Document:

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                                                                   EXHIBIT 10.13

                           FIRST AMENDED AND RESTATED

                              EMPLOYMENT AGREEMENT

        This First Amended and Restated Employment Agreement (the "Agreement")
is entered into effective as of January 7, 2002 between Critical Path ("Critical
Path" or the "Company") and William McGlashan ("McGlashan") (or collectively
referred to as the "Parties") and supersedes and replaces in all respects all of
the terms of that certain Employment Agreement entered into between the parties
as of August 1, 2001 (the "Former Agreement"). The Company desires to appoint
McGlashan to the position of Chief Executive Officer for an indeterminate term
and to have the benefits of his expertise and knowledge. McGlashan, in turn,
desires to be employed by the Company as its Chief Executive Officer. The
Parties, therefore, enter into this Agreement to establish the terms and
conditions of McGlashan's employment as Chief Executive Officer of the Company.

        In consideration of the mutual covenants and representations contained
in this Agreement, the Company and McGlashan agree as follows:

        1. EMPLOYMENT OF MCGLASHAN; DUTIES. The Company agrees to employ
McGlashan, and McGlashan agrees to be employed by the Company, as the Chief
Executive Officer ("CEO") of the Company and the President of the Company's
subsidiary to be formed, Critical Path International ("CPI"). In his role as CEO
of the Company, McGlashan shall report to the Board of Directors. As the CEO of
the Company and the President of CPI, McGlashan's key duties will include the
normal and customary duties of such positions and such other duties as the
Company shall determine from time to time. McGlashan will use his specialized
expertise, independent judgment and discretion in executing his job duties.
McGlashan shall devote all of his time, interest and efforts reasonably
necessary to the fulfillment of his duties and responsibilities under this
Agreement.

                Consistent with the office of Chief Executive Officer and the
duties typically attendant thereto, the Company reserves the right to change
McGlashan's job duties and responsibilities in its sole discretion at any time
upon reasonable notice, based on the needs of the Company and McGlashan's
expertise and skills, subject to Section 12.4 below.

        2. EMPLOYMENT PERIOD. McGlashan shall serve as CEO of the Company until
discharged by the Board of Directors of the Company or his employment is
otherwise terminated pursuant to Section 12 below.

        3. PLACE OF EMPLOYMENT. McGlashan and the Company agree that during the
Employment Period, his services will be performed at the Company's principal
offices in San Francisco, California, subject to any necessary travel
requirements of his position and duties hereunder.

        4. BASE SALARY. During the Employment Period, the Company shall pay
McGlashan at the rate of Four Hundred Fifty Thousand Dollars ($450,000.00) per
year, to be paid twice per month, subject to applicable withholding.

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        5. BONUS COMPENSATION. McGlashan acknowledges prior receipt of $500,000
as a bonus paid as an inducement to enter into this Agreement. In addition, so
long as McGlashan has not been terminated for Cause, as defined in Section 12.3
below, McGlashan will be eligible for bonus compensation, payable immediately
following completion of the Company's audited financial statements for each full
fiscal year, commencing with the 2002 fiscal year, subject to the following
terms and conditions:

Eligible for annual bonus of 100% of base salary upon achieving 120% of
financial metrics ("Plan"), to be determined by the Board of Directors of the
Company. Such bonus will also be payable on a sliding scale at between 100% and
120% of Plan, as determined by the Board. Achieving substantially in excess of
120% of agreed-upon financial metrics shall result in additional bonus
accelerators as agreed between McGlashan and the Board of Directors up to a
potential bonus of 200% of base salary.

        6. EQUITY COMPENSATION. McGlashan shall be granted an option to purchase
1.7 million shares of the Company's Common Stock at an exercise price of fair
market value as of the date of grant, pursuant to the Critical Path Amended and
Restated 1998 Stock Plan. Subject to McGlashan's continued employment by the
Company at each vesting date, such option shall vest in equal monthly
installments from the date of this Agreement over a three (3) year period. Other
than the vesting schedule, such option shall be granted pursuant to the same
terms and conditions as contained in McGlashan's prior option agreement(s),
including provisions for 100% acceleration of vesting of such option on a change
of control.

