Document:

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                                                                   EXHIBIT 10.1
                                     SM&A
                                  CORPORATION

                                    AMENDED
                            1997 STOCK OPTION PLAN

NOTICE:  QUALIFIED OPTIONS UNDER THIS PLAN BEAR RESTRICTIONS GOVERNED BY SECTION
422 OF THE INTERNAL REVENUE CODE.  PLAN PARTICIPANTS ARE URGED TO READ SECTION
422 AND TO UNDERSTAND THE RESTRICTIONS CONTAINED THEREIN.  NOT ALL SECTION 422
                                                           -------------------
RESTRICTIONS ARE REFERENCED IN THIS PLAN.  OPTIONS GRANTED HEREUNDER MAY BEAR
-----------------------------------------
RESTRICTIONS IMPOSED BY FEDERAL AND STATE SECURITIES LAWS.  PLAN PARTICIPANTS
ARE URGED TO CONSULT WITH THEIR TAX AND LEGAL ADVISORS CONCERNING THE NATURE AND
RESTRICTIONS UPON THE OPTIONS GOVERNED HEREBY.

1.   Purposes.
     --------

     (a)  The purpose of the Plan is to provide a means by which selected
employees, Directors and Consultants of the Company and its Affiliates, may be
given an opportunity to benefit from increases in value of the stock of the
Company through the granting of Incentive Stock Options and Nonstatutory Stock
Options, as defined below.

     (b)  The Company, by means of the Plan, seeks to retain the services of
persons who are now Employees, Directors or Consultants of the Company or its
Affiliates, to secure and retain the services of new Employees, Directors and
Consultants, and to provide incentives for such persons to exert maximum efforts
for the success of the Company and its Affiliates.

     (c)  The Company intends that the Options issued under the Plan shall, in
the discretion of the Board or any Committee to which responsibility for
administration of the Plan has been delegated pursuant to Section 3(c), be
                                                          ------------
either Incentive Stock Options and Nonstatutory Stock Options.  All Options
shall be separately designated Incentive Stock Options or Nonstatutory Stock
Options at the time of grant, and in such form as issued pursuant to Section 6,
                                                                     ---------
and a certificate or certificates will be issued for shares purchased on
exercise of such Options.

2.   Definitions.
     -----------

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

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

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

     (d) "Committee" means a Committee appointed by the Board in accordance with
          ---------
Section 3(c) of the Plan.
------------

     (e) "Company" means SM&A Corporation, a California corporation.
          -------

     (f) "Consultant" means any person, including an advisor, engaged by the
          ----------
Company or an Affiliate to render consulting or advisory services and who is
compensated for such services, provided that the term "Consultant" shall not
include Directors who are paid only a director's fee by the Company or who are
not compensated by the Company for their services as Directors.

     (g) "Continuous Status as an Employee, Director or Consultant" means the
          --------------------------------------------------------
employment or relationship as a Director or Consultant is not interrupted or
terminated.  The Board, in its sole discretion, may determine whether Continuous
Status as an Employee, Director or Consultant shall be considered interrupted in
the case of:  (i) any leave of absence approved by the Board, including sick
leave, military leave or any other personal leave; provided, however, that for
                                                   -----------------
purposes of Incentive Stock Options, any such leave may not exceed three (3)
months, unless reemployment upon the expiration of such leave is guaranteed by
contract, Company policies or statute; or (ii) transfers between locations of
the Company or between the Company, Affiliates or their successors.

     (h) "Director" means a member of the Board.
          --------

     (i) "Employee" means any person, including Officers and Directors, employed
          --------
by the Company or any Affiliate of the Company.  Neither service as a Director
nor payment of a director's fee by the Company shall be sufficient to constitute
"employment" by the Company.

