Document:

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                                                                     EXHIBIT 4.2

                    SUNRISE TECHNOLOGIES INTERNATIONAL, INC.

                 2000 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN

1.  PURPOSES.

        (a) ELIGIBLE OPTION RECIPIENTS. The persons eligible to receive Options
are the Non-Employee Directors of the Company.

        (b) AVAILABLE OPTIONS. The purpose of the Plan is to provide a means by
which Non-Employee Directors may be given an opportunity to benefit from
increases in value of the Common Stock through the granting of Nonstatutory
Stock Options.

        (c) GENERAL PURPOSE. The Company, by means of the Plan, seeks to retain
the services of its Non-Employee Directors, to secure and retain the services of
new Non-Employee Directors and to provide incentives for such persons to exert
maximum efforts for the success of the Company and its Affiliates.

2. DEFINITIONS.

        (a) "Affiliate" means any parent corporation or subsidiary corporation
of the Company, whether now or hereafter existing, as those terms are defined in
Section 424(e) and (f), respectively, of the Code.

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

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

        (d) "Common Stock" means the common stock of the Company.

        (e) "Company" means Sunrise Technologies International, Inc., a Delaware
corporation.

        (f) "Consultant" means any person, including an advisor, (i) engaged by
the Company or an Affiliate to render consulting or advisory services and who is
compensated for such services or (ii) who is a member of the Board of Directors
of an Affiliate. However, the term "Consultant" shall not include either
Directors of the Company who are not compensated by the Company for their
services as Directors or Directors of the Company who are merely paid a
director's fee by the Company for their services as Directors.

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        (g) "Continuous Service" means that the Optionholder's service with the
Company or an Affiliate, whether as an Employee, Director or Consultant, is not
interrupted or terminated. The Optionholder's Continuous Service shall not be
deemed to have terminated merely because of a change in the capacity in which
the Optionholder renders service to the Company or an Affiliate as an Employee,
Consultant or Director or a change in the entity for which the Optionholder
renders such service, provided that there is no interruption or termination of
the Optionholder's service. For example, a change in status without interruption
from a Non-Employee Director of the Company to a Consultant of an Affiliate or
an Employee of the Company will not constitute an interruption of Continuous
Service. The Board or the chief executive officer of the Company, in that
party's sole discretion, may determine whether Continuous Service shall be
considered interrupted in the case of any leave of absence approved by that
party, including sick leave, military leave or any other personal leave.

        (h) "Director" means a member of the Board of Directors of the Company.

        (i) "Disability" means the permanent and total disability of a person
within the meaning of Section 22(e)(3) of the Code.

        (j) "Employee" means any person employed by the Company or an Affiliate.
Mere service as a Director or payment of a director's fee by the Company or an
Affiliate shall not be sufficient to constitute "employment" by the Company or
an Affiliate.

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

        (l) "Fair Market Value" means, as of any date, the value of the Common
Stock determined on the basis of the closing sale price at which Common Stock
has been sold the regular way on the principal securities exchange on which the
Common Stock is traded on the last previous day on which there was such a sale.

        (m) "Initial Grant" means an Option granted to a Non-Employee Director
who meets the criteria specified in subsection 6(a) of the Plan.

        (n) "Non-Employee Director" means a Director who is not an Employee.

        (o) "Nonstatutory Stock Option" means an Option not intended to qualify
as an incentive stock option within the meaning of Section 422 of the Code and
the regulations promulgated thereunder.

        (p) "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.

        (q) "Option" means a Nonstatutory Stock Option granted pursuant to the
Plan.

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        (r) "Option Agreement" means a written agreement between the Company and
an Optionholder evidencing the terms and conditions of an individual Option
grant. Each Option Agreement shall be subject to the terms and conditions of the
Plan.

        (s) "Optionholder" means a person to whom an Option is granted pursuant
to the Plan or, if applicable, such other person who holds an outstanding
Option.

        (t) "Plan" means this Sunrise Technologies International, Inc. 2000
Non-Employee Directors' Stock Option Plan.

        (u) "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange Act or
any successor to Rule 16b-3, as in effect from time to time.

        (v) "Securities Act" means the Securities Act of 1933, as amended.

        (w) "Term Grant" means an Option granted on the first day of each three
(3) year term to all Non-Employee Directors who meet the criteria specified in
subsection 6(b) of the Plan.

