Document:

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                                                                   EXHIBIT 10.45

                                 March 28, 2000

VIA FEDERAL EXPRESS

Joel Zettl
Vice President, Finance
The Lightspan Partnership, Inc.
10140 Campus Point Drive
San Diego, CA 92121

       RE:    LEASE COMMITMENT BETWEEN PENTECH FINANCIAL SERVICES, INC. AND THE
              LIGHTSPAN PARTNERSHIP, INC. DATED JUNE 25, 1999

Dear Mr. Zettl:

       Under the terms of the financing commitment for $1,000,000 referred to
above, delivery and acceptance of all equipment was to occur no later than March
30, 1999. To date, Pentech has funded lease schedules for The Lightspan
Partnership totaling $264,198.00.

       In order to allow The Lightspan Partnership to draw down the balance of
the commitment of $735,802, Pentech Financial Services, Inc. is agreeable to
extending the date for delivery and acceptance to and including September 30,
2000, subject to the terms and conditions of the original proposal dated April
14, 1999, upon payment by The Lightspan Partnership of our standard extension
fee of .75% of the remaining line or $5,518.52, plus outstanding late charges of
$949.14, for a total of $6,467.66.

       If The Lightspan Partnership is agreeable to this extension of the
delivery and acceptance date, please have the appropriate corporate officer sign
this letter where indicated below and return the letter together with The
Lightspan Partnership's check for the extension fee. This letter when fully
executed will serve as an addendum to the original proposal of April 14, 1999.

       If you have any questions on any of the foregoing, please give me a call.
Thank you.

                                        Very truly yours,

                                        PENTECH FINANCIAL SERVICES, INC.

                                        Daphne Wells
                                        General Counsel
/dw

ACCEPTED as of the 29th day of March, 2000.

                                        THE LIGHTSPAN PARTNERSHIP, INC.

                                        By /s/ JOEL ZETTL
                                          --------------------------------------
                                        Name Joel Zettl
                                            ------------------------------------
                                        Its VP -- Controller
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                                                                   EXHIBIT 10(l)

                              AMENDED AND RESTATED
                                 ASHWORTH, INC.
                           2000 EQUITY INCENTIVE PLAN

                                    ARTICLE I
                                 PURPOSE OF PLAN

                  The Company has adopted this Plan to promote the interests of
the Company and its stockholders by using investment interests in the Company to
attract, retain and motivate its management and other persons, to encourage and
reward their contributions to the performance of the Company, and to align their
interests with the interests of the Company's stockholders. Capitalized terms
not otherwise defined herein have the meanings ascribed to them in Article IX.

                                   ARTICLE II
                         EFFECTIVE DATE AND TERM OF PLAN

2.1               TERM OF PLAN.

                  This Plan became effective as of the Effective Date and will
continue in effect until the Expiration Date, at which time this Plan will
automatically terminate.

2.2               EFFECT ON AWARDS.

                  Awards may be granted only during the Plan Term, but each
Award granted during the Plan Term will remain in effect after the Expiration
Date until such Award has been exercised, terminated or expired in accordance
with its terms and the terms of this Plan.

2.3               STOCKHOLDER APPROVAL.

                  This Plan must be approved by the Company's stockholders
within 12 months before or after the Effective Date.  The effectiveness of any
Awards granted prior to such stockholder approval will be subject to such
stockholder approval and rescinded if stockholder approval is not obtained.

                                   ARTICLE III
                             SHARES SUBJECT TO PLAN

3.1               NUMBER OF SHARES.

                  The maximum number of shares of Common Stock that may be
issued pursuant to Awards under this Plan (including previous versions hereof or
other plans that are replaced or restated by this Plan) is 1,900,000, subject to
adjustment as set forth in Section 3.4.

3.2               SOURCE OF SHARES.

                  The Common Stock to be issued under this Plan will be made
available, at the discretion of the Administrator, either from authorized but
unissued shares of Common Stock or from previously issued shares of Common Stock
reacquired by the Company.

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3.3               AVAILABILITY OF UNUSED SHARES.

                  Shares of Common Stock subject to unexercised portions of any
Award that expire, terminate or are canceled, and shares of Common Stock issued
pursuant to an Award that are reacquired by the Company pursuant to the terms of
the Award under which such shares were issued, will again become available for
the grant of further Awards under this Plan as part of the shares available
under Section 3.1. In addition, shares of Common Stock subject to an Award that
are delivered to or retained by the Company upon exercise to cover cashless
exercise or tax withholding, and any shares of Common Stock underlying an Award
that are not issued because the Award is settled in cash, will be available for
grant of further Awards under this Plan as part of the shares available under
Section 3.1.

3.4               ADJUSTMENT PROVISIONS.

                        (a) Adjustments. If the Company consummates any
Reorganization in which holders of shares of Common Stock are entitled to
receive in respect of such shares any additional shares or new or different
shares or securities, cash or other consideration (including, without
limitation, a different number of shares of Common Stock), or if the outstanding
shares of Common Stock are increased, decreased or exchanged for a different
number or kind of shares or other securities through merger, consolidation, sale
or exchange of assets of the Company, reorganization, recapitalization,
reclassification, combination, stock dividend, stock split, reverse stock split,
spin-off, or similar transaction then, subject to Section 8.1, an appropriate
and proportionate adjustment shall be made by the Administrator in its
discretion in: (1) the maximum number and kind of shares subject to this Plan as
provided in Section 3.1; (2) the number and kind of shares or other securities
subject to then outstanding Awards; and/or (3) the price for each share or other
unit of any other securities subject to, or measurement criteria applicable to,
then outstanding Awards.

                        (b) No Fractional Interests. No fractional interests
will be issued under the Plan resulting from any adjustments.

                        (c) Adjustments Related to Company Stock. To the extent
any adjustments relate to stock or securities of the Company, such adjustments
will be made by the Administrator, whose determination in that respect will be
final, binding and conclusive.

                        (d) Right to Make Adjustment. The grant of an Award will
not affect in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge or to consolidate or to dissolve, liquidate or sell, or
transfer all or any part of its business or assets.

                        (e) Limitations. No adjustment to the terms of an
Incentive Stock Option may be made unless such adjustment either: (i) would not
cause the Option to lose its status as an Incentive Stock Option; or (ii) is
agreed to in writing by the Administrator and the Recipient.

3.5               RESERVATION OF SHARES.

                  The Company will at all times reserve and keep available
shares of Common Stock equaling at least the total number of shares of Common
Stock issuable pursuant to all outstanding Awards.

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                                   ARTICLE IV
                             ADMINISTRATION OF PLAN

4.1               ADMINISTRATOR.

                        (a) Plan Administration. This Plan will be administered
by the Board and may also be administered by a Committee of the Board appointed
pursuant to Section 4.1(b).

                        (b) Administration by Committee. The Board in its sole
discretion may from time to time appoint a Committee of not less than two (2)
Board members with authority to administer this Plan in whole or part and,
subject to applicable law, to exercise any or all of the powers, authority and
discretion of the Board under this Plan. The Board may from time to time
increase or decrease (but not below two (2)) the number of members of the
Committee, remove from membership on the Committee all or any portion of its
members, and/or appoint such person or persons as it desires to fill any vacancy
existing on the Committee, whether caused by removal, resignation or otherwise.
The Board may disband the Committee at any time.

4.2               AUTHORITY OF ADMINISTRATOR.

                        (a) Authority to Interpret Plan. Subject to the express
provisions of this Plan, the Administrator will have the power to implement,
interpret and construe this Plan and any Awards and Award Documents or other
documents defining the rights and obligations of the Company and Recipients
hereunder and thereunder, to determine all questions arising hereunder and
thereunder, and to adopt and amend such rules and regulations for the
administration hereof and thereof as it may deem desirable. The interpretation
and construction by the Administrator of any provisions of this Plan or of any
Award or Award Document, and any action taken by, or inaction of, the
Administrator relating to this Plan or any Award or Award Document, will be
within the discretion of the Administrator and will be conclusive and binding
upon all persons. Subject only to compliance with the express provisions hereof,
the Administrator may act in its discretion in matters related to this Plan and
any and all Awards and Award Documents.

                        (b) Authority to Grant Awards. Subject to the express
provisions of this Plan, the Administrator may from time to time in its
discretion select the Eligible Persons to whom, and the time or times at which,
Awards will be granted or sold, the nature of each Award, the number of shares
of Common Stock or the number of rights that make up or underlie each Award, the
exercise price and period (if applicable) for the exercise of each Award, and
such other terms and conditions applicable to each individual Award as the
Administrator may determine. Any and all terms and conditions of Awards may be
established by the Administrator without regard to existing Awards or other
grants and without incurring any obligation of the Company in respect of
subsequent Awards. The Administrator may grant at any time new Awards to an
Eligible Person who has previously received Awards or other grants (including
other stock options) regardless of the status of such other Awards or grants.
The Administrator may grant Awards singly or in combination or in tandem with
other Awards as it determines in its discretion.