     (j) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
          ------------

     (k) "Fair Market Value" means, as of any date, the value of the Common
          -----------------
Stock of the Company determined as follows:

               (i)  If the Common Stock is listed on any established stock
     exchange or a national market system, including without limitation the
     National Market System of the National Association of Securities Dealers,
     Inc. Automated Quotation ("NASDAQ") System, the Fair Market Value of a
                                ------
     share of Common Stock shall be the closing sales price for such stock (or
     the closing bid, if no sales were reported) as quoted on such system or
     exchange on the last market trading day prior to the day of determination,
     as reported in the Wall Street Journal or such other source as the Board
     deems reliable;

               (ii) If the Common Stock is quoted on the NASDAQ System (but not
     on the National Market System thereof) or is regularly quoted by a
     recognized securities dealer but selling prices are not reported, the Fair
     Market Value of a share of Common Stock shall be

                                                                               2
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     the mean between the bid and asked prices for the Common Stock on the last
     market trading day prior to the day of determination, as reported in the
     Wall Street Journal or such other source as the Board deems reliable;

               (iii)  In the absence of an established market for the Common
     Stock, the Fair Market Value shall be determined in good faith by the
     Board.

     (l) "Incentive Stock Option" means an Option intended to qualify as an
          ----------------------
incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.

     (m) "Non-Employee Director" shall mean a director who:
          ---------------------

               (i)    Is not currently an officer (as defined in Rule 16a-1(f)
     of the Exchange Act) of the Company or a parent or subsidiary of the
     Company, or otherwise currently employed by the Company or a parent or
     subsidiary of the Company;

               (ii)   Does not receive compensation, either directly or
     indirectly, from the Company or a parent or subsidiary of the Company, for
     services rendered as a consultant or in any capacity other than as a
     director, except for an amount that does not exceed the dollar amount for
     which disclosure would be required pursuant to Rule 404(a) of the Exchange
     Act;

               (iii)  Does not possess an interest in any other transaction for
     which disclosure would be required pursuant to Rule 404(a) of the Exchange
     Act; and

               (iv)   Is not engaged in a business relationship for which
     disclosure would be required pursuant to Rule 404(b) of the Exchange Act.

     (n) "Nonstatutory Stock Option" means an Option not intended to qualify as
          -------------------------
an Incentive Stock Option.

     (o) "Officer" means a person who is an officer of the Company within the
          -------
meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

     (p) "Option" means a stock option granted pursuant to the Plan.
          ------

     (q) "Option Agreement" means a written agreement between the Company and an
          ----------------
Optionee evidencing the terms and conditions of an individual Option grant.
Each Option Agreement shall be subject to the terms and conditions of the Plan.

     (r) "Optionee" means an Employee, Director or Consultant who holds an
          --------
outstanding Option.

     (s) "Participant" means an Employee, Director or Consultant who is granted
          -----------
Options.

     (t) "Plan" means this Amended 1997 Stock Option Plan.
          ----

                                                                               3
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     (u) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any successor to
          ----------
Rule 16b-3, as in effect when discretion is being exercised with respect to the
Plan.

     (v) "Securities Act" means the Securities Act of 1933, as amended.
          --------------

3.   Administration.
     --------------

     (a) The Plan shall be administered by the Board unless and until the Board
delegates administration to a Committee, as provided in Section 3(c).
                                                        ------------

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

               (i)    To determine from time to time which of the persons
     eligible under the Plan shall be granted Options; when and how Options
     shall be granted; whether an Option will be an Incentive Stock Option or a
     Nonstatutory Stock Option, the provisions of each Option granted (which
     need not be identical), including the vesting schedule for the Options, and
     the number of shares underlying such Options to be granted to each such
     person;

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

               (iii)  To amend the Plan as provided in Section 12; and
                                                       ----------

               (iv)   Generally, to exercise such powers and to perform such
     acts as the Board deems necessary or advisable to promote the best
     interests of the Company.

     (c) The Board may delegate administration of the Plan to a committee
composed of not fewer than two (2) members of the Board (the "Committee"), all
                                                              ---------
of the members of which Committee shall be Non-Employee Directors.  If
administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore possessed
by the Board (and references in this Plan to the Board shall thereafter be to
the Committee), subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board.  The
Board may abolish the Committee at any time and revest in the Board the
administration of the Plan.