3. ADMINISTRATION.

        (a) ADMINISTRATION BY BOARD. The Board shall administer the Plan. The
Board may not delegate administration of the Plan to a committee.

        (b) POWERS OF BOARD. The Board shall have the power, subject to, and
within the limitations of, the express provisions of the Plan:

                (i) To determine the provisions of each Option to the extent not
        specified in the Plan.

                (ii) To construe and interpret the Plan and Options granted
        under it, and to establish, amend and revoke rules and regulations for
        its administration. The Board, in the exercise of this power, may
        correct any defect, omission or inconsistency in the Plan or in any
        Option Agreement, in a manner and to the extent it shall deem necessary
        or expedient to make the Plan fully effective.

                (iii) To amend the Plan or an Option as provided in Section 12.

                (iv) To terminate or suspend the Plan as provided in Section 13.

                (v) Generally, to exercise such powers and to perform such acts
        as the Board deems necessary or expedient to promote the best interests
        of the Company that are not in conflict with the provisions of the Plan.

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        (c) EFFECT OF BOARD'S DECISION. All determinations, interpretations and
constructions made by the Board in good faith shall not be subject to review by
any person and shall be final, binding and conclusive on all persons.

4. SHARES SUBJECT TO THE PLAN.

        (a) SHARE RESERVE. Subject to the provisions of Section 11 relating to
adjustments upon changes in the Common Stock, the Common Stock that may be
issued pursuant to Options shall not exceed in the aggregate 180,000 shares of
Common Stock.

        (b) REVERSION OF SHARES TO THE SHARE RESERVE. If any Option shall for
any reason expire or otherwise terminate, in whole or in part, without having
been exercised in full, the shares of Common Stock not acquired under such
Option shall revert to and again become available for issuance under the Plan.

        (c) SOURCE OF SHARES. The shares of Common Stock subject to the Plan may
be unissued shares or reacquired shares, bought on the market or otherwise.

5. ELIGIBILITY.

        The Options as set forth in section 6 automatically shall be granted
under the Plan to all Non-Employee Directors.

6. NON-DISCRETIONARY GRANTS.

        (a) INITIAL GRANTS. Without any further action of the Board, each person
who is elected or appointed for the first time to be a Non-Employee Director,
automatically shall, upon the date of such person's initial election or
appointment to be a Non-Employee Director by the Board or the Company's
stockholders, be granted an Option to purchase 60,000 shares of Common Stock (an
"Initial Grant") on the terms and conditions set forth herein.

        (b) TERM GRANTS. Without any further action of the Board, a Non-Employee
Director shall be granted an Option to purchase 60,000 shares of Common Stock at
each three (3) year anniversary date of the Initial Grant that he or she is
still a Non-Employee Director.

7. OPTION PROVISIONS.

        Each Option shall be in such form and shall contain such terms and
conditions as required by the Plan. Each Option shall contain such additional
terms and conditions, not inconsistent with the Plan, as the Board shall deem
appropriate. Each Option shall include (through incorporation of provisions
hereof by reference in the Option or otherwise) the substance of each of the
following provisions:

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        (a) TERM. No Option shall be exercisable after the expiration of ten
(10) years from the date it was granted.

        (b) EXERCISE PRICE. The exercise price of each option shall be one
hundred percent (100%) of the Fair Market Value of the stock subject to the
Option on the date the Option is granted. Notwithstanding the foregoing, an
Option may be granted with an exercise price lower than that set forth in the
preceding sentence if such Option is granted pursuant to an assumption or
substitution for another option in a manner satisfying the provisions of Section
424(a) of the Code.

        (c) CONSIDERATION. The purchase price of stock acquired pursuant to an
Option may be paid, to the extent permitted by applicable statutes and
regulations, in any combination of the following methods:

                (i) By cash or check.

                (ii) By delivery of already owned shares of Common Stock either
        that the Optionholder has held for the period required to avoid a charge
        to the Company's reported earnings (generally six months) or that the
        Optionholder did not acquire, directly or indirectly from the Company,
        that are owned free and clear of any liens, claims, encumbrances or
        security interests, and that are valued at Fair Market Value on the date
        of exercise. "Delivery" for these purposes shall include delivery to the
        Company of the Optionholder's attestation of ownership of such shares of
        Common Stock in a form approved by the Company. Notwithstanding the
        foregoing, the Optionholder may not exercise the Option by tender to the
        Company of Common Stock to the extent such tender would violate the
        provisions of any law, regulation or agreement restricting the
        redemption of the Company's stock.

