Document:

Exhibit
10.8

DISTILLER’S
GRAIN MARKETING AGREEMENT

THIS
DISTILLER’S GRAIN MARKETING AGREEMENT (the “Agreement”), is
entered into effective as of 3-20-07, 20  07, by Akron Riverview Corn Processors,
LLC, an Iowa Limited Liability Company (“Seller”), and Commodity Specialist
Company, a Delaware Corporation (“Buyer”).

W I T N E S S E T
H:

WHEREAS, Seller
desires to sell and Buyer desires to purchase the Distiller’s Dried Grains with
Solubles (“DDGS”) (hereinafter DDGS is sometimes referred to as the “Products”)
output of the ethanol production plant which Seller owns in Akron, Iowa and
which is to be shipped by railcar; and

WHEREAS, Seller
and Buyer wish to agree in advance of the sale and purchase of the Products to
the price formula, payment, delivery and other terms thereof in consideration
of the mutually promised performance of the other;

NOW, THEREFORE, in
consideration of the promises and the mutual covenants and conditions herein
contained, and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by both parties, it is hereby agreed:

1.                                       BUYER
PERFORMANCE.  Buyer agrees to perform
the services that it provides for Seller in a professional and competent
manner.

2.                                       PURCHASE
AND SALE.  Seller agrees to sell to
Buyer and Buyer agrees to purchase from Seller the entire bulk feed grade DDGS
output from the Plant which is to be shipped by railcar, subject to all terms
and conditions set forth in this Agreement. 
Buyer shall label all Products that are sold by Buyer and shall register
all labels with the states where such Products are sold. All DDGS that is to be shipped by any method other than railcar shall
be sold by Seller and Buyer shall have no responsibility with respect to such
DDGS.

3.                                   TRADE RULES.  All purchases and sales made hereunder shall
be governed by the Feed Trade Rules of the National Grain and Feed Association
unless otherwise specified.  Said Trade
Rules, a copy of which is appended hereto as Exhibit A, shall, to the
extent applicable, be a part of this Agreement as if fully set forth herein.

4.                                       TERM
AND TERMINATION.

A.                                   The
initial term of this Agreement shall be
for one year commencing as of substantial completion and start-up of production
of the Plant (the “Effective Date”). 
Start-up is anticipated to occur in 2008.  Unless earlier terminated in
accordance with this

Agreement, this Agreement shall be automatically
renewed for successive one (1) year terms thereafter unless either party gives
written notice to the other party of its election not to renew not later than
60 days prior to the expiration of the then current term.

B.                                     In the event that during the term of this
Agreement, or any renewal thereof, Seller materially changes the quality of the
Products produced at the Plant through the application of new technology and
equipment, either Seller or Buyer shall have the right to terminate this
Agreement upon 60 days notice. Notwithstanding such termination, Seller shall
remain liable to provide Products to Buyer in sufficient quantities, either
through the Plant or buying such product, to honor any sales contract that
Buyer may have to which Seller has consented.

5.                                       DELIVERY
AND TITLE.

A.  The place of delivery for all Products sold
pursuant to this Agreement shall be FOB Plant. 
Buyer and Buyer’s agents shall be given access to Seller’s Plant in a
manner and at all times reasonably necessary and convenient for Buyer to take
delivery as provided herein.  Buyer shall
schedule the loading and shipping of all outbound Products purchased hereunder which
is shipped by  rail.  All labor and equipment necessary to
load  rail cars shall be supplied by
Seller without charge to Buyer.  Seller
agrees to handle all Products in a good and workmanlike manner in accordance
with Buyer’s reasonable requirements and in accordance with normal industry
practice.  Seller shall maintain the rail
loading facilities in safe operating condition in accordance with normal
industry standards.

B.  Seller shall be responsible at all times for
the quantity, quality and condition of any Products in storage at the Plant.
Seller shall not be responsible for the quantity, quality and condition of any
of Products stored by Buyer at locations other than the Plant.

C.  Buyer shall give to Seller a schedule of
quantities of the Products to be removed by rail with sufficient advance notice
reasonably to allow Seller to provide the required services.  Seller shall provide the labor, equipment and
facilities necessary to meet Buyer’s loading schedule and, except for any
consequential or indirect damages, shall be responsible for Buyer’s actual
costs or damages resulting from Seller’s failure to do so.  Buyer shall order and supply rail cars as
scheduled for rail shipments.  All
freight charges shall be the responsibility of Buyer and shall be billed
directly to Buyer.