                                                                               4
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4.   Shares Subject to the Plan.
     --------------------------

     Subject to the provisions of Section 11 relating to adjustments upon
                                  ----------
changes in stock, the stock that may be issued pursuant to Options shall not
exceed in the aggregate Two Million Five Hundred Thousand (2,500,000) shares of
the Company's Common Stock.  If any Option shall for any reason expire or
otherwise terminates, in whole or in part, without having been exercised in
full, the stock not acquired under such Option shall revert to and again become
available for issuance under the Plan.

5.   Eligibility.
     -----------

     (a) Incentive Stock Options may be granted only to Employees.  Nonstatutory
Stock Options may be granted only to Employees, Directors or Consultants.

     (b) A Director shall be eligible for the benefits of the Plan provided that
such Director's participation conforms to the requirements of Rule 16b-3, if
applicable.

     (c) No person shall be eligible for the grant of an Incentive Stock Option
if, at the time of grant, such person owns (or is deemed to own pursuant to
Section 424(d) of the Code) stock possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company or of any of
its Affiliates unless the exercise price of such Incentive Stock Option is at
least one hundred ten percent (110%) of the Fair Market Value of such stock at
the date of grant.

6.   Option Provisions.
     -----------------

     Each Option shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate.  The provisions of separate
Options need not be identical, but each Option shall include (through
incorporation of provisions hereof by reference in the Option or otherwise) the
substance of each of the following provisions:

     (a) Term.  No Option shall be exercisable after the expiration of ten (10)
         ----
years from the date it was granted.

     (b) Price.  The exercise price of each Incentive Stock Option shall be not
         -----
less than one hundred percent (100%) of the Fair Market Value of the stock
subject to the Option on the date the Option is granted.  Notwithstanding the
foregoing, the exercise price of any Incentive Stock Option granted hereunder to
any stockholder possessing at least 10% of the total combined voting power of
all classes of stock of the Company shall be not less than one hundred ten
percent (110%) of the Fair Market Value of the stock subject to the Option on
the date the Option is granted.

     (c) Consideration.  The purchase price of stock acquired pursuant to an
         -------------
Option shall be paid, to the extent permitted by applicable statutes and
regulations, either (i) in cash at the time the Option is exercised, (ii) at the
discretion of the Board or the Committee, either at the time of the grant or
exercise of the Option, by delivering to the Company other shares of Common
Stock of the Company (provided that the shares have been held for the period
required to avoid a charge to the

                                                                               5
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Company's reported earnings), (iii) at the discretion of the Board or the
Committee, either at the time of the grant or exercise of the Option, by
delivering to the Company all or any part of an Option granted under this Plan
for a cashless exercise (provided that such cashless exchange will not result in
a charge to the Company's reported earnings), or (iv) by tendering any other
form of legal consideration that may be acceptable to the Board.

     (d) Transferability.  An Incentive Stock Option shall not be transferable
         ---------------
except by will or by the laws of descent and distribution, and shall be
exercisable during the lifetime of the person to whom the Incentive Stock Option
is granted only by such person.  A Nonstatutory Stock Option granted to an
Optionee subject to Section 16 of the Exchange Act on the date of grant shall
not be transferable except by will or by the laws of descent and distribution or
pursuant to a qualified domestic relations order satisfying the requirements of
Rule 16b-3 and the rules thereunder (a "QDRO"), and shall be exercisable during
the lifetime of the person to whom the Option is granted only by such person or
any transferee pursuant to a QDRO.  A Nonstatutory Stock Option granted to an
Optionee who is not subject to Section 16 of the Exchange Act on the date of
grant may not be transferable except by will or by the laws of descent and
distribution, unless otherwise permitted by the Board.  The person to whom the
Option is granted may, by delivering written notice to the Company, in a form
satisfactory to the Company, designate a third party who, in the event of the
death of the Optionee, shall thereafter be entitled to exercise the Option.