                        (c) Procedures. Subject to the Company's charter or
bylaws or any Board resolution conferring authority on the Committee, any action
of the Administrator with respect to the administration of this Plan must be
taken pursuant to a majority vote of the authorized number of members of the
Administrator or by the unanimous written consent of its members; provided,
however, that (i) if the Administrator is the Committee and consists of two (2)
members, then actions of the Administrator must be unanimous, and (ii) actions
taken by the Board will be valid if approved in accordance with applicable law.

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4.3               NO LIABILITY.

                  No member of the Board or the Committee or any designee
thereof will be liable for any action or inaction with respect to this Plan or
any Award or any transaction arising under this Plan or any Award except in
circumstances constituting bad faith of such member.

4.4               AMENDMENTS.

                        (a) Plan Amendments. The Administrator may at any time
and from time to time in its discretion, insofar as permitted by applicable law,
rule or regulation and subject to Section 4.4(c), suspend or discontinue this
Plan or revise or amend it in any respect whatsoever, and this Plan as so
revised or amended will govern all Awards, including those granted before such
revision or amendment. Without limiting the generality of the foregoing, the
Administrator is authorized to amend this Plan to comply with or take advantage
of amendments to applicable laws, rules or regulations, including the Securities
Act, the Exchange Act, the IRC, or the rules of any exchange or market system
upon which the Common Stock is listed or trades, or any rules or regulations
promulgated thereunder. No stockholder approval of any amendment or revision
will be required unless such approval is required by applicable law, rule or
regulation.

                        (b) Award Amendments. The Administrator may at any time
and from time to time in its discretion, but subject to Section 4.4(c) and
compliance with applicable statutory or administrative requirements, accelerate
or extend the vesting or exercise period of any Award as a whole or in part, and
make such other modifications in the terms and conditions of an Award as it
deems advisable. Notwithstanding the foregoing and except as permitted in
Section 3.4, the Administrator may not amend the price for each share or other
unit of any other securities subject to, or measurement criteria applicable to,
then outstanding Awards (such amendment a "Repricing") without receiving prior
approval of the Company's stockholders. Similarly, the Administrator may not
effectively Reprice an outstanding Award by replacing an outstanding Award with
new Award grant.

                        (c) Limitation. Except as otherwise provided in this
Plan or in the applicable Award Document, no amendment, revision, suspension or
termination of this Plan or an outstanding Award that would cause an Incentive
Stock Option to cease to qualify as such or that would alter, impair or diminish
in any material respect any rights or obligations under any Award theretofore
granted under this Plan may be effected without the written consent of the
Recipient to whom such Award was granted.

4.5               OTHER COMPENSATION PLANS.

                  This Plan supersedes and replaces all stock option plans of
the Company in effect as of the Effective Date, but the adoption of this Plan
will not affect any other stock option, incentive or other compensation plans in
effect from time to time for the Company, and this Plan will not preclude the
Company from establishing any other forms of incentive or other compensation for
employees, directors, advisors or consultants of the Company, whether or not
approved by stockholders. Notwithstanding the fact that this Plan supersedes and
replaces all stock option plans of the Company in effect as of the Effective
Date, this plan does not affect in any way, any outstanding award grants made
under such other plans prior to the Effective Date.

4.6               PLAN BINDING ON SUCCESSORS.

                  This Plan will be binding upon the successors and assigns of
the Company.

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4.7               REFERENCES TO SUCCESSOR STATUTES, REGULATIONS AND RULES.

                  Any reference in this Plan to a particular statute, regulation
or rule will also refer to any successor provision of such statute, regulation
or rule.

4.8               INVALID PROVISIONS.

                  In the event that any provision of this Plan is found to be
invalid or otherwise unenforceable under any applicable law, such invalidity or
unenforceability is not to be construed as rendering any other provisions
contained herein invalid or unenforceable, and all such other provisions are to
be given full force and effect to the same extent as though the invalid and
unenforceable provision were not contained herein.

4.9               GOVERNING LAW.

                  This Agreement will be governed by and interpreted in
accordance with the internal laws of the State of Delaware, without giving
effect to the principles of the conflicts of laws thereof.

4.10              INTERPRETATION.

                  Headings herein are for convenience of reference only, do not
constitute a part of this Plan, and will not affect the meaning or
interpretation of this Plan.  References herein to Sections or Articles are
references to the referenced Section or Article hereof, unless otherwise
specified.

                                    ARTICLE V
                            GENERAL AWARD PROVISIONS

5.1               PARTICIPATION IN PLAN.

                        (a) Eligibility to Receive Awards. A person is eligible
to receive grants of Awards if, at the time of the grant of the Award, such
person is an Eligible Person or has received an offer of employment from the
Company, provided that Awards granted to a person who has received an offer of
employment will terminate and be forfeited without consideration if the
employment offer is not accepted within such time as may be specified by the
Company. Status as an Eligible Person will not be construed as a commitment that
any Award will be granted under this Plan to an Eligible Person or to Eligible
Persons generally.

                        (b) Eligibility to Receive Incentive Stock Options.
Incentive Stock Options may be granted only to Eligible Persons meeting the
employment requirements of Section 422 of the IRC.

                        (c) Awards to Foreign Nationals. Notwithstanding
anything to the contrary herein, the Administrator may, in order to fulfill the
purposes of this Plan, modify grants of Awards to Recipients who are foreign
nationals or employed outside of the United States to recognize differences in
applicable law, tax policy or local custom.

5.2               AWARD DOCUMENTS.

Each Award must be evidenced by an agreement duly executed on behalf of the
Company and by the Recipient or, in the Administrator's discretion, a confirming
memorandum issued by the Company to the Recipient, setting forth such terms and
conditions applicable to the Award as the Administrator may in its discretion
determine. Awards will not be deemed made or binding upon the Company, and

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Recipients will have no rights thereto, until such an agreement is entered into
between the Company and the Recipient or such a memorandum is delivered by the
Company to the Recipient, but an Award may have an effective date prior to the
date of such an agreement or memorandum. Award Documents may be (but need not
be) identical and must comply with and be subject to the terms and conditions of
this Plan, a copy of which will be provided to each Recipient and incorporated
by reference into each Award Document. Any Award Document may contain such other
terms, provisions and conditions not inconsistent with this Plan as may be
determined by the Administrator. In case of any conflict between this Plan and
any Award Document, this Plan shall control.

5.3               PAYMENT FOR AWARDS.

                        (a) Payment of Exercise Price. The exercise price or
other payment for an Award is payable upon the exercise of a Stock Option or
upon other purchase of shares pursuant to an Award granted hereunder by delivery
of legal tender of the United States or payment of such other consideration as
the Administrator may from time to time deem acceptable in any particular
instance; provided, however, that the Administrator may, in the exercise of its
discretion, allow exercise of an Award in a broker-assisted or similar
transaction in which the exercise price is not received by the Company until
promptly after exercise.

                        (b) Company Assistance. The Company may assist any
person to whom an Award is granted (including, without limitation, any officer
or director of the Company) in the payment of the purchase price or other
amounts payable in connection with the receipt or exercise of that Award, by
lending such amounts to such person on such terms and at such rates of interest
and upon such security (if any) as may be consistent with applicable law and
approved by the Administrator. In case of such a loan, the Administrator may
require that the exercise be followed by a prompt sale of some or all of the
underlying shares and that a portion of the sale proceeds be dedicated to full
payment of the exercise price and amounts required pursuant to Section 5.10.

                        (c) Cashless Exercise. If permitted in any case by the
Administrator in its discretion, the exercise price for Awards may be paid by
capital stock of the Company delivered in transfer to the Company by or on
behalf of the person exercising the Award and duly endorsed in blank or
accompanied by stock powers duly endorsed in blank, with signatures guaranteed
in accordance with the Exchange Act if required by the Administrator; or
retained by the Company from the stock otherwise issuable upon exercise or
surrender of vested and/or exercisable Awards or other equity awards previously
granted to the Recipient and being exercised (if applicable) (in either case
valued at Fair Market Value as of the exercise date); or such other
consideration as the Administrator may from time to time in the exercise of its
discretion deem acceptable in any particular instance.

                        (d) No Precedent. Recipients will have no rights to the
assistance described in Section 5.3(b) or the exercise techniques described in
Section 5.3(c), and the Company may offer or permit such assistance or
techniques on an ad hoc basis to any Recipient without incurring any obligation
to offer or permit such assistance or techniques on other occasions or to other
Recipients.