D.  Buyer shall provide loading orders as
necessary to permit Seller to maintain Seller’s usual production schedule,
provided, however, that Buyer shall not be responsible for failure to schedule
removal of the DDGS unless Seller shall have provided to Buyer production
schedules as follows:  Five (5) days
prior to the beginning of each calendar month during the term hereof, Seller
shall provide to Buyer a tentative schedule for production in the next calendar
month which is to be shipped by railcar. 
Seller shall inform Buyer daily of inventory and production status. For
purposes of this paragraph,

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notification will
be sufficient if made by e-mail or facsimile as follows:

If to Buyer, to
the attention of Steve Markham, Facsimile number 612-330-9894 or email to smarkham@csc-world.com,
and

If to Seller, to
the attention of Steve Galles, Facsimile number 712-376-2815 or email to
steve.galles@littlesiouxcornprocessors.com,

Or to such other
representatives of Buyer and Seller as they may designate to the other in
writing.

E.  Title, risk of loss and full shipping
responsibility shall pass to Buyer upon loading the DDGS into rail cars and
delivering to Buyer of the bill of lading for each such shipment.

6.                                       PRICE
AND PAYMENT

A.  Buyer agrees to pay Seller as follows:  for all Products removed by Buyer from the
Plant a price equal to ninety eight (98%) of the FOB Plant price actually
received by Buyer from its customers, with 2% to be retained by Buyer as its
service fee, provided, however, that Buyer’s service fee shall not be less
$1.50 per ton nor shall it exceed $2.00 per ton.  The calculation on the minimum and maximum
fee payable to Buyer shall be made with respect to each weekly payment and will
not be carried over to any subsequent payments. By way of illustration, if the
2% to be retained by Buyer for any given week is less than $1.50 per ton, the
fee to be retained by Buyer shall then be $1.50 per ton.  If in subsequent
weeks the 2% is greater than $1.50 but less than $2.00, the fee shall be the
2%.  Conversely, if the 2% for any period exceeds $2.00, the fee shall
then be $2.00 per ton. If in subsequent weeks the 2% is less than $2.00 but
greater than $1.50, the fee shall be the 2%.  For purposes of this
provision, the FOB Plant price shall be the actual sale price, less all freight
costs incurred by Buyer in delivering the Product to its customer.

B.  Buyer agrees that it shall not sell Products
for delivery without the prior oral or written consent of Seller.  Buyer agrees to use commercially reasonable
efforts to achieve the highest resale price available under prevailing market
conditions.  Seller’s sole and exclusive
remedy for breach of Buyer’s obligations hereunder shall be to terminate this
Agreement. Buyer shall collect all applicable state tonnage taxes on Products
sold by Buyer and shall remit to the appropriate governmental agency.

B.  Within ten (10) days following receipt of
certified weight certificates, which certificates shall be presented to Buyer
each Thursday for all shipments during the preceding week, Buyer shall pay
Seller the full price, determined pursuant to paragraph 6(A) above, for all
properly documented shipments.  Buyer
agrees to maintain accurate sales records and to provide such records to Seller
upon request.  Seller shall have the
option to audit Buyer’s sales invoices at any time during normal business hours
and

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during the term of
this Agreement.  If any such audit
reveals a deficiency in payment due Seller, Buyer shall immediately pay Seller
the amount of such deficiency plus interest calculated from the date such
payment should have been made at the prime rate then in effect as represented
in the Wall Street Journal.

7.                                       QUANTITY
AND WEIGHTS.

A.  It is understood that the output of Products
shall be determined by Seller’s production schedule and that no warranty or
representation has been made by Seller as to the exact quantities of Products
to be sold pursuant to this Agreement.

B.  The quantity of Products delivered to Buyer
from Seller’s Plant shall be established by weight certificates obtained from
scale at the Plant which is certified as of the time of weighing and which
complies with all applicable laws, rules and regulations or in the event that
the scale at the Plant is inoperable then at other scales which are certified
as of the time of weighing and which comply with all applicable laws, rules and
regulations. The outbound weight certificates shall be determinative of the
quantity of Products for which Buyer is obligated to pay pursuant to Section 6.

8.                                       QUALITY.

A.  Seller understands that Buyer intends to sell
the Products purchased from Seller as a primary animal feed ingredient and that
said Products are subject to minimum quality standards for such use.  Seller agrees and warrants that the Products
produced at its Plant and delivered to Buyer will comply with current industry
standards in the feed trade.

B.  Seller warrants that all Products, unless the
parties agree otherwise, sold to Buyer hereunder shall, at the time of delivery
to Buyer, conform to the following minimum quality standard:

 

	
   

  	
   

  	
  Protein

  	
   

  	
  Fat

  	
   

  	
  Fiber

  	
   

  	
  Moisture

  	
   

  	
  Ash

  	
   

  
	
   

  	
   

  	
  Min

  	
   

  	
   

  	
  Max

  	
   

  	
   

  	
  Min

  	
   

  	
   

  	
  Max

  	
   

  	
   

  	
  Min

  	
   

  	
   

  	
  Max

  	
   

  	
   

  	
  Min

  	
   

  	
   

  	
  Max

  	
   

  	
   

  	
  Min

  	
   

  	
   

  	
  Max

  	
   

  
	
  DDGS

  	
   

  	
  25

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  9

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  15

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  12

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  6

  	
   

  

 

The standard for DDGS will be determined on an “as
is” basis rather than a dry weight basis. Minimum quality standards for
Solubles shall be agreed upon by the parties at a subsequent date.  Buyer may amend the foregoing minimum
quality standard upon 90 days written notice to Seller; provided, however, such
amended minimum quality standards are acceptable under current industry
standards in the feed trade industry at the time of amendment.