     (e) Vesting.  The total number of shares of stock subject to an Option may,
         -------
but need not, be allotted in periodic installments (which may, but need not, be
equal).  The Option Agreement may provide that from time to time during each of
such installment periods, the Option may become exercisable ("vest") with
                                                              ----
respect to some or all of the shares allotted to that period, and may be
exercised with respect to some or all of the shares allotted to such period
and/or any prior period as to which the Option became vested but was not fully
exercised.  The Option may be subject to such other terms and conditions on the
time or times when it may be exercised (which may be based on performance or
other criteria) as the Board may deem appropriate.  The provisions of this
Section 6(e) are subject to any Option provisions governing the minimum number
------------
of shares as to which an Option may be exercised.

     (f) Termination of Employment or Relationship as a Director or Consultant.
         ---------------------------------------------------------------------
In the event an Optionee's Continuous Status as an Employee, Director or
Consultant terminates (other than upon the Optionee's death or disability), the
Optionee may exercise his or her Option (to the extent that the Optionee was
entitled to exercise it at the date of termination) but only within such period
of time ending on the earlier of (i) the date ninety (90) days after the
termination of the Optionee's Continuous Status as an Employee, Director or
Consultant (or such longer period specified in the Option Agreement), or (ii)
the expiration of the term of the Option as set forth in the Option Agreement.
If, after termination, the Optionee does not exercise his or her Option within
the time specified in the Option Agreement, the Option shall terminate, and the
shares covered by such Option shall revert to and again become available for
issuance under the Plan.

     (g) Disability of Optionee.  In the event an Optionee's Continuous Status
         ----------------------
as an Employee, Director or Consultant terminates as a result of the Optionee's
disability, the Optionee may exercise his or her Option (to the extent that the
Optionee was entitled to exercise it at the date of termination), but only
within such period of time ending on the earlier of (i) the date six (6)

                                                                               6
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months following such termination (or such longer period specified in the Option
Agreement), or (ii) the expiration of the term of the Option as set forth in the
Option Agreement. If, at the date of termination, the Optionee is not entitled
to exercise his or her entire Option, the shares covered by the unexercisable
portion of the Option shall revert to and again become available for issuance
under the Plan. If, after termination, the Optionee does not exercise his or her
Option within the time specified herein, the Option shall terminate, and the
shares covered by such Option shall revert to and again become available for
issuance under the Plan.

     (h) Death of Optionee.  In the event of the death of an Optionee during, or
         -----------------
within a period specified in the Option after the termination of, the Optionee's
Continuous Status as an Employee, Director or Consultant, the Option may be
exercised (to the extent the Optionee was entitled to exercise the Option at the
date of death) by the Optionee's estate, by a person who acquired the right to
exercise the Option by bequest or inheritance or by a person designated to
exercise the option upon the Optionee's death pursuant to Section 6(d), but only
                                                          ------------
within the period ending on the earlier of (i) the date twelve (12) months
following the date of death (or such longer period specified in the Option
Agreement), or (ii) the expiration of the term of such Option as set forth in
the Option Agreement.  If, at the time of death, the Optionee was not entitled
to exercise his or her entire Option, the shares covered by the unexercisable
portion of the Option shall revert to and again become available for issuance
under the Plan.  If, after death, the Option is not exercised within the time
specified herein, the Option shall terminate, and the shares covered by such
Option shall revert to and again become available for issuance under the Plan.

7.   Cancellation and Regrant of Options.
     -----------------------------------

     The Board or the Committee shall have the authority to effect, at any time
and from time to time, (i) the repricing of any outstanding Options under the
Plan, and/or (ii) with the consent of the affected holders of Options, the
cancellation of any outstanding Options under the Plan and the grant in
substitution therefor of new Options under the Plan covering the same or
different numbers of shares of stock, but having an exercise price per share not
less than one hundred percent (100%) of the Fair Market Value in the case of an
Incentive Stock Option or, in the case of a ten percent (10%) stockholder (as
described in Section 5(c)) not less than one hundred ten percent (110%) of the
             ------------
Fair Market Value in the case of an Incentive Stock Option.

