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                                                                    EXHIBIT 10.5

                               WEBSIDESTORY, INC.

                 AMENDED AND RESTATED 2000 EQUITY INCENTIVE PLAN

                       TERMINATION DATE: DECEMBER 19, 2009

1.       PURPOSES.

         (a)      AMENDMENT AND RESTATEMENT. The Plan amends and restates the
WebSideStory 1998 Stock Option Plan effective August 1, 1998 and the
WebSideStory 1999 Stock Option Plan effective June 16, 1999 (the "PRIOR PLANS").
All outstanding options granted under the Prior Plans also shall be amended.

         (b)      ELIGIBLE STOCK AWARD RECIPIENTS. The persons eligible to
receive Stock Awards are the Employees, Directors and Consultants of the Company
and its Affiliates.

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

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

2.       DEFINITIONS.

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

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

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

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

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

         (f)      "COMPANY" means WebSideStory, Inc., a California corporation.

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

         (h)      "CONTINUOUS SERVICE" means that the Participant's service with
the Company or an Affiliate, whether as an Employee, Director or Consultant, is
not interrupted or terminated. The Participant's Continuous Service shall not be
deemed to have terminated merely because of a change in the capacity in which
the Participant renders service to the Company or an Affiliate as an Employee,
Consultant or Director or a change in the entity for which the Participant
renders such service, provided that there is no interruption or termination of
the Participant's Continuous Service. For example, a change in status from an
Employee of the Company to a Consultant of an Affiliate or a Director will not
constitute an interruption of Continuous Service. The Board or the chief
executive officer of the Company, in that party's sole discretion, may determine
whether Continuous Service shall be considered interrupted in the case of any
leave of absence approved by that party, including sick leave, military leave or
any other personal leave.

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

         (j)      "DIRECTOR" means a member of the Board of Directors of the
Company.

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

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

         (m)      "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

         (n)      "FAIR MARKET VALUE" means, as of any date, the value of the
Common Stock determined as follows:

                  (i)      If the Common Stock is listed on any established
stock exchange or traded on the Nasdaq National Market or the Nasdaq SmallCap
Market, the Fair Market Value of a share of Common Stock shall be the closing
sales price for such stock (or the closing bid, if no sales were reported) as
quoted on such exchange or market (or the exchange or market with the greatest
volume of trading in the Common Stock) on the last market trading day prior to
the day

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of determination, as reported in The Wall Street Journal or such other source as
the Board deems reliable.

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

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

         (o)      "INCENTIVE STOCK OPTION" means an Option intended to qualify
as an incentive stock option within the meaning of Section 422 of the Code and
the regulations promulgated thereunder.

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

         (q)      "NON-EMPLOYEE DIRECTOR" means a Director who either (i) is not
a current Employee or Officer of the Company or its parent or a subsidiary, does
not receive compensation (directly or indirectly) from the Company or its parent
or a subsidiary for services rendered as a consultant or in any capacity other
than as a Director (except for an amount as to which disclosure would not be
required under Item 404(a) of Regulation S-K promulgated pursuant to the
Securities Act ("Regulation S-K")), does not possess an interest in any other
transaction as to which disclosure would be required under Item 404(a) of
Regulation S-K and is not engaged in a business relationship as to which
disclosure would be required under Item 404(b) of Regulation S-K; or (ii) is
otherwise considered a "non-employee director" for purposes of Rule 16b-3.

         (r)      "NONSTATUTORY STOCK OPTION" means an Option not intended to
qualify as an Incentive Stock Option.

         (s)      "OFFICER" means (i) before the Listing Date, any person
designated by the Company as an officer and (ii) on and after the Listing Date,
a person who is an officer of the Company within the meaning of Section 16 of
the Exchange Act and the rules and regulations promulgated thereunder.

         (t)      "OPTION" means an Incentive Stock Option or a Nonstatutory
Stock Option granted pursuant to the Plan.

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

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

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

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

         (y)      "PLAN" means this WebSideStory, Inc. 2000 Equity Incentive
Plan.

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

         (aa)     "SECURITIES ACT" means the Securities Act of 1933, as amended.

         (bb)     "STOCK AWARD" means any right granted under the Plan,
including an Option, a stock bonus and a right to acquire restricted stock.

         (cc)     "STOCK AWARD AGREEMENT" means a written agreement between the
Company and a holder of a Stock Award evidencing the terms and conditions of an
individual Stock Award grant. Each Stock Award Agreement shall be subject to the
terms and conditions of the Plan.

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

3.       ADMINISTRATION.

         (a)      ADMINISTRATION BY BOARD. The Board shall administer the Plan
unless and until the Board delegates administration to a Committee, as provided
in subsection 3(c).

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

                  (i)      To determine from time to time which of the persons
eligible under the Plan shall be granted Stock Awards; when and how each Stock
Award shall be granted; what type or combination of types of Stock Award shall
be granted; the provisions of each Stock Award granted (which need not be
identical), including the time or times when a person shall be

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permitted to receive Common Stock pursuant to a Stock Award; and the number of
shares of Common Stock with respect to which a Stock Award shall be granted to
each such person.

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

                  (iii)    To amend the Plan or a Stock Award as provided in
Section 12.

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

         (c)      DELEGATION TO COMMITTEE.

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

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

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

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4.       SHARES SUBJECT TO THE PLAN.

         (a)      SHARE RESERVE. Subject to the provisions of Section 11
relating to adjustments upon changes in Common Stock, the Common Stock that may
be issued pursuant to Stock Awards shall not exceed in the aggregate Seven
Million Seven Hundred Thirty-Three Thousand One Hundred Fifty-Three (7,733,153)
shares of Common Stock.

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

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

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

5.       ELIGIBILITY.

         (a)      ELIGIBILITY FOR SPECIFIC STOCK AWARDS. Incentive Stock Options
may be granted only to Employees. Stock Awards other than Incentive Stock
Options may be granted to Employees, Directors and Consultants.

         (b)      TEN PERCENT SHAREHOLDERS.

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

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

                  (iii)    Prior to the Listing Date, a Ten Percent Shareholder
shall not be granted a restricted stock award unless the purchase price of the
restricted stock is at least (i) one hundred

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percent (100%) of the Fair Market Value of the Common Stock at the date of grant
or (ii) such lower percentage of the Fair Market Value of the Common Stock at
the date of grant as is permitted by Section 260.140.41 of Title 10 of the
California Code of Regulations at the time of the grant of the Option.

         (c)      SECTION 162(M) LIMITATION. Subject to the provisions of
Section 11 relating to adjustments upon changes in the shares of Common Stock,
no Employee shall be eligible to be granted Options covering more than Nine
Hundred Forty-One Thousand One Hundred Seventy-Six (941,176) shares of Common
Stock during any calendar year. This subsection 5(c) shall not apply prior to
the Listing Date and, following the Listing Date, this subsection 5(c) shall not
apply until (i) the earliest of: (1) the first material modification of the Plan
(including any increase in the number of shares of Common Stock reserved for
issuance under the Plan in accordance with Section 4); (2) the issuance of all
of the shares of Common Stock reserved for issuance under the Plan; (3) the
expiration of the Plan; or (4) the first meeting of shareholders at which
Directors are to be elected that occurs after the close of the third calendar
year following the calendar year in which occurred the first registration of an
equity security under Section 12 of the Exchange Act; or (ii) such other date
required by Section 162(m) of the Code and the rules and regulations promulgated
thereunder.

         (d)      CONSULTANTS.

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

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

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

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6.       OPTION PROVISIONS.

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

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

         (b)      EXERCISE PRICE OF AN INCENTIVE STOCK OPTION. Subject to the
provisions of subsection 5(b) regarding Ten Percent Shareholders, the exercise
price of each Incentive Stock Option shall be not less than one hundred percent
(100%) of the Fair Market Value of the Common Stock subject to the Option on the
date the Option is granted. Notwithstanding the foregoing, an Incentive Stock
Option may be granted with an exercise price lower than that set forth in the
preceding sentence if such Option is granted pursuant to an assumption or
substitution for another option in a manner satisfying the provisions of Section
424(a) of the Code.

         (c)      EXERCISE PRICE OF A NONSTATUTORY STOCK OPTION. Subject to the
provisions of subsection 5(b) regarding Ten Percent Shareholders, the exercise
price of each Nonstatutory Stock Option granted prior to the Listing Date shall
be not less than eighty-five percent (85%) of the Fair Market Value of the
Common Stock subject to the Option on the date the Option is granted. The
exercise price of each Nonstatutory Stock Option granted on or after the Listing
Date shall be not less than eighty-five percent (85%) of the Fair Market Value
of the Common Stock subject to the Option on the date the Option is granted.
Notwithstanding the foregoing, a Nonstatutory Stock Option may be granted with
an exercise price lower than that set forth in the preceding sentence if such
Option is granted pursuant to an assumption or substitution for another option
in a manner satisfying the provisions of Section 424(a) of the Code.

         (d)      CONSIDERATION. The purchase price of Common Stock acquired
pursuant to an Option shall be paid, to the extent permitted by applicable
statutes and regulations, either (i) in cash at the time the Option is exercised
or (ii) at the discretion of the Board at the time of the grant of the Option
(or subsequently in the case of a Nonstatutory Stock Option) (1) by delivery to
the Company of other Common Stock, (2) according to a deferred payment or other
similar arrangement with the Optionholder or (3) in any other form of legal
consideration that may be acceptable to the Board. Unless otherwise specifically
provided in the Option, the purchase price of Common Stock acquired pursuant to
an Option that is paid by delivery to the Company of other Common Stock
acquired, directly or indirectly from the Company, shall be paid only by shares
of the Common Stock of the Company that have been held for more than six (6)
months

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(or such longer or shorter period of time required to avoid a charge to earnings
for financial accounting purposes). At any time that the Company is incorporated
in Delaware, payment of the Common Stock's "par value," as defined in the
Delaware General Corporation Law, shall not be made by deferred payment.

         In the case of any deferred payment arrangement, interest shall be
compounded at least annually and shall be charged at the minimum rate of
interest necessary to avoid the treatment as interest, under any applicable
provisions of the Code, of any amounts other than amounts stated to be interest
under the deferred payment arrangement.

         (e)      TRANSFERABILITY OF AN INCENTIVE STOCK OPTION. An Incentive
Stock Option shall not be transferable except by will or by the laws of descent
and distribution and shall be exercisable during the lifetime of the
Optionholder only by the Optionholder. Notwithstanding the foregoing, the
Optionholder may, by delivering written notice to the Company, in a form
satisfactory to the Company, designate a third party who, in the event of the
death of the Optionholder, shall thereafter be entitled to exercise the Option.

         (f)      TRANSFERABILITY OF A NONSTATUTORY STOCK OPTION. A Nonstatutory
Stock Option granted prior to the Listing Date shall not be transferable except
by will or by the laws of descent and distribution and, to the extent provided
in the Option Agreement, to such further extent as permitted by Section
260.140.41(d) of Title 10 of the California Code of Regulations at the time of
the grant of the Option, and shall be exercisable during the lifetime of the
Optionholder only by the Optionholder. A Nonstatutory Stock Option granted on or
after the Listing Date shall be transferable to the extent provided in the
Option Agreement. If the Nonstatutory Stock Option does not provide for
transferability, then the Nonstatutory Stock Option shall not be transferable
except by will or by the laws of descent and distribution and shall be
exercisable during the lifetime of the Optionholder only by the Optionholder.
Notwithstanding the foregoing, the Optionholder may, by delivering written
notice to the Company, in a form satisfactory to the Company, designate a third
party who, in the event of the death of the Optionholder, shall thereafter be
entitled to exercise the Option.

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

         (h)      MINIMUM VESTING PRIOR TO THE LISTING DATE. Notwithstanding the
foregoing subsection 6(g), to the extent that the following restrictions on
vesting are required by Section 260.140.41(f) of Title 10 of the California Code
of Regulations at the time of the grant of the Option, then:

                  (i)      Options granted prior to the Listing Date to an
Employee who is not an Officer, Director or Consultant shall provide for vesting
of the total number of shares of

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Common Stock at a rate of at least twenty percent (20%) per year over five (5)
years from the date the Option was granted, subject to reasonable conditions
such as continued employment; and

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

         (i)      TERMINATION OF CONTINUOUS SERVICE. In the event an
Optionholder's Continuous Service terminates (other than upon the Optionholder's
death or Disability), the Optionholder may exercise his or her Option (to the
extent that the Optionholder was entitled to exercise such Option as of the date
of termination) but only within such period of time ending on the earlier of (i)
the date three (3) months following the termination of the Optionholder's
Continuous Service (or such longer or shorter period specified in the Option
Agreement, which period shall not be less than thirty (30) days for Options
granted prior to the Listing Date unless such termination is for cause), or (ii)
the expiration of the term of the Option as set forth in the Option Agreement.
If, after termination, the Optionholder does not exercise his or her Option
within the time specified in the Option Agreement, the Option shall terminate.

         (j)      EXTENSION OF TERMINATION DATE. An Optionholder's Option
Agreement may also provide that if the exercise of the Option following the
termination of the Optionholder's Continuous Service (other than upon the
Optionholder's death or Disability) would be prohibited at any time solely
because the issuance of shares of Common Stock would violate the registration
requirements under the Securities Act, then the Option shall terminate on the
earlier of (i) the expiration of the term of the Option set forth in subsection
6(a) or (ii) the expiration of a period of three (3) months after the
termination of the Optionholder's Continuous Service during which the exercise
of the Option would not be in violation of such registration requirements.

         (k)      DISABILITY OF OPTIONHOLDER. In the event that an
Optionholder's Continuous Service terminates as a result of the Optionholder's
Disability, the Optionholder may exercise his or her Option (to the extent that
the Optionholder was entitled to exercise such Option as of the date of
termination), but only within such period of time ending on the earlier of (i)
the date twelve (12) months following such termination (or such longer or
shorter period specified in the Option Agreement, which period shall not be less
than six (6) months for Options granted prior to the Listing Date) or (ii) the
expiration of the term of the Option as set forth in the Option Agreement. If,
after termination, the Optionholder does not exercise his or her Option within
the time specified herein, the Option shall terminate.