        7. EMPLOYEE LOAN. The Company shall provide a full recourse loan to
McGlashan for the purchase of a principal residence in an amount not to exceed
$4 Million (the "Loan"). The Loan will be funded upon, or just prior to, the
close of escrow on the purchase of such principal residence so long as McGlashan
has not voluntarily resigned or been terminated by the Company for cause as
defined in Section 12.3 below. The Loan shall be evidenced by a Promissory Note
and a Loan Agreement, in the form attached hereto as Exhibits A and B,
respectively. The Loan shall be a full recourse 10 year term loan. The Loan
shall at all times be secured by Mr. McGlashan's principal residence (but not
necessarily in first mortgage position) and to the extent necessary shall also
be secured by that percentage of McGlashan's personal shareholdings in the
Company such that at all times all outstanding principal plus accrued interest
is at least 120% secured. The Company may obtain an annual appraisal of the
property at its expense to ensure the Loan is secured as provided herein. If
necessary following such appraisal, McGlashan shall exercise any vested options
and pledge to the Company the number of shares necessary to bring the Company's
security to at least 120% of the Loan amount plus accrued interest. McGlashan
shall pledge such shares to the Company and execute an Assignment Separate from
Certificate in connection with such pledge. Interest on the Loan shall be at the
long term applicable federal rate (AFR) and shall be deferred until principal is
due.

                The Loan Agreement shall provide (i) that the Loan will be
entirely forgiven in the event of a Change of Control (as defined in the Loan
Agreement) in the event that total consideration received by the Company in
connection with such Change of Control is greater than $10 per share; (ii) in
the event McGlashan's employment is terminated by (a) Mr. McGlashan's voluntary
resignation or (b) by the Company for Cause (as defined in Section 11), then the
Loan will become due and payable, with interest, in full no later than twelve
(12)

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months following such termination; (iii) in the event McGlashan's employment is
terminated other than for Cause (including his Constructive Termination), the
Loan will remain in effect for the remainder of its term.

        8. EMPLOYEE BENEFITS.

                a. For so long as McGlashan is employed by the Company,
McGlashan will be entitled to participate in the same employee benefits plans
generally available to the Company's other executive and managerial employees,
subject to the terms of the applicable plans, including: (i) all health
insurance benefits provided to the Company's exempt employees; (ii) paid
vacation in accordance with the Company's policies and procedures in effect with
respect to the Company's other senior officers (for which the days selected for
McGlashan's vacation shall be scheduled at a mutually agreeable time for the
Company and McGlashan); and (iii) eligibility to participate in any profit
sharing or other retirement plan maintained by the Company for its executive
employees. Company also agrees to pay all fees and expenses in connection with
his membership and participation in the Young Presidents' Organization.

                b. The Company shall obtain coverage for McGlashan under a
director and officer insurance policy during the term of his employment that is
equal to or comparable to the same coverage provided to the Company's other
executive officers.

        9. INDEMNIFICATION BY THE COMPANY. To the fullest extent required by
law, the Company agrees to indemnify and hold McGlashan harmless for any actions
made in good faith while performing his duties as President and Chief Operating
Officer of the Company and President of CPI.

        10. NON-DISCLOSURE OF CONFIDENTIAL AND PROPRIETARY INFORMATION.
McGlashan acknowledges and agrees that during his employment with the Company,
he will have access to, or become acquainted with the Company's "Confidential
and Proprietary Information." "Confidential and Proprietary Information"
includes, but is not limited to:

                a. The Company's trade secrets;

                b. Information developed by or on behalf of the Company such as
financial information, billing information, marketing strategies, price lists,
research, pending products and proposals, and proprietary materials; or

                c. Information of or concerning third parties including
customers, suppliers and business partners, customer lists, supplier lists, as
well as financial and billing information, and information about employees of
the Company, including salaries and personnel data.

                McGlashan agrees that at all times during his employment and
after his employment ends, he will protect the confidentiality of Confidential
and Proprietary Information and will not directly use or disclose any
Confidential and Proprietary Information except as may be necessary in
connection with the services McGlashan provides to the Company.

                McGlashan further agrees that all the Company property and
documents provided to him, including Confidential and Proprietary Information
produced by him or others in

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connection with his employment with the Company, including copies thereof, shall
remain the sole property of the Company and shall be returned promptly to the
Company upon request or when he leaves the employment of the Company, including
but not limited to, internal, proprietary, financial, technical, employee,
sales, and marketing information.