8.   Covenants of the Company.
     ------------------------

     (a) During the terms of the Options, the Company shall keep available at
all times the number of shares of stock which would be issuable under such
outstanding Options.

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

                                                                               7
<PAGE>

and until such authority is obtained.

9.   Use of Proceeds from Stock.
     --------------------------

     Proceeds from the sale of Common Stock upon exercise of the Options shall
constitute general funds of the Company.

10.  Miscellaneous.
     -------------

     (a) Neither an Optionee nor any person to whom an Option is transferred
under Section 6(d) shall be deemed to be the holder of, or to have any of the
      ------------
rights of a holder with respect to, any shares subject to such Option unless and
until such person has satisfied all requirements for exercise of the Option
pursuant to its terms.

     (b) Nothing in the Plan or any Option granted pursuant thereto shall confer
upon any Employee, Director, Consultant or other holder of Options any right to
continue in the employ of the Company or any Affiliate (or to continue acting as
a Director or Consultant) or shall affect the right of the Company or any
Affiliate to terminate the employment or relationship as a Director or
Consultant of any Employee, Director, Consultant or other holder of Options with
or without cause.

     (c) To the extent that the aggregate Fair Market Value (determined at the
time of grant) of stock with respect to which Incentive Stock Options are
granted are exercisable for the first time by an Optionee during any calendar
year under all plans of the Company and its Affiliates exceeds One Hundred
Thousand Dollars ($100,000), the Options or portions thereof which exceed such
limit (according to the order in which they were granted) shall be treated as
Nonstatutory Stock Options.

     (d) The Company may require any person to whom an Option is granted, or any
person to whom an Option is transferred under Section 6(d), as a condition of
                                              ------------
exercising any Option, (1) to give written assurances satisfactory to the
Company as to such person's knowledge and experience in financial and business
matters and/or to employ a purchaser representative reasonably satisfactory to
the Company who is knowledgeable and experienced in financial and business
matters, and that he or she is capable of evaluating, alone or together with the
purchaser representative, the merits and risks of exercising the Option; and (2)
to give written assurances satisfactory to the Company stating that such person
is acquiring the stock subject to the Option for such person's own account and
not with any present intention of selling or otherwise distributing the stock.
The foregoing requirements, and any assurances given pursuant to such
requirements, shall be inoperative if (i) the issuance of the shares upon the
exercise or acquisition of stock under the Option has been registered under a
then currently effective registration statement under the Securities Act, or
(ii) as to any particular requirement, a determination is made by counsel for
the Company that such requirement need not be met in the circumstances under the
then applicable securities laws.  The Company may, upon advice of counsel to the
Company, place legends on stock certificates issued under the Plan as such
counsel deems necessary or appropriate in order to comply with applicable
securities laws, including, but not limited to, legends restricting the transfer
of the stock.

                                                                               8
<PAGE>

     (e) To the extent provided by the terms of an Option Agreement, the person
to whom an Option is granted may, at the discretion of the Board, satisfy any
mandatory federal, state or local tax withholding obligation relating to the
exercise or acquisition of stock under an Option by any of the following means
or by a combination of such means:  (1) tendering cash payment; (2) authorizing
the Company to withhold shares from the shares of the Common Stock otherwise
issuable to the Participant as a result of the exercise or acquisition of stock
under the Option provided that such arrangement will not result in a charge to
the Company's reported earnings; or (3) delivering to the Company owned and
unencumbered shares of the Common Stock of the Company that have been held for
the period required to avoid a charge to the Company's reported earnings.  The
exercise of the Option may be conditioned upon the receipt by the Company of
satisfactory evidence of the Participant's satisfaction of any withholding
obligations.

