Document:

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                                                                  Exhibit 10.60

                               SERVICES AGREEMENT

         This Agreement (the "Agreement") is made as of the fifth day of
December, 2000 by and among: (i) Meridian Ventures, LLC, a Nevada limited
liability company controlled by Thomas C. Shull ("Meridian"), and Thomas C.
Shull ("Shull"), jointly and severally; and (ii) Hanover Direct, Inc.
("Company"), a Delaware corporation.

                  1. Provision of Services. Meridian shall provide for the
         benefit of the Company the services of Shull and the services of two
         (or more, at Meridian's discretion) additional consultants (the
         "Consultants") who shall provide services equivalent to those which
         would be provided by two full-time consultants. In connection
         therewith, Shull shall serve as the President and Chief Executive
         Officer (the "President/CEO") and as a member of the Board of Directors
         and its Executive Committee (the "Executive Committee").

                  2. Responsibilities. The President/CEO shall act and serve
         during the term of this Agreement as the President and Chief Executive
         Officer of the Company and shall report to the Company's Board of
         Directors. The employment responsibilities of the President/CEO will
         include those normally held by the president and chief executive
         officer of a corporation of a similar size and nature to the Company.
         The President/CEO shall devote his full-time efforts (which shall mean
         an average of 50 hours per work week, excluding reasonable vacation,
         personal, sick time or de minimus non-conflicting time for Meridian) in
         connection with his role as President, Chief Executive Office and
         member of the Executive Committee. All employees and officers shall
         report directly or indirectly to the President/CEO.

                  3. Term. Subject to paragraph 6, the term of this Agreement
         (the "Agreement Term") and the term for services of Shull shall
         commence as of December 5, 2000 and shall terminate on December 4,
         2001. The term for the services of the Consultants shall commence on
         December 5, 2000 and shall terminate on June 4, 2001, or upon any
         earlier termination of the Agreement Term. Such terms shall be
         renewable by mutual written agreement of the parties.

                  4. Compensation. (a) In consideration for providing the
         services of Shull as President/CEO and the services of the Consultants,
         during the Agreement Term, Meridian shall receive, in addition to the
         other consideration provided in this Agreement, compensation at the
         rate of $75,000 per month for services of Shull and, during the first
         six-months (6) of the Agreement Term, an additional $75,000 per month
         for the aggregate services of the Consultants payable in advance during
         the first week of each month (the "Base Fee").
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                  (b)      The compensation payable to Meridian under this
                           Agreement is in consideration for the services of
                           Shull and services of the Consultants. To the extent
                           permitted by applicable law, the Company shall not be
                           obligated to provide Shull or any Consultant (and
                           Meridian, Shull and Meridian on behalf of each other
                           Meridian employee serving hereunder as a Consultant
                           specifically decline) any employee benefits (for
                           example, health, 401K, pension, or other benefits
                           provided by the Company to its employees, etc.) under
                           this Agreement. Notwithstanding the foregoing, the
                           Company will allow Shull during the Agreement Term to
                           avail himself of any Company's employee discount
                           offered to other employees generally.

                  (c)      In addition to the payments required by paragraph
                           4(a), during the Agreement Term the Company shall pay
                           Meridian a flat fee of $30,000 per month for the
                           first six-months (6) of services and $15,000 per
                           month for the remaining six-months (6) of services,
                           which represents 20% of the compensation in paragraph
                           (4)(a) and is deemed to cover Meridian over-head
                           (including legal and accounting), health care costs,
                           payroll costs, and other expenses (the "Flat Fee").
                           If, notwithstanding paragraph 4(b), applicable law
                           requires the Company to provide Shull or any
                           Consultant with any employee benefits (other than the
                           Company's employee discount given Shull), the value
                           of such benefits shall be offset against the Flat
                           Fee.

                  (d)      The Company shall reimburse Meridian for the
                           reasonable out-of-pocket expenses of the
                           President/CEO and Consultants (such as travel, meals,
                           communications and lodging) which are incurred during
                           the Agreement Term on behalf of the Company on
                           appropriate business. Meridian shall submit invoices
                           and documentation for such reimbursable expenses on a
                           monthly basis, and the Company shall process payment
                           of the same upon receipt in accordance with its
                           customary procedures.

                  (e)      The Company shall provide a personal secretary to be
                           interviewed and selected by Shull to assist Shull in
                           the performance of duties as President/CEO during the
                           Agreement Term. The secretary shall be employed by
                           the Company at its cost.

                  (f)      The Company shall promptly reimburse Meridian and
                           Shull for their reasonable legal fees in the event
                           that either of them shall consult with their counsel
                           during the Agreement Term in connection with their
                           fiduciary responsibilities to the Company under the
                           Agreement, provided that such fees shall not without
                           the prior written approval of the Executive Committee
                           (which shall not be unreasonably withheld) exceed
                           $20,000 (except that such $20,000 cap shall not limit
                           the fees payable pursuant to paragraph 8 hereof).

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                  (g)      The Consultants shall have the right to accept
                           another engagement during the Agreement Term,
                           provided such engagement does not lessen the ability
                           of Meridian and Shull to perform their services
                           hereunder or conflict with the obligations of
                           Meridian and Shull hereunder or present a conflict of
                           interest with respect to the Company. Neither
                           paragraph 2 nor any of the preceding subparagraphs of
                           this paragraph 4 will be affected by this right given
                           to the Consultants.