C.  Payment of invoice does not waive Buyer’s rights if goods do not comply
with terms or specifications of this Agreement. Unless otherwise agreed
between the parties to this Agreement, and in addition to other remedies
permitted by law, the Buyer may, without

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obligation to pay,
reject either before or after delivery, any of the Products which when
inspected or used fail in a material way to conform to this Agreement.  Should any of the Products be seized or
condemned by any federal or state department or agency for any reason except
noncompliance by Buyer with applicable federal or state requirements, such
seizure or condemnation shall operate as a rejection by Buyer of the goods
seized or condemned and Buyer shall not be obligated to offer any defense in
connection with the seizure or condemnation. When rejection occurs before or
after delivery, at its option, Buyer may:

(1) Dispose of the
rejected goods after first offering Seller a reasonable opportunity of
examining and taking possession thereof, if the condition of the goods
reasonably appears to Buyer to permit such delay in making disposition; or

(2) Dispose of the
rejected goods in any manner directed by Seller which Buyer can accomplish
without violation of applicable laws, rules, regulations or property rights; or

(3) If Buyer has
no available means of disposal of rejected goods and Seller fails to direct
Buyer to dispose of it as provided herein, Buyer may return the rejected goods
to Seller, upon which event Buyer’s obligations with respect to said rejected
goods shall be deemed fulfilled.  Title
and risk of loss shall pass to Seller promptly upon rejection by Buyer.

(4) Seller shall
reimburse Buyer for all costs reasonably incurred by Buyer in storing,
transporting, returning and disposing of the rejected goods. Buyer shall have
no obligation to pay Seller for rejected goods and may deduct reasonable costs
and expenses to be reimbursed by Seller from amounts otherwise owed by Buyer to
Seller.

(5) If Seller
produces Products which comply with the warranty in Section C above but which
do not meet applicable industry standards, Buyer agrees to purchase such
Products for resale but makes no representation or warranty as to the price at
which such Products can be sold.  If the
Products deviates so severely from industry standard as to be unsalable, then
it shall be disposed of in the manner provided for rejected goods in Section C
above.

D.  If Seller knows or reasonably suspects that
any of the Products produced at its Plant are adulterated or misbranded, or
outside of industry quality standards, Seller shall promptly so notify Buyer so
that such Products can be tested before entering interstate commerce.  If Buyer knows or reasonably suspects that
any of the Products produced by Seller at its Plant are adulterated, misbranded
or outside of industry quality standards, then Buyer may obtain independent
laboratory tests of the affected goods. If such goods are tested and found to
comply with all warranties made by Seller herein, then Buyer shall pay all
testing costs; and if the goods are found not to comply with such warranties,
Seller will pay all testing costs.

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9.                                       RETENTION
OF SAMPLES.  Seller will take an
origin sample of Products from each rail car before it leaves the Plant using
standard sampling methodology.  Seller
will label these samples to indicate the date of shipment and the  railcar number involved.  Seller will also retain the samples and
labeling information for no less than 
one year.

10.                                 INSURANCE.

A.  Seller warrants to Buyer that all employees
engaged in the removal of the Products from Seller’s Plant shall be covered as
required by law by worker’s compensation and unemployment compensation
insurance.

B.  Seller agrees to maintain throughout every
term of this Agreement comprehensive general liability insurance, including
product liability coverage, with combined single limits of not less than
$2,000,000.  Seller’s policies of
comprehensive general liability insurance shall be endorsed to require at least
thirty (30) days advance notice to Buyer prior to the effective date of any
decrease in or cancellation of coverage. 
Seller shall cause Buyer to be named as an additional insured on Seller’s
insurance policy and shall provide a certificate of insurance to Buyer to
establish the coverage maintained by Seller not later than fourteen (14) days
prior to completion and start-up of production of the Plant.

C.  Buyer agrees to carry such insurance on its
vehicles operating on Seller’s property as Seller reasonably deems
appropriate.  The parties acknowledge
that Buyer may elect to self insure its vehicles.  Upon request, Buyer shall provide certificate
of insurance to Seller to establish the coverage maintained by Buyer.

D.  Notwithstanding the foregoing, nothing herein
shall be construed to constitute a waiver by either party of claims, causes of
action or other rights which either party may have or hereafter acquire against
the other for damage or injury to its agents, employees, invitees, property,
equipment or inventory, or third party claims against the other for damage or
injury to other persons or the property of others.