11.  Adjustments Upon Changes in Stock.
     ---------------------------------

     (a) Subject to any required action by stockholders, the number of shares
which may be purchased upon the exercise of each outstanding Option shall be
proportionately increased or decreased upon the occurrence of any change,
increase or decrease in the number and type of issued shares of Common Stock of
the Company, without receipt of consideration by the Company, which change
results from a stock split, a stock dividend, a merger, consolidation,
reorganization, reincorporation, a recapitalization, a combination of shares,
change in corporate structure or other like capital adjustment, so that upon the
exercise of each Option the holders of such Options shall receive the number and
type of securities which the holders would have received had the Options been
exercised on the date preceding such change, increase or decrease.  In the event
of any such adjustment, the exercise price for each share shall be likewise
adjusted in inverse proportion to the increase or decrease in the number of
shares purchasable.

     (b) In the event of:  (1) a dissolution, liquidation or sale of
substantially all of the assets of the Company; (2) a merger or consolidation in
which the Company is not the surviving corporation; or (3) a reverse merger in
which the Company is the surviving corporation but the shares of the Company's
Common Stock outstanding immediately preceding the merger are converted by
virtue of the merger into other property, whether in the form of securities,
cash or otherwise, then to the extent permitted by applicable law:  (i) any
surviving corporation shall assume any Options outstanding under the Plan or
shall substitute similar Options for those outstanding under the Plan, or (ii)
such Options shall continue in full force and effect.  In the event any
surviving corporation refuses to assume or continue such Options, or to
substitute similar options for those outstanding under the Plan, then, with
respect to Options held by persons then performing services as Employees,
Directors or Consultants, the time during which such Options vest shall be
accelerated and the Options terminated if not exercised prior to such event.

12.  Amendment of the Plan.
     ---------------------

     (a) The Board at any time, and from time to time, may amend the Plan
provided that the implementation of such amendment by the Company complies with
all applicable law.

     (b) The Board may in its sole discretion submit any other amendment to the
Plan for

                                                                               9
<PAGE>

stockholder approval, including, but not limited to, amendments to the Plan
intended to satisfy the requirements of Section 162(m) of the Code and the
regulations promulgated thereunder regarding the exclusion of performance-based
compensation from the limit on corporate deductibility of compensation paid to
certain executive officers.

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

     (d) Rights and obligations under any Option granted before amendment of the
Plan shall not be altered or impaired by any amendment of the Plan unless (i)
the Company requests the consent of the person to whom the Option was granted,
and (ii) such person consents in writing.

13.  Termination or Suspension of the Plan.
     -------------------------------------

     (a) The Board may suspend or terminate the Plan at any time.  Unless sooner
terminated, the Plan shall terminate on October 1, 2007, which shall be within
ten (10) years from the date the Plan is adopted by the Board or approved by the
stockholders of the Company, whichever is earlier.  No Options may be granted
under the Plan while the Plan is suspended or after it is terminated.

     (b) Rights and obligations under any Option granted while the Plan is in
effect shall not be altered or impaired by suspension or termination of the
Plan, except with the consent to the person to whom the Option was granted.

14.  Effective Date of Plan.
     ----------------------

     The Plan shall become effective as determined by the Board, but no Options
granted under the Plan shall be exercised unless and until the Plan has been
approved by the stockholders of the Company, which approval shall be within
twelve (12) months before or after the date the Plan is adopted by the Board.

15.  Financial Information.
     ---------------------

     The Company will provide to each Optionee financial statements of the
Company at least annually in accordance with Section 260.140.46 of Title 10 of
the California Code of Regulations.

