Document:

TRUST AGREEMENT

                  TRUST AGREEMENT, between MS Structured Asset Corp. (the
"Depositor") and LaSalle Bank National Association (the "Trustee"), made as of
the date set forth in Schedule I attached hereto, which Schedule together with
Schedules II and III attached hereto, are made a part hereof. The terms of the
Standard Terms for Trust Agreements, dated March 5, 2003 (the "Standard Terms")
are, except to the extent otherwise expressly stated, hereby incorporated by
reference herein in their entirety with the same force and effect as though set
forth herein. Capitalized terms used herein and not defined shall have the
meanings defined in the Standard Terms. References to "herein", "hereunder",
"this Trust Agreement" and the like shall include the Schedule I attached hereto
and the Standard Terms so incorporated by reference.

                  WHEREAS, the Depositor and the Trustee desire to establish the
Trust identified in Schedule I attached hereto (the "Trust") for the primary
purposes of (i) holding the Underlying Securities, (ii) entering into any Swap
Agreement with the Swap Counterparty and (iii) issuing the Units;

                  WHEREAS, the Depositor desires that the respective beneficial
interests in the Trust be divided into transferable fractional shares, such
shares to be represented by the Units;

                  WHEREAS, the Depositor desires to appoint the Trustee as
trustee of the Trust and the Trustee desires to accept such appointment;

                  WHEREAS, the Depositor shall transfer, convey and assign to
the Trust without recourse, and the Trust shall acquire, all of the Depositor's
right, title and interest in and under the Underlying Securities and other
property identified in Schedule II to the Trust Agreement (the "Trust
Property"); and

                  WHEREAS, the Trust agrees to acquire the Trust Property
specified herein in consideration for Units having an initial Unit Principal
Balance identified in Schedule I attached hereto, subject to the terms and
conditions specified in the Trust Agreement;

                  NOW THEREFORE, the Depositor hereby appoints the Trustee as
trustee hereunder and hereby requests the Trustee to receive the Underlying
Securities from the Depositor and to issue in accordance with the instructions
of the Depositor Units having the terms specified in Schedule I attached hereto,
and the Trustee accepts such appointment and, for itself and its successors and
assigns, hereby declares that it shall hold all the estate, right, title and
interest in any property contributed to the trust account established hereunder
(except property to be applied to the payment or reimbursement of or by the
Trustee for any fees or expenses which under the terms hereof is to be so
applied) in trust for the benefit of all present and future Holders of the
fractional shares of beneficial interest issued hereunder, namely, the
Unitholders, and subject to the terms and provisions hereof.

<PAGE>

                  IN WITNESS WHEREOF, each of the undersigned has executed this
instrument as of the date set forth in the Schedule I attached hereto.

                              LASALLE BANK NATIONAL ASSOCIATION
                                as Trustee on behalf of the Trust identified
                                in Schedule I hereto, and not in its individual
                                capacity

                              By:  /s/ Ann M. Kelly
                                   ----------------------------
                                   Name:   Ann M. Kelly
                                   Title:  Assistant Vice President

                              MS STRUCTURED ASSET CORP.

                              By: /s/ John Kehoe
                                  ----------------------------
                                   Name:  John Kehoe
                                   Title: Vice President

Attachments: Schedules I, II and III

<PAGE>

                                   Schedule I
                           (Terms of Trust and Units)

Trust:                                      SATURNS Trust No. 2003-4

Date of Trust Agreement:                    March 20, 2003

Trustee:                                    LaSalle Bank National Association

 Units:                                     The Trust will issue two classes of
                                            Units: the Class A Units and the
                                            Class B Units.  Only the Class A
                                            Units will be publicly offered.

Initial Unit Principal Balance
of the Class A Units:                       $25,975,000

Initial Notional Amount
of the Class B Units:                       $25,975,000

Issue Price of Units:                       Class A Units: 100%

                                            Class B Units: $2,216,000

Number of Units:                            Class A Units:

                                            1,039,000 (Unit Principal Balance
                                            of $25 each)

                                            Class B Units:

                                            As specified by the Depositor

Minimum Denomination:                       Class A Units:

                                            $25 and $25 increments in excess
                                            thereof. Each $25 of Unit Principal
                                            Balance is a Unit.

                                            Class B Units:

                                            $100,000 and $1,000 increments in
                                            excess thereof.

Cut-off Date:                               March 20, 2003

Closing Date:                               March 20, 2003

Specified Currency:                         United States dollars

Business Day:                               New York, New York and Chicago,
                                            Illinois

Interest Rate:                              Class A Units:

                                            6.375% per annum on the basis of a
                                            360 day year consisting of twelve
                                            30 day months.

                                            Class B Units:

                                            0.9499% per annum on the basis of a
                                            360 day year consisting of twelve
                                            30 day months.

                                            The right of the Class A Units to
                                            accrued interest is pari passu with
                                            the right of the Class B Units to
                                            accrued interest from accrued
                                            interest on the securities.

Interest Reset Period:                      Not Applicable

Rating:                                     Class A Units:

                                            A3 by Moody's

                                            A- by S&P

Rating Agencies:                            Moody's and S&P

Scheduled Final Distribution Date:          November 1, 2029. The Units will
                                            have the same final maturity as the
                                            Underlying Securities.

Prepayment/Redemption:                      The Trust Property is subject to
                                            call in accordance with Schedule
                                            III. Any such call will cause a
                                            redemption of a corresponding
                                            portion of the Class A Units and a
                                            proportional reduction in the
                                            Notional Amount of the Class B
                                            Units.

                                            If the call rights under the Swap
                                            Agreement are partially exercised,
                                            (i) the Trustee will randomly select
                                            Class A Units to be redeemed in full
                                            from the proceeds of such partial
                                            exercise of the Swap Agreement and
                                            (ii) the Trustee will first redeem,
                                            up to a Notional Amount equal to the
                                            principal amount of Underlying
                                            Securities subject to such exercised
                                            call, Class B Units held by any Swap
                                            Counterparty who has exercised its
                                            call rights under the Swap Agreement
                                            and then by random selection. If
                                            sufficient funds are not available
                                            to redeem each such redeemed Unit in
                                            full, one Unit may be fractionally
                                            redeemed as a result of each such
                                            partial exercise.

