Document:

Exhibit 10.2

                              SUBLICENSE AGREEMENT
                               TELEPHONE PRODUCTS

AGREEMENT made as of the day of June, 2000  ("Effective  Date"),  by and between
TREASURES OF ST.  PETER'S IN THE VATICAN,  LTD.,  a New York  corporation,  with
offices  at  39  West  29th  Street,  New  York,  NY  10001  ("TSV"),  and  MAXX
INTERNATIONAL,  INC.,  a New York  corporation  with offices at 130 S. El Camino
Drive, Beverly Hills, CA 90212 ("Sublicensee").

                                    RECITALS

     A. TSV has the exclusive right and license (the "License") with Capitola di
San  Pietro  in  Vaticano   ("Licensor")   for  the   manufacture  and  sale  of
reproductions of the Works of Art, or the details thereof, located in the Museum
of the  Treasures  of St Peters in the Vatican,  utilizing  all  trademarks  and
copyrights  pertaining thereto,  owned by the Licensor,  in certain parts of the
world (the  "Reproductions")  TSV has the right to sublicense  any of the rights
granted to it by the License,  as long as any such  sublicense does not conflict
with any term or conditions of the License.

     B.  Sublicensee  desires  to obtain  from TSV an  exclusive  sublicense  to
manufacture and sell certain Products (as defined herein), utilizing one or more
of the  Reproductions  and TSV is  willing  to grant  such  sublicense  upon and
subject to the terms and conditions hereof.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the parties hereto agree as follows:

1. Grant of Sublicense.  TSV hereby grants to Sublicensee the exclusive right to
manufacture  or  produce  and sell  the  Products  (as  defined  herein)  in the
Territory  (as  defined  herein)   Sublicensee  shall  not  have  the  right  to
sublicense, or assign, any of its rights hereunder, except as set forth below.

     a. The term "Products" is defined herein as products and services  relating
to telephones  including,  but not limited to, long distance and local services,
pre-paid and post paid calling cards,  800 and the like  telephone  services and
paging Each product or the literature  attached to such product or service shall
be imprinted with one or more of the Reproductions (the "Products").

     b. The Sublicensee is restricted from marketing and selling the Products by
or through a fundraising program or through a retail store operation.

<PAGE>

     c. The term  "Territory"  as defined herein shall include the continents of
North and South America, Asia and Australia (the. "Territory").

     d.  The  Sublicensee  may  sub-sublicense  or  assign  part  of its  rights
hereunder in the Territory outside the continental United States of America, all
of which are subject to and conditioned  upon the prior written  approval of TSV
including,  but not limited to,  approval of all agreements  with such assignee,
co-venturers  or  similar  party,  provided  that (i) the gross  revenue of such
assignee,  co-venturer  or similar  party  shall be deemed to be included in the
definition of Net Sales of Products set forth in subparagraph 4 b iv below, (ii)
such third parties shall agree to be subject to all covenants of the Sublicensee
contained in this Agreement,  and (iii) such prior written approval of TSV shall
not be unreasonably withheld.

     e. Where  Products are marketed as part of a promotional  tie-in,  premium,
giveaway or similar method of  merchandising,  proceeds from the distribution of
such  Products  shall be  included  in Net Sales of Products as if they had been
distributed at retail, unless otherwise agreed in writing by TSV.

2.  Acceptance.  Sublicensee  hereby accepts the rights and  privileges  granted
hereunder  Sublicensee further  acknowledges and agrees that in the event of any
conflict  between this  Agreement and the License,  the provisions of the latter
shall control.

3 Term.  The term of the  Sublicense  shall  commence on the Effective  Date and
shall continue in effect until February 7, 2006, unless sooner terminated as set
forth  herein,  or until the  License is  terminated  by the  Licensor  thereof,
whichever event first occurs.

     3.1 TSV  grants to  Sublicensee  a right of first  refusal  to enter into a
sublicense  covering products  substantially  similar to the products herein but
covering Territory which includes  continents,  or countries not included in the
Territory contained herein and the renewal of this Sublicense. Upon TSV offering
this  right of first  refusal  to  Sublicensee,  Sublicensee  shall have 60 days
thereafter to accept.

4. Royalties. In consideration of the rights granted to it under this Agreement,
Sublicensee agrees to pay to TSV the following royalties or sublicense fees (the
"Royalties"):

     a. An Advance Royalty in the amount of $500,000 payable as follows:

     (i)  $100,000 upon execution of this Agreement

     (ii) $100,000 30 days after execution of this Agreement

     (iii) $100,000 30 days thereafter

     (iv) $100,000 30 days thereafter

     (v)  $100,000 30 days thereafter

The Advance  Royalty shall be  non-refundable,  but will be applied and credited
against the Royalties due and payable to TSV pursuant to Paragraph  4.b. and 4.c
(i).

<PAGE>

Any  Royalties  payable by  Sublicensee  pursuant to  Paragraph  4.b.(i) for the
initial  quarter of the term hereof,  in excess of the initial four  payments of
the Advance  Royalty,  shall be applied and credited  against the final  Advance
Royalty payment.

     b. Royalties  shall be equal to five (5%) of the Net Sales of Products,  as
defined below, by Sublicensee during the term of this Agreement.

     (i) Royalties shall be payable  quarterly within twenty (20) days after the
end of each such quarter.

     (ii) Sublicensee shall render to TSV with each payment of Royalties, or for
each quarter of the  Sublicense,  a statement,  certified as true and correct by
Sublicensee's chief financial officer, setting forth such information reasonably
required by TSV.

     (iii) Net Sales of Products  by  Sublicensee  shall mean gross  revenues of
Sublicensee (and of any subsidiary,  affiliate, co-venturer or approved assignee
or sublicensee  thereof) from the sale of Products,  less applicable sales, use,
value added or similar taxes assessed on sales, authorized returns,  allowances,
discounts, credit card merchant discount charges and breakage.

     c. The following  Minimum Royalties shall be payable during the term hereof
as follows:

(i)   Effective Date through 9-15-2001                        $500,000
(ii)  for the next 12 months ending 9-15-2002                 $600,000
(iii) for the next 12 months ending 9-15-2003                 $750,000
(iv)  for the next 12 months ending 9-15-2004                 $900,000
(v)   for the next 12 months ending 9-15-2005                 $1,000,000
(vi)  for the balance of the term ending February 7, 2006     $1,100,000 annual
                                                               amount (prorated)

In the event  aggregate  Royalties  paid pursuant to Paragraph 4.b. based on Net
Sales  of  Products  during  any of the  foregoing  periods  do  not  equal  the
applicable Minimum Royalties, Sublicensee shall pay any deficiency amount to TSV
within twenty (20) days following the end of the applicable period.

5. Covenants of Sublicensee. Sublicensee further covenants and agrees:

     a. to use,  apply  and  direct  its best  efforts  to  promote  the sale of
Products within the Territory.

     b. To conduct all of  Sublicensee's  operations  hereunder in compliance in
all material  respects with all applicable  laws,  rules and  regulations of all
applicable governmental authorities.

<PAGE>

     c. to use its best  efforts not to cause or permit the  Products to be sold
to retailers or wholesalers for the sale thereof outside the Territory.

     d. not to utilize or employ any promotional or advertising  material in the
sale of Products that is unethical, immoral or offensive to good taste, or which
is not consistent with moral or religious principles.

     e. to submit to TSV for its  review and  approval,  prior to the public use
thereof,  any such  promotional  or  advertising  material  proposed  for use in
connection with the sale by Sublicensee of Products under this Agreement.

     f. to submit to TSV for its  review and  approval,  prior to the public use
thereof,  two (2) copies of each  different  design for  Products  and three (3)
samples of each  different  type or design of Product to be sold by  Sublicensee
hereunder.

     g. not to utilize in connection  with  advertising  or Product  sales,  any
name, logo or other markings  identifying or depicting Licensor other than those
prescribed  and  approved by TSV or for which TSV's prior  written  approval has
been obtained.

     h. not to  contact  any  officials  or  representatives  of TSV's  Licensor
without  coordination  through and obtaining of the prior  written  consent from
TSV.

TSV shall have the right to approve or disapprove any items  submitted  pursuant
to  Paragraphs  5. e. and 5. f. above,  and will  exercise good faith efforts to
provide  Sublicense with a written response within twenty 20 business days after
its  receipt of a  submission.  In the event of  disapproval,  TSV shall  notify
Sublicense  of the  reasons  for such  disapproval.  TSV shall not  unreasonably
withhold or delay any such approval.

6. Covenant of TSV. TSV further covenants and agrees:

     a. to make available to Sublicense for copying,  at Sublicensee's  cost and
expense,  any  reproductions,  transparencies,  slides or photos of the Works of
Art,  in  TSV's  possession  from  time to  time,  and  shall  otherwise  assist
Sublicense in obtaining  details of artwork for purposes of  developing  designs
for Products.

     b. to use good faith  efforts to take such  actions as are  determined,  in
TSV's sole discretion, to be commercially reasonable, to enjoin any infringement
of the rights granted to Sublicensee herein.

7.  Review  by  TSV/Licensor.  It is  understood  and  agreed  that  TSV has the
obligation  under the License to submit to its  Licensor  for review a sample of
each Product to be manufactured and/or sold by Sublicensee hereunder.  TSV shall
not unreasonably withhold or delay any such approval.

<PAGE>

8. Books and Records. While this Agreement remains in effect, and for the period
of two (2) years  thereafter,  Sublicensee  shall keep and maintain complete and
accurate  books and  records of all its  productions  and sales of  Product,  in
sufficient  detail to  enable  determination  of  Royalties  payable  hereunder.
Sublicensee shall permit TSV, by its duly authorized agents and representatives,
to examine and audit  Sublicensee's  books and records during reasonable advance
written  notice,  for the prupose of verifying any payment  required  under this
Agreement and Sublicensee's  compliance with its obligations  hereunder.  In the
event any amounts due and payable to TSV have been  underpaid  by three  percent
(3%) or more, Sublicensee shall pay promptly to TSV the cost of such examination
and audit,  in  addition  to the amount of such  underpayment.  Any  payments or
statements  not  challenged  within three (3) years of receipt  thereof shall be
deemed accepted.

9. Termination.  TSV shall have the right to terminate this Agreement by written
notice  delivered to  Sublicensee  upon the  occurrence  of any of the following
events:

     a. If the  Sublicensee  fails to make  payments and submit  statements  and
reports as required by Paragraph 4 hereof.

     b.  If  Sublicensee   becomes  subject  to  any  voluntary  or  involuntary
insolvency,  bankruptcy or similar proceedings, or an assignment for the benefit
of creditors is made by  Sublicensee,  and the same remains  undischarged  for a
period of thirty (30) days.

     c. If  Sublicensee  breaches any other therm or provision of this agreement
and fails to cure such breach  within  thirty (30) days after receipt of written
notice  from  TSV,  sent  by  certified  or  registered  mail,   specifying  the
particulars of such breach.

     Notwithstanding   contrary  provisions  contained  herein,  any  notice  of
termination from TSV shall not become effective if Sublicensee  shall remedy the
violation  stated  within such notice  within  thirty (30) days of receiving the
notice.  TSV shall give good  circumstances of the violation,  the good faith of
Sublicensee and the factors involved in completing the remedy.

     Following  termination  or expiration of this  Agreement,  including,  as a
result of the termination of TSV's License,  Sublicensee shall return all copies
of all Reproductions of the Works of Art, shall cease all production of Products
(except for Products in process),  and shall  exercise  commercially  reasonable
efforts  to sell its  remaining  inventory  of  Products,  subject to payment of
Royalties with respect to such sales as provided for herein.  Sublicensee  shall
have a period of ninety (90) days,  commencing with the expiration or other such
termination  date, in which to sell-off Products which are on hand or in process
as of such date.

