Document:

<PAGE>

                                                                  EXHIBIT 10.3

                                 PHASECOM, INC.

               1999 EMPLOYEE AND CONSULTANT EQUITY INCENTIVE PLAN

         1. PURPOSE. The purpose of the 1999 Employee and Consultant Equity
Incentive Plan (the "Plan") of PHASECOM, Inc., a Delaware corporation (the
"Company"), is to provide incentives to attract, retain and motivate eligible
persons whose present and potential contributions are important to the
success of the Company, its Parent, Subsidiaries and Affiliates, by offering
them an opportunity to participate in the Company's future performance
through awards of Options, Restricted Stock and Stock Bonuses. The company
wishes the issuance of options to its employees in Israel to conform with the
requirements of Section 3(9) of the Israeli Income Tax Ordinance, and for
this purpose the appended document Annex A amends this plan to so conform.
Capitalized terms not defined in the text are defined in Section 23.

         2.       SHARES SUBJECT TO THE PLAN.

                  2.1 NUMBER OF SHARES AVAILABLE. Subject to Sections 2.2 and
18, the total number of Shares reserved and available for grant and issuance
pursuant to the Plan shall be one million six hundred thousand (1,600,000)
Shares. Subject to Sections 2.2 and 18, Shares shall again be available for
grant and issuance in connection with future Awards under the Plan that: (a)
are subject to issuance upon exercise of an Option but cease to be subject to
such Option for any reason other than exercise of such Option; (b) are
subject to an Award granted hereunder but are forfeited; or (c) are subject
to an Award that otherwise terminates without Shares being issued.

                  2.2 ADJUSTMENT OF SHARES. In the event that the number of
outstanding Shares is changed by a stock dividend, recapitalization, stock
split, reverse stock split, subdivision, combination, reclassification or
similar change in the capital structure of the Company without consideration,
then (a) the number of Shares reserved for issuance under the Plan; (b) the
Exercise Prices of and number of Shares subject to outstanding Options; and
(c) the number of Shares subject to other outstanding Awards shall be
proportionately adjusted, subject to any required action by the Board or the
shareholders of the Company and compliance with applicable securities laws;
PROVIDED, HOWEVER, that fractions of a Share shall not be issued but shall
either be paid in cash at Fair Market Value or shall be rounded up to the
nearest Share, as determined by the Committee.

         3. ELIGIBILITY. ISOs (as defined in Section 5 below) may be granted
only to employees (including officers and directors who are also employees)
of the Company, or of a Parent or Subsidiary of the Company. All other Awards
may be granted to employees, officers, directors, consultants and advisors of
the Company or any Parent, Subsidiary or Affiliate of the Company; PROVIDED,
HOWEVER, such consultants and advisors render bona fide services not in
connection with the offer and sale of securities in a capital-raising
transaction. A person may be granted more than one Award under the Plan.

         4.       ADMINISTRATION.

                  4.1 COMMITTEE AUTHORITY. The Plan shall be administered by
the Committee or the Board acting as the Committee. Subject to the general
purposes, terms and conditions of the Plan, and to the direction of the
Board, the Committee shall have full power to implement and carry out the
Plan. The Committee shall have the authority to:

<PAGE>

                           (a)      construe and interpret the Plan, any Award
                                    Agreement and any other agreement or
                                    document executed pursuant to the Plan;

                           (b)      prescribe, amend and rescind rules and
                                    regulations relating to the Plan;

                           (c)      select persons to receive Awards;

                           (d)      determine the form and terms of Awards;

                           (e)      determine the number of Shares or other
                                    consideration subject to Awards;

                           (f)      determine whether Awards will be granted
                                    singly, in combination, in tandem with, in
                                    replacement of, or as alternatives to, other
                                    Awards under the Plan or any other incentive
                                    or compensation plan of the Company or any
                                    Parent, Subsidiary or Affiliate of the
                                    Company;

                           (g)      grant waivers of Plan or Award conditions;

                           (h)      determine the vesting, exercisability and
                                    payment of Awards;

                           (i)      correct any defect, supply any omission, or
                                    reconcile any inconsistency in the Plan, any
                                    Award or any Award Agreement;

                           (j)      determine whether an Award has been earned;
                                    and

                           (k)      make all other determinations necessary or
                                    advisable for the administration of the
                                    Plan.

                  4.2 COMMITTEE DISCRETION. Any determination made by the
Committee with respect to any Award shall be made in its sole discretion at
the time of grant of the Award or, unless in contravention of any express
term of the Plan or Award, at any later time, and such determination shall be
final and binding on the company and all persons having an interest in any
Award under the Plan. The Committee may delegate to one or more officers of
the Company the authority to grant an Award under the Plan to Participants
who are not Insiders of the Company.

                  4.3 EXCHANGE ACT REQUIREMENTS. If the Company is subject to
the Exchange Act, the Company will take appropriate steps to comply with the
disinterested director requirements of Section 16(b) of the Exchange Act,
including but not limited to, the appointment by the Board of a Committee
consisting of not less than two (2) persons (who are members of the Board),
each of whom is a Disinterested Person.

         5. OPTIONS. The Committee may grant Options to eligible persons and
shall determine whether such Options shall be Incentive Stock Options within
the meaning of the Code ("ISOs") or Nonqualified Stock Options ("NQSOs"), the
number of Shares subject to the

                                       -2-

<PAGE>

Option, the Exercise Price of the Option, the period during which the Option
may be exercised, and all other terms and conditions of the Option, subject
to the following:

                  5.1 FORM OF OPTION GRANT. Each Option granted under the
Plan shall be evidenced by an Award Agreement which shall expressly identify
the Option as an ISO or NQSO ("STOCK OPTION AGREEMENT"), and be in such form
and contain such provisions (which need not be the same for each Participant)
as the Committee shall from time to time approve, and which shall comply with
and be subject to the terms and conditions of the Plan.

                  5.2 DATE OF GRANT. The date of grant of an Option shall be
the date on which the Committee makes the determination to grant such Option,
unless otherwise specified by the Committee. The Stock Option Agreement and a
copy of the Plan will be delivered to the Participant within a reasonable
time after the granting of the Option.

                  5.3 EXERCISE PERIOD. Options shall be exercisable within
the times or upon the events determined by the Committee as set forth in the
Stock Option Agreement; PROVIDED, HOWEVER, that no Option shall be
exercisable after the expiration of ten (10) years from the date the Option
is granted, and provided further that no Option granted to a person who
directly or by attribution owns more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or any Parent or
Subsidiary of the Company ("TEN PERCENT SHAREHOLDER") shall be exercisable
after the expiration of five (5) years from the date the Option is granted.
The Committee also may provide for the exercise of Options to become
exercisable at one time or from time to time, periodically or otherwise, in
such number or percentage as the Committee determines.

                  5.4 EXERCISE PRICE. The Exercise Price shall be determined
by the Committee when the Option is granted and may be not less than
eighty-five percent (85%) of the Fair Market Value of the Shares on the date
of grant; provided that (i) the Exercise Price of an ISO shall be not less
than one hundred percent (100%) of the Fair Market Value of the Shares on the
date of grant; and (ii) the Exercise Price of any Option granted to a Ten
Percent Shareholder shall not be less than one hundred ten percent (110%) of
the Fair Market Value of the Shares on the date of grant. Payment for the
Shares purchased may be made in accordance with Section 8 of the Plan.

                  5.5 METHOD OF EXERCISE. Options may be exercised only by
delivery to the Company of a written stock option exercise agreement (the
"EXERCISE AGREEMENT") in a form approved by the Committee (which need not be
the same for each Participant), stating the number of Shares being purchased,
the restrictions imposed on the Shares, if any, and such representations and
agreements regarding Participant's investment intent and access to
information and other matters, if any, as may be required or desirable by the
Company to comply with applicable securities laws, together with payment in
full of the Exercise Price for the number of Shares being purchased.

                  5.6 TERMINATION. Notwithstanding the exercise periods set
forth in the Stock Option Agreement, exercise of an Option shall always be
subject to the following:

                           (a)      If the Participant is Terminated for any
                                    reason except death or Disability, then
                                    Participant may exercise such Participant's
                                    Options only to the extent that such Options
                                    would have been exercisable upon the
                                    Termination Date no later than three (3)

                                       -3-
<PAGE>

                                    months after the Termination Date (or such
                                    shorter time period as may be specified in
                                    the Stock Option Agreement), but in any
                                    event, no later than the expiration date of
                                    the Options.

                           (b)      If the Participant is terminated because of
                                    death or Disability (or the Participant dies
                                    within three (3) months of such
                                    termination), then Participant's Options may
                                    be exercised only to the extent that such
                                    Options would have been exercisable by
                                    Participant on the Termination Date and must
                                    be exercised by Participant (or
                                    Participant's legal representative or
                                    authorized assignee) no later than twelve
                                    (12) months after the Termination Date (or
                                    such shorter time period as may be specified
                                    in the Stock Option Agreement), but in any
                                    event no later than the expiration date of
                                    the Options; PROVIDED, HOWEVER, that in the
                                    event of termination due to Disability other
                                    than as defined in Section 22(e)(3) of the
                                    Code, any ISO that remains exercisable after
                                    ninety (90) days after the date of
                                    termination shall be deemed a NQSO.

                  5.7 LIMITATIONS ON EXERCISE. The Committee may specify a
reasonable minimum number of Shares that may be purchased on any exercise of
an Option; PROVIDED, HOWEVER, that such minimum number will not prevent
Participant from exercising the Option for the full number of Shares for
which it is then exercisable.

                  5.8 LIMITATIONS ON ISOS. The aggregate Fair Market Value
(determined as of the date of grant) of Shares with respect to which ISOs are
exercisable for the first time by a Participant during any calendar year
(under the Plan or under any other incentive stock option plan of the Company
or any Affiliate, Parent or Subsidiary of the Company) shall not exceed One
Hundred Thousand Dollars ($100,000). If the Fair Market Value of Shares on
the date of grant with respect to which ISOs are exercisable for the first
time by a Participant during any calendar year exceeds One Hundred Thousand
Dollars ($100,000), the Options for the first One Hundred Thousand Dollars
($100,000) worth of Shares to become exercisable in such calendar year shall
be ISOs and the Options for the amount in excess of One Hundred Thousand
Dollars ($100,000) that become exercisable in that calendar year shall be
NQSOs. In the event that the Code or the regulations promulgated thereunder
are amended after the Effective Date of the Plan to provide for a different
limit on the Fair Market Value of Shares permitted to be subject to ISOs,
such different limit shall be automatically incorporated herein and shall
apply to any Options granted after the effective date of such amendment.