         (l)      DEATH OF OPTIONHOLDER. In the event (i) an Optionholder's
Continuous Service terminates as a result of the Optionholder's death or (ii)
the Optionholder dies within the period (if any) specified in the Option
Agreement after the termination of the Optionholder's Continuous Service for a
reason other than death, then the Option may be exercised (to the extent the
Optionholder was entitled to exercise such Option as of the date of death) by
the Optionholder's estate, by a person who acquired the right to exercise the
Option by bequest or inheritance or by a person designated to exercise the
option upon the Optionholder's death

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pursuant to subsection 6(e) or 6(f), but only within the period ending on the
earlier of (1) the date six (6) months following the date of death (or such
longer or shorter period specified in the Option Agreement, which period shall
not be less than six (6) months for Options granted prior to the Listing Date)
or (2) the expiration of the term of such Option as set forth in the Option
Agreement. If, after death, the Option is not exercised within the time
specified herein, the Option shall terminate.

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

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

         (o)      RIGHT OF FIRST REFUSAL. The Option may, but need not, include
a provision whereby the Company may elect, prior to the Listing Date, to
exercise a right of first refusal following receipt of notice from the
Optionholder of the intent to transfer all or any part of the shares of Common
Stock received upon the exercise of the Option. Except as expressly provided in
this subsection 6(o), such right of first refusal shall otherwise comply with
any applicable provisions of the Bylaws of the Company.

         (p)      RE-LOAD OPTIONS.

                  (i)      Without in any way limiting the authority of the
Board to make or not to make grants of Options hereunder, the Board shall have
the authority (but not an obligation) to include as part of any Option Agreement
a provision entitling the Optionholder to a further Option (a "Re-Load Option")
in the event the Optionholder exercises the Option evidenced by the Option
Agreement, in whole or in part, by surrendering other shares of Common Stock in
accordance with this Plan and the terms and conditions of the Option Agreement.
Unless otherwise specifically provided in the Option, the Optionholder shall not
surrender shares of Common Stock acquired, directly or indirectly from the
Company, unless such shares have been

                                       11
<PAGE>

held for more than six (6) months (or such longer or shorter period of time
required to avoid a charge to earnings for financial accounting purposes).

                  (ii)     Any such Re-Load Option shall (1) provide for a
number of shares of Common Stock equal to the number of shares of Common Stock
surrendered as part or all of the exercise price of such Option; (2) have an
expiration date which is the same as the expiration date of the Option the
exercise of which gave rise to such Re-Load Option; and (3) have an exercise
price which is equal to one hundred percent (100%) of the Fair Market Value of
the Common Stock subject to the Re-Load Option on the date of exercise of the
original Option. Notwithstanding the foregoing, a Re-Load Option shall be
subject to the same exercise price and term provisions heretofore described for
Options under the Plan.

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

7.       PROVISIONS OF STOCK AWARDS OTHER THAN OPTIONS.

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

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

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

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

                                       12
<PAGE>

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

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

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

                  (ii)     CONSIDERATION. The purchase price of Common Stock
acquired pursuant to the restricted stock purchase agreement shall be paid
either: (i) in cash at the time of purchase; (ii) at the discretion of the
Board, according to a deferred payment or other similar arrangement with the
Participant; or (iii) in any other form of legal consideration that may be
acceptable to the Board in its discretion; provided, however, that at any time
that the Company is incorporated in Delaware, then payment of the Common Stock's
"par value," as defined in the Delaware General Corporation Law, shall not be
made by deferred payment.

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

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

                                       13
<PAGE>

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

8.       COVENANTS OF THE COMPANY.

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

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

9.       USE OF PROCEEDS FROM STOCK.

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

10.      MISCELLANEOUS.

         (a)      ACCELERATION OF EXERCISABILITY AND VESTING. The Board shall
have the power to accelerate the time at which a Stock Award may first be
exercised or the time during which a Stock Award or any part thereof will vest
in accordance with the Plan, notwithstanding the provisions in the Stock Award
stating the time at which it may first be exercised or the time during which it
will vest.

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

                                       14
<PAGE>

         (c)      NO EMPLOYMENT OR OTHER SERVICE RIGHTS. Nothing in the Plan or
any instrument executed or Stock Award granted pursuant thereto shall confer
upon any Participant any right to continue to serve the Company or an Affiliate
in the capacity in effect at the time the Stock Award was granted or shall
affect the right of the Company or an Affiliate to terminate (i) the employment
of an Employee with or without notice and with or without cause, (ii) the
service of a Consultant pursuant to the terms of such Consultant's agreement
with the Company or an Affiliate or (iii) the service of a Director pursuant to
the Bylaws of the Company or an Affiliate, and any applicable provisions of the
corporate law of the state in which the Company or the Affiliate is
incorporated, as the case may be.

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

         (e)      INVESTMENT ASSURANCES. The Company may require a Participant,
as a condition of exercising or acquiring Common Stock under any Stock Award,
(i) to give written assurances satisfactory to the Company as to the
Participant's knowledge and experience in financial and business matters and/or
to employ a purchaser representative reasonably satisfactory to the Company who
is knowledgeable and experienced in financial and business matters and that he
or she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the Stock Award; and (ii) to
give written assurances satisfactory to the Company stating that the Participant
is acquiring Common Stock subject to the Stock Award for the Participant's own
account and not with any present intention of selling or otherwise distributing
the Common Stock. The foregoing requirements, and any assurances given pursuant
to such requirements, shall be inoperative if (1) the issuance of the shares of
Common Stock upon the exercise or acquisition of Common Stock under the Stock
Award has been registered under a then currently effective registration
statement under the Securities Act or (2) as to any particular requirement, a
determination is made by counsel for the Company that such requirement need not
be met in the circumstances under the then applicable securities laws. The
Company may, upon advice of counsel to the Company, place legends on stock
certificates issued under the Plan as such counsel deems necessary or
appropriate in order to comply with applicable securities laws, including, but
not limited to, legends restricting the transfer of the Common Stock.

         (f)      WITHHOLDING OBLIGATIONS. To the extent provided by the terms
of a Stock Award Agreement, the Participant may satisfy any federal, state or
local tax withholding obligation relating to the exercise or acquisition of
Common Stock under a Stock Award by any of the following means (in addition to
the Company's right to withhold from any compensation paid to the Participant by
the Company) or by a combination of such means: (i) tendering a cash payment;
(ii) authorizing the Company to withhold shares of Common Stock from the shares
of Common Stock otherwise issuable to the Participant as a result of the
exercise or acquisition of Common Stock under the Stock Award, provided,
however, that no shares of Common Stock are

                                       15
<PAGE>

withheld with a value exceeding the minimum amount of tax required to be
withheld by law; or (iii) delivering to the Company owned and unencumbered
shares of Common Stock.

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

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

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

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

         (i)      REPURCHASE LIMITATION. Notwithstanding any other provisions
contained herein, Options granted pursuant to this Plan shall be subject to the
following conditions:

                  (i)      REPURCHASE RIGHT. At the Committee's discretion,
Common Stock issued pursuant to the exercise of an Option may be subject to a
right, but not an obligation, of

                                       16
<PAGE>

repurchase by the Corporation (the "Right of Repurchase"), at the price
specified in subsection 10(i)(ii), if the Optionholder ceases to be an Employee
for any reason ("Employment Termination") at any time after the grant of the
Option pursuant to which such Common Stock was issued. Common Stock issued by
the Company will only be transferable by the Optionholder subject to the Right
of Repurchase, and the Company will legend the Right of Repurchase on the stock
certificates evidencing such shares of Common Stock and will take such other
steps as it deems necessary to ensure compliance with this restriction. The
Company's rights under this subsection 10(i)(i) will be freely assignable, in
whole or in part.

                  (ii)     REPURCHASE PRICE. The price per share of Common Stock
at which the Company may exercise the Right of Repurchase under subsection
10(i)(i) (the "Repurchase Price") will be the higher of the exercise price of
each share of Common Stock as paid by the Optionholder, or Fair Market Value of
the shares of Common Stock on the date the Company sends the notice to the
Optionholder of its exercise of its Right of Repurchase pursuant to subsection
10(i)(i).

                  (iii)    REPURCHASE PROCEDURE. The Company may exercise its
Right of Repurchase by sending a written notice to the Optionholder and to the
Escrow Agent, if any, of its taking such action and specifying the number of
shares of Common Stock being repurchased. The Company's Right of Repurchase will
terminate if not exercised by written notice from the Company to the
Optionholder within 90 days of the date on which the Company learns of the
Employment Termination or the last date any Option granted to such Optionholder
is exercised, which ever is later. If the Company exercises its Right of
Repurchase, the Optionholder, or if applicable, the Escrow Agent, will deliver
to the Company every stock certificate representing the shares of Common Stock
being repurchased, together with appropriate Assignments Separate from
Certificates, and the Company will then promptly pay the total Repurchase Price
in cash (or cancellation of purchase money indebtedness for the Common Stock, if
applicable) to the Optionholder, or if applicable, to the Escrow Agent, for
delivery to the Optionholder.

                  (iv)     ELECTION TO DEFER PURCHASE OF INCENTIVE STOCK OPTION
SHARES.

                           (A)      Notwithstanding the preceding provisions of
this subsection 10(i), an Optionholder whose shares of Common Stock were issued
pursuant to an Incentive Stock Option may elect to defer the Company's
repurchase of such Common Stock pursuant to this subsection 10 (i) until the
holding period requirements of Section 422(a) of the Code are met. Such election
will be in writing in such form as the Committee may require and will be
delivered to the Company and to the Escrow Agent by certified mail no later than
seven days after the date on which the Optionholder receives notice that the
Company elects to exercise its Right of Repurchase. Such election will pertain
to all such shares of Common Stock issued to the Optionholder and will be
irrevocable.

                           (B)      With respect to an Optionholder who makes
the election described in subsection 10(i)(iv), the Company will repurchase such
Common Stock on or before the date which is 90 days following the earlier of the
date on which the Optionholder dies or the date on which the holding period
requirements of Section 422(a) of the Code are met. The Repurchase Price of each
such share of Common Stock determined under subsection 10(i)(ii) will be

                                       17
<PAGE>

calculated by substituting for the Optionholder's Employment Termination date
the earlier of the date on which the Optionholder dies or the date on which such
holding period requirements are met.

                  (v)      ESCROW. To facilitate the consummation of the
Company's Right of Repurchase under this subsection 10(i)(i), at the request of
the Committee, the Optionholder and the Company will execute Joint Escrow
Instructions and the Optionholder will deliver and deposit with the Escrow Agent
named in the Joint Escrow Instructions two "Assignments Separate from
Certificate," together with all certificates evidencing the shares of Common
Stock issued to the Optionholder pursuant to the Plan, duly endorsed in blank.
The Escrow Agent will hold such documents and deliver the same to the Company
pursuant to the Joint Escrow Instructions and in accordance with the terms of
this subsection 10(i), as applicable.

                  (vi)     BINDING EFFECT. The Company's Right of Repurchase
will inure to the benefit of its successors and assigns and will be binding on
any representative, executor, administrator, heir, or legatee of the
Optionholder.

                  (vii)    PAYMENT OF NET AMOUNT OWING. Notwithstanding anything
to the contrary contained herein, if the Company determines to exercise its
Rights of Repurchase pursuant to this subsection before any Common Stock has
been issued as a result of an exercise of an Option, in lieu of issuing any
Common Stock, the Company will have the right, but not the obligation, to pay to
the Optionholder the net amount owing to the Optionholder.

                  (viii)   TERMINATION OF RIGHT OF REPURCHASE. Notwithstanding
any other provision of this subsection 10(i)(i), in the event that the Common
Stock is listed on any United States securities exchange or traded on any formal
over-the-counter market in general use in the United States at the time the
Optionholder would otherwise be required to transfer his or her Common Stock,
the Company will no longer have the Right of Repurchase, and the Optionholder
will have no obligation to comply with this Section 10(i)(i).

         (j)      RIGHT OF FIRST REFUSAL. Notwithstanding any other provisions
contained herein, Options granted pursuant to this Plan shall be subject to the
following conditions:

                           (i)      RIGHT OF FIRST REFUSAL. At the Committee's
         discretion, Common Stock issued pursuant to the exercise of an Option
         may be subject to a requirement that if an Optionholder proposes to
         sell, pledge, or otherwise transfer any Common Stock acquired pursuant
         to exercise of an Option, or any interest in such Common Stock, to any
         person or entity, the Company will have a right of first refusal (the
         "Right of First Refusal") with respect to such Common Stock. Any
         Optionholder desiring to transfer Common Stock subject to the Right of
         First Refusal will give a written notice (the "Transfer Notice") to the
         Company describing fully the proposed transfer, including the number of
         shares of Common Stock proposed to be transferred, the proposed
         transfer price, and the name and address of the proposed transferee.
         The Transfer Notice will be signed both by the Optionholder and by the
         proposed transferee and must constitute a binding commitment of both
         parties to the transfer of the Common Stock. The Company will have the
         right to purchase the Common Stock subject to the Transfer Notice on
         the

                                       18
<PAGE>
         terms of the proposal referred to in the Transfer Notice, subject to
         any change in such terms permitted under subsection 10(j)(ii), by
         delivery of a notice of exercise of the Right of First Refusal within
         30 days after the date the Transfer Notice is received by the Company.
         The Company's rights under this subsection 10(j)(i) will be freely
         assignable, in whole or in part.

                  (ii)     TRANSFER OF SHARES. If the Company fails to exercise
         the Right of First Refusal within 30 days after the date on which it
         receives the Transfer Notice, the Optionholder may, not later than six
         months following receipt of the Transfer Notice by the Company,
         consummate a transfer of the Common Stock subject to the Transfer
         Notice on the terms and conditions described in the Transfer Notice.
         Any proposed transfer on terms and conditions different from those
         described in the Transfer Notice, as well as any subsequent proposed
         transfer by the Optionholder, will again be subject to the Right of
         First Refusal and will again require compliance with the procedure
         described in Section 10(j)(i). If the Company exercises its Right of
         First Refusal, the Optionholder will immediately endorse and deliver to
         the Company every stock certificate representing the Common Stock being
         purchased, and the Company will then promptly pay the purchase price in
         accordance with the terms set forth in the Transfer Notice.

                  (iii)    REPURCHASE PAYMENT. The amount payable to an
         Optionholder pursuant to the Company's exercise of the Right of First
         Refusal will be paid to the Optionholder in accordance with the terms
         and conditions of the Transfer Notice or may, at the election of the
         Company, be paid in full in cash.