                (iii) Pursuant to a program developed under Regulation T as
        promulgated by the Federal Reserve Board that, prior to the issuance of
        Common Stock, results in either the receipt of cash (or check) by the
        Company or the receipt of irrevocable instructions to pay the aggregate
        exercise price to the Company from the sales proceeds.

        (d) TRANSFERABILITY. An Option is transferable by will or by the laws of
descent and distribution. An Option also is transferable (i) by instrument to an
inter vivos or testamentary trust, in a form accepted by the Company, in which
the option is to be passed to beneficiaries upon the death of the trustor
(settlor) and (ii) by gift, in a form accepted by the Company, to a "family
member" of the Optionholder as that term is defined in the general instructions
to Form S-8 (promulgated under the Securities Act). An Option shall be
exercisable during the lifetime of the Optionholder only by the Optionholder and
a permitted transferee as provided herein. However, the Optionholder may, by
delivering written notice to the Company, in a form

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satisfactory to the company, designate a third party who, in the event of the
death of the Optionholder, shall thereafter be entitled to exercise the Option.

        (e) EXERCISE SCHEDULE. An Option shall be exercisable only for whole
shares and then only as the shares of Common Stock subject to the Option vest.

        (f) VESTING SCHEDULE. Options shall vest in consecutive monthly
installments at a rate of one thirty-sixth (1/36th) of the total number of
shares subject to such Option. The first such installment shall vest one month
from the date of grant of such Option and shall continue until such Option has
fully vested, provided however, that vesting shall cease on termination of the
Optionholder's Continuous Service.

        (g) TERMINATION OF CONTINUOUS SERVICE. In the event an Optionholder's
Continuous Service terminates (other than due to the Optionholder's death or
Disability), the Optionholder may exercise his or her Option (to the extent that
the Optionholder was entitled to exercise it as of the date of termination) but
only within such period of time ending on the earlier of (i) the date that is
three (3) months after the date of such termination, or (ii) the expiration of
the term of the Option as set forth in the Option Agreement. If, after
termination, the Optionholder does not exercise his or her option within the
time specified in the Option Agreement, the Option shall terminate.

        (h) DISABILITY OF OPTIONHOLDER. In the event an Optionholder's
Continuous Service terminates due to the Optionholder's Disability, the
Optionholder may exercise his or her Option (to the extent that the Optionholder
was entitled to exercise it as of the date of termination), but only within such
period of time ending on the earlier of (i) the date that is twelve (12) months
after the date of such termination, or (ii) the expiration of the term of the
Option as set forth in the Option Agreement. If, after termination, the
Optionholder does not exercise his or her Option within the time specified
herein, the Option shall terminate.

        (i) DEATH OF OPTIONHOLDER. In the event (i) an Optionholder's Continuous
Service terminates as a result of the Optionholder's death or (ii) the
Optionholder dies within the three-month period after the termination of the
Optionholder's Continuous Service for a reason other than death, then the Option
may be exercised (to the extent the Optionholder was entitled to exercise the
Option as of the date of death) by the Optionholder's estate, by a person who
acquired the right to exercise the Option by bequest or inheritance or by a
person designated to exercise the Option upon the Optionholder's death, but only
within the period ending on the earlier of (1) the date that is twelve (12)
months following the date of death or (2) the expiration of the term of such
Option as set forth in the Option Agreement. If, after death, the Option is not
exercised within the time specified herein, the option shall terminate.

        (j) EXTENSION OF TERMINATION DATE. If exercise of the Option following
the termination of the Optionholder's Continuous Service would be prohibited at
any time solely because the issuance of shares would violate the registration
requirements under the Securities

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Act, then the option shall terminate on the earlier of: (i) the expiration of
the term of the Option set forth in subsection 7(a), or (ii) the expiration of
the applicable period of time after the termination of the Optionholder's
Continuous Service during which the exercise of the Option would not be in
violation of such registration requirements.