                  5.9 MODIFICATION, EXTENSION OR RENEWAL. The Committee may
modify, extend or renew outstanding Options and authorize the grant of new
Options in substitution therefor; PROVIDED, HOWEVER, that any such action may
not without the written consent of Participant, impair any of Participant's
rights under any Option previously granted. Any outstanding ISO that is
modified, extended, renewed or otherwise altered shall be treated in
accordance with Section 424(h) of the Code. The Committee may reduce the
Exercise Price of outstanding Options without the consent of Participants
affected by a written notice to them; PROVIDED, HOWEVER, that the Exercise
Price may not be reduced below the minimum Exercise price that would be
permitted under Section 5.4 of the Plan for Options granted on the date the
action is taken to reduce the Exercise Price.

                  5.10 NO DISQUALIFICATION. Notwithstanding any other provision
in the Plan, no term of the Plan relating to ISOs shall be interpreted, amended
or altered, nor shall any

                                       -4-

<PAGE>

discretion or authority granted under the Plan be exercised, so as to
disqualify the Plan under Section 422 of the Code or, without the consent of
the Participant affected, to disqualify any ISO under Section 422 of the Code.

         6. RESTRICTED STOCK. A Restricted Stock Award is an offer by the
Company to sell to an eligible person Shares that are subject to
restrictions. The Committee shall determine to whom an offer will be made,
the number of Shares the person may purchase, the price to be paid (the
"Purchase Price"), the restrictions to which the Shares shall be subject, and
all other terms and conditions of the Restricted Stock Award, subject to the
following:

                  6.1 FORM OF RESTRICTED STOCK AWARD. All purchases under a
Restricted Stock Award made pursuant to the Plan shall be evidenced by an
Award Agreement ("Restricted Stock Purchase Agreement") that shall be in such
form (which need not be the same for each Participant) as the Committee shall
from time to time approve, and shall comply with and be subject to the terms
and conditions of the Plan. The offer of Restricted Stock shall be accepted
by the Participant's execution and delivery of the Restricted Stock Purchase
Agreement and full payment for the shares to the Company within thirty (30)
days from the date the Restricted Stock Purchase Agreement is delivered to
the person. If such person does not execute and deliver the Restricted Stock
Purchase Agreement along with full payment for the Shares to the Company
within thirty (30) days, then the offer shall terminate, unless otherwise
determined by the Committee.

                  6.2 PURCHASE PRICE. The Purchase Price of Shares sold
pursuant to a Restricted Stock Award shall be determined by the Committee and
shall be at least eighty-five percent (85%) of the Fair Market Value of the
Shares on the date the Restricted Stock Award is granted, except in the case
of a sale to a Ten Percent Shareholder, in which case the Purchase Price
shall be one hundred and ten percent (110%) of the Fair Market Value. Payment
of the Purchase Price may be made in accordance with Section 8 of the Plan.

                  6.3 RESTRICTIONS. Restricted Stock Awards shall be subject
to such restrictions as the Committee may impose. The Committee may provide
for the lapse of such restrictions in installments and may accelerate or
waive such restrictions, in whole or in part, based on length of service,
performance or such other factors or criteria as the Committee may determine.
Restricted Stock Awards which the Committee intends to qualify under Code
section 162(m) shall be subject to a performance-based goal. Restrictions on
such stock shall lapse based on one or more of the following performance
goals: stock price, market share, sales increases, earning per share, return
on equity, cost reductions, or any other similar performance measure
established by the Committee. Such performance measures shall be established
by the Committee, in writing, no later than the earlier of (a) ninety (90)
days after the commencement of the performance period with respect to which
the Restricted Stock award is made and (b) the date as of which twenty-five
percent (25%) of such performance period has elapsed.

         7.       STOCK BONUSES.

                  7.1 AWARDS OF STOCK BONUSES. A Stock Bonus is an award of
Shares (which may consist of Restricted Stock) for services rendered to the
Company or any Parent, Subsidiary or Affiliate of the Company. A Stock Bonus may
be awarded for past services already rendered to the Company, or any Parent,
Subsidiary or Affiliate of the Company pursuant to an Award Agreement (the
"Stock Bonus Agreement") that shall be in such form (which need

                                       -5-

<PAGE>

not be the same for each Participant) as the Committee shall from time to
time approve, and shall comply with and be subject to the terms and
conditions of the Plan subject to Section 7.2 herein, a Stock Bonus may be
awarded upon satisfaction of such performance goals as are set out in advance
in Participant's individual Award Agreement (the "Performance Stock Bonus
Agreement") that shall be in such form (which need not be the same for each
Participant) as the Committee shall from time to time approve, and shall
comply with and be subject to the terms and conditions of the Plan. Stock
Bonuses may vary from Participant to Participant and between groups of
Participants, and may be based upon such other criteria as the Committee may
determine; PROVIDED, HOWEVER, that performance-based bonuses shall be
restricted to individuals earning at least Sixty Thousand Dollars ($60,000)
per year and of adequate sophistication and sufficiently empowered to achieve
the performance goals.

                  7.2 CODE SECTION 162(m). A Stock Bonus that the Committee
intends to qualify for the performance-based exception under Code section
162(m) shall only be awarded based upon the attainment of one or more of the
following performance goals: stock price, market share, sales increases,
earning per share, return on equity, cost reductions, or any other similar
performance measure established by the Committee. Such performance measures
shall be established by the Committee, in writing, no later than the earlier
of: (a) ninety (90) days after the commencement of the performance period
with respect to which the Stock Bonus award is made; and (b) the date as of
which twenty-five percent (25%) of such performance period has elapsed.

                  7.3 TERMS OF STOCK BONUSES. The Committee shall determine
the number of Shares to be awarded to the Participant and whether such Shares
shall be Restricted Stock. If the Stock Bonus is being earned upon the
satisfaction of performance goals pursuant to a Performance Stock Bonus
Agreement, then the Committee shall determine: (a) the nature, length and
starting date of any period during which performance is to be measured (the
"Performance Period") for each Stock Bonus; (b) the performance goals and
criteria to be used to measure the performance, if any; (c) the number of
Shares that may be awarded to the Participant; and (d) the extent to which
such Stock Bonuses have been earned. Performance Periods may overlap and
Participants may participate simultaneously with respect to Stock Bonuses
that are subject to different Performance Periods and different performance
goals and other criteria. The number of Shares may be fixed or may vary in
accordance with such performance goals and criteria as may be determined by
the Committee. The Committee may adjust the performance goals applicable to
the Stock Bonuses to take into account changes in law and accounting or tax
rules and to make such adjustments as the Committee deems necessary or
appropriate to reflect the impact of extraordinary or unusual items, events
or circumstances to avoid windfalls or hardships.

                  7.4 FORM OF PAYMENT. The earned portion of a Stock Bonus
may be paid currently or on a deferred basis with such interest or dividend
equivalent, if any, as the Committee may determine. Payment may be made in
the form of cash, whole Shares, including Restricted Stock, or a combination
thereof, either in a lump sum payment or in installments, all as the
Committee shall determine.

                  7.5 TERMINATION DURING PERFORMANCE PERIOD. If a Participant
is Terminated during a Performance Period for any reason, then such
Participant shall be entitled to payment (whether in Shares, cash or
otherwise) with respect to the Stock Bonus only to the extent earned as of
the date of Termination in accordance with the Performance Stock Bonus
Agreement, unless the Committee shall determine otherwise.

                                       -6-

<PAGE>

         8.       PAYMENT FOR SHARE PURCHASES.

                  8.1 PAYMENT. Payment for Shares purchased pursuant to the
Plan may be made in cash (by check) or, where expressly approved for the
Participant by the Committee and where permitted by law:

                           (a)      by cancellation of indebtedness of the
                                    Company to the Participant;

                           (b)      by surrender of Shares that either (1) have
                                    been owned by Participant for more than six
                                    (6) months and have been paid for within the
                                    meaning of SEC Rule 144 (and, if such shares
                                    were purchased from the Company by use of a
                                    promissory note, such note has been fully
                                    paid with respect to such Shares); or (2)
                                    were obtained by Participant in the public
                                    market;

                           (c)      by tender of a full recourse promissory note
                                    having such terms as may be approved by the
                                    Committee and bearing interest at a rate
                                    sufficient to avoid imputation of income
                                    under Sections 483 and 1274 of the Code;
                                    PROVIDED, HOWEVER, that Participants who are
                                    not employees of the Company shall not be
                                    entitled to purchase Shares with a
                                    promissory note unless the note is
                                    adequately secured by collateral other than
                                    the Shares.

                           (d)      by waiver of compensation due or accrued to
                                    Participant for services rendered;

                           (e)      by tender of property;

                           (f)      with respect only to purchases upon exercise
                                    of an Option, and provided that a public
                                    market for the Company's stock exists:

                                    (1)     through a "same day sale" commitment
                                            from Participant and a broker-dealer
                                            that is a member of the National
                                            Association of Securities Dealers
                                            (an "NASD Dealer") whereby the
                                            Participant irrevocably elects to
                                            exercise the Option and to sell a
                                            portion of the Shares so purchased
                                            to pay for the Exercise Price, and
                                            whereby the NASD Dealer irrevocably
                                            commits upon receipt of such Shares
                                            to forward the Exercise Price
                                            directly to the Company; or

                                    (2)     through a "margin" commitment from
                                            Participant and an NASD Dealer
                                            whereby Participant irrevocably
                                            elects to exercise the Option and to
                                            pledge the Shares so purchased to
                                            the NASD Dealer in a margin account
                                            as security for a loan from the NASD
                                            Dealer in the amount of the Exercise
                                            Price, and whereby the NASD Dealer
                                            irrevocably commits upon receipt of
                                            such Shares to forward the exercise
                                            price directly to the Company; or

                                       -7-

<PAGE>

                           (g)      by any combination of the foregoing.

                  8.2 LOAN GUARANTIES. The Committee may help the Participant
pay for Shares purchased under the Plan by authorizing a guaranty by the
Company of a third-party loan to the Participant.

           9.     WITHHOLDING TAXES.

                  9.1 WITHHOLDING GENERALLY. Whenever Shares are to be issued
in satisfaction of Awards granted under the Plan, the Company may require the
Participant to remit to the Company an amount sufficient to satisfy federal,
state and local withholding tax requirements prior to the delivery of any
certificate or certificates for such Shares. Whenever, under the Plan,
payments in satisfaction of Awards are to be made in cash, such payment shall
be net of an amount sufficient to satisfy federal, state, and local
withholding tax requirements.