        11. DEVELOPED INFORMATION. McGlashan agrees to promptly disclose and
assign to the Company, the rights to all ideas, improvements, inventions,
programs, surveys, trade secrets, know-how and data, whether or not patentable
or registrable under copyright or similar statutes that McGlashan makes,
conceives, reduces to practice or learn during McGlashan's employment which (a)
are within the scope of his employment and are related to or useful in the
business of the Company or its actual or demonstrably anticipated activities, or
(b) result from tasks assigned to McGlashan by the Company, or (c) are funded by
the Company, or (d) result from use of premises owned, leased or contracted for
by the Company (hereinafter "Developed Information"). Such disclosure shall
continue for one (1) year after termination of McGlashan's employment with
respect to anything that would be Developed Information if made, conceived,
reduced to practice or learned during the term of this Agreement.

                This Agreement does not require assignment of any invention
which qualifies fully for protection under California Labor Code section 2870
(hereinafter "Section 2870"). McGlashan understand that he bears the full burden
of proving to the Company that Developed Information qualifies fully under
Section 2870.

        12. TERMINATION.

                12.1 AT-WILL EMPLOYMENT. McGlashan's employment pursuant to this
Agreement is "at-will." As such, either the Company or McGlashan shall have
right to terminate McGlashan's employment under this Agreement at any time, for
any reason, with or without notice.

                12.2 SEVERANCE. If McGlashan's employment is terminated other
than for "Cause" or if he resigns as a result of a "Constructive Termination,"
then McGlashan shall be offered, in exchange for a release of all claims, a lump
sum severance payment equal to twelve (12) months salary under this Agreement
plus 50% of his prior year's bonus. In addition, benefits under this Agreement
shall be continued for a period of one (1) year, and McGlashan will receive one
(1) year of accelerated vesting of the options granted to him by the Company as
of the date of termination.

                12.3 For purposes of this Agreement, "Cause" means:

                a. Commission of a felony, an act involving moral turpitude, or
an act constituting common law fraud, and which has a material adverse effect on
the business or affairs of the Company or its affiliates or stockholders;

                b. Intentional or willful misconduct or refusal to follow the
lawful instructions of the Board of Directors; or

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                c. Intentional breach of company confidential information
obligations which has an adverse effect on the Company or its affiliates or
stockholders.

For these purposes, no act or failure to act shall be considered "intentional or
willful" unless it is done, or omitted to be done, in bad faith without a
reasonable belief that the action or omission is in the best interests of the
Company.

                12.4 RESIGNATION DUE TO "CONSTRUCTIVE TERMINATION". For purposes
of this agreement, resignation as a result of "Constructive Termination" means
that any of the following is undertaken without McGlashan's express written
consent:

                a. A substantial diminution in McGlashan's title, duties, or
compensation;

                b. A substantial increase in McGlashan's duties without a
mutually agreeable increase in compensation;

                c. Any change in ownership or corporate structure which results
in McGlashan no longer being CEO of a stand-alone publicly traded company
through no fault of McGlashan;

                d. Failure of the Company to maintain coverage for McGlashan
under an appropriate director and officer insurance policy;

                e. A relocation of the Company's business office to a location
more than fifty (50) miles from San Francisco, except for reasonably required
travel by McGlashan on the Company's business.

                f. The Company's material breach of this Agreement that remains
uncured for thirty (30) days following McGlashan's written notice of such breach
to the Company's Board of Directors.

                12.5 CONTINUED AFFILIATION WITH THE COMPANY. McGlashan's stock
options granted pursuant to this Agreement shall continue to vest for so long as
McGlashan is affiliated with the Company as an employee or Board member.

                12.6 EFFECT OF TERMINATION FOR "CAUSE." Upon any termination of
this Agreement for Cause, the Company will have no further obligation to make
any payment to McGlashan, under this Agreement or otherwise, except for the
monthly base salary and vacation accrued as of the date of termination. In
addition, McGlashan's entitlement to participate in any Company benefit plans
shall immediately cease as of the date of termination, except as otherwise
required by law.