8. COVENANTS OF THE COMPANY.

        (a) AVAILABILITY OF SHARES. During the terms of the Options, the Company
shall keep available at all times the number of shares of Common Stock required
to satisfy such Options.

        (b) SECURITIES LAW COMPLIANCE. The Company shall seek to obtain from
each regulatory commission or agency having jurisdiction over the Plan such
authority as may be required to grant Options and to issue and sell shares of
Common Stock upon exercise of the options; provided, however, that this
undertaking shall not require the Company to register under the Securities Act
the Plan, any Option or any stock issued or issuable pursuant to any such
Option. If, after reasonable efforts, the Company is unable to obtain from any
such regulatory commission or agency the authority which counsel for the Company
deems necessary for the lawful issuance and sale of stock under the Plan, the
Company shall be relieved from any liability for failure to issue and sell stock
upon exercise of such options unless and until such authority is obtained.

9. USE OF PROCEEDS FROM STOCK.

        Proceeds from the sale of stock pursuant to Options shall constitute
general funds of the Company.

10. MISCELLANEOUS.

        (a) STOCKHOLDER RIGHTS. No Optionholder shall be deemed to be the holder
of, or to have any of the rights of a holder with respect to, any shares subject
to such option unless and until such Optionholder has satisfied all requirements
for exercise of the Option pursuant to its terms.

        (b) NO SERVICE RIGHTS. Nothing in the Plan or any instrument executed or
Option granted pursuant thereto shall confer upon any Optionholder any right to
continue to serve the Company as a Non-Employee Director or shall affect the
right of the Company or an Affiliate to terminate (i) the employment of an
Employee with or without notice and with or without cause, (ii) the service of a
Consultant pursuant to the terms of such Consultant's agreement with the Company
or an Affiliate or (iii) the service of a Director pursuant to the Bylaws of the
Company or an Affiliate, and any applicable provisions of the corporate law of
the state in which the Company or the Affiliate is incorporated, as the case may
be.

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        (c) INVESTMENT ASSURANCES. The Company may require an Optionholder, as a
condition of exercising or acquiring stock under any Option, (i) to give written
assurances satisfactory to the Company as to the Optionholder's knowledge and
experience in financial and business matters and/or to employ a purchaser
representative reasonably satisfactory to the Company who is knowledgeable and
experienced in financial and business matters and that he or she is capable of
evaluating, alone or together with the purchaser representative, the merits and
risks of exercising the Option; and (ii) to give written assurances satisfactory
to the Company stating that the Optionholder is acquiring the stock subject to
the Option for the Optionholder's own account and not with any present intention
of selling or otherwise distributing the stock. The foregoing requirements, and
any assurances given pursuant to such requirements, shall be inoperative if
(iii) the issuance of the shares upon the exercise or acquisition of stock under
the option has been registered under a then currently effective registration
statement under the Securities Act or (iv) as to any particular requirement, a
determination is made by counsel for the .Company that such requirement need not
be met in the circumstances under the then applicable securities laws. The
Company may, upon advice of counsel to the Company, place legends on stock
certificates issued under the Plan as such counsel deems necessary or
appropriate in order to comply with applicable securities laws, including, but
not limited to, legends restricting the transfer of the stock.

        (d) WITHHOLDING OBLIGATIONS. The Optionholder may satisfy any federal,
state or local tax withholding obligation relating to the exercise or
acquisition of stock under an Option by any of the following means (in addition
to the Company's right to withhold from any compensation paid to the
Optionholder by the Company) or by a combination of such means: (i) tendering a
cash payment; (ii) authorizing the Company to withhold shares from the shares of
the Common Stock otherwise issuable to the Optionholder as a result of the
exercise or acquisition of stock under the Option, provided, however, that no
shares of Common Stock are withheld with a value exceeding the minimum amount of
tax required to be withheld by law; or (iii) delivering to the Company owned and
unencumbered shares of the Common Stock.

