE DATE. Subject to shareholder approval, the Plan
         shall become effective as of February 6, 1997.

                  16.2 TERMINATION DATE. Except as to options granted and
         outstanding under the Plan prior to such time, the Plan shall terminate
         at midnight on February 5, 2007, and no Option shall be granted after
         that time. Options then outstanding may continue to be exercised in
         accordance with their terms. The Plan may be suspended or terminated at
         any earlier time by the Board within the limitations set forth in
         Section 4.

         17. NON-EXCLUSIVITY OF THE PLAN. Nothing contained in the Plan is
intended to amend, modify, or rescind any previously approved compensation
plans, programs or options entered into by the Company. This Plan shall be
construed to be in addition to and independent of any and all such other
arrangements. Neither the adoption of the Plan by the Board nor the submission
of the Plan to the shareholders of the Company for approval shall be construed
as creating any limitations on the power or authority of the Board to adopt,
with or without shareholder approval, such additional or other compensation
arrangements as the Board may from time to time deem desirable.

         18. GOVERNING LAW. The Plan and all rights and obligations under it
shall be construed and enforced in accordance with the laws of the State of
California.

         19. INFORMATION TO OPTIONEES. Optionees under the Plan who do not
otherwise have access to financial statements of the Company will receive the
Company's financial statements at least annually.

                                      -8-

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