                  5. Stock Options. No later than January 5, 2001, the Company
         will grant Shull and the Consultants stock options for an aggregate
         four million (4,000,000) shares of the common stock of the Company
         ("Shares"). Each option shall have an exercise price of $0.25 per
         Share. Allocation of the options shall be as follows: Thomas C. Shull
         (options for 2,700,000 Shares), Paul Jen (options for 500,000 Shares),
         John F. Shull (options for 500,000 Shares), Evan M. Dudik (options for
         200,000 Shares) and Peter Schweinfurt (options for 100,000 Shares). All
         options shall terminate upon any termination of the Agreement pursuant
         to paragraph 6(a)(i) or 6(a)(iv). All outstanding options shall vest
         and become exercisable upon any termination of the Agreement pursuant
         to paragraph 6(a)(ii), 6(a)(iii), 6(a)(v) or 6(a)(vi). When options
         vest and become exercisable upon a termination of the Agreement, they
         shall remain exercisable until their termination on the second
         anniversary of the termination of the Agreement (or their earlier
         exercise). In the event of a vesting resulting from a termination of
         the Agreement pursuant to paragraph 6(a)(v), such vesting shall take
         place sufficiently in advance of such termination (but subject to its
         occurrence) to permit each optionee to take all steps reasonably
         necessary to exercise his options and to deal with the Shares purchased
         under the options so that those Shares may be treated in the same
         manner in connection with the transaction described in paragraph
         6(a)(v) as the Shares of other shareholders.

                  6. Termination. (a) The Agreement, the Agreement Term, the
         term for services of Shull and the engagement of Meridian and Shull
         hereunder will terminate upon the first to occur of the following: (i)
         the tenth day after written notice by the Company to Meridian and Shull
         with respect to any material breach by Meridian or Shull of the terms
         of this Agreement or Willful Misconduct (as hereinafter defined)
         committed by Meridian or Shull; (ii) the tenth day after written notice
         by Meridian and Shull to Company that the Company is in material breach
         of this Agreement; (iii) December 4, 2001; (iv) the death or permanent
         disability of Shull; (v) the first day after the acquisition of the
         Company (whether by merger or the acquisition of all of its outstanding
         capital stock) or the tenth day after the sale of at least two-thirds
         (2/3) of the assets of each of the Company's two primary businesses;
         and (vi) or the day the Company terminates the engagement of Meridian
         and Shull when there has been no Willful Misconduct or material breach
         of the Agreement by either Meridian or Shull.

                  (b)      The parties agree that Meridian and Shull will have
                           been unable to pursue alternative, profitable
                           opportunities in order to take on this engagement,

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                           that Meridian and Shull would suffer substantial
                           financial damage if either party were to exercise its
                           rights of termination hereunder, and that the amount
                           of damages to Meridian and Shull would be difficult,
                           if not impossible, to calculate accurately.
                           Accordingly, the parties agree that if pursuant to
                           this paragraph 6, Meridian, Shull or the Company
                           shall at any time cause this Agreement to terminate
                           or the Agreement shall otherwise terminate, then the
                           Company shall pay Meridian an amount as set forth
                           below. In the event of the termination of this
                           Agreement as provided in paragraph 6(a), Meridian
                           shall receive hereunder the Base Fee and the Flat Fee
                           through the end of the month in which the date of
                           termination has occurred, plus a termination payment
                           as follows:

                                    (A)   If the termination is pursuant to
                                          paragraph 6(a)(i), 6(a)(iii) or
                                          6(a)(iv) above, no amount shall be due
                                          and owing to Meridian;

                                    (B)   If the termination is pursuant to
                                          paragraph 6(a)(ii) or 6(a)(vi),
                                          Meridian shall be entitled to receive
                                          a lump sum payment equal to the
                                          greater of (i) $540,000 or (ii) the
                                          aggregate amount of Base Fees and Flat
                                          Fees to which it would have otherwise
                                          been entitled through the end of the
                                          Agreement Term. If the termination is
                                          pursuant to paragraph 6(a)(v) and the
                                          amount realized in the transaction
                                          described therein equals or exceeds
                                          $0.50 per Share (or the equivalent of
                                          $0.50 per Share), Meridian shall be
                                          entitled to receive a lump sum payment
                                          equal to the aggregate amount of Base
                                          Fees and Flat Fees to which it would
                                          have otherwise been entitled through
                                          the end of the Agreement Term. If the
                                          termination is pursuant to paragraph
                                          6(a)(v) and the amount realized in the
                                          transaction described therein is less
                                          than $0.50 per Share (or the
                                          equivalent of $0.50 per Share),
                                          Meridian shall be entitled to receive
                                          a lump sum payment equal to the
                                          greater of the aggregate amount of
                                          Base Fees and Flat Fees to which it
                                          would have otherwise been entitled
                                          through the end of the Agreement Term
                                          or the sum of $1,000,000.

                  (c)      The parties agree that the amounts established
                           hereunder are liquidated damages reasonable under the
                           terms and circumstances of this Agreement (but
                           excluding amounts due under paragraph 8 which shall
                           continue to survive the termination of this
                           Agreement), the payment of which shall fully satisfy
                           and discharge any obligation of the Company to pay
                           (i) any further compensation under paragraph 4 and
                           (ii) any compensation for lost

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                           opportunity costs incurred by Meridian or Shull as a
                           result of either party entering into this Agreement.

                  (d)      In addition, upon termination of this Agreement for
                           any reason, the Company shall reimburse Meridian in
                           accordance with paragraph 4(d) for all reasonable
                           reimbursable expenses incurred by Meridian to the
                           time of termination.