Additional Distribution:                    Class A Units:

                                            If the Underlying Security Issuer
                                            gives notice of a self-tender as to
                                            Underlying Securities held by the
                                            Trust and a Swap Counterparty
                                            exercises its call rights under a
                                            Swap Agreement in connection with
                                            such self-tender prior to March 20,
                                            2008, each redeemed Class A
                                            Unitholder shall receive an
                                            additional distribution of $1.50 per
                                            Class A Unit from the proceeds of
                                            such exercise in respect of
                                            principal, price or premium with
                                            respect to the Underlying Securities
                                            in excess of the corresponding Unit
                                            Principal Balance of the Class A
                                            Units to be redeemed.

                                            Class B Units:

                                            If a Swap Counterparty exercises its
                                            call rights under the Swap
                                            Agreement, then the Class B Units
                                            designated for a reduction in
                                            Notional Amount in connection with
                                            such exercise shall receive an
                                            amount equal to the Class B Present
                                            Value Amount as of the date of such
                                            reduction in Notional Amount as an
                                            additional distribution from any
                                            Class B Unit Payment Obligation as
                                            payable under the Swap Agreement in
                                            connection with such exercise, as
                                            applicable. In no event will amounts
                                            payable on the Class B Units under
                                            this provision exceed the Class B
                                            Present Value Amount.

                                            "Class B Present Value Amount"
                                            means, with respect to a date, an
                                            amount equal to the present value of
                                            the Future Class B Unit Interest for
                                            such date in respect of the
                                            corresponding portion of the
                                            Notional Amount of the Class B Units
                                            being reduced discounted at a rate
                                            of 7.375% per annum on the basis of
                                            a 360 day year consisting of twelve
                                            30 day months.

                                            "Future Class B Unit Interest" means
                                            with respect to any date of
                                            reduction in the Notional Amount of
                                            the Class B Units resulting from an
                                            exercise of call rights under the
                                            Swap Agreement, the interest on the
                                            corresponding portion of the
                                            Notional Amount of the Class B
                                            Units, other than interest paid or
                                            accrued through such date, that
                                            would accrue at the rate and in the
                                            manner specified hereunder and would
                                            be payable at the times specified
                                            hereunder on such corresponding
                                            portion of the Notional Amount of
                                            the Class B Units to the Scheduled
                                            Final Distribution Date had such
                                            reduction of the Notional Amount of
                                            the Class B Units not occurred.

Swap Agreement:                             The ISDA Master Agreement referred
                                            to in Schedule III and any
                                            assignment thereof.

Swap Counterparty:                          Party A to the Swap Agreement
                                            referred to in Schedule III or any
                                            assignee thereof.

                                            In the event of a self-tender for
                                            the Underlying Securities the
                                            Trustee shall tender to the
                                            Underlying Security Issuer an amount
                                            of the Underlying Securities equal
                                            to the total number of options
                                            exercised, and shall apply the
                                            proceeds of such tender in cash
                                            settlement of such options as
                                            provided in the Swap Agreement;
                                            provided, however, that to the
                                            extent any amount of Underlying
                                            Securities tendered is not accepted
                                            by the Underlying Security Issuer
                                            and paid for in accordance with the
                                            terms of the tender offer, such
                                            options relating to the Underlying
                                            Securities so tendered and not
                                            accepted shall be deemed rescinded
                                            and no settlement thereof shall be
                                            deemed to have occurred, with the
                                            number of such rescinded options to
                                            be allocated among the Swap
                                            Counterparties in proportion to the
                                            number of options initially
                                            exercised (and each Swap
                                            Counterparty shall be entitled to
                                            exercise such rescinded options in
                                            the future).

Swap Termination Payment:                   With respect to each $1,000 face
                                            amount of Underlying Securities and
                                            each corresponding option under the
                                            Swap Agreement, an amount equal to
                                            the excess (if any) of the sale
                                            proceeds of the Underlying
                                            Securities, reduced by (x) accrued
                                            interest on the Underlying
                                            Securities, (y) the $1,000 of Unit
                                            Principal Balance of the Class A
                                            Units and the Class B Present Value
                                            Amount with respect to $1,000 of the
                                            Notional Amount of Class B Units to
                                            be redeemed in relation to such sale
                                            and (z) any additional distribution
                                            on the Class A Units to be redeemed
                                            in relation to such sale or
                                            distribution.

Swap Notional Amount:                       The notional amount specified in
                                            Schedule III.

Swap Payment Date:                          Not Applicable

Swap Rate:                                  Not Applicable

Distribution Date:                          Each May 1 and November 1, or
                                            the next succeeding Business Day if
                                            such day is not a Business Day,
                                            commencing May 1, 2003, and any
                                            other date upon which funds are
                                            available for distribution in
                                            accordance with the terms hereof.

                                            If any payment with respect to the
                                            Underlying Securities held by the
                                            Trust is not received by the Trustee
                                            by 12 noon (New York City time) on a
                                            Distribution Date, the corresponding
                                            distribution on the Units will not
                                            occur until the next Business Day
                                            that the Trust is in receipt of
                                            proceeds of such payment prior to 12
                                            noon, with no adjustment to the
                                            amount distributed or the Record
                                            Date.

Record                                      Date: The record date for each
                                            Distribution Date shall be the third
                                            Business Day prior to such
                                            Distribution Date, without
                                            adjustment for any change in the
                                            Distribution Date due to the receipt
                                            of funds for distribution after 12
                                            noon.

Form:                                       Global Security

Depositary:                                 DTC

Trustee Fees and Expenses:                  As compensation for and in payment
                                            of trust expenses related to its
                                            services hereunder other than
                                            Extraordinary Trust Expenses, the
                                            Trustee will receive Trustee Fees on
                                            each Distribution Date in the amount
                                            equal to $2,000. The Trustee Fee
                                            shall cease to accrue after
                                            termination of the Trust. The
                                            "Trigger Amount" with respect to
                                            Extraordinary Trust Expenses for the
                                            Trust is $25,000 and the Maximum
                                            Reimbursable Amount is $100,000. The
                                            Trustee Fee will be paid by the
                                            Expense Administrator. Expenses will
                                            be reimbursed by the Expense
                                            Administrator in accordance with the
                                            Expense Administration Agreement.

