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                                                                    Exhibit 10.2
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                            EARTHWATCH INCORPORATED

                          1999 Equity Incentive Plan
                           Adopted February 15, 2000
                  Approved By Stockholders ____________, 1999
                      Termination Date:  February 15, 2010

I.   PURPOSES.

     A.   Eligible Stock Award Recipients. The persons eligible to receive Stock
          Awards are the Employees, Directors and Consultants of the Company and
          its Affiliates.

     B.   Available Stock Awards. The purpose of the Plan is to provide a means
          by which eligible recipients of Stock Awards may be given an
          opportunity to benefit from increases in value of the Common Stock
          through the granting of the following Stock Awards: (i) Incentive
          Stock Options, (ii) Nonstatutory Stock Options, (iii) stock bonuses
          and (iv) rights to acquire restricted stock.

     C.   General Purpose. The Company, by means of the Plan, seeks to retain
          the services of the group of persons eligible to receive Stock Awards,
          to secure and retain the services of new members of this group and to
          provide incentives for such persons to exert maximum efforts for the
          success of the Company and its Affiliates.

II.  DEFINITIONS.

     A.   "Accountants" means the independent public accountants of the Company.

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

     C.   "Board" means the Board of Directors of the Company.

     D.  "Cause" means (i) conviction of, a guilty plea with respect to, or a
     plea of nolo contendere to a charge that a Participant has committed a
     felony under the laws of the United States or of any state or a crime
     involving moral turpitude, including, but not limited to, fraud, theft,
     embezzlement or any crime that results in or is intended to result in
     personal enrichment at the expense of the Company or an Affiliate; (ii)
     material breach of any agreement entered into between the Participant and
     the Company or an Affiliate that impairs the Company's or the Affiliate's
     interest therein; (iii) willful misconduct, significant failure of the
     Participant to perform the Participant's duties, or gross neglect by the
     Participant of the Participant's duties; or (iv) engagement in any activity
     that constitutes a material conflict of interest with the Company or any
     Affiliate.

     E.   "Change in Control" means (i) a sale, lease or other disposition of
     all or substantially all of the assets of the Company; (ii) a consolidation
     or merger of the

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     Company with or into any other corporation or other entity or person, or
     any other corporate reorganization, in which the stockholders of the
     Company immediately prior to such consolidation, merger or reorganization,
     own less than 50% of the outstanding voting power of the surviving entity
     (or its parent) following the consolidation, merger or reorganization;
     (iii) a reverse merger in which the Company is the surviving corporation
     but the shares of the 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; (iv) prior to the Listing
     Date, any transaction or series of related transactions in which in excess
     of fifty percent (50%) of the Company's outstanding voting power is
     transferred to a person, entity or group within the meaning of Section
     13(d) or 14(d) of the Exchange Act, as hereafter amended or succeeded,
     excluding any employee benefit plan, or related trust, sponsored or
     maintained by the Company or an Affiliate (such person, entity or group, a
     "Group"); or (v) after the Listing Date, an acquisition by any Group of the
     beneficial ownership (within the meaning of Rule 13d-3 promulgated under
     the Exchange Act) of securities of the Company or its successor
     representing at least thirty percent (30%) of the combined voting power
     entitled to vote in the election of directors. Notwithstanding the
     foregoing, in the case of (ii) and (iii) above, such transactions shall
     only be deemed a "Change in Control" if the stockholders of the Company or
     its successor immediately prior to such merger, consolidation or reverse
     merger: (A) hold less than fifty percent (50%) of the outstanding
     securities of the surviving company following the merger, consolidation or
     reverse merger, or (B) in the event that the securities of an affiliated
     entity or corporation are issued to the stockholders of the Company in the
     transaction, hold less than fifty percent (50%) of the outstanding
     securities of such affiliated entity or corporation. "Change in Control"
     does not include the initial public offering of the securities of the
     Company pursuant to a registration statement filed under the Securities Act
     (the "IPO"), nor does it include any event, transaction or series of
     transactions constituting part of an IPO or an attempted IPO.

     F.   "Code" means the Internal Revenue Code of 1986, as amended.

     G.   "Committee" means a committee of one or more members of the Board
     appointed by the Board in accordance with subsection 3(c).

     H.   "Common Stock" means the common stock of the Company.

     I.   "Company" means EarthWatch Incorporated, a Delaware corporation.

     J.   "Constructive Termination" means the occurrence of any of the
     following events or conditions: (i) (A) a change in the Participant's
     status, title, position or responsibilities (including reporting
     responsibilities) which represents an adverse change from the Participant's
     status, title, position or responsibilities as in effect at any time within
     ninety (90) days preceding the date of a Change in Control or at any time
     thereafter; (B) the assignment to the Participant of any duties or
     responsibilities which are inconsistent with the Participant's status,
     title, position or responsibilities as in effect at any time within ninety
     (90) days preceding the date of a Change in Control or at any time
     thereafter; or (C) any removal of the Participant from or failure to
     reappoint or reelect the Participant to any of such offices or positions,
     except in connection with the termination of the Participant's Continuous
     Service for Cause, as a result of the Participant's Disability or death or
     by the Participant other than as a result of Constructive Termination; (ii)
     a reduction in the Participant's annual base compensation or any failure to
     pay the

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     Participant any compensation or benefits to which the Participant is
     entitled within five (5) days of the date due; (iii) the Company's
     requiring the Participant to relocate to any place outside a thirty (30)
     mile radius of the Participant's current work site, except for reasonably
     required travel on the business of the Company or its Affiliates which is
     not materially greater than such travel requirements prior to the Change in
     Control; (iv) the failure by the Company to (A) continue in effect (without
     reduction in benefit level and/or reward opportunities) any material
     compensation or employee benefit plan in which the Participant was
     participating at any time within ninety (90) days preceding the date of a
     Change in Control or at any time thereafter, unless such plan is replaced
     with a plan that provides substantially equivalent compensation or benefits
     to the Participant, or (B) provide the Participant with compensation and
     benefits, in the aggregate, at least equal (in terms of benefit levels
     and/or reward opportunities) to those provided for under each other
     employee benefit plan, program and practice in which the Participant was
     participating at any time within ninety (90) days preceding the date of a
     Change in Control or at any time thereafter; (v) any material breach by the
     Company of any provision of an agreement between the Company and the
     Participant, whether pursuant to this Plan or otherwise, other than a
     breach which is cured by the Company within fifteen (15) days following
     notice by the Participant of such breach; or (vi) the failure of the
     Company to obtain an agreement, satisfactory to the Participant, from any
     successors and assigns to assume and agree to perform the obligations
     created under this Plan.