     Upon termination or expiration, all royalties under this Agreement shall be
immediately due and payable, and Sublicensee shall send TSV a complete inventory
report and accounting  with full payment due, within ninety (90) days after such
expiration or

<PAGE>

termination.  Thereafter,  all remaining  Products and  component  parts thereof
shall be destroyed and Sublicensee  shall promptly  deliver to TSV a certificate
of destruction evidencing same. Sublicensee agrees that (i) its failure to cease
the  manufacture,  sale and/or  distribution  of Products upon the expiration or
termination  of this  Agreement  will result in the  immediate  and  irreparable
damage to TSV,  (ii) there is no adequate  remedy at law for such  failure,  and
(iii) in the event of such failure,  TSV shall be entitled to injunctive relief.
TSV shall be  entitled  to recover  from  Sublicensee,  in addition to any other
remedies  in the  event of  default,  any and all  attorneys'  fees,  costs  and
expenses,  including  collection  agency  fees,  costs and  expenses,  including
collection agency fees, incurred by TSV to enforce the provisions hereof.

10.  Relationship  of Parties.  The parties  understand  and agree that  nothing
herein  contained shall be construed to place the parties in the relationship of
joint venturers,  partners or agents of the other, that neither party shall make
any representation to the contrary,  and that neither party shall have the power
to obligate or bind the other in any manner whatsoever.

11.  Insurance.  Sublicensee  agrees to obtain and maintain at its own expense a
comprehensive  general liability insurance policy,  from a recognized  insurance
company and in form  reasonably  acceptable  to TSV,  providing  coverage of the
minimum  amounts of  $1,000,000  per event and  $3,000,000  in the  aggregate to
insure  against  all claims of third  parties,  with TSV named as an  additional
insured,  and with an  endorsement  that such  insurance  may not be canceled or
amended except upon thirty (30) days prior written notice to TSV.

12. Indemnification.  Sublicensee agrees to indemnify,  hold harmless and defend
TSV and its agents and representatives (with counsel acceptable to TSV) from and
against any and all claims, demands, losses, liabilities,  judgements, costs and
expenses,  including  attorneys' fees and expenses,  arising out of or resulting
from the sale of Products Sublicensee pursuant to this Agreement.

13.  Assignment.  The rights  granted  hereunder  are of a  personal  nature and
Sublicensee  shall not, directly or indirectly,  assign,  transfer or sublicense
any of its rights under this Agreement without the prior written consent of TSV,
which  consent  will  not be  unreasonably  withheld  or  unduly  delayed.  This
Agreement  shall be binding upon and inure to the benefit of the parties  hereto
and their permitted successors and assigns.

14. Governing Law. The validity, interpretation, construction and performance of
this Agreement shall be governed by the law of the State of New York.

15. Dispute  Resolution/Jurisdiction.  Any controversy, claim or dispute arising
out of or in any way relating to this Agreement,  or the breach  thereof,  shall
be:

     a. If the amount  thereof is less than  $75,000,  it shall be  resolved  by
arbitration  under the  Commercial  Rules of  American  Arbitration  Association
(except to the extent in conflict

<PAGE>

with the provisions of sub-paragraph  15.c. below),  with such arbitration to be
held in New York, New York and to be binding upon the parties.

     b. If the amount thereof is $75,000, or more, the parties hereby consent to
the exclusive  jurisdiction of the United States District Court for the Southern
District  of New York  for the  resolution  of all  matters  pertaining  to this
Agreement.

     c. With respect to  arbitrations,  the parties  agree that, if the rules of
the AAA so allow:

     (i) arbitrations shall be conducted before a single arbitrator  selected by
the parties in accordance with the applicable rules of the American  Arbitration
Association.

     (ii) the  decision of the  arbitrator  shall be rendered  within sixty (60)
days after the close of hearings and shall be binding  upon all  parties,  and a
judgment or decree upon the decision  rendered by the  arbitrator may be entered
in any court of competent jurisdiction.

     (iii)  at the  request  of any  party,  arbitration  proceedings  shall  be
conducted  confidentially;  in which case all  documents,  testimony and records
shall be received,  heard and maintained by the  arbitrator in confidence  under
seal,  available for inspection only by the  Association,  the parties and their
respective attorneys and experts, each of whom shall agree in writing to receive
such information confidentially and to maintain such information in confidence.

     (iv) hearings in the  arbitration  proceeding  shall commence  within sixty
(60) days after the selection of the arbitrator.

     (v) each party consents to the service of process in the arbitration or out
of any of the aforementioned courts by mailing copies thereof by certified mail,
postage prepaid,  such service to become effective three (3) business days after
such mailing.  Nothing  herein shall effect  either  party's right to service of
process in any other manner prescribed by law.

16. Notices. All notices,  requests and other communications  hereunder shall be
in writing and shall be mailed, postage prepaid, to the parties as follows:

If to TSV, to:

John Loata, President
Treasurers of St. Peter's in the Vatican, Ltd.
39 West 29th Street
New York, NY 10001

With a copy to:

<PAGE>

Joseph S. Williams, Esq.
14 Tinker Lane
Greenwich, CT 06830

If to Sublicensee, to:

Michael Solomon, Chief Executive Officer
MAXX International Inc.
130 S. El Camino Drive
Beverly Hills, CA 90212

Or to such other  address as either  party may, by written  notice,  give to the
other.

17. Confidentiality. Except as required by request of, or to fulfill obligations
to, the  Licensor  or any  affiliated  entity,  applicable  legal or  accounting
requirements or disclosure  obligations relative to security offerings,  each of
the parties for  itself,  and its  respective  representatives  and  affiliates,
covenants  and agrees  that if shall treat and  safeguard  as  confidential  and
secret and shall not use or disclose to others any  proprietary or  confidential
information  (the  "Protected   Information")   disclosed  to  it,  its  agents,
representatives,  officers, directors, employees or advisors with respect to the
transactions  contemplated  herein. Each of the parties and its affiliates shall
return to the others all Protected  Information  furnished to any of them or any
of their agents, representative,  officers, directors, employees or advisors and
shall maintain such confidentiality during the applicable term hereof, and for a
period  of two (2)  years  after  the  term.  For  purposes  of this  provision,
Protected  Information shall not include (i) sales and royalty  information,  or
(ii) information  which is, at the time of its disclosure,  in the public domain
or  otherwise  becomes  available to party on a  non-confidential  basis from an
independent source which not prohibited from revealing such information.

18.  Entire  Agreement.  There  are no  representations,  warranties,  promises,
agreement,  or  covenants  other than those  contained  herein.  This  Agreement
constitutes  the entire  agreement  between the parties and supersedes any prior
agreements or understanding relating to the subject matter hereof.

19.  Counterparts.  This Agreement may be executed and delivered in counterparts
with facsimile  signatures,  and all such executed facsimile  counterparts shall
constitute  one and the same  agreement  having  the same force and effect as an
executed original.

<PAGE>

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

                                      "TSV"

                                             TREASURES OF ST. PETER'S
                                             IN THE VATICAN,LTD.

                                         By: /s/ John Loata
                                             ---------------------------
                                             John Loata, President

                                      "SUBLICENSE"

                                             MAXX INTERNATIONAL, INC.

                                         By: /s/ Michael Solomon
                                             ---------------------------
                                             Michael Solomon
                                             Chief Executive Officer<PAGE>   1

                                                                    EXHIBIT 10.2

                              OMNISKY CORPORATION

                                 2000 STOCK PLAN

                                 ---------------

                                    ARTICLE 1

                               GENERAL PROVISIONS

I.     PURPOSE OF THE PLAN

       This 2000 Stock Plan is intended to promote the interests of OmniSky
Corporation, a Delaware corporation, by providing eligible persons with the
opportunity to acquire a proprietary interest, or otherwise increase their
proprietary interest, in the Corporation as an incentive for them to remain in
the service of the Corporation.

       Capitalized terms shall have the meanings assigned to such terms in the
attached Appendix.

II.    STRUCTURE OF THE PLAN

       A. The Plan shall be divided into five separate equity incentive
programs:

              1. the Discretionary Option Grant Program under which eligible
persons may, at the discretion of the Plan Administrator, be granted options to
purchase shares of Common Stock,

              2. the Salary Investment Option Grant Program under which eligible
employees may elect to have a portion of their base salary invested each year in
special options,

              3. the Stock Issuance Program under which eligible persons may, at
the discretion of the Plan Administrator, be issued shares of Common Stock
directly, either through the immediate purchase of such shares or as a bonus for
services rendered to the Corporation (or any Parent or Subsidiary),

              4. the Automatic Option Grant Program under which eligible
non-employee Board members shall automatically receive options at periodic
intervals to purchase shares of Common Stock, and

              5. the Director Fee Option Grant Program under which non-employee
Board members may elect to have all or any portion of their annual retainer fee
otherwise payable in cash applied to a special option grant.

       B. The provisions of Articles One and Seven shall apply to all equity
programs under the Plan and shall govern the interests of all persons under the
Plan.

<PAGE>   2

III.   ADMINISTRATION OF THE PLAN

       A. The Primary Committee shall have sole and exclusive authority to
administer the Discretionary Option Grant and Stock Issuance Programs with
respect to Section 16 Insiders. Administration of the Discretionary Option Grant
and Stock Issuance Programs with respect to all other persons eligible to
participate in those programs may, at the Board's discretion, be vested in the
Primary Committee or a Secondary Committee, or the Board may retain the power to
administer those programs with respect to all such persons. However, any
discretionary option grants or stock issuances for members of the Primary
Committee shall be made by a disinterested majority of the Board.

       B. Members of the Primary Committee or any Secondary Committee shall
serve for such period of time as the Board may determine and may be removed by
the Board at any time. The Board may also at any time terminate the functions of
any Secondary Committee and reassume all powers and authority previously
delegated to such committee.

       Each Plan Administrator shall, within the scope of its administrative
functions under the Plan, have full power and authority (subject to the
provisions of the Plan) to establish such rules and regulations as it may deem
appropriate for proper administration of the Discretionary Option Grant and
Stock Issuance Programs and to make such determinations under, and issue such
interpretations of, the provisions of those programs and any outstanding options
or stock issuances thereunder as it may deem necessary or advisable. Decisions
of the Plan Administrator within the scope of its administrative functions under
the Plan shall be final and binding on all parties who have an interest in the
Discretionary Option Grant and Stock Issuance Programs under its jurisdiction or
any option or stock issuance thereunder.

       C. The Primary Committee shall have the sole and exclusive authority to
determine which Section 16 Insiders and other highly compensated Employees shall
be eligible for participation in the Salary Investment Option Grant Program for
one or more calendar years. However, all option grants under the Salary
Investment Option Grant Program shall be made in accordance with the express
terms of that program, and the Primary Committee shall not exercise any
discretionary functions with respect to the option grants made under that
program.

       D. Service on the Primary Committee or the Secondary Committee shall
constitute service as a Board member, and members of each such committee shall
accordingly be entitled to full indemnification and reimbursement as Board
members for their service on such committee. No member of the Primary Committee
or the Secondary Committee shall be liable for any act or omission made in good
faith with respect to the Plan or any options or stock issuances under the Plan.

       E. Administration of the Automatic Option Grant and Director Fee Option
Grant Programs shall be self-executing in accordance with the terms of those
programs, and no Plan Administrator shall exercise any discretionary functions
with respect to any option grants or stock issuances made under those programs.

                                      -2-
<PAGE>   3

IV.    ELIGIBILITY

       A. The persons eligible to participate in the Discretionary Option Grant
and Stock Issuance Programs are as follows:

              1. Employees,

              2. non-employee members of the Board or the board of directors of
any Parent or Subsidiary, and

              3. consultants and other independent advisors who provide services
to the Corporation (or any Parent or Subsidiary).

       B. Only Employees who are Section 16 Insiders or other highly compensated
individuals shall be eligible to participate in the Salary Investment Option
Grant Program.

       C. Only non-employee Board members shall be eligible to participate in
the Automatic Option Grant and Director Fee Option Grant Programs.

       D. Each Plan Administrator shall, within the scope of its administrative
jurisdiction under the Plan, have full authority to determine, (i) with respect
to the option grants under the Discretionary Option Grant Program, which
eligible persons are to receive such grants, the time or times when those grants
are to be made, the number of shares to be covered by each such grant, the
status of the granted option as either an Incentive Option or a Non-Statutory
Option, the time or times when each option is to become exercisable, the vesting
schedule (if any) applicable to the option shares and the maximum term for which
the option is to remain outstanding and (ii) with respect to stock issuances
under the Stock Issuance Program, which eligible persons are to receive such
issuances, the time or times when the issuances are to be made, the number of
shares to be issued to each Participant, the vesting schedule (if any)
applicable to the issued shares and the consideration for such shares.