                12.7 COOPERATION WITH COMPANY AT TERMINATION OF EMPLOYMENT. Upon
termination of this Agreement by either party, McGlashan shall cooperate fully
with Company in providing an orderly transition of all McGlashan's pending work.
Upon the mutual agreement of the Parties, McGlashan also may provide such
full-time or part-time services as Company may reasonably require during all or
any part of the period following any notice of termination given by either
party.

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                12.8 RETURN OF COMPANY PROPERTY UPON TERMINATION. Upon
termination of McGlashan's employment, McGlashan shall return all originals and
copies of the Company's property in McGlashan's possession or control, including
equipment, devices, vehicles, keys, computers, and including materials,
memoranda, records, reports, recordings, customer lists or other documents, and
specifically including any documents or computer disks or records containing
confidential information, trade secrets or other proprietary information

        13. NATURE OF EMPLOYMENT. McGlashan represents to the Company that he
has no other outstanding commitments inconsistent with any of the terms of this
Agreement or the services to be provided in accordance with this Agreement. In
addition, while employed with the Company, McGlashan shall not, whether for
compensation or otherwise, directly or indirectly perform any services or acts
for any person or entity who is in competition with any business, services or
products being offered for sale or produced by the Company. McGlashan shall not
own an interest in, participate in or be connected as an officer, employee,
agent, independent contractor, partner, shareholder or principal, of any
corporation, partnership, proprietorship, firm, association, person, or other
entity that directly or indirectly compete with the services and business of
Company.

        14. NONSOLICITATION UPON TERMINATION OF EMPLOYMENT.

                14.1 NONSOLICITATION OF CLIENTS. McGlashan agrees all customers
or clients of the Company for which McGlashan provides services during
McGlashan's employment are solely the clients of the Company and not of
McGlashan. McGlashan agrees that both while employed and for a period of one (1)
year after the termination of this Agreement for any reason, McGlashan shall
not, either directly or indirectly, solicit business, as to products or services
competitive with those of the Company, from any of the Company's clients or
prospective clients.

                14.2 NONSOLICITATION OF EMPLOYEES. McGlashan agrees the Company
has invested substantial time and effort and resources in assembling, training
and managing its present staff of personnel, which constitutes a significant
asset of the Company. Accordingly, McGlashan agrees that both while employed and
for a period of one (1) year after the termination of this Agreement for any
reason, McGlashan will not directly or indirectly induce or solicit or encourage
any of the Company's employees to leave their employment with the Company.

        15. NOTICES. Any notices, requests, demands and other communications
provided for by this Agreement shall be sufficient if in writing and if sent by
registered or certified mail to McGlashan at the last address he has filed in
writing with the Company or, in the case of the Company, to the General Counsel
at the Company's principal executive offices.

        16. BINDING AGREEMENT. This Agreement shall be binding upon McGlashan
and the Company on and after the date of this Agreement. The rights and
obligations of the Company under this Agreement shall inure to the benefit of
the Company and any successor of the Company.

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        17. INTEGRATION. This Agreement, the Promissory Note and Loan Agreement
attached hereto as Exhibits A and B, and the Nonstatutory Stock Option Agreement
entered into pursuant to Section 6 above constitute the entire understanding of
McGlashan and the Company with respect to the subject matter herein and
supersedes and voids any and all prior agreements or understandings, written or
oral, regarding the subject matter hereof. To the extent any of the referenced
agreements are inconsistent with this Employment Agreement, the terms of the
Employment Agreement shall control. This Agreement may not be changed, modified,
or discharged orally, but only by an instrument in writing signed by the
Parties.

        18. CONSTRUCTION. Each party has reviewed this Agreement. Therefore the
normal rule of construction that any ambiguity or uncertainty in any writing
shall be interpreted against the party drafting the writing shall not apply to
any action on this Agreement.

        19. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of California, and the invalidity or unenforceability of any provisions
hereof shall in no way affect the validity or enforceability of any other
provision.

        20. SEVERABILITY. Any provision of this Agreement which is prohibited or
unenforceable by any court of competent jurisdiction will immediately become
null and void, leaving the remainder of this Agreement in full force and effect.
Any such prohibition or unenforceability in any court of competent jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.