     K.   "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 who are not compensated by the Company for their
     services as Directors or Directors who are merely paid a director's fee by
     the Company for their services as Directors.

     L.   "Continuous Service" means that the Participant's service with the
     Company or an Affiliate, whether as an Employee, Director or Consultant, is
     not interrupted or terminated. The Participant's Continuous Service shall
     not be deemed to have terminated merely because of a change in the capacity
     in which the Participant renders service to the Company or an Affiliate as
     an Employee, Consultant or Director or a change in the entity for which the
     Participant renders such service, provided that there is no interruption or
     termination of the Participant's Continuous Service. For example, a change
     in status from an Employee of the Company to a Consultant of an Affiliate
     or a Director 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.

     M.   "Covered Employee" means the chief executive officer and the four (4)
     other highest compensated officers of the Company for whom total
     compensation is required to be reported to stockholders under the Exchange
     Act, as determined for purposes of Section 162(m) of the Code.

     N.   "Director" means a member of the Board of Directors of the Company.

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     O.   "Disability" means (i) before the Listing Date, the inability of a
     person, in the opinion of a qualified physician acceptable to the Company,
     to perform the major duties of that person's position with the Company or
     an Affiliate of the Company because of the sickness or injury of the person
     and (ii) after the Listing Date, the permanent and total disability of a
     person within the meaning of Section 22(e)(3) of the Code.

     P.   "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.

     Q.   "Exchange Act" means the Securities Exchange Act of 1934, as amended.

     R.   "Fair Market Value" means, as of any date, the value of the Common
     Stock determined as follows:

          1.   If the Common Stock is listed on any established stock exchange
               or traded on the Nasdaq National Market or the Nasdaq SmallCap
               Market, 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 exchange or market (or the
               exchange or market with the greatest volume of trading in 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 Board deems reliable.

          2.   In the absence of such markets for the Common Stock, the Fair
               Market Value shall be determined in good faith by the Board.

          3.   Prior to the Listing Date, the value of the Common Stock shall be
               determined in a manner consistent with Section 260.140.50 of
               Title 10 of the California Code of Regulations.

     S.   "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.

     T.   "Listing Date" means the first date upon which any security of the
     Company is listed (or approved for listing) upon notice of issuance on any
     securities exchange or designated (or approved for designation) upon notice
     of issuance as a national market security on an interdealer quotation
     system if such securities exchange or interdealer quotation system has been
     certified in accordance with the provisions of Section 25100(o) of the
     California Corporate Securities Law of 1968.

     U.   "Non-Employee Director" means a Director who either (i) is not a
     current Employee or Officer of the Company or its parent or a subsidiary,
     does not receive compensation (directly or indirectly) from the Company or
     its parent or a subsidiary for services rendered as a consultant or in any
     capacity other than as a Director (except for an amount as to which
     disclosure would not be required under Item 404(a) of Regulation S-K
     promulgated pursuant to the Securities Act ("Regulation S-K")), does not
     possess an interest in any other transaction as to which disclosure would
     be required under Item 404(a) of Regulation S-K and is

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     not engaged in a business relationship as to which disclosure would be
     required under Item 404(b) of Regulation S-K; or (ii) is otherwise
     considered a "non-employee director" for purposes of Rule 16b-3.

     V.   "Nonstatutory Stock Option" means an Option not intended to qualify as
     an Incentive Stock Option.

     W.   "Officer" means (i) before the Listing Date, any person designated by
     the Company as an officer and (ii) on and after the Listing Date, 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.

     X.   "Option" means an Incentive Stock Option or a Nonstatutory Stock
     Option granted pursuant to the Plan.

     Y.   "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.

     Z.   "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.

     AA.  "Outside Director" means a Director who either (i) is not a current
     employee of the Company or an "affiliated corporation" (within the meaning
     of Treasury Regulations promulgated under Section 162(m) of the Code), is
     not a former employee of the Company or an "affiliated corporation"
     receiving compensation for prior services (other than benefits under a tax
     qualified pension plan), was not an officer of the Company or an
     "affiliated corporation" at any time and is not currently receiving direct
     or indirect remuneration from the Company or an "affiliated corporation"
     for services in any capacity other than as a Director or (ii) is otherwise
     considered an "outside director" for purposes of Section 162(m) of the
     Code.

     BB.  "Participant" means a person to whom a Stock Award is granted pursuant
     to the Plan or, if applicable, such other person who holds an outstanding
     Stock Award.

     CC.  "Plan" means this EarthWatch Incorporated 1999 Equity Incentive Plan.

     DD.  "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.

     EE.  "Securities Act" means the Securities Act of 1933, as amended.

     FF.  "Stock Award" means any right granted under the Plan, including an
     Option, a stock bonus and a right to acquire restricted stock.

     GG.  "Stock Award Agreement" means a written agreement between the Company
     and a holder of a Stock Award evidencing the terms and conditions of an
     individual Stock Award grant. Each Stock Award Agreement shall be subject
     to the terms and conditions of the Plan.

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     HH.  "Ten Percent Stockholder" means a person who owns (or is deemed to own
     pursuant to Section 424(d) of the Code) stock possessing more than ten
     percent (10%) of the total combined voting power of all classes of stock of
     the Company or of any of its Affiliates.

III. Administration.

     A.   Administration by Board. The Board shall administer the Plan unless
     and until the Board delegates administration to a Committee, as provided in
     subsection 3(c). Any interpretation of the Plan by the Board and any
     decision by the Board under the Plan shall be final and binding on all
     persons.