       E. The Plan Administrator shall have the absolute discretion either to
grant options in accordance with the Discretionary Option Grant Program or to
effect stock issuances in accordance with the Stock Issuance Program.

       F. The individuals who shall be eligible to participate in the Automatic
Option Grant Program shall be limited to (i) those individuals who first become
non-employee Board members on or after the Underwriting Date, whether through
appointment by the Board or election by the Corporation's stockholders and (ii)
those individuals who continue to serve as non-employee Board members at one or
more Annual Stockholders Meetings held after the Underwriting Date. A
non-employee Board member who has previously been in the employ of the
Corporation (or any Parent or Subsidiary) shall not be eligible to receive an
option grant under the Automatic Option Grant Program at the time he or she
first becomes a non-employee Board member, but shall be eligible to receive
periodic option grants under the Automatic Option Grant Program while he or she
continues to serve as a non-employee Board member.

                                      -3-
<PAGE>   4

V.     STOCK SUBJECT TO THE PLAN

       A. The stock issuable under the Plan shall be shares of authorized but
unissued or reacquired Common Stock, including shares repurchased by the
Corporation on the open market. The maximum number of shares of Common Stock
initially reserved for issuance over the term of the Plan shall not exceed four
million (4,000,000 ) shares. Such reserve shall consist of the number of shares
estimated to remain available for issuance, as of the Plan Effective Date, under
the Predecessor Plan, including the shares subject to the outstanding options to
be incorporated into the Plan and the additional shares which would otherwise be
available for future grant.

       B. The number of shares of Common Stock available for issuance under the
Plan shall automatically increase on the first trading day of January each
calendar year during the term of the Plan, beginning with the calendar year
2001, by an amount equal to the lesser of: (i) 3% of the total number of shares
of Common Stock outstanding on the last trading day in December of the
immediately preceding calendar year, (ii) one million (1,000,000) shares and
(iii) an amount determined by the Board.

       C. No one person participating in the Plan may receive options,
separately exercisable stock appreciation rights and direct stock issuances for
more than 1,000,000 shares of Common Stock in the aggregate per calendar year;
provided, however, that in connection with his or her initial Service, an
individual may be granted options, separately exercisable stock appreciation
rights and direct stock issuances up to an additional 2,500,000 shares (that is,
for a possible total of 3,500,000 shares in the year of initial Service).

       D. Shares of Common Stock subject to outstanding options (including
options incorporated into this Plan from the Predecessor Plan) shall be
available for subsequent issuance under the Plan to the extent those options
expire, terminate or are cancelled for any reason prior to exercise in full.
Unvested shares issued under the Plan and subsequently repurchased by the
Corporation, at the original exercise or issue price paid per share, pursuant to
the Corporation's repurchase rights under the Plan shall be added back to the
number of shares of Common Stock reserved for issuance under the Plan and shall
accordingly be available for reissuance through one or more subsequent options
or direct stock issuances under the Plan. However, should the exercise price of
an option under the Plan be paid with shares of Common Stock or should shares of
Common Stock otherwise issuable under the Plan be withheld by the Corporation in
satisfaction of the withholding taxes incurred in connection with the exercise
of an option or the vesting of a stock issuance under the Plan, then the number
of shares of Common Stock available for issuance under the Plan shall be reduced
by the gross number of shares for which the option is exercised or which vest
under the stock issuance, and not by the net number of shares of Common Stock
issued to the holder of such option or stock issuance. Shares of Common Stock
underlying one or more stock appreciation rights exercised under the Plan shall
not be available for subsequent issuance.

       E. If any change is made to the Common Stock by reason of any stock
split, stock dividend, recapitalization, combination of shares, exchange of
shares or other change affecting the outstanding Common Stock as a class without
the Corporation's receipt of consideration, appropriate adjustments shall be
made to (i) the maximum number and/or class of securities issuable under the
Plan, (ii) the number and/or class of securities by which the share reserve is
to increase each calendar year

                                      -4-
<PAGE>   5

pursuant to the automatic share increase provisions of the Plan, (iii) the
number and/or class of securities for which any one person may be granted
options, separately exercisable stock appreciation rights and direct stock
issuances under the Plan per calendar year and in connection with initial
Service to the Corporation (or Parent or Subsidiary), (iv) the number and/or
class of securities for which grants are subsequently to be made under the
Automatic Option Grant Program to new and continuing non-employee Board members,
(v) the number and/or class of securities and the exercise price per share in
effect under each outstanding option under the Plan and (vi) the number and/or
class of securities and price per share in effect under each outstanding option
incorporated into this Plan from the Predecessor Plan. Such adjustments to the
outstanding options are to be effected in a manner which shall preclude the
enlargement or dilution of rights and benefits under such options. The
adjustments determined by the Plan Administrator shall be final, binding and
conclusive.

                                    ARTICLE 2

                       DISCRETIONARY OPTION GRANT PROGRAM

I.     OPTION TERMS

       Each option shall be evidenced by one or more written or electronic
documents in the form approved by the Plan Administrator; provided, however,
that each such document shall comply with the terms specified below. Each
document evidencing an Incentive Option shall, in addition, be subject to the
provisions of the Plan applicable to Incentive Options.

       A. Exercise Price.

              1. The exercise price per share shall be fixed by the Plan
Administrator.

              2. The exercise price shall become immediately due upon exercise
of the option and shall, subject to the provisions of Section II of Article
Seven and the documents evidencing the option, be payable in any form of
consideration permitted by applicable law including one or more of the following
forms:

                     (i) in cash or check made payable to the Corporation;

                     (ii) shares of Common Stock held for the requisite period
necessary to avoid a charge to the Corporation's earnings for financial
reporting purposes and valued at Fair Market Value on the Exercise Date; or

                     (iii) to the extent the option is exercised for vested
shares, through a special sale and remittance procedure pursuant to which the
Optionee shall concurrently provide irrevocable instructions to (a) a
Corporation-designated brokerage firm to effect the immediate sale of the
purchased shares and remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
exercise price payable for the purchased shares plus all applicable Federal,
state and local income and employment taxes required to be withheld by the
Corporation by reason of such exercise and (b) the Corporation to deliver the
certificates for the purchased shares directly to such brokerage firm in order
to complete the sale. Except to the extent

                                      -5-
<PAGE>   6

such sale and remittance procedure is utilized, payment of the exercise price
for the purchased shares must be made on the Exercise Date.

       B. Exercise and Term of Options. Each option shall be exercisable at such
time or times, during such period and for such number of shares as shall be
determined by the Plan Administrator and set forth in the documents evidencing
the option.

       C. Effect of Termination of Service.

              1. The following provisions shall govern the exercise of any
options outstanding at the time of the Optionee's cessation of Service or death:

                             (i) Any option outstanding at the time of the
Optionee's cessation of Service for any reason shall remain exercisable for such
period of time thereafter as shall be determined by the Plan Administrator and
set forth in the documents evidencing the option, but no such option shall be
exercisable after the expiration of the option term (as set forth in the
documents evidencing the option).

                             (ii) Any option exercisable in whole or in part by
the Optionee at the time of death may be subsequently exercised by his or her
Beneficiary.

                            (iii) During the applicable post-Service exercise
period, the option may not be exercised in the aggregate for more than the
number of vested shares for which the option is exercisable on the date of the
Optionee's cessation of Service. Upon the expiration of the applicable exercise
period or (if earlier) upon the expiration of the option term, the option shall
terminate and cease to be outstanding for any vested shares for which the option
has not been exercised. However, the option shall, immediately upon the
Optionee's cessation of Service, terminate and cease to be outstanding to the
extent the option is not otherwise at that time exercisable for vested shares.

                             (iv) Should the Optionee's Service be terminated
for Misconduct or should the Optionee engage in Misconduct while his or her
options are outstanding, then all such options shall terminate immediately and
cease to be outstanding.

              2. The Plan Administrator shall have complete discretion,
exercisable either at the time an option is granted or at any time while the
option remains outstanding, to:

                            (i) extend the period of time for which the option
is to remain exercisable following the Optionee's cessation of Service from the
limited exercise period otherwise in effect for that option to such greater
period of time as the Plan Administrator shall deem appropriate, and/or

                            (ii) permit the option to be exercised, during the
applicable post-Service exercise period, not only with respect to the number of
vested shares of Common Stock for which such option is exercisable at the time
of the Optionee's cessation of Service, but also with respect to one or more
additional installments in which the Optionee would have vested had the Optionee
continued in Service.

                                      -6-
<PAGE>   7

       D. Stockholder Rights. The holder of an option shall have no stockholder
rights with respect to the shares subject to the option until such person shall
have exercised the option, paid the exercise price and become a holder of record
of the purchased shares.

       E. Repurchase Rights. The Plan Administrator shall have the discretion to
grant options which are exercisable for unvested shares of Common Stock. Should
the Optionee cease Service while holding such unvested shares, the Corporation
shall have the right to repurchase, at the exercise price paid per share, any or
all of those unvested shares. The terms upon which such repurchase right shall
be exercisable (including the period and procedure for exercise and the
appropriate vesting schedule for the purchased shares) shall be established by
the Plan Administrator and set forth in the document evidencing such repurchase
right.

       F. Limited Transferability of Options. During the lifetime of the
Optionee, Incentive Options shall be exercisable only by the Optionee and shall
not be assignable or transferable other than to a Beneficiary following the
Optionee's death. Non-Statutory Options shall be subject to the same
restrictions, except that a Non-Statutory Option may, to the extent permitted by
the Plan Administrator, be assigned in whole or in part during the Optionee's
lifetime (i) as a gift to one or more members of the Optionee's immediate
family, to a trust in which Optionee and/or one or more such family members hold
more than fifty percent (50%) of the beneficial interest or to an entity in
which more than fifty percent (50%) of the voting interests are owned by one or
more such family members or (ii) pursuant to a domestic relations order. The
terms applicable to the assigned portion shall be the same as those in effect
for the option immediately prior to such assignment and shall be set forth in
such documents issued to the assignee as the Plan Administrator may deem
appropriate.

II.    INCENTIVE OPTIONS

       The terms specified below shall be applicable to all Incentive Options.
Except as modified by the provisions of this Section II, all the provisions of
Articles One, Two and Seven shall be applicable to Incentive Options. Options
which are specifically designated as Non-Statutory Options when issued under the
Plan shall not be subject to the terms of this Section II.

       A. Eligibility. Incentive Options may only be granted to Employees.

       B. Exercise Price. The exercise price per share shall not be less than
one hundred percent (100%) of the Fair Market Value per share of Common Stock on
the option grant date.

       C. Dollar Limitation. The aggregate Fair Market Value of the shares of
Common Stock (determined as of the respective date or dates of grant) for which
one or more options granted to any Employee under the Plan (or any other option
plan of the Corporation or any Parent or Subsidiary) may for the first time
become exercisable as Incentive Options during any one calendar year shall not
exceed the sum of One Hundred Thousand Dollars ($100,000), unless the Internal
Revenue Code shall hereafter be amended to permit a higher aggregate threshold
in which case the dollar limitation shall be such higher threshold. To the
extent the Employee holds two (2) or more such options which become exercisable
for the first time in the same calendar year, the foregoing limitation on the
exercisability of such options as Incentive Options shall be applied on the
basis of the order in which such options are granted.

                                      -7-
<PAGE>   8

       D. Term. The term of an Incentive Option shall not exceed ten (10) years
from the date of grant.

       E. 10% Stockholder. If any Employee to whom an Incentive Option is
granted is a 10% Stockholder, then the exercise price per share shall not be
less than one hundred ten percent (110%) of the Fair Market Value per share of
Common Stock on the option grant date, and the option term shall not exceed five
(5) years measured from the option grant date.

III.   CHANGE IN CONTROL/HOSTILE TAKE-OVER

       A. Each option outstanding at the time of a Change in Control but not
otherwise fully-vested shall automatically accelerate so that each such option
shall, immediately prior to the effective date of the Change in Control, become
exercisable for all of the shares of Common Stock at the time subject to that
option and may be exercised for any or all of those shares as fully-vested
shares of Common Stock. However, an outstanding option shall not, subject to
paragraph III(E) below, so accelerate if and to the extent: (i) such option is,
in connection with the Change in Control, assumed or otherwise continued in full
force and effect by the successor corporation (or parent thereof) pursuant to
the terms of the Change in Control, (ii) such option is replaced with a cash
incentive program of the successor corporation which preserves the spread
existing at the time of the Change in Control on the shares of Common Stock for
which the option is not otherwise at that time exercisable and provides for
subsequent payout in accordance with the same vesting schedule applicable to
those option shares or (iii) the acceleration of such option is subject to other
limitations imposed by the Plan Administrator at the time of the option grant.
Each option outstanding at the time of the Change in Control shall terminate as
provided in Section III.C. of this Article Two.