                  (e)      Any amounts payable to Meridian pursuant to this
                           paragraph 6 shall be paid in a lump sum within five
                           business days after the termination date of this
                           Agreement; provided, however, that, if the party
                           receiving a notice pursuant to paragraph 6(a)(i) or
                           6(a)(ii) notifies the other party that a dispute
                           exists concerning the termination, then, for purposes
                           of paragraphs 5 and 6, the deemed date of termination
                           of the Agreement shall be the date on which the
                           dispute is finally resolved, either by mutual written
                           agreement of the parties or by a final judgment,
                           order or decree of an arbitrator or court of
                           competent jurisdiction (which, in either case, is not
                           appealable or with respect to which the time for
                           appeal therefrom has expired and no appeal has been
                           perfected); provided further that the date of
                           termination of the Agreement shall be extended by a
                           notice of dispute only if such notice is given in
                           good faith and the party giving such notice pursues
                           the resolution of such dispute with reasonable
                           diligence. To the extent permitted by applicable law,
                           any such dispute and any other controversy arising
                           under or in connection with this Agreement, except
                           (at the Company's election) a dispute or controversy
                           under paragraph 9, shall be settled exclusively by
                           binding arbitration in New York, New York, in
                           accordance with the Employment Dispute Resolution
                           Rules then in effect with the American Arbitration
                           Association. Judgment may be entered on the
                           arbitrator's award in any court having jurisdiction.

                  7. Insurance. The Company shall maintain in force during the
         term of this Agreement, directors' and officers' liability insurance
         ("D&O Insurance") with limits not less than five million dollars
         ($5,000,000) on terms and conditions currently provided for under the
         Company's existing insurance policy, and shall use reasonable efforts
         to name Shull as an insured thereunder within ten (10) days after this
         Agreement has been executed by the parties and approved by the Company.
         A copy of the policy shall be furnished to Shull for his information as
         soon as the policy can, with reasonable efforts, be obtained from the
         insurer.

                  8. Indemnity. If Meridian, Shull or any employee of Meridian
         who serves as Consultant to the Company ("Indemnitee") is threatened
         with or made a party to, or called as a witness or deposed or
         subpoenaed in, any action, suit or other legal, administrative or
         governmental proceeding or other legal process by reason that
         Indemnitee is or was deemed a consultant, officer, employee or other
         agent of the

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         Company or any of its affiliates, the Company shall defend, indemnify
         and hold Indemnitee harmless to the maximum extent allowed by
         applicable law and the Company's Certificate of Incorporation and
         By-Laws against all liabilities, obligations, losses, damages,
         penalties, actions, judgments, suits, claims, disbursements and
         expenses, including counsel fees reasonably incurred by Indemnitee in
         connection therewith, to the extent the same are not paid under the D&O
         Insurance ("Indemnified Liability" or "Indemnified Liabilities");
         provided however, that Indemnitee shall not be entitled to
         indemnification hereunder to the extent any such liability, obligation,
         loss, damage, penalty, action, judgment, suit, claim, disbursement or
         expense results from the gross negligence, willful misconduct or
         criminal conviction ("Willful Misconduct") of Indemnitee as determined
         by a court of competent jurisdiction. Indemnitee represents and
         warrants that it or he has not received notice of any claim which might
         constitute an Indemnified Liability hereunder. The Company represents
         that it has not received any notice of any claim against Indemnitee
         that would constitute an Indemnified Liability hereunder. Payments
         under this indemnity in respect of indemnified settlements or judgments
         shall be paid at the time of final settlement or final judgment (from
         which no appeal may be taken), or, in respect of counsel fees or costs
         of defense, which shall be limited to one counsel for all Indemnitees,
         shall be paid at the time such fees or costs are incurred.

                  With the prior written consent of the Company, which shall not
         be unreasonably withheld, Indemnitee shall have the right to pay or
         compromise and adjust all Indemnified Liabilities not manifestly
         without merit. Company shall have the right to pay or compromise
         without Indemnitee's consent Indemnified Liabilities other than those
         which arise from or are related to any criminal action, suit or
         proceeding. Notwithstanding anything to the contrary contained in the
         preceding sentence, Indemnitee's consent shall be required for any
         settlement which contains a stipulation to, or admission or
         acknowledgement of, any liability or wrongdoing on the part of
         Indemnitee.

                  This paragraph 8 shall survive the termination of this
         Agreement.

                  9. Confidentiality. Meridian and Shull shall at all times both
         during its and his engagement hereunder and after termination thereof
         regard and preserve as confidential all trade secrets and other
         confidential information pertaining to the business of the Company that
         have been or may be obtained by Meridian or Shull by reason of the
         performance of the terms of this Agreement. Meridian and Shull agree
         that all documents, reports, manuals, drawings, designs, tools,
         equipment, plans, proposals, marketing and sales plans, customer lists,
         or materials made by the Company or coming into Meridian's or Shull's
         possession by reason of its or his performance under this Agreement are
         the property of the Company and shall not be used by Meridian or Shull
         in any way prohibited by this Agreement. Except as expressly provided
         herein, during the Agreement Term and after termination thereof,
         Meridian and/or Shull shall not deliver,

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         reproduce, publish or in any way allow, after due care, information
         describing any trade secrets or other confidential documents or things
         to be delivered or used by any third party without specific direction
         or written consent of the Company or in response to lawful process.
         Immediately upon termination of this Agreement, Meridian and Shull
         shall promptly deliver to the Company all documents, tools, equipment,
         drawings, blueprints, manuals, material and significant or confidential
         letters and notes, reports, price lists, customer lists and copies
         thereof, and all other materials relating to the Company's business and
         which are in the possession of or under the control of Meridian or
         Shull. Confidential information as defined above shall exclude
         information or materials that become generally available to the public
         other than through disclosure by Meridian, Shull or any employee of
         Meridian in violation of this Agreement.

                  This paragraph 9 shall survive the termination of the
         Agreement.

                  10. Miscellaneous. This Agreement shall be governed by and
         construed in accordance with the internal laws of the state of New
         Jersey.