     B.   Powers of Board. The Board shall have the power, subject to, and
     within the limitations of, the express provisions of the Plan:

          1.   To determine from time to time which of the persons eligible
               under the Plan shall be granted Stock Awards; when and how each
               Stock Award shall be granted; what type or combination of types
               of Stock Award shall be granted; the provisions of each Stock
               Award granted (which need not be identical), including the time
               or times when a person shall be permitted to receive Common Stock
               pursuant to a Stock Award; and the number of shares of Common
               Stock with respect to which a Stock Award shall be granted to
               each such person.

          2.   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 Board, in the exercise of this power, may
               correct any defect, omission or inconsistency in the Plan or in
               any Stock Award Agreement, in a manner and to the extent it shall
               deem necessary or expedient to make the Plan fully effective.

          3.   To amend the Plan or a Stock Award as provided in Section 12.

          4.   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 which are not in conflict with the
               provisions of the Plan.

     C.   Delegation to Committee.

          1.   General. The Board may delegate administration of the Plan to a
               Committee or Committees of one (1) or more members of the Board,
               and the term "Committee" shall apply to any person or persons to
               whom such authority has been delegated. If administration is
               delegated to a Committee, the Committee shall have, in connection
               with the administration of the Plan, the powers theretofore
               possessed by the Board, including the power to delegate to a
               subcommittee any of the administrative powers the Committee is
               authorized to exercise (and references in this Plan to the Board
               shall thereafter be to the Committee or subcommittee), subject,
               however, to such resolutions, not inconsistent with the
               provisions of the Plan, as may be adopted from time to time by
               the

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               Board. The Board may abolish the Committee at any time and revest
               in the Board the administration of the Plan.

          2.   Committee Composition when Common Stock is Publicly Traded. At
               such time as the Common Stock is publicly traded, in the
               discretion of the Board, a Committee may consist solely of two or
               more Outside Directors, in accordance with Section 162(m) of the
               Code, and/or solely of two or more Non-Employee Directors, in
               accordance with Rule 16b-3. Within the scope of such authority,
               the Board or the Committee may (1) delegate to a committee of one
               or more members of the Board who are not Outside Directors the
               authority to grant Stock Awards to eligible persons who are
               either (a) not then Covered Employees and are not expected to be
               Covered Employees at the time of recognition of income resulting
               from such Stock Award or (b) not persons with respect to whom the
               Company wishes to comply with Section 162(m) of the Code and/or
               (2) delegate to a committee of one or more members of the Board
               who are not Non-Employee Directors the authority to grant Stock
               Awards to eligible persons who are not then subject to Section 16
               of the Exchange Act.

IV.  Shares Subject to the Plan.

     A.   Share Reserve. Subject to the provisions of Section 11 relating to
     adjustments upon changes in Common Stock, the Common Stock that may be
     issued pursuant to Stock Awards shall not exceed in the aggregate
     ten million (10,000,000) shares of Common Stock.

     B.   Reversion of Shares to the Share Reserve. If any Stock Award 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 Stock Award 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.

     D.   Share Reserve Limitation. Prior to the Listing Date and to the extent
     then required by Section 260.140.45 of Title 10 of the California Code of
     Regulations, the total number of shares of Common Stock issuable upon
     exercise of all outstanding Options and the total number of shares of
     Common Stock provided for under any stock bonus or similar plan of the
     Company shall not exceed the applicable percentage as calculated in
     accordance with the conditions and exclusions of Section 260.140.45 of
     Title 10 of the California Code of Regulations, based on the shares of
     Common Stock of the Company that are outstanding at the time the
     calculation is made.

V.   Eligibility.

     A.   Eligibility for Specific Stock Awards. Incentive Stock Options may be
     granted only to Employees. Stock Awards other than Incentive Stock Options
     may be granted to Employees, Directors and Consultants.

     B.   Ten Percent Stockholders.

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          1.   A Ten Percent Stockholder shall not be granted an Incentive Stock
               Option unless the exercise price of such Option is at least one
               hundred ten percent (110%) of the Fair Market Value of the Common
               Stock at the date of grant and the Option is not exercisable
               after the expiration of five (5) years from the date of grant.

          2.   Prior to the Listing Date, a Ten Percent Stockholder shall not be
               granted a Nonstatutory Stock Option unless the exercise price of
               such Option is at least (i) one hundred ten percent (110%) of the
               Fair Market Value of the Common Stock at the date of grant or
               (ii) such lower percentage of the Fair Market Value of the Common
               Stock at the date of grant as is permitted by Section 260.140.41
               of Title 10 of the California Code of Regulations at the time of
               the grant of the Option.

          3.   Prior to the Listing Date, a Ten Percent Stockholder shall not be
               granted a restricted stock award unless the purchase price of the
               restricted stock is at least (i) one hundred percent (100%) of
               the Fair Market Value of the Common Stock at the date of grant or
               (ii) such lower percentage of the Fair Market Value of the Common
               Stock at the date of grant as is permitted by Section 260.140.41
               of Title 10 of the California Code of Regulations at the time of
               the grant of the Option.

     C.   Section 162(m) Limitation. Subject to the provisions of Section 11
     relating to adjustments upon changes in the shares of Common Stock, no
     Employee shall be eligible to be granted Options covering more than
     10,000,000 shares of Common Stock during any calendar year. This
     subsection 5(c) shall not apply prior to the Listing Date and, following
     the Listing Date, this subsection 5(c) shall not apply until (i) the
     earliest of: (1) the first material modification of the Plan (including any
     increase in the number of shares of Common Stock reserved for issuance
     under the Plan in accordance with Section 4); (2) the issuance of all of
     the shares of Common Stock reserved for issuance under the Plan; (3) the
     expiration of the Plan; or (4) the first meeting of stockholders at which
     Directors are to be elected that occurs after the close of the third
     calendar year following the calendar year in which occurred the first
     registration of an equity security under Section 12 of the Exchange Act; or
     (ii) such other date required by Section 162(m) of the Code and the rules
     and regulations promulgated thereunder.

     D.   Consultants.

          1.   Prior to the Listing Date, a Consultant shall not be eligible for
               the grant of a Stock Award if, at the time of grant, either the
               offer or the sale of the Company's securities to such Consultant
               is not exempt under Rule 701 of the Securities Act ("Rule 701")
               because of the nature of the services that the Consultant is
               providing to the Company, or because the Consultant is not a
               natural person, or as otherwise provided by Rule 701, unless the
               Company determines that such grant need not comply with the
               requirements of Rule 701 and will satisfy another exemption under
               the Securities Act as well as comply with the securities laws of
               all other relevant jurisdictions.