       B. All outstanding repurchase rights shall also terminate automatically,
and the shares of Common Stock subject to those terminated rights shall
immediately vest in full, in the event of any Change in Control, except to the
extent: (i) those repurchase rights are assigned to the successor corporation
(or parent thereof) or otherwise continue in full force and effect pursuant to
the terms of the Change in Control or (ii) such accelerated vesting is precluded
by other limitations imposed by the Plan Administrator at the time the
repurchase right is issued.

       C. Immediately following the consummation of the Change in Control, all
outstanding options shall terminate and cease to be outstanding, except to the
extent assumed by the successor corporation (or parent thereof) or otherwise
expressly continued in full force and effect pursuant to the terms of the Change
in Control.

       D. Each option which is assumed in connection with a Change in Control
shall be appropriately adjusted, immediately after such Change in Control, to
apply to the number and class of securities which would have been issuable to
the Optionee in consummation of such Change in Control had the option been
exercised immediately prior to such Change in Control. Appropriate adjustments
to reflect such Change in Control shall also be made to (i) the exercise price
payable per share under each outstanding option, provided the aggregate exercise
price payable for such securities shall remain the same, (ii) the maximum number
and/or class of securities available for issuance over the remaining term of the
Plan and (iii) the maximum number and/or class of securities for which any one
person may be granted options, separately exercisable stock appreciation rights

                                      -8-
<PAGE>   9

and direct stock issuances under the Plan per calendar year and upon initial
Service to the Corporation. To the extent the actual holders of the
Corporation's outstanding Common Stock receive cash consideration for their
Common Stock in consummation of the Change in Control, the successor corporation
may, in connection with the assumption of the outstanding options, substitute
one or more shares of its own common stock with a fair market value equivalent
to the cash consideration paid per share of Common Stock in such Change in
Control.

       E. The Plan Administrator may at any time provide that one or more
options will automatically accelerate in connection with a Change in Control,
whether or not those options are assumed or otherwise continued in full force
and effect pursuant to the terms of the Change in Control. Any such option shall
accordingly become exercisable, immediately prior to the effective date of such
Change in Control, as to the number of shares of Common Stock as the Plan
Administrator shall determine and may be exercised for any or all of those
shares as fully-vested shares of Common Stock. In addition, the Plan
Administrator may at any time provide that one or more of the Corporation's
repurchase rights shall not be assignable in connection with such Change in
Control and shall terminate upon the consummation of such Change in Control.

       F. The Plan Administrator may at any time provide that one or more
options will automatically accelerate upon an "involuntary termination" (to be
defined by the Plan Administrator) of the Optionee's Service within a designated
period following the effective date of any Change in Control in which those
options do not otherwise accelerate. Any options so accelerated shall remain
exercisable for fully-vested shares for such period of time as permitted by the
Plan or the documents evidencing the option. In addition, the Plan Administrator
may at any time provide that one or more of the Corporation's repurchase rights
shall immediately terminate upon such involuntary termination.

       G. The Plan Administrator may at any time provide that one or more
options will automatically accelerate in connection with a Hostile Take-Over.
Any such option shall become exercisable, immediately prior to the effective
date of such Hostile Take-Over, for all of the shares of Common Stock at the
time subject to that option and may be exercised for any or all of those shares
as fully-vested shares of Common Stock. In addition, the Plan Administrator may
at any time provide that one or more of the Corporation's repurchase rights
shall terminate automatically upon the consummation of such Hostile Take-Over.
Alternatively, the Plan Administrator may condition such automatic acceleration
and termination upon an "involuntary termination" (to be defined by the Plan
Administrator) of the Optionee's Service within a designated period following
the effective date of such Hostile Take-Over. Each option so accelerated shall
remain exercisable for fully-vested shares for such period of time as permitted
by the Plan or the documents evidencing the option.

       H. The portion of any Incentive Option accelerated in connection with a
Change in Control or Hostile Take Over shall remain exercisable as an Incentive
Option only to the extent the applicable One Hundred Thousand Dollar ($100,000)
limitation is not exceeded. To the extent such dollar limitation is exceeded,
the accelerated portion of such option shall be exercisable as a Non-Statutory
Option for purposes of the Federal tax laws.

                                      -9-
<PAGE>   10

IV.    CANCELLATION AND REGRANT OF OPTIONS

       The Plan Administrator shall have the authority to effect, at any time
and from time to time, with the consent of the affected option holders, the
cancellation of any or all outstanding options under the Discretionary Option
Grant Program (including outstanding options incorporated from the Predecessor
Plan) and to grant in substitution new options covering the same or different
number of shares of Common Stock but with an exercise price per share based on
the Fair Market Value per share of Common Stock on the new grant date.

V.     STOCK APPRECIATION RIGHTS

       A. The Plan Administrator shall have full power and authority to grant to
selected Optionees tandem stock appreciation rights and/or limited stock
appreciation rights.

       B. The following terms shall govern the grant and exercise of tandem
stock appreciation rights:

                     (i) One or more Optionees may be granted the right,
exercisable upon such terms as the Plan Administrator may establish, to elect
between the exercise of the underlying option for shares of Common Stock and the
surrender of that option in exchange for a distribution from the Corporation in
an amount equal to the excess of (a) the Fair Market Value (on the option
surrender date) of the number of shares in which the Optionee is at the time
vested under the surrendered option (or surrendered portion thereof) over (b)
the aggregate exercise price payable for such shares.

                     (ii) No such option surrender shall be effective unless it
is approved by the Plan Administrator, either at the time of the actual option
surrender or at any earlier time. If the surrender is so approved, then the
distribution to which the Optionee shall be entitled may be made in shares of
Common Stock valued at Fair Market Value on the option surrender date, in cash,
or partly in shares and partly in cash, as the Plan Administrator shall in its
sole discretion deem appropriate.

                     (iii) If the surrender of an option is not approved by the
Plan Administrator, then the Optionee shall retain whatever rights the Optionee
had under the surrendered option (or surrendered portion thereof) on the option
surrender date and may exercise such rights at any time prior to the later of
(a) five (5) business days after the receipt of the rejection notice or (b) the
last day on which the option is otherwise exercisable in accordance with the
terms of the documents evidencing such option, but in no event may such rights
be exercised more than ten (10) years after the option grant date.

       C. The following terms shall govern the grant and exercise of limited
stock appreciation rights:

              (i) One or more Section 16 Insiders may be granted limited stock
appreciation rights with respect to their outstanding options.

              (ii) Upon the occurrence of a Hostile Take-Over, each individual
holding one or more options with such a limited stock appreciation right shall
have the unconditional right

                                      -10-
<PAGE>   11

(exercisable for a thirty (30)-day period following such Hostile Take-Over) to
surrender each such option to the Corporation. In return for the surrendered
option, the Optionee shall receive a cash distribution from the Corporation in
an amount equal to the excess of (A) the Take-Over Price of the shares of Common
Stock at the time subject to such option (whether or not the Optionee is
otherwise vested in those shares) over (B) the aggregate exercise price payable
for those shares. Such cash distribution shall be paid within five (5) days
following the option surrender date.

              (iii) At the time such limited stock appreciation right is
granted, the Plan Administrator shall pre-approve any subsequent exercise of
that right in accordance with the terms of this Paragraph C. Accordingly, no
further approval of the Plan Administrator or the Board shall be required at the
time of the actual option surrender and cash distribution.

                                    ARTICLE 3

                     SALARY INVESTMENT OPTION GRANT PROGRAM

I.     OPTION GRANTS

       The Primary Committee may implement the Salary Investment Option Grant
Program for one or more calendar years beginning after the Plan Effective Date
and select the Section 16 Insiders and other highly compensated Employees
eligible to participate in the Salary Investment Option Grant Program for each
such calendar year. Each selected individual who elects to participate in the
Salary Investment Option Grant Program must, prior to the start of each calendar
year of participation, file with the Plan Administrator (or its designate) an
irrevocable authorization directing the Corporation to reduce his or her base
salary for that calendar year by an amount not less than five thousand Dollars
($5,000) nor more than seventy five thousand Dollars ($75,000). Each individual
who files such a timely election shall be granted an option under the Salary
Investment Grant Program on the first trading day in January for the calendar
year for which the salary reduction is to be in effect.

II.    OPTION TERMS

       Each option shall be a Non-Statutory Option evidenced by one or more
documents in the form approved by the Plan Administrator; provided, however,
that each such document shall comply with the terms specified below.

       A. Exercise Price.

              1. The exercise price per share shall be thirty-three and
one-third percent (33-1/3%) of the Fair Market Value per share of Common Stock
on the option grant date or such other price as the Primary Committee may
establish.

              2. The exercise price shall become immediately due upon exercise
of the option and shall be payable in one or more of the alternative forms
authorized under the Discretionary Option

                                      -11-
<PAGE>   12

Grant Program. Except to the extent the sale and remittance procedure specified
thereunder is utilized, payment of the exercise price for the purchased shares
must be made on the Exercise Date.

       B. Number of Option Shares. The number of shares of Common Stock subject
to the option shall be determined pursuant to the following formula (rounded
down to the nearest whole number):

       X = A/(B x 66-2/3%), where

       X is the number of option shares,

       A is the dollar amount of the approved reduction in the Optionee's base
salary for the calendar year, and

       B is the Fair Market Value per share of Common Stock on the option grant
date.

       C. Exercise and Term of Options. The option shall become exercisable in a
series of twelve (12) successive equal monthly installments upon the Optionee's
completion of each calendar month of Service in the calendar year for which the
salary reduction is in effect. Each option shall have a maximum term of ten (10)
years measured from the option grant date.

       D. Effect of Termination of Service. Each option outstanding at the time
of the Optionee's cessation of Service shall remain exercisable, for any or all
of the shares for which the option is exercisable at the time of such cessation
of Service, until the earlier of (i) the expiration of the option term or (ii)
the expiration of the three (3)-year period following the Optionee's cessation
of Service. To the extent the option is held by the Optionee at the time of his
or her death, the option may be exercised by his or her Beneficiary. However,
the option shall, immediately upon the Optionee's cessation of Service,
terminate and cease to remain outstanding with respect to any and all shares of
Common Stock for which the option is not otherwise at that time exercisable.

III.   CHANGE IN CONTROL/HOSTILE TAKE-OVER

       A. In the event of any Change in Control or Hostile Take-Over while the
Optionee remains in Service, each outstanding option shall automatically
accelerate so that each such option shall, immediately prior to the effective
date of the Change in Control or Hostile Take-Over, become fully exercisable
with respect to the total number of shares of Common Stock at the time subject
to such option and may be exercised for any or all of those shares as
fully-vested shares of Common Stock. Each such option accelerated in connection
with a Change in Control shall terminate upon the Change in Control, except to
the extent assumed by the successor corporation (or parent thereof) or otherwise
continued in full force and effect pursuant to the terms of the Change in
Control. Each such option accelerated in connection with a Hostile Take-Over
shall remain exercisable until the expiration or sooner termination of the
option term.

       B. Each option which is assumed in connection with a Change in Control
shall be appropriately adjusted to apply to the number and class of securities
which would have been issuable to the Optionee in consummation of such Change in
Control had the option been exercised immediately prior to such Change in
Control. Appropriate adjustments shall also be made to the exercise price
payable per share under each outstanding option, provided the aggregate exercise

                                      -12-
<PAGE>   13

price payable for such securities shall remain the same. To the extent the
actual holders of the Corporation's outstanding Common Stock receive cash
consideration for their Common Stock in consummation of the Change in Control,
the successor corporation may, in connection with the assumption of the
outstanding options, substitute one or more shares of its own common stock with
a fair market value equivalent to the cash consideration paid per share of
Common Stock in such Change in Control.