5.4               NO EMPLOYMENT RIGHTS.

                        Nothing contained in this Plan (or in Award Documents or
in any other documents related to this Plan or to Awards) will confer upon any
Eligible Person or Recipient any right to continue in the employ of or
engagement by the Company or any Affiliated Entity or constitute any contract or
agreement of employment or engagement, or interfere in any way with the right of
the Company or any Affiliated Entity to reduce such person's compensation or
other benefits or to terminate the employment or engagement of such Eligible
Person or Recipient, with or without cause. Except as expressly provided in

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this Plan or in any statement evidencing the grant of an Award, the Company has
the right to deal with each Recipient in the same manner as if this Plan and any
such statement evidencing the grant of an Award did not exist, including,
without limitation, with respect to all matters related to the hiring,
discharge, compensation and conditions of the employment or engagement of the
Recipient. Unless otherwise set forth in a written agreement binding upon the
Company or an Affiliated Entity, all employees of the Company or an Affiliated
Entity are "at will" employees whose employment may be terminated by the Company
or the Affiliated Entity at any time for any reason or no reason, without
payment or penalty of any kind. Any question(s) as to whether and when there has
been a termination of a Recipient's employment or engagement, the reason (if
any) for such termination, and/or the consequences thereof under the terms of
this Plan or any statement evidencing the grant of an Award pursuant to this
Plan will be determined by the Administrator and the Administrator's
determination thereof will be final and binding.

5.5               RESTRICTIONS UNDER APPLICABLE LAWS AND REGULATIONS.

                        (a) Government Approvals. All Awards will be subject to
the requirement that, if at any time the Company determines, in its discretion,
that the listing, registration or qualification of the securities subject to
Awards granted under this Plan upon any securities exchange or interdealer
quotation system or under any federal, state or foreign law, or the consent or
approval of any government or regulatory body, is necessary or desirable as a
condition of, or in connection with, the granting of such an Award or the
issuance, if any, or purchase of shares in connection therewith, such Award may
not be exercised as a whole or in part unless and until such listing,
registration, qualification, consent or approval has been effected or obtained
free of any conditions not acceptable to the Company. During the term of this
Plan, the Company will use its reasonable efforts to seek to obtain from the
appropriate governmental and regulatory agencies any requisite qualifications,
consents, approvals or authorizations in order to issue and sell such number of
shares of its Common Stock as is sufficient to satisfy the requirements of this
Plan. The inability of the Company to obtain any such qualifications, consents,
approvals or authorizations will relieve the Company of any liability in respect
of the nonissuance or sale of such stock as to which such qualifications,
consents, approvals or authorizations pertain.

                        (b) No Registration Obligation; Recipient
Representations. The Company will be under no obligation to register or qualify
the issuance of Awards or underlying securities under the Securities Act or
applicable state securities laws. Unless the issuance of Awards and underlying
securities have been registered under the Securities Act and qualified or
registered under applicable state securities laws, the Company shall be under no
obligation to issue any Awards or underlying securities unless the Awards and
underlying securities may be issued pursuant to applicable exemptions from such
registration or qualification requirements. In connection with any such exempt
issuance, the Administrator may require the Recipient to provide a written
representation and undertaking to the Company, satisfactory in form and scope to
the Company, that such Recipient is acquiring such Awards and underlying
securities for such Recipient's own account as an investment and not with a view
to, or for sale in connection with, the distribution of any such securities, and
that such person will make no transfer of the same except in compliance with any
rules and regulations in force at the time of such transfer under the Securities
Act and other applicable law, and that if securities are issued without
registration, a legend to this effect (together with any other legends deemed
appropriate by the Administrator) may be endorsed upon the securities so issued,
and to the effect of any additional representations that are appropriate in
light of applicable securities laws and rules. The Company may also order its
transfer agent to stop transfers of such shares. The Administrator may also
require the Recipient to provide the Company such information and other
documents as the Administrator may request in order to satisfy the Administrator
as to the investment sophistication and experience of the Recipient and as to
any other conditions for compliance with any such exemptions from registration
or qualification.

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5.6               ADDITIONAL CONDITIONS.

                  Any Award may be subject to such provisions (whether or not
applicable to any other Award or Recipient) as the Administrator deems
appropriate, including without limitation provisions for the forfeiture of or
restrictions on resale or other disposition of securities of the Company
acquired under this Plan, provisions giving the Company the right to repurchase
securities of the Company acquired under this Plan in the event the Recipient
leaves the Company for any reason or elects to effect any disposition thereof,
and provisions to comply with federal and state securities laws.

5.7               NO PRIVILEGES RE STOCK OWNERSHIP OR SPECIFIC ASSETS.

                  Except as otherwise set forth herein, a Recipient or a
permitted transferee of an Award will have no rights as a shareholder with
respect to any shares issuable or issued in connection with the Award until the
Recipient has delivered to the Company all amounts payable and performed all
obligations required to be performed in connection with exercise of the Award
and the Company has issued such shares. No person will have any right, title or
interest in any fund or in any specific asset (including shares of capital
stock) of the Company by reason of any Award granted hereunder. Neither this
Plan (or any documents related hereto) nor any action taken pursuant hereto is
to be construed to create a trust of any kind or a fiduciary relationship
between the Company and any person. To the extent that any person acquires a
right to receive an Award hereunder, such right shall be no greater than the
right of any unsecured general creditor of the Company.

5.8               NONASSIGNABILITY.

                  No Award is assignable or transferable except: (a) by will or
by the laws of descent and distribution; or (b) subject to the final sentence of
this Section 5.8, upon dissolution of marriage pursuant to a qualified domestic
relations order or, in the discretion of the Administrator and under
circumstances that would not adversely affect the interests of the Company,
transfers for estate planning purposes or pursuant to a nominal transfer that
does not result in a change in beneficial ownership. During the lifetime of a
Recipient, an Award granted to such person will be exercisable only by the
Recipient (or the Recipient's permitted transferee) or such person's guardian or
legal representative. Notwithstanding the foregoing, Stock Options intended to
be treated as Incentive Stock Options (or other Awards subject to transfer
restrictions under the IRC) may not be assigned or transferred in violation of
Section 422(b)(5) of the IRC or the regulations thereunder, and nothing herein
is intended to allow such assignment or transfer.

5.9               INFORMATION TO RECIPIENTS.

                        (a) Provision of Information. The Administrator in its
sole discretion may determine what, if any, financial and other information is
to be provided to Recipients and when such financial and other information is to
be provided after giving consideration to applicable federal and state laws,
rules and regulations, including, without limitation, applicable federal and
state securities laws, rules and regulations.

                        (b) Confidentiality. The furnishing of financial and
other information that is confidential to the Company is subject to the
Recipient's agreement to maintain the confidentiality of such financial and
other information, and not to use the information for any purpose other than
evaluating the Recipient's position under this Plan. The Administrator may
impose other restrictions on the access to and use of such confidential
information and may require a Recipient to acknowledge the Recipient's
obligations under this Section 5.9(b) (which acknowledgment is not to be a
condition to Recipient's obligations under this Section 5.9(b)).

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5.10              WITHHOLDING TAXES.

                  Whenever the granting, vesting or exercise of any Award, or
the issuance of any securities upon exercise of any Award or transfer thereof,
gives rise to tax or tax withholding liabilities or obligations, the
Administrator will have the right as a condition thereto to require the
Recipient to remit to the Company an amount sufficient to satisfy any federal,
state and local withholding tax requirements arising in connection therewith.
The Administrator may, in the exercise of its discretion, allow satisfaction of
tax withholding requirements by accepting delivery of stock of the Company or by
withholding a portion of the stock otherwise issuable in connection with an
Award, in each case valued at Fair Market value as of the date of such delivery
or withholding, as the case may be, is determined.

5.11              LEGENDS ON AWARDS AND STOCK CERTIFICATES.

                  Each Award Document and each certificate representing
securities acquired upon vesting or exercise of an Award must be endorsed with
all legends, if any, required by applicable federal and state securities and
other laws to be placed on the Award Document and/or the certificate. The
determination of which legends, if any, will be placed upon Award Documents or
the certificates will be made by the Administrator in its discretion and such
decision will be final and binding.

5.12              EFFECT OF TERMINATION OF EMPLOYMENT ON AWARDS.

                        (a) Termination of Vesting. Notwithstanding anything to
the contrary herein, but subject to Section 5.12(b) Awards will be exercisable
by a Recipient (or the Recipient's successor in interest) following such
Recipient's termination of employment only to the extent that installments
thereof had become exercisable on or prior to the date of such termination and
are not forfeited pursuant to Section 5.15.

                        (b) Alteration of Vesting and Exercise Periods.
Notwithstanding anything to the contrary herein, the Administrator may in its
discretion (i) designate shorter or longer periods following a Recipient's
termination of employment during which Awards may vest or be exercised;
provided, however, that any shorter periods determined by the Administrator will
be effective only if provided for in this Plan or the instrument that evidences
the grant to the Recipient of the affected Award or if such shorter period is
agreed to in writing by the Recipient, and (ii) accelerate the vesting of all or
any portion of any Awards by increasing the number of shares purchasable at any
time.