Expense Administrator:                      The Trustee will act as Expense
                                            Administrator on behalf of the Trust
                                            pursuant to an Expense
                                            Administration Agreement, dated as
                                            of the date of the Trust Agreement
                                            (the "Expense Administration
                                            Agreement"), between the Trustee as
                                            Expense Administrator (the "Expense
                                            Administrator") and the Trust.

                                            The Expense Administrator will
                                            receive a fee equal to $6,507
                                            payable on each Distribution Date.
                                            Amounts in respect of an additional
                                            payment obligation of the Swap
                                            Counterparty in respect of the
                                            Expense Administrator's fee shall
                                            also be considered part of the
                                            Expense Administrator's fee
                                            hereunder and under the Expense
                                            Administration Agreement. The
                                            Expense Administrator's fee is
                                            payable only from available interest
                                            receipts received with respect to
                                            the Underlying Securities after
                                            application of such receipts to
                                            payment of accrued interest on the
                                            Units. The Amounts specified in the
                                            paragraph are also referred to as
                                            the "Expense Administrator's Fee".

                                            The Expense Administrator will be
                                            responsible for paying the Trustee
                                            Fee and reimbursing certain other
                                            expenses of the Trust in accordance
                                            with the Expense Administration
                                            Agreement.

Listing:                                    The Depositor has applied to list
                                            the Class A Units on the New York
                                            Stock Exchange.

ERISA Restrictions:                         With respect to the Class A Units,
                                            no ERISA Restrictions apply. With
                                            respect to the Class B Units, the No
                                            Plan Restriction applies.

QIB Restriction:                            Not applicable to the Class A Units.
                                            Applicable to the Class B Units.

Trust Wind-Up Event:                        If (i) cash settlement applies under
                                            the Swap Agreement (other than in
                                            connection with a self-tender by the
                                            Underlying Security Issuer for the
                                            Underlying Securities), (ii) a Trust
                                            Wind-Up Event has occurred in
                                            connection with the exercise of any
                                            call rights under the Swap Agreement
                                            and (iii) the Selling Agent cannot
                                            obtain a bid for the Underlying
                                            Securities in excess of 100% of the
                                            aggregate Unit Principal Balance of
                                            the Units and accrued interest on
                                            the Underlying Securities, then the
                                            Underlying Securities will not be
                                            sold, the Swap Counterparty's
                                            exercise of the call rights will be
                                            rescinded (and the Swap Counterparty
                                            shall be entitled to exercise such
                                            options in the future) and any
                                            related Trust Wind-Up Event will be
                                            deemed not to have occurred.

Termination:                                If a Trust Wind-Up Event occurs, any
                                            Underlying Securities held by the
                                            Trust will be liquidated (pursuant
                                            to the terms of the Swap Agreement
                                            in the event of an exercise of
                                            options under the Swap Agreement or
                                            otherwise by sale thereof).

                                            If the related Trust Wind-Up Event
                                            occurs due to an exercise of the
                                            call rights under the Swap Agreement
                                            as to all Underlying Securities held
                                            by the Trust, (i) amounts received
                                            as accrued interest on the
                                            Underlying Securities will be
                                            applied to amounts treated as
                                            accrued interest outstanding on the
                                            Class A Units and the Class B Units,
                                            (ii) amounts received as principal
                                            or par on the Underlying Securities
                                            (including any portion of the Strike
                                            Price (as defined in the Swap
                                            Agreement) will be applied to the
                                            Unit Principal Balance of the Class
                                            A Units up to 100% of the Unit
                                            Principal Balance of each Class A
                                            Unit and (iii) any additional
                                            amounts received in respect of
                                            principal, price or premium (or any
                                            portion of the Strike Price in
                                            excess of the amount in (ii)) will
                                            be in each case applied first to the
                                            Class A Units as an additional
                                            distribution and second to the Class
                                            B Units as an additional
                                            distribution in the event of any
                                            payment in connection with any
                                            redemption, but only up to the
                                            amount specified under "Additional
                                            Distributions" in this Trust
                                            Agreement. Notwithstanding the
                                            foregoing, any Class B Unit Payment
                                            Obligation made by the Swap
                                            Counterparty under the Swap
                                            Agreement will be distributed to the
                                            Class B Units as set forth under
                                            "Additional Distributions".
                                            Remaining accrued interest will be
                                            applied to the Expense
                                            Administrator's fee. Amounts in
                                            respect of an additional payment
                                            obligation of each Swap Counterparty
                                            in respect of the Expense
                                            Administrator's Fee will be paid to
                                            the Expense Administrator. Remaining
                                            amounts will be allocated to any
                                            applicable additional distribution
                                            on the Class B Units and then to the
                                            Swap Termination Payment.

                                            If the Trust is terminated for any
                                            other reason, the proceeds of
                                            liquidation will be applied to
                                            redeem the Class A Units, up to
                                            their stated principal balance, and
                                            the Class B Units. The Class A Units
                                            will have a claim on the proceeds of
                                            the liquidation equal to their
                                            aggregate Unit Principal Balance
                                            plus accrued interest. The Class B
                                            Units will have a claim on the
                                            proceeds of liquidation equal to
                                            accrued interest plus the Class B
                                            Present Value Amount, in each case
                                            as of such date of termination. If
                                            the proceeds of the liquidation are
                                            less than the combined claim amounts
                                            of the Class A Units and the Class B
                                            Units, the proceeds will be
                                            distributed in proportion to the
                                            claim amounts of the Class A Units
                                            and the Class B Units in full
                                            satisfaction of the claims of the
                                            Units. If the proceeds of
                                            liquidation exceed the stated
                                            principal balance of the Class A and
                                            the Class B Present Value of the
                                            Class B Units and the accrued
                                            interest on the Underlying
                                            Securities, the excess will be paid
                                            to the Swap Counterparty as a Swap
                                            Termination Payment under the Swap
                                            Agreement, other than amounts
                                            payable to the Expense Administrator
                                            in respect of the Expense
                                            Administrator's Fee.

Self-Tenders by
Underlying Security Issuer:                 The Trust will not participate in
                                            any self-tender by the Underlying
                                            Security Issuer for the Underlying
                                            Securities and the Trustee will not
                                            accept any instructions to the
                                            contrary from the Unitholders,
                                            except in connection with an
                                            exercise by a Swap Counterparty of
                                            its call rights. Any Swap
                                            Counterparty may exercise its call
                                            rights in connection with any
                                            self-tender in accordance with the
                                            Swap Agreement and the Trustee may
                                            participate in the self tender by
                                            the Underlying Security Issuer on
                                            behalf of an exercising Swap
                                            Counterparty.