11. ADJUSTMENTS UPON CHANGES IN STOCK.

        (a) CAPITALIZATION ADJUSTMENTS. If any change is made in the stock
subject to the Plan, or subject to any Option, without the receipt of
consideration by the Company (through merger, consolidation, reorganization,
recapitalization, reincorporation, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or other transaction not involving the
receipt of consideration by the Company), the Plan will be appropriately
adjusted in the class(es) and maximum number of securities subject both to the
Plan pursuant to subsection 4(a) and to the nondiscretionary Options specified
in Section 5, and in the classes and maximum number of securities added to the
Plan each January 1 pursuant to subsection 4(a), and the outstanding Options
will be appropriately adjusted in the class(es) and number of securities and
price per share of stock subject to such outstanding Options. The Board shall
make such adjustments, and

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its determination shall be final, binding and conclusive (The conversion of any
convertible securities of the Company shall not be treated as a transaction
"without receipt of consideration" by the Company.)

        (b) DISSOLUTION OR LIQUIDATION. In the event of a dissolution or
liquidation of the Company, then all outstanding Options shall terminate,
immediately prior to such event.

        (c) CHANGE IN CONTROL. In the event of (i) a sale, lease or other
disposition of all or substantially all of the securities or assets of the
Company, (ii) a merger or consolidation in which the Company is not the
surviving corporation or (iii) a reverse merger in which the Company is the
surviving corporation but the shares of Common Stock outstanding immediately
preceding the merger are converted by virtue of the merger into other property,
whether in the form of securities, cash or otherwise, then any surviving
corporation or acquiring corporation may assume any Options outstanding under
the Plan or may substitute similar Options (including an option to acquire the
same consideration paid to the stockholders in the transaction described in this
subsection 11(c)) for those outstanding under the Plan, and the vesting of
Options held by Non-Employee Directors shall accelerate in full on the date
immediately preceding the date of such event. In the event no surviving
corporation or acquiring corporation assumes such Options or substitutes similar
Options for those outstanding under the Plan, then with respect to Options held
by Optionholders whose Continuous Service has not terminated, the vesting of
such Options (and the time during which such Options may be exercised) shall
accelerate in full on the date immediately preceding the date of such event, and
the Options shall terminate if not exercised at or prior to such event. With
respect to any other Options outstanding under the Plan, such options shall
terminate if not exercised prior to such event.

12. AMENDMENT OF THE PLAN AND OPTIONS.

        (a) AMENDMENT OF PLAN. The Board at any time, and from time to time, may
amend the Plan. However, except as provided in Section 11 relating to
adjustments upon changes in stock, no amendment shall be effective unless
approved by the stockholders of the Company to the extent stockholder approval
is necessary to satisfy the requirements of Rule 16b-3 or any Nasdaq or
securities exchange listing requirements.

        (b) STOCKHOLDER APPROVAL. The Board may, in its sole discretion, submit
any other amendment to the Plan for stockholder approval.

        (c) NO IMPAIRMENT OF RIGHTS. Rights under any option granted before
amendment of the Plan shall not be impaired by any amendment of the Plan unless
(i) the Company requests the consent of the Optionholder and (ii) the
Optionholder consents in writing.

        (d) AMENDMENT OF OPTIONS. The Board at any time, and from time to time,
may amend the terms of any one or more options; provided, however, that the
rights under any Option

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shall not be impaired by any such amendment unless (i) the Company requests the
consent of the Optionholder and (ii) the Optionholder Consents in writing.

13. TERMINATION OR SUSPENSION OF THE PLAN.

        (a) PLAN TERM. The Board may suspend or terminate the Plan at any time.
No Options may be granted under the Plan while the Plan is suspended or after it
is terminated.

        (b) NO IMPAIRMENT OF RIGHTS. Suspension or termination of the Plan shall
not impair rights and obligations under any Option granted while the Plan is in
effect except with the written consent of the Optionholder.

14. EFFECTIVE DATE OF PLAN.

        The Plan shall become effective on April 13, 2000, but no option shall
be exercised unless and until the Plan has been approved by the stockholders of
the Company, which approval shall be within twelve (12) months before or after
the date the Plan is adopted by the Board.

15. CHOICE OF LAW.

        All questions concerning the construction, validity and interpretation
of this Plan shall be governed by the law of the State of Delaware without
regard to such state's conflict of laws rules.<PAGE>   1

                                                                     EXHIBIT 4.3

                    SUNRISE TECHNOLOGIES INTERNATIONAL, INC.