                        (c) Leave of Absence. In the case of any employee on an
approved leave of absence, the Administrator may make such provision respecting
continuance of Awards granted to such employee as the Administrator in its
discretion deems appropriate, except that in no event will an Award be
exercisable after the date such Award would expire in accordance with its terms
had the Recipient remained continuously employed.

                        (d) General Cessation. Except as otherwise set forth in
this Plan or an Award Document or as determined by the Administrator in its
discretion, all Awards granted to a Recipient, and all of such Recipient's
rights thereunder, will terminate upon termination for any reason of such
Recipient's employment with the Company or any Affiliated Entity (or cessation
of any other service relationship between the Recipient and the Company or any
Affiliated Entity in place as of the date the Award was granted).

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5.13              LOCK-UP AGREEMENTS.

                  Each Recipient agrees as a condition to receipt of an Award
that, in connection with any public offering by the Company of its equity
securities and upon the request of the Company and the principal underwriter (if
any) in such public offering, any shares of Common Stock acquired or that may be
acquired upon exercise or vesting of an Award may not be sold, offered for sale,
encumbered, or otherwise disposed of or subjected to any transaction that will
involve any sales of securities of the Company, without the prior written
consent of the Company or such underwriter, as the case may be, for a period of
not more than 365 days after the effective date of the registration statement
for such public offering. Each Recipient will, if requested by the Company or
the principal underwriter, enter into a separate agreement to the effect of this
Section 5.13.

5.14              RESTRICTIONS ON COMMON STOCK AND OTHER SECURITIES.

                  Common Stock or other securities of the Company issued or
issuable in connection with any Award will be subject to all of the restrictions
imposed under this Plan upon Common Stock issuable or issued upon exercise of
Stock Options, except as otherwise determined by the Administrator.

5.15              CANCELLATION AND RESCISSION OF AWARDS.

                  Unless an Award Document or other separate written agreement
binding upon the Company provides otherwise, the Administrator may cancel any
unexpired, unpaid or deferred Award (whether or not vested) at any time if the
Recipient thereof fails at any time to comply with all applicable provisions of
the Award Document or this Plan, or does any of the following:

                        (a) During employment or engagement with the Company or
any Affiliated Entity or at any time within 365 days after termination of
employment or engagement with the Company or any Affiliated Entity, renders
services for any organization or engages directly or indirectly in any business
that, in the judgment of the Chief Executive Officer of the Company or other
senior officer designated by the Administrator, is or becomes competitive with
the Company or any Affiliated Entity, or which organization or business, or the
rendering of services to such organization or business, is or becomes otherwise
prejudicial to or in conflict with the business or interests of the Company or
any Affiliated Entity. For a Recipient whose employment has terminated, the
judgment of the Chief Executive Officer or such other senior officer shall be
based upon the Recipient's position and responsibilities while employed by the
Company or any Affiliated Entity, the Recipient's post-employment
responsibilities and position with the other organization or business, the
extent of past, current and potential competition or conflict between the
Company or any Affiliated Entity and the other organization or business, the
effect on the customers, suppliers and competitors of the Company or Affiliated
Entity of the Recipient's assuming the post-employment position, the guidelines
established in any employee handbook, any employment agreement with the
Recipient, and such other considerations as are deemed by the Company to be
relevant given the applicable facts and circumstances.

                        (b) During employment or engagement with the Company or
any Affiliated Entity or at any time thereafter, fails to comply with any
confidentiality agreement with the Company or any Affiliated Entity to which the
Recipient is party, or with the policies of the Company or Affiliated Entity
regarding nondisclosure of confidential information, or without prior written
authorization from the Company or any Affiliated Entity, discloses to anyone
outside the Company or any Affiliated Entity, or uses for any purpose or in any
context other than in performance of the Recipient's duties to the Company or
any Affiliated Entity, any confidential or trade secret information of the
Company or any Affiliated Entity.

                                      A-10
<PAGE>   11

                        (c) During employment or engagement with the Company or
any Affiliated Entity or at any time thereafter, fails to comply with any
agreement with the Company or any Affiliated Entity regarding assignment of
inventions, or to otherwise disclose promptly and assign to the Company or any
Affiliated Entity all right, title and interest in any invention or idea,
patentable or not, made or conceived by the Recipient during and within the
scope of employment or engagement by the Company or any Affiliated Entity,
relating in any manner to the actual or anticipated business, research, or
development work of the Company or any Affiliated Entity, or to do anything
reasonably necessary to enable the Company or any Affiliated Entity to secure a
patent where appropriate in the United States and other countries.

                        (d) During employment or engagement with the Company or
any Affiliated Entity or at any time thereafter, breaches any agreement with or
duty to the Company or any Affiliated Entity.

                  Upon and as a condition to exercise of any Award, a Recipient
shall certify on a form acceptable to the Company that he or she is in
compliance with the terms and conditions of this Plan and any applicable Award
Document and has not done any of the things described in this Section 5.15.
Furthermore, if a Recipient does any of the things described in this Section
5.15 within 180 days after any exercise, payment or delivery pursuant to an
Award, the Company may rescind such exercise, payment or delivery. The Company
shall notify the Recipient in writing of any such rescission within two years
after such exercise, payment or delivery. Within ten days after receiving such
notice from the Company, a Recipient shall pay to the Company the amount of any
gain realized or payment received as a result of the rescinded exercise, payment
or delivery pursuant to an Award. Such payment shall be made by returning to the
Company all shares of capital stock that the Recipient received in connection
with the rescinded exercise, payment or delivery, or if such shares have been
transferred by the Recipient, then by paying the equivalent value thereof at the
time of their transfer to the Company in cash. To assist in enforcement of the
Company's rescission right described above, the Company may, in its discretion,
retain any Common Stock or other consideration otherwise deliverable to a
Recipient in connection with an Award until the rescission period described
above has lapsed.

5.16              LIMITS ON AWARDS TO ELIGIBLE PERSONS.

                  Notwithstanding any other provision of this Plan, in order for
the compensation attributable to Awards hereunder to qualify as
Performance-Based Compensation, no one Eligible Person shall be granted awards
with respect to more than 250,000 shares of Common Stock in any one calendar
year. The limitation set forth in this Section 5.16 will be subject to
adjustment as provided in Section 3.4 or under Article VIII, but only to the
extent such adjustment would not affect the status of compensation attributable
to Awards as Performance-Based Compensation.

                                   ARTICLE VI
                                     AWARDS

6.1               STOCK OPTIONS.

                        (a) Nature of Stock Options. Stock Options may be
Incentive Stock Options or Nonqualified Stock Options.

                        (b) Option Exercise Price. The exercise price for each
Stock Option will be determined by the Administrator as of the date such Stock
Option is granted.

                        (c) Option Period and Vesting. Stock Options granted
hereunder will vest and may be exercised as determined by the Administrator,
except that exercise of Stock Options after termination

                                      A-11
<PAGE>   12

of the Recipient's employment shall be subject to Section 5.12. Each Stock
Option granted hereunder and all rights or obligations thereunder shall expire
on such date as may be determined by the Administrator, but not later than ten
(10) years after the date the Stock Option is granted and may be subject to
earlier termination as provided herein or in the Award Document. Except as
otherwise provided herein, a Stock Option will become exercisable, as a whole or
in part, on the date or dates specified by the Administrator and thereafter will
remain exercisable until the exercise, expiration or earlier termination of the
Stock Option.

                        (d) Exercise of Stock Options. The exercise price for
Stock Options will be paid as set forth in Section 5.3. No Stock Option will be
exercisable except in respect of whole shares, and fractional share interests
shall be disregarded. Not fewer than 100 shares of Common Stock may be purchased
at one time and Stock Options must be exercised in multiples of 100 unless the
number purchased is the total number of shares for which the Stock Option is
exercisable at the time of exercise. A Stock Option will be deemed to be
exercised when the Secretary or other designated official of the Company
receives written notice of such exercise from the Recipient in the form of
Exhibit A hereto or such other form as the Company may specify from time to
time, together with payment of the exercise price in accordance with Section 5.3
and any amounts required under Section 5.10 or, with permission of the
Administrator, arrangement for such payment. Notwithstanding any other provision
of this Plan, the Administrator may impose, by rule and/or in Award Documents,
such conditions upon the exercise of Stock Options (including, without
limitation, conditions limiting the time of exercise to specified periods) as
may be required to satisfy applicable regulatory requirements, including,
without limitation, Rule 16b-3 and Rule 10b-5 under the Exchange Act, and any
amounts required under Section 5.10, or any applicable section of or regulation
under the IRC.