                  (iv)     BINDING EFFECT. The Company's Right of First Refusal
         will inure to the benefit of its successors and assigns and will be
         binding upon any transferee of the Common Stock, other than a
         transferee acquiring Common Stock in a transaction with respect to
         which the Company failed to exercise its Right of First Refusal (a
         "Free Transferee") or a transferee of a Free Transferee.

                  (v)      TERMINATION OF RIGHT OF FIRST REFUSAL.
         Notwithstanding any other provision of this subsection 10(j), if the
         Common Stock is listed on any United States securities exchange or
         traded on any formal over-the-counter market in general use in the
         United States at the time the Optionholder desires to transfer his or
         her Common Stock, the Company will no longer have the Right of First
         Refusal, and the Optionholder will have no obligation to comply with
         this subsection 10(j).

11.      ADJUSTMENTS UPON CHANGES IN STOCK.

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

                                       19
<PAGE>

maximum number of securities subject to award to any person pursuant to
subsection 5(c), and the outstanding Stock Awards will be appropriately adjusted
in the class(es) and number of securities and price per share of Common Stock
subject to such outstanding Stock Awards. The Board shall make such adjustments,
and its determination shall be final, binding and conclusive. (The conversion of
any convertible securities of the Company shall not be treated as a transaction
"without receipt of consideration" by the Company.)

         (b)      CHANGE IN CONTROL--DISSOLUTION OR LIQUIDATION. In the event of
a dissolution or liquidation of the Company, then all outstanding Stock Awards
shall terminate immediately prior to such event. The Committee will notify the
Optionholder not less than 15 days prior to the proposed consummation of a
pending dissolution or liquidation, and the Option will be exercisable as to all
Common Stock which are vested prior to expiration until immediately prior to the
consummation of such action.

         (c)      CHANGE IN CONTROL--ASSET SALE, MERGER, CONSOLIDATION OR
REVERSE MERGER. In the event of (i) a sale, lease or other disposition of all or
substantially all of the assets of the Company, (ii) a merger or consolidation
in which the Company is not the surviving corporation or (iii) a reverse merger
in which the Company is the surviving corporation but the shares of Common Stock
outstanding immediately preceding the merger are converted by virtue of the
merger into other property, whether in the form of securities, cash or
otherwise, then any surviving corporation or acquiring corporation shall assume
any Stock Awards outstanding under the Plan or shall substitute similar stock
awards (including an award to acquire the same consideration paid to the
shareholders in the transaction described in this subsection 11(c) for those
outstanding under the Plan). In the event any surviving corporation or acquiring
corporation refuses to assume such Stock Awards or to substitute similar stock
awards for those outstanding under the Plan, then with respect to Stock Awards
held by Participants whose Continuous Service has not terminated, the vesting of
such Stock Awards (and, if applicable, the time during which such Stock Awards
may be exercised) shall be accelerated in full, and the Stock Awards shall
terminate if not exercised (if applicable) at or prior to such event. With
respect to any other Stock Awards outstanding under the Plan, such Stock Awards
shall terminate if not exercised (if applicable) prior to such event. The
Committee will notify the Optionholder not less than 15 days prior to the
proposed consummation of such transaction, and the Option will be exercisable as
to all Common Stock which are vested prior to expiration and until immediately
prior to the consummation of such transaction.

12.      AMENDMENT OF THE PLAN AND STOCK AWARDS.

         (a)      AMENDMENT OF PLAN. The Board at any time, and from time to
time, may amend the Plan. However, except as provided in Section 11 relating to
adjustments upon changes in Common Stock, no amendment shall be effective unless
approved by the shareholders of the Company to the extent shareholder approval
is necessary to satisfy the requirements of Section 422 of the Code, Rule 16b-3
or any Nasdaq or securities exchange listing requirements.

         (b)      SHAREHOLDER APPROVAL. The Board may, in its sole discretion,
submit any other amendment to the Plan for shareholder approval, including, but
not limited to, amendments to the Plan intended to satisfy the requirements of
Section 162(m) of the Code and the regulations

                                       20
<PAGE>

thereunder regarding the exclusion of performance-based compensation from the
limit on corporate deductibility of compensation paid to certain executive
officers.

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

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

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

13.      TERMINATION OR SUSPENSION OF THE PLAN.

         (a)      PLAN TERM. The Board may suspend or terminate the Plan at any
time. Unless sooner terminated, the Plan shall terminate on the day before the
tenth (10th) anniversary of the date the Plan is adopted by the Board or
approved by the shareholders of the Company, whichever is earlier. No Stock
Awards may be granted under the Plan while the Plan is suspended or after it is
terminated.

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

14.      EFFECTIVE DATE OF PLAN.

         The Plan shall become effective as determined by the Board, but no
Stock Award shall be exercised (or, in the case of a stock bonus, shall be
granted) unless and until the Plan has been approved by the shareholders of the
Company, which approval shall be within twelve (12) months before or after the
date the Plan is adopted by the Board.

15.      CHOICE OF LAW.

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

                                       21<PAGE>

                                                                    EXHIBIT 10.6
                               WEBSIDESTORY, INC.
                        2004 EQUITY INCENTIVE AWARD PLAN

                                   ARTICLE 1

                                    PURPOSE

      The purpose of the WebSideStory, Inc. 2004 Equity Incentive Award Plan
(the "PLAN") is to promote the success and enhance the value of WebSideStory,
Inc. (the "COMPANY") by linking the personal interests of members of the Board,
Employees, and Consultants to those of the Company's stockholders and by
providing an incentive to members of the Board, Employees, and Consultants for
performance to generate returns to the Company's stockholders. The Plan is also
intended to provide flexibility to the Company in its ability to motivate,
attract, and retain the services of members of the Board, Employees, and
Consultants upon whose judgment, interest, and special effort the successful
conduct of the Company's operation largely depends.

      All share numbers set forth in this Plan give effect to the 3.5-for-1
reverse stock split implemented by the Company in connection with its initial
public offering.

                                   ARTICLE 2

                          DEFINITIONS AND CONSTRUCTION

      Wherever the following terms are used in the Plan they will have the
meanings given below, unless the context clearly indicates otherwise. The
singular pronoun includes the plural where the context so indicates.

      2.1 "AWARD" means an Option, a Restricted Stock award, a Stock
Appreciation Right award, a Performance Share award, a Performance Stock Unit
award, a Dividend Equivalents award, a Stock Payment award, a Deferred Stock
award, a Restricted Stock Unit award, an Other Stock-Based Award, a Performance
Bonus Award, or a Performance-Based Award granted to a Participant pursuant to
the Plan.

      2.2 "AWARD AGREEMENT" means any written or electronic agreement, contract,
or other instrument or document evidencing an Award.

      2.3 "BOARD" means the board of directors of the Company.

      2.4 "CHANGE IN CONTROL" means and includes each of the following:

            (a) A transaction or series of transactions (other than an offering
of Stock to the general public through a registration statement filed with the
Securities and Exchange Commission) whereby any "person" or related "group" of
"persons" (as such terms are used in Sections 13(d) and 14(d)(2) of the Exchange
Act) (other than the Company, any of its subsidiaries, an employee benefit plan
maintained by the Company or any of its subsidiaries or a "person" that, prior
to such transaction, directly or indirectly controls, is controlled by, or is
under common control with, the Company) directly or indirectly acquires
beneficial ownership

<PAGE>

(within the meaning of Rule 13d-3 under the Exchange Act) of securities of the
Company possessing more than 50% of the total combined voting power of the
Company's securities outstanding immediately after such acquisition; or

            (b) During any period of two consecutive years, individuals who, at
the beginning of such period, constitute the Board together with any new
director(s) (other than a director designated by a person who shall have entered
into an agreement with the Company to effect a transaction described in Section
2.4(a) or Section 2.4(c)) whose election by the Board or nomination for election
by the Company's stockholders was approved by a vote of at least two-thirds of
the directors then still in office who either were directors at the beginning of
the two year period or whose election or nomination for election was previously
so approved, cease for any reason to constitute a majority thereof; or

            (c) The consummation by the Company (whether directly involving the
Company or indirectly involving the Company through one or more intermediaries)
of (x) a merger, consolidation, reorganization, or business combination or (y) a
sale or other disposition of all or substantially all of the Company's assets or
(z) the acquisition of assets or stock of another entity, in each case other
than a transaction:

                  (i) Which results in the Company's voting securities
outstanding immediately before the transaction continuing to represent (either
by remaining outstanding or by being converted into voting securities of the
Company or the person that, as a result of the transaction, controls, directly
or indirectly, the Company or owns, directly or indirectly, all or substantially
all of the Company's assets or otherwise succeeds to the business of the Company
(the Company or such person, the "SUCCESSOR ENTITY")) directly or indirectly, at
least a majority of the combined voting power of the Successor Entity's
outstanding voting securities immediately after the transaction, and

                  (ii) After which no person or group beneficially owns voting
securities representing 50% or more of the combined voting power of the
Successor Entity; provided, however, that no person or group will be treated for
purposes of this Section 2.4(c)(ii) as beneficially owning 50% or more of
combined voting power of the Successor Entity solely as a result of the voting
power held in the Company prior to the consummation of the transaction; or

            (d) The Company's stockholders approve a liquidation or dissolution
of the Company.

The Committee will have full and final authority, which will be exercised in its
discretion, to determine conclusively whether a Change in Control of the Company
has occurred pursuant to the above definition, and the date of the occurrence of
such Change in Control and any incidental matters relating thereto.

      2.5 "CODE" means the Internal Revenue Code of 1986, as amended from time
to time, and the regulations issued thereunder.

      2.6 "COMMITTEE" means the Board or a committee of the Board described in
Article 12.

                                       2
<PAGE>

      2.7 "CONSULTANT" means any consultant or adviser if:

            (a) The consultant or adviser renders bona fide services to the
Company or any Subsidiary;

            (b) The services rendered by the consultant or adviser are not in
connection with the offer or sale of securities in a capital-raising transaction
and do not directly or indirectly promote or maintain a market for the Company's
securities; and

            (c) The consultant or adviser is a natural person who has contracted
directly with the Company or any Subsidiary to render such services.

      2.8 "COVERED EMPLOYEE" means an Employee who is, or is likely to become, a
"covered employee" within the meaning of Section 162(m) of the Code.

      2.9 "DEFERRED STOCK" means a right to receive a specified number of shares
of Stock during specified time periods pursuant to Article 8.

      2.10 "DISABILITY" means a permanent and total disability within the
meaning of Section 22(e)(3) of the Code, as it may be amended from time to time.

      2.11 "DIVIDEND EQUIVALENTS" means a right granted to a Participant
pursuant to Article 8 to receive the equivalent value (in cash or Stock) of
dividends that otherwise would have been paid on Stock which is subject to an
Award.

      2.12 "EFFECTIVE DATE" has the meaning set forth in Section 13.1.

      2.13 "ELIGIBLE INDIVIDUAL" means any person who is a member of the Board,
Consultant or Employee, as determined by the Committee.

      2.14 "EMPLOYEE" means any officer or other employee (as defined in
accordance with Section 3401(c) of the Code) of the Company or any Subsidiary.

      2.15 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time.

      2.16 "FAIR MARKET VALUE" means, as of any date, the value of Stock
determined as follows:

            (1) If the Stock is listed on any established stock exchange or a
national market system, including without limitation the Nasdaq National Market
or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value
will be the closing sales price for such stock (or the closing bid, if no sales
were reported) as quoted on such exchange or system for the last market trading
day prior to the date of determination, as reported in The Wall Street Journal
or such other source that the Committee deems reliable;

            (2) If the Stock is regularly quoted by a recognized securities
dealer but selling prices are not reported, its Fair Market Value will be the
mean of the closing bid and

                                       3
<PAGE>

asked prices for the Stock on the date prior to the date of determination as
reported in The Wall Street Journal or such other source as the Committee deems
reliable; or

            (3) In the absence of an established market for the Stock, the Fair
Market Value thereof will be determined in good faith by the Committee.

      2.17 "INCENTIVE STOCK OPTION" means an Option that is intended to be an
incentive stock option and meets the requirements of Section 422 of the Code or
any successor provision thereto.

      2.18 "INDEPENDENT DIRECTOR" means a member of the Board who is not an
Employee of the Company.

      2.19 "NON-EMPLOYEE DIRECTOR" means a member of the Board who qualifies as
a "Non-Employee Director" as defined in Rule 16b-3(b)(3) of the Exchange Act, or
any successor definition adopted by the Board.

      2.20 "NON-QUALIFIED STOCK OPTION" means an Option that is not intended to
be or otherwise does not qualify as an Incentive Stock Option.

      2.21 "OPTION" means a right granted to a Participant pursuant to Article 5
of the Plan to purchase a specified number of shares of Stock at a specified
price during specified time periods. An Option may be either an Incentive Stock
Option or a Non-Qualified Stock Option.

      2.22 "OTHER STOCK-BASED AWARD" means an Award granted or denominated in
Stock or units of Stock pursuant to Section 8.7 of the Plan.

      2.23 "PARTICIPANT" means any Eligible Individual who, as a member of the
Board, Consultant or Employee, has been granted an Award pursuant to the Plan.

      2.24 "PERFORMANCE-BASED AWARD" means an Award granted to selected Covered
Employees, but which is subject to the terms and conditions set forth in Article
9.

      2.25 "PERFORMANCE BONUS AWARD" has the meaning set forth in Section 8.8.

      2.26 "PERFORMANCE CRITERIA" means the criteria that the Committee selects
for purposes of establishing the Performance Goal or Performance Goals for a
Participant for a Performance Period. The Performance Criteria that will be used
to establish Performance Goals are limited to the following: net earnings
(either before or after interest, taxes, depreciation and amortization),
economic value-added (as determined by the Committee), sales or revenue, net
income (either before or after taxes), operating earnings, cash flow (including,
but not limited to, operating cash flow and free cash flow), cash flow return on
capital, return on net assets, return on stockholders' equity, return on assets,
return on capital, stockholder returns, return on sales, gross or net profit
margin, productivity, expense, margins, operating efficiency, customer
satisfaction, working capital, earnings per share, price per share of Stock, and
market share, any of which may be measured either in absolute terms or as
compared to any incremental increase or as compared to results of a peer group.