                                                                              10
<PAGE>

                                     SM&A
                                  CORPORATION

                                   OPTION TO
                             PURCHASE COMMON STOCK
                                      OF
                               SM&A CORPORATION

                                  VOID AFTER
                                EXPIRATION DATE
                                ---------------

     This certifies that HOLDER'S NAME ("Holder") is entitled to purchase from
                         -------------
SM&A CORPORATION, a California corporation (the "Corporation"):

                          QUANTITY  (NUMERIC QUANTITY)
                          --------

shares of Common Stock, of the Corporation (the "Shares"), subject to the terms
and conditions of the Corporation's 1997 Amended Stock Option Plan (the "Plan")
and such additional terms and conditions contained herein.  Any conflict between
the terms and conditions of the Plan and those contained herein shall be
resolved in favor of the Plan.  A copy of the Plan is attached hereto as Exhibit
                                                                         -------
"A".  Capitalized terms not otherwise defined herein shall have such definition
---
as is set forth in the Plan.  The number of shares of Common Stock purchasable
hereunder may be adjusted upon the occurrence of certain events, as specified in
the Plan and as set forth below.

The options granted hereby are (check one):  ______    Qualified
                                             ______    Nonqualified;

and are governed by the terms of the Plan concerning such type of options
thereunder.

IMPORTANT!  IF THESE ARE QUALIFIED OPTIONS, YOU ARE URGED TO REVIEW CAREFULLY
THE REQUIREMENTS AND RESTRICTIONS OF QUALIFIED OPTIONS UNDER THE PLAN AND
SECTION 422 OF THE INTERNAL REVENUE CODE.  WHETHER THE OPTIONS ARE QUALIFIED OR
NONQUALIFIED, YOU ARE URGED TO SEEK INDEPENDENT ADVICE CONCERNING THE LEGAL AND
TAX EFFECTS OF THESE OPTIONS AND SHOULD NOT RELY ON ANY SUMMARY OF SUCH MATTERS
CONTAINED HEREIN.

     The purchase price to be paid for the Shares upon the exercise of all or
any portion of this Option shall be:

                               $PRICE PER SHARE
                               ----------------
          per share of Common Stock purchased (the "Purchase Price").

1.  Exercise of Option:  Vesting.
    ----------------------------

    Holder may exercise this Option at any time until 5:00P.M., California time
on

               MMMM/DD/YYYY (the "Expiration Date"),
               ------------

                                                                     Page 1 of 3
<PAGE>

                                     SM&A
                                  CORPORATION

in accordance with the Vesting Schedule (the "Vesting Schedule") set forth below
by delivery to the Corporation, at its principal office, of:

     (a)  this Option,

     (b)  the Exercise Form, attached to this Option, duly executed and
specifying the number of Shares of Common Stock to be purchased hereunder, and

     (c)  cash or a certified or official bank check payable to the order of the
Corporation in the amount of the aggregate Purchase Price for the number of
Shares to be purchased.

     Upon receipt thereof, the Corporation shall, as promptly as practicable,
and in any event within 30 days thereafter, cause to be executed and delivered
to Holder a certificate or certificates for the aggregate number of the Shares
issuable upon such exercise. If this Option shall have been exercised only in
part of the total number of vested options, the Corporation shall, at the time
of delivery of such certificate or certificates, deliver to Holder a new Option
evidencing the rights of Holder to purchase the remaining Shares of Common Stock
called for by this Option, pursuant to the same terms and conditions and with
the same restrictions specified herein, and which new Option shall be of like
tenor to this Option. The Corporation shall pay all expenses, taxes and other
charges payable in connection with the preparation, issuance and delivery of
stock certificates.

     All shares of Common Stock issuable upon the exercise of this Option will
be validly issued, fully paid and nonassessable.

     The Options shall vest in accordance with the following Vesting Schedule
beginning one (1) year following the date Option was granted.

          First Year   25%
          Second Year  25%
          Third Year   25%
          Fourth Year  25%

2.   Lost, Stolen, Mutilated or Destroyed Option.
     -------------------------------------------

     If this Option is lost, stolen, mutilated or destroyed, the Corporation
may, on such terms as to indemnity or otherwise as the Corporation may in its
discretion impose (which shall, in the case of a mutilated Option, include the
surrender thereof), issue a new Option of like denomination, tenor and date as
this Option.