       C. Upon the occurrence of a Hostile Take-Over, the Optionee shall have a
thirty (30)-day period in which to surrender to the Corporation each of his or
her outstanding options. The Optionee shall in return be entitled to a cash
distribution from the Corporation in an amount equal to the excess of (i) the
Option Surrender Value of the shares of Common Stock at the time subject to each
surrendered option (whether or not the Optionee is otherwise at the time vested
in those shares) over (ii) the aggregate exercise price payable for such shares.
Such cash distribution shall be paid within five (5) days following the
surrender of the option to the Corporation.

IV.    REMAINING TERMS

       The remaining terms of each option granted under the Salary Investment
Option Grant Program shall be the same as the terms in effect for options made
under the Discretionary Option Grant Program.

                                    ARTICLE 4

                             STOCK ISSUANCE PROGRAM

I.     STOCK ISSUANCE TERMS

       Shares of Common Stock may be issued under the Stock Issuance Program
through direct and immediate issuances without any intervening options. Shares
of Common Stock may also be issued under the Stock Issuance Program pursuant to
share right awards which entitle the recipients to receive those shares upon the
attainment of designated performance goals or Service requirements. Each such
award shall be evidenced by one or more documents which comply with the terms
specified below.

       A. Purchase Price.

              1. The purchase price per share shall be fixed by the Plan
Administrator.

              2. Subject to the provisions of Section II of Article Seven,
shares of Common Stock may be issued under the Stock Issuance Program for any of
the following items of consideration which the Plan Administrator may deem
appropriate in each individual instance:

                            (i) cash or check made payable to the Corporation,
or

                            (ii) past services rendered to the Corporation (or
any Parent or Subsidiary).

                                      -13-
<PAGE>   14

       B. Vesting/Issuance Provisions.

              1. The Plan Administrator may issue shares of Common Stock which
are fully and immediately vested upon issuance or which are to vest in one or
more installments over the Participant's period of Service or upon attainment of
specified performance objectives. Alternatively, the Plan Administrator may
issue share right awards which shall entitle the recipient to receive a
specified number of vested shares of Common Stock upon the attainment of one or
more performance goals or Service requirements established by the Plan
Administrator.

              2. Any new, substituted or additional securities or other property
(including money paid other than as a regular cash dividend) which the
Participant may have the right to receive with respect to his or her unvested
shares of Common Stock by reason of any stock dividend, stock split,
recapitalization, combination of shares, exchange of shares or other change
affecting the outstanding Common Stock as a class without the Corporation's
receipt of consideration shall be issued subject to (i) the same vesting
requirements applicable to the Participant's unvested shares of Common Stock and
(ii) such escrow arrangements as the Plan Administrator shall deem appropriate.

              3. The Participant shall have full stockholder rights with respect
to the issued shares of Common Stock, whether or not the Participant's interest
in those shares is vested. Accordingly, the Participant shall have the right to
vote such shares and to receive any regular cash dividends paid on such shares.

              4. Should the Participant cease to remain in Service while holding
one or more unvested shares of Common Stock, or should the performance
objectives not be attained with respect to one or more such unvested shares of
Common Stock, then those shares shall be immediately surrendered to the
Corporation for cancellation, and the Participant shall have no further
stockholder rights with respect to those shares. To the extent the surrendered
shares were previously issued to the Participant for consideration paid in cash
or cash equivalent (including the Participant's purchase-money indebtedness),
the Corporation shall repay to the Participant the cash consideration paid for
the surrendered shares and shall cancel the unpaid principal balance of any
outstanding purchase-money note of the Participant attributable to the
surrendered shares.

              5. The Plan Administrator may waive the surrender and cancellation
of one or more unvested shares of Common Stock (or other assets attributable
thereto) which would otherwise occur upon the cessation of the Participant's
Service or the non-attainment of the performance objectives applicable to those
shares. Such waiver shall result in the immediate vesting of the Participant's
interest in the shares of Common Stock as to which the waiver applies. Such
waiver may be effected at any time, whether before or after the Participant's
cessation of Service or the attainment or non-attainment of the applicable
performance objectives.

              6. Outstanding share right awards shall automatically terminate,
and no shares of Common Stock shall actually be issued in satisfaction of those
awards, if the performance goals or Service requirements established for such
awards are not attained. The Plan Administrator, however, shall have the
authority to issue shares of Common Stock in satisfaction of one or more
outstanding share right awards as to which the designated performance goals or
Service requirements are not attained.

                                      -14-
<PAGE>   15

II.    CHANGE IN CONTROL/HOSTILE TAKE-OVER

       A. All of the Corporation's outstanding repurchase rights shall terminate
automatically, and all the shares of Common Stock subject to those terminated
rights shall immediately vest in full, in the event of any Change in Control,
except to the extent (i) those repurchase rights are assigned to the successor
corporation (or parent thereof) or otherwise continue in full force and effect
pursuant to the terms of the Change in Control or (ii) such accelerated vesting
is precluded by other limitations imposed by the Plan Administrator at the time
the repurchase right is issued.

       B. The Plan Administrator may at any time provide for the automatic
termination of one or more of those outstanding repurchase rights and the
immediate vesting of the shares of Common Stock subject to those terminated
rights upon (i) a Change in Control or Hostile Take-Over or (ii) an "involuntary
termination" (to be defined by the Plan Administrator) of the Participant's
Service within a designated period following the effective date of any Change in
Control or Hostile Take-Over in which those repurchase rights are assigned to
the successor corporation (or parent thereof) or otherwise continue in full
force and effect.

III.   SHARE ESCROW/LEGENDS

       Unvested shares may, in the Plan Administrator's discretion, be held in
escrow by the Corporation until the Participant's interest in such shares vests
or may be issued directly to the Participant with restrictive legends on the
certificates evidencing those unvested shares.

                                    ARTICLE 5

                         AUTOMATIC OPTION GRANT PROGRAM

I.     OPTION TERMS

       A. Grant Dates. Options shall be made on the dates specified below:

              1. Each individual who is first elected or appointed as a
non-employee Board member at any time after the date on which the Corporation
completes its initial public offering shall automatically be granted, on the
date of such initial election or appointment, a Non-Statutory Option to purchase
one thousand (1,000) shares of Common Stock, provided that individual has not
previously been in the employ of the Corporation (or any Parent or Subsidiary).

       On the date of each annual stockholders meeting beginning with the 2001
annual stockholder meeting, each individual who is to continue to serve as a
non-employee Board member shall automatically be granted a Non-Statutory Option
to purchase one thousand (1,000) shares of Common Stock, provided that
individual has served as a non-employee Board member for at least six (6)
months. There shall be no limit on the number of such 1,000 share option grants
any one Eligible Director may receive over his or her period of Board service,
and non-employee Board members who have previously been in the employ of the
Corporation (or any Parent or Subsidiary) or who have otherwise received one or
more stock option grants from the Corporation prior to the Underwriting Date
shall be eligible to receive one or more such annual option grants over their
period of continued Board service.

                                      -15-
<PAGE>   16

       B. Exercise Price.

              1. The exercise price per share shall be equal to one hundred
percent (100%) of the Fair Market Value per share of Common Stock on the option
grant date.

              2. The exercise price shall be payable in one or more of the
alternative forms authorized under the Discretionary Option Grant Program.
Except to the extent the sale and remittance procedure specified thereunder is
utilized, payment of the exercise price for the purchased shares must be made on
the Exercise Date.

       C. Option Term. Each option shall have a term of ten (10) years measured
from the option grant date.

       D. Exercise and Vesting of Options. Each option shall be immediately
exercisable for any or all of the option shares. However, any unvested shares
purchased under the option shall be subject to repurchase by the Corporation, at
the exercise price paid per share, upon the Optionee's cessation of Board
service prior to vesting in those shares. Each option shall vest, and the
Corporation's repurchase right shall lapse upon the Optionee's completion of
twelve (12) months of Board service measured from the option grant date.

       E. Cessation of Board Service. The following provisions shall govern the
exercise of any options outstanding at the time of the Optionee's cessation of
Board service:

                            (i) Any option outstanding at the time of the
Optionee's cessation of Board service for any reason shall remain exercisable
for a twelve (12)-month period following the date of such cessation of Board
service, but in no event shall such option be exercisable after the expiration
of the option term.

                            (ii) Any option exercisable in whole or in part by
the Optionee at the time of death may be subsequently exercised by his or her
Beneficiary.

                            (iii) Following the Optionee's cessation of Board
service, the option may not be exercised in the aggregate for more than the
number of shares for which the option was exercisable on the date of such
cessation of Board service. Upon the expiration of the applicable exercise
period or (if earlier) upon the expiration of the option term, the option shall
terminate and cease to be outstanding for any vested shares for which the option
has not been exercised. However, the option shall, immediately upon the
Optionee's cessation of Board service, terminate and cease to be outstanding for
any and all shares for which the option is not otherwise at that time
exercisable.

                            (iv) However, should the Optionee cease to serve as
a Board member by reason of death or Permanent Disability, then all shares at
the time subject to the option shall immediately vest so that such option may,
during the twelve (12)-month exercise period following such cessation of Board
service, be exercised for all or any portion of those shares as fully-vested
shares of Common Stock.

                                      -16-
<PAGE>   17

II.    CHANGE IN CONTROL/HOSTILE TAKE-OVER

       A. In the event of any Change in Control or Hostile Take-Over, the shares
of Common Stock at the time subject to each outstanding option but not otherwise
vested shall automatically vest in full so that each such option may,
immediately prior to the effective date of such Change in Control or Hostile
Take-Over, became fully exercisable for all of the shares of Common Stock at the
time subject to such option and may be exercised for all or any of those shares
as fully-vested shares of Common Stock. Each such option accelerated in
connection with a Change in Control shall terminate upon the Change in Control,
except to the extent assumed by the successor corporation (or parent thereof) or
otherwise continued in full force and effect pursuant to the terms of the Change
in Control. Each such option accelerated in connection with a Hostile Take-Over
shall remain exercisable until the expiration or sooner termination of the
option term.

       B. All outstanding repurchase rights shall automatically terminate and
the shares of Common Stock subject to those terminated rights shall immediately
vest in full, in the event of any Change in Control or Hostile Take-Over.

       C. Upon the occurrence of a Hostile Take-Over, the Optionee shall have a
thirty (30)-day period in which to surrender to the Corporation each of his or
her outstanding options. The Optionee shall in return be entitled to a cash
distribution from the Corporation in an amount equal to the excess of (i) the
Option Surrender Value of the shares of Common Stock at the time subject to each
surrendered option (whether or not the option is otherwise at the time
exercisable for those shares) over (ii) the aggregate exercise price payable for
such shares. Such cash distribution shall be paid within five (5) days following
the surrender of the option to the Corporation.

       D. Each option which is assumed in connection with a Change in Control
shall be appropriately adjusted to apply to the number and class of securities
which would have been issuable to the Optionee in consummation of such Change in
Control had the option been exercised immediately prior to such Change in
Control. Appropriate adjustments shall also be made to the exercise price
payable per share under each outstanding option, provided the aggregate exercise
price payable for such securities shall remain the same. To the extent the
actual holders of the Corporation's outstanding Common Stock receive cash
consideration for their Common Stock in consummation of the Change in Control,
the successor corporation may, in connection with the assumption of the
outstanding options, substitute one or more shares of its own common stock with
a fair market value equivalent to the cash consideration paid per share of
Common Stock in such Change in Control.

III.   REMAINING TERMS

       The remaining terms of each option granted under the Automatic Option
Grant Program shall be the same as the terms in effect for options made under
the Discretionary Option Grant Program.

                                      -17-
<PAGE>   18

                                    ARTICLE 6

                        DIRECTOR FEE OPTION GRANT PROGRAM

I.     OPTION GRANTS

       The Board may implement the Director Fee Option Grant Program as of the
first day of any calendar year or years beginning after the Underwriting Date.
Upon such implementation of the Program, each non-employee Board member may
elect to apply all or any portion of the annual retainer fee otherwise payable
in cash for his or her service on the Board to the acquisition of a special
option grant under this Director Fee Option Grant Program. Such election must be
filed with the Corporation's Chief Financial Officer prior to the first day of
the calendar year for which the election is to be in effect. Each non-employee
Board member who files such a timely election with respect to the annual
retainer fee shall automatically be granted an option under this Director Fee
Option Grant Program on the first trading day in January in the calendar year
for which that fee would otherwise be payable.