Depositor Optional Exchange:                Depositor Optional Exchange applies
                                            to this Series of Units.

                                            Section 5.12(c)(ii) of the Standard
                                            Terms shall be incorporated herein
                                            by replacing 5.12 (c)(ii) with the
                                            following: "(ii) such exchange is to
                                            be effected on any Distribution Date
                                            or any date that is 90 days before
                                            or after a Distribution Date (or the
                                            succeeding Business Day if such date
                                            is not a Business Day) with 45 days
                                            notice".

                                            Pursuant to 5.12(c)(iii) each Swap
                                            Counterparty and the Expense
                                            Administrator must consent to such
                                            an exchange.

Terms of Retained Interest:                 Notwithstanding any other provision
                                            herein or in the Standard Terms, the
                                            Depositor retains the right to
                                            receive any and all interest that
                                            accrues on the Underlying Securities
                                            prior to the Closing Date. The
                                            Depositor will receive such accrued
                                            interest on the first Distribution
                                            Date (or redemption date if earlier)
                                            for the Units and such amount shall
                                            be paid from the interest payment
                                            made with respect to the Underlying
                                            Securities on the first Distribution
                                            Date.

                                            The amount of the Retained Interest
                                            is $724,632.

                                            If an Underlying Security Default
                                            occurs on or prior to the first
                                            Distribution Date and the Depositor
                                            does not receive such Retained
                                            Interest amount in connection with
                                            such Distribution Date, the
                                            Depositor will have a claim for such
                                            Retained Interest, and will share
                                            pro rata with holders of the Units
                                            to the extent of such claim in the
                                            proceeds from the recovery on the
                                            Underlying Securities.

Call Option Terms:                          Not Applicable.

Sale of Underlying Securities:              If the Swap Counterparty is not an
                                            affiliate of the Selling Agent, the
                                            Selling Agent will extend a right of
                                            first refusal to each Swap
                                            Counterparty to purchase the
                                            Underlying Securities at the highest
                                            bid received by the Selling Agent.

                                            If more than one Swap Counterparty
                                            exercises such right of first
                                            refusal, Underlying Securities will
                                            be sold to each exercising Swap
                                            Counterparty in proportion to the
                                            number of options held by such Swap
                                            Counterparty; provided, that if only
                                            one Swap Counterparty exercises such
                                            right of first refusal, such Swap
                                            Counterparty shall be entitled to
                                            purchase all of the Underlying
                                            Securities to be sold by the Selling
                                            Agent.

                                            If cash settlement applies and if
                                            the Swap Counterparty exercises any
                                            of its call rights other than in
                                            connection with a self-tender for
                                            the Underlying Securities by the
                                            Underlying Security Issuer (or
                                            extent thereof in the event of an
                                            exercise of call rights in excess of
                                            the amount to be redeemed), a number
                                            of Underlying Securities
                                            corresponding to the number of call
                                            rights exercised by the Swap
                                            Counterparty will be sold by the
                                            Selling Agent on behalf of the
                                            Trust. If the Selling Agent cannot
                                            obtain a bid for the Underlying
                                            Securities in excess of the amount
                                            specified in the Swap Agreement,
                                            then the Underlying Securities will
                                            not be sold, the Swap Counterparty's
                                            exercise, will be rescinded (and the
                                            Swap Counterparty shall be entitled
                                            to exercise such call rights in the
                                            future) and any related Trust
                                            Wind-Up Event will be deemed not to
                                            have occurred.

Selling Agent:                              Morgan Stanley & Co. Incorporated.

Rating Agency Condition:                    The definition of Rating Agencies
                                            Condition in the Standard Terms
                                            shall not apply.

                                            "Rating Agency Condition": With
                                            respect to any specified action or
                                            determination, means receipt of (i)
                                            written confirmation by Moody's (if
                                            the Units are rated by Moody's, for
                                            so long as the Units are outstanding
                                            and rated by Moody's) and (ii)
                                            written confirmation by S&P (if the
                                            Units are rated by S&P, for so long
                                            as the Units are outstanding and
                                            rated by S&P), that such specified
                                            action or determination will not
                                            result in the reduction or
                                            withdrawal of their then-current
                                            ratings on the Units. Such
                                            satisfaction may relate either to a
                                            specified transaction or may be a
                                            confirmation with respect to any
                                            future transactions which comply
                                            with generally applicable conditions
                                            published by the applicable rating
                                            agency.

<PAGE>

                                   Schedule II
                            (Terms of Trust Property)

Underlying Securities:                      Dow Chemical Company 7.375%
                                            debentures due November 1, 2029

Underlying Security Issuer:                 Dow Chemical Company

Principal Amount:                           $25,975,000

Underlying Security Rate:                   7.375%

Credit Ratings:                             A3 by Moody's

                                            A- by S&P

Listing:                                    None

Underlying Security
Issuance Agreement:                         An indenture dated as of April 1,
                                            1992 between the Underlying Security
                                            Issuer and the Underlying Security
                                            Trustee as supplemented and amended
                                            from time to time.

Form:                                       Global

Currency of
Denomination:                               United States dollars

Acquisition Price by Trust:                 $27,837,725

Underlying Security
Payment Date:                               Each May 1 and November 1

Original Issue Date:                        The Underlying Securities were
                                            issued on or about November 9, 1999.

Maturity Date:                              November 1, 2029

Sinking Fund Terms:                         Not Applicable

Redemption Terms:                           Not Applicable

CUSIP No.:/ISIN No.                         260543BJ1

Underlying Security Trustee:                The First National Bank of Chicago

Available Information
Regarding the Underlying Security Issuer
(if other than U.S.
Treasury obligations):                      The Underlying Security Issuer is
                                            subject to the informational
                                            requirements of the Securities
                                            Exchange Act of 1934, as amended,
                                            and in accordance therewith files
                                            reports and other information with
                                            the Securities and Exchange
                                            Commission (the "Commission"). Such
                                            reports and other information can be
                                            inspected and copied at the public
                                            reference facilities maintained by
                                            the Commission at 450 Fifth Street,
                                            N.W., Washington, D.C. 20549 and at
                                            the following Regional Offices of
                                            the Commission: Woolworth Building,
                                            233 Broadway, New York, New York
                                            10279, and Northwest Atrium Center,
                                            500 West Madison Street, Chicago,
                                            Illinois 60661. Copies of such
                                            materials can be obtained from the
                                            Public Reference Section of the
                                            Commission at 450 Fifth Street,
                                            N.W., Washington, District of
                                            Columbia 20549 at prescribed rates.