11.                                 REPRESENTATIONS
AND WARRANTIES

A.  Seller represents and warrants that all of
the Products delivered to Buyer shall not be adulterated or misbranded within
the meaning of the Federal Food, Drug and Cosmetic Act and may lawfully be
introduced into interstate commerce pursuant to the provisions of the Act.  Seller further warrants that the Products
shall fully comply with any applicable state laws governing quality, naming and
labeling of product.  Payment of invoice
shall not constitute a waiver by Buyer of Buyer’s rights as to goods which do
not comply with this Agreement or with applicable laws and regulations.  EXCEPT AS
SPECIFICALLY STATED IN THIS AGREEMENT, SELLER MAKES NO WARRANTY OR
REPRESENTATION, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY WARRANTY
OF MERCHANTABILITY OR

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FITNNESS
FOR A PARTICULAR PURPOSE.

B.  Seller represents and warrants that the
Products delivered to Buyer shall be free and clear of liens and encumbrances.

12.                                 EVENTS
OF DEFAULT.  The occurrence of any of
the following shall be an event of default under this Agreement:  (1) failure of either party to make payment
to the other when due; (2) default by either party in the performance of the
covenants and agreements set forth in this Agreement; (3) if either party shall
become insolvent, or make a general assignment for the benefit of creditors or
to an agent authorized to liquidate any substantial amount of its assets, or be
adjudicated bankrupt, or file a petition in bankruptcy, or apply to a court for
the appointment of a receiver for any of its assets or properties with or
without consent, and such receiver shall not be discharged within sixty (60)
days following appointment.

13.                                 REMEDIES.  Upon the happening of an Event of Default,
the parties hereto shall have all remedies available under applicable law with
respect to a Event of Default by the other party.  Without limiting the foregoing, the parties
shall have the following remedies whether in addition to or as one of the
remedies otherwise available to them; (1) to declare all amounts owed
immediately due and payable; and (2) immediately to terminate this Agreement
effective upon receipt by the party in default of the notice of termination,
provided, however, the parties shall be allowed 10 days from the date of
receipt of notice of default for to cure any default. Notwithstanding any other
provision of this Agreement, Buyer may offset against amounts otherwise owed to
Seller the price of any product which fails to conform to any requirements of
this Agreement.

14.                                 FORCE
MAJEURE.  Neither Seller nor Buyer
will be liable to the other for any failure or delay in the performance of any
obligation under this Agreement due to events beyond its reasonable control,
including, but not limited to, fire, storm, flood, earthquake, explosion, act
of the public enemy, riots, civil disorders, sabotage, strikes, lockouts, labor
disputes, labor shortages, war stoppages or slowdowns initiated by labor,
transportation embargoes, failure or shortage of materials, acts of God, or
acts or regulations or priorities of the federal, state or local government or
branches or agencies thereof.

15.                                 INDEMNIFICATION.

A.  Seller shall
indemnify, defend and hold Buyer and its officers, directors, employees and
agents harmless, from any and all losses, liabilities, damages, expenses
(including reasonable attorneys’ fees), costs, claims, demands, that Buyer or
its officers, directors, employees or agents may suffer, sustain or become
subject to, or as a result of (i) any misrepresentation or breach of warranty,
covenant or agreement of Seller contained herein or (ii) the Seller’s
negligence or willful misconduct.

B.  Buyer shall
indemnify, defend and hold Seller and its officer, directors, employees and
agents harmless, from any and all losses, liabilities, damages, expenses

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(including
reasonable attorneys’ fees), costs, claims, demands, that Seller or its
officers, directors, employees or agents may suffer, sustain or become subject
to, or as a result of (i) any misrepresentation or breach of warranty, covenant
or agreement of Buyer contained herein or (ii) the Buyer’s negligence or
willful misconduct.

C.  Where such personal injury, death or loss of
or damage to property is the result of negligence on the part of both Seller
and Buyer, each party’s duty of indemnification shall be in proportion to the
percentage of that party’s negligence or faults.

D.  Seller acknowledges that in order to maximize
the total revenue to be generated through the sale of the Products, Buyer may
take positions by selling Products in anticipation of Seller providing the
Products provided the Seller has given verbal or written consent.  Notwithstanding the fact that Seller’s
obligation is to provide Buyer with the output of the Plant the parties
acknowledge that Buyer may suffer losses as a result of positions taken by Buyer
if Seller discontinues operations for any reason whatsoever including Force
Majeure.  Therefore, Seller shall
indemnify, defend and hold Buyer and its officers, directors, employees and
agents harmless from any and all losses, liabilities, damages, expenses
(including reasonable attorney’s fees), costs, claims, demands that Buyer or
its officers, directors, employees, or agents may suffer, sustain or become
subject to as a result of any sale or purchase of Products taken by Buyer in
anticipation of Seller delivering the Porducts hereunder, provided Buyer has
taken commercially reasonable steps to avoid the loss.  Seller shall not be liable for any loss
resulting from Seller discontinuing operations related to a position taken by
Buyer for deliverywithout the consent of Seller.