II.    OPTION TERMS

       Each option shall be a Non-Statutory Option governed by the terms and
conditions specified below.

       A. Exercise Price.

              1. The exercise price per share shall be thirty-three and
one-third percent (33-1/3%) of the Fair Market Value per share of Common Stock
on the option grant date or such other price as the Board may establish.

              2. The exercise price shall become immediately due upon exercise
of the option and shall be payable in one or more of the alternative forms
authorized under the Discretionary Option Grant Program. Except to the extent
the sale and remittance procedure specified thereunder is utilized, payment of
the exercise price for the purchased shares must be made on the Exercise Date.

       B. Number of Option Shares. The number of shares of Common Stock subject
to the option shall be determined pursuant to the following formula (rounded
down to the nearest whole number):

       X = A / (B x 66-2/3%), where

       X is the number of option shares,

       A is the portion of the annual retainer fee subject to the non-employee
Board member's election, and

       B is the Fair Market Value per share of Common Stock on the option grant
date.

       C. Exercise and Term of Options. The option shall become exercisable in a
series of twelve (12) successive equal monthly installments upon the Optionee's
completion of each month of Board

                                      -18-
<PAGE>   19

service during the calendar year in which the option is granted. Each option
shall have a maximum term of ten (10) years measured from the option grant date.

       D. Cessation of Board Service. Should the Optionee cease Board service
for any reason (other than death or Permanent Disability) while holding one or
more options, then each such option shall remain exercisable, for any or all of
the shares for which the option is exercisable at the time of such cessation of
Board service, until the earlier of (i) the expiration of the ten (10)-year
option term or (ii) the expiration of the three (3)-year period measured from
the date of such cessation of Board service. However, each option held by the
Optionee at the time of such cessation of Board service shall immediately
terminate and cease to remain outstanding with respect to any and all shares of
Common Stock for which the option is not otherwise at that time exercisable.

       E. Death or Permanent Disability. Should the Optionee's service as a
Board member cease by reason of death or Permanent Disability, then each option
held by such Optionee shall immediately become exercisable for all the shares of
Common Stock at the time subject to that option, and the option may be exercised
for any or all of those shares as fully-vested shares until the earlier of (i)
the expiration of the ten (10)-year option term or (ii) the expiration of the
three (3)-year period measured from the date of such cessation of Board service.
Should the Optionee die after cessation of Board service but while holding one
or more options, then each such option may be exercised, for any or all of the
shares for which the option is exercisable at the time of the Optionee's
cessation of Board service (less any shares subsequently purchased by Optionee
prior to death), by the Optionee's Beneficiary. Such right of exercise shall
lapse, and the option shall terminate, upon the earlier of (i) the expiration of
the ten (10)-year option term or (ii) the three (3)-year period measured from
the date of the Optionee's cessation of Board service.

III.   CHANGE IN CONTROL/HOSTILE TAKE-OVER

       A. In the event of any Change in Control or Hostile Take-Over while the
Optionee remains in Board service, each outstanding option held by such Optionee
shall automatically accelerate so that each such option shall, immediately prior
to the effective date of the Change in Control or Hostile Take-Over, become
fully exercisable with respect to the total number of shares of Common Stock at
the time subject to such option and may be exercised for any or all of those
shares as fully-vested shares of Common Stock. Each such option accelerated in
connection with a Change in Control shall terminate upon the Change in Control,
except to the extent assumed by the successor corporation (or parent thereof) or
otherwise expressly continued in full force and effect pursuant to the terms of
the Change in Control. Each such option accelerated in connection with a Hostile
Take-Over shall remain exercisable until the expiration or sooner termination of
the option term.

       B. Upon the occurrence of a Hostile Take-Over, the Optionee shall have a
thirty (30)-day period in which to surrender to the Corporation each of his or
her outstanding options. The Optionee shall in return be entitled to a cash
distribution from the Corporation in an amount equal to the excess of (i) the
Option Surrender Value of the shares of Common Stock at the time subject to each
surrendered option (whether or not the Optionee is otherwise at the time vested
in those shares) over (ii) the aggregate exercise price payable for such shares.
Such cash distribution shall be paid within five (5) days following the
surrender of the option to the Corporation.

                                      -19-
<PAGE>   20

       C. Each option which is assumed in connection with a Change in Control
shall be appropriately adjusted, immediately after such Change in Control, to
apply to the number and class of securities which would have been issuable to
the Optionee in consummation of such Change in Control had the option been
exercised immediately prior to such Change in Control. Appropriate adjustments
shall also be made to the exercise price payable per share under each
outstanding option, provided the aggregate exercise price payable for such
securities shall remain the same. To the extent the actual holders of the
Corporation's outstanding Common Stock receive cash consideration for their
Common Stock in consummation of the Change in Control, the successor corporation
may, in connection with the assumption of the outstanding options under the
Director Fee Option Grant Program, substitute one or more shares of its own
common stock with a fair market value equivalent to the cash consideration paid
per share of Common Stock in such Change in Control.

IV.    REMAINING TERMS

       The remaining terms of each option granted under this Director Fee Option
Grant Program shall be the same as the terms in effect for options made under
the Discretionary Option Grant Program.

                                    ARTICLE 7

                                  MISCELLANEOUS

I.     NO IMPAIRMENT OF AUTHORITY

       Outstanding awards shall in no way affect the right of the Corporation to
adjust, reclassify, reorganize or otherwise change its capital or business
structure or to merge, consolidate, dissolve, liquidate or sell or transfer all
or any part of its business or assets.

II.    FINANCING

       The Plan Administrator may permit any Optionee or Participant to pay the
option exercise price under the Discretionary Option Grant Program or the
purchase price of shares issued under the Stock Issuance Program by delivering a
full-recourse, interest bearing promissory note payable in one or more
installments. The terms of any such promissory note (including the interest rate
and the terms of repayment) shall be established by the Plan Administrator in
its sole discretion. In no event may the maximum credit available to the
Optionee or Participant exceed the sum of (i) the aggregate option exercise
price or purchase price payable for the purchased shares (less the par value of
such shares) plus (ii) any Federal, state and local income and employment tax
liability incurred by the Optionee or the Participant in connection with the
option exercise or share purchase.

III.   TAX WITHHOLDING

       A. The Corporation's obligation to deliver shares of Common Stock upon
the exercise of options or the issuance or vesting of such shares under the Plan
shall be subject to the satisfaction of all applicable Federal, state and local
income and employment tax withholding requirements.

                                      -20-
<PAGE>   21

       B. The Plan Administrator may, in its discretion, provide any or all
holders of Non-Statutory Options or unvested shares of Common Stock under the
Plan with the right to use shares of Common Stock in satisfaction of all or part
of the Withholding Taxes incurred by such holders in connection with the
exercise of their options or the vesting of their shares. Such right may be
provided to any such holder in either or both of the following formats:

       Stock Withholding: The election to have the Corporation withhold, from
the shares of Common Stock otherwise issuable upon the exercise of such
Non-Statutory Option or the vesting of such shares, a portion of those shares
with an aggregate Fair Market Value equal to the minimum required percentage of
the Withholding Taxes (not to exceed one hundred percent (100%)) designated by
the holder.

       Stock Delivery: The election to deliver to the Corporation, at the time
the Non-Statutory Option is exercised or the shares vest, one or more shares of
Common Stock previously acquired by such holder (other than in connection with
the option exercise or share vesting triggering the Withholding Taxes) with an
aggregate Fair Market Value equal to the minimum required percentage of the
Taxes (not to exceed one hundred percent (100%)) designated by the holder.

IV.    EFFECTIVE DATE AND TERM OF THE PLAN

       A. The Plan shall become effective immediately upon the Plan Effective
Date. However, the Salary Investment Option Grant and Director Fee Option Grant
Programs shall not be implemented until such time as the Primary Committee or
the Board may deem appropriate. Options may be granted under the Discretionary
Option Grant Program at any time on or after the Plan Effective Date. However,
no options granted under the Plan may be exercised, and no shares shall be
issued under the Plan, until the Plan is approved by the Corporation's
stockholders. If such stockholder approval is not obtained within twelve (12)
months after the Plan Effective Date, then all options previously granted under
this Plan shall terminate and cease to be outstanding, and no further options
shall be granted and no shares shall be issued under the Plan.

       B. The Plan shall serve as the successor to the Predecessor Plan, and no
further options or direct stock issuances shall be made under the Predecessor
Plan after the Plan Effective Date. All options outstanding under the
Predecessor Plan on the Plan Effective Date shall be incorporated into the Plan
at that time and shall be treated as outstanding options under the Plan.
However, each outstanding option so incorporated shall continue to be governed
solely by the terms of the documents evidencing such option, and no provision of
the Plan shall be deemed to affect or otherwise modify the rights or obligations
of the holders of such incorporated options with respect to their acquisition of
shares of Common Stock.

       C. One or more provisions of the Plan, including (without limitation) the
option/vesting acceleration provisions of Article Two relating to Changes in
Control, may, in the Plan Administrator's discretion, be extended to one or more
options incorporated from the Predecessor Plan which do not otherwise contain
such provisions.

       D. The Plan shall terminate upon the earlier of (i) July 28, 2010, or
(ii) the date the Board terminates the Plan. Upon such plan termination, all
outstanding options and unvested stock

                                      -21-
<PAGE>   22

issuances shall thereafter continue to have force and effect in accordance with
the provisions of the documents evidencing such grants or issuances.

V.     AMENDMENT OF THE PLAN

       A. The Board shall have complete and exclusive power and authority to
amend or modify the Plan in any or all respects. However, no such amendment or
modification shall adversely affect the rights and obligations with respect to
stock options or unvested stock issuances at the time outstanding under the Plan
unless the Optionee or the Participant consents to such amendment or
modification. In addition, certain amendments may require stockholder approval
pursuant to applicable laws or regulations.

       B. Options to purchase shares of Common Stock may be granted under the
Discretionary Option Grant and Salary Investment Option Grant Programs and
shares of Common Stock may be issued under the Stock Issuance Program that are
in each instance in excess of the number of shares then available for issuance
under the Plan, provided any excess shares actually issued under those programs
shall be held in escrow until there is obtained stockholder approval of an
amendment sufficiently increasing the number of shares of Common Stock available
for issuance under the Plan. If such stockholder approval is not obtained within
twelve (12) months after the date the first such excess issuances are made, then
(i) any unexercised options granted on the basis of such excess shares shall
terminate and cease to be outstanding and (ii) the Corporation shall promptly
refund to the Optionees and the Participants the exercise or purchase price paid
for any excess shares issued under the Plan and held in escrow, together with
interest (at the applicable short term federal rate) for the period the shares
were held in escrow, and such shares shall thereupon be automatically cancelled
and cease to be outstanding.

VI.    USE OF PROCEEDS

       Any cash proceeds received by the Corporation from the sale of shares of
Common Stock under the Plan shall be used for general corporate purposes.

VII.   REGULATORY APPROVALS

       A. The implementation of the Plan, the granting of any stock option under
the Plan and the issuance of any shares of Common Stock (i) upon the exercise of
any granted option or (ii) under the Stock Issuance Program shall be subject to
the Corporation's procurement of all approvals and permits required by
regulatory authorities having jurisdiction over the Plan, the stock options
granted under it and the shares of Common Stock issued pursuant to it.

       B. No shares of Common Stock or other assets shall be issued or delivered
under the Plan unless and until there shall have been compliance with all
applicable requirements of Federal and state securities laws, including the
filing and effectiveness of the Form S-8 registration statement for the shares
of Common Stock issuable under the Plan, and all applicable listing requirements
of any stock exchange (or the Nasdaq National Market, if applicable) on which
Common Stock is then listed for trading.

                                      -22-
<PAGE>   23

VIII.  NO EMPLOYMENT/SERVICE RIGHTS

       Nothing in the Plan shall confer upon the Optionee or the Participant any
right to continue in Service for any period of specific duration or interfere
with or otherwise restrict in any way the rights of the Corporation (or any
Parent or Subsidiary employing or retaining such person) or of the Optionee or
the Participant, which rights are hereby expressly reserved by each, to
terminate such person's Service at any time for any reason, with or without
cause.