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          2.   From and after the Listing Date, a Consultant shall not be
               eligible for the grant of a Stock Award if, at the time of grant,
               a Form S-8 Registration Statement under the Securities Act ("Form
               S-8") is not available to register either the offer or the sale
               of the Company's securities to such Consultant because of the
               nature of the services that the Consultant is providing to the
               Company, or because the Consultant is not a natural person, or as
               otherwise provided by the rules governing the use of Form S-8,
               unless the Company determines both (1) that such grant (a) shall
               be registered in another manner under the Securities Act (e.g.,
               on a Form S-3 Registration Statement) or (b) does not require
               registration under the Securities Act in order to comply with the
               requirements of the Securities Act, if applicable, and (2) that
               such grant complies with the securities laws of all other
               relevant jurisdictions.

          3.   Rule 701 and Form S-8 generally are available to consultants and
               advisors only if (1) they are natural persons; (2) they provide
               bona fide services to the issuer, its parents, its majority-owned
               subsidiaries or majority-owned subsidiaries of the issuer's
               parent; and (3) the services are not in connection with the offer
               or sale of securities in a capital-raising transaction, and do
               not directly or indirectly promote or maintain a market for the
               issuer's securities.

VI.  Option Provisions.

     A.   Each Option shall be in such form and shall contain such terms and
     conditions as the Board shall deem appropriate. All Options shall be
     separately designated Incentive Stock Options or Nonstatutory Stock Options
     at the time of grant, and, if certificates are issued, a separate
     certificate or certificates will be issued for shares of Common Stock
     purchased on exercise of each type of Option. The provisions of separate
     Options need not be identical, but each Option shall include (through
     incorporation of provisions hereof by reference in the Option or otherwise)
     the substance of each of the following provisions:

     B.   Term. Subject to the provisions of subsection 5(b) regarding Ten
     Percent Stockholders, no Option shall be exercisable after the expiration
     of ten (10) years from the date it was granted.

     C.   Exercise Price of an Incentive Stock Option. Subject to the provisions
     of subsection 5(b) regarding Ten Percent Stockholders, the exercise price
     of each Incentive Stock Option shall be not less than one hundred percent
     (100%) of the Fair Market Value of the Common Stock subject to the Option
     on the date the Option is granted. Notwithstanding the foregoing, an
     Incentive Stock 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.

     D.   Exercise Price of a Nonstatutory Stock Option. Subject to the
     provisions of subsection 5(b) regarding Ten Percent Stockholders, the
     exercise price of each Nonstatutory Stock Option granted prior to the
     Listing Date shall be not less than eighty-five percent (85%) of the Fair
     Market Value of the Common Stock subject to the Option on the date the
     Option is granted. The exercise price of each Nonstatutory Stock Option
     granted on or after the Listing Date shall be

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     not less than eighty-five percent (85%) of the Fair Market Value of the
     Common Stock subject to the Option on the date the Option is granted.
     Notwithstanding the foregoing, a Nonstatutory Stock 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.

     E.   Consideration. The purchase price of Common Stock acquired pursuant to
     an Option shall be paid, to the extent permitted by applicable statutes and
     regulations, either (i) in cash at the time the Option is exercised or (ii)
     at the discretion of the Board at the time of the grant of the Option (or
     subsequently in the case of a Nonstatutory Stock Option) (1) by delivery to
     the Company of other Common Stock, (2) according to a deferred payment or
     other similar arrangement with the Optionholder or (3) in any other form of
     legal consideration that may be acceptable to the Board; provided, however,
     that at any time that the Company is incorporated in Delaware, payment of
     the Common Stock's "par value," as defined in the Delaware General
     Corporation Law, shall not be made by deferred payment. In the case of any
     deferred payment arrangement, interest shall be compounded at least
     annually and shall be charged at the minimum rate of interest necessary to
     avoid the treatment as interest, under any applicable provisions of the
     Code, of any amounts other than amounts stated to be interest under the
     deferred payment arrangement. Unless otherwise specifically provided in the
     Option, the purchase price of Common Stock acquired pursuant to an Option
     that is paid by delivery to the Company of other Common Stock acquired,
     directly or indirectly from the Company, shall be paid only by shares of
     the Common Stock of the Company that have been held for more than six (6)
     months (or such longer or shorter period of time required to avoid a charge
     to earnings for financial accounting purposes).

     F.   Transferability of an Incentive Stock Option. An Incentive Stock
     Option shall not be transferable except by will or by the laws of descent
     and distribution and shall be exercisable during the lifetime of the
     Optionholder only by the Optionholder. Notwithstanding the foregoing, the
     Optionholder may, by delivering written notice to the Company, in a form
     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.

     G.   Transferability of a Nonstatutory Stock Option. A Nonstatutory Stock
     Option granted prior to the Listing Date shall not be transferable except
     by will or by the laws of descent and distribution and, to the extent
     provided in the Option Agreement, to such further extent as permitted by
     Section 260.140.41(d) of Title 10 of the California Code of Regulations at
     the time of the grant of the Option, and shall be exercisable during the
     lifetime of the Optionholder only by the Optionholder. A Nonstatutory Stock
     Option granted on or after the Listing Date shall be transferable to the
     extent provided in the Option Agreement. If the Nonstatutory Stock Option
     does not provide for transferability, then the Nonstatutory Stock Option
     shall not be transferable except by will or by the laws of descent and
     distribution and shall be exercisable during the lifetime of the
     Optionholder only by the Optionholder. Notwithstanding the foregoing, the
     Optionholder may, by delivering written notice to the Company, in a form
     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.

                                       10
<PAGE>

     H.   Vesting Generally. The total number of shares of Common Stock subject
     to an Option may, but need not, vest and therefore become exercisable in
     periodic installments that may, but need not, be equal. The Option may be
     subject to such other terms and conditions on the time or times when it may
     be exercised (which may be based on performance or other criteria) as the
     Board may deem appropriate. The vesting provisions of individual Options
     may vary. The provisions of this subsection 6(g) are subject to any Option
     provisions governing the minimum number of shares of Common Stock as to
     which an Option may be exercised.