                  9.2 STOCK WITHHOLDING. When, under applicable tax laws, a
Participant incurs tax liability in connection with the exercise or vesting
of any Award that is subject to tax withholding and the Participant is
obligated to pay the Company the amount required to be withheld, the
Committee may allow the Participant to satisfy the minimum withholding tax
obligation by electing to have the Company withhold from the Shares to be
issued that number of Shares having a Fair Market Value equal to the minimum
amount required to be withheld, determined on the date that the amount of tax
to be withheld is to be determined (the "Tax Date"). All elections by a
Participant to have Shares withheld for this purpose shall be made in writing
in a form acceptable to the Committee and shall be subject to the following
restrictions:

                           (a)      the election must be made on or prior to the
                                    applicable Tax Date;

                           (b)      once made, then except as provided below,
                                    the election shall be irrevocable as to the
                                    particular Shares as to which the election
                                    is made;

                           (c)      all elections shall be subject to the
                                    consent or disapproval of the Committee;

                           (d)      if the Participant is an Insider and if the
                                    Company is subject to Section 16(b) of the
                                    Exchange Act: (1) the election may not be
                                    made within six (6) months of the date of
                                    grant of the Award, except as otherwise
                                    permitted by SEC Rule 16b-3(e) under the
                                    Exchange Act, and (2) either (A) the
                                    election to use stock withholding must be
                                    irrevocably made at least six (6) months
                                    prior to the Tax Date (although such
                                    election may be revoked at any time at least
                                    six (6) months prior to the Tax Date), or
                                    (B) the exercise of the Option or election
                                    to use stock withholding must be made in the
                                    ten (10) day period beginning on the third
                                    day following the release of the Company's
                                    quarterly or annual summary statement of
                                    sales or earnings; and

                           (e)      in the event that the Tax Date is deferred
                                    until six (6) months after the delivery of
                                    Shares under Section 83(b) of the Code, the

                                       -8-

<PAGE>

                                    Participant shall receive the full number of
                                    Shares with respect to which the exercise
                                    occurs, but such Participant shall be
                                    unconditionally obligated to tender back to
                                    the Company the proper number of Shares on
                                    the Tax Date.

         10.      PRIVILEGES OF STOCK OWNERSHIP.

                  10.1 VOTING AND DIVIDENDS. No Participant shall have any of
the rights of a shareholder with respect to any Shares until the Shares are
issued to the Participant. After Shares are issued to the Participant, the
Participant shall be a shareholder and have all the rights of a shareholder
with respect to such Shares, including the right to vote and receive all
dividends or other distributions made or paid with respect to such Shares;
PROVIDED, HOWEVER, that if such Shares are Restricted Stock, then any new,
additional or different securities the Participant may become entitled to
receive with respect to such Shares by virtue of a stock dividend, stock
split or any other change in the corporate or capital structure of the
Company shall be subject to the same restrictions as the Restricted Stock.

                  10.2 FINANCIAL STATEMENTS. The Company shall provide
financial statements to each Participant prior to such Participant's purchase
of Shares under the Plan, and to each Participant annually during the period
such Participant has Awards outstanding; PROVIDED, HOWEVER, the Company shall
not be required to provide such financial statements to Participants whose
services in connection with the Company assure them access to equivalent
information.

         11. TRANSFERABILITY. Awards granted under the Plan, and any interest
therein, shall not be transferable or assignable by Participant, and may not
be made subject to execution, attachment or similar process, otherwise than
by will or by the laws of descent and distribution or as consistent with the
specific Plan and Award Agreement provisions relating thereto. During the
lifetime of the Participant an Award shall be exercisable only by the
Participant, and any elections with respect to an Award, may be made only by
the Participant.

         12. RESTRICTIONS ON SHARES. At the discretion of the Committee, the
Company may reserve to itself and/or its assignee(s) in the Award Agreement a
right of first refusal to purchase all Shares that a Participant (or a
subsequent transferee) may propose to transfer to a third party.

         13. CERTIFICATES. All certificates for Shares or other securities
delivered under the Plan shall be subject to such stock transfer orders,
legends and other restrictions as the Committee may deem necessary or
advisable, including restrictions under any applicable federal, state or
foreign securities law, or any rules, regulations and other requirements of
the SEC or any stock exchange or automated quotation system upon which the
Shares may be listed.

         14. ESCROW; PLEDGE OF SHARES. To enforce any restrictions on a
Participant's Shares, the Committee may require the Participant to deposit
all certificates representing Shares, together with stock powers or other
instruments of transfer approved by the Committee, appropriately endorsed in
blank, with the Company or an agent designated by the Company to hold in
escrow until such restrictions have lapsed or terminated, and the Committee
may cause a legend or legends referencing such restrictions to be placed on
the certificates. Any Participant who is permitted to execute a promissory
note as partial or full consideration for

                                       -9-

<PAGE>

the purchase of Shares under the Plan shall be required to place and deposit
with the Company all or part of the Shares so purchased as collateral to
secure the payment of Participant's obligation to the Company under the
promissory note; PROVIDED, HOWEVER, that the Committee may require or accept
other or additional forms of collateral to secure the payment of such
obligation and, in any event, the Company shall have full recourse against
the Participant under the promissory note notwithstanding any pledge of the
Participant's Shares or other collateral. In connection with any pledge of
the Shares, Participant shall be required to execute and deliver a written
pledge agreement in such form as the Committee shall from time to time
approve. The Shares purchased with the promissory note may be released from
the pledge on a pro rata basis as the promissory note is paid.

         15. EXCHANGE AND BUYOUT OF AWARDS. The Committee may, at any time or
from time to time, authorize the Company, with the consent of the respective
Participants, to issue new Awards in exchange for the surrender and
cancellation of any or all outstanding Awards. The Committee may at any time
buy from a Participant an Award previously granted with payment in cash,
Shares (including Restricted Stock) or other consideration, based on such
terms and conditions as the Committee and the Participant shall agree.

         16. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. An Award shall
not be effective unless such Award is in compliance with all applicable
federal and state securities laws, rules and regulations of any governmental
body, and the requirements of any stock exchange or automated quotation
system upon which the Shares may then be listed, as they are in effect on the
date of grant of the Award and also on the date of exercise or other
issuance. Notwithstanding any other provision in the Plan, the Company shall
have no obligation to issue or deliver certificates for Shares under the Plan
prior to (a) obtaining any approvals from governmental agencies that the
Company determines are necessary or advisable, and/or (b) completion of any
registration or other qualification of such shares under any state or federal
law or ruling of any governmental body that the Company determines to be
necessary or advisable. The Company shall be under no obligation to register
the Shares with the SEC or to effect compliance with the registration,
qualification or listing requirements of any state securities laws, stock
exchange or automated quotation system, and the Company shall have no
liability for any inability or failure to do so.

         17. NO OBLIGATION TO EMPLOY. Nothing in the Plan or any Award
granted under the Plan shall confer or be deemed to confer on any Participant
any right to continue in the employ of, or to continue any other relationship
with, the Company or any Parent, Subsidiary or Affiliate of the Company or
limit in any way the right of the Company or any Parent, Subsidiary or
Affiliate of the Company to terminate Participant's employment or other
relationship at any time, with or without cause.

         18.      CORPORATE TRANSACTIONS.

                  18.1 ASSUMPTION OR REPLACEMENT OF AWARDS BY SUCCESSOR. In the
event of (a) a merger or consolidation in which the Company is not the surviving
corporation (other than a merger or consolidation with a wholly-owned
subsidiary, a reincorporation of the Company in a different jurisdiction, or
other transaction in which there is no substantial change in the shareholders of
the company and the Awards granted under the Plan are assumed or replaced by the
successor corporation, which assumption shall be binding on all Participants);
(b) a dissolution or liquidation of the Company; (c) the sale of substantially
all of the assets of the Company; or (d) any other transaction which qualifies
as a "corporate transaction" under

                                       -10-

<PAGE>

Section 424(a) of the Code wherein the shareholders of the Company give up
all of their equity interest in the Company (EXCEPT for the acquisition, sale
or transfer of all or substantially all of the outstanding shares of the
Company), any or all outstanding Awards may be assumed or replaced by the
successor corporation (if any), which assumption or replacement shall be
binding on all Participants. In the alternative, the successor corporation
may substitute equivalent Awards or provide substantially similar
consideration to Participants as was provided to shareholders (after taking
into account the existing provisions of the Awards). The successor
corporation may also issue, in place of outstanding Shares of the Company
held by the Participant, substantially similar shares or other property
subject to repurchase restrictions no less favorable to the Participant.

                  In the event such successor corporation (if any) refuses to
assume or substitute Options, as provided above, pursuant to a transaction
described in this Subsection 18.1, such Options shall expire on such
transaction at such time and on such conditions as the Board shall determine.

                  18.2 OTHER TREATMENT OF AWARDS. Subject to any greater
rights granted to Participants under the foregoing provisions of this Section
18, in the event of the occurrence of any transaction described in Section
18.1, any outstanding Awards shall be treated as provided in the applicable
agreement or plan of merger, consolidation, dissolution, liquidation, sale of
assets or other "corporate transaction."

                  18.3 ASSUMPTION OF AWARDS BY THE COMPANY. The Company, from
time to time, also may substitute or assume outstanding awards granted by
another company, whether in connection with an acquisition of such other
company or otherwise, by either (a) granting an Award under the Plan in
substitution of such other company's award; or (b) assuming such award as if
it had been granted under the Plan if the terms of such assumed award could
be applied to an Award granted under the Plan. Such substitution or
assumption shall be permissible if the holder of the substituted or assumed
award would have been eligible to be granted an Award under the Plan if the
other company had applied the rules of the Plan to such grant. In the event
the Company assumes an award granted by another company, the terms and
conditions of such award shall remain unchanged (EXCEPT that the exercise
price and the number and nature of Shares issuable upon exercise of any such
option will be adjusted approximately pursuant to Section 424(a) of the
Code). In the event the Company elects to grant a new Option rather than
assuming an existing option, such new Option may be granted with a similarly
adjusted Exercise Price.

         19. ADOPTION AND SHAREHOLDER APPROVAL. The Plan shall become effective
on the date that it is adopted by the Board (the "Effective Date"). The Plan
shall be approved by the shareholders of the Company (excluding Shares issued
pursuant to this Plan), consistent with applicable laws, within twelve months
before or after the Effective Date. Upon the Effective Date, the Board may grant
Awards pursuant to the Plan; PROVIDED, HOWEVER, that: (a) no Option may be
exercised prior to initial shareholder approval of the Plan; (b) no Option
granted pursuant to an increase in the number of Shares approved by the Board
shall be exercised prior to the time such increase has been approved by the
shareholders of the Company; and (c) in the event that shareholder approval is
not obtained within the time period provided herein, all Awards granted
hereunder shall be cancelled, any Shares issued pursuant to any Award shall be
cancelled and any purchase of Shares hereunder shall be rescinded. After the
Company becomes subject to Section 16(b) of the Exchange Act, the Company will
comply with the

                                       -11-

<PAGE>

requirements of Rule 16b-3 (or its successor), as amended, with respect to
shareholder approval.

         20. TERM OF PLAN. The Plan will terminate ten (10) years from the
Effective Date or, if earlier, the date of shareholder approval of the Plan.