                                      -23-
<PAGE>   24

                                    APPENDIX

                                    --------

       The following definitions shall be in effect under the Plan:

       A. "Automatic Option Grant Program" shall mean the automatic option grant
program in effect under the Plan.

       B. "Beneficiary" shall mean, in the event the Plan Administrator
implements a beneficiary designation procedure, the person designated by an
Optionee or Participant, pursuant to such procedure, to succeed to such person's
rights under any outstanding awards held by him or her at the time of death. In
the absence of such designation or procedure, the Beneficiary shall be the
personal representative of the estate of the Optionee or Participant or the
person or persons to whom the award is transferred by will or the laws of
descent and distribution.

       C. "Board" shall mean the Corporation's Board of Directors.

       D. "Change in Control" shall mean a change in ownership or control of the
Corporation effected through any of the following transactions:

              (i) a merger, consolidation or reorganization approved by the
Corporation's stockholders, unless securities representing more than fifty
percent (50%) of the total combined voting power of the voting securities of the
successor corporation are immediately thereafter beneficially owned, directly or
indirectly and in substantially the same proportion, by the persons who
beneficially owned the Corporation's outstanding voting securities immediately
prior to such transaction,

              (ii) any stockholder-approved transfer or other disposition of all
or substantially all of the Corporation's assets, or

              (iii) the acquisition, directly or indirectly by any person or
related group of persons (other than the Corporation or a person that directly
or indirectly controls, is controlled by, or is under common control with, the
Corporation), of "beneficial ownership" (within the meaning of Rule 13d-3 of the
1934 Act) of securities possessing more than fifty percent (50%) of the total
combined voting power of the Corporation's outstanding securities pursuant to a
tender or exchange offer made directly to the Corporation's stockholders which
the Board recommends such stockholders accept.

       E. "Code" shall mean the Internal Revenue Code of 1986, as amended.

       F. "Common Stock" shall mean the Corporation's common stock.

       G. "Corporation" shall mean OmniSky Corporation, a Delaware corporation,
and any corporate successor to all or substantially all of the assets or voting
stock of OmniSky Corporation which shall by appropriate action adopt the Plan.

<PAGE>   25

       H. "Director Fee Option Grant Program" shall mean the director fee option
grant program in effect under the Plan.

       I. "Discretionary Option Grant Program" shall mean the discretionary
option grant program in effect under the Plan.

       J. "Eligible Director" shall mean a non-employee Board member eligible to
participate in the Automatic Option Grant Program in accordance with the
eligibility provisions of Articles One and Five.

       K. "Employee" shall mean an individual who is in the employ of the
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.

       L. "Exercise Date" shall mean the date on which the Corporation shall
have received written notice of the option exercise.

       M. "Fair Market Value" per share of Common Stock on any relevant date
shall be determined in accordance with the following provisions:

              (i) If the Common Stock is at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be the closing selling price
per share of Common Stock on the date in question, as such price is reported on
the Nasdaq National Market or any successor system. If there is no closing
selling price for the Common Stock on the date in question, then the Fair Market
Value shall be the closing selling price on the last preceding date for which
such quotation exists.

              (ii) If the Common Stock is at the time listed on any Stock
Exchange, then the Fair Market Value shall be the closing selling price per
share of Common Stock on the date in question on the Stock Exchange determined
by the Plan Administrator to be the primary market for the Common Stock, as such
price is officially quoted in the composite tape of transactions on such
exchange. If there is no closing selling price for the Common Stock on the date
in question, then the Fair Market Value shall be the closing selling price on
the last preceding date for which such quotation exists.

              (iii) For purposes of any option grants made on the Underwriting
Date, the Fair Market Value shall be deemed to be equal to the price per share
at which the Common Stock is to be sold in the initial public offering pursuant
to the underwriting agreement.

              (iv) For purposes of any options made prior to the Underwriting
Date, the Fair Market Value shall be determined by the Plan Administrator, after
taking into account such factors as it deems appropriate.

       N. "Hostile Take-Over" shall mean:

              (i) the acquisition, directly or indirectly, by any person or
related group of persons (other than the Corporation or a person that directly
or indirectly controls, is controlled by, or is under common control with, the
Corporation) of "beneficial ownership" (within the meaning of

                                      A-2-
<PAGE>   26

Rule 13d-3 of the 1934 Act) of securities possessing more than fifty percent
(50%) of the total combined voting power of the Corporation's outstanding
securities pursuant to a tender or exchange offer made directly to the
Corporation's stockholders which the Board does not recommend such stockholders
to accept, or

              (ii) a change in the composition of the Board over a period of
thirty-six (36) consecutive months or less such that a majority of the Board
members ceases, by reason of one or more contested elections for Board
membership, to be comprised of individuals who either (A) have been Board
members continuously since the beginning of such period or (B) have been elected
or nominated for election as Board members during such period by at least a
majority of the Board members described in clause (A) who were still in office
at the time the Board approved such election or nomination.

       O. "Incentive Option" shall mean an option which satisfies the
requirements of Code Section 422.

       P. "Misconduct" shall mean the commission of any act of fraud,
embezzlement or dishonesty by the Optionee or Participant, any unauthorized use
or disclosure by such person of confidential information or trade secrets of the
Corporation (or any Parent or Subsidiary), or any intentional wrongdoing by such
person, whether by omission or commission, which adversely affects the business
or affairs of the Corporation (or any Parent or Subsidiary) in a material
manner. This definition shall not in any way limit the grounds for the dismissal
or discharge of any person in the Service of the Corporation (or any Parent or
Subsidiary).

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

       R. "Non-Statutory Option" shall mean an option not intended to satisfy
the requirements of Code Section 422.

       S. "Option Surrender Value" shall mean the Fair Market Value per share of
Common Stock on the date the option is surrendered to the Corporation or, in the
event of a Hostile Take-Over, effected through a tender offer, the highest
reported price per share of Common Stock paid by the tender offeror in effecting
such Hostile Take-Over, if greater. However, if the surrendered option is an
Incentive Option, the Option Surrender Value shall not exceed the Fair Market
Value per share.

       T. "Optionee" shall mean any person to whom an option is granted under
the Discretionary Option Grant Program, Salary Investment Option Grant Program,
Automatic Option Grant Program or Director Fee Option Grant Program.

       U. "Parent" shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

                                      A-3-
<PAGE>   27

       V. "Participant" shall mean any person who is issued shares of Common
Stock under the Stock Issuance Program.

       W. "Permanent Disability" or "Permanently Disabled" shall mean the
inability of the Optionee or the Participant to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment expected to result in death or to be of continuous duration of twelve
(12) months or more. However, solely for purposes of the Automatic Option Grant
and Director Fee Option Grant Programs, Permanent Disability or Permanently
Disabled shall mean the inability of the non-employee Board member to perform
his or her usual duties as a Board member by reason of any medically
determinable physical or mental impairment expected to result in death or to be
of continuous duration of twelve (12) months or more.

       X. "Plan" shall mean this 2000 Stock Plan.

       Y. "Plan Administrator" shall mean the particular entity, whether the
Primary Committee, the Board or the Secondary Committee, which is authorized to
administer the Discretionary Option Grant, Salary Investment Option Grant and
Stock Issuance Programs with respect to one or more classes of eligible persons,
to the extent such entity is carrying out its administrative functions under
those programs with respect to the persons under its jurisdiction. However, the
Primary Committee shall have the plenary authority to make all factual
determinations and to construe and interpret any and all ambiguities under the
Plan to the extent such authority is not otherwise expressly delegated to any
other Plan Administrator.

       Z. "Plan Effective Date" shall mean the date the Plan shall become
effective and shall be coincident with the Underwriting Date.

       AA. "Predecessor Plan" shall mean the Corporation's pre-existing 1999
Stock Plan in effect immediately prior to the Plan Effective Date hereunder.

       BB. "Primary Committee" shall mean the committee of two (2) or more
non-employee Board members appointed by the Board to administer the
Discretionary Option Grant and Stock Issuance Programs with respect to Section
16 Insiders and to administer the Salary Investment Option Grant Program solely
with respect to the selection of the eligible individuals who may participate in
such program.

       CC. "Salary Investment Option Grant Program" shall mean the salary
investment grant program in effect under the Plan.

       DD. "Secondary Committee" shall mean a committee of one (1) or more Board
members appointed by the Board to administer the Discretionary Option Grant and
Stock Issuance Programs with respect to eligible persons other than Section 16
Insiders.

       EE. "Section 16 Insider" shall mean an officer or director of the
Corporation subject to the short-swing profit liabilities of Section 16 of the
1934 Act.

       FF. "Service" shall mean the performance of services for the Corporation
(or any Parent or Subsidiary) by a person in the capacity of an Employee, a
non-employee member of the board of

                                      A-4-
<PAGE>   28

directors or a consultant or independent advisor, except to the extent otherwise
specifically provided in the documents evidencing the option grant or stock
issuance.

       GG. "Stock Exchange" shall mean either the American Stock Exchange or the
New York Stock Exchange.

       HH. "Stock Issuance Program" shall mean the stock issuance program in
effect under the Plan.

       II. "Subsidiary" shall mean any corporation (other than the Corporation)
in an unbroken chain of corporations beginning with the Corporation, provided
each corporation (other than the last corporation) in the unbroken chain owns,
at the time of the determination, stock possessing fifty percent (50%) or more
of the total combined voting power of all classes of stock in one of the other
corporations in such chain.

       JJ. "10% Stockholder" shall mean the owner of stock (as determined under
Code Section 424(d)) possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Corporation (or any Parent
or Subsidiary).

       KK. "Underwriting Date" shall mean the date the Securities Exchange
Commission declares effective the Corporation's registration statement for its
initial public offering of the Common Stock.

       LL. "Withholding Taxes" shall mean the Federal, state and local income
and employment withholding tax liabilities to which the holder of Non-Statutory
Options or unvested shares of Common Stock may become subject in connection with
the exercise of those options or the vesting of those shares.

                                      A-5-
<PAGE>   29

                              OMNISKY CORPORATION

                                 2000 STOCK PLAN

                             STOCK OPTION AGREEMENT

       Unless otherwise defined herein, the terms defined in the Plan shall have
the same defined meanings in this Stock Option Agreement (the "Option
Agreement").

I.     NOTICE OF STOCK OPTION GRANT

       This is the Option Agreement that is referred to and made a part of the
foregoing Notice of Grant of Stock Options and Option Agreement (the "Notice of
Grant").

II.    AGREEMENT

       A.     Grant of Option.

              The Plan Administrator hereby grants to the Optionee named in the
Notice of Grant (the "Optionee") an option (the "Option") to purchase the number
of shares of Common Stock (the "Shares"), as set forth in the Notice of Grant,
at the exercise price per share set forth in the Notice of Grant (the "Exercise
Price"), subject to the terms and conditions of the Plan, which is incorporated
herein by reference. Subject to Article 7 V of the Plan, in the event of a
conflict between the terms and conditions of the Plan and the terms and
conditions of this Option Agreement, the terms and conditions of the Plan shall
prevail.

              If designated in the Notice of Grant as an Incentive Option
("ISO"), this Option is intended to qualify as an incentive stock option under
Section 422 of the Code. However, if this Option is intended to be an ISO, to
the extent that it exceeds the $100,000 rule of Code Section 422(d) it shall be
treated as a Non-Statutory Option ("NSO").

       B.     Exercise of Option.

              (a) Right to Exercise. This Option is exercisable during its term
in accordance with the vesting schedule set forth in the Notice of Grant and the
applicable provisions of the Plan and this Option Agreement.

              (b) Method of Exercise. This Option is exercisable by delivery of
an exercise notice, in the form attached as Exhibit A (the "Exercise Notice"),
which shall state the election to exercise the Option, the number of Shares in
respect of which the Option is being exercised (the "Exercised Shares"), and
such other representations and agreements as may be required by the Corporation
pursuant to the provisions of the Plan. The Exercise Notice shall be completed
by the Optionee and delivered to the Corporation. The Exercise Notice shall be
accompanied by payment of the aggregate Exercise Price as to all Exercised
Shares. This Option shall be deemed to be exercised upon receipt by the
Corporation of such fully executed Exercise Notice accompanied by such aggregate
Exercise Price.