16.                                 GOVERNMENTAL
ACTION.  The parties recognize that
the value of the Products could change as a result of various governmental
programs, be they foreign or domestic. 
In the event that a significant value change of the Products as a result
of any such governmental program, Buyer may request re-negotiation of the
contract price for the Products by providing written notice to Seller.  Buyer shall be required to demonstrate that
the value of the Products has significantly changed in the market.  Should such a change take place, the parties
agree to negotiate, in good faith, a revised sale price for the Products.  If, after a good faith effort, the parties
are unable to agree on a new price within the 90 day period immediately
following notice to the other party, then in such event and notwithstanding the
other provisions hereof, Buyer may terminate this Agreement upon 90 days prior
written notice.

17.                                 RELATIONSHIP
OF PARTIES.  This Agreement creates
no relationship other than that of buyer and seller between the parties
hereto.  Specifically, there is no
agency, partnership, joint venture or other joint or mutual enterprise or
undertaking created hereby.  Nothing
contained in this Agreement authorizes one party to act for or on behalf of the
other and neither party is entitled to commissions from the other.

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18.                                 MISCELLANEOUS.

A.  This writing is intended by the parties as a
final expression of their agreement and a complete and exclusive statement of
the terms thereof.

B.  No course of prior dealings between the
parties and no usage of trade, except where expressly incorporated by
reference, shall be relevant or admissible to supplement, explain, or vary any
of the terms of this Agreement.

C.  Acceptance of, or acquiescence in, a course
of performance rendered under this or any prior agreement shall not be relevant
or admissible to determine the meaning of this Agreement even though the
accepting or acquiescing party has knowledge of the nature or the performance
and an opportunity to make objection.

D.  No representations, understandings or
agreements have been made or relied upon in the making of this Agreement other
than as specifically set forth herein.

E.  This Agreement can only be modified by a
writing signed by all of the parties or their duly authorized agents.

F.  The paragraph headings herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.

G.  This Agreement shall be construed and
performed in accordance with the laws of the State of Iowa.

H.  The respective rights, obligations and
liabilities of the parties under this Agreement are not assignable or delegable
without the prior written consent of the other party.

I.  Notice shall be deemed to have been given to
the party to whom it is addressed ninety-six (96) hours after it is deposited
in certified U.S. mail, postage prepaid, return receipt requested, addressed as
follows:

	
  

  	
  Buyer:

  	
  Commodity Specialist Company

  
	
   

  	
   

  	
  310 Grain
  Exchange Bldg.

  
	
   

  	
   

  	
  400 South Fourth
  Street

  
	
   

  	
   

  	
  Minneapolis,
  Minnesota 55415

  
	
   

  	
   

  	
  ATTN: Steve J.
  Markham

  
	
   

  	
   

  	
   

  
	
   

  	
  Seller:

  	
  Akron Riverview Corn Processors, LLC

  
	
   

  	
   

  	
  4808 F. Avenue

  
	
   

  	
   

  	
  Marcus, Iowa
  51035

  
	
   

  	
   

  	
  ATTN: Steve Roe

  
	
   

  	
   

  	
   

  
	
   

  	
  Copy To:

  	
  Amy Piepmeier, Esq.

  
	
   

  	
   

  	
  Brown, Winick,
  Graves, Gross

  

 

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  Baskerville and
  Schoenbaum, PLC

  
	
   

  	
   

  	
  Suite 2000 Ruan
  Center

  
	
   

  	
   

  	
  666 Grand Avenue

  
	
   

  	
   

  	
  Des Moines, Iowa
  50309

  

 

IN WITNESS
THEREOF, the parties have caused this Agreement to be executed the day and year
first above written.

	
  

  	
  COMMODITY SPECIALISTS COMPANY

  
	
   

  	
   

  
	
   

  	
  By

  	
             /s
  Philip Nindau

  	
   

  
	
   

  	
  Title

  	
      Co-President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AKRON RIVERVIEW CORN PROCESSORS, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
             /s/
  Stephen G. Roe

  	
   

  
	
   

  	
  Title

  	
      President

  	
   

  
					

 

 10Exhibit 10.11

Omnicell, Inc.

1999 Equity Incentive Plan

Adopted by the Board of Directors: 
September 1, 1999

Amended and Restated by the Board of Directors:  November 5, 2002

Amended by the Board of
Directors:  October 24, 2006

Termination Date:  August 30, 2009

1.                                      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, (iv) rights to acquire
restricted stock and (v) Stock Unit Awards. 
The Plan also provides for non-discretionary grants of Nonstatutory
Stock Options to Non-Employee Directors of the Company.