        21. MANDATORY ARBITRATION. The Parties agree that any future
controversy, claim or dispute arising out of or related to McGlashan's
employment or the termination of his employment shall be resolved by binding
arbitration, except where the law specifically forbids the use of arbitration as
a final and binding remedy, or where Section 21(e) below specifically allows a
different remedy.

                a. The Parties agree that the dispute shall be resolved by
binding arbitration in San Francisco, California. If the Parties are unable to
jointly select an arbitrator, they will obtain a list from the Federal Mediation
and Conciliation Service and select an arbitrator by striking names from that
list.

                b. The arbitrator shall have the authority to determine whether
the conduct complained of violates the complainant's rights and, if so, to grant
any relief authorized by law; subject to the exclusions of Section 21(e) below.
The arbitrator shall not have the authority to modify, change, or refuse to
enforce the terms of this Employment Agreement.

                c. The Company shall bear the costs of the arbitration, except
that McGlashan may be required to pay costs not to exceed the amount of the
then-current filing fee for a civil action filed in the court of general
jurisdiction in the State of California. The arbitrator shall award the
prevailing party in the arbitration its attorneys' fees.

                d. Arbitration shall be the exclusive final remedy for any
dispute between the Parties including but not limited to any disputes or claims
for discrimination or harassment (such as claims under the Fair Employment and
Housing Act, Title VII of the Civil Rights Act of 1964, the Americans with
Disabilities Act, or the Age Discrimination in Employment Act), wrongful

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termination, breach of contract, breach of public policy, physical or mental
harm or distress, or any other disputes.

                e. Notwithstanding the arbitration provisions set forth herein,
the Parties reserve their right to seek an injunction or other equitable relief
from a court with applicable authority. McGlashan acknowledges that in the event
of any breach of any provision of Sections 10, 11, or 14 of this Agreement, the
Company would be irreparably and immediately harmed and could not be made whole
by monetary damages. It is accordingly agreed that the Company shall be entitled
to seek an injunction to prevent breach of this Agreement and to compel specific
performance of this Agreement, in addition to any other remedy to which it may
be entitled in law or equity. To the extent any portion of Sections 10, 11 or 14
of this Agreement is deemed by the court to be overly restrictive as to time,
scope or geographical area, the Parties agree that the court shall have the
authority to reform the unlawful provision to be in conformance with the law,
with the Parties' agreement that Sections 10, 11 and 14 are to be given the
fullest force and effect permissible by law.

                f. The arbitrator shall issue a written arbitration decision
stating the arbitrator's essential findings and conclusions upon which any award
is based. A party's right to review of the decision is limited to the grounds
provided under applicable law. The Parties agree that the arbitration award
shall be enforceable in any court having jurisdiction to enforce this Agreement.

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

                                            CRITICAL PATH, INC.

Dated: 3/18/02                              By: /s/ David Hayden
      -----------------------                   --------------------------------
                                                DAVID HAYDEN, Executive Chairman

Dated: 3/18/02                              By: /s/ William McGlashan
      -----------------------                   --------------------------------
                                                William McGlashan, Personally

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1/31/02 -- cb
2/26/02 - cb
02/27/02 -- cl

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                                                                   EXHIBIT 10.14

                              CRITICAL PATH, INC.

                   AMENDED AND RESTATED 1998 STOCK OPTION PLAN

                       NONSTATUTORY STOCK OPTION AGREEMENT

Critical Path, Inc., a California corporation (the "Company"), granted an Option
on December 21, 2001 to purchase shares of its common stock (the "Shares") to
the Optionee named below. The terms and conditions of that Option grant, as
amended and restated, are set forth in this cover sheet, the attachment, the
Company's 1998 Stock Option Plan (the "Plan") and in the Optionee's employment
agreement with the Company dated August 1, 2001 as may be amended and in effect
from time to time.

Date of Option Grant: December 21, 2001
                      --------------------

Name of Optionee: William McGlashan, Jr.
                  -----------------------

Optionee's Social Security Number:

Number of Shares Covered by Option: 1,700,000
                                    -----------------

Exercise Price per Share: $2.56
                          -------

Vesting Start Date: December 21, 2001
                    ------------------

        BY SIGNING THIS COVER SHEET, YOU AGREE TO ALL OF THE TERMS AND
CONDITIONS DESCRIBED IN THE ATTACHED AGREEMENT AND IN THE PLAN, A COPY OF WHICH
IS ALSO ENCLOSED.