                  11. Modification. This Agreement may only be modified by
         mutual agreement.

                  12. Assignment. This Agreement is a personal service contract
         and may not be assigned by either party.

                  13. Notices. All notices required or permitted by this
         Agreement shall be in writing and shall be personally delivered or
         faxed to the parties at their addresses set forth below or to such
         different addresses as such parties shall direct by notice sent in
         accordance with this paragraph.

         If to Thomas C. Shull or Meridian Ventures, LLC:

                  28 Leeward Lane
                  Riverside, CT 06878
                  Tel.:  203-637-7659
                  Fax:  203-637-5576

         with copies to:

                  Alan D. Aronson, Esq.
                  Rosenfeld, Wolff, Aronson & Klein
                  2049 Century Park East, Suite 3090
                  Los Angeles, California  90067
                  Tel.:  310-556-1221
                  Fax:  310-556-0401

         If to Company:

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                  Eloy Michotte
                  Chairman of the Board, Hanover Direct, Inc.
                  Richemont International Limited
                  15 Hill Street
                  London W1J 5QT United Kingdom
                  Tel.:  011442075142743
                  Fax:  011442074910284

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         with copies to:

                  General Counsel
                  Hanover Direct, Inc.
                  1500 Harbor Boulevard
                  Weehawken, New Jersey  07087
                  Tel.: 201-863-7300
                  Fax:  201-272-3468

                  and

                  Morris J. Kramer, Esq.
                  Skadden, Arps, Slate, Meagher & Flom LLP
                  Four Times Square
                  New York, New York 10036-6522
                  Tel.:  212-735-3000
                  Fax:  212-735-2000

                  14. Counterparts. This Agreement may be signed in two or more
         counterparts, each of which shall be deemed an original, but all of
         which together shall constitute one and the same instrument.

                  15. Attorneys' Fees. Shull shall be entitled to reimbursement
         for reasonable attorneys' fees and disbursements incurred in connection
         with the review of, and advice with respect to the execution of, this
         Agreement; provided, however, that the aggregate amount of such
         reimbursement shall not exceed $5,000. If any legal action or
         proceeding or arbitration proceeding is brought either for the
         enforcement of this Agreement or because of an alleged dispute, breach,
         default, or material misrepresentation in connection with any of the
         provisions of the Agreement, the successful or prevailing party shall
         be entitled, in addition to any other relief to which it may be
         entitled, to recover reasonable attorneys' fees and other costs
         incurred in that action or proceeding including fees and costs incurred
         on appeal and in collecting any judgment, and the arbitrator or court
         shall so provide in its judgment.

                  16. Consent to Jurisdiction. Subject to their agreement to
         binding arbitration in paragraph 6(e), the Company, Meridian and Shull
         each hereby irrevocably consent to the jurisdiction of the courts of
         the State of New Jersey for all purposes in connection with any legal
         action or proceeding which arises out of or relates to this Agreement
         and agree that any legal action or proceeding instituted under this
         Agreement shall be brought only

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         in such courts and that such courts shall have jurisdiction as provided
         above, except that the Company shall be entitled to enforce its rights
         under paragraph 9 in any court of competent jurisdiction.

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

                                    HANOVER DIRECT, INC.

                                    By:     /s/ Brian C. Harriss
                                       --------------------------------------

                                    MERIDIAN VENTURES, LLC

                                    By:     /s/ Thomas C. Shull
                                       --------------------------------------
                                            Thomas C. Shull, President

                                    By:     /s/ Thomas C. Shull
                                       --------------------------------------
                                            Thomas C. Shull, as an individual

                                       10<PAGE>   1
                                                                    EXHIBIT 10.3

                                                 As amended on November 28, 2000

                              VIEWPOINT CORPORATION
                  (FORMERLY KNOWN AS METACREATIONS CORPORATION)
                       1995 NONSTATUTORY STOCK OPTION PLAN

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

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

                -       to provide additional incentive to Employees and
                        Consultants, and

                -       to promote the success of the Company's business.

Options granted under the Plan may be Incentive Stock Options or Nonstatutory
Stock Options, as determined by the Administrator at the time of grant. Stock
Purchase Rights may also be granted under the Plan.

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

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

                (b)     "Applicable Laws" means the legal requirements relating
to the administration of stock option plans under state corporate and securities
laws and the Code.

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

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

                (e)     "Committee" means a Committee appointed by the Board in
accordance with Section 4 of the Plan.

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

                (g)     "Company" means MetaCreations Corporation, a Delaware
corporation formerly known as MetaTools, Inc.

                (h)     "Consultant" means any person, including a Director or
an advisor, engaged by the Company or a Parent or Subsidiary to render services
and who is compensated for such services.

                (i)     "Continuous Status as an Employee or Consultant" means
that the employment or consulting relationship with the Company, any Parent, or
Subsidiary, is not interrupted or terminated. Continuous Status as an Employee
or Consultant shall not be considered interrupted in the case of (i) any leave
of absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor. A
leave of absence approved by the Company shall include sick leave, military
leave, or any other personal leave approved by an

<PAGE>   2

authorized representative of the Company. For purposes of Incentive Stock
Options, no such leave may exceed ninety days, unless reemployment upon
expiration of such leave is guaranteed by statute or contract. If reemployment
upon expiration of a leave of absence approved by the Company is not so
guaranteed, on the 181st day of such leave any Incentive Stock Option held by
the Optionee shall cease to be treated as an Incentive Stock Option and shall be
treated for tax purposes as a Nonstatutory Stock Option.

                (j)     "Director" means a member of the Board.

                (k)     "Disability" means total and permanent disability as
defined in Section 22(e)(3) of the Code.

                (l)     "Employee" means any person, including Officers and
Directors, employed by the Company or any Parent or Subsidiary of the Company.
Neither service as a Director nor payment of a director's fee by the Company
shall be sufficient to constitute "employment" by the Company.