                                       4
<PAGE>

      2.27 "PERFORMANCE GOALS" means, for a Performance Period, the goals
established in writing by the Committee for the Performance Period based upon
the Performance Criteria. Depending on the Performance Criteria used to
establish such Performance Goals, the Performance Goals may be expressed in
terms of overall Company performance or the performance of a Subsidiary,
division, or other operational unit. The Committee, in its discretion, may
adjust or modify the calculation of Performance Goals for such Performance
Period in order to prevent the dilution or enlargement of the rights of
Participants (i) in the event of, or in anticipation of, any unusual or
extraordinary corporate item, transaction, event, or development, or (ii) in
recognition of, or in anticipation of, any other unusual or nonrecurring events
affecting the Company, or the financial statements of the Company, or in
response to, or in anticipation of, changes in applicable laws, regulations,
accounting principles, or business conditions.

      2.28 "PERFORMANCE PERIOD" means the one or more periods of time, which may
be of varying and overlapping durations, as the Committee may select, over which
the attainment of one or more Performance Goals will be measured for the purpose
of determining a Participant's right to, and the payment of, a Performance-Based
Award.

      2.29 "PERFORMANCE SHARE" means a right granted to a Participant pursuant
to Article 8, to receive Stock, the payment of which is contingent upon
achieving certain Performance Goals or other performance based targets
established by the Committee.

      2.30 "PERFORMANCE STOCK UNIT" means a right granted to a Participant
pursuant to Article 8, to receive Stock, the payment of which is contingent upon
achieving certain Performance Goals or other performance-based targets
established by the Committee.

      2.31 "PLAN" means this WebSideStory, Inc. 2004 Equity Incentive Award
Plan, as it may be amended from time to time.

      2.32 "PUBLIC TRADING DATE" means the first date upon which Stock is listed
(or approved for listing) upon notice of issuance on any securities exchange or
designated (or approved for designation) upon notice of issuance as a national
market security on an interdealer quotation system.

      2.33 "QUALIFIED PERFORMANCE-BASED COMPENSATION" means any compensation
that is intended to qualify as "qualified performance-based compensation" as
described in Section 162(m)(4)(C) of the Code.

      2.34 "RESTRICTED STOCK" means Stock awarded to a Participant pursuant to
Article 6 that is subject to certain restrictions and may be subject to risk of
forfeiture or repurchase.

      2.35 "RESTRICTED STOCK UNIT" means an Award granted pursuant to Section
8.6.

      2.36 "SECURITIES ACT" means the Securities Act of 1933, as amended.

      2.37 "STOCK" means the common stock of the Company, par value $0.001 per
share, and such other securities of the Company that may be substituted for
Stock pursuant to Article 11.

                                       5
<PAGE>

      2.38 "STOCK APPRECIATION RIGHT" or "SAR" means a right granted pursuant to
Article 7 to receive a payment equal to the excess of the Fair Market Value of a
specified number of shares of Stock on the date the SAR is exercised over the
Fair Market Value of such number of shares of Stock on the date the SAR was
granted as set forth in the applicable Award Agreement.

      2.39 "STOCK PAYMENT" means (a) a payment in the form of shares of Stock,
or (b) an option or other right to purchase shares of Stock, as part of any
bonus, deferred compensation or other arrangement, made in lieu of all or any
portion of the compensation, granted pursuant to Article 8.

      2.40 "SUBSIDIARY" means any "subsidiary corporation" as defined in Section
424(f) of the Code and any applicable regulations promulgated thereunder of the
Company or any other entity of which a majority of the outstanding voting stock
or voting power is beneficially owned directly or indirectly by the Company.

                                   ARTICLE 3

                           SHARES SUBJECT TO THE PLAN

3.1   Number of Shares.

            (a) Subject to Article 11 and Section 3.1(b), the aggregate number
of shares of Stock which may be issued or transferred pursuant to Awards under
the Plan will be 2,100,000 shares. In addition to the foregoing, subject to
Article 11, commencing on January 1, 2005 and on each January 1 thereafter
during the term of the Plan through and including January 1, 2014, the number of
shares of Stock which may be issued or transferred pursuant to Awards under the
Plan will be increased by that number of shares of Stock equal to the least of
(i) four percent (4%) of the Company's outstanding shares of Stock on such date,
(ii) 1,000,000 shares, or (iii) a lesser amount determined by the Board. To
satisfy the applicable regulations under the Code relating to Incentive Stock
Options, the maximum number of shares of Stock that may be delivered in
connection with Awards under the Plan will be 12,100,000 shares.

            (b) To the extent that an Award terminates, expires, or lapses for
any reason, any shares of Stock subject to the Award will again be available for
the grant of an Award pursuant to the Plan. Additionally, any shares of Stock
tendered or withheld to satisfy the grant or exercise price or tax withholding
obligation pursuant to any Award will again be available for the grant of an
Award pursuant to the Plan. If shares of Stock issued pursuant to Awards are
repurchased by the Company at no less than their original purchase price, such
shares of Stock shall become available for future grant under the Plan. To the
extent permitted by applicable law or any exchange rule, shares of Stock issued
in assumption of, or in substitution for, any outstanding awards of any entity
acquired in any form of combination by the Company or any Subsidiary will not be
counted against shares of Stock available for grant pursuant to this Plan.

            (c) Notwithstanding the provisions of this Section 3.1, no shares of
Stock may again be optioned, granted or awarded if such action would cause an
Incentive Stock Option to fail to qualify as an Incentive Stock Option under
Code Section 422.

                                       6
<PAGE>

      3.2 Stock Distributed. Any Stock distributed pursuant to an Award may
consist, in whole or in part, of authorized and unissued Stock, treasury Stock
or Stock purchased on the open market.

      3.3 Limitation on Number of Shares Subject to Awards. Notwithstanding any
provision in the Plan to the contrary, and subject to Article 11, the maximum
number of shares of Stock with respect to one or more Awards that may be granted
to any one Participant during a rolling three-year period (measured from the
date of any grant) will be 1,500,000; provided, however, that the foregoing
limitation will not apply prior to the Public Trading Date and, following the
Public Trading Date, the foregoing limitation will not apply until the earliest
of: (a) the first material modification of the Plan (including any increase in
the number of shares reserved for issuance under the Plan in accordance with
Section 3.1); (b) the issuance of all of the shares of Stock reserved for
issuance under the Plan; (c) the expiration of the Plan; (d) the first meeting
of stockholders at which members of the Board are to be elected that occurs
after the close of the third calendar year following the calendar year in which
occurred the first registration of an equity security of the Company under
Section 12 of the Exchange Act; or (e) such other date required by Section
162(m) of the Code and the rules and regulations promulgated thereunder.

                                   ARTICLE 4

                          ELIGIBILITY AND PARTICIPATION

      4.1   Eligibility.

            (a) General. Persons eligible to participate in this Plan include
Employees, Consultants and all members of the Board, as determined by the
Committee.

            (b) Foreign Participants. In order to assure the viability of Awards
granted to Participants employed in foreign countries, the Committee may provide
for such special terms as it may consider necessary or appropriate to
accommodate differences in local law, tax policy, or custom. Moreover, the
Committee may approve such supplements to, or amendments, restatements, or
alternative versions of, the Plan as it may consider necessary or appropriate
for such purposes without thereby affecting the terms of the Plan as in effect
for any other purpose; provided, however, that no such supplements, amendments,
restatements, or alternative versions will increase the share limitations
contained in Sections 3.1 and 3.3 of the Plan.

      4.2 Participation. Subject to the provisions of the Plan, the Committee
may, from time to time, select from among all Eligible Individuals, those to
whom Awards will be granted and will determine the nature and amount of each
Award. No individual will have any right to be granted an Award pursuant to this
Plan.

                                       7
<PAGE>

                                   ARTICLE 5

                                 STOCK OPTIONS

      5.1 General. The Committee is authorized to grant Options to Participants
on the following terms and conditions:

            (a) Exercise Price. The exercise price per share of Stock subject to
an Option will be determined by the Committee and set forth in the Award
Agreement; provided that the exercise price for any Option will not be less than
par value of a share of Stock on the date of grant.

            (b) Time and Conditions of Exercise. The Committee will determine
the time or times at which an Option may be exercised in whole or in part;
provided that the term of any Option granted under the Plan will not exceed ten
years. The Committee will also determine the performance or other conditions, if
any, that must be satisfied before all or part of an Option may be exercised.

            (c) Payment. The Committee will determine the methods by which the
exercise price of an Option may be paid, the form of payment, including, without
limitation, cash, promissory note bearing interest at no less than such rate as
will then preclude the imputation of interest under the Code, shares of Stock
held for such period of time as may be required by the Committee in order to
avoid adverse accounting consequences and having a Fair Market Value on the date
of delivery equal to the aggregate exercise price of the Option or exercised
portion thereof, or other property acceptable to the Committee (including
through the delivery of a notice that the Participant has placed a market sell
order with a broker with respect to shares of Stock then issuable upon exercise
of the Option, and that the broker has been directed to pay a sufficient portion
of the net proceeds of the sale to the Company in satisfaction of the Option
exercise price; provided that payment of such proceeds is then made to the
Company upon settlement of such sale), and the methods by which shares of Stock
will be delivered or deemed to be delivered to Participants. Notwithstanding any
other provision of the Plan to the contrary, no Participant who is a member of
the Board or an "executive officer" of the Company within the meaning of Section
13(k) of the Exchange Act will be permitted to pay the exercise price of an
Option in any method which would violate Section 13(k) of the Exchange Act.

            (d) Evidence of Grant. All Options will be evidenced by a written
Award Agreement between the Company and the Participant. The Award Agreement
will include such additional provisions as may be specified by the Committee.

      5.2 Incentive Stock Options. Incentive Stock Options may be granted only
to employees (as defined in accordance with Section 3401(c) of the Code) of the
Company and the Company's "subsidiary corporations" as that term is defined in
Section 424(f) of the Code and any applicable regulations promulgated
thereunder, and the terms of any Incentive Stock Options granted pursuant to the
Plan must comply with the following additional provisions of this Section 5.2:

                                       8
<PAGE>

            (a) Exercise Price. Subject to Section 5.2(d) below, the exercise
price per share of Stock subject to an Incentive Stock Option will be set by the
Committee; provided that the exercise price for any Incentive Stock Option will
not be less than 100% of the Fair Market Value on the date of grant.

            (b) Expiration of Option. An Incentive Stock Option may not be
exercised to any extent by anyone after the tenth anniversary of the date it is
granted, unless an earlier time is set in the Award Agreement.

            (c) Individual Dollar Limitation. The aggregate Fair Market Value
(determined as of the time the Option is granted) of all shares of Stock with
respect to which Incentive Stock Options are first exercisable by a Participant
in any calendar year may not exceed $100,000.00 or such other limitation as
imposed by Section 422(d) of the Code, or any successor provision. To the extent
that Incentive Stock Options are first exercisable by a Participant in excess of
such limitation, the excess will be considered Non-Qualified Stock Options.

            (d) Ten Percent Owners. An Incentive Stock Option will be granted to
any individual who, at the date of grant, owns stock possessing more than ten
percent of the total combined voting power of all classes of Stock of the
Company or any "subsidiary corporation" of the Company or "parent corporation"
of the Company (each within the meaning of Section 424 of the Code) only if such
Option is granted at an exercise price per share that is not less than 110% of
Fair Market Value on the date of grant and the Option is exercisable for no more
than five years from the date of grant.

            (e) Transfer Restriction. The Participant will give the Company
prompt notice of any disposition of shares of Stock acquired by exercise of an
Incentive Stock Option within (i) two years from the date of grant of such
Incentive Stock Option or (ii) one year after the transfer of such shares of
Stock to the Participant.

            (f) Expiration of Incentive Stock Options. No Award of an Incentive
Stock Option may be made pursuant to this Plan after the Expiration Date.

            (g) Right to Exercise. During a Participant's lifetime, an Incentive
Stock Option may be exercised only by the Participant.

      5.3 Substitution of Stock Appreciation Rights. The Committee may provide
in the Award Agreement evidencing the grant of an Option that the Committee, in
its sole discretion, will have to right to substitute a Stock Appreciation Right
for such Option at any time prior to or upon exercise of such Option, subject to
the provisions of Section 7.2 hereof; provided that such Stock Appreciation
Right will be exercisable for the same number of shares of Stock for which such
substituted Option would have been exercisable.

      5.4 Paperless Exercise. In the event that the Company establishes, for
itself or using the services of a third party, an automated system for the
exercise of Options, such as a system using an internet website or interactive
voice response, then the paperless exercise of Options by a Participant may be
permitted through the use of such an automated system.

                                       9
<PAGE>

                                   ARTICLE 6

                             RESTRICTED STOCK AWARDS

      6.1 Grant of Restricted Stock. The Committee is authorized to make Awards
of Restricted Stock to any Participant selected by the Committee in such amounts
and subject to such terms and conditions as determined by the Committee. All
Awards of Restricted Stock will be evidenced by a written Restricted Stock Award
Agreement.

      6.2 Issuance and Restrictions. Restricted Stock will be subject to such
repurchase restrictions, forfeiture restrictions, restrictions on
transferability and other restrictions as the Committee may impose (including,
without limitation, limitations on the right to vote Restricted Stock or the
right to receive dividends on the Restricted Stock). These restrictions may
lapse separately or in combination at such times, pursuant to such
circumstances, in such installments, or otherwise, as the Committee determines
at the time of the grant of the Award or thereafter.

      6.3 Forfeiture. Except as otherwise determined by the Committee at the
time of the grant of the Award or thereafter, upon termination of employment or
service during the applicable restriction period, Restricted Stock that is at
that time subject to restrictions will be forfeited or subject to repurchase by
the Company under such terms as the Committee shall determine; provided,
however, that, the Committee may (a) provide in any Restricted Stock Award
Agreement that restrictions or forfeiture conditions relating to Restricted
Stock will be waived in whole or in part in the event of terminations resulting
from specified causes, and (b) in other cases waive in whole or in part
restrictions or forfeiture conditions relating to Restricted Stock.

      6.4 Certificates for Restricted Stock. Restricted Stock granted pursuant
to the Plan may be evidenced in such manner as the Committee shall determine. If
certificates representing shares of Restricted Stock are registered in the name
of the Participant, certificates must bear an appropriate legend referring to
the terms, conditions, and restrictions applicable to such Restricted Stock, and
the Company may, at its discretion, retain physical possession of the
certificate until such time as all applicable restrictions lapse.