<PAGE>

                                  Schedule III
                              (Call Option Confirm)

<PAGE>

--------------------------------------------------------------------------------
Date:      March 20, 2003

To:        SATURNS Trust No. 2003-4         From:      Morgan Stanley & Co.
                                                       International Limited

Attn:      Asset-Backed Securities Group    Contact:   Chris Boas
           SATURNS Trust No. 2003-4

Fax:       312-904-2084                     Fax:       212-761-0406

Tel:       312-904-9387                     Tel:       212-761-1395
--------------------------------------------------------------------------------

Re: Bond Option Transaction. MS Reference Number SQ28D

         The purpose of this letter agreement is to confirm the terms and
conditions of the Transaction entered into between you and Morgan Stanley & Co.
International Limited ("MSIL"), with Morgan Stanley & Co. Incorporated
("MS&Co."), as agent, on the Trade Date specified below (the "Transaction").
This letter agreement constitutes a "Confirmation" as referred to in the
Agreement below.

         The definitions and provisions contained in the 1997 ISDA Government
Bond Option Definitions as published by the International Swaps and Derivatives
Association, Inc. ("ISDA") are incorporated into this Confirmation and this
transaction shall be deemed a "Government Bond Option Transaction" for purposes
of such definitions. In the event of any inconsistency between those definitions
and this Confirmation, this Confirmation will govern.

         1. This Confirmation supplements, forms a part of, and is subject to,
the ISDA Master Agreement dated as of the date hereof, as amended and
supplemented from time to time (the "Agreement"), between you and us. All
provisions contained in the Agreement govern this Confirmation except as
expressly modified below.

         2. The terms of the particular Transaction to which this Confirmation
relates are as follows:

I. General Terms

Trade Date:                         March 20, 2003

Option Style:                       American

Option Type:                        Call

Buyer:                              MSIL ("Party A")

Seller:                             SATURNS Trust No. 2003-4 ("Party B")

Bonds:                              The obligation identified as follows:

                                    Bond Issuer:           Dow Chemical Company
                                    Issue:                 7.375% debentures
                                                           due 2029
                                    CUSIP:                 260543BJ1
                                    Coupon:                7.375%
                                    Maturity Date:         November 1, 2029
                                    Face Amount Purchased: USD 25,975,000

Premium:                            USD $64,938

Premium Payment Date:               March 20, 2003

Number of Options:                  25,975

Option Entitlement:                 USD 1,000 of face amount of the Bonds per
                                    Option.

Strike Price:                       (i) For any Exercise Date prior to March 20,
                                    2008, 106%, in the case of an exercise
                                    related to a self-tender by the Bond Issuer
                                    for Bonds held by the Trust, of the
                                    corresponding portion of the face amount of
                                    the Bonds, but exclusive of accrued interest
                                    on the Bonds or (ii) for any Exercise Date
                                    on or after March 20, 2008, 100% of the face
                                    amount of the Bonds exclusive of accrued
                                    interest.

Calculation Agent:                  Party A

II. Exercise Terms

Automatic Exercise:                 Inapplicable

Exercise Period:                    Any Business Day from, and including, 9:00
                                    a.m. (New York time) on March 20, 2008, to,
                                    and including, the Expiration Time on the
                                    Expiration Date; provided, however, the
                                    Exercise Period shall also include any
                                    Business Day prior to March 20, 2008, if
                                    notice of redemption or self-tender has been
                                    delivered by the Bond Issuer as to Bonds
                                    held by the Trust.

Exercise Date:                      For each Option exercised, the day during
                                    the Exercise Period on which that Option is
                                    exercised.

Rescission of Exercise:             Party A may rescind its notice of exercise
                                    at any time prior to the Settlement Date by
                                    providing notice of rescission to Party B.

                                    If Cash Settlement applies and if Party B
                                    cannot obtain a bid for the Bonds held by it
                                    in excess of the Strike Price together with
                                    accrued interest on the Bonds, then Party
                                    A's notice of exercise shall be rescinded.
                                    If Cash Settlement applies and Party A
                                    exercises its Options in connection with a
                                    self-tender for settlement prior to March
                                    20, 2008, Party A's notice of exercise shall
                                    be automatically rescinded if the price
                                    offered by the Bond Issuer does not exceed
                                    the Strike Price together with accrued
                                    interest on the Bonds.

                                    Upon any rescission of exercise (whether
                                    pursuant to the foregoing sentence or
                                    otherwise) the Options for which notice of
                                    exercise was given and for which exercise
                                    was rescinded shall continue in full force
                                    and effect without regard to such provision
                                    of notice.

                                    Any Options exercised under this Transaction
                                    may be deemed rescinded to the extent so
                                    provided under Schedule I to the Trust
                                    Agreement.

Multiple Exercise:                  Applicable

Minimum Number of Options:          1

Written Confirmation of Exercise:   Applicable. Buyer shall give exercise notice
                                    which may be given orally (including by
                                    telephone) during the Exercise Period but no
                                    later than the Notification Date. Buyer will
                                    execute and deliver a written exercise
                                    notice confirming the substance of such oral
                                    notice, however, failure to provide such
                                    written notice will not affect the validity
                                    of the oral notice.

Limitation on Rights of MSIL:       Buyer may, by written notice thereof to
                                    Seller, delegate its rights to provide a
                                    notice of exercise hereunder to a third
                                    party (the "Third Party"). Any such
                                    delegation will be irrevocable by Buyer
                                    without the written consent of the Third
                                    Party. Any such Third Party will have the
                                    same rights and obligations regarding
                                    providing notice of exercise hereunder as
                                    the Buyer had prior to such delegation.
                                    While any such delegation is effective,
                                    Seller will only recognize a notice of
                                    exercise that is provided by the Third
                                    Party.