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

                (n)     "Fair Market Value" means, as of any date, the value of
Common Stock determined as follows:

                        (i)     If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation the
Nasdaq National Market of the National Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ") System, the Fair Market Value of a Share of
Common Stock shall be the closing sales price for such stock (or the closing
bid, if no sales were reported) as quoted on such system or exchange (or the
exchange with the greatest volume of trading in Common Stock) on the last market
trading day prior to the day of determination, as reported in The Wall Street
Journal or such other source as the Administrator deems reliable;

                        (ii)    If the Common Stock is quoted on the NASDAQ
System (but not on the Nasdaq National Market thereof) or is regularly quoted by
a recognized securities dealer but selling prices are not reported, the Fair
Market Value of a Share of Common Stock shall be the mean between the high bid
and low asked prices for the Common Stock on the last market trading day prior
to the day of determination, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable;

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

                (o)     "Incentive Stock Option" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code and the regulations promulgated thereunder.

                (p)     "Nonstatutory Stock Option" means an Option not intended
to qualify as an Incentive Stock Option.

                (q)     "Notice of Grant" means a written notice evidencing
certain terms and conditions of an individual Option or Stock Purchase Right
grant. The Notice of Grant is part of the Option Agreement.

<PAGE>   3

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

                (s)     "Option" means a stock option granted pursuant to the
Plan.

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

                (u)     "Option Exchange Program" means a program whereby
outstanding options are surrendered in exchange for options with a lower
exercise price.

                (v)     "Optioned Stock" means the Common Stock subject to an
Option or Stock Purchase Right.

                (w)     "Optionee" means an Employee or Consultant who holds an
outstanding Option or Stock Purchase Right.

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

                (y)     "Plan" means this 1995 Stock Plan.

                (z)     "Restricted Stock" means shares of Common Stock acquired
pursuant to a grant of Stock Purchase Rights under Section 11 below.

                (aa)    "Restricted Stock Purchase Agreement" means a written
agreement between the Company and the Optionee evidencing the terms and
restrictions applying to stock purchased under a Stock Purchase Right. The
Restricted Stock Purchase Agreement is subject to the terms and conditions of
the Plan and the Notice of Grant.

                (bb)    "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.

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

                (dd)    "Share" means a share of the Common Stock, as adjusted
in accordance with Section 13 of the Plan.

                (ee)    "Stock Purchase Right" means the right to purchase
Common Stock pursuant to Section 11 of the Plan, as evidenced by a Notice of
Grant.

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

        3.      Stock Subject to the Plan. Subject to the provisions of Section
13 of the Plan, the maximum aggregate number of Shares which may be optioned and
sold under the Plan is 11,750,000 which number includes 426,300 Shares that were
previously authorized but unissued under the Company's 1994 Incentive Stock
Option, Non-Qualified Stock Option and Restricted Stock Purchase Plan. The
Shares may be authorized, but unissued, or reacquired Common Stock.

<PAGE>   4

                If an Option or Stock Purchase Right expires or becomes
unexercisable without having been exercised in full, or is surrendered pursuant
to an Option Exchange Program, the unpurchased Shares which were subject thereto
shall become available for future grant or sale under the Plan (unless the Plan
has terminated); provided, however, that Shares that have actually been issued
under the Plan, whether upon exercise of an Option or Right, shall not be
returned to the Plan and shall not become available for future distribution
under the Plan, except that if Shares of Restricted Stock are repurchased by the
Company at their original purchase price, and the original purchaser of such
Shares did not receive any benefits of ownership of such Shares, such Shares
shall become available for future grant under the Plan. For purposes of the
preceding sentence, voting rights shall not be considered a benefit of Share
ownership.

        4.      Administration of the Plan.

                (a)     Procedure.

                        (i)     Multiple Administrative Bodies. If permitted by
Rule 16b-3, the Plan may be administered by different bodies with respect to
Directors, Officers who are not Directors, and Employees who are neither
Directors nor Officers.

                        (ii)    Administration With Respect to Directors and
Officers Subject to Section 16(b). With respect to Option or Stock Purchase
Right grants made to Employees who are also Officers or Directors subject to
Section 16(b) of the Exchange Act, the Plan shall be administered by (A) the
Board, if the Board may administer the Plan in a manner complying with the rules
under Rule 16b-3 relating to the disinterested administration of employee
benefit plans under which Section 16(b) exempt discretionary grants and awards
of equity securities are to be made, or (B) a committee designated by the Board
to administer the Plan, which committee shall be constituted to comply with the
rules under Rule 16b-3 relating to the disinterested administration of employee
benefit plans under which Section 16(b) exempt discretionary grants and awards
of equity securities are to be made. Once appointed, such Committee shall
continue to serve in its designated capacity until otherwise directed by the
Board. From time to time the Board may increase the size of the Committee and
appoint additional members, remove members (with or without cause) and
substitute new members, fill vacancies (however caused), and remove all members
of the Committee and thereafter directly administer the Plan, all to the extent
permitted by the rules under Rule 16b-3 relating to the disinterested
administration of employee benefit plans under which Section 16(b) exempt
discretionary grants and awards of equity securities are to be made.

                        (iii)   Administration With Respect to Other Persons.
With respect to Option or Stock Purchase Right grants made to Employees or
Consultants who are neither Directors nor Officers of the Company, the Plan
shall be administered by (A) the Board or (B) a committee designated by the
Board, which committee shall be constituted to satisfy Applicable Laws. Once
appointed, such Committee shall serve in its designated capacity until otherwise
directed by the Board. The Board may increase the size of the Committee and
appoint additional members, remove members (with or without cause) and
substitute new members, fill vacancies (however caused), and remove all members
of the Committee and thereafter directly administer the Plan, all to the extent
permitted by Applicable Laws.