         21. AMENDMENT OR TERMINATION OF PLAN. The Board may at any time
terminate or amend the Plan in any respect, including without limitation
amendment of any form of Award Agreement or instrument to be executed
pursuant to the Plan; PROVIDED, HOWEVER, that the Board shall not, without
the approval of the shareholders of the Company, amend the Plan in any manner
that requires such shareholder approval pursuant to the Code or the
regulations promulgated thereunder as such provisions apply to ISO plans or
pursuant to the Exchange Act or Rule 16b-3 (or its successor), as amended,
thereunder.

         22. NONEXCLUSIVITY OF THE PLAN. Neither the adoption of the Plan by
the Board, the submission of the Plan to the shareholders of the Company for
approval, nor any provision of the Plan shall be construed as creating any
limitations on the power of the Board to adopt such additional compensation
arrangements as it may deem desirable, including, without limitation, the
granting of stock options and bonuses otherwise than under the Plan, and such
arrangements may be either generally applicable or applicable only in
specific cases.

         23. DEFINITIONS. As used in the Plan, the following terms shall have
the following meanings:

                  "AFFILIATE" means any corporation that directly, or
indirectly through one or more intermediaries, controls or is controlled by,
or is under common control with, another corporation, where "control"
(including the terms "controlled by" and "under common control with") means
the possession, direct or indirect, of the power to cause the direction of
the management and policies of the corporation, whether through the ownership
of voting securities, by contract or otherwise.

                  "AWARD" means any award under the Plan, including any
Option, Restricted Stock or Stock Bonus.

                  "AWARD AGREEMENT" means, with respect to each Award, the
signed written agreement between the Company and the Participant setting
forth the terms and conditions of the Award.

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

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

                  "COMMITTEE" means the committee appointed by the Board to
administer the Plan, or if no committee is appointed, the Board.

                  "COMPANY" means PhaseCom, Inc., a corporation organized
under the laws of the State of Delaware, or any successor corporation.

                  "DISABILITY" means a disability, whether temporary or
permanent, partial or total, as determined by the Committee.

<PAGE>

                  "DISINTERESTED PERSON" means a director who has not, during
the period that person is a member of the Committee and for one (1) year
prior to service as a member of the Committee, been granted or awarded equity
securities pursuant to the Plan or any other plan of the Company or any
Parent, Subsidiary or Affiliate of the Company, except in accordance with the
requirements set forth in Rule 16b-3(c)(2)(i) (and any successor regulation
thereto) as promulgated by the SEC under Section 16(b) of the Exchange Act,
as such rule is amended from time to time and as interpreted by the SEC.

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

                  "EXERCISE PRICE" means the price at which a holder of an
Option may purchase the Shares issuable upon exercise of the Option.

                  "FAIR MARKET VALUE" means, as of any date, the value of a
share of the Company's Common Stock determined as follows:

                           (a)      if such Common Stock is then quoted on the
                                    Nasdaq National Market, its last reported
                                    sale price on the Nasdaq National Market or,
                                    if no such reported sale takes place on such
                                    date, the average of the closing bid and
                                    asked prices;

                           (b)      if such Common Stock is publicly traded and
                                    is then listed on a national securities
                                    exchange, the last reported sale price or,
                                    if no such reported sale takes place on such
                                    date, the average of the closing bid and
                                    asked prices on the principal national
                                    securities exchange on which the Common
                                    Stock is listed or admitted to trading;

                           (c)      if such Common Stock is publicly traded but
                                    is not quoted on the Nasdaq National Market
                                    nor listed or admitted to trading on a
                                    national securities exchange, the average of
                                    the closing bid and asked prices on such
                                    date, as reported by The Wall Street
                                    Journal, for the over-the-counter market; or

                           (d)      if none of the foregoing is applicable, by
                                    the Board of Directors of the Company in
                                    good faith.

                  "INSIDER" means an officer or director of the Company or
any other person whose transactions in the Company's Common Stock are subject
to Section 16 of the Exchange Act.

                  "OPTION" means an award of an option to purchase Shares
pursuant to Section 5.

                  "PARENT" means any corporation (other than the Company) in
an unbroken chain of corporations ending with the Company, if at the time of
the granting of an Award under the Plan, each of such corporations other than
the Company owns stock possessing fifty percent (50%), or more, of the total
combined voting power of all classes of stock in one of the other
corporations in such chain.

                                       -13-

<PAGE>

                  "PARTICIPANT" means a person who receives an Award under
the Plan.

                  "PLAN" means this PhaseCom,  Inc. 1999 Employee and
Consultant Equity Incentive Plan, as amended from time to time.

                  "RESTRICTED STOCK AWARD" means an award of Shares pursuant
to Section 6.

                  "SEC" means the Securities and Exchange Commission.

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

                  "SHARES" means shares of the Company's Common Stock
reserved for issuance under the Plan, as adjusted pursuant to Sections 2 and
15, and any successor security.

                  "STOCK BONUS" means an award of Shares, or cash in lieu of
Shares, pursuant to Section 7.

                  "SUBSIDIARY" means any corporation (other than the Company)
in an unbroken chain of corporations beginning with the Company if, at the
time of granting of the Award, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing fifty percent (50%),
or more, of the total combined voting power of all classes of stock in one of
the other corporations in such claim.

                  "TERMINATION" or "TERMINATED" means, for purposes of the
Plan with respect to a Participant, that the Participant has ceased to
provide services as an employee, director, consultant or adviser, to the
Company or a Parent, Subsidiary or Affiliate of the Company, except in the
case of sick leave, military leave, or any other leave of absence approved by
the Committee; PROVIDED, HOWEVER, that such leave is for a period of not more
than ninety (90) days, or reinstatement upon the expiration of such leave is
guaranteed by contract or statute. The Committee shall have sole discretion
to determine whether a Participant has ceased to provide services and the
effective date on which the Participant ceased to provide services (the
"Termination Date").

                                       -14-<PAGE>

                                                           Exhibit 10.4

                                    VYYO INC.
                              AMENDED AND RESTATED
               2000 EMPLOYEE AND CONSULTANT EQUITY INCENTIVE PLAN

1. SECTION GENERAL PURPOSE OF PLAN; DEFINITIONS.

                  The name of this plan is the Vyyo Inc. Amended and Restated
2000 Employee and Consultant Equity Incentive Plan (the "Plan"). The Plan was
adopted by the Board (defined below) and approved by the stockholders of the
Company (defined below) on November 22, 1999. The Board subsequently amended
and restated Plan in its entirety on February 2, 2000 (the "Amendment"), and
such Amendment was approved by the stockholders of the Company on the same
date. The purpose of the Plan is to enable the Company to attract and retain
highly qualified personnel who will contribute to the Company's success and
to provide incentives to Participants (defined below) that are linked
directly to increases in stockholder value and will therefore inure to the
benefit of all stockholders of the Company. The Company wishes the issuance
of Awards (defined below) to its employees in Israel to conform with the
requirements of Section 3(9) of the Israeli Income Tax Ordinance, and for
this purpose the appended document Annex A amends this Plan to so conform.

                  For purposes of the Plan, the following terms shall be
defined as set forth below:

                  (a) "ADMINISTRATOR" means the Board, or if and to the
extent the Board does not administer the Plan, the Committee in accordance
with Section 2 below.

                  (b) "AFFILIATE" means any corporation that directly, or
indirectly through one or more intermediaries, controls or is controlled by,
or is under common control with, another corporation, where "control"
(including the terms "controlled by" and "under common control with") means
the possession, direct or indirect, of the power to cause the direction of
the management and policies of the corporation, whether through the ownership
of voting securities, by contract or otherwise.

                  (c) "AWARD" means any award under the Plan.

<PAGE>

                  (d) "AWARD AGREEMENT" means, with respect to each Award,
the signed written agreement between the Company and the Participant setting
forth the terms and conditions of the Award.

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

                  (f) "CODE" means the Internal Revenue Code of 1986, as
amended from time to time, or any successor thereto.

                  (g) "COMMITTEE" means any committee the Board may appoint
to administer the Plan. To the extent necessary and desirable, the Committee
shall be composed entirely of individuals who meet the qualifications
referred to in Section 162(m) of the Code and Rule 16b-3 under the Exchange
Act. If at any time or to any extent the Board shall not administer the Plan,
then the functions of the Board specified in the Plan shall be exercised by
the Committee.

                  (h) "COMMON STOCK" means the common stock, par value
$0.0001 per share, of the Company.

                  (i) "COMPANY" means Vyyo Inc., a Delaware corporation (or
any successor corporation).

                  (j) "DEFERRED STOCK" means the right to receive Shares at
the end of a specified deferral period granted pursuant to Section 8 below.

                  (k) "DISABILITY" means the inability of a Participant to
perform substantially his or her duties and responsibilities to the Company
or to any Parent or Subsidiary by reason of a physical or mental disability
or infirmity (i) for a continuous period of six months, or (ii) at such
earlier time as the Participant submits medical evidence satisfactory to the
Administrator that the Participant has a physical or mental disability or
infirmity that will likely prevent the Participant from returning to the
performance of the Participant's work duties for six months or longer. The
date of such Disability shall be the last day of such six-month period or the
day on which the Participant submits such satisfactory medical evidence, as
the case may be.

                  (l) "ELIGIBLE RECIPIENT" means an officer, director,
employee, consultant or advisor of the Company or of any Parent or Subsidiary.

<PAGE>

                  (m) "EMPLOYEE DIRECTOR" means any director of the Company
who is also an employee of the Company or of any Parent or Subsidiary.

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

                  (o) "EXERCISE PRICE" means the per share price at which a
holder of an Award may purchase the Shares issuable upon exercise of the
Award.

                  (p) "FAIR MARKET VALUE" as of a particular date shall mean
the fair market value of a share of Common Stock as determined by the
Administrator in its sole discretion; PROVIDED, HOWEVER, that (i) if the
Common Stock is admitted to trading on a national securities exchange, fair
market value of a share of Common Stock on any date shall be the closing sale
price reported for such share on such exchange on such date or, if no sale
was reported on such date, on the last date preceding such date on which a
sale was reported, (ii) if the Common Stock is admitted to quotation on the
National Association of Securities Dealers Automated Quotation ("Nasdaq")
System or other comparable quotation system and has been designated as a
National Market System ("NMS") security, fair market value of a share of
Common Stock on any date shall be the closing sale price reported for such
share on such system on such date or, if no sale was reported on such date,
on the last date preceding such date on which a sale was reported, (iii) if
the Common Stock is admitted to quotation on the Nasdaq System but has not
been designated as an NMS security, fair market value of a share of Common
Stock on any date shall be the average of the highest bid and lowest asked
prices of such share on such system on such date or, if no bid and ask prices
were reported on such date, on the last date preceding such date on which
both bid and ask prices were reported; (iv) in the case of a Limited Stock
Appreciation Right, the fair market value of a share of Common Stock shall be
the "Change in Control Price" (as defined in the Award Agreement evidencing
such Limited Stock Appreciation Right) of a share of Common Stock as of the
date of exercise.