3.   Restrictions on Transfer:  Compliance with Securities Act:  Legend
     ------------------------------------------------------------------
Condition.
---------

     Neither this Option nor the right to purchase shares of Common Stock upon
exercise of this Option may be transferred by Holder in whole or in part except
that this Option may be exercised by Holder's conservator, trustee or estate
subject to all the terms and conditions set forth herein.  To the extent not
exercised by Holder on the Expiration Date, this Option and all rights hereunder
shall expire and the Option and such rights shall thereupon automatically be
cancelled and shall cease to exist.  Common Stock issued upon valid exercise of
this Option in whole or in part shall not be transferable by  Holder other than
in accordance with the Securities Act of 1933, as amended ("Securities Act"),
and the rules and regulations promulgated thereunder, together with applicable
state securities laws.  Unless a Registration Statement concerning such shares
is then in effect with the Securities and Exchange

                                                                     Page 2 of 3
<PAGE>

                                     SM&A
                                  CORPORATION

Commission, certificates evidencing shares of the Common Stock issued upon
exercise of this Option shall bear the following legend:

     THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
     REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
     MAY NOT BE OFFERED FOR RESALE OR RESOLD UNLESS REGISTERED
     PURSUANT TO THE PROVISIONS OF THAT ACT, UNLESS AN EXEMPTION
     FROM REGISTRATION IS AVAILABLE.

4.   Notices.
     -------

     Any notice or other document required or permitted to be given or delivered
to Holder shall be deemed given to him if given at the following address:

                    Holder:   Holder's First and Last Name
                              Address
                              City, State, Zip

Any such notice or other document shall be mailed first-class, postage prepaid,
to such address or such other address as shall have been furnished to the
Corporation in writing by Holder.  Any notice or other document required or
permitted to be given or delivered to the Corporation shall be mailed first-
class, postage prepaid to the Corporation at its principal executive offices,
4695 MacArthur Court, Eighth Floor, Newport Beach, California 92660, Attention:
Chief Financial Officer.

5.   Applicable Law.
     --------------

     This Option shall be construed and enforced in accordance with and governed
by the laws of the State of California.

6.   Headings.
     --------

     The headings herein are for convenience only and are not part of this
Option and shall not affect the interpretation hereof.

     IN WITNESS WHEREOF, the Corporation has caused this Option to be executed
in its name by its President and Assistant Secretary, thereunto duly authorized.

MMMM/DD/YYYY                       SM&A CORPORATION,
------------
Date Stock Option Granted          a California corporation

                                   By:_________________________________
                                      Michael A. Piraino, President

                                   By:_________________________________
                                      Daniel P. O'Connell, Assistant Secretary

                                                                     Page 3 of 3<PAGE>

                                                              EXHIBIT 10.2
                       ________________________________

                             AMENDED AND RESTATED
                         EMPLOYEE STOCK PURCHASE PLAN

     THIS AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN (the "Plan") was
                                                                  -----
established by SM&A Corporation, a California corporation (the "Company")
                                                                -------
effective as of March 1, 1999 (the "Effective Date").  The Plan has been amended
                                    --------------
and restated as provided herein effective as of July 1, 1999.

                                   ARTICLE 1
                              PURPOSE OF THE PLAN
                              -------------------

     1.1  Purpose.  The Company has determined that it is in its best interest
          -------
to provide incentives to attract and retain employees and to increase employee
morale by providing a program through which employees of the Company, and the
Company's subsidiaries as the Company's Board of Directors (the "Board of
                                                                 --------
Directors") may from time to time designate (each a "Designated Subsidiary," and
---------                                            ---------------------
collectively, "Designated Subsidiaries"), may acquire a proprietary interest in
               -----------------------
the Company through the purchase of shares of the Common Stock of the Company
("Company Stock"). The Plan is hereby established by the Company to permit
  -------------
employees to subscribe for, and purchase directly from the Company, shares of
the Company Stock at a discount from the market price and