(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.

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

(e)                                  “Common Stock” means the common stock of the Company.

(f)                                    “Company” means Omnicell, Inc., a Delaware corporation.

(g)                                 “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 

 1
 

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.

(h)                                 “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.

(i)                                    “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 shareholders under the Exchange Act,
as determined for purposes of Section 162(m) of the Code.

(j)                                    “Director” means a member of the Board of Directors of
the Company.

(k)                                “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.

(l)                                    “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.

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

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

(i)                                    If
the Common Stock is listed on any established stock exchange or traded on any
established market, and unless otherwise determined by the Board, 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 date of determination, as reported in The Wall Street Journal  or
such other source as the Board deems reliable. 
Unless otherwise provided by the Board, if there is no closing sales
price (or closing bid if no sales were reported) for the Common Stock on the
date of 

 2
 

determination, then the Fair Market Value shall be the
closing selling price (or closing bid if no sales were reported) on the last
preceding date for which such quotation exists.

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

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

(p)                                  “IPO Date” means the effective date of the initial
public offering of the Company’s Common Stock.

(q)                                  “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.

(r)                                  “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 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.

(s)                                  “Non-Employee Director Option” means a Nonstatutory
Stock Option granted pursuant to Section 7 hereof.

(t)                                    “Non-Employee Director Option Agreement” means a written
agreement between the Company and a Non-Employee Director evidencing the terms
and conditions of a Non-Employee Director Option grant.  Each Non-Employee Director Option Agreement
shall be subject to the terms and conditions of the Plan.

(u)                                 “Nonstatutory Stock Option” means an Option not intended
to qualify as an Incentive Stock Option.

(v)                                   “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.

 3
 

(w)                                “Option” means an Incentive Stock Option or a
Nonstatutory Stock Option granted pursuant to the Plan.

(x)                                  “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.

(y)                                  “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.

(z)                                  “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.

(aa)                            “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.

(bb)                            “Plan” means this Omnicell, Inc. 1999 Equity Incentive
Plan.

(cc)                            “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.

(dd)                            “Securities Act” means the Securities Act of 1933, as
amended.

(ee)                            “Stock Award” means any right granted under the Plan,
including an Option, a Stock Unit Award, a stock bonus and a right to acquire
restricted stock.

(ff)                                “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.

(gg)                          “Ten Percent Shareholder” 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.

3.                                      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).

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

 4
 

(i)                                    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.

(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 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.

(iii)                            To
amend the Plan or a Stock Award as provided in Section 13.

(iv)                               To
effect, at any time and from time to time, with the consent of any adversely
affected Optionholder, (1) the reduction of the exercise price of any
outstanding Option under the Plan to the then Fair Market Value and/or (2) the
cancellation of any outstanding Option under the Plan and the grant in
substitution therefore of (A) a new Option under the Plan covering the same or
a different number of shares of Common Stock, (B) a stock bonus, (C) the right
to acquire restricted stock, (D) cash and/or (E) other valuable consideration
(as determined by the Board, in its sole discretion).

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

(c)                                  Delegation
to Committee.

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

(ii)                                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 

 5
 

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.

(d)                                  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 12 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 five million (5,000,000) shares
of Common Stock, plus an annual increase to be added each January 1,
beginning January 1, 2001, equal to the lesser of (i) five and one-half percent
(5.5%) of the total number of shares of Common Stock outstanding on such
January 1 or (ii) three million (3,000,000)  shares of Common Stock.  Notwithstanding the foregoing, the Board may
designate a smaller number of shares of Common Stock to be added to the share
reserve as of a particular January 1. The shares that may be issuable
under incentive stock options shall be limited to the above maximum number of
shares reserved under the Plan.

(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.  In addition, if any stock award
issued under the Company’s 1992 Incentive Stock Option Plan and 1995 Management
Stock Option Plan 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 this Plan provided such shares shall not be issuable under
an incentive stock option.

(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.

 6
 

5.                                      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 Shareholders.

(i)                                    A
Ten Percent Shareholder 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.

(ii)                                Prior
to the Listing Date, a Ten Percent Shareholder 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.

(iii)                            Prior
to the Listing Date, a Ten Percent Shareholder 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 12 relating to adjustments upon changes in the shares of
Common Stock, no Employee shall be eligible to be granted Options covering more
than one million two hundred thousand (1,200,000) 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 shareholders 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.

(i)                                    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 

 7
 

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.

(ii)                                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 (i)
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
(ii) that such grant complies with the securities laws of all other relevant
jurisdictions.

(iii)                            Rule
701 and Form S-8 generally are available to consultants and advisors only if
(i) they are natural persons; (ii) they provide bona fide services to the
issuer, its parents, its majority-owned subsidiaries or majority-owned
subsidiaries of the issuer’s parent; and (iii) 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.