                (b)     Powers of the Administrator. Subject to the provisions
of the Plan, and in the case of a Committee, subject to the specific duties
delegated by the Board to such Committee, the Administrator shall have the
authority, in its discretion:

<PAGE>   5

                        (i)     to determine the Fair Market Value of the Common
Stock, in accordance with Section 2(n) of the Plan;

                        (ii)    to select the Consultants and Employees to whom
Options and Stock Purchase Rights may be granted hereunder;

                        (iii)   to determine whether and to what extent Options
and Stock Purchase Rights or any combination thereof, are granted hereunder;

                        (iv)    to determine the number of shares of Common
Stock to be covered by each Option and Stock Purchase Right granted hereunder;

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

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

                        (vii)   to reduce the exercise price of any Option or
Stock Purchase Right to the then current Fair Market Value if the Fair Market
Value of the Common Stock covered by such Option or Stock Purchase Right shall
have declined since the date the Option or Stock Purchase Right was granted;

                        (viii)  to construe and interpret the terms of the Plan
and awards granted pursuant to the Plan;

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

                        (x)     to modify or amend each Option or Stock Purchase
Right (subject to Section 15(c) of the Plan), including the discretionary
authority to extend the post-termination exercisability period of Options longer
than is otherwise provided for in the Plan;

                        (xi)    to authorize any person to execute on behalf of
the Company any instrument required to effect the grant of an Option or Stock
Purchase Right previously granted by the Administrator;

                        (xii)   to institute an Option Exchange Program;

                        (xiii)  to determine the terms and restrictions
applicable to Options and Stock Purchase Rights and any Restricted Stock; and

                        (xiv)   to make all other determinations deemed
necessary or advisable for administering the Plan.

<PAGE>   6

                (c)     Effect of Administrator's Decision. The Administrator's
decisions, determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options or Stock Purchase Rights.

        5.      Eligibility. Nonstatutory Stock Options and Stock Purchase
Rights may be granted to Employees and Consultants. Incentive Stock Options may
be granted only to Employees. If otherwise eligible, an Employee or Consultant
who has been granted an Option or Stock Purchase Right may be granted additional
Options or Stock Purchase Rights.

        6.      Limitations.

                (a)     Each Option shall be designated in the written option
agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.
However, notwithstanding such designation, to the extent that the aggregate Fair
Market Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 6(a), Incentive Stock Options shall be taken into account in the order
in which they were granted. The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is granted.

                (b)     Neither the Plan nor any Option or Stock Purchase Right
shall confer upon an Optionee any right with respect to continuing the
Optionee's employment or consulting relationship with the Company, nor shall
they interfere in any way with the Optionee's right or the Company's right to
terminate such employment or consulting relationship at any time, with or
without cause.

                (c)     The following limitations shall apply to grants of
Options and Stock Purchase Rights to Employees:

                        (i)     No Employee shall be granted, in any fiscal year
of the Company, Options and Stock Purchase Rights to purchase more than 300,000
Shares.

                        (ii)    In connection with his or her initial
employment, an Employee may be granted Options and Stock Purchase Rights to
purchase up to an additional 150,000 Shares which shall not count against the
limit set forth in subsection (i) above.

                        (iii)   The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 13.

                        (iv)    If an Option or Stock Purchase Right is
cancelled in the same fiscal year of the Company in which it was granted (other
than in connection with a transaction described in Section 13), the cancelled
Option or Stock Purchase Right will be counted against the limits set forth in
subsections (i) and (ii) above. For this purpose, if the exercise price of an
Option or Stock Purchase Right is reduced, the transaction will be treated as a
cancellation of the Option or Stock Purchase Right and the grant of a new Option
or Stock Purchase Right.

        7.      Term of Plan. Subject to Section 19 of the Plan, the Plan shall
become effective upon the earlier to occur of its adoption by the Board or its
approval by the shareholders of the Company as described in Section 19 of the
Plan. It shall continue in effect for a term of ten (10) years unless terminated
earlier under Section 15 of the Plan.

<PAGE>   7

        8.      Term of Option. The term of each Option shall be stated in the
Notice of Grant; provided, however, that in the case of an Incentive Stock
Option, the term shall be ten (10) years from the date of grant or such shorter
term as may be provided in the Notice of Grant. Moreover, in the case of an
Incentive Stock Option granted to an Optionee who, at the time the Incentive
Stock Option is granted, owns stock representing more than ten percent (10%) of
the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the term of the Incentive Stock Option shall be five (5) years from
the date of grant or such shorter term as may be provided in the Notice of
Grant.

        9.      Option Exercise Price and Consideration.

                (a)     Exercise Price. The per share exercise price for the
Shares to be issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:

                        (i)     In the case of an Incentive Stock Option

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

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

                        (ii)    In the case of a Nonstatutory Stock Option, the
per Share exercise price shall be determined by the Administrator.

                (b)     Waiting Period and Exercise Dates. At the time an Option
is granted, the Administrator shall fix the period within which the Option may
be exercised and shall determine any conditions which must be satisfied before
the Option may be exercised. In so doing, the Administrator may specify that an
Option may not be exercised until the completion of a service period.