Notification Date:                  The Swap Counterparty may give notice of its
                                    intention to exercise the call rights under
                                    the Swap Agreement on not less than 15 or
                                    more than 60-calendar days' notice. The Swap
                                    Counterparty may give notice of its
                                    intention to exercise its call rights under
                                    the Swap Agreement with respect to Bonds
                                    held by the Trust as to which the Bond
                                    Issuer has given notice of a self-tender
                                    with two business days notice prior to the
                                    settlement of exercise but no later than
                                    4:00 p.m. New York time on the second
                                    Business Day immediately preceding the
                                    scheduled settlement of the self-tender.

Limited Right to Confirm Exercise:  Inapplicable

Expiration Date:                    November 1, 2026

Expiration Time:                    4:00 p.m. New York time

Business Days:                      New York and Chicago

III. Settlements:

Settlement:                         Cash Settlement if MSIL is Party A or if the
                                    Options are exercised in connection with a
                                    self-tender; otherwise Physical Settlement.
                                    Party A will notify Party B separately
                                    regarding the clearance system details for
                                    Physical Settlement.

Spot Price (Cash Settlement Only):  The cash proceeds received by Party B in
                                    connection with sale of the Bonds by Party
                                    B, excluding any amounts in respect of
                                    accrued interest. In the event of a
                                    self-tender by the Bond Issuer, the self
                                    tender price, as applicable, paid by the
                                    Bond Issuer, excluding accrued interest.

Cash Settlement Amount (Cash        The Cash  Settlement  Amount shall be
Settlement Only):                   adjusted to reflect the Additional Payment
                                    Obligation of Party A.

Bond  Payment (Physical Settlement  The Bond Payment shall also include the
Only):                              Additional Payment Obligation of Party A.

Deposit of Bond  Payment (Physical  Party A must  deposit the Bond Payment with
Settlement Only):                   the Trustee on the Business Day prior to the
                                    Exercise  Date.  The Bonds are to be
                                    delivered "free" to Party A.

Additional Payment Obligation of    To the Expense Administrator(the "Expense
Party A:                            Administrator Payment Obligation"):

                                    If any exercise of Options hereunder is an
                                    exercise of less than all Options remaining
                                    unexercised hereunder, Party A shall pay to
                                    the Expense Administrator an amount equal to
                                    the present value of a stream of payments
                                    equal to $6,507 payable on each payment date
                                    for the Bonds until the maturity of the
                                    Bonds discounted at a rate of 5% per annum
                                    on the basis of a 360 day year consisting of
                                    twelve 30 day months from the date of such
                                    exercise until the Scheduled Final
                                    Distribution Date (as defined in the Trust
                                    Agreement), assuming for this purpose that
                                    the Trust (as defined in the Trust
                                    Agreement) is not terminated prior to the
                                    Scheduled Final Distribution Date,
                                    multiplied by the Option Entitlement
                                    multiplied by the number of Options
                                    exercised and divided by $25,975,000.

                                    To Party B for Payment on the Class B Units
                                    (the "Class B Unit Payment Obligation"):

                                    Upon any exercise hereunder, Party A shall
                                    pay to Party B, for distribution with
                                    respect to the Class B Units outstanding
                                    under the Trust Agreement, the Class B
                                    Present Value Amount (as defined in the
                                    Trust Agreement).

Settlement Date:                    For Cash Settlement, as applicable, the
                                    Business Day of settlement of the sale of
                                    the Bonds by Party B or the Business Day of
                                    settlement of a self tender. For Physical
                                    Settlement, the Exercise Date.

         3. Additional Definitions.

         "Expense Administration Agreement" means the expense administration
agreement dated as of the date hereof between Party B and the Expense
Administrator.

         "Expense Administrator" means LaSalle Bank National Association acting
pursuant to the "Expense Administration Agreement".

         "Trust Agreement" means the trust agreement dated as of the date hereof
between the MS Structured Asset Corp. and LaSalle Bank National Association.

         4. Representations. Morgan Stanley & Co. Incorporated is acting as
agent for both parties but does not guarantee the performance of Party A.

         5. Additional Termination Event. As set forth in the Agreement, a Trust
Wind-Up Event will result in an Additional Termination Event under the Agreement
with respect to which Party B shall be the Affected Party and this Transaction
shall be an Affected Transaction. A redemption by the Bond Issuer of a portion
of the Bonds held by Party B will result in a partial Additional Termination
Event to the extent of the Bonds being so redeemed (or, to the extent there are
multiple Swap Counterparties, to such portion of the Bonds being redeemed
allocable to the options held by Party A) if Party A does not exercise Options
hereunder corresponding to such Bonds.

         6. Swap Termination Payments. In the event an Early Termination Date is
designated with respect to which this Transaction is an Affected Transaction,
there shall be payable to Party A as a termination payment for each option so
terminated in lieu of the termination payment determined in accordance with
Section 6(e) of the Agreement, the amount specified as the Swap Termination
Payment in the Trust Agreement.

         7. Assignment. The rights under this Confirmation and the Agreement may
be assigned at any time and from time to time in whole or in part; provided that
the Rating Agency Condition (as defined in the Trust Agreement) is satisfied
with respect to such assignment and any transfer. The transferee in any such
assignment or transfer must be a qualified institutional buyer as defined in
Rule 144A under the Securities Act of 1933, as amended.

         8. Account Details.

Payments to Party A:                   Citibank, N.A., New York
                                       SWIFT BIC Code: CITIUS33
                                       ABA No.  021 000 089
                                       FAO: Morgan Stanley & Co. International
                                            Limited
                                       Account No. 3042-1519

Operations Contact:                    Barbara Kent
                                       Tel  212-537-1449
                                       Fax  212-537-1868

Payments to Party B:                   LaSalle Bank, Chicago, Illinois
                                       ABA No. 071 000 505
                                       Reference:  SATURNS 2003-4
                                       Unit Account / AC-2090067/
                                       Account No.: 67-9180-505

Operations Contact:                    Andy Streepey
                                       Tel:  312-904-9387
                                       Fax: 312-904-2084

<PAGE>

         Please confirm that the foregoing correctly sets forth the terms of our
agreement MS Reference Number SQ28D by executing this Confirmation and returning
it to us.