                        (e) Termination of Employment.

                                (i) Termination for Just Cause. Subject to
Section 5.12 and except as otherwise provided in a written agreement between the
Company or an Affiliated Entity and the Recipient, which may be entered into at
any time before or after termination of employment, in the event of a Just Cause
Dismissal of a Recipient all of the Recipient's unexercised Stock Options,
whether or not vested, will expire and become unexercisable as of the date of
such Just Cause Dismissal.

                                (ii) Termination Other Than for Just Cause.
Subject to Section 5.12 and except as otherwise provided in a written agreement
between the Company or an Affiliated Entity and the Recipient, which may be
entered into at any time before or after termination of employment, if a
Recipient's employment with the Company or any Affiliated Entity terminates for:

                                        (A) any reason other than for Just Cause
Dismissal, death, Permanent Disability or Retirement, the Recipient's Awards,
whether or not vested, will expire and become unexercisable as of the earlier
of: (A) the date such Stock Options would expire in accordance with their terms
had the Recipient remained employed; and (B) 90 days after the date of
employment termination in the case of Stock Options intended to be treated as
Incentive Stock Options, or 180 days after the date of employment termination in
the case of Nonqualified Stock Options.

                                        (B) death or Permanent Disability or
Retirement, the Recipient's unexercised Awards will, whether or not vested,
expire and become unexercisable as of the earlier of: (A) the date such Awards
would expire in accordance with their terms had the Recipient remained employed;
and (B) 365 days after the date of employment termination.

                        (f) Special Provisions Regarding Incentive Stock
Options. Notwithstanding anything herein to the contrary,

                                      A-12
<PAGE>   13

                                (i) The exercise price and vesting period of any
Stock Option intended to be treated as an Incentive Stock Option must comply
with the provisions of Section 422 of the IRC and the regulations thereunder. As
of the Effective Date, such provisions require, among other matters, that: (A)
the exercise price must not be less than the Fair Market Value of the underlying
stock as of the date the Incentive Stock Option is granted, and not less than
110% of the Fair Market Value as of such date in the case of a grant to a
Significant Stockholder; and (B) that the Incentive Stock Option not be
exercisable after the expiration of ten (10) years from the date of grant or the
expiration of five (5) years from the date of grant in the case of an Incentive
Stock Option granted to a Significant Stockholder.

                                (ii) The aggregate Fair Market Value (determined
as of the respective date or dates of grant) of the Common Stock for which one
or more Options granted to any Recipient under this Plan (or any other option
plan of the Company or any of its subsidiaries or affiliates) may for the first
time become exercisable as Incentive Stock Options under the federal tax laws
during any one calendar year may not exceed $100,000.

                                (iii) Any Stock Options granted as Incentive
Stock Options pursuant to this Plan that for any reason fail or cease to qualify
as such will be treated as Nonqualified Stock Options. If the limit described in
Section 6.1(f)(ii) is exceeded, the earliest granted Stock Options will be
treated as Incentive Stock Options, up to such limit.

6.2               PERFORMANCE AWARDS.

                        (a) Grant of Performance Award. The Administrator will
determine in its discretion the performance criteria (which need not be
identical and may be established on an individual or group basis) governing
Performance Awards, the terms thereof, and the form and time of payment of
Performance Awards.

                        (b) Payment of Award. Upon satisfaction of the
conditions applicable to a Performance Award, payment will be made to the
Recipient in cash, in shares of Common Stock valued at Fair Market Value as of
the date payment is due, or in a combination of Common Stock and cash, as the
Administrator in its discretion may determine.

6.3               RESTRICTED STOCK.

                        (a) Award of Restricted Stock. The Administrator will
determine the Purchase Price (if any), the terms of payment of the Purchase
Price, the restrictions upon the Restricted Stock, and when such restrictions
will lapse.

                        (b) Requirements of Restricted Stock. All shares of
Restricted Stock granted or sold pursuant to this Plan will be subject to the
following conditions:

                                (i) No Transfer. The shares may not be sold,
assigned, transferred, pledged, hypothecated or otherwise disposed of, alienated
or encumbered until the restrictions are removed or expire;

                                (ii) Certificates. The Administrator may require
that the certificates representing Restricted Stock granted or sold to a
Recipient remain in the physical custody of an escrow holder or the Company
until all restrictions are removed or expire;

                                (iii) Restrictive Legends. Each certificate
representing Restricted Stock granted or sold to a Recipient pursuant to this
Plan will bear such legend or legends making reference to

                                      A-13
<PAGE>   14

the restrictions imposed upon such Restricted Stock as the Administrator in its
discretion deems necessary or appropriate to enforce such restrictions; and

                                (iv) Other Restrictions. The Administrator may
impose such other conditions on Restricted Stock as the Administrator may deem
advisable, including, without limitation, restrictions under the Securities Act,
under the Exchange Act, under the requirements of any stock exchange or
interdealer quotation system upon which such Restricted Stock or other
securities of the Company are then listed or traded and under any blue sky or
other securities laws applicable to such shares.

                        (c) Lapse of Restrictions. The restrictions imposed upon
Restricted Stock will lapse in accordance with such terms or other conditions as
are determined by the Administrator.

                        (d) Rights of Recipient. Subject to the provisions of
Section 6.3(b) and any restrictions imposed upon the Restricted Stock, the
Recipient will have all rights of a stockholder with respect to the Restricted
Stock granted or sold to such Recipient under this Plan, including, without
limitation, the right to vote the shares and receive all dividends and other
distributions paid or made with respect thereto.

                        (e) Termination of Employment. Unless the Administrator
in its discretion determines otherwise, if a Recipient's employment with the
Company or any Affiliated Entity terminates for any reason, all of the
Recipient's Restricted Stock remaining subject to restrictions on the date of
such termination of employment will be repurchased by the Company at the
Purchase Price (if any) paid by the Recipient to the Company, without interest
or premium, and otherwise returned to the Company without consideration.

6.4               STOCK APPRECIATION RIGHTS.

                        (a) Granting of Stock Appreciation Rights. The
Administrator may at any time and from time to time approve the grant to
Eligible Persons of Stock Appreciation Rights, related or unrelated to Stock
Options.

                        (b) SARs Related to Options.

                                (i) A Stock Appreciation Right related to a
Stock Option will entitle the holder of the related Stock Option, upon exercise
of the Stock Appreciation Right, to surrender such Stock Option, or any portion
thereof to the extent previously vested but unexercised, with respect to the
number of shares as to which such Stock Appreciation Right is exercised, and to
receive payment of an amount computed pursuant to Section 6.4(b)(iii). Such
Stock Option will, to the extent surrendered, then cease to be exercisable.

                                (ii) A Stock Appreciation Right related to a
Stock Option hereunder will be exercisable at such time or times, and only to
the extent that, the related Stock Option is exercisable, and will not be
transferable except to the extent that such related Stock Option may be
transferable (and under the same conditions), will expire no later than the
expiration of the related Stock Option, and may be exercised only when the
market price of the Common Stock subject to the related Stock Option exceeds the
exercise price of the Stock Option.

                                (iii) Upon the exercise of a Stock Appreciation
Right related to a Stock Option, the Recipient will be entitled to receive
payment of an amount determined by multiplying: (A) the difference obtained by
subtracting the exercise price of a share of Common Stock specified in the
related Stock Option from the Fair Market Value of a share of Common Stock on
the date of exercise of such

                                      A-14
<PAGE>   15

Stock Appreciation Right (or as of such other date or as of the occurrence of
such event as may have been specified in the instrument evidencing the grant of
the Stock Appreciation Right), by (B) the number of shares as to which such
Stock Appreciation Right is exercised.

                        (c) SARs Unrelated to Options. The Administrator may
grant Stock Appreciation Rights unrelated to Stock Options. Section 6.4(b)(iii)
will govern the amount payable at exercise under such Stock Appreciation Right,
except that in lieu of an option exercise price the initial base amount
specified in the Award shall be used.

                        (d) Limits. Notwithstanding the foregoing, the
Administrator, in its discretion, may place a dollar limitation on the maximum
amount that will be payable upon the exercise of a Stock Appreciation Right.

                        (e) Payments. Payment of the amount determined under the
foregoing provisions may be made solely in whole shares of Common Stock valued
at their Fair Market Value on the date of exercise of the Stock Appreciation
Right or, alternatively, at the discretion of the Administrator, in cash or in a
combination of cash and shares of Common Stock as the Administrator deems
advisable. The Administrator has full discretion to determine the form in which
payment of a Stock Appreciation Right will be made and to consent to or
disapprove the election of a Recipient to receive cash in full or partial
settlement of a Stock Appreciation Right. If the Administrator decides to make
full payment in shares of Common Stock, and the amount payable results in a
fractional share, payment for the fractional share will be made in cash.