                  (q) "INCENTIVE STOCK OPTION" means any Option intended to
be designated as an "incentive stock option" within the meaning of Section
422 of the Code.

<PAGE>

                  (r) "LIMITED STOCK APPRECIATION RIGHT" means a Stock
Appreciation Right that can be exercised only in the event of a "Change in
Control" (as defined in the Award Agreement evidencing such Limited Stock
Appreciation Right).

                  (s) "NON-EMPLOYEE DIRECTOR" means a director of the Company
who is not an employee of the Company or of any Parent or Subsidiary.

                  (t) "NON-QUALIFIED STOCK OPTION" means any Option that is
not an Incentive Stock Option, including any Option that provides (as of the
time such Option is granted) that it will not be treated as an Incentive
Stock Option.

                  (u) "OPTION" means an option to purchase Shares granted
pursuant to Section 6 below.

                  (v) "PARENT" means any corporation (other than the Company)
in an unbroken chain of corporations ending with the Company, if each of the
corporations in the chain (other than the Company) owns stock possessing 50%
or more of the combined voting power of all classes of stock in one of the
other corporations in the chain.

                  (w) "PARTICIPANT" means (i) any Eligible Recipient selected
by the Administrator, pursuant to the Administrator's authority in Section 2
below, to receive grants of Options, Stock Appreciation Rights, Limited Stock
Appreciation Rights, awards of Restricted Stock, Deferred Stock, or
Performance Shares or any combination of the foregoing, or (ii) any
Non-Employee Director who is eligible to receive grants of Options pursuant
to Section 6(i) below.

                  (x) "PERFORMANCE SHARES" means Shares that are subject to
restrictions based upon the attainment of specified performance objectives
granted pursuant to Section 8 below.

                  (y) "REGISTRATION STATEMENT" means the registration
statement on Form S-1 filed with the Securities and Exchange Commission for
the initial underwritten public offering of the Common Stock.

                  (z) "RESTRICTED STOCK" means Shares subject to certain
restrictions granted pursuant to Section 8 below.

<PAGE>

                  (aa) "SHARES" means shares of Common Stock reserved for
issuance under the Plan, as adjusted pursuant to Sections 3 and 4, and any
successor security.

                  (bb) "STOCK APPRECIATION RIGHT" means the right pursuant to
an Award granted under Section 7 below to receive an amount equal to the
excess, if any, of (i) the Fair Market Value, as of the date such Stock
Appreciation Right or portion thereof is surrendered, of the Shares covered
by such right or such portion thereof, over (ii) the aggregate Exercise Price
of such right or such portion thereof.

                  (cc) "SUBSIDIARY" means any corporation (other than the
Company) in an unbroken chain of corporations beginning with the Company, if
each of the corporations (other than the last corporation) in the unbroken
chain owns stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in the chain.

2. SECTION ADMINISTRATION.

                  The Plan shall be administered in accordance with the
requirements of Section 162(m) of the Code (but only to the extent necessary
and desirable to maintain qualification of Awards under the Plan under
Section 162(m) of the Code) and, to the extent applicable, Rule 16b-3 under
the Exchange Act ("Rule 16b-3"), by the Board or, at the Board's sole
discretion, by the Committee, which shall be appointed by the Board, and
which shall serve at the pleasure of the Board.

                  Pursuant to the terms of the Plan, the Administrator shall
have the power and authority to grant to Eligible Recipients Options, Stock
Appreciation Rights or Limited Stock Appreciation Rights, Awards of
Restricted Stock, Deferred Stock or Performance Shares or any combination of
the foregoing; PROVIDED, HOWEVER, that automatic, nondiscretionary grants of
Options shall be made to Non-Employee Directors pursuant to and in accordance
with the terms of Section 6(i) below. Except as otherwise provided in Section
6(i) below, the Administrator shall have the authority:

                  (a) to select those Eligible Recipients who shall be
Participants;

                  (b) to determine whether and to what extent Options, Stock
Appreciation Rights, Limited Stock Appreciation Rights, Awards of Restricted
Stock,

<PAGE>

Deferred Stock or Performance Shares or a combination of any of the
foregoing, are to be granted hereunder to Participants;

                  (c) to determine the number of Shares to be covered by each
Award granted hereunder;

                  (d) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of each Award granted hereunder (including, but
not limited to, (x) the restrictions applicable to Awards of Restricted Stock
or Deferred Stock and the conditions under which restrictions applicable to
such Awards of Restricted Stock or Deferred Stock shall lapse, and (ii) the
performance goals and periods applicable to Awards of Performance Shares);

                  (e) to determine the terms and conditions, not inconsistent
with the terms of the Plan, which shall govern all written instruments
evidencing Options, Stock Appreciation Rights, Limited Stock Appreciation
Rights, Awards of Restricted Stock, Deferred Stock or Performance Shares or
any combination of the foregoing granted hereunder;

                  (f) to reduce the Exercise Price of any Option to the then
current Fair Market Value if the Fair Market Value of the Shares covered by
such Option has declined since the date such Option was granted; and

                  (g) the Committee may, at any time or from time to time,
authorize the Company, with the consent of the respective Participants, to
issue new Awards in exchange for the surrender and cancellation of any or all
outstanding Awards. The Committee may at any time buy from a Participant an
Award previously granted with payment in cash, Shares (including Restricted
Stock) or other consideration, based on such terms and conditions as the
Committee and the Participant shall agree.

                  (h) The Administrator shall have the authority, in its sole
discretion, to adopt, alter and repeal such administrative rules, guidelines
and practices governing the Plan as it shall from time to time deem
advisable; to interpret the terms and provisions of the Plan and any Award
issued under the Plan (and any Award Agreement relating thereto); and to
otherwise supervise the administration of the Plan.

<PAGE>

                  (i) All decisions made by the Administrator pursuant to the
provisions of the Plan shall be final, conclusive and binding on all persons,
including the Company and the Participants.

3. SECTION SHARES SUBJECT TO PLAN.

                  (a) The total number of shares of Common Stock reserved and
available for issuance under the Plan shall be 5,000,000 shares, plus an
annual increase to be added on the first day of the Company's fiscal year
(beginning 2001) equal to the lesser of (i) 900,000 shares or (ii) five
percent (5%) of the number of outstanding shares of Common Stock on the last
day of the immediately preceding fiscal year. Such shares may consist, in
whole or in part, of authorized and unissued shares or treasury shares. The
aggregate number of Shares as to which Options, Stock Appreciation Rights,
and Awards of Restricted Stock, Deferred Stock and Performance Shares may be
granted to any Participant during any calendar year may not, subject to
adjustment as provided in this Section 3, exceed 80% of the Shares reserved
for the purposes of the Plan.

                  (b) Consistent with the provisions of Section 162(m) of the
Code, as from time to time applicable, to the extent that (i) an Option
expires or is otherwise terminated without being exercised, or (ii) any
Shares subject to any Award of Restricted Stock, Deferred Stock or
Performance Shares granted hereunder are forfeited, such Shares shall again
be available for issuance in connection with future Awards granted under the
Plan. If any Shares have been pledged as collateral for indebtedness incurred
by a Participant in connection with the exercise of an Option and such Shares
are returned to the Company in satisfaction of such indebtedness, such Shares
shall again be available for issuance in connection with future Awards
granted under the Plan.

                  (c) In the event of any stock dividend, recapitalization,
stock split, reverse stock split, subdivision, combination, reclassification
or similar change in the capital structure of the Company without
consideration, an equitable substitution or proportionate adjustment shall be
made in (i) the aggregate number of Shares reserved for issuance under the
Plan, (ii) the kind, number and Exercise Prices of Shares subject to
outstanding Options, and (iii) the kind, number and Exercise Prices of Shares
subject to outstanding Awards of Restricted Stock, Deferred Stock and
Performance Shares, in each case as may be determined by the Administrator,
in its sole discretion, subject to any required action by the Board or the
stockhold-

<PAGE>

ers of the Company and in compliance with applicable securities laws;
PROVIDED, HOWEVER, that fractions of a Share shall not be issued but shall
either be paid in cash at Fair Market Value or shall be rounded up to the
nearest whole share, as determined by the Committee. An adjusted Exercise
Price shall also be used to determine the amount payable by the Company upon
the exercise of any Stock Appreciation Right or Limited Stock Appreciation
Right related to any Option.

4. SECTION CORPORATE TRANSACTIONS

                  (a) ASSUMPTION OR REPLACEMENT OF AWARDS BY SUCCESSOR. In
the event of (i) a merger or consolidation in which the Company is not the
surviving corporation (other than a merger or consolidation with a
wholly-owned subsidiary, a reincorporation of the Company in a different
jurisdiction, or other transaction in which there is no substantial change in
the stockholders of the Company and the Awards granted under the Plan are
assumed or replaced by the successor corporation, which assumption shall be
binding on all Participants); (ii) a dissolution or liquidation of the
Company; (iii) the sale of substantially all of the assets of the Company; or
(iv) any other transaction which qualifies as a "corporate transaction" under
Section 424(a) of the Code wherein the stockholders of the Company give up
all of their equity interest in the Company (EXCEPT for the acquisition, sale
or transfer of all or substantially all of the outstanding shares of the
Company), any or all outstanding Awards may be assumed or replaced by the
successor corporation (if any) or Parent thereof, which assumption or
replacement shall be binding on all Participants. In the alternative, the
successor corporation or Parent thereof may substitute equivalent awards or
provide substantially similar consideration to Participants as was provided
to stockholders of the Company (after taking into account the existing
provisions of the Awards). The successor corporation or Parent thereof may
also issue, in place of outstanding shares of the Company held by the
Participant, substantially similar shares or other property subject to
repurchase restrictions no less favorable to the Participant. In the event
such successor corporation (if any) or Parent thereof does not assume or
substitute awards, as provided above, pursuant to a transaction described in
this Section 4(a), such Awards shall automatically become fully vested and
exercisable and be released from any restrictions on transfer and repurchase
or forfeiture rights, immediately prior to the specified effective date of
such transaction, for all the Shares at the time represented by such Awards.
In such event, effective upon the consummation of the transaction, or at such
other time and on such conditions as the Board shall determine, all
outstanding Awards under the Plan shall terminate and cease to remain

<PAGE>

outstanding, except to the extent assumed by the successor corporation or its
Parent.

                  (b) OTHER TREATMENT OF AWARDS. Subject to any greater
rights granted to Participants under the foregoing provisions of this Section
4, in the event of the occurrence of any transaction described in Section
4(a), any outstanding Awards shall be treated as provided in the applicable
Award Agreement or plan of merger, consolidation, dissolution, liquidation,
sale of assets or other "corporate transaction."