Best Regards,

MORGAN STANLEY & CO. INTERNATIONAL LIMITED

BY: /s/ John Kehoe
   -------------------------
     Name:  John Kehoe
     Title: Attorney in fact

Acknowledged and agreed as of the date first written above:

SATURNS TRUST NO. 2003-4
BY:  LaSalle Bank National Association,
      solely as Trustee and not in its individual capacity.

BY: /s/ Ann M. Kelly
    ------------------------
     Name:   Ann M. Kelly
     Title:  Assistant Vice President

MORGAN STANLEY & CO. INCORPORATED hereby agrees to and
acknowledges its role as agent for both parties in accordance with
the Schedule to the Agreement.

BY: /s/ John Kehoe
   -------------------------
     Name:  John Kehoe
     Title: Attorney in factF5 Networks-- 1998 Equity Incentive Plan.DOC

     EXHIBIT 10.1

      

     Amended and
     Restated

     

     F5 Networks, Inc.

     

     1998 Equity Incentive Plan

      

     Adopted November
     12,1998

     Approved By Shareholders November 12,1998

     Amendment Approved by Shareholders February 13, 2003

     Termination Date:  November 11,2008

     1.        
     Purposes.

        
     (a)        Eligible Stock Award
     Recipients.  The persons eligible to receive Stock Awards are the
     Employees, Directors and Consultants of the Company and its
     Affiliates.   

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

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

     2.        
     Definitions.

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

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

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

        
     (d)        "Committee"
     means a Committee appointed by the Board in accordance with
     subsection 3(c).

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

        
     (f)        "Company"
     means F5 Networks, Inc., a Washington corporation.

     1

     

      

        
     (g)        "Consultant"
     means any person, including an advisor, (i) who is engaged by the Company
     or an Affiliate to render services other than as an Employee or as a
     Director or (ii) who is a member of the Board of Directors of an Affiliate.

        
     (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 of the Company 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 day of determination or, if the day of
     determination is not a market trading day, then on the last market trading
     day prior to the day of determination, as reported in The Wall Street
     Journal or such other source as the Board deems reliable.

     2

     

      

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

        
     (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 the Common 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 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 of the Company 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 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.

        
     (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.

     3

     

      

        
     (w)       "Outside Director"
     means a Director of the Company 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 F5 Networks, Inc. 1998 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 or an administrator, 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 permitted to receive stock pursuant to a
     Stock Award; and the number of shares with respect to which a Stock Award
     shall be granted to each such person.

     4

     

      

                
     (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 or more members of the Board, and the term "Committee"
     shall apply to any person or persons to whom such authority has been
     delegated.  The Board or the Committee may further delegate its
     authority and responsibilities under the Plan to an Officer.  However,
     if administration is delegated to an Officer, such Officer may grant Stock
     Awards only within guidelines established by the Board or the Committee,
     and only the Board or the Committee may make a Stock Award to an Officer or
     Director.  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, or an Officer to whom
     authority has been delegated), 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. 
     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 (i) 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 (1) 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 (2) not persons with respect to whom the
     Company wishes to comply with Section 162(m) of the Code and/or) (ii)
     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.

     5

     

      

     4.        
     Shares Subject to the Plan.

        
     (a)        Share Reserve. 
     Subject to the provisions of Section 11 relating to adjustments upon
     changes in stock, the stock that may be issued pursuant to Stock Awards
     shall not exceed in the aggregate Three Million (3,000,000) 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 stock not acquired under such Stock Award shall revert to and
     again become available for issuance under the Plan.  The number of
     shares of Common Stock that may be issued pursuant to Stock Awards, as
     specified in subsection 4(a), shall only be reduced to reflect new shares
     that are actually delivered under the Plan.  Therefore, a
     stock-for-stock exercise of an Option shall result in only the net number
     of additional shares of Common Stock being counted against the share
     reserve.

        
     (c)        Source of Shares. 
     The stock subject to the Plan may be unissued shares or reacquired shares,
     bought on the market or otherwise.

     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. 
     No Ten Percent Shareholder shall be eligible for the grant of 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.

        
     (c)        Section 162(m) Limitation. 
     Subject to the provisions of Section 11 relating to adjustments upon
     changes in stock, no employee shall be eligible to be granted Options
     covering more than Two Hundred Thousand (200,000) shares of the 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 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 of the Company 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.

     6

     

      

     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 a
     certificate is issued for shares purchased on exercise of an Option, a
     separate certificate or certificates will be issued for shares 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 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 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
     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 fifty percent (50%) of the Fair Market
     Value of the 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 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) by (1) delivery to the Company of other
     Common Stock, (2) according to a deferred payment or other arrangement
     (which may include, without limiting the generality of the foregoing, the
     use of other Common Stock) with the Participant or (3) in any other form of
     legal consideration that may be acceptable to the Board. 
     Notwithstanding the foregoing, no Officer or Director may pay the exercise
     price of an Option by a deferred payment arrangement.

     7

     

      

     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 provisions of this
     subsection 6(e), 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 be transferable to the extent that transferability
     is both permitted by Section 260.140.41(d) of Title 10 of the California
     Code of Regulations at the time the Option is granted and provided for in
     the Option Agreement.  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 provisions of this
     subsection 6(f), 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
     which 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 as to which an
     Option may be exercised.   

        
     (h)        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 it 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, for Options granted prior to the Listing Date, shall not
     be less than thirty (30) days, 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.

         (i)        
     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 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.

     8

     

      

        
     (j)         Disability of
     Optionholder.  In the event 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 it 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, for Options granted prior to the
     Listing Date, shall not be less than six (6) months) 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.

        
     (k)       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 the Option as of the date of death) by the Optionholder's estate,
     by a person who acquired the right to exercise the Option by bequest or
     inheritance or by a person designated to exercise the option upon the
     Optionholder's death pursuant to subsection 6(e) or 6(f), but only within
     the period ending on the earlier of (1) the date eighteen (18) months
     following the date of death (or such longer or shorter period specified in
     the Option Agreement, which, for Options granted prior to the Listing Date,
     shall not be less than six (6) months) 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.

        
     (l)         Re-Load Options. 
     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.  Any such Re-Load Option shall (i) provide for a
     number of shares equal to the number of shares surrendered as part or all
     of the exercise price of such Option; (ii) 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 (iii) 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.