6.                                      Option Provisions.

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:

(a)                                  Term.  Subject to the provisions of subsection 5(b)
regarding Ten Percent Shareholders, no Option granted prior to the Listing Date
shall be exercisable after the expiration of ten (10) years from the date it
was granted, and no Incentive Stock Option granted on or after the Listing Date
shall be exercisable after the expiration of ten (10) years from the date it
was granted.

(b)                                  Exercise
Price of an Incentive Stock Option. 
Subject to the provisions of subsection 5(b) regarding Ten Percent
Shareholders, 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.

 8

(c)                                  Exercise
Price of a Nonstatutory Stock Option. 
Subject to the provisions of subsection 5(b) regarding Ten Percent
Shareholders, 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 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.

(d)                                  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.  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).  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.

(e)                                  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.

(f)                                    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 

 9
 

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.

(g)                                 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.

(h)                                 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:

(i)                                    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

(ii)                                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.

(i)                                    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 three (3) months 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.

(j)                                    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 

 10
 

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 three (3) months 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.

(k)                                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 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.

(l)                                    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 eighteen (18)
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.

(m)                              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 11(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 11(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.

(n)                                 Right
of Repurchase.  Subject to the “Repurchase
Limitation” in subsection 11(h), the Option may, but need not, include a
provision whereby the Company may elect, prior 

 11
 

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

(p)                                  Re-Load
Options.

(i)                                    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. 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).

(ii)                                Any
such Re-Load Option shall (1) 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; (2) 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 (3) 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.

(iii)                            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 11(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.

 12
 

7.                                      [Reserved]

8.                                      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:

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

(ii)                                Vesting.  Subject to the “Repurchase Limitation” in
subsection 11(h), shares of Common Stock awarded under the stock bonus 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.

(iii)                            Termination
of Participant’s Continuous Service. 
Subject to the “Repurchase Limitation” in subsection 11(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.

(iv)                               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:

(i)                                    Purchase
Price.  Subject to the provisions of
subsection 5(b) regarding Ten Percent Shareholders, the purchase price under
each restricted stock purchase agreement shall be such amount as the Board
shall determine and designate in such restricted stock 

 13
 

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.

(ii)                                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 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.

(iii)                            Vesting.  Subject to the “Repurchase Limitation” in
subsection 11(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.

(iv)                               Termination
of Participant’s Continuous Service. 
Subject to the “Repurchase Limitation” in subsection 11(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.

(v)                                   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.

(c)                                  Stock
Unit Awards.  The Board may grant
Participants “Stock Unit Awards” under the Plan, meaning the right to acquire
one share of the Company’s Common Stock (or cash or property of an equivalent
value) in respect of each Stock Unit, subject to such terms and conditions as
the Board shall deem appropriate, including any provisions for the deferral of
the receipt of any shares of Common Stock, cash or property otherwise
distributable to the Participant in respect of the Stock Unit Award.  Each Stock Unit Award agreement shall be in
such form and shall contain such terms and conditions as the Board shall deem
appropriate, which terms and conditions may change from time to time, and the
terms and conditions of separate Stock Unit Award agreements need not be
identical, but each Stock Unit Award agreement shall include (through
incorporation of provisions hereof by reference in the agreement or otherwise)
the substance of each of the following provisions:

 14
 

(i)                                    Consideration.  At the time of grant of a Stock Unit Award,
the Board will determine the consideration, if any, to be paid by the Participant
upon delivery of each share of Common Stock subject to the Stock Unit Award.
The consideration to be paid (if any) by the Participant for each share of
Common Stock acquired pursuant to the Stock Unit Award agreement shall be paid
either: (i) in cash upon delivery of each share of Common Stock subject to the
Stock Unit Award; (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, subject to any restrictions under applicable law regarding payment
in respect of the “par value” of the Common Stock.

(ii)                                Vesting.  At the time of the grant of a Stock Unit
Award, the Board may impose such restrictions or conditions (which may be based
on performance or other criteria) to the vesting of the Stock Unit Award as it,
in its sole discretion, deems appropriate.

(iii)                            Payment.
 A Stock Unit Award may be settled by
the delivery of shares of Common Stock valued at Fair Market Value on the
redemption date, their cash equivalent, any combination thereof or in any other
form of consideration, as determined by the Board and contained in the Stock
Unit Award agreement.

(iv)                               Additional
Restrictions.  At the time of the
grant of a Stock Unit Award, the Board, as it deems appropriate, may impose
such restrictions or conditions that delay the delivery of the shares of Common
Stock (or their cash equivalent) subject to a Stock Unit Award after the
vesting of such Stock Unit Award.