                (c)     Form of Consideration. The Administrator shall determine
the acceptable form of consideration for exercising an Option, including the
method of payment. In the case of an Incentive Stock Option, the Administrator
shall determine the acceptable form of consideration at the time of grant. Such
consideration may consist entirely of:

                        (i)     cash;

                        (ii)    check;

                        (iii)   promissory note;

                        (iv)    other Shares which (A) in the case of Shares
acquired upon exercise of an option, have been owned by the Optionee for more
than six months on the date of surrender, and (B) have a Fair Market Value on
the date of surrender equal to the aggregate exercise price of the Shares as to
which said Option shall be exercised;

<PAGE>   8

                        (v)     delivery of a properly executed exercise notice
together with such other documentation as the Administrator and the broker, if
applicable, shall require to effect an exercise of the Option and delivery to
the Company of the sale or loan proceeds required to pay the exercise price;

                        (vi)    a reduction in the amount of any Company
liability to the Optionee, including any liability attributable to the
Optionee's participation in any Company-sponsored deferred compensation program
or arrangement;

                        (vii)   any combination of the foregoing methods of
payment; or

                        (viii)  such other consideration and method of payment
for the issuance of Shares to the extent permitted by Applicable Laws.

        10.     Exercise of Option.

                (a)     Procedure for Exercise; Rights as a Shareholder. Any
Option granted hereunder shall be exercisable according to the terms of the Plan
and at such times and under such conditions as determined by the Administrator
and set forth in the Option Agreement.

                        An Option may not be exercised for a fraction of a
Share.

                        An Option shall be deemed exercised when the Company
receives: (i) written notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his or her spouse.
Until the stock certificate evidencing such Shares is issued (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company), no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such stock certificate promptly after the Option is exercised. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 13 of the Plan.

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

                (b)     Termination of Employment or Consulting Relationship.
Upon termination of an Optionee's Continuous Status as an Employee or
Consultant, other than upon the Optionee's death or Disability, the Optionee may
exercise his or her Option, but only within such period of time as is specified
in the Notice of Grant, and only to the extent that the Optionee was entitled to
exercise it at the date of termination (but in no event later than the
expiration of the term of such Option as set forth in the Notice of Grant). In
the absence of a specified time in the Notice of Grant, the Option shall remain
exercisable for three (3) months following the Optionee's termination. In the
case of an Incentive Stock Option, such period of time for exercise shall not
exceed three (3) months from the date of termination. If, on the date of
termination, the Optionee is not entitled to exercise the Optionee's entire
Option, the Shares covered by the unexercisable

<PAGE>   9

portion of the Option shall revert to the Plan. If, after termination, the
Optionee does not exercise his or her Option within the time specified by the
Administrator, the Option shall terminate, and the Shares covered by such Option
shall revert to the Plan.

                Notwithstanding the above, in the event of an Optionee's change
in status from Consultant to Employee or Employee to Consultant, an Optionee's
Continuous Status as an Employee or Consultant shall not automatically terminate
solely as a result of such change in status. However, in such event, an
Incentive Stock Option held by the Optionee shall cease to be treated as an
Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory
Stock Option three months and one day following such change of status.

                (c)     Disability of Optionee. In the event that an Optionee's
Continuous Status as an Employee or Consultant terminates as a result of the
Optionee's Disability, the Optionee may exercise his or her Option at any time
within twelve (12) months from the date of such termination, but only to the
extent that the Optionee was entitled to exercise it at the date of such
termination (but in no event later than the expiration of the term of such
Option as set forth in the Notice of Grant). If, at the date of termination, the
Optionee is not entitled to exercise his or her entire Option, the Shares
covered by the unexercisable portion of the Option shall revert to the Plan. If,
after termination, the Optionee does not exercise his or her Option within the
time specified herein, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.

                (d)     Death of Optionee. In the event of the death of an
Optionee, the Option may be exercised at any time within twelve (12) months
following the date of death (but in no event later than the expiration of the
term of such Option as set forth in the Notice of Grant), by the Optionee's
estate or by a person who acquired the right to exercise the Option by bequest
or inheritance, but only to the extent that the Optionee was entitled to
exercise the Option at the date of death. If, at the time of death, the Optionee
was not entitled to exercise his or her entire Option, the Shares covered by the
unexercisable portion of the Option shall immediately revert to the Plan. If,
after death, the Optionee's estate or a person who acquired the right to
exercise the Option by bequest or inheritance does not exercise the Option
within the time specified herein, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.

                (e)     Rule 16b-3. Options granted to individuals subject to
Section 16 of the Exchange Act ("Insiders") must comply with the applicable
provisions of Rule 16b-3 and shall contain such additional conditions or
restrictions as may be required thereunder to qualify for the maximum exemption
from Section 16 of the Exchange Act with respect to Plan transactions.

        11.     Stock Purchase Rights.

                (a)     Rights to Purchase. Stock Purchase Rights may be issued
either alone, in addition to, or in tandem with other awards granted under the
Plan and/or cash awards made outside of the Plan. After the Administrator
determines that it will offer Stock Purchase Rights under the Plan, it shall
advise the offeree in writing, by means of a Notice of Grant, of the terms,
conditions and restrictions related to the offer, including the number of Shares
that the offeree shall be entitled to purchase, the price to be paid, and the
time within which the offeree must accept such offer, which shall in no event
exceed six (6) months from the date upon which the Administrator made the
determination to grant the Stock Purchase Right. The offer shall be accepted by
execution of a Restricted Stock Purchase Agreement in the form determined by the
Administrator.

<PAGE>   10

                (b)     Repurchase Option. Unless the Administrator determines
otherwise, the Restricted Stock Purchase Agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's employment with the Company for any reason (including death or
Disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock purchase agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company. The repurchase option shall lapse at a rate determined by the
Administrator.

                (c)     Rule 16b-3. Stock Purchase Rights granted to Insiders,
and Shares purchased by Insiders in connection with Stock Purchase Rights, shall
be subject to any restrictions applicable thereto in compliance with Rule 16b-3.
An Insider may only purchase Shares pursuant to the grant of a Stock Purchase
Right, and may only sell Shares purchased pursuant to the grant of a Stock
Purchase Right, during such time or times as are permitted by Rule 16b-3.