     I.   Minimum Vesting Prior to the Listing Date. Notwithstanding the
     foregoing subsection 6(g), to the extent that the following restrictions on
     vesting are required by Section 260.140.41(f) of Title 10 of the California
     Code of Regulations at the time of the grant of the Option, then:

          1.   Options granted prior to the Listing Date to an Employee who is
               not an Officer, Director or Consultant shall provide for vesting
               of the total number of shares of Common Stock at a rate of at
               least twenty percent (20%) per year over five (5) years from the
               date the Option was granted, subject to reasonable conditions
               such as continued employment; and

          2.   Options granted prior to the Listing Date to Officers, Directors
               or Consultants may be made fully exercisable, subject to
               reasonable conditions such as continued employment, at any time
               or during any period established by the Company.

     J.   Termination of Continuous Service. In the event an Optionholder's
     Continuous Service terminates (other than upon the Optionholder's death or
     Disability), the Optionholder may exercise his or her Option (to the extent
     that the Optionholder was entitled to exercise such Option as of the date
     of termination) but only within such period of time ending on the earlier
     of (i) the date thirty (30) days following the termination of the
     Optionholder's Continuous Service (or such longer or shorter period
     specified in the Option Agreement, which period shall not be less than
     thirty (30) days for Options granted prior to the Listing Date unless such
     termination is for cause), 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.

     K.   Extension of Termination Date. An Optionholder's Option Agreement may
     also provide that if the exercise of the Option following the termination
     of the Optionholder's Continuous Service (other than upon the
     Optionholder's death or Disability) would be prohibited at any time solely
     because the issuance of shares of Common Stock would violate the
     registration requirements under the Securities Act, then the Option shall
     terminate on the earlier of (i) the expiration of the term of the Option
     set forth in subsection 6(a) or (ii) the expiration of a period of thirty
     (30) days 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.

     L.   Disability of Optionholder. In the event that an Optionholder's
     Continuous Service terminates as a result of the Optionholder's Disability,
     the Optionholder may exercise his or her Option (to the extent that the
     Optionholder

                                       11
<PAGE>

     was entitled to exercise such Option as of the date of termination), but
     only within such period of time ending on the earlier of (i) the date
     twelve (12) months following such termination (or such longer or shorter
     period specified in the Option Agreement, which period shall not be less
     than six (6) months for Options granted prior to the Listing Date) 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.

     M.   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 period (if any) specified in the Option
     Agreement 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 such 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 pursuant to subsection
     6(e) or 6(f), but only within the period ending on the earlier of (1) the
     date twelve (12) months following the date of death (or such longer or
     shorter period specified in the Option Agreement, which period shall not be
     less than six (6) months for Options granted prior to the Listing Date) 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.

     N.   Early Exercise. The Option may, but need not, include a provision
     whereby the Optionholder may elect at any time before the Optionholder's
     Continuous Service terminates to exercise the Option as to any part or all
     of the shares of Common Stock subject to the Option prior to the full
     vesting of the Option. Subject to the "Repurchase Limitation" in subsection
     10(h), any unvested shares of Common Stock so purchased may be subject to a
     repurchase option in favor of the Company or to any other restriction the
     Board determines to be appropriate. Provided that the "Repurchase
     Limitation" in subsection 10(h) is not violated, the Company will not
     exercise its repurchase option until at least six (6) months (or such
     longer or shorter period of time required to avoid a charge to earnings for
     financial accounting purposes) have elapsed following exercise of the
     Option unless the Board otherwise specifically provides in the Option.

     O.   Right of Repurchase. Subject to the "Repurchase Limitation" in
     subsection 10(h), the Option may, but need not, include a provision whereby
     the Company may elect, prior to the Listing Date, to repurchase all or any
     part of the vested shares of Common Stock acquired by the Optionholder
     pursuant to the exercise of the Option. Provided that the "Repurchase
     Limitation" in subsection 10(h) is not violated, the Company will not
     exercise its repurchase option until at least six (6) months (or such
     longer or shorter period of time required to avoid a charge to earnings for
     financial accounting purposes) have elapsed following exercise of the
     Option unless the Board otherwise specifically provides in the Option.

     P.   Right of First Refusal. The Option may, but need not, include a
     provision whereby the Company may elect, prior to the Listing Date, to
     exercise a right of first refusal following receipt of notice from the
     Optionholder of the intent to transfer all or any part of the shares of
     Common Stock received upon the exercise of the Option. Except as expressly
     provided in this subsection 6(o), such

                                       12
<PAGE>

     right of first refusal shall otherwise comply with any applicable
     provisions of the Bylaws of the Company.

     Q.   Re-Load Options. Without in any way limiting the authority of the
     Board to make or not to make grants of Options hereunder, the Board shall
     have the authority (but not an obligation) to include as part of any Option
     Agreement a provision entitling the Optionholder to a further Option (a
     "Re-Load Option") in the event the Optionholder exercises the Option
     evidenced by the Option Agreement, in whole or in part, by surrendering
     other shares of Common Stock in accordance with this Plan and the terms and
     conditions of the Option Agreement. Any such Re-Load Option shall (i)
     provide for a number of shares of Common Stock equal to the number of
     shares of Common Stock surrendered as part or all of the exercise price of
     such Option; (ii) have an expiration date which is the same as the
     expiration date of the Option the exercise of which gave rise to such Re-
     Load Option; and (iii) have an exercise price which is equal to one hundred
     percent (100%) of the Fair Market Value of the Common Stock subject to the
     Re-Load Option on the date of exercise of the original Option.
     Notwithstanding the foregoing, a Re-Load Option shall be subject to the
     same exercise price and term provisions heretofore described for Options
     under the Plan. Unless otherwise specifically provided in the Option, the
     Optionholder shall not surrender shares of Common Stock acquired, directly
     or indirectly from the Company, unless such shares have been held for more
     than six (6) months (or such longer or shorter period of time required to
     avoid a charge to earnings for financial accounting purposes).