6.5               STOCK PAYMENTS.

                  The Administrator may approve Stock Payments to any Eligible
Person on such terms and conditions as the Administrator may determine. Stock
Payments will replace cash compensation at the Fair Market Value of the
Common Stock on the date payment is due.

6.6               DIVIDEND EQUIVALENTS.

                  The Administrator may grant Dividend Equivalents to any
Recipient who has received a Stock Option, SAR or other Award denominated in
shares of Common Stock. Dividend Equivalents may be paid in cash, Common Stock
or other Awards; the amount of Dividend Equivalents paid other than in cash will
be determined by the Administrator by application of such formula as the
Administrator may deem appropriate to translate the cash value of dividends paid
to the alternative form of payment of the Dividend Equivalent. Dividend
Equivalents will be computed as of each dividend record date and will be payable
to recipients thereof at such time as the Administrator may determine.

6.7               STOCK BONUSES.

                  The Administrator may issue Stock Bonuses to Eligible Persons
on such terms and conditions as the Administrator may determine.

6.8               STOCK SALES.

                  The Administrator may sell to Eligible Persons shares of
Common Stock on such terms and conditions as the Administrator may determine.

                                      A-15
<PAGE>   16

6.9               PHANTOM STOCK.

                  The Administrator may grant Awards of Phantom Stock to
Eligible Persons. Phantom Stock is a cash payment measured by the Fair Market
Value of a specified number of shares of Common Stock on a specified date, or
measured by the excess of such Fair Market Value over a specified minimum, which
may but need not include a Dividend Equivalent.

6.10              OTHER STOCK-BASED BENEFITS.

                  The Administrator is authorized to grant Other Stock-Based
Benefits. Other Stock-Based Benefits are any arrangements granted under this
Plan not otherwise described above that: (a) by their terms might involve the
issuance or sale of Common Stock or other securities of the Company; or (b)
involve a benefit that is measured, as a whole or in part, by the value,
appreciation, dividend yield or other features attributable to a specified
number of shares of Common Stock or other securities of the Company.

                                   ARTICLE VII
                          NONEMPLOYEE DIRECTOR OPTIONS

7.1               ANNUAL GRANT OF OPTIONS.

                  Persons serving as Nonemployee Directors at the start of each
fiscal year shall receive a grant of an option to purchase up to 10,000 shares
of the Company's Common Stock (an "ANNUAL OPTION") at an exercise price per
share equal to the Fair Market Value of the Common Stock at that time, subject
to: (a) vesting as set forth in Section 7.2, and (b) adjustment as set forth in
this Plan. For purposes hereof, a "Nonemployee Director" is a director of the
Company who qualifies as a "Non-Employee Director" under Rule 16b-3 under the
Exchange Act (such person being an "ELIGIBLE DIRECTOR").

7.2               VESTING.

                  Annual Options shall vest ratably (2,500) on the first day of
each fiscal quarter if the Recipient has remained a Non-Employee Director from
the grant date to such vesting time. Notwithstanding the foregoing, however,
Annual Options that have not vested and become exercisable at the time the
optionee ceases to be a Non-Employee Director shall terminate.

7.3               EXERCISE.

                  Nonemployee Directors' Options will be exercisable, and the
exercise price therefore shall be paid, in the same manner as provided herein
for other Stock Options.

7.4               TERM OF OPTIONS AND EFFECT OF TERMINATION.

Notwithstanding any other provision of the Plan, no Nonemployee Director's
Option granted under the Plan shall be exercisable after the expiration of ten
years from the effective date of its grant. In the event that the recipient of
any Nonemployee Directors' Options granted under the Plan shall cease to be a
director of the Company, all Annual Options granted under this plan to such
recipient shall be exercisable, to the extent already exercisable at the date
such recipient ceases to be a director and regardless of the reason the
recipient ceases to be a director, for a period of 365 days after that date (or,
if sooner, until the expiration of the option according to its terms), and shall
then terminate; In the event of the death of an optionee while such optionee is
a director of the Company or within the period after termination of such status
during which he or she is permitted to exercise an option, such option may be

                                      A-16
<PAGE>   17

exercised by any person or persons designated by the optionee on a beneficiary
designation form adopted by the Plan administrator for such purpose or, if there
is no effective beneficiary designation form on file with the Company, by the
executors or administrators of the optionee's estate or by any person or persons
who shall have acquired the option directly from the optionee by his or her will
or the applicable laws of descent and distribution.

7.5               AMENDMENT; SUSPENSION.

                  The Administrator may at any time and from time to time in its
discretion (a) change the number of shares or vesting periods associated with
the Annual Options, and (b) suspend and reactivate this Article VII.

                                  ARTICLE VIII
                                CHANGE IN CONTROL

8.1               PROVISION FOR AWARDS UPON CHANGE IN CONTROL.

                  As of the effective time and date of any Change in Control,
this Plan and any then outstanding Awards (whether or not vested) will
automatically terminate unless: (a) provision is made in writing in connection
with such transaction for the continuance of this Plan and for the assumption of
such Awards, or for the substitution for such Awards of new awards covering the
securities of a successor entity or an affiliate thereof, with appropriate
adjustments as to the number and kind of securities and exercise prices or other
measurement criteria, in which event this Plan and such outstanding Awards will
continue or be replaced, as the case may be, in the manner and under the terms
so provided; or (b) the Board otherwise provides in writing for such adjustments
as it deems appropriate in the terms and conditions of the then-outstanding
Awards (whether or not vested), including, without limitation, (i) accelerating
the vesting of outstanding Awards, and/or (ii) providing for the cancellation of
Awards and their automatic conversion into the right to receive the securities,
cash or other consideration that a holder of the shares underlying such Awards
would have been entitled to receive upon consummation of such Change in Control
had such shares been issued and outstanding immediately prior to the effective
date and time of the Change in Control (net of the appropriate option exercise
prices). If, pursuant to the foregoing provisions of this Section 8.1, this Plan
and the Awards terminate by reason of the occurrence of a Change in Control
without provision for any of the action(s) described in clause (a) or (b)
hereof, then subject to Sections 5.12 and 5.15, any Recipient holding
outstanding Awards will have the right, at such time prior to the consummation
of the Change in Control as the Board designates, to exercise or receive the
full benefit of the Recipient's Awards to the full extent not theretofore
exercised, including any installments which have not yet become vested.

8.2               TERMINATION OF EMPLOYMENT IN CONNECTION WITH A CHANGE IN
                  CONTROL.

                        (a) Acceleration of Awards. If a Change in Control
occurs and provision for Awards is made as described in part (a) or (b) of
Section 8.1 such that a Recipient continues to own Awards or replacement awards,
but in connection with such Change in Control the Recipient's employment with
the Company or an Affiliated Entity is terminated by the Company or an
Affiliated Entity, then, subject to Sections 5.12 and 5.15 and the terms of any
written employment agreement between the Company or any Affiliated Entity and
the Recipient and the specific terms of any Award, such Recipient will have the
right to exercise or receive the full benefit of the Recipient's Awards during
the applicable time period provided in Section 5.12, without regard to any
vesting or performance requirements or other milestones.

                        (b) Employment Termination. For purposes of this
Section, and subject to any separate written agreement binding upon the Company,
a Recipient's employment with the Company or

                                      A-17
<PAGE>   18

any Affiliated Entity will be deemed to have been terminated in connection with
a Change in Control if: (i) the Recipient is removed from the Recipient's
employment by, or resigns the Recipient's employment upon the request of, a
Person exercising practical voting control over the Company following the Change
in Control or a person acting upon authority or at the instruction of such
Person; or (ii) the Recipient's position is eliminated as a result of a
reduction in force made to reduce over-capacity or unnecessary duplication of
personnel within 180 days after the consummation of the Change in Control and
the Recipient is not offered a replacement position with compensation
substantially similar to the compensation in effect immediately before the
Change in Control. Unless otherwise provided in a written agreement with the
Company or any Affiliated Entity, assignment of a Recipient to different duties
or reporting will not be deemed to constitute or justify termination of
Recipient's employment in connection with the Change in Control.

                                   ARTICLE IX
                                   DEFINITIONS

                  Capitalized terms used in this Plan and not otherwise defined
have the meanings set forth below:

                  "ADMINISTRATOR" means the Board as long as no Committee has
been appointed and is in effect and also means the Committee to the extent that
the Board has delegated authority thereto.

                  "AFFILIATED ENTITY" means any Parent Corporation of the
Company or Subsidiary Corporation of the Company or any other entity
controlling, controlled by, or under common control with the Company.

                  "APPLICABLE DIVIDEND PERIOD" means (i) the period between the
date a Dividend Equivalent is granted and the date the related Stock Option,
SAR, or other Award is exercised, terminates, or is converted to Common Stock,
or (ii) such other time as the Administrator may specify in the written
instrument evidencing the grant of the Dividend Equivalent.