Optionee: /s/ William McGlashan
         -----------------------------------------------
                          (Signature)

Company:  /s/ David Hayden
         -----------------------------------------------
                          (Signature)

Title:
      ---------------------------------

Attachment

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                               CRITICAL PATH, INC.

                   AMENDED AND RESTATED 1998 STOCK OPTION PLAN

                       NONSTATUTORY STOCK OPTION AGREEMENT

NONSTATUTORY STOCK OPTION       This option is not intended to be an incentive
                                stock option under section 422 of the Internal
                                Revenue Code and will be interpreted
                                accordingly.

VESTING                         The Shares under this option will vest in
                                accordance with the vesting schedule indicated
                                below:

NUMBER OF OPTIONS               VESTING EVENT

 1,700,000                      Vesting in equal monthly installments from
                                Vesting Start Date listed on the cover sheet to
                                this Agreement, for a period of three (3) years
                                from such Vesting Start Date subject to
                                continued employment with the Company during
                                that period and all other terms and conditions
                                as described herein.

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                                Your option vesting will cease in the event that
                                your employment and service as a Company
                                director both terminate for any reason. Your
                                option vesting will also cease upon your
                                voluntary resignation of employment or upon a
                                termination for Cause (as such terms are defined
                                in your employment agreement with the Company).
                                A leave of absence, regardless of the reason,
                                shall be deemed to constitute the cessation of
                                your employment unless the Company authorizes
                                such leave, and you return within the time
                                specified in such authorization.

                                The above performance-based acceleration
                                triggers will cease to be applicable upon your
                                prior cessation of employment for any reason.
                                The Compensation Committee of the Board of
                                Directors must certify in writing that the
                                performance goals have been satisfied before any
                                Option vesting will be accelerated pursuant to
                                attainment of performance goals.

                                In the event of a Change in Control of the
                                Company, 100% of your then-unvested Options
                                (meaning 100% of your unvested Options that are
                                otherwise scheduled to vest under (ii), and
                                (iii) above on each vesting date had a Change in
                                Control not occurred) shall become vested
                                provided that you are employed by the Company on
                                the date the negotiations or communications
                                began (as determined by the Board in good faith)
                                which lead to the Change in Control.

                                For purposes of this Agreement, a "Change in
                                Control" of the Company shall be defined as the
                                occurrence of any one of the following:

                                (i)     the consummation of a merger or
                                        consolidation of the Company with or
                                        into another entity or any other
                                        corporate reorganization, if more than
                                        50% of the combined voting power of the
                                        continuing or surviving entity's
                                        securities outstanding immediately after
                                        such merger, consolidation or other
                                        reorganization is owned by persons who
                                        were not shareholders of the Company
                                        immediately prior to such merger,
                                        consolidation or other reorganization;

                                (ii)    the sale, transfer or other disposition
                                        of all or substantially all of the
                                        Company's assets;

                                (iii)   the dissolution, liquidation or winding
                                        up of the Company;

                                (iv)    any transaction as a result of which any
                                        person is the "beneficial owner" (as
                                        defined in Rule 13d-3 under the

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                                        Securities Exchange Act of 1934),
                                        directly or indirectly, of securities of
                                        the Company representing at least 20% of
                                        the total voting power represented by
                                        the Company's then outstanding voting
                                        securities.

                                For purposes of this section, the term "person"
                                shall have the same meaning as when used in
                                sections 13(d) and 14(d) of the Securities
                                Exchange Act but shall exclude: (A) trustee or
                                other fiduciary holding securities under an
                                employee benefit plan of the Company or a
                                subsidiary of the Company; (B) A corporation
                                owned directly or indirectly by the shareholders
                                of the Company in substantially the same
                                proportions as their ownership of the common
                                stock of the Company; and (C) the Company.

                                A transaction shall not constitute a Change in
                                Control if its sole purpose is to change the
                                state of the Company's incorporation or to
                                create a holding company that will be owned in
                                substantially the same proportions by the
                                persons who held the Company's securities
                                immediately before such transactions.