     R.   Any such Re-Load Option may be an Incentive Stock Option or a
     Nonstatutory Stock Option, as the Board may designate at the time of the
     grant of the original Option; provided, however, that the designation of
     any Re-Load Option as an Incentive Stock Option shall be subject to the one
     hundred thousand dollar ($100,000) annual limitation on the exercisability
     of Incentive Stock Options described in subsection 10(d) and in Section
     422(d) of the Code. There shall be no Re-Load Options on a Re-Load Option.
     Any such Re-Load Option shall be subject to the availability of sufficient
     shares of Common Stock under subsection 4(a) and the "Section 162(m)
     Limitation" on the grants of Options under subsection 5(c) and shall be
     subject to such other terms and conditions as the Board may determine which
     are not inconsistent with the express provisions of the Plan regarding the
     terms of Options.

VII. Provisions of Stock Awards other than Options.

     A.   Stock Bonus Awards. Each stock bonus agreement shall be in such form
     and shall contain such terms and conditions as the Board shall deem
     appropriate. The terms and conditions of stock bonus agreements may change
     from time to time, and the terms and conditions of separate stock bonus
     agreements need not be identical, but each stock bonus agreement shall
     include (through incorporation of provisions hereof by reference in the
     agreement or otherwise) the substance of each of the following provisions:

          1.   Consideration. A stock bonus may be awarded in consideration for
               past services actually rendered to the Company or an Affiliate
               for its benefit.

          2.   Vesting. Subject to the "Repurchase Limitation" in subsection
               10(h), shares of Common Stock awarded under the stock bonus

                                       13
<PAGE>

               agreement may, but need not, be subject to a share repurchase
               option in favor of the Company in accordance with a vesting
               schedule to be determined by the Board.

          3.   Termination of Participant's Continuous Service. Subject to the
               "Repurchase Limitation" in subsection 10(h), in the event a
               Participant's Continuous Service terminates, the Company may
               reacquire any or all of the shares of Common Stock held by the
               Participant which have not vested as of the date of termination
               under the terms of the stock bonus agreement.

          4.   Transferability. For a stock bonus award made before the Listing
               Date, rights to acquire shares of Common Stock under the stock
               bonus agreement shall not be transferable except by will or by
               the laws of descent and distribution and shall be exercisable
               during the lifetime of the Participant only by the Participant.
               For a stock bonus award made on or after the Listing Date, rights
               to acquire shares of Common Stock under the stock bonus agreement
               shall be transferable by the Participant only upon such terms and
               conditions as are set forth in the stock bonus agreement, as the
               Board shall determine in its discretion, so long as Common Stock
               awarded under the stock bonus agreement remains subject to the
               terms of the stock bonus agreement.

     B.   Restricted Stock Awards. Each restricted stock purchase agreement
     shall be in such form and shall contain such terms and conditions as the
     Board shall deem appropriate. The terms and conditions of the restricted
     stock purchase agreements may change from time to time, and the terms and
     conditions of separate restricted stock purchase agreements need not be
     identical, but each restricted stock purchase agreement shall include
     (through incorporation of provisions hereof by reference in the agreement
     or otherwise) the substance of each of the following provisions:

          1.   Purchase Price. Subject to the provisions of subsection 5(b)
               regarding Ten Percent Stockholders, the purchase price under each
               restricted stock purchase agreement shall be such amount as the
               Board shall determine and designate in such restricted stock
               purchase agreement. For restricted stock awards made prior to the
               Listing Date, the purchase price shall not be less than eighty-
               five percent (85%) of the Common Stock's Fair Market Value on the
               date such award is made or at the time the purchase is
               consummated. For restricted stock awards made on or after the
               Listing Date, the purchase price shall not be less than eighty-
               five percent (85%) of the Common Stock's Fair Market Value on the
               date such award is made or at the time the purchase is
               consummated.

          2.   Consideration. The purchase price of Common Stock acquired
               pursuant to the restricted stock purchase agreement shall be paid
               either: (i) in cash at the time of purchase; (ii) at the
               discretion of the Board, according to a deferred payment or other
               similar arrangement with the Participant; or (iii) in any other
               form of legal consideration that may be acceptable to the Board
               in its discretion; provided, however, that at any time that the
               Company is

                                       14
<PAGE>

               incorporated in Delaware, then payment of the Common Stock's "par
               value," as defined in the Delaware General Corporation Law, shall
               not be made by deferred payment.

          3.   Vesting. Subject to the "Repurchase Limitation" in subsection
               10(h), shares of Common Stock acquired under the restricted stock
               purchase agreement may, but need not, be subject to a share
               repurchase option in favor of the Company in accordance with a
               vesting schedule to be determined by the Board.

          4.   Termination of Participant's Continuous Service. Subject to the
               "Repurchase Limitation" in subsection 10(h), in the event a
               Participant's Continuous Service terminates, the Company may
               repurchase or otherwise reacquire any or all of the shares of
               Common Stock held by the Participant which have not vested as of
               the date of termination under the terms of the restricted stock
               purchase agreement.

          5.   Transferability. For a restricted stock award made before the
               Listing Date, rights to acquire shares of Common Stock under the
               restricted stock purchase agreement shall not be transferable
               except by will or by the laws of descent and distribution and
               shall be exercisable during the lifetime of the Participant only
               by the Participant. For a restricted stock award made on or after
               the Listing Date, rights to acquire shares of Common Stock under
               the restricted stock purchase agreement shall be transferable by
               the Participant only upon such terms and conditions as are set
               forth in the restricted stock purchase agreement, as the Board
               shall determine in its discretion, so long as Common Stock
               awarded under the restricted stock purchase agreement remains
               subject to the terms of the restricted stock purchase agreement.

VIII. Covenants of the Company.

     A.   Availability of Shares. During the terms of the Stock Awards, the
     Company shall keep available at all times the number of shares of Common
     Stock required to satisfy such Stock Awards.

     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 Stock Awards and to issue and sell
     shares of Common Stock upon exercise of the Stock Awards; provided,
     however, that this undertaking shall not require the Company to register
     under the Securities Act the Plan, any Stock Award or any Common Stock
     issued or issuable pursuant to any such Stock Award. 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 Common Stock under the Plan,
     the Company shall be relieved from any liability for failure to issue and
     sell Common Stock upon exercise of such Stock Awards unless and until such
     authority is obtained.