                                   ARTICLE 7

                            STOCK APPRECIATION RIGHTS

      7.1 Grant of Stock Appreciation Rights. A Stock Appreciation Right may be
granted to any Participant selected by the Committee. A Stock Appreciation Right
may be granted (a) in connection and simultaneously with the grant of an Option,
(b) with respect to a previously granted Option, or (c) independent of an
Option. A Stock Appreciation Right will be subject to such terms and conditions
not inconsistent with the Plan as the Committee shall impose and will be
evidenced by an Award Agreement.

      7.2 Coupled Stock Appreciation Rights.

            (a) A Coupled Stock Appreciation Right ("CSAR") will be related to a
particular Option and will be exercisable only when and to the extent the
related Option is

                                       10
<PAGE>

exercisable.

            (b) A CSAR may be granted to a Participant for no more than the
number of shares subject to the simultaneously or previously granted Option to
which it is coupled.

            (c) A CSAR will entitle the Participant (or other person entitled to
exercise the Option pursuant to the Plan) to surrender to the Company the
unexercised portion of the Option to which the CSAR relates (to the extent then
exercisable pursuant to its terms) and to receive from the Company in exchange
therefor an amount determined by multiplying the difference obtained by
subtracting the Option exercise price from the Fair Market Value of a share of
Stock on the date of exercise of the CSAR by the number of shares of Stock with
respect to which the CSAR will have been exercised, subject to any limitations
the Committee may impose.

      7.3 Independent Stock Appreciation Rights.

            (a) An Independent Stock Appreciation Right ("ISAR") will be
unrelated to any Option and will have a term set by the Committee. An ISAR will
be exercisable in such installments as the Committee may determine. An ISAR will
cover such number of shares of Stock as the Committee may determine. The
exercise price per share of Stock subject to each ISAR will be set by the
Committee; provided, however, that the Committee, in its sole and absolute
discretion, may provide that the ISAR may be exercised subsequent to a
termination of employment or service, as applicable, or following a Change in
Control of the Company, or because of the Participant's retirement, death or
disability, or otherwise.

            (b) An ISAR will entitle the Participant (or other person entitled
to exercise the ISAR pursuant to the Plan) to exercise all or a specified
portion of the ISAR (to the extent then exercisable pursuant to its terms) and
to receive from the Company an amount determined by multiplying the difference
obtained by subtracting the exercise price per share of the ISAR from the Fair
Market Value of a share of Stock on the date of exercise of the ISAR by the
number of shares of Stock with respect to which the ISAR will have been
exercised, subject to any limitations the Committee may impose.

      7.4 Payment and Limitations on Exercise. Payment of the amounts determined
under Sections 7.2(c) and 7.3(b) above will be in cash, in Stock (based on its
Fair Market Value as of the date the Stock Appreciation Right is exercised) or a
combination of both, as determined by the Committee.

                                   ARTICLE 8

                              OTHER TYPES OF AWARDS

      8.1 Performance Share Awards. Any Participant selected by the Committee
may be granted one or more Performance Share awards which will be denominated in
a number of shares of Stock and which may be linked to any one or more of the
Performance Criteria or other specific performance criteria determined
appropriate by the Committee, in each case on a specified date or dates or over
any period or periods determined by the Committee. In making

                                       11
<PAGE>

such determinations, the Committee will consider (among such other factors as it
deems relevant in light of the specific type of award) the contributions,
responsibilities and other compensation of the particular Participant.

      8.2 Performance Stock Units. Any Participant selected by the Committee may
be granted one or more Performance Stock Unit awards which will be denominated
in units of value including dollar value of shares of Stock and which may be
linked to any one or more of the Performance Criteria or other specific
performance criteria determined appropriate by the Committee, in each case on a
specified date or dates or over any period or periods determined by the
Committee. In making such determinations, the Committee will consider (among
such other factors as it deems relevant in light of the specific type of award)
the contributions, responsibilities and other compensation of the particular
Participant.

      8.3 Dividend Equivalents. Any Participant selected by the Committee may be
granted Dividend Equivalents based on the dividends declared on the shares of
Stock that are subject to any Award, to be credited as of dividend payment
dates, during the period between the date the Award is granted and the date the
Award is exercised, vests or expires, as determined by the Committee. Such
Dividend Equivalents will be converted to cash or additional shares of Stock by
such formula and at such time and subject to such limitations as may be
determined by the Committee.

      8.4 Stock Payments. Any Participant selected by the Committee may receive
Stock Payments in the manner determined from time to time by the Committee. The
number of shares will be determined by the Committee and may be based upon the
Performance Criteria or other specific performance criteria determined
appropriate by the Committee, determined on the date such Stock Payment is made
or on any date thereafter.

      8.5 Deferred Stock. Any Participant selected by the Committee may be
granted an award of Deferred Stock in the manner determined from time to time by
the Committee. The number of shares of Deferred Stock will be determined by the
Committee and may be linked to the Performance Criteria or other specific
performance criteria determined to be appropriate by the Committee, in each case
on a specified date or dates or over any period or periods determined by the
Committee. Stock underlying a Deferred Stock award will not be issued until the
Deferred Stock award has vested, pursuant to a vesting schedule or performance
criteria set by the Committee. Unless otherwise provided by the Committee, a
Participant awarded Deferred Stock will have no rights as a Company stockholder
with respect to such Deferred Stock until such time as the Deferred Stock Award
has vested and the Stock underlying the Deferred Stock Award has been issued.

      8.6 Restricted Stock Units. The Committee is authorized to make Awards of
Restricted Stock Units to any Participant selected by the Committee in such
amounts and subject to such terms and conditions as determined by the Committee.
At the time of grant, the Committee will specify the date or dates on which the
Restricted Stock Units will become fully vested and nonforfeitable, and may
specify such conditions to vesting as it deems appropriate. At the time of
grant, the Committee will specify the maturity date applicable to each grant of
Restricted Stock Units which will be no earlier than the vesting date or dates
of the Award and may be determined at the election of the grantee. On the
maturity date, the Company will

                                       12
<PAGE>

transfer to the Participant one unrestricted, fully transferable share of Stock
for each Restricted Stock Unit scheduled to be paid out on such date and not
previously forfeited. The Committee will specify the purchase price, if any, to
be paid by the grantee to the Company for such shares of Stock.

      8.7 Other Stock-Based Awards. Any Participant selected by the Committee
may be granted one or more Awards that provide Participants with shares of Stock
or the right to purchase shares of Stock or that have a value derived from the
value of, or an exercise or conversion privilege at a price related to, or that
are otherwise payable in shares of Stock and which may be linked to any one or
more of the Performance Criteria or other specific performance criteria
determined appropriate by the Committee, in each case on a specified date or
dates or over any period or periods determined by the Committee.

      8.8 Performance Bonus Awards. Any Participant selected by the Committee
may be granted one or more Performance-Based Awards in the form of a cash bonus
(a "PERFORMANCE BONUS AWARD") payable upon the attainment of Performance Goals
that are established by the Committee and relate to one or more of the
Performance Criteria, in each case on a specified date or dates or over any
period or periods determined by the Committee. Any such Performance Bonus Award
paid to a Covered Employee will be based upon objectively determinable bonus
formulas established in accordance with Article 9. The maximum amount of any
Performance Bonus Award payable to a Covered Employee with respect to any fiscal
year of the Company will not exceed $500,000.

      8.9 Term. Except as otherwise provided herein, the term of any Award of
Performance Shares, Performance Stock Units, Dividend Equivalents, Stock
Payments, Deferred Stock, Restricted Stock Units, Other Stock-Based Awards or
Performance Bonus Awards will be set by the Committee in its discretion.

      8.9 Exercise or Purchase Price. The Committee may establish the exercise
or purchase price, if any, of any Award of Performance Shares, Performance Stock
Units, Deferred Stock, Stock Payments, Restricted Stock Units or Other
Stock-Based Awards; provided, however, that such price will not be less than the
par value of a share of Stock on the date of grant, unless otherwise permitted
by applicable state law.

      8.10 Form of Payment. Payments with respect to any Awards granted under
this Article 8 will be made in cash, in Stock or a combination of both, as
determined by the Committee.

      8.12 Award Agreement. All Awards under this Article 8 will be subject to
such additional terms and conditions as determined by the Committee and will be
evidenced by a written Award Agreement.

                                   ARTICLE 9

                            PERFORMANCE-BASED AWARDS

      9.1 Purpose. The purpose of this Article 9 is to provide the Committee the
ability to qualify Awards as Qualified Performance-Based Compensation. If the
Committee, in its

                                       13
<PAGE>

discretion, decides to grant a Performance-Based Award to a Covered Employee,
the provisions of this Article 9 will control over any contrary provision of the
Plan; provided, however, that the Committee may in its discretion grant Awards
to Covered Employees that are based on Performance Criteria or Performance Goals
but that do not satisfy the requirements of this Article 9.

      9.2 Applicability. This Article 9 will apply only to those Covered
Employees selected by the Committee to receive Performance-Based Awards which
are intended to be Qualified Performance-Based Compensation. The designation of
a Covered Employee as a Participant for a Performance Period will not in any
manner entitle the Participant to receive an Award for the period. Moreover,
designation of a Covered Employee as a Participant for a particular Performance
Period will not require designation of such Covered Employee as a Participant in
any subsequent Performance Period and designation of one Covered Employee as a
Participant will not require designation of any other Covered Employees as a
Participant in such period or in any other period.

      9.3 Procedures with Respect to Performance-Based Awards. To the extent
necessary to comply with the Qualified Performance-Based Compensation
requirements of Section 162(m)(4)(C) of the Code, with respect to any Award
granted under Articles 6 and 8 which may be granted to one or more Covered
Employees, no later than ninety days following the commencement of any fiscal
year in question or any other designated fiscal period or period of service (or
such other time as may be required or permitted by Section 162(m) of the Code),
the Committee will, in writing, (a) designate one or more Covered Employees, (b)
select the Performance Criteria applicable to the Performance Period, (c)
establish the Performance Goals, and amounts of such Awards, as applicable,
which may be earned for such Performance Period, and (d) specify the
relationship between Performance Criteria and the Performance Goals and the
amounts of such Awards, as applicable, to be earned by each Covered Employee for
such Performance Period. Following the completion of each Performance Period,
the Committee will certify in writing whether the applicable Performance Goals
have been achieved for such Performance Period. In determining the amount earned
by a Covered Employee, the Committee will have the right to reduce or eliminate
(but not to increase) the amount payable at a given level of performance to take
into account additional factors that the Committee may deem relevant to the
assessment of individual or corporate performance for the Performance Period.

      9.4 Payment of Performance-Based Awards. A Participant will be eligible to
receive payment pursuant to a Performance-Based Award for a Performance Period
only if the Performance Goals for such period are achieved. In determining the
amount earned under a Performance-Based Award, the Committee may reduce or
eliminate the amount of the Performance-Based Award earned for the Performance
Period, if in its sole and absolute discretion, such reduction or elimination is
appropriate.

      9.5 Additional Limitations. Notwithstanding any other provision of the
Plan, any Award which is granted to a Covered Employee and is intended to
constitute Qualified Performance-Based Compensation will be subject to any
additional limitations set forth in Section 162(m) of the Code (including any
amendment to Section 162(m) of the Code) or any regulations or rulings issued
thereunder that are requirements for qualification as qualified

                                       14
<PAGE>

performance-based compensation as described in Section 162(m)(4)(C) of the Code,
and the Plan will be deemed amended to the extent necessary to conform to such
requirements.

                                   ARTICLE 10

                         PROVISIONS APPLICABLE TO AWARDS

      10.1 Stand-Alone and Tandem Awards. Awards granted pursuant to the Plan
may, in the discretion of the Committee, be granted either alone, in addition
to, or in tandem with, any other Award granted pursuant to the Plan. Awards
granted in addition to or in tandem with other Awards may be granted either at
the same time as or at a different time from the grant of such other Awards.

      10.2 Award Agreement. Awards under the Plan will be evidenced by Award
Agreements that set forth the terms, conditions and limitations for each Award
which may include the term of an Award, the provisions applicable in the event
the Participant's employment or service terminates, and the Company's authority
to unilaterally or bilaterally amend, modify, suspend, cancel or rescind an
Award.

      10.3 Limits on Transfer. No right or interest of a Participant in any
Award may be pledged, encumbered, or hypothecated to or in favor of any party
other than the Company or a Subsidiary, or will be subject to any lien,
obligation, or liability of such Participant to any other party other than the
Company or a Subsidiary. Except as otherwise provided by the Committee, no Award
will be assigned, transferred, or otherwise disposed of by a Participant other
than by will or the laws of descent and distribution. The Committee by express
provision in the Award or an amendment thereto may permit an Award (other than
an Incentive Stock Option) to be transferred to, exercised by and paid to
certain persons or entities related to the Participant, including but not
limited to members of the Participant's family, charitable institutions, or
trusts or other entities whose beneficiaries or beneficial owners are members of
the Participant's family and/or charitable institutions, or to such other
persons or entities as may be expressly approved by the Committee, pursuant to
such conditions and procedures as the Committee may establish. Any permitted
transfer will be subject to the condition that the Committee receive evidence
satisfactory to it that the transfer is being made for estate and/or tax
planning purposes (or to a "blind trust" in connection with the Participant's
termination of employment or service with the Company or a Subsidiary to assume
a position with a governmental, charitable, educational or similar non-profit
institution) and on a basis consistent with the Company's lawful issue of
securities.

      10.4 Beneficiaries. Notwithstanding Section 10.3, a Participant may, in
the manner determined by the Committee, designate a beneficiary to exercise the
rights of the Participant and to receive any distribution with respect to any
Award upon the Participant's death. A beneficiary, legal guardian, legal
representative, or other person claiming any rights pursuant to the Plan is
subject to all terms and conditions of the Plan and any Award Agreement
applicable to the Participant, except to the extent the Plan and Award Agreement
otherwise provide, and to any additional restrictions deemed necessary or
appropriate by the Committee. If the Participant is married and resides in a
community property state, a designation of a person other than the

                                       15
<PAGE>

Participant's spouse as his or her beneficiary with respect to more than 50% of
the Participant's interest in the Award will not be effective without the prior
written consent of the Participant's spouse. If no beneficiary has been
designated or survives the Participant, payment will be made to the person
entitled thereto pursuant to the Participant's will or the laws of descent and
distribution. Subject to the foregoing, a beneficiary designation may be changed
or revoked by a Participant at any time provided the change or revocation is
filed with the Committee.