                  (c) ASSUMPTION OF AWARDS BY THE COMPANY. The Company, from
time to time, also may substitute or assume outstanding awards granted by
another company, whether in connection with an acquisition of such other
company or otherwise, by either (i) granting an Award under the Plan in
substitution of such other company's award; or (ii) assuming such award as if
it had been granted under the Plan if the terms of such assumed award could
be applied to an award granted under the Plan. Such substitution or
assumption shall be permissible if the holder of the substituted or assumed
award would have been eligible to be granted an Award under the Plan if the
other company had applied the rules of the Plan to such grant. In the event
the Company assumes an award granted by another company, the terms and
conditions of such award shall remain unchanged (EXCEPT that the exercise
price and the number and nature of Shares issuable upon exercise of any such
option will be adjusted approximately pursuant to Section 424(a) of the
Code). In the event the Company elects to grant a new Option rather than
assuming an existing option, such new Option may be granted with a similarly
adjusted Exercise Price.

5. SECTION ELIGIBILITY.

                  Eligible Recipients shall be eligible to be granted
Options, Stock Appreciation Rights, Limited Stock Appreciation Rights, Awards
of Restricted Stock, Deferred Stock or Performance Shares or any combination
of the foregoing hereunder. The Participants under the Plan shall be selected
from time to time by the Administrator, in its sole discretion, from among
the Eligible Recipients, and the Administrator shall determine, in its sole
discretion, the number of Shares covered by each such Award.

<PAGE>

6. SECTION OPTIONS.

                  Options may be granted alone or in addition to other Awards
granted under the Plan. Any Option granted under the Plan shall be in such
form as the Administrator may from time to time approve, and the provisions
of each Option need not be the same with respect to each Participant.
Participants who are granted Options shall enter into an Award Agreement with
the Company, in such form as the Administrator shall determine, which Award
Agreement shall set forth, among other things, the Exercise Price of the
Option, the term of the Option and provisions regarding exercisability of the
Option granted thereunder.

                  The Options granted under the Plan may be of two types: (i)
Incentive Stock Options and (ii) Non-Qualified Stock Options.

                  The Administrator shall have the authority to grant to any
officer or employee of the Company or of any Parent or Subsidiary (including
directors who are also officers of the Company) Incentive Stock Options,
Non-Qualified Stock Options, or both types of Options (in each case with or
without Stock Appreciation Rights or Limited Stock Appreciation Rights).
Directors who are not also officers of the Company or of any Parent or
Subsidiary, consultants or advisors to the Company or to any Parent or
Subsidiary may only be granted Non-Qualified Stock Options (with or without
Stock Appreciation Rights or Limited Stock Appreciation Rights). To the
extent that any Option does not qualify as an Incentive Stock Option, it
shall constitute a separate Non-Qualified Stock Option. More than one Option
may be granted to the same Participant and be outstanding concurrently
hereunder.

                  Options granted under the Plan shall be subject to the
following terms and conditions and shall contain such additional terms and
conditions, not inconsistent with the terms of the Plan, as the Administrator
shall deem desirable:

                  (a) OPTION EXERCISE PRICE. The per share Exercise Price of
Shares purchasable under an Option shall be determined by the Administrator in
its sole discretion at the time of grant but shall not, (i) in the case of
Incentive Stock Options, be less than 100% of the Fair Market Value of the
Common Stock on such date, (ii) in the case of Non-Qualified Stock Options
intended to qualify as "performance-based compensation" within the meaning of
Section 162(m) of the Code, be less than 100% of the Fair Market Value of the
Common Stock on such date

<PAGE>

and (iii) in any event, be less than the par value (if any) of the Common
Stock. If a Participant owns or is deemed to own (by reason of the
attribution rules applicable under Section 424(d) of the Code) more than 10%
of the combined voting power of all classes of stock of the Company or of any
Parent or Subsidiary and an Incentive Stock Option is granted to such
Participant, the per share Exercise Price of such Incentive Stock Option (to
the extent required at the time of grant by the Code shall be no less than
110% of the Fair Market Value of the Common Stock on the date such Incentive
Stock Option is granted.

                  (b) OPTION TERM. The term of each Option shall be fixed by
the Administrator, but no Option shall be exercisable more than ten years
after the date such Option is granted; PROVIDED, HOWEVER, that if an employee
owns or is deemed to own (by reason of the attribution rules of Section
424(d) of the Code) more than 10% of the combined voting power of all classes
of stock of the Company or of any Parent or Subsidiary and an Incentive Stock
Option is granted to such employee, the term of such Incentive Stock Option
(to the extent required by the Code at the time of grant) shall be no more
than five years from the date of grant.

                  (c) EXERCISABILITY. Options shall be exercisable at such
time or times and subject to such terms and conditions as shall be determined
by the Administrator at or after the time of grant. The Administrator may
provide at the time of grant, in its sole discretion, that any Option shall
be exercisable only in installments, and the Administrator may waive such
installment exercise provisions at any time, in whole or in part, based on
such factors as the Administrator may determine, in its sole discretion,
including but not limited to in connection with any "change in control" of
the Company (as defined in the Award Agreement evidencing such Option).

                  (d) METHOD OF EXERCISE. Subject to Section 6(c), Options
may be exercised in whole or in part at any time during the Option period, by
giving written notice of exercise to the Company specifying the number of
Shares to be purchased, accompanied by payment in full of the aggregate
Exercise Price of the Shares so purchased in cash or its equivalent, as
determined by the Administrator. In addition, payment for Shares purchased
pursuant to the Plan may be made, where expressly approved for the
Participant by the Committee and where permitted by law:

<PAGE>

                           (i) by cancellation of indebtedness of the Company to
                  the Participant;

                           (ii) by surrender of shares of Common Stock that
                  either (1) have been owned by Participant for more than six
                  (6) months and have been paid for within the meaning of SEC
                  Rule 144 (and, if such shares were purchased from the Company
                  by use of a promissory note, such note has been fully paid
                  with respect to such Shares); or (2) were obtained by
                  Participant in the public market;

                           (iii) by waiver of compensation due or accrued to
                  Participant for services rendered;

                           (iv) by tender of property;

                           (v) with respect only to purchases upon exercise of
                  an Option, and provided that a public market for the Common
                  Stock exists: (i) through a "same day sale" commitment from
                  Participant and a broker-dealer that is a member of the
                  National Association of Securities Dealers (an "NASD Dealer")
                  whereby the Participant irrevocably elects to exercise the
                  Option and to sell a portion of the Shares so purchased to pay
                  for the aggregate Exercise Price of the Shares so purchased,
                  and whereby the NASD Dealer irrevocably commits upon receipt
                  of such Shares to forward such Exercise Price directly to the
                  Company; or (ii) through a "margin" commitment from
                  Participant and an NASD Dealer whereby Participant irrevocably
                  elects to exercise the Option and to pledge the Shares so
                  purchased to the NASD Dealer in a margin account as security
                  for a loan from the NASD Dealer in the amount of the aggregate
                  Exercise Price of the Shares so purchased, and whereby the
                  NASD Dealer irrevocably commits upon receipt of such Shares to
                  forward such Exercise Price directly to the Company;

                           (vi) in the case of the exercise of a Non-Qualified
                  Stock Option, in the form of Restricted Stock or Performance
                  Shares subject to an Award hereunder (based, in each case, on
                  the Fair Market Value of the Common Stock on the date the
                  Option is exercised); PROVIDED, HOWEVER, that in the case of
                  an Incentive Stock Option, the right to make payment in the
                  form of already owned shares of

<PAGE>

                  Common Stock may be authorized only at the time of grant.
                  If payment of the Exercise Price of a Non-Qualified Stock
                  Option is made in whole or in part in the form of
                  Restricted Stock or Performance Shares, the Shares received
                  upon the exercise of such Option shall be restricted in
                  accordance with the original terms of the Restricted Stock
                  Award or Performance Shares Award in question, except that
                  the Administrator may direct that such restrictions shall
                  apply only to that number of Shares equal to the number of
                  shares surrendered upon the exercise of such Option.

                           (vii) by any combination of the foregoing or

                           (viii) by any other form of consideration permitted
                  by applicable law.

                  A Participant shall generally have the rights to dividends
and any other rights of a stockholder with respect to the Shares subject to
the Option only after the Participant has given written notice of exercise,
has paid in full for such Shares, and, if requested, has given the
representation described in Section 11(b).

                  The Administrator may require the surrender of all or a
portion of any Option granted under the Plan as a condition precedent to the
grant of a new Option. Subject to the provisions of the Plan, such new Option
shall be exercisable at the Exercise Price, during such period and on such
other terms and conditions as are specified by the Administrator at the time
the new Option is granted. Consistent with the provisions of Section 162(m),
to the extent applicable, upon their surrender, Options shall be canceled and
the Shares previously subject to such canceled Options shall again be
available for future grants of Options and other Awards hereunder.

                  (e) LOANS. The Company or any Parent or Subsidiary may make
loans available to Option holders in connection with the exercise of
outstanding Options, as the Administrator, in its sole discretion, may
determine. Such loans shall (i) be evidenced by promissory notes entered into
by the Option holders in favor of the Company or any Parent or Subsidiary,
(ii) be subject to the terms and conditions set forth in this Section 6(e)
and such other terms and conditions, not inconsistent with the Plan, as the
Administrator shall determine, (iii) bear interest at the applicable Federal
interest rate or such other rate as the Administrator shall

<PAGE>

determine, and (iv) be subject to Board approval (or to approval by the
Administrator to the extent the Board may delegate such authority). In no
event may the principal amount of any such loan exceed the sum of (x) the
aggregate Exercise Price less the par value (if any) of the Shares covered by
the Option, or portion thereof, exercised by the holder, and (y) any Federal,
state, and local income tax attributable to such exercise. The initial term
of the loan, the schedule of payments of principal and interest under the
loan, the extent to which the loan is to be with or without recourse against
the holder with respect to principal and/or interest and the conditions upon
which the loan will become payable in the event of the holder's termination
of service to the Company or to any Parent or Subsidiary shall be determined
by the Administrator. Unless the Administrator determines otherwise, when a
loan is made, Shares having an aggregate Fair Market Value at least equal to
the principal amount of the loan shall be pledged by the holder to the
Company as security for payment of the unpaid balance of the loan, and such
pledge shall be evidenced by a pledge agreement, the terms of which shall be
determined by the Administrator, in its sole discretion; PROVIDED, HOWEVER,
that each loan shall comply with all applicable laws, regulations and rules
of the Board of Governors of the Federal Reserve System and any other
governmental agency having jurisdiction.