                        SUPPLEMENTAL EMPLOYEE STOCK PLAN

                            Adopted December 21, 2000

        1. Purpose.

                The Company, by means of the Plan and the individual
Supplemental Employee Stock Agreements issued thereunder, desires from time to
time to provide bonuses, stock grants in connection with performance, restricted
stock awards, and severance awards to certain Eligible Employees, subject to
such terms and conditions established by the Award Committee. It is the
intention of the Company that this Plan be a welfare benefit plan under ERISA.

        2. Definitions.

                Whenever used in this Plan, unless the context clearly indicates
otherwise, the following words shall have the following meaning:

                (a) "AFFILIATE" means affiliate, as provided under Rule 12b-2 of
the General Rules and Regulations of the Exchange Act.

                (b) "AWARD COMMITTEE" means, at any given point in time, the
individual serving in the capacity of President and Chief Executive Officer of
the Company and the individual serving in the capacity of Chief Operating
Officer of the Company.

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

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

                (e) "COMMON STOCK" means the common stock of the Company.

                (f) "COMPANY" means Sunrise Technologies International, Inc., a
Delaware corporation.

                (g) "ELIGIBLE EMPLOYEE" means any person employed by the Company
who is not an Officer at the date of the grant of the Stock Award.

                (h) "ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the regulations thereunder.

                (i) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor act thereto.

                (j) "FAIR MARKET VALUE" means, as of any date, the value of the
Common Stock determined by the Award Committee.

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                (k) "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.

                (l) "PLAN" means this Sunrise Technologies International, Inc.
Supplemental Employee Stock Plan.

                (m) "PLAN YEAR" means the fiscal year of the Plan and is the
twelve month period ending December 31.

                (n) "STOCK AWARD" means the consideration provided to an
Eligible Employee pursuant to the individual Stock Award Agreement. The
consideration may be in the form of cash, Common Stock or a combination thereof.

                (o) "SUPPLEMENTAL EMPLOYEE STOCK AGREEMENT" means the stock
award agreement entered into between the Company and the Eligible Employee
pursuant to this Plan.

        3. Administration.

                (a) ADMINISTRATION BY AWARD COMMITTEE. The Award Committee shall
administer the Plan and be deemed the "administrator" as provided in Section
3(16)(A) of ERISA. In the absence of an Award Committee, the Board shall
administer the Plan, and all references herein to the Award Committee shall
refer to the Board.

                (b) POWERS OF AWARD COMMITTEE. The Award Committee shall have
the power, subject to, and within the limitations of, the express provisions of
the Plan.

                        (i) To determine the provisions of each Stock Award to
the extent not specified in the Plan.

                        (ii) To construe and interpret the Plan and Stock Awards
granted under it, and to establish, amend and revoke rules and regulations for
its administration. The Award Committee, in the exercise of this power, may
correct any defect, omission or inconsistency in the Plan, in a manner and to
the extent it shall deem necessary or expedient to make the Plan fully
effective.

                        (iii) To adopt the form of Stock Award Agreement for
each grant subject to the provisions of Section 5.

                        (iv) To amend the Plan as provided in Section 10.

                        (v) Generally, to exercise such powers and to perform
such acts as the Award Committee deems necessary or expedient to promote the
best interests of the Company that are not in conflict with the provisions of
the Plan.
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                (c) EFFECT OF AWARD COMMITTEE'S DECISION. All determinations,
interpretations and constructions made by the Award Committee in good faith
shall not be subject to review by any person and shall be final, binding and
conclusive on all persons.

        4. Shares Subject to the Plan.

                (a) SHARE RESERVE. Subject to the provisions of Section 7
relating to adjustments upon changes in the Common Stock, the Common Stock that
may be issued as Stock Awards shall not exceed in the aggregate 160,000 shares
of Common Stock.

                (b) REVERSION OF SHARES TO THE SHARE RESERVE. If any Common
Stock granted pursuant to the Plan shall for any reason be forfeited, the shares
of Common Stock shall revert to and again become available for issuance under
the Plan.

                (c) SOURCE OF SHARES. The shares of Common Stock subject to the
Plan may be unissued shares or reacquired shares, bought on the market or
otherwise.

        5. Eligibility and Grant of Stock Awards.

                The Stock Awards shall be granted under the Plan at such time
and in such amounts to those Eligible Employees designated by the Award
Committee. All Stock Awards granted hereunder shall be evidenced by a
Supplemental Employee Stock Agreement that shall specify the date of the Stock
Award, the amount and form of the Stock Award and such other provisions as the
Award Committee shall determine. Individual Stock Awards and Supplemental
Employee Stock Agreements need not be the same for each designated Eligible
Employee.