<PAGE>   30

              No Shares shall be issued pursuant to the exercise of this Option
unless such issuance and exercise comply with the requirements relating to the
administration of stock option plans under United States state corporate laws,
United States federal and state securities laws, the Code, any Stock Exchange or
quotation system on which the Common Stock is listed or quoted and the
applicable laws of any other country or jurisdiction where options are granted
("Applicable Laws"). Assuming such compliance, for income tax purposes the
Exercised Shares shall be considered transferred to the Optionee on the date the
Option is exercised with respect to such Exercised Shares.

       C.     Method of Payment.

              Payment of the aggregate Exercise Price shall be by any of the
following, or a combination thereof, at the election of the Optionee:

              1. cash;

              2. check;

              3. consideration received by the Corporation under a cashless
exercise program implemented by the Corporation in connection with the Plan; or

              4. surrender of other Shares, which in the case of Shares acquired
from the Corporation, (i) have been owned by the Optionee for more than six (6)
months on the date of surrender, and (ii) have a Fair Market Value on the date
of surrender equal to the aggregate Exercise Price of the Exercised Shares.

       D.     Non-Transferability of Option.

              This Option may not be transferred in any manner otherwise than by
will or by the laws of descent or distribution and may be exercised during the
lifetime of Optionee only by the Optionee. The terms of the Plan and this Option
Agreement shall be binding upon the executors, administrators, heirs, successors
and assigns of the Optionee.

       E.     Term of Option.

              This Option may be exercised prior to the Expiration Date
indicated in the Notice of Grant in accordance with the Plan and the terms of
this Option Agreement. In no event shall this Option be exercised later than the
Expiration Date indicated in the Notice of Grant. This Option may be exercised
for three (3) months after Optionee ceases to provide Services. Notwithstanding
the foregoing, an Option which is an NSO may be exercised for six (6) months
after Optionee ceases to provide Services. Upon the death or Permanent
Disability of Optionee, this Option may be exercised for twelve (12) months
after Optionee ceases to provide Services.

       F.     Tax Obligations.

              1. Withholding Taxes. Optionee agrees to make appropriate
arrangements with the Corporation (or the Parent or Subsidiary of the
Corporation employing or retaining Optionee) for the satisfaction of all
Federal, state, and local income and employment tax withholding requirements
applicable to the Option exercise. Optionee acknowledges and agrees that the
Corporation may refuse to honor the exercise and refuse to deliver Shares if
such withholding amounts are not delivered at the time of exercise.

                                      -2-
<PAGE>   31

              2. Notice of Disqualifying Disposition of ISO Shares. If the
Option granted to Optionee herein is an ISO, and if Optionee sells or otherwise
disposes of any of the Shares acquired pursuant to the ISO on or before the
later of (1) the date two years after the Date of Grant, or (2) the date one
year after the date of exercise, the Optionee shall immediately notify the
Corporation in writing of such disposition. Optionee agrees that Optionee may be
subject to income tax withholding by the Corporation on the compensation income
recognized by the Optionee.

       G.     Acceleration.

       Notwithstanding anything to the contrary set forth in this Agreement (but
specifically subject to Paragraph E above):

              (i) in the event of a Change of Control (as defined below),
twenty-five percent (25%) of the unvested Shares subject to this Option shall
vest and become exercisable; and

              (ii) in the event of Optionee's Involuntary Termination (as
defined below) after a Change of Control but prior to the date which is twelve
months following a Change of Control, then one hundred percent (100%) of the
unvested Shares subject to this Option shall vest and become exercisable.

       For purposes of this Agreement, "Involuntary Termination" means (i) a
termination by the Corporation of the Optionee's employment with the Corporation
other than for Cause (as defined below); (ii) a material reduction of or
variation in the Optionee's duties, authority or responsibilities, relative to
the Optionee's duties, authority or responsibilities as in effect immediately
prior to such reduction or variation; (iii) a reduction by the Corporation in
the base salary of the Optionee as in effect immediately prior to such
reduction; (iv) a material reduction by the Corporation in the kind or level of
employee benefits, including bonuses, to which the Optionee was entitled
immediately prior to such reduction, with the result that the Optionee's overall
benefits package is materially reduced; or (v) the relocation of the Optionee to
a facility or a location more than sixty (60) miles from the Optionee's then
present location.

       For purposes of this Agreement, "Cause" shall mean (i) any willful act of
personal dishonesty, fraud or misrepresentation taken by the Optionee in
connection with his or her responsibilities as an employee which was intended to
result in substantial gain or personal enrichment of the Optionee at the expense
of the Corporation and was materially and demonstrably injurious to the
Corporation; (ii) the Optionee's conviction of a felony on account of any act
which was materially and demonstrably injurious to the Corporation; or (iii) the
Optionee's willful and continued failure to substantially perform his or her
principal duties and obligations of employment (other than any such failure
resulting from incapacity due to physical or mental illness), which failure is
not remedied in a reasonable period of time after receipt of written notice from
the Corporation. No act or failure to act shall be considered "willful" unless
done or omitted to be done in bad faith and without reasonable belief that the
act or omission was in or not opposed to the best interests of the Corporation.

       For purposes of this Agreement "Change of Control" means the occurrence
of any of the following events:

              (i) Any "person" (as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended), is or becomes the
"beneficial owner" (as defined in

                                      -3-
<PAGE>   32

Rule 13d-3 under said Act), directly or indirectly, of securities of the
Corporation representing 50% or more of the total voting power represented by
the Corporation's then outstanding voting securities; or

              (ii) A change in the composition of the Board of Directors of the
Corporation as a result of which fewer than a majority of the directors are
"Incumbent Directors." "Incumbent Directors" shall mean directors who either (A)
are directors of the Corporation as of the date hereof, or (B) are elected, or
nominated for election, to the Board of Directors with the affirmative votes
(either by a specific vote or by approval of the proxy statement of the
Corporation in which such person is named as a nominee for election as a
director without objection to such nomination) of at least three-quarters of the
Incumbent Directors at the time of such election or nomination (but shall not
include an individual whose election or nomination is in connection with an
actual or threatened proxy contest relating to the election of directors of the
Corporation); or

              (iii) The stockholders of the Corporation approve a merger or
consolidation of the Corporation with any other entity, other than a merger or
consolidation which would result in the voting securities of the Corporation
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity or such surviving entity's parent) at least fifty percent (50%)
of the total voting power represented by the voting securities of the
Corporation or such surviving entity or such surviving entity's parent
outstanding immediately after such merger or consolidation, or the stockholders
of the Corporation approve a plan of complete liquidation of the Corporation or
an agreement for the sale or disposition by the Corporation of all or
substantially all the Corporation's assets.

       H. Lock-Up Period. Optionee hereby agrees that Optionee shall not offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any
Common Stock (or other securities) of the Corporation or enter into any swap,
hedging or other arrangement that transfers to another, in whole or in part, any
of the economic consequences of ownership of any Common Stock (or other
securities) of the Corporation held by Optionee (other than those included in
the registration) for a period specified by the representative of the
underwriters of Common Stock (or other securities) of the Corporation not to
exceed one hundred eighty (180) days following the effective date of a
registration statement of the Corporation filed under the Securities Act.

              Optionee agrees to execute and deliver such other agreements as
may be reasonably requested by the Corporation or the underwriter which are
consistent with the foregoing or which are necessary to give further effect
thereto. In addition, if requested by the Corporation or the representative of
the underwriters of Common Stock (or other securities) of the Corporation,
Optionee shall provide, within ten (10) days of such request, such information
as may be required by the Corporation or such representative in connection with
the completion of any public offering of the Corporation's securities pursuant
to a registration statement filed under the Securities Act. The obligations
described in this Section shall not apply to a registration relating solely to
employee benefit plans on Form S-1 or Form S-8 or similar forms that may be
promulgated in the future, or a registration relating solely to a Commission
Rule 145 transaction on Form S-4 or similar forms that may be promulgated in the
future. The Corporation may impose stop-transfer instructions with respect to
the shares of Common Stock (or other securities) subject to the foregoing
restriction until the end of said one hundred eighty (180) day period. Optionee
agrees that any transferee of any Option shall be bound by this Section.

                                      -4-
<PAGE>   33

       I.     Entire Agreement; Governing Law.

              The Plan is incorporated herein by reference. The Plan and this
Option Agreement constitute the entire agreement of the parties with respect to
the subject matter hereof and supersede in their entirety all prior undertakings
and agreements of the Corporation and Optionee with respect to the subject
matter hereof, and may not be modified adversely to the Optionee's interest
except by means of a writing signed by the Corporation and Optionee. This
agreement is governed by the internal substantive laws, but not the choice of
law rules, of California.

       J.     NO GUARANTEE OF CONTINUED SERVICE.

              OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES
PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING TO PROVIDE
SERVICES AT THE WILL OF THE CORPORATION (AND NOT THROUGH THE ACT OF BEING HIRED,
BEING GRANTED AN OPTION OR PURCHASING SHARES HEREUNDER). OPTIONEE FURTHER
ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED
HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS
OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT TO PROVIDE SERVICES FOR THE VESTING
PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH OPTIONEE'S RIGHT
OR THE CORPORATION'S RIGHT TO TERMINATE OPTIONEE'S SERVICES AT ANY TIME, WITH OR
WITHOUT CAUSE.

       K.     Miscellaneous.

              Optionee acknowledges receipt of a copy of the Plan and represents
that he or she is familiar with the terms and provisions thereof, and hereby
accepts this Option subject to all of the terms and provisions thereof. Optionee
has reviewed the Plan and this Option in their entirety, has had an opportunity
to obtain the advice of counsel prior to executing this Option and fully
understands all provisions of the Option. Optionee hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions arising under the Plan or this Option. Optionee
further agrees to notify the Corporation upon any change in residence address.

                                      -5-
<PAGE>   34

                                    EXHIBIT A

                               OMNISKY CORPORATION

                                 2000 STOCK PLAN

                                 EXERCISE NOTICE

OmniSky Corporation
1001 Elwell Court
Palo Alto, CA  94303

Attention:  Stock Administrator

       1. Exercise of Option. Effective as of today, ________________, _____,
the undersigned ("Purchaser") hereby elects to purchase ______________ shares
(the "Shares") of the Common Stock of OmniSky Corporation (the "Corporation")
under and pursuant to the Corporation's 2000 Stock Plan (the "Plan") and the
Stock Option Agreement dated ______ (the "Option Agreement"). The purchase price
for the Shares shall be $_____, as required by the Option Agreement.

       2. Delivery of Payment. Purchaser herewith delivers to the Corporation
the full purchase price for the Shares.

       3. Representations of Purchaser. Purchaser acknowledges that Purchaser
has received, read and understood the Plan and the Option Agreement and agrees
to abide by and be bound by their terms and conditions.

       4. Rights as Shareholder. Until the issuance (as evidenced by the
appropriate entry on the books of the Corporation or of a duly authorized
transfer agent of the Corporation) of the Shares, no right to vote or receive
dividends or any other rights as a shareholder shall exist with respect to the
Shares, notwithstanding the exercise of the Option. The Shares acquired upon
exercise of the Option shall be issued to the Optionee as soon as practicable
after exercise of the Option. No adjustment will be made for a dividend or other
right for which the record date is prior to the date of issuance, except as
provided in the Plan.

       5. Tax Consultation. Purchaser understands that Purchaser may suffer
adverse tax consequences as a result of Purchaser's purchase or disposition of
the Shares. Purchaser represents that Purchaser has consulted with any tax
consultants Purchaser deems advisable in connection with the purchase or
disposition of the Shares and that Purchaser is not relying on the Corporation
for any tax advice.

       6. Entire Agreement; Governing Law. The Plan and the Option Agreement are
incorporated herein by reference. This Agreement, the Plan and the Option
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their

<PAGE>   35

entirety all prior undertakings and agreements of the Corporation and Purchaser
with respect to the subject matter hereof, and may not be modified adversely to
the Purchaser's interest except by means of a writing signed by the Corporation
and Purchaser. This agreement is governed by the internal substantive laws, but
not the choice of law rules, of California.

Submitted by:                               Accepted by:

PURCHASER:                                  OMNISKY CORPORATION

---------------------------------           ------------------------------------
Signature                                   By

---------------------------------           ------------------------------------
Print Name                                  Its

Address:                                    Address:

                                            1001 Elwell Court
---------------------------------
                                            Palo Alto, CA  94303
---------------------------------

                                            ------------------------------------
                                            Date Received

                                      -2-

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