                  (f) NON-TRANSFERABILITY OF OPTIONS. Except under the laws
of descent and distribution, the Participant shall not be permitted to sell,
transfer, pledge or assign any Option, and all Options shall be exercisable,
during the Participant's lifetime, only by the Participant; PROVIDED,
HOWEVER, that the Participant shall be permitted to transfer one or more
Non-Qualified Stock Options to a trust controlled by the Participant during
the Participant's lifetime for estate planning purposes.

                  (g) TERMINATION OF EMPLOYMENT OR SERVICE. If a
Participant's employment with or service as a director, consultant or advisor
to the Company or to any Parent or Subsidiary terminates by reason of his or
her death, Disability or for any other reason, the Option may thereafter be
exercised to the extent provided in the Award Agreement evidencing such
Option, or as otherwise determined by the Administrator.

                  (h) ANNUAL LIMIT ON INCENTIVE STOCK OPTIONS. To the extent
that the aggregate Fair Market Value (determined as of the date the Incentive
Stock Option is granted) of Shares with respect to which Incentive Stock
Options granted to a Participant under this Plan and all other option plans
of the Company or of any Parent or Subsidiary become exercisable for the
first time by the Participant during

<PAGE>

any calendar year exceeds $100,000 (as determined in accordance with Section
422(d) of the Code), the portion of such Incentive Stock Options in excess of
$100,000 shall be treated as Non-Qualified Stock Options.

                  (i) AUTOMATIC GRANTS OF OPTIONS TO NON-EMPLOYEE DIRECTORS.
The Company shall grant Non-Qualified Stock Options to Non-Employee Directors
pursuant to this Section 6(i), which grants shall be automatic and
nondiscretionary and otherwise subject to the terms and conditions set forth
in this subsection (i) and the terms of the Plan (the "Automatic Non-Employee
Director Options"). Each Non-Employee Director who first becomes a director
of the Company following the Effective Date (as defined in Section 12) shall
be automatically granted a Non-Qualified Stock Option to purchase 50,000
Shares (an "Initial Option"). Each Non-Employee Director shall be
automatically granted a Non-Qualified Stock Option to purchase 15,000 Shares
(the "Annual Options") on the date immediately following the Company's annual
meeting of stockholders; PROVIDED, HOWEVER, that he or she is then a director
of the Company and, PROVIDED, FURTHER, that as of such date, such director
shall have served on the Board for at least the preceding six (6) months.

                  (j) The term of each Automatic Non-Employee Director Option
shall be ten (10) years, and the Exercise Price purchasable under an
Automatic Non-Employee Director Option shall be no less than 100% of the Fair
Market Value of the Common Stock on the date of grant, PROVIDED, HOWEVER, in
no event shall the Exercise Price purchasable under an Automatic Non-Employee
Director Option be less than the par value (if any) of the Common Stock. The
Initial Options shall vest and become exercisable in four equal annual
installments on each of the first four anniversaries of the date of grant.
The Annual Options shall be 100% vested and fully exercisable as of the date
of grant.

                  (k) In the event that the number of Shares available for
grant under the Plan is not sufficient to accommodate the Automatic
Non-Employee Director Options, then the remaining Shares available for
Automatic Non-Employee Director Options shall be granted to Non-Employee
Directors on a pro-rata basis. No further grants shall be made until such
time, if any, as additional Shares become available for grant under the Plan
through action of the Board and/or the stockholders of the Company to
increase the number of Shares that may be issued under the Plan or through
cancellation or expiration of Awards previously granted hereunder.

<PAGE>

7. SECTION STOCK APPRECIATION RIGHTS AND LIMITED STOCK APPRECIATION RIGHTS.

                  Stock Appreciation Rights and Limited Stock Appreciation
Rights may be granted either alone ("Free Standing Rights") or in conjunction
with all or part of any Option granted under the Plan ("Related Rights"). In
the case of a Non-Qualified Stock Option, Related Rights may be granted
either at or after the time of the grant of such Option. In the case of an
Incentive Stock Option, Related Rights may be granted only at the time of the
grant of the Incentive Stock Option. The Administrator shall determine the
Eligible Recipients to whom, and the time or times at which, grants of Stock
Appreciation Rights or Limited Stock Appreciation Rights shall be made; the
number of Shares to be awarded, the Exercise Price (or, in the case of a
Limited Stock Appreciation Right, the "Change in Control" price), and all
other conditions of Stock Appreciation Rights and Limited Stock Appreciation
Rights. The provisions of Stock Appreciation Rights and Limited Stock
Appreciation Rights need not be the same with respect to each Participant.

                  Stock Appreciation Rights and Limited Stock Appreciation
Rights granted under the Plan shall be subject to the following terms and
conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Administrator shall deem
desirable:

                  (a) AWARDS. The prospective recipient of a Stock
Appreciation Right or Limited Stock Appreciation Right shall not have any
rights with respect to such Award, unless and until such recipient has
executed an Award Agreement evidencing the Award (a "Stock Appreciation Right
Agreement" or "Limited Stock Appreciation Right Agreement," as appropriate)
and delivered a fully executed copy thereof to the Company, within a period
of sixty days (or such other period as the Administrator may specify) after
the award date. Participants who are granted Stock Appreciation Rights or
Limited Stock Appreciation Rights shall have no rights as stockholders of the
Company with respect to the grant or exercise of such rights.

                  (b) EXERCISABILITY.

                           (i) Stock Appreciation Rights that are Free Standing
                  Rights ("Free Standing Stock Appreciation Rights") shall be
                  exercisable at such time or times and subject to such terms
                  and conditions

<PAGE>

                  as shall be determined by the Administrator at or after
                  grant; PROVIDED, HOWEVER, that no Free Standing Stock
                  Appreciation Right shall be exercisable during the first
                  six months of its term, except that this additional
                  limitation shall not apply in the event of a Participant's
                  death or Disability prior to the expiration of such
                  six-month period.

                           (ii) Stock Appreciation Rights that are Related
                  Rights ("Related Stock Appreciation Rights") shall be
                  exercisable only at such time or times and to the extent that
                  the Options to which they relate shall be exercisable in
                  accordance with the provisions of Section 6 above and this
                  Section 7 of the Plan; PROVIDED, HOWEVER, that a Related Stock
                  Appreciation Right granted in connection with an Incentive
                  Stock Option shall be exercisable only if and when the Fair
                  Market Value of the Common Stock subject to the Incentive
                  Stock Option exceeds the Exercise Price of such Option;
                  PROVIDED, FURTHER, that no Related Stock Appreciation Right
                  shall be exercisable during the first six months of its term,
                  except that this additional limitation shall not apply in the
                  event of a Participant's death or Disability prior to the
                  expiration of such six-month period.

                           (iii) Limited Stock Appreciation Rights shall only be
                  exercised within the 30-day period following a "Change in
                  Control" (as defined by the Administrator in the Limited Stock
                  Appreciation Right Agreement evidencing such right) and, with
                  respect to Limited Stock Appreciation Rights that are Related
                  Rights ("Related Limited Stock Appreciation Rights"), only to
                  the extent that the Options to which they relate shall be
                  exercisable in accordance with the provisions of Section 6
                  above and this Section 7 of the Plan.

                  (c) PAYMENT UPON EXERCISE.

                           (i) Upon the exercise of a Free Standing Stock
                  Appreciation Right, the Participant shall be entitled to
                  receive up to, but not more than, an amount in cash or that
                  number of Shares (or any combination of cash and Shares) equal
                  in value to the excess of the Fair Market Value as of the date
                  of exercise over the per share Exercise Price specified in the
                  Free Standing Stock Appreciation Right

<PAGE>

                  (which Exercise Price shall be no less than 100% of the
                  Fair Market Value of the Common Stock on the date of grant)
                  multiplied by the number of Shares in respect of which the
                  Free Standing Stock Appreciation Right is being exercised,
                  with the Administrator having the right to determine the
                  form of payment.

                           (ii) A Related Right may be exercised by a
                  Participant by surrendering the applicable portion of the
                  related Option. Upon such exercise and surrender, the
                  Participant shall be entitled to receive up to, but not more
                  than, an amount in cash or that number of Shares (or any
                  combination of cash and Shares) equal in value to the excess
                  of the Fair Market Value as of the date of exercise over the
                  per share Exercise Price specified in the related Option
                  multiplied by the number of Shares in respect of which the
                  Related Stock Appreciation Right is being exercised, with the
                  Administrator having the right to determine the form of
                  payment. Options which have been so surrendered, in whole or
                  in part, shall no longer be exercisable to the extent the
                  Related Rights have been so exercised.

                           (iii) Upon the exercise of a Limited Stock
                  Appreciation Right, the Participant shall be entitled to
                  receive an amount in cash equal in value to the excess of the
                  "Change in Control Price" (as defined in the Award Agreement
                  evidencing such Limited Stock Appreciation Right) of a share
                  of Common Stock Share as of the date of exercise over (A) the
                  per share Exercise Price specified in the related Option, or
                  (B) in the case of a Limited Stock Appreciation Right which is
                  a Free Standing Stock Appreciation Right, the per share
                  Exercise Price specified in the Free Standing Stock
                  Appreciation Right, such excess to be multiplied by the number
                  of Shares in respect of which the Limited Stock Appreciation
                  Right shall have been exercised.

                  (d) NON-TRANSFERABILITY.

                           (i) Free Standing Stock Appreciation Rights shall be
                  transferable only when and to the extent that an Option would
                  be transferable under Section 6(f) of the Plan.

<PAGE>

                           (ii) Related Stock Appreciation Rights shall be
                  transferable only when and to the extent that the underlying
                  Option would be transferable under Section 6(f) of the Plan.

                          (iii) Limited Stock Appreciation Rights shall be
                  transferable only when and to the extent that an Option would
                  be transferable under Section 6(f) of the Plan.

                  (e) TERMINATION OF EMPLOYMENT OR SERVICE

                            (i) In the event of the termination of employment or
                  service of a Participant who has been granted one or more Free
                  Standing Stock Appreciation Rights, such rights shall be
                  exercisable at such time or times and subject to such terms
                  and conditions as shall be determined by the Administrator at
                  or after grant.

                           (ii) In the event of the termination of employment or
                  service of a Participant who has been granted one or more
                  Related Stock Appreciation Rights, such rights shall be
                  exercisable at such time or times and subject to such terms
                  and conditions as set forth in the related Options.

                          (iii) In the event of the termination of employment
                  or service of a Participant who has been granted one or more
                  Limited Stock Appreciation Rights, such rights shall be
                  exercisable at such time or times and subject to such terms
                  and conditions as shall be determined by the Administrator at
                  or after grant.

                  (f) TERM.

                            (i) The term of each Free Standing Stock
                  Appreciation Right shall be fixed by the Administrator, but
                  no Free Standing Stock Appreciation Right shall be
                  exercisable more than ten years after the date such right
                  is granted.