IX.  Use of Proceeds from Stock.

     A.   Proceeds from the sale of Common Stock pursuant to Stock Awards shall

                                       15
<PAGE>

     constitute general funds of the Company.

X.   Miscellaneous.

     A.   Acceleration of Exercisability and Vesting. The Board shall have the
     power to accelerate the time at which a Stock Award may first be exercised
     or the time during which a Stock Award or any part thereof will vest in
     accordance with the Plan, notwithstanding the provisions in the Stock Award
     stating the time at which it may first be exercised or the time during
     which it will vest.

     B.   Stockholder Rights. No Participant shall be deemed to be the holder
     of, or to have any of the rights of a holder with respect to, any shares of
     Common Stock subject to such Stock Award unless and until such Participant
     has satisfied all requirements for exercise of the Stock Award pursuant to
     its terms.

     C.   No Employment or other Service Rights. Nothing in the Plan or any
     instrument executed or Stock Award granted pursuant thereto shall confer
     upon any Participant any right to continue to serve the Company or an
     Affiliate in the capacity in effect at the time the Stock Award was granted
     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.

     D.   Incentive Stock Option $100,000 Limitation. To the extent that the
     aggregate Fair Market Value (determined at the time of grant) of Common
     Stock with respect to which Incentive Stock Options are exercisable for the
     first time by any Optionholder during any calendar year (under all plans of
     the Company and its Affiliates) exceeds one hundred thousand dollars
     ($100,000), the Options or portions thereof which exceed such limit
     (according to the order in which they were granted) shall be treated as
     Nonstatutory Stock Options.

     E.   Investment Assurances. The Company may require a Participant, as a
     condition of exercising or acquiring Common Stock under any Stock Award,
     (i) to give written assurances satisfactory to the Company as to the
     Participant'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 Stock
     Award; and (ii) to give written assurances satisfactory to the Company
     stating that the Participant is acquiring Common Stock subject to the Stock
     Award for the Participant's own account and not with any present intention
     of selling or otherwise distributing the Common Stock. The foregoing
     requirements, and any assurances given pursuant to such requirements, shall
     be inoperative if (iii) the issuance of the shares of Common Stock upon the
     exercise or acquisition of Common Stock under the Stock Award 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

                                       16
<PAGE>

     with applicable securities laws, including, but not limited to, legends
     restricting the transfer of the Common Stock.

     F.   Information Obligation. Prior to the Listing Date, to the extent
     required by Section 260.140.46 of Title 10 of the California Code of
     Regulations, the Company shall deliver financial statements to Participants
     at least annually. This subsection 10(g) shall not apply to key Employees
     whose duties in connection with the Company assure them access to
     equivalent information.

     G.   Repurchase Limitation. The terms of any repurchase option shall be
     specified in the Stock Award and may be either at Fair Market Value at the
     time of repurchase or at not less than the original purchase price. To the
     extent required by Section 260.140.41 and Section 260.140.42 of Title 10 of
     the California Code of Regulations at the time a Stock Award is made, any
     repurchase option contained in a Stock Award granted prior to the Listing
     Date to a person who is not an Officer, Director or Consultant shall be
     upon the terms described below:

          1.   Fair Market Value. If the repurchase option gives the Company the
               right to repurchase the shares of Common Stock upon termination
               of employment at not less than the Fair Market Value of the
               shares of Common Stock to be purchased on the date of termination
               of Continuous Service, then (i) the right to repurchase shall be
               exercised for cash or cancellation of purchase money indebtedness
               for the shares of Common Stock within ninety (90) days of
               termination of Continuous Service (or in the case of shares of
               Common Stock issued upon exercise of Stock Awards after such date
               of termination, within ninety (90) days after the date of the
               exercise) or such longer period as may be agreed to by the
               Company and the Participant (for example, for purposes of
               satisfying the requirements of Section 1202(c)(3) of the Code
               regarding "qualified small business stock") and (ii) the right
               terminates when the shares of Common Stock become publicly
               traded.

          2.   Original Purchase Price. If the repurchase option gives the
               Company the right to repurchase the shares of Common Stock upon
               termination of Continuous Service at the original purchase price,
               then (i) the right to repurchase at the original purchase price
               shall lapse at the rate of at least twenty percent (20%) of the
               shares of Common Stock per year over five (5) years from the date
               the Stock Award is granted (without respect to the date the Stock
               Award was exercised or became exercisable) and (ii) the right to
               repurchase shall be exercised for cash or cancellation of
               purchase money indebtedness for the shares of Common Stock within
               ninety (90) days of termination of Continuous Service (or in the
               case of shares of Common Stock issued upon exercise of Options
               after such date of termination, within ninety (90) days after the
               date of the exercise) or such longer period as may be agreed to
               by the Company and the Participant (for example, for purposes of
               satisfying the requirements of Section 1202(c)(3) of the Code
               regarding "qualified small business stock").

XI.  Adjustments upon Changes in Stock.

                                       17
<PAGE>

     A.   Capitalization Adjustments. If any change is made in the Common Stock
     subject to the Plan, or subject to any Stock Award, 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) and the maximum
     number of securities subject to award to any person pursuant to subsection
     5(c), and the outstanding Stock Awards will be appropriately adjusted in
     the class(es) and number of securities and price per share of Common Stock
     subject to such outstanding Stock Awards. The Board shall make such
     adjustments, and 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.   Change in Control. In the event of a Change in Control, then with
     respect to Stock Awards held by Participants, the vesting of such Stock
     Awards (and, if applicable, the time during which such Stock Awards may be
     exercised) shall be accelerated in full, and the Stock Awards shall
     terminate if not exercised (if applicable) at or prior to such event. With
     respect to any other Stock Awards outstanding under the Plan, such Stock
     Awards shall terminate if not exercised (if applicable) prior to such
     event.