     9

     

      

     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 dollars ($100,000)
     annual limitation on 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 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 shall be awarded in consideration for past services actually
     rendered to the Company for its benefit.

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

                
     (iv)       Transferability.  For a
     stock bonus award made before the Listing Date, rights to acquire shares
     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
     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 stock
     awarded under the stock bonus agreement remains subject to the terms of the
     stock bonus agreement.

     10

     

      

        
     (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, the purchase price shall not be less than fifty percent (50%) of
     the 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 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 arrangement with the Participant; or (iii) in any other form of legal
     consideration that may be acceptable to the Board in its discretion. 
     Notwithstanding the foregoing, no Officer or Director may pay the purchase
     price for restricted stock by a deferred payment arrangement.

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

                
     (v)        Transferability. 
     For a restricted stock award made before the Listing Date, rights to
     acquire shares 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 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 stock awarded under
     the restricted stock purchase agreement remains subject to the terms of the
     restricted stock purchase agreement.

     11

     

      

     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 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
     stock under the Plan, the Company shall be relieved from any liability for
     failure to issue and sell 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 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 subject to such Stock Award
     unless and until such Participant has satisfied all requirements for
     exercise of the Stock Award pursuant to its terms.

        
     (c)        No Employment or other
     Service Rights.  Nothing in the Plan or any instrument executed or
     Stock Award granted pursuant thereto shall confer upon any Participant or
     other holder of Stock Awards 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.

     12

     

      

        
     (d)        Incentive Stock Option
     $100,000 Limitation.  To the extent that the aggregate Fair Market
     Value (determined at the time of grant) of 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 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 the stock subject to the Stock Award for the Participant's own
     account and not with any present intention of selling or otherwise
     distributing the stock.  The foregoing requirements, and any
     assurances given pursuant to such requirements, shall be inoperative if
     (iii) the issuance of the shares upon the exercise or acquisition of stock
     under the Stock Award has been registered under a then currently effective
     registration statement under the Securities Act or (iv) 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 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 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 from the shares of the Common
     Stock otherwise issuable to the Participant as a result of the exercise or
     acquisition of stock under the Stock Award; or (iii) delivering to the
     Company owned and unencumbered shares of the Common Stock.

        
     (g)        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 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,
     any repurchase option contained in a Stock Award granted prior to the
     Listing Date to a Participant who is not an Officer, Director or Consultant
     shall be upon the terms described below:

     13

     

      

                
     (i)         Fair Market Value. 
     If the repurchase option gives the Company the right to repurchase the
     shares upon termination of employment at not less than the Fair Market
     Value of the shares 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 within
     ninety (90) days of termination of Continuous Service (or in the case of
     shares 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 become publicly traded.

                
     (ii)        Original Purchase Price. 
     If the repurchase option gives the Company the right to repurchase the
     shares 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 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 within 
     ninety (90) days of termination of Continuous Service (or in the case of
     shares 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").

        
     (h)        Cancellation and Re-Grant of
     Options.

                
     (i)         Authority to Reprice. 
     The Board shall have the authority to effect, at any time and from time to
     time, (i) the repricing of any outstanding Options under the Plan
     and/or (ii) with the consent of any adversely affected holders of
     Options, the cancellation of any outstanding Options under the Plan and the
     grant in substitution therefor of new Options under the Plan covering the
     same or different numbers of shares of Common Stock.  The exercise
     price per share shall be not less than that specified under the Plan for
     newly granted Stock Awards.  Notwithstanding the foregoing, the Board
     may grant an Option with an exercise price lower than that set forth above
     if such Option is granted as part of a transaction to which Section 424(a)
     of the Code applies.

                
     (ii)        Effect of Repricing under
     Section 162(m) of the Code.  Shares subject to an Option which is
     amended or canceled in order to set a lower exercise price per share shall
     continue to be counted against the maximum award of Options permitted to be
     granted pursuant to subsection 5(c).  The repricing of an Option under
     this subsection 10(i) resulting in a reduction of the exercise price shall
     be deemed to be a cancellation of the original Option and the grant of a
     substitute Option; in the event of such repricing, both the original and
     the substituted Options shall be counted against the maximum awards of
     Options permitted to be granted pursuant to subsection 5(c).  The
     provisions of this subsection 10(i)(b) shall be applicable only to the
     extent required by Section 162(m) of the Code.

     14

     

      

     11.      
     Adjustments upon Changes in Stock.

        
     (a)        Capitalization Adjustments. 
     If any change is made in the stock subject to the Plan, or subject to any
     Stock Award, without the receipt of consideration by the Company (through
     merger, consolidation, reorganization, recapitalization, reincorporation,
     stock dividend, dividend in property other than cash, stock split,
     liquidating dividend, combination of shares, exchange of shares, change in
     corporate structure or other transaction not involving the receipt of
     consideration by the Company), the Plan will be appropriately adjusted in
     the class(es) and maximum number of securities subject to the Plan pursuant
     to subsection 4(a) and the maximum number of securities subject to award to
     any person pursuant to subsection 5(c), and the outstanding Stock Awards
     will be appropriately adjusted in the class(es) and number of securities
     and price per share of stock subject to such outstanding Stock
     Awards.  The Board, the determination of which shall be final, binding
     and conclusive, shall make such adjustments.  (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 such Stock Awards 
     shall be terminated if not exercised (if applicable) prior to such event.

        
     (c)        Change in Control--Asset
     Sale, Merger, Consolidation or Reverse Merger. 

                
     (i)         In the event of (1)
     a sale of substantially all of the assets of the Company, (2) a merger or
     consolidation in which the Company is not the surviving corporation or (3)
     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). 

                
     (ii)        For purposes of
     subsection 11(c) an Award shall be deemed assumed if, following the change
     in control, the Award confers the right to purchase in accordance with its
     terms and conditions, for each share of Common Stock subject to the Award
     immediately prior to the change in control, the consideration (whether
     stock, cash or other securities or property) to which a holder of a share
     of Common Stock on the effective date of the change in control was
     entitled.

                
     (iii)       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 50% 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.

     15

     

      

     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 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 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.

     16

     

      

     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.

         All questions
     concerning the construction, validity and interpretation of this Plan shall
     be governed by the law of the State of Washington, without regard to such
     states conflict of laws rules.

      

      

      

     17

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