(v)                                   Dividend
Equivalents.  Dividend equivalents
may be credited in respect of shares of Common Stock covered by a Stock Unit
Award, as determined by the Board and contained in the Stock Unit Award
agreement.  At the sole discretion of the
Board, such dividend equivalents may be converted into additional shares of
Common Stock covered by the Stock Unit Award in such manner as determined by
the Board.  Any additional shares covered
by the Stock Unit Award credited by reason of such dividend equivalents will be
subject to all the terms and conditions of the underlying Stock Unit Award
agreement to which they relate.

(vi)                               Termination
of Participant’s Continuous Service. 
Except as otherwise provided in the applicable Stock Unit Award agreement,
such portion of the Stock Unit Award that has not vested will be forfeited upon
the Participant’s termination of Continuous Service.

(vii)                           Transferability.  Rights to acquire shares of Common Stock
under Stock Unit Awards shall be transferable by the Participant only upon such
terms and conditions as are set forth in the applicable Stock Award Agreement,
as the Board shall determine in its discretion. If the Stock Unit Award
agreement does not provide for transferability, then the Stock Unit Awards shall
not be transferable except by will or by the laws of descent and distribution,
unless otherwise required by applicable law.

 15
 

(d)                                  Section
409A.  Notwithstanding anything in
the Plan to the contrary, it is the intent of the Company that the
administration of the Plan, and the granting of all Stock Awards under this
Plan, shall be done in accordance with Section 409A of the Code and the
Department of Treasury regulations and other interpretive guidance issued
thereunder, including any guidance or regulations that may be issued after the
effective date of this Plan, and shall not cause the acceleration of, or the
imposition of the additional, taxes provided for in Section 409A of the Code
without the express consent of the affected Participant.  Any Stock Award shall be granted, deferred,
paid out or modified under this Plan in a manner that shall be intended to
avoid resulting in the acceleration of taxation, or the imposition of penalty
taxation, under Section 409A upon a Participant absent the express consent of
the affected Participant. In the event that it is reasonably determined by the
Board that any amounts payable in respect of any Stock Award under the Plan
will be taxable to a Participant under Section 409A of the Code prior to the
payment and/or delivery to such Participant of such amounts or will be subject
to the acceleration of taxation or the imposition of penalty taxation under
Section 409A of the Code, in either case without the consent of the
Participant, the Board may, without the consent of the affected Participants,
(i) adopt such amendments to the Plan and related Stock Award, and appropriate
policies and procedures, including amendments and policies with retroactive
effect, that the Board determines necessary or appropriate to preserve the intended
tax treatment of the benefits provided by the Plan and Stock Awards hereunder,
and/or (ii) take such other actions as the Board determines necessary or
appropriate to comply with the requirements of Section 409A of the Code.

9.                                      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.

10.                               Use of Proceeds from Stock.

Proceeds from the sale of Common Stock pursuant to
Stock Awards shall constitute general funds of the Company.

11.                               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 

 16
 

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)                                  Shareholder
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 (1) 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 (2) 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 Common Stock.

 17
 

(f)                                    Withholding
Obligations.  To the extent provided
by the terms of a Stock Award Agreement, the Participant may satisfy any
federal, state or local tax withholding obligation relating to the exercise or
acquisition of Common Stock under a Stock Award by any of the following means
(in addition to the Company’s right to withhold from any compensation paid to
the Participant by the Company) or by a combination of such means:  (i) tendering a cash payment; (ii)
authorizing the Company to withhold shares of Common Stock from the shares of
Common Stock otherwise issuable to the Participant as a result of the exercise
or acquisition of Common Stock under the Stock Award, 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 Common Stock.

(g)                                 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 11(g) shall not apply to key Employees whose duties in connection
with the Company assure them access to equivalent information.

(h)                                 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:

(i)                                    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.

(ii)                                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 

 18
 

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”).

12.                               Adjustments upon Changes in Stock.

(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 (i) a
dissolution, liquidation or sale of substantially all of the 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, to the extent
permitted by applicable law:  (i) any
surviving corporation shall assume any Stock Awards outstanding under the Plan
or shall substitute similar stock awards (including an award to acquire the
same consideration paid to the shareholders in the transaction described in
this subsection 12(c)) for those outstanding under the Plan, or (ii) such Stock
Awards shall continue in full force and effect. 
In the event any surviving corporation refuses to assume or continue
such Stock Awards, or to substitute similar stock awards for those outstanding
under the Plan, then with respect to Stock Awards held by Participants whose
Continuous Service has not terminated, the time during which such Stock Awards
may be exercised shall be accelerated, and the Stock Awards terminated if not
exercised prior to such event.

13.                               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 12 relating to adjustments upon
changes in Common Stock, no amendment shall be effective unless approved by the
shareholders of the Company to the extent shareholder 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)                                  Shareholder
Approval.  The Board may, in its sole
discretion, submit any other amendment to the Plan for shareholder approval,
including, but not limited to, amendments to 

 19
 

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.

14.                               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
shareholders 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.

15.                               Effective Date of Plan.

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

16.                               Choice of Law.

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

 20

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