        6. Withholding Obligations.

                The Company shall have the power and the right to deduct or
withhold, or require an Eligible Employee to remit to the Company, an amount
sufficient to satisfy federal, state and local taxes, domestic or foreign,
required by law or regulation to be withheld with respect to any taxable event
arising as a result of this Plan.

        7. Capitalization Adjustments.

                If any change is made in the stock subject to the Plan without
the receipt of consideration by the Company (through merger, consolidation,
reorganization, recapitalization, reincorporation, stock dividend, dividend in
property other than cash, stock split, liquidating dividend, combination of
shares, exchange of shares, change in corporate structure or other transaction
not involving the receipt of consideration by the Company), the Plan will be
appropriately adjusted in the class(es) and maximum number of securities subject
to the Plan pursuant to subsection 4(a). The Board shall make such adjustments,
and its determination shall

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be final, binding and conclusive (The conversion of any convertible securities
of the Company shall not be treated as a transaction "without receipt of
consideration" by the Company).

        8. Indemnification.

                The Company shall indemnify and hold harmless each member of the
Award Committee and the Board from any and all claims, losses, damages, expenses
(including reasonable counsel fees approved by the Company), and liability
(including any reasonable amounts paid in settlement with the Company's
approval), arising from any act or omission of such members except when the same
is judicially determined to be due to the gross negligence or willful misconduct
of such member.

        9. No Contract for Continued Services.

                This Plan shall not be construed as creating any contract for
continued services between the Company and the Eligible Employee, and nothing
herein contained shall give the Eligible Employee the right to be retained as an
Employee of the Company.

        10. Amendment of the Plan.

                The Award Committee or the Board at any time, and from time to
time, may amend the Plan, provided however that any increase in the shares of
Common Stock reserved for issuance under this Plan shall require approval of the
Board. No such amendment shall impair any Stock Award granted to an Eligible
Employee prior to the date of such amendment except with the written consent of
such Eligible Employee.

        11. Termination or Suspension of the Plan.

                (a) PLAN TERM. The Board may suspend or terminate the Plan at
any time. No Stock Award may be granted under the Plan while the Plan is
suspended or after it is terminated.

                (b) NO IMPAIRMENT OF RIGHTS. Suspension or termination of the
Plan shall not impair rights and obligations under any Stock Award granted while
the Plan is in effect except with the written consent of the Eligible Employee.

        12. Benefit Claims Procedure

                In accordance with Section 503 of ERISA and the regulations of
the Secretary of Labor prescribed thereunder:

                (a) IN GENERAL. Normally, the Award Committee shall inform a
designated Eligible Employee of his award of benefits under this Plan. Any
designated Eligible Employee who has a claim concerning benefits may submit
such claim in writing to the Award Committee with such other documentation
which the Award Committee may require.

                (b) INITIAL CLAIM. The Award Committee shall, within ninety
(90) days of submission of a claim, provide adequate notice in writing to any
claimant with a description of any material or information which is necessary
in order for the claimant to perfect the claim and an explanation of why such
information is necessary. If special circumstances require an extension of time
for processing the claim, the Award Committee shall furnish the claimant a
written notice of such extension prior to the expiration of the ninety (90) day
period. The extension notice shall indicate the reasons for the extension and
the expected date for a final decision, which date shall not be more than one
hundred eighty (180) days from the initial claim.

                (c) APPEAL. The Award Committee shall, upon written request by
a claimant within sixty (60) days of receipt of the notice that the claim has
been denied, afford a reasonable opportunity to such claimant for a full and
fair review by the Award Committee of the decision denying the claim. The
Award Committee will afford the claimant an opportunity to review its
decision, the Award Committee will attempt to make its decision as soon as
practicable, and in no event will the Award Committee take more than one
hundred twenty (120) days to send the claimant a written notice of its
decision.

        13. Effective Date of Plan.

                The Plan shall become effective on January 1, 2001.

                                      -4-
<PAGE>   5

        14. Choice of Law.

                All questions concerning the construction, validity and
interpretation of this Plan shall be governed by the law of the State of
California without regard to such state's conflict of laws rules.

                                      -5-

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