      10.5 Stock Certificates; Book Entry Procedures.

            (a) Notwithstanding anything herein to the contrary, the Company
will not be required to issue or deliver any certificates evidencing shares of
Stock pursuant to the exercise of any Award, unless and until the Board has
determined, with advice of counsel, that the issuance and delivery of such
certificates is in compliance with all applicable laws, regulations of
governmental authorities and, if applicable, the requirements of any exchange on
which the shares of Stock are listed or traded. All Stock certificates delivered
pursuant to the Plan are subject to any stop-transfer orders and other
restrictions as the Committee deems necessary or advisable to comply with
federal, state, or foreign jurisdiction, securities or other laws, rules and
regulations and the rules of any national securities exchange or automated
quotation system on which the Stock is listed, quoted, or traded. The Committee
may place legends on any Stock certificate to reference restrictions applicable
to the Stock. In addition to the terms and conditions provided herein, the Board
may require that a Participant make such reasonable covenants, agreements, and
representations as the Board, in its discretion, deems advisable in order to
comply with any such laws, regulations, or requirements. The Committee will have
the right to require any Participant to comply with any timing or other
restrictions with respect to the settlement or exercise of any Award, including
a window-period limitation, as may be imposed in the discretion of the
Committee.

            (b) Notwithstanding any other provision of the Plan, unless
otherwise determined by the Committee or required by any applicable law, rule or
regulation, the Company will not deliver to any Participant certificates
evidencing shares of Stock issued in connection with any Award and instead such
shares of Stock will be recorded in the books of the Company (or, as applicable,
its transfer agent or stock plan administrator).

                                   ARTICLE 11

                          CHANGES IN CAPITAL STRUCTURE

      11.1 Adjustments.

            (a) In the event of any stock dividend, stock split, combination or
exchange of shares, merger, consolidation, spin-off, recapitalization or other
distribution (other than normal cash dividends) of Company assets to
stockholders, or any other change affecting the shares of Stock or the share
price of the Stock, the Committee will make such proportionate adjustments, if
any, as the Committee in its discretion may deem appropriate to reflect such
change with respect to (i) the aggregate number and type of shares that may be
issued under the Plan (including, but not limited to, adjustments of the
limitations in Sections 3.1 and 3.3); (ii) the terms and conditions of any
outstanding Awards (including, without limitation, any applicable

                                       16
<PAGE>

performance targets or criteria with respect thereto); and (iii) the grant or
exercise price per share for any outstanding Awards under the Plan. Any
adjustment affecting an Award intended as Qualified Performance-Based
Compensation must be made consistent with the requirements of Section 162(m) of
the Code.

            (b) In the event of any transaction or event described in Section
11.1(a) or any unusual or nonrecurring transactions or events affecting the
Company, any affiliate of the Company, or the financial statements of the
Company or any affiliate (including without limitation any Change in Control),
or of changes in applicable laws, regulations or accounting principles, the
Committee, in its sole discretion and on such terms and conditions as it deems
appropriate, either by the terms of the Award or by action taken prior to the
occurrence of such transaction or event and either automatically or upon the
Participant's request, is hereby authorized to take any one or more of the
following actions whenever the Committee determines that such action is
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan or with respect
to any Award under the Plan, to facilitate such transactions or events or to
give effect to such changes in laws, regulations or principles:

                  (i) To provide for either (A) termination of any such Award in
exchange for an amount of cash and/or other property, if any, equal to the
amount that would have been attained upon the exercise of such Award or
realization of the Participant's rights (and, for the avoidance of doubt, if as
of the date of the occurrence of the transaction or event described in this
Section 11.1(b), the Committee determines in good faith that no amount would
have been attained upon the exercise of such Award or realization of the
Participant's rights, then such Award may be terminated by the Company without
payment) or (B) the replacement of such Award with other rights or property
selected by the Committee in its sole discretion;

                  (ii) To provide that such Award be assumed by the successor or
survivor corporation, or a parent or subsidiary thereof, or will be substituted
for by similar options, rights or awards covering the stock of the successor or
survivor corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to the number and kind of shares and prices; and

                  (iii) To make adjustments in the number and type of shares of
Stock (or other securities or property) subject to outstanding Awards, and in
the number and kind of outstanding Restricted Stock or Deferred Stock and/or in
the terms and conditions of (including the grant or exercise price), and the
criteria included in, outstanding options, rights and awards and options, rights
and awards which may be granted in the future.

      11.2 Acceleration Upon Change in Control. Notwithstanding Section 11.1, if
a Change in Control occurs and a Participant's Awards are not converted,
assumed, or replaced by a successor entity or its parent or Subsidiary, then
immediately prior to the Change in Control such Awards will become fully
exercisable and all forfeiture restrictions on such Awards will lapse. Upon, or
in anticipation of, a Change in Control, the Committee may cause any and all
Awards outstanding under this Plan to terminate at a specific time in the
future, including but not limited to the date of such Change in Control, and
will give each Participant the right to exercise such Awards during a period of
time as the Committee, in its sole and absolute discretion, shall

                                       17
<PAGE>

determine. The Committee will have sole discretion to determine whether an Award
has been converted, assumed or replaced by the surviving or successor entity or
its parent or Subsidiary in connection with a Change in Control.

      11.3 Outstanding Awards - Certain Mergers. Subject to any required action
by the stockholders of the Company, in the event that the Company is the
surviving corporation in any merger or consolidation (except a merger or
consolidation as a result of which the holders of shares of Stock receive
securities of another corporation), each Award outstanding on the date of such
merger or consolidation will pertain to and apply to the securities that a
holder of the number of shares of Stock subject to such Award would have
received in such merger or consolidation.

      11.4 Outstanding Awards - Other Changes. In the event of any other change
in the capitalization of the Company or corporate change other than those
specifically referred to in this Article 11, the Committee may, in its absolute
discretion, make such adjustments in the number and kind of shares or other
securities subject to Awards outstanding on the date on which such change occurs
and in the per share grant or exercise price of each Award as the Committee may
consider appropriate to prevent dilution or enlargement of rights.

      11.5 No Other Rights. Except as expressly provided in the Plan, no
Participant will have any rights by reason of any subdivision or consolidation
of shares of stock of any class, the payment of any dividend, any increase or
decrease in the number of shares of stock of any class or any dissolution,
liquidation, merger, or consolidation of the Company or any other corporation.
Except as expressly provided in the Plan or pursuant to action of the Committee
under the Plan, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, will affect, and no
adjustment by reason thereof will be made with respect to, the number of shares
of Stock subject to an Award or the grant or exercise price of any Award.

                                   ARTICLE 12

                                 ADMINISTRATION

      12.1 Committee. Unless and until the Board delegates administration of the
Plan to a Committee as set forth below, the Plan will be administered by the
full Board, and for such purposes the term "Committee" as used in this Plan will
be deemed to refer to the Board. The Board may delegate administration of the
Plan to a Committee or Committees of one or more members of the Board, and the
term "Committee" will apply to any person or persons to whom such authority has
been delegated. If administration is delegated to a Committee, the Committee
will have, in connection with the administration of the Plan, the powers
theretofore possessed by the Board, including the power to delegate to a
subcommittee any of the administrative powers the Committee is authorized to
exercise (and references in this Plan to the Board will thereafter be to the
Committee or subcommittee), subject, however, to such resolutions, not
inconsistent with the provisions of the Plan, as may be adopted from time to
time by the Board. Notwithstanding the foregoing, however, from and after the
Public Trading Date, a Committee of the Board will administer the Plan and the
Committee will consist solely of two or more members of the Board each of whom
is both an "outside director," within the meaning of Section

                                       18
<PAGE>

162(m) of the Code, and a Non-Employee Director. Notwithstanding the foregoing,
(a) the full Board, acting by a majority of its members in office, will conduct
the general administration of the Plan with respect to all Awards granted to
Independent Directors and for purposes of such Awards the term "Committee" as
used in this Plan will be deemed to refer to the Board and (b) the Committee may
delegate its authority under this Plan to the extent permitted by Section 12.5.
Appointment of Committee members will be effective upon acceptance of
appointment. The Board may abolish the Committee at any time and re-vest in the
Board the administration of the Plan. Committee members may resign at any time
by delivering written notice to the Board. Vacancies in the Committee may only
be filled by the Board.

      12.2 Action by the Committee. A majority of the Committee will constitute
a quorum. The acts of a majority of the members present at any meeting at which
a quorum is present, and acts approved in writing by a majority of the Committee
in lieu of a meeting, will be deemed the acts of the Committee. Each member of
the Committee is entitled to, in good faith, rely or act upon any report or
other information furnished to that member by any officer or other employee of
the Company or any Subsidiary, the Company's independent certified public
accountants, or any executive compensation consultant or other professional
retained by the Company to assist in the administration of the Plan.

      12.3 Authority of Committee. Subject to any specific designation in the
Plan, the Committee has the exclusive power, authority and discretion to:

            (a) Designate Participants to receive Awards;

            (b) Determine the type or types of Awards to be granted to each
Participant;

            (c) Determine the number of Awards to be granted and the number of
shares of Stock to which an Award will relate;

            (d) Determine the terms and conditions of any Award granted pursuant
to the Plan, including, but not limited to, the exercise price, grant price, or
purchase price, any reload provision, any restrictions or limitations on the
Award, any schedule for lapse of forfeiture restrictions or restrictions on the
exercisability of an Award, and accelerations or waivers thereof, any provisions
related to non-competition and recapture of gain on an Award, based in each case
on such considerations as the Committee in its sole discretion determines;
provided, however, that the Committee will not have the authority to accelerate
the vesting or waive the forfeiture of any Performance-Based Awards;

            (e) Determine whether, to what extent, and pursuant to what
circumstances an Award may be settled in, or the exercise price of an Award may
be paid in, cash, Stock, other Awards, or other property, or an Award may be
canceled, forfeited, or surrendered;

            (f) Prescribe the form of each Award Agreement, which need not be
identical for each Participant;

            (g) Decide all other matters that must be determined in connection
with an Award;

                                       19
<PAGE>

            (h) Establish, adopt, or revise any rules and regulations as it may
deem necessary or advisable to administer the Plan;

            (i) Interpret the terms of, and any matter arising pursuant to, the
Plan or any Award Agreement; and

            (j) Make all other decisions and determinations that may be required
pursuant to the Plan or as the Committee deems necessary or advisable to
administer the Plan.

      12.4 Decisions Binding. The Committee's interpretation of the Plan, any
Awards granted pursuant to the Plan, any Award Agreement and all decisions and
determinations by the Committee with respect to the Plan are final, binding, and
conclusive on all parties.

      12.5 Delegation of Authority. To the extent permitted by applicable law,
the Committee may from time to time delegate to a committee of one or more
members of the Board or one or more officers of the Company the authority to
grant or amend Awards to Participants other than (a) senior executives of the
Company who are subject to Section 16 of the Exchange Act, (b) Covered
Employees, or (c) officers of the Company (or members of the Board) to whom
authority to grant or amend Awards has been delegated under this Plan. Any
delegation under this Plan will be subject to the restrictions and limits that
the Committee specifies at the time of such delegation, and the Committee may at
any time rescind the authority so delegated or appoint a new delegatee. At all
times, the delegatee appointed under this Section 12.5 will serve in such
capacity at the pleasure of the Committee.

                                       20
<PAGE>

                                   ARTICLE 13

                          EFFECTIVE AND EXPIRATION DATE

      13.1 Effective Date. The Plan is effective as of the Public Trading Date
(the "EFFECTIVE DATE"); provided, that the Plan has been approved by the
Company's stockholders prior to such date.

      13.2 Expiration Date. The Plan will expire on, and no Award may be granted
pursuant to the Plan after, the earlier of the tenth anniversary of (i) the date
this Plan is approved by the Company's stockholders or (ii) the date this Plan
is approved by the Board (the "EXPIRATION DATE"). Any Awards that are
outstanding on the Expiration Date will remain in force according to the terms
of the Plan and the applicable Award Agreement.

                                   ARTICLE 14

                    AMENDMENT, MODIFICATION, AND TERMINATION

      14.1 Amendment, Modification, And Termination. The Board or the Committee
may terminate, amend or modify the Plan; provided, however, that (a) to the
extent necessary to comply with any applicable law, regulation, or stock
exchange rule, the Company will obtain stockholder approval of any Plan
amendment in such a manner and to such a degree as required, and (b) stockholder
approval is required for any amendment to the Plan that (i) increases the number
of shares available under the Plan (other than any adjustment as provided by
Article 11), or (ii) permits the Committee to extend the exercise period for an
Option beyond ten years from the date of grant. Notwithstanding any provision in
this Plan to the contrary, absent approval of the stockholders of the Company,
no Option may be amended to reduce the per share exercise price of the shares
subject to such Option below the per share exercise price as of the date the
Option is granted and, except as permitted by Article 11, no Option may be
granted in exchange for, or in connection with, the cancellation or surrender of
an Option having a higher per share exercise price.

      14.2 Awards Previously Granted. No termination, amendment, or modification
of the Plan will adversely affect in any material way any Award previously
granted pursuant to the Plan without the prior written consent of the
Participant.

                                   ARTICLE 15

                               GENERAL PROVISIONS

      15.1 No Rights to Awards. No Participant, employee, or other person will
have any claim to be granted any Award pursuant to the Plan, and neither the
Company nor the Committee is obligated to treat Participants, employees, and
other persons uniformly.

      15.2 No Stockholders Rights. Except as otherwise provided herein, a
Participant will have none of the rights of a stockholder with respect to shares
of Stock covered by any Award until the Participant becomes the record owner of
such shares of Stock.

                                       21
<PAGE>

      15.3 Withholding. The Company or any Subsidiary will have the authority
and the right to deduct or withhold, or require a Participant to remit to the
Company, an amount sufficient to satisfy federal, state, local and foreign taxes
(including the Participant's payroll, social security or other tax obligations)
required by law to be withheld with respect to any taxable event concerning a
Participant arising as a result of this Plan. The Committee may in its
discretion and in satisfaction of the foregoing requirement allow a Participant
to elect to have the Company withhold shares of Stock otherwise issuable under
an Award (or allow the return of shares of Stock) having a Fair Market Value
equal to the sums required to be withheld. Notwithstanding any other provision
of the Plan, the number of shares of Stock which may be withheld with respect to
the issuance, vesting, exercise or payment of any Award (or which may be
repurchased from the Participant of such Award within six months (or such other
period as may be determined by the Committee) after such shares of Stock were
acquired by the Participant from the Company) in order to satisfy the
Participant's federal, state, local and foreign tax liabilities with respect to
the issuance, vesting, exercise or payment of the Award will be limited to the
number of shares which have a Fair Market Value on the date of withholding or
repurchase equal to the aggregate amount of such liabilities based on the
minimum statutory withholding rates for federal, state, local and foreign tax
purposes that are applicable to such taxable income.