TERM                            Your option will expire in any event at the
                                close of business at Company headquarters on the
                                day before the 10th anniversary of the Date of
                                Grant, as shown on the cover sheet. It will
                                expire earlier if your employment and your
                                service as a Company director terminate, as
                                described below.

REGULAR TERMINATION             If your employment and your service as a Company
                                director terminate for any reason except Cause,
                                death or Disability, then your option will
                                expire at the close of business at Company
                                headquarters on the 90th day after your
                                termination date.

CAUSE                           If your employment or service as a Company
                                director terminates on account of Cause, then
                                your option will expire immediately.

DEATH                           In the event of your death during the period of
                                your employment or service as a Company
                                director, your option will expire at the close
                                of business at Company headquarters on the date
                                six months after the date of death. During that
                                six-month period, your estate or heirs may
                                exercise your option.

                                       3
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DISABILITY                      If your employment and service as a Company
                                director terminate because of your Disability,
                                then your option will expire at the close of
                                business at Company headquarters on the date six
                                months after your termination date.

                                "Disability" means that you are unable to engage
                                in any substantial gainful activity by reason of
                                any medically determinable physical or mental
                                impairment.

LEAVES OF ABSENCE               For purposes of this option, your employment
                                does not terminate when you go on a bona fide
                                leave of absence, that was approved by the
                                Company in writing, if the terms of the leave
                                provide for continued service crediting, or when
                                continued service crediting is required by
                                applicable law. Your employment terminates in
                                any event when the approved leave ends if you
                                fail or refuse to return to active service.

                                Consistent with the terms of this Agreement and
                                your Employment Agreement, the Company
                                determines which leaves count for this purpose,
                                and when your employment terminates for all
                                purposes under the Plan.

RESTRICTIONS ON EXERCISE        The Company will not permit you to exercise this
                                option if the issuance of Shares at that time
                                would violate any law or regulation.

NOTICE OF EXERCISE              When you wish to exercise this option, you must
                                notify the Company by filing the proper "Notice
                                of Exercise" form at the address given on the
                                form. Your notice must specify how many Shares
                                you wish to purchase. Your notice must also
                                specify how your Shares should be registered (in
                                your name only or in your and your spouse's
                                names as community property or as joint tenants
                                with right of survivorship). The notice will be
                                effective when received by the Company.

                                If someone else wants to exercise this option
                                after your death, that person must prove to the
                                Company's satisfaction that he or she is
                                entitled to do so.

FORM OF PAYMENT                 When you submit your notice of exercise, you
                                must include payment of the option price for the
                                Shares you are purchasing. Payment may be made
                                in one (or a combination) of the following
                                forms:

                                -       Your personal check, a cashier's check
                                        or a money order.

                                -       By delivery (on a form prescribed by the
                                        Committee) of an

                                       4
<PAGE>

                                        irrevocable direction to a securities
                                        broker to sell Shares and to deliver all
                                        or part of the sale proceeds to the
                                        Company in payment of the aggregate
                                        Exercise Price.

WITHHOLDING TAXES               You will not be allowed to exercise this option
                                unless you make acceptable arrangements to pay
                                any withholding or other taxes that may be due
                                as a result of the option exercise or the sale
                                of the Shares acquired upon exercise of this
                                option.

RESTRICTIONS ON RESALE          By signing this Agreement, you agree not to sell
                                any option Shares at a time when applicable laws
                                or regulations or Company or underwriter trading
                                policies prohibit a sale.

                                You represent and agree that the Shares to be
                                acquired upon exercising this option will be
                                acquired for investment, and not with a view to
                                the sale or distribution thereof.

                                In the event that the sale of Shares under the
                                Plan is not registered under the Securities Act
                                but an exemption is available which requires an
                                investment representation or other
                                representation, you shall represent and agree at
                                the time of exercise to make such
                                representations as are deemed necessary or
                                appropriate by the Company and its counsel.

                                Prior to any Change in Control of the Company,
                                the shares acquired under this option can be
                                sold or transferred only pursuant to an SEC Rule
                                10b5-1 trading plan that is pre-approved by the
                                Board of Director's Compensation Committee.