     C.   Parachute Payments. In the event that the acceleration of the vesting
     and exercisability of the Stock Awards and/or lapse of reacquisition or
     repurchase rights held by the Company with respect to Stock Awards provided
     for in subsection 11(d) and benefits otherwise payable to a Participant (i)
     constitute "parachute payments" within the meaning of Section 280G (as it
     may be amended or replaced) of the Code, and (ii) but for this subsection
     would be subject to the excise tax imposed by Section 4999 (as it may be
     amended or replaced) of the Code (the "Excise Tax"), then such
     Participant's benefits hereunder shall be either

          1.   provided to such Participant in full, or

          2.   provided to such Participant as to such lesser extent which would
               result in no portion of such benefits being subject to the Excise
               Tax,

     D.   Whichever of the foregoing amounts, when taking into account
     applicable federal, state and local income taxes and the Excise Tax,
     results in the receipt by such Participant, on an after-tax basis, of the
     greatest amount of benefits, notwithstanding that all or some portion of
     such benefits may be taxable under the Excise Tax. Unless the Company and
     such Participant otherwise agree in writing, any determination required
     under this subsection shall be made in writing in good faith by the
     Accountants. In the event of a reduction of benefits hereunder, the
     Participant shall be given the choice of which benefits to reduce. For
     purposes of making the calculations required by this subsection, the
     Accountants may make reasonable assumptions and approximations concerning
     applicable taxes and may rely on reasonable, good faith interpretations
     concerning the application of the Code. The Company and such Participants
     shall furnish to the Accountants such information and documents as the
     Accountants may reasonably request in order to make a determination under
     this subsection. The Company shall bear all costs the

                                       18
<PAGE>

      Accountants may reasonably incur in connection with any calculations
      contemplated by this subsection.

XII.  Amendment of the Plan and Stock Awards.

      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 Common 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 Section
      422 of the Code, 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, including, but
      not limited to, amendments to the Plan intended to satisfy the
      requirements of Section 162(m) of the Code and the regulations thereunder
      regarding the exclusion of performance-based compensation from the limit
      on corporate deductibility of compensation paid to certain executive
      officers.

      C.  Contemplated Amendments. It is expressly contemplated that the Board
      may amend the Plan in any respect the Board deems necessary or advisable
      to provide eligible Employees with the maximum benefits provided or to be
      provided under the provisions of the Code and the regulations promulgated
      thereunder relating to Incentive Stock Options and/or to bring the Plan
      and/or Incentive Stock Options granted under it into compliance therewith.

      D.  No Impairment of Rights. Rights under any Stock Award 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 Participant and (ii)
      the Participant consents in writing.

      E.  Amendment of Stock Awards. The Board at any time, and from time to
      time, may amend the terms of any one or more Stock Awards; provided,
      however, that the rights under any Stock Award shall not be impaired by
      any such amendment unless (i) the Company requests the consent of the
      Participant and (ii) the Participant consents in writing.

XIII. Termination or Suspension of the Plan.

      A.  Plan Term. The Board may suspend or terminate the Plan at any time.
      Unless sooner terminated, the Plan shall terminate on the day before the
      tenth (10th) anniversary of the date the Plan is adopted by the Board or
      approved by the stockholders of the Company, whichever is earlier. No
      Stock Awards 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 Participant.

XIV.  Effective Date of Plan.

      A.  The Plan shall become effective as determined by the Board, but no
      Stock Award shall be exercised (or, in the case of a stock bonus, shall be
      granted) unless and until the Plan has been approved by the stockholders
      of the Company, which

                                       19
<PAGE>

     approval shall be within twelve (12) months before or after the date the
     Plan is adopted by the Board.

XV.  Choice of Law.

     A.   The law of the State of Colorado shall govern all questions concerning
     the construction, validity and interpretation of this Plan, without regard
     to such state's conflict of laws rules.

                                       20<PAGE>

                                                                   Exhibit 10.3
                                                                   ------------

                           BALL-EARTHWATCH AGREEMENT

     This Ball-EarthWatch Agreement, dated as of April 8, 1999, is made by and
between EarthWatch Incorporated, a Delaware corporation ("EarthWatch" or the
"Company"), and Ball Technologies Holdings Corp., a Colorado corporation
("Ball").

     Whereas, Ball and/or its affiliates currently perform services under
certain agreements with EarthWatch related to satellite construction and certain
engineering support services;

     Whereas, EarthWatch is in need of equity financing to fund its business
operations, including satellite constructions, and to enable it to perform its
obligations pursuant to its agreements with Ball; and

     Whereas, Ball has agreed to transfer stock to EarthWatch to facilitate the
Company's ability to attract additional financing to fund EarthWatch's business
operations, including its obligations pursuant to its agreements with Ball.

     Now Therefore, the parties agree as follows:

     Subject to the following paragraph, Ball hereby transfers to EarthWatch two
million seven hundred sixty-one thousand nine hundred eighty-three (2,761,983)
shares of Series A Participating Preferred Stock, par value $.001 per share, of
the Company (the "Transferred Shares") standing in Ball's name on the books of
the Company represented by Certificate No. 100 (the "Certificate") and does
hereby irrevocably constitute and appoint the Company's Secretary attorney to
transfer, following delivery by Ball to the Company of said Certificate, said
stock on the books of the Company with full power of substitution in the
premises.

     The transfer of such shares to the Company shall be effective immediately
prior to the filing with the Secretary of State of the State of Delaware of the
Amended and Restated Certificate of Incorporation of EarthWatch (the "Restated
Certificate") in connection with the proposed recapitalization of EarthWatch;
and no such transfer shall occur unless such Restated Certificate is so filed.
Ball agrees to surrender the Certificate in a timely manner to permit transfer
of the Transferred Shares; and EarthWatch shall retire and cancel all of the
Transferred Shares, effective immediately after such transfer becomes effective,
but immediately prior to the filing with the Secretary of State of the State of
Delaware of the Restated Certificate.

     This Ball-EarthWatch Agreement shall terminate, and no such transfer,
retirement or cancellation shall occur, if such Restated Certificate has not
been filed with the Delaware Secretary of State on or before April 15, 1999.

               [Remainder of This Page Intentionally Left Blank]
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date written below.

Dated: April 8, 1999

                               Ball Technologies Holdings Corp.

                               By:    /s/ Donald C.Lewis
                               Name:  Donald C. Lewis
                               Title: Secretary

                               EarthWatch Incorporated

                               By:    /s/ Herbert F. Satterlee, III
                               Name:  Herbert F. Satterlee, III
                               Title: President and Chief Executive Officer

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