                  "AWARD" means any Stock Option, Performance Award, Restricted
Stock, Stock Appreciation Right, Stock Payment, Stock Bonus, Stock Sale, Phantom
Stock, Dividend Equivalent, or Other Stock-Based Benefit granted or sold to an
Eligible Person under this Plan, or any similar award granted by the Company
prior to the Effective Date and outstanding as of the Effective Date that is
governed by this Plan.

                  "AWARD DOCUMENT" means the agreement or confirming memorandum
setting forth the terms and conditions of an Award.

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

                  "CHANGE IN CONTROL" means the following and shall be deemed to
occur if any of the following events occurs:

                        (i) Any Person becomes the beneficial owner (within the
                meaning of Rule 13d-3 promulgated under the Exchange Act) of
                thirty percent (30%) or more of either the then outstanding
                shares of Common Stock or the combined voting power of the
                Company's then outstanding securities entitled to vote generally
                in the election of directors; or

                        (ii) Individuals who, as of the effective date hereof,
                constitute the Board (the "INCUMBENT BOARD") cease for any
                reason to constitute at least a majority of the Board, provided

                                      A-18
<PAGE>   19

                that any individual who becomes a director after the effective
                date hereof whose election, or nomination for election by the
                Company's shareholders, is approved by a vote of at least a
                majority of the directors then comprising the Incumbent Board
                shall be considered to be a member of the Incumbent Board unless
                that individual was nominated or elected by any person, entity
                or group (as defined above) having the power to exercise,
                through beneficial ownership, voting agreement and/or proxy,
                twenty percent (20%) or more of either the outstanding shares of
                Common Stock or the combined voting power of the Company's then
                outstanding voting securities entitled to vote generally in the
                election of directors, in which case that individual shall not
                be considered to be a member of the Incumbent Board unless such
                individual's election or nomination for election by the
                Company's shareholders is approved by a vote of at least
                two-thirds of the directors then comprising the Incumbent Board;
                or

                        (iii) Consummation by the Company of the sale or other
                disposition by the Company of all or substantially all of the
                Company's assets or a Reorganization of the Company with any
                other person, corporation or other entity, other than

                              (A) a Reorganization that would result in the
                voting securities of the Company outstanding immediately prior
                thereto (or, in the case of a Reorganization that is preceded or
                accomplished by an acquisition or series of related acquisitions
                by any Person, by tender or exchange offer or otherwise, of
                voting securities representing 5% or more of the combined voting
                power of all securities of the Company, immediately prior to
                such acquisition or the first acquisition in such series of
                acquisitions) continuing to represent, either by remaining
                outstanding or by being converted into voting securities of
                another entity, more than 50% of the combined voting power of
                the voting securities of the Company or such other entity
                outstanding immediately after such Reorganization (or series of
                related transactions involving such a Reorganization), or

                              (B) a Reorganization effected to implement a
                recapitalization or reincorporation of the Company (or similar
                transaction) that does not result in a material change in
                beneficial ownership of the voting securities of the Company or
                its successor; or

                        (iv) Approval by the shareholders of the Company or an
                order by a court of competent jurisdiction of a plan of
                liquidation of the Company.

                  "COMMITTEE" means any committee appointed by the Board to
administer this Plan pursuant to Section 4.1.

                  "COMMON STOCK" means the common stock of the Company, as
constituted on the Effective Date, and as thereafter adjusted under Section 3.4.

                  "COMPANY" means Ashworth, Inc., a Delaware corporation.

                  "DIVIDEND EQUIVALENT" means a right granted by the Company
under Section 6.6 to a holder of a Stock Option, Stock Appreciation Right or
other Award denominated in shares of Common Stock to receive from the Company
during the Applicable Dividend Period payments equivalent to the amount of
dividends payable to holders of the number of shares of Common Stock underlying
such Stock Option, Stock Appreciation Right, or other Award.

                  "EFFECTIVE DATE" means December 14, 1999 which is the date
this Plan was adopted by the Board.

                                      A-19
<PAGE>   20

                  "ELIGIBLE PERSON" includes directors, officers, employees,
consultants and advisors of the Company or of any Affiliated Entity.

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

                  "EXCHANGE ACT REGISTERED COMPANY" means that the Company has
any class of any equity security registered pursuant to Section 12 of the
Exchange Act.

                  "EXPIRATION DATE" means the tenth (10th) anniversary of the
Effective Date.

                  "FAIR MARKET VALUE" of a share of the Company's capital stock
as of a particular date means: (i) if the stock is listed on an established
stock exchange or exchanges (including for this purpose, the Nasdaq National
Market), the arithmetic mean of the highest and lowest sale prices of the stock
for the trading day immediately preceding such date on the primary exchange upon
which the stock trades, as measured by volume, as published in The Wall Street
Journal, or, if no sale price was quoted for such date, then as of the next
preceding date on which such a sale price was quoted; or (ii) if the stock is
not then listed on an exchange or the Nasdaq National Market, the average of the
closing bid and asked prices per share for the stock in the over-the-counter
market on such date (in the case of (i) or (ii), subject to adjustment as and if
necessary and appropriate to set an exercise price not less than 100% of the
fair market value of the stock on the date an Award is granted); or (iii) if the
stock is not then listed on an exchange or quoted in the over-the-counter
market, an amount determined in good faith by the Administrator, provided,
however, that (A) when appropriate, the Administrator in determining Fair Market
Value of capital stock of the Company may take into account such other factors
as it may deem appropriate under the circumstances, and (B) if the stock is
traded on the Nasdaq SmallCap Market and both sales prices and bid and asked
prices are quoted or available, the Administrator may elect to determine Fair
Market Value under either clause (i) or (ii) above. Notwithstanding the
foregoing, the Fair Market Value of capital stock for purposes of grants of
Incentive Stock Options must be determined in compliance with applicable
provisions of the IRC. The Fair Market Value of rights or property other than
capital stock of the Company means the fair market value thereof as determined
by the Administrator on the basis of such factors as it may deem appropriate.

                  "INCENTIVE STOCK OPTION" means a Stock Option that qualifies
as an incentive stock option under Section 422 of the IRC.

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

                  "JUST CAUSE DISMISSAL" means a termination of a Recipient's
employment for any of the following reasons: (i) the Recipient violates any
reasonable rule or regulation of the Board, the Company's President or Chief
Executive Officer or the Recipient's superiors that results in damage to the
Company or any Affiliated Entity or which, after written notice to do so, the
Recipient fails to correct within a reasonable time not exceeding 15 days; (ii)
any willful misconduct or gross negligence by the Recipient in the
responsibilities assigned to the Recipient; (iii) any willful failure to perform
the Recipient's job as required to meet the objectives of the Company or any
Affiliated Entity; (iv) any wrongful conduct of a Recipient which has an adverse
impact on the Company or any Affiliated Entity or which constitutes a
misappropriation of assets of the Company or any Affiliated Entity; (v) the
Recipient does any of the things described in Section 5.15; or (vi) any other
conduct that the Administrator reasonably determines constitutes Just Cause for
Dismissal; provided, however, that if a Recipient is party to an employment
agreement with the Company or any Affiliated Entity providing for just cause
dismissal (or some comparable concept) of Recipient from Recipient's employment
with the Company or any Affiliated Entity, "Just Cause Dismissal" for purposes
of this Plan will have the same meaning as ascribed thereto or to such
comparable concept in such employment agreement.

                                      A-20
<PAGE>   21

                  "NONQUALIFIED STOCK OPTION" means a Stock Option that is not
an Incentive Stock Option.

                  "OTHER STOCK-BASED BENEFITS" means an Award granted under
Section 6.10.

                  "PARENT CORPORATION" means any Parent Corporation as defined
in Section 424(e) of the IRC.

                  "PERFORMANCE AWARD" means an Award under Section 6.2, payable
in cash, Common Stock or a combination thereof, that vests and becomes payable
over a period of time upon attainment of performance criteria established in
connection with the grant of the Award.

                  "PERFORMANCE-BASED COMPENSATION" means performance-based
compensation as described in Section 162(m) of the IRC. If the amount of
compensation an Eligible Person will receive under any Award is not based solely
on an increase in the value of Common Stock after the date of grant or award,
the Administrator, in order to qualify an Award as performance-based
compensation under Section 162(m) of the IRC, can condition the grant, award,
vesting, or exercisability of such an Award on the attainment of a
preestablished, objective performance goal. For this purpose, a preestablished,
objective performance goal may include one or more of the following performance
criteria: (a) cash flow, (b) earnings per share (including earnings before
interest, taxes, and amortization), (c) return on equity, (d) total Shareholder
return, (e) return on capital, (f) return on assets or net assets, (g) income or
net income, (h) operating income or net operating income, (i) operating margin,
(j) return on operating revenue, and (k) any other similar performance criteria.