TRANSFER OF OPTION              Prior to your death, only you may exercise this
                                option. You cannot transfer or assign this
                                option. For instance, you may not sell this
                                option or use it as security for a loan. If you
                                attempt to do any of these things, this option
                                will immediately become invalid. You may,
                                however, dispose of this option in your will.

                                Regardless of any marital property settlement
                                agreement, the Company is not obligated to honor
                                a notice of exercise from your spouse or former
                                spouse, nor is the Company obligated to
                                recognize such individual's interest in your
                                option in any other way.

NO RETENTION RIGHTS             Your option or this Agreement does not give you
                                the right to be retained by the Company (or any
                                subsidiaries) in any capacity. The Company (and
                                any subsidiaries) reserves the right to
                                terminate your Service at any time and for any
                                reason.

                                       5
<PAGE>

SHAREHOLDER RIGHTS              You, or your estate or heirs, have no rights as
                                a shareholder of the Company until a certificate
                                for your option Shares has been issued. No
                                adjustments are made for dividends or other
                                rights if the applicable record date occurs
                                before your stock certificate is issued, except
                                as described in the Plan.

ADJUSTMENTS                     In the event of a stock split, a stock dividend
                                or a similar change in the Company stock, the
                                number of Shares covered by this option and the
                                exercise price per share may be adjusted
                                pursuant to the Plan. Your option shall be
                                subject to the terms of the agreement of merger,
                                liquidation or reorganization in the event the
                                Company is subject to such corporate activity,
                                except to the extent the foregoing conflict with
                                or are in any way inconsistent with Section 8 of
                                your employment agreement.

FORFEITURE                      If, at any time within one year after
                                termination of employment, you engage in either
                                of the following: (i) your commission of a
                                felony or an act constituting common law fraud,
                                in each case having a material adverse effect on
                                the business or affairs of the Company or its
                                affiliates or stockholders; or (ii) your willful
                                or intentional breach of Company confidential
                                information obligations, in each case having a
                                material adverse effect on the business or
                                affairs of the Company or its affiliates or
                                stockholders; then (1) this option shall
                                terminate and be forfeited effective the date on
                                which you enter into such activity, unless
                                terminated or forfeited sooner by operation of
                                another term or condition of this option or the
                                Plan, (2) any stock acquired by you pursuant to
                                the exercise of this option during the
                                Forfeiture Period (as defined below) shall be
                                forfeited, and (3) any gain realized by you from
                                the sale of stock acquired through the exercise
                                of this option during the Forfeiture Period
                                shall be paid by you to the Company. The
                                "Forfeiture Period" shall mean the period
                                commencing six months prior to your termination
                                of employment and ending one year from your
                                termination of employment.

RIGHT OF SET OFF                By accepting this Agreement, you consent to a
                                deduction from any amounts the Company owes you
                                from time to time, to the extent of the amounts
                                you owe the Company under the paragraph above.
                                If the Company does not recover by means of
                                set-off the full amount you owe it, calculated
                                as set forth above, you agree to pay immediately
                                the unpaid balance to the Company upon the
                                Company's demand.

LEGENDS                         All certificates representing the Shares issued
                                upon exercise of this option shall have endorsed
                                thereon the applicable legends.

                                       6
<PAGE>

APPLICABLE LAW                  This Agreement will be interpreted and enforced
                                under the laws of the State of California.

THE PLAN AND OTHER AGREEMENTS   The text of the Plan and your employment
                                agreement are incorporated in this Agreement by
                                reference. Certain capitalized terms used in
                                this Agreement are defined in the Plan or your
                                employment agreement.

                                This Agreement, the Plan and your employment
                                agreement with the Company dated August 1, 2001,
                                as may be amended and in effect from time to
                                time, constitute the entire understanding
                                between you and the Company regarding this
                                option. Any prior agreements, commitments or
                                negotiations concerning this option are
                                superseded.

BY SIGNING THE COVER SHEET OF THIS AGREEMENT, YOU AGREE TO ALL OF THE TERMS AND
CONDITIONS DESCRIBED ABOVE AND IN THE PLAN, EXCEPT TO THE EXTENT MODIFIED BY
YOUR EMPLOYMENT AGREEMENT AND THIS AGREEMENT.

                                       7

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