      15.4 No Right to Employment or Services. Nothing in the Plan or any Award
Agreement will interfere with or limit in any way the right of the Company or
any Subsidiary to terminate any Participant's employment or services at any
time, nor confer upon any Participant any right to continue in the employ or
service of the Company or any Subsidiary.

      15.5 Unfunded Status of Awards. The Plan is intended to be an "unfunded"
plan for incentive compensation. With respect to any payments not yet made to a
Participant pursuant to an Award, nothing contained in the Plan or any Award
Agreement will give the Participant any rights that are greater than those of a
general creditor of the Company or any Subsidiary.

      15.6 Indemnification. To the extent allowable pursuant to applicable law,
each member of the Committee or of the Board will be indemnified and held
harmless by the Company from any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by such member in connection with or
resulting from any claim, action, suit, or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action or failure
to act pursuant to the Plan and against and from any and all amounts paid by him
or her in satisfaction of judgment in such action, suit, or proceeding against
him or her; provided he or she gives the Company an opportunity, at its own
expense, to handle and defend the same before he or she undertakes to handle and
defend it on his or her own behalf. The foregoing right of indemnification will
not be exclusive of any other rights of indemnification to which such persons
may be entitled pursuant to the Company's Certificate of Incorporation or
Bylaws, as a matter of law, or otherwise, or any power that the Company may have
to indemnify them or hold them harmless.

                                       22
<PAGE>

      15.7 Relationship to other Benefits. No payment pursuant to the Plan will
be taken into account in determining any benefits pursuant to any pension,
retirement, savings, profit sharing, group insurance, welfare or other benefit
plan of the Company or any Subsidiary except to the extent otherwise expressly
provided in writing in such other plan or an agreement thereunder.

      15.8 Expenses. The expenses of administering the Plan will be borne by the
Company and its Subsidiaries.

      15.9 Titles and Headings. The titles and headings of the Sections in the
Plan are for convenience of reference only and, in the event of any conflict,
the text of the Plan, rather than such titles or headings, will control.

      15.10 Fractional Shares. No fractional shares of Stock will be issued and
the Committee will determine, in its discretion, whether cash will be given in
lieu of fractional shares or whether such fractional shares will be eliminated
by rounding up or down as appropriate.

      15.11 Limitations Applicable to Section 16 Persons. Notwithstanding any
other provision of the Plan, the Plan, and any Award granted or awarded to any
Participant who is then subject to Section 16 of the Exchange Act, will be
subject to any additional limitations set forth in any applicable exemptive rule
under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of
the Exchange Act) that are requirements for the application of such exemptive
rule. To the extent permitted by applicable law, the Plan and Awards granted or
awarded under this Plan will be deemed amended to the extent necessary to
conform to such applicable exemptive rule.

      15.12 Government and Other Regulations. The obligation of the Company to
make payment of awards in Stock or otherwise will be subject to all applicable
laws, rules, and regulations, and to such approvals by government agencies as
may be required. The Company will be under no obligation to register pursuant to
the Securities Act any of the shares of Stock paid pursuant to the Plan. If the
shares paid pursuant to the Plan may in certain circumstances be exempt from
registration pursuant to the Securities Act, the Company may restrict the
transfer of such shares in such manner as it deems advisable to ensure the
availability of any such exemption.

      15.13 Governing Law. The Plan and all Award Agreements will be construed
in accordance with and governed by the laws of the State of Delaware.

                                       23
<PAGE>

                                    * * * * *

      I certify that the foregoing Plan was duly adopted by the board of
directors of WebSideStory, Inc. on July 14, 2004.

                                    * * * * *

      I certify that the foregoing Plan was approved by the stockholders of
WebSideStory, Inc. on July 21, 2004.

      Executed on this 21st day of July, 2004.

                                      /s/ Michael Christian
                                      ______________________________________
                                      Michael Christian, Corporate Secretary

                                       24
<PAGE>

                               WEBSIDESTORY, INC.

              STOCK OPTION GRANT NOTICE AND STOCK OPTION AGREEMENT
                   UNDER THE 2004 EQUITY INCENTIVE AWARD PLAN

      WebSideStory, Inc. (the "COMPANY"), pursuant to its 2004 Equity Incentive
Award Plan (the "PLAN"), hereby grants to the Optionee listed below
("OPTIONEE"), an option to purchase the number of shares of the Company's Stock
set forth below. This option is subject to all of the terms and conditions as
set forth herein and in the Plan and the attached Stock Option Agreement, each
of which are incorporated herein by reference. Unless otherwise defined herein,
the terms defined in the Plan shall have the same defined meanings in this Stock
Option Grant Notice and the attached Stock Option Agreement.

OPTIONEE:                                      _________________________________

GRANT DATE:                                    _________________________________

VESTING COMMENCEMENT DATE:                     _________________________________

EXERCISE PRICE PER SHARE:                      $____________ per share

TOTAL NUMBER OF SHARES GRANTED:                _________________________________

TOTAL EXERCISE PRICE:                          $____________

EXPIRATION DATE:                               _________________________________

TYPE OF OPTION:   [ ] Incentive Stock Option  [ ] Non-Qualified Stock Option

VESTING SCHEDULE: [To be specified in individual agreements]

      By his or her signature and the Company's signature below, Optionee agrees
to be bound by the terms and conditions of the Plan and the attached Stock
Option Agreement. Optionee has reviewed the attached Stock Option Agreement and
the Plan in their entirety, has had an opportunity to obtain the advice of
counsel prior to executing this option and fully understands all provisions of
this Stock Option Grant Notice, the attached Stock Option Agreement and the
Plan. Optionee hereby agrees to accept as binding, conclusive and final all
decisions or interpretations of the administrator of the Plan upon any questions
arising under the Plan or this option. Optionee further agrees to notify the
Company upon any change in the residence address indicated below.

WEBSIDESTORY, INC.:                      OPTIONEE:

By: ________________________________     By: ___________________________________
Print Name:                              Print Name:
Title:

Address: 10182 Telesis Court, 6th Floor  Address:
         San Diego, CA 92121

                               GRANT NOTICE PAGE 1

<PAGE>

                               WEBSIDESTORY, INC.
                        2004 EQUITY INCENTIVE AWARD PLAN

                             STOCK OPTION AGREEMENT

      Pursuant to the Stock Option Grant Notice ("GRANT NOTICE") to which this
Stock Option Agreement (this "AGREEMENT") is attached, WebSideStory, Inc. (the
"COMPANY") has granted to the Optionee an option under the Company's 2004 Equity
Incentive Award Plan (the "PLAN") to purchase the number of shares of Stock
indicated in the Grant Notice at the exercise price indicated in the Grant
Notice. Capitalized terms not specifically defined herein shall have the
meanings specified in the Plan. The Option is subject to the terms and
conditions of the Plan which are incorporated herein by reference.

                                    ARTICLE I
                                 GRANT OF OPTION

      1.1   Grant of Option. In consideration of the Optionee's agreement to
remain in the employ of or to continue to provide services to the Company or its
Subsidiaries and for other good and valuable consideration, effective as of the
Grant Date set forth in the Grant Notice (the "GRANT DATE"), the Company
irrevocably grants to the Optionee the Option to purchase any part or all of an
aggregate of the number of shares of Stock set forth in the Grant Notice, upon
the terms and conditions set forth in this Agreement. Unless designated as a
Non-Qualified Stock Option in the Grant Notice, the Option shall be an Incentive
Stock Option to the maximum extent permitted by law.

      1.2   Purchase Price. The purchase price per share of the shares of Stock
subject to the Option shall be as set forth in the Grant Notice, without
commission or other charge; provided, however, that if this Option is designated
as an Incentive Stock Option, the price per share of the shares subject to the
Option shall not be less than the greater of (i) 100% of the Fair Market Value
of a share of Stock on the Grant Date, or (ii) 110% of the Fair Market Value of
a share of Stock on the Grant Date in the case of an Optionee then owning
(within the meaning of Section 424(d) of the Code) more than 10% of the total
combined voting power of all classes of stock of the Company or any "subsidiary
corporation" of the Company or any "parent corporation" of the Company (each
within the meaning of Section 424 of the Code).

      1.3   Consideration to the Company. In consideration of the granting of
the Option by the Company, the Optionee agrees to render faithful and efficient
services to the Company or any Subsidiary, with such duties and responsibilities
as the Company shall from time to time prescribe. Nothing in the Plan or this
Agreement shall confer upon the Optionee any right to (a) continue in the employ
of the Company or any Subsidiary or shall interfere with or restrict in any way
the rights of the Company and its Subsidiaries, which are hereby expressly
reserved, to discharge the Optionee, if the Optionee is an Employee, or (b)
continue to provide services to the Company or any Subsidiary or shall interfere
with or restrict in any way the rights of the Company or its Subsidiaries, which
are hereby expressly reserved, to terminate the services of Optionee, if the
Optionee is a consultant, at any time for any reason whatsoever, with or without
cause, except to the extent expressly provided otherwise in a written agreement
between the Company and the Optionee.

                                   ARTICLE II
                            PERIOD OF EXERCISABILITY

      2.1   Commencement of Exercisability.

            (a)   Subject to Sections 2.3 and 4.11, the Option shall become
exercisable in such amounts and at such times as are set forth in the Grant
Notice.

            (b)   No portion of the Option which has not become exercisable at
Termination of Service (as defined below) shall thereafter become exercisable,
except as may be otherwise provided by the Committee or as set forth in a
written agreement between the Company and the Optionee.

                          STOCK OPTION AGREEMENT PAGE 1

<PAGE>

      2.2   Duration of Exercisability. The installments provided for in the
vesting schedule set forth in the Grant Notice are cumulative. Each such
installment which becomes exercisable pursuant to Section 3.1 shall remain
exercisable until it becomes unexercisable under Section 2.3.

      2.3   Expiration of Option. The Option may not be exercised to any extent
by anyone after the first to occur of the following events:

            (a)   The expiration of ten years from the Grant Date; or

            (b)   If this Option is designated as an Incentive Stock Option and
the Optionee owned (within the meaning of Section 424(d) of the Code), at the
time the Option was granted, more than 10% of the total combined voting power of
all classes of stock of the Company or any "subsidiary corporation" of the
Company or "parent corporation" of the Company (each within the meaning of
Section 424 of the Code), the expiration of five years from the date the Option
was granted; or

            (c)   The expiration of ninety days following the date of the
Optionee's Termination of Service, unless such Termination of Service occurs by
reason of the Optionee's death or Disability; or

            (d)   The expiration of one year following the date of the
Optionee's Termination of Service by reason of the Optionee's death or
Disability.

            (e)   For purposes of this Agreement, "TERMINATION OF SERVICE" means
the time when the service relationship (whether as an Employee, Director or a
consultant) between the Optionee and the Company or any Subsidiary is terminated
for any reason, with or without cause, including, but not by way of limitation,
a termination by resignation, discharge, death or Disability; but excluding (i)
a termination where there is a simultaneous reemployment or continuing
employment or consultancy of the Optionee by the Company or any Subsidiary or a
"parent corporation" of the Company (within the meaning of Section 424 of the
Code), (ii) at the discretion of the Committee, a termination which results in a
temporary severance of the employee-employer relationship, and (iii) at the
discretion of the Committee, a termination which is followed by the simultaneous
establishment of a consulting relationship by the Company or a Subsidiary with a
former Employee. The Committee, in its absolute discretion, shall determine the
effect of all matters and questions relating to Termination of Service for the
purposes of this Agreement, and all questions of whether particular leaves of
absence for Optionees who are Employees of the Company or any of its
Subsidiaries constitute Terminations of Service; provided, however, that, if
this Option is designated as an Incentive Stock Option, unless otherwise
determined by the Committee in its discretion, a leave of absence, change in
status from an Employee to an independent contractor or other change in the
employee-employer relationship shall constitute a Termination of Service if, and
to the extent that, such leave of absence, change in status or other change
interrupts employment for the purposes of Section 422(a)(2) of the Code and the
then applicable regulations and revenue rulings under said Section.
Notwithstanding any other provision of the Plan or this Agreement, the Company
or any Subsidiary has an absolute and unrestricted right to terminate the
Optionee's employment and/or consultancy at any time for any reason whatsoever,
with or without cause, except to the extent expressly provided otherwise in a
written agreement between the Company and the Optionee.

      2.4   Special Tax Consequences. The Optionee acknowledges that, to the
extent that the aggregate Fair Market Value of stock with respect to which
Incentive Stock Options (but without regard to Section 422(d) of the Code),
including the Option, are exercisable for the first time by the Optionee during
any calendar year (under the Plan and all other incentive stock option plans of
the Company, any "subsidiary corporation" of the Company and any "parent
corporation" of the Company (each within the meaning of Section 424 of the
Code)) exceeds $100,000, the Option and such other options shall be treated as
not qualifying under Section 422 of the Code but rather shall be taxed as
Non-Qualified Stock Options. The Optionee further acknowledges that the rule set
forth in the preceding sentence shall be applied by taking options into account
in the order in which they were granted. For purposes of these rules, the Fair
Market Value of Stock shall be determined as of the time the option with respect
to such Stock is granted.

                          STOCK OPTION AGREEMENT PAGE 2

<PAGE>

                                   ARTICLE III
                               EXERCISE OF OPTION

      3.1   Person Eligible to Exercise. Except as provided in Sections 4.2(b)
and 4.2(c), during the lifetime of the Optionee, only the Optionee may exercise
the Option or any portion thereof. After the death of the Optionee, any
exercisable portion of the Option may, prior to the time when the Option becomes
unexercisable under Section 2.3, be exercised by the Optionee's beneficiary
designated in accordance with Section 10.4 of the Plan. If no beneficiary has
been designated or survives the Optionee, the Option may be exercised by the
person entitled to such exercise pursuant to the Optionee's will or the laws of
descent and distribution.

      3.2   Partial Exercise. Any exercisable portion of the Option or the
entire Option, if then wholly exercisable, may be exercised in whole or in part
at any time prior to the time when the Option or portion thereof becomes
unexercisable under Section 2.3.