                  "PERMANENT DISABILITY" means that the Recipient becomes
physically or mentally incapacitated or disabled so that the Recipient is unable
to perform substantially the same services as the Recipient performed prior to
incurring such incapacity or disability (the Company, at its option and expense,
being entitled to retain a physician to confirm the existence of such incapacity
or disability, and the determination of such physician to be binding upon the
Company and the Recipient), and such incapacity or disability continues for a
period of three (3) consecutive months or six (6) months in any 12-month period
or such other period(s) as may be determined by the Administrator with respect
to any Award, provided that for purposes of determining the period during which
an Incentive Stock Option may be exercised pursuant to Section 6.1(e), Permanent
Disability shall mean "permanent and total disability" as defined in Section
22(e) of the IRC.

                  "PERSON" means any person, entity or group, within the meaning
of Section 13(d) or 14(d) of the Exchange Act, but excluding (i) the Company and
its subsidiaries, (ii) any employee stock ownership or other employee benefit
plan maintained by the Company and (iii) an underwriter or underwriting
syndicate that has acquired the Company's securities solely in connection with a
public offering thereof.

                  "PHANTOM STOCK" means an Award granted under Section 6.9.

                  "PLAN" means this 2000 Equity Incentive Plan of the Company.

                  "PLAN TERM" means the period during which this Plan remains in
effect (commencing the Effective Date and ending on the Expiration Date).

                  "PURCHASE PRICE" means the purchase price (if any) to be paid
by a Recipient for Restricted Stock as determined by the Administrator (which
price shall be at least equal to the minimum price required under applicable
laws and regulations for the issuance of Common Stock which is nontransferable
and subject to a substantial risk of forfeiture until specific conditions are
met).

                  "RECIPIENT" means a person who has received an Award.

                                      A-21
<PAGE>   22

                  "REORGANIZATION" means any merger, consolidation or other
reorganization.

                  "RESTRICTED STOCK" means Common Stock that is the subject of
an Award made under Section 6.3 and that is nontransferable and subject to a
substantial risk of forfeiture until specific conditions are met, as set forth
in this Plan and in any statement evidencing the grant of such Award.

                  "RETIREMENT" of a Recipient means the Recipient's resignation
from the Company or any Affiliated Entity after reaching age 60 and at least
five years of full-time employment by the Company or any Affiliated Entity,
without any circumstances that would justify a Just Cause Dismissal of the
Recipient.

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

                  "SHAREHOLDER AGREEMENT" has the meaning set forth in Section
5.6.

                  "SIGNIFICANT STOCKHOLDER" is an individual who, at the time a
Stock Option is granted to such individual under this Plan, owns more than ten
percent (10%) of the combined voting power of all classes of stock of the
Company or of any Parent Corporation or Subsidiary Corporation (after
application of the attribution rules set forth in Section 424(d) of the IRC).

                  "STOCK APPRECIATION RIGHT" or "SAR" means a right granted
under Section 6.4 to receive a payment that is measured with reference to the
amount by which the Fair Market Value of a specified number of shares of Common
Stock appreciates from a specified date, such as the date of grant of the SAR,
to the date of exercise.

                  "STOCK BONUS" means an issuance or delivery of unrestricted or
restricted shares of Common Stock under Section 6.7 as a bonus for services
rendered or for any other valid consideration under applicable law.

                  "STOCK PAYMENT" means a payment in shares of the Company's
Common Stock under Section 6.5 to replace all or any portion of the compensation
or other payment (other than base salary) that would otherwise become payable to
the Recipient in cash.

                  "STOCK OPTION" means a right to purchase stock of the Company
granted under Section 6.1 of this Plan.

                  "STOCK SALE" means a sale of Common Stock to an Eligible
Person under Section 6.8.

                  "SUBSIDIARY CORPORATION" means any Subsidiary Corporation as
defined in Section 424(f) of the IRC.

                                      A-22
<PAGE>   23

                                  EXHIBIT A TO
                                 ASHWORTH, INC.
                           2000 EQUITY INCENTIVE PLAN

NOTICE OF EXERCISE

Ashworth, Inc.

RE:  STOCK OPTION

                  Notice is hereby given that I elect to purchase the number of
shares (the "SHARES") set forth below pursuant to the stock option referenced
below at the exercise price applicable thereto:

<TABLE>
<S>                                                   <C>
                  Option Grant Date:                  _______________

                  Total Number of Shares
                  Underlying Original Option:         _______________

                  Number of Shares for which
                  Option has been previously
                  exercised:                          _______________

                  Exercise Price Per Share:           _______________

                  Number of Shares Being
                  Acquired With This Exercise:              _________
</TABLE>

                  A check in the amount of the aggregate price of the shares
being purchased is attached.

                  I hereby confirm that such shares are being acquired by me for
my own account for investment purposes, and not with a view to, or for resale in
connection with, any distribution thereof. I will not sell or dispose of my
Shares in violation of the Securities Act of 1933, as amended, or any applicable
federal or state securities laws. Further, I understand that the exemption from
taxable income at the time of exercise is dependent upon my holding such stock
for a period of at least one year from the date of exercise and two years from
the date of grant of the Option.

                  I understand that the certificate representing the Shares will
bear a restrictive legend within the contemplation of the Securities Act and as
required by such other state or federal law or regulation applicable to the
issuance or delivery of the Shares.

                  I agree to provide to the Company such additional documents or
information as may be required pursuant to the Company's 2000 Equity Incentive
Plan.

                                            ------------------------------------
                                            (signature)

                                            ------------------------------------
                                            (name of Optionee)

                                      A-23
<PAGE>   24

                                 ASHWORTH, INC.
                             NOTICE OF OPTION GRANT

                  This Notice of Option Grant will confirm that as of
__________, ____, Ashworth, Inc. (the "Company") granted a stock option to you
pursuant to the Company's 2000 Equity Incentive Plan (the "Plan") upon the
following terms and conditions:

<TABLE>
<S>                                          <C>
                  Option Grant Date:         ___________, _____

                  Type of Option:            Incentive

                  Maximum Number of
                  Shares of Common
                  Stock Issuable Upon
                  Exercise of Option:        __________

                  Exercise Price:            $_____ per share

                  Vesting Schedule:

                  Expiration Date:           ___________, _____
</TABLE>

                  In addition to the terms described herein, this award is
subject to the terms and conditions of the Plan, a copy of which is attached
hereto and incorporated herein by reference.

                  SALE, TRANSFER OR HYPOTHECATION OF THE OPTION REFERRED TO
ABOVE AND SHARES ISSUABLE UNDER THIS OPTION ARE SUBJECT TO RESTRICTIONS UNDER
THE PLAN AND APPLICABLE LAW.

                                            ASHWORTH, INC.

                                            By:
                                               ---------------------------------
                                            Name:
                                                 -------------------------------
                                            Title:
                                                  ------------------------------

<PAGE>   25

                                 ASHWORTH, INC.
                           2000 EQUITY INCENTIVE PLAN

                             STOCK OPTION AGREEMENT

                THIS STOCK OPTION AGREEMENT (this "AGREEMENT") is made effective
as of the Option Grant Date set forth below, by and between Ashworth, Inc., a
Delaware corporation (the "COMPANY"), and _________________________
("OPTIONEE"). Terms not otherwise defined in this Agreement shall have the
meanings ascribed to them in the Company's 2000 Equity Incentive Plan (the
"PLAN"). The parties agree as follows:

                1. GOVERNING PLAN. Optionee has received a copy of the Plan.
This Agreement is subject in all respects to the applicable provisions of the
Plan, which are incorporated herein by reference. In the case of any conflict
between the provisions of the Plan and this Agreement, the provisions of the
Plan shall control.

                2. GRANT OF OPTION. The Company hereby grants to Optionee a
stock option (the "OPTION") to purchase shares of the Company's Common Stock
upon the following terms and conditions:

<TABLE>
<S>                                                               <C>
                  Option Grant Date:                              ____________________

                  Type of Option (Incentive/Nonqualified):

                  Maximum Number of Shares of Common Stock
                  Issuable Upon Exercise of Option:
                                                                  ____________________

                  Purchase Price Per Share:                       $___________________

                  Vesting Schedule:
</TABLE>

                  3. GOVERNING LAW. This Agreement shall be governed by,
interpreted under, and construed and enforced in accordance with the internal
laws, and not the laws pertaining to conflicts or choice of laws, of the State
of California applicable to agreements made or to be performed wholly within the
State of California.

                  IN WITNESS WHEREOF, the Company and Optionee have executed
this Agreement effective as of the Option Grant Date.

The Company:                                Optionee:

By:________________________________         ____________________________________

Its:_______________________________         Name:_______________________________

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