                           (ii) The term of each Related Stock Appreciation
                  Right shall be the term of the Option to which it relates, but
                  no Related

<PAGE>

                  Stock Appreciation Right shall be exercisable more than ten
                  years after the date such right is granted.

                          (iii) The term of each Limited Stock Appreciation
                  Right shall be fixed by the Administrator, but no Limited
                  Stock Appreciation Right shall be exercisable more than ten
                  years after the date such right is granted.

8. SECTION RESTRICTED STOCK, DEFERRED STOCK AND PERFORMANCE SHARES.

                  Awards of Restricted Stock, Deferred Stock or Performance
Shares may be issued either alone or in addition to other Awards granted
under the Plan. The Administrator shall determine the Eligible Recipients to
whom, and the time or times at which, Awards of Restricted Stock, Deferred
Stock or Performance Shares shall be made; the number of Shares to be
awarded; the Exercise Price, if any, to be paid by the Participant for the
acquisition of Restricted Stock, Deferred Stock or Performance Shares; the
Restricted Period (as defined in Section 8(b)) applicable to Awards of
Restricted Stock or Deferred Stock; the performance objectives applicable to
Awards of Deferred Stock or Performance Shares; and all other conditions of
the Awards of Restricted Stock, Deferred Stock and Performance Shares.
Subject to the requirements of Section 162(m) of the Code, as applicable, the
Administrator may also condition the grant of the Award of Restricted Stock,
Deferred Stock or Performance Shares upon the exercise of Options, or upon
such other criteria as the Administrator may determine, in its sole
discretion. The provisions of the Awards of Restricted Stock, Deferred Stock
or Performance Shares need not be the same with respect to each Participant.
In the sole discretion of the Administrator, loans may be made to
Participants in connection with the purchase of Restricted Stock under
substantially the same terms and conditions as provided in Section 6(e) of
the Plan with respect to the exercise of Options.

                  (a) AWARDS AND CERTIFICATES. The prospective recipient of
Awards of Restricted Stock, Deferred Stock or Performance Shares shall not
have any rights with respect to any such Award, unless and until such
recipient has executed an Award Agreement evidencing the Award (a "Restricted
Stock Award Agreement," "Deferred Stock Award Agreement" or "Performance
Shares Award Agreement," as appropriate) and delivered a fully executed copy
thereof to the Company, within a period of sixty days (or such other period
as the Administrator may specify) after the award date. Except as otherwise
provided below in Section

<PAGE>

8(b), (i) each Participant who is granted an Award of Restricted Stock or
Performance Shares shall be issued a stock certificate in respect of such
shares of Restricted Stock or Performance Shares; and (ii) such certificate
shall be registered in the name of the Participant, and shall bear an
appropriate legend referring to the terms, conditions, and restrictions
applicable to any such Award.

                  (b) The Company may require that the stock certificates
evidencing Restricted Stock or Performance Shares granted hereunder be held
in the custody of the Company until the restrictions thereon shall have
lapsed, and that, as a condition of any Award of Restricted Stock or
Performance Shares, the Participant shall have delivered a stock power,
endorsed in blank, relating to the Shares covered by such Award.

                  (c) With respect to Awards of Deferred Stock, at the
expiration of the Restricted Period, stock certificates in respect of such
Shares of Deferred Stock shall be delivered to the Participant, or his legal
representative, in a number equal to the number of Shares covered by the
Deferred Stock Award.

                  (d) RESTRICTIONS AND CONDITIONS. The Awards of Restricted
Stock, Deferred Stock and Performance Shares granted pursuant to this Section
8 shall be subject to the following restrictions and conditions:

                           (i) Subject to the provisions of the Plan and the
                  Restricted Stock Award Agreement, Deferred Stock Award
                  Agreement or Performance Shares Award Agreement, as
                  appropriate, governing any such Award, during such period as
                  may be set by the Administrator commencing on the date of
                  grant (the "Restricted Period"), the Participant shall not be
                  permitted to sell, transfer, pledge or assign shares of
                  Restricted Stock, Deferred Stock or Performance Shares awarded
                  under the Plan; PROVIDED, HOWEVER, that the Administrator may,
                  in its sole discretion, provide for the lapse of such
                  restrictions in installments and may accelerate or waive such
                  restrictions in whole or in part based on such factors and
                  such circumstances as the Administrator may determine, in its
                  sole discretion, including, but not limited to, the attainment
                  of certain performance related goals, the Participant's
                  termination of employment or service as a director, consultant
                  or advisor to the Company or any Parent or Subsidiary, the
                  Participant's death or Disability or the occurrence of a
                  "change in control" as defined in the Restricted Stock Award
                  Agreement,

<PAGE>

                  Deferred Stock Award Agreement or Performance Shares Award
                  Agreement, as appropriate, evidencing such Award.

                           (ii) Except as provided in Section 8(c)(i), the
                  Participant shall generally have the rights of a stockholder
                  of the Company with respect to Restricted Stock or Performance
                  Shares during the Restricted Period. The Participant shall
                  generally not have the rights of a stockholder with respect to
                  Shares subject to Awards of Deferred Stock during the
                  Restricted Period; PROVIDED, HOWEVER, that dividends declared
                  during the Restricted Period with respect to the number of
                  Shares covered by Awards of Deferred Stock shall be paid to
                  the Participant. Certificates for unrestricted Shares shall be
                  delivered to the Participant promptly after, and only after,
                  the Restricted Period shall expire without forfeiture in
                  respect of such Awards of Restricted Stock, Deferred Stock or
                  Performance Shares except as the Administrator, in its sole
                  discretion, shall otherwise determine.

                           (iii) The rights of Participants granted Awards of
                  Restricted Stock, Deferred Stock or Performance Shares upon
                  termination of employment or service as a director, consultant
                  or advisor to the Company or to any Parent or Subsidiary
                  terminates for any reason during the Restricted Period shall
                  be set forth in the Restricted Stock Award Agreement, Deferred
                  Stock Award Agreement or Performance Shares Award Agreement,
                  as appropriate, governing such Awards.

9. SECTION AMENDMENT AND TERMINATION.

                  The Board may amend, alter or discontinue the Plan, but no
amendment, alteration, or discontinuation shall be made that would impair the
rights of a Participant under any Award theretofore granted without such
Participant's consent, or that, without the approval of the stockholders (as
described below), would:

                  (a) except as provided in Section 3 of the Plan, increase
the total number of Shares reserved for issuance under the Plan;

<PAGE>

                  (b) change the class of officers, directors, employees,
consultants and advisors eligible to participate in the Plan; or

                  (c) extend the maximum Option period under Section 6(b) of
the Plan.

                  (d) Notwithstanding the foregoing, stockholder approval
under this Section 9 shall only be required at such time and under such
circumstances as stockholder approval would be required under Section 162(m)
of the Code or other applicable law, rule or regulation with respect to any
material amendment to an employee benefit plan of the Company.

                  (e) The Administrator may amend the terms of any Award
theretofore granted, prospectively or retroactively, but, subject to Section
3 of Plan, no such amendment shall impair the rights of any Participant
without his or her consent.

10. SECTION UNFUNDED STATUS OF PLAN.

                  The Plan is intended to constitute an "unfunded" plan for
incentive compensation. With respect to any payments not yet made to a
Participant by the Company, nothing contained herein shall give any such
Participant any rights that are greater than those of a general creditor of
the Company.

11. SECTION GENERAL PROVISIONS.

                  (a) Shares shall not be issued pursuant to the exercise of
any Award granted hereunder unless the exercise of such Award and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act
of 1933, as amended, the Exchange Act and the requirements of any stock
exchange upon which the Common Stock may then be listed, and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.

                  (b) The Administrator may require each person acquiring
Shares to represent to and agree with the Company in writing that such person
is acquiring the Shares without a view to distribution thereof. The
certificates for such Shares may include any legend which the Administrator
deems appropriate to reflect any restrictions on transfer.

<PAGE>

                  (c) All certificates for Shares delivered under the Plan
shall be subject to such stock-transfer orders and other restrictions as the
Administrator may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock exchange
upon which the Common Stock is then listed, and any applicable Federal or
state securities law, and the Administrator may cause a legend or legends to
be placed on any such certificates to make appropriate reference to such
restrictions.

                  (d) Nothing contained in the Plan shall prevent the Board
from adopting other or additional compensation arrangements, subject to
stockholder approval, if such approval is required; and such arrangements may
be either generally applicable or applicable only in specific cases. The
adoption of the Plan shall not confer upon any Eligible Recipient any right
to continued employment or service with the Company or any Parent or
Subsidiary, as the case may be, nor shall it interfere in any way with the
right of the Company or any Parent or Subsidiary to terminate the employment
or service of any of its Eligible Recipients at any time.

                  (e) Each Participant shall, no later than the date as of
which the value of an Award first becomes includible in the gross income of
the Participant for Federal income tax purposes, pay to the Company, or make
arrangements satisfactory to the Administrator regarding payment of, any
Federal, state, or local taxes of any kind required by law to be withheld
with respect to such Award. The obligations of the Company under the Plan
shall be conditional on the making of such payments or arrangements, and the
Company shall, to the extent permitted by law, have the right to deduct any
such taxes from any payment of any kind otherwise due to the Participant.

                  (f) No member of the Board or the Administrator, nor any
officer or employee of the Company acting on behalf of the Board or the
Administrator, shall be personally liable for any action, determination, or
interpretation taken or made in good faith with respect to the Plan, and all
members of the Board or the Administrator and each and any officer or
employee of the Company acting on their behalf shall, to the extent permitted
by law, be fully indemnified and protected by the Company in respect of any
such action, determination or interpretation.

<PAGE>

12. SECTION STOCKHOLDER APPROVAL; EFFECTIVE DATE OF PLAN; EFFECTIVE DATE OF
AMENDMENTS.

                  (a) The grant of any Award hereunder shall be contingent
upon stockholder approval of the Plan being obtained within 12 months before
or after the date the Board adopts the Plan.

                  (b) Subject to the approval of the Plan by the stockholders
of the Company within twelve (12) months before or after the date the Plan is
adopted by the Board, the Plan shall be effective as of November 22, 1999.

                  (c) Subject to the approval of the Amendments by the
stockholders of the Company within twelve (12) months before or after the
date the Amendments are adopted by the Board, the Amendments to the Plan
shall be effective as of the first trading day on or after the date on which
the Securities and Exchange Commission declares the Company's Registration
Statement effective (the "Effective Date").

13. SECTION TERM OF PLAN.

                  No Option, Stock Appreciation Right, Limited Stock
Appreciation Right, or Awards of Restricted Stock, Deferred Stock or
Performance Shares shall be granted pursuant to the Plan on or after November
22, 2009, but Awards theretofore granted may extend beyond that date.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00001-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00001-of-00352.parquet"}]]