                (d)     Other Provisions. The Restricted Stock Purchase
Agreement shall contain such other terms, provisions and conditions not
inconsistent with the Plan as may be determined by the Administrator in its sole
discretion. In addition, the provisions of Restricted Stock Purchase Agreements
need not be the same with respect to each purchaser.

                (e)     Rights as a Shareholder. Once the Stock Purchase Right
is exercised, the purchaser shall have the rights equivalent to those of a
shareholder, and shall be a shareholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 13
of the Plan.

        12.     Non-Transferability of Options and Stock Purchase Rights. Unless
otherwise specified by the Administrator, an Option or Stock Purchase Right may
not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any
manner other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee.

<PAGE>   11

        13.     Adjustments Upon Changes in Capitalization, Dissolution, Merger
or Asset Sale.

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

                (b)     Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, to the extent that an Option or Stock
Purchase Right has not been previously exercised, it will terminate immediately
prior to the consummation of such proposed action. The Board may, in the
exercise of its sole discretion in such instances, declare that any Option or
Stock Purchase Right shall terminate as of a date fixed by the Board and give
each Optionee the right to exercise his or her Option or Stock Purchase Right as
to all or any part of the Optioned Stock, including Shares as to which the
Option or Stock Purchase Right would not otherwise be exercisable.

                (c)     Merger or Asset Sale. In the event of a merger of the
Company with or into another corporation, or the sale of substantially all of
the assets of the Company, each outstanding Option and Stock Purchase Right
shall be assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. In the event
that the successor corporation refuses to assume or substitute for the Option or
Stock Purchase Right, the Optionee shall have the right to exercise the Option
or Stock Purchase Right as to all of the Optioned Stock, including Shares as to
which it would not otherwise be exercisable. If an Option or Stock Purchase
Right is exercisable in lieu of assumption or substitution in the event of a
merger or sale of assets, the Administrator shall notify the Optionee that the
Option or Stock Purchase Right shall be fully exercisable for a period of
fifteen (15) days from the date of such notice, and the Option or Stock Purchase
Right shall terminate upon the expiration of such period. For the purposes of
this paragraph, the Option or Stock Purchase Right shall be considered assumed
if, following the merger or sale of assets, the option or right confers the
right to purchase or receive, for each Share of Optioned Stock subject to the
Option or Stock Purchase Right immediately prior to the merger or sale of
assets, the consideration (whether stock, cash, or other securities or property)
received in the merger or sale of assets by holders of Common Stock for each
Share held on the effective date of the transaction (and if holders were offered
a choice of consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares); provided, however, that if such
consideration received in the merger or sale of assets was not solely common
stock of the successor corporation or its Parent, the Administrator may, with
the

<PAGE>   12

consent of the successor corporation, provide for the consideration to be
received upon the exercise of the Option or Stock Purchase Right, for each Share
of Optioned Stock subject to the Option or Stock Purchase Right, to be solely
common stock of the successor corporation or its Parent equal in fair market
value to the per share consideration received by holders of Common Stock in the
merger or sale of assets.

        14.     Date of Grant. The date of grant of an Option or Stock Purchase
Right shall be, for all purposes, the date on which the Administrator makes the
determination granting such Option or Stock Purchase Right, or such other later
date as is determined by the Administrator. Notice of the determination shall be
provided to each Optionee within a reasonable time after the date of such grant.

        15.     Amendment and Termination of the Plan.

                (a)     Amendment and Termination. The Board may at any time
amend, alter, suspend or terminate the Plan.

                (b)     Shareholder Approval. The Company shall obtain
shareholder approval of any Plan amendment to the extent necessary and desirable
to comply with Rule 16b-3 or with Section 422 of the Code (or any successor rule
or statute or other applicable law, rule or regulation, including the
requirements of any exchange or quotation system on which the Common Stock is
listed or quoted). Such shareholder approval, if required, shall be obtained in
such a manner and to such a degree as is required by the applicable law, rule or
regulation.

                (c)     Effect of Amendment or Termination. No amendment,
alteration, suspension or termination of the Plan shall impair the rights of any
Optionee, unless mutually agreed otherwise between the Optionee and the
Administrator, which agreement must be in writing and signed by the Optionee and
the Company.

        16.     Conditions Upon Issuance of Shares.

                (a)     Legal Compliance. Shares shall not be issued pursuant to
the exercise of an Option or Stock Purchase Right unless the exercise of such
Option or Stock Purchase Right and the issuance and delivery of such Shares
shall comply with all relevant provisions of law, including, without limitation,
the Securities Act of 1933, as amended, the Exchange Act, the rules and
regulations promulgated thereunder, Applicable Laws, and the requirements of any
stock exchange or quotation system upon which the Shares may then be listed or
quoted, and shall be further subject to the approval of counsel for the Company
with respect to such compliance.

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

<PAGE>   13

        17.     Liability of Company.

                (a)     Inability to Obtain Authority. The inability of the
Company to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.

                (b)     Grants Exceeding Allotted Shares. If the Optioned Stock
covered by an Option or Stock Purchase Right exceeds, as of the date of grant,
the number of Shares which may be issued under the Plan without additional
shareholder approval, such Option or Stock Purchase Right shall be void with
respect to such excess Optioned Stock, unless shareholder approval of an
amendment sufficiently increasing the number of Shares subject to the Plan is
timely obtained in accordance with Section 15(b) of the Plan.

        18.     Reservation of Shares. The Company, during the term of this
Plan, will at all times reserve and keep available such number of Shares as
shall be sufficient to satisfy the requirements of the Plan.

        19.     Stockholder Approval. Continuance of the Plan shall be subject
to approval by the stockholders of the Company within twelve (12) months before
or after the date the Plan is adopted. Such stockholder approval shall be
obtained in the manner and to the degree required under applicable federal and
state law.

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