      3.3   Manner of Exercise. The Option, or any exercisable portion thereof,
may be exercised solely by delivery to the Secretary of the Company or the
Secretary's office of all of the following prior to the time when the Option or
such portion thereof becomes unexercisable under Section 2.3:

            (a)   An exercise notice in writing signed by the Optionee or the
other person then entitled to exercise the Option or portion thereof, stating
that the Option or portion thereof is thereby exercised, such notice complying
with all applicable rules established by the Committee. Such notice shall be
substantially in the form attached as Exhibit A (or such other form as is
prescribed by the Committee) (the "EXERCISE NOTICE"); and

            (b)   (i)   Full payment (in cash or by check) for the shares with
      respect to which the Option or portion thereof is exercised, to the extent
      permitted under applicable laws; or

                  (ii)  With the consent of the Committee, such payment may be
      made, in whole or in part, through the delivery of shares of Stock which
      have been owned by the Optionee for at least six months, duly endorsed for
      transfer to the Company with a Fair Market Value on the date of delivery
      equal to the aggregate exercise price of the Option or exercised portion
      thereof; or

                  (iii) To the extent permitted under applicable laws, through
      the delivery of a notice that the Optionee has placed a market sell order
      with a broker with respect to shares of Stock then issuable upon exercise
      of the Option, and that the broker has been directed to pay a sufficient
      portion of the net proceeds of the sale to the Company in satisfaction of
      the Option exercise price, provided, that payment of such proceeds is made
      to the Company upon settlement of such sale; or

                  (iv)  With the consent of the Committee, any combination of
      the consideration provided in the foregoing subparagraphs (i), (ii) and
      (iii); and

            (c)   A bona fide written representation and agreement, in such form
as is prescribed by the Committee, signed by the Optionee or other person then
entitled to exercise such Option or portion thereof, stating that the shares of
Stock are being acquired for the Optionee's own account, for investment and
without any present intention of distributing or reselling said shares or any of
them except as may be permitted under the Securities Act and then applicable
rules and regulations thereunder, and that the Optionee or other person then
entitled to exercise such Option or portion thereof will indemnify the Company
against and hold it free and harmless from any loss, damage, expense or
liability resulting to the Company if any sale or distribution of the shares by
such person is contrary to the representation and agreement referred to above.
The Committee may, in its absolute discretion, take whatever additional actions
it deems appropriate to ensure the observance and performance of such
representation and agreement and to effect compliance with the Securities Act
and any other federal or state securities laws or regulations. Without limiting
the generality of the foregoing, the Committee may require an opinion of counsel
acceptable to it to the effect that any subsequent transfer of shares acquired
on an Option exercise does not violate the Securities Act, and may issue
stop-transfer orders covering such shares. Share certificates evidencing Stock
issued on exercise of the Option shall bear an appropriate legend referring to
the provisions of this subsection (c) and the agreements herein. The written
representation and agreement referred to in the first sentence of this

                          STOCK OPTION AGREEMENT PAGE 3

<PAGE>

subsection (c) shall, however, not be required if the shares to be issued
pursuant to such exercise have been registered under the Securities Act, and
such registration is then effective in respect of such shares; and

            (d)   Full payment to the Company (or other employer corporation) of
all amounts which, under federal, state or local tax law, it is required to
withhold upon exercise of the Option. With the consent of the Committee, (i)
shares of Stock owned by the Optionee for at least six months duly endorsed for
transfer or (ii) shares of Stock issuable to the Optionee upon exercise of the
Option, having a Fair Market Value at the date of Option exercise equal to the
statutory minimum sums required to be withheld, may be used to make all or part
of such payment; and

            (e)   In the event the Option or portion thereof shall be exercised
pursuant to Section 3.1 by any person or persons other than the Optionee,
appropriate proof of the right of such person or persons to exercise the Option.

      3.4   Conditions to Issuance of Stock Certificates. The shares of Stock
deliverable upon the exercise of the Option, or any portion thereof, may be
either previously authorized but unissued shares or issued shares which have
then been reacquired by the Company. Such shares shall be fully paid and
nonassessable. The Company shall not be required to issue or deliver any shares
of Stock purchased upon the exercise of the Option or portion thereof prior to
fulfillment of all of the following conditions:

            (a)   The admission of such shares to listing on all stock exchanges
on which such Stock is then listed; and

            (b)   The completion of any registration or other qualification of
such shares under any state or federal law or under rulings or regulations of
the Securities and Exchange Commission or of any other governmental regulatory
body which the Committee shall, in its absolute discretion, deem necessary or
advisable; and

            (c)   The obtaining of any approval or other clearance from any
state or federal governmental agency which the Committee shall, in its absolute
discretion, determine to be necessary or advisable; and

            (d)   The receipt by the Company of full payment for such shares,
including payment of all amounts which, under federal, state or local tax law,
the Company (or other employer corporation) is required to withhold upon
exercise of the Option; and

            (e)   The lapse of such reasonable period of time following the
exercise of the Option as the Committee may from time to time establish for
reasons of administrative convenience.

      3.5   Rights as Stockholder. The holder of the Option shall not be, nor
have any of the rights or privileges of, a stockholder of the Company in respect
of any shares purchasable upon the exercise of any part of the Option unless and
until such shares shall have been issued by the Company to such holder.
Notwithstanding any other provision of the Plan or this Agreement, unless
otherwise determined by the Committee or required by applicable law, rule or
regulation, the Company shall not deliver to the Optionee certificates
evidencing shares of Stock issued in connection with the exercise of this Option
and instead such shares of Stock will be recorded in the books of the Company
(or, as applicable, its transfer agent or stock plan administrator).

                                   ARTICLE IV
                                OTHER PROVISIONS

      4.1   Administration. The Committee shall have the power to interpret the
Plan and this Agreement and to adopt such rules for the administration,
interpretation and application of the Plan as are consistent therewith and to
interpret, amend or revoke any such rules. All actions taken and all
interpretations and determinations made by the Committee in good faith shall be
final and binding upon the Optionee, the Company and all other interested
persons. No member of the Committee shall be personally liable for any action,
determination or interpretation made in good faith with respect to the Plan,
this Agreement or the Option. In its absolute discretion, the Board may

                          STOCK OPTION AGREEMENT PAGE 4

<PAGE>

at any time and from time to time exercise any and all rights and duties of the
Committee under the Plan and this Agreement.

      4.2   Option Not Transferable.

            (a)   Subject to Section 4.2(b), the Option may not be sold,
pledged, assigned or transferred in any manner other than by will or the laws of
descent and distribution unless and until the Option has been exercised, or the
shares underlying such Option have been issued, and all restrictions applicable
to such shares have lapsed. Neither the Option nor any interest or right therein
shall be liable for the debts, contracts or engagements of the Optionee or his
or her successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect, except to the extent that such disposition is
permitted by the preceding sentence.

            (b)   Notwithstanding any other provision in this Agreement, with
the consent of the Committee and to the extent the Option is not intended to
qualify as an Incentive Stock Option, the Option may be transferred to,
exercised by and paid to certain persons or entities related to the Optionee,
including but not limited to members of the Optionee's family, charitable
institutes or trusts or other entities whose beneficiaries or beneficial owners
are members of the Optionee's family or to such other persons or entities as may
be expressly approved by the Committee (each a "PERMITTED TRANSFEREE"), pursuant
to such conditions and procedures as the Committee may require. Any permitted
transfer will be subject to the condition that the Committee receive evidence
satisfactory to it that the transfer is being made for estate and/or tax
planning purposes (or to a "blind trust" in connection with the Optionee's
Termination of Service with the Company or a Subsidiary to assume a position
with a governmental, charitable, educational or similar non-profit institution)
and on a basis consistent with the Company's lawful issue of securities.

            (c)   Unless transferred to a Permitted Transferee in accordance
with Section 4.2(b), during the lifetime of the Optionee, only the Optionee may
exercise the Option or any portion thereof. Subject to such conditions and
procedures as the Committee may require, a Permitted Transferee may exercise the
Option or any portion thereof during the Optionee's lifetime. After the death of
the Optionee, any exercisable portion of the Option may, prior to the time when
the Option becomes unexercisable under Section 2.3, be exercised by the
Optionee's beneficiary designated in accordance with Section 10.4 of the Plan.
If no beneficiary has been designated or survives the Optionee, the Option may
be exercised by the person entitled to such exercise pursuant to the Optionee's
will or the laws of descent and distribution.

      4.3   Restrictive Legends and Stop-Transfer Orders.

            (a)   The share certificate or certificates evidencing the shares of
Stock purchased hereunder shall be endorsed with any legends that may be
required by state or federal securities laws.

            (b)   The Optionee agrees that, in order to ensure compliance with
the restrictions referred to herein, the Company may issue appropriate "stop
transfer" instructions to its transfer agent, if any, and that, if the Company
transfers its own securities, it may make appropriate notations to the same
effect in its own records.

            (c)   The Company shall not be required (i) to transfer on its books
any shares of Stock that have been sold or otherwise transferred in violation of
any of the provisions of this Agreement, or (ii) to treat as owner of such
shares of Stock or to accord the right to vote or pay dividends to any purchaser
or other transferee to whom such shares shall have been so transferred.

      4.4   Shares to Be Reserved. The Company shall at all times during the
term of the Option reserve and keep available such number of shares of Stock as
will be sufficient to satisfy the requirements of this Agreement.

                          STOCK OPTION AGREEMENT PAGE 5

<PAGE>

      4.5   Notices. Any notice to be given under the terms of this Agreement to
the Company shall be addressed to the Company in care of the Secretary of the
Company, and any notice to be given to the Optionee shall be addressed to the
Optionee at the address given beneath the Optionee's signature on the Grant
Notice. By a notice given pursuant to this Section 4.5, either party may
hereafter designate a different address for notices to be given to that party.
Any notice which is required to be given to the Optionee shall, if the Optionee
is then deceased, be given to the Optionee's designated beneficiary if any, or
the person otherwise entitled to exercise his or her Option pursuant to Section
3.1 by written notice under this Section 4.5. Any notice shall be deemed duly
given when sent via email or when sent by certified mail (return receipt
requested) and deposited in a post office or branch post office regularly
maintained by the United States Postal Service.

      4.6   Titles. Titles are provided herein for convenience only and are not
to serve as a basis for interpretation or construction of this Agreement.

      4.7   Notification of Disposition. If this Option is designated as an
Incentive Stock Option, the Optionee shall give prompt notice to the Company of
any disposition or other transfer of any shares of Stock acquired under this
Agreement if such disposition or transfer is made (a) within two years from the
Grant Date with respect to such shares or (b) within one year after the transfer
of such shares to him. Such notice shall specify the date of such disposition or
other transfer and the amount realized, in cash, other property, assumption of
indebtedness or other consideration, by the Optionee in such disposition or
other transfer.

      4.8   Governing Law; Severability. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware excluding that
body of law pertaining to conflicts of law. Should any provision of this
Agreement be determined by a court of law to be illegal or unenforceable, the
other provisions shall nevertheless remain effective and shall remain
enforceable.

      4.9   Conformity to Securities Laws. The Optionee acknowledges that the
Plan is intended to conform to the extent necessary with all provisions of the
Securities Act and the Exchange Act and any and all regulations and rules
promulgated by the Securities and Exchange Commission thereunder, and state
securities laws and regulations. Notwithstanding anything herein to the
contrary, the Plan shall be administered, and the Option is granted and may be
exercised, only in such a manner as to conform to such laws, rules and
regulations. To the extent permitted by applicable law, the Plan and this
Agreement shall be deemed amended to the extent necessary to conform to such
laws, rules and regulations.

      4.10  Amendments. This Agreement may not be modified, amended or
terminated except by an instrument in writing, signed by the Optionee or such
other person as may be permitted to exercise the Option pursuant to Section 3.1
and by a duly authorized representative of the Company.

      4.11  Successors and Assigns. The Company may assign any of its rights
under this Agreement to single or multiple assignees, and this Agreement shall
inure to the benefit of the successors and assigns of the Company. Subject to
the restrictions on transfer herein set forth, this Agreement shall be binding
upon the Optionee and his or her heirs, executors, administrators, successors
and assigns.

                          STOCK OPTION AGREEMENT PAGE 6

<PAGE>

                                    EXHIBIT A

                   TO GRANT NOTICE AND STOCK OPTION AGREEMENT

                             FORM OF EXERCISE NOTICE

      Effective as of today, ___________, _____, the undersigned ("OPTIONEE")
hereby elects to exercise the Optionee's option to purchase _________ shares of
the common stock (the "SHARES") of WebSideStory, Inc. (the "COMPANY") under and
pursuant to the WebSideStory, Inc. 2004 Equity Incentive Award Plan (the "PLAN")
and the Stock Option Grant Notice and Stock Option Agreement dated
_____________, _____ (the "OPTION AGREEMENT"). Capitalized terms not
specifically defined herein shall have the meanings specified in the Option
Agreement.

GRANT DATE:                              _______________________________________

NUMBER OF SHARES AS TO WHICH OPTION IS
EXERCISED:                               _______________________________________

EXERCISE PRICE PER SHARE:                $____________

TOTAL EXERCISE PRICE:                    $____________

CERTIFICATE TO BE ISSUED IN NAME OF:     _______________________________________

CASH PAYMENT DELIVERED HEREWITH:         $____________ (Representing the full
                                         Exercise Price for the Shares, as
                                         well as any applicable withholding
                                         tax)

TYPE OF OPTION: [ ] Incentive Stock Option  [ ] Non-Qualified Stock Option

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

      2.    Rights as Stockholder. Until the Shares are issued (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company), no right to vote or receive dividends or any
other rights as a stockholder shall exist with respect to Shares subject to the
Option, notwithstanding the 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 the
Shares are issued, except as provided in Article 11 of the Plan.

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

      4.    Binding Effect. The Optionee agrees that the Shares are being
acquired in accordance with and subject to the terms, provisions and conditions
of the Plan and the Option Agreement, to all of which the Optionee hereby
expressly assents. This Agreement, the Plan and the Option Agreement constitute
the entire agreement of the parties and supersede in their entirety all prior
undertakings and agreements of the Company and the Optionee with respect to the
subject matter hereof.

SUBMITTED BY:                            ACCEPTED BY:

___________________________________      WEBSIDESTORY, INC.
Optionee

                                         By: ___________________________________
Address: __________________________      Name: _________________________________
         __________________________      Its: __________________________________

                             EXERCISE NOTICE PAGE 1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00137-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00137-of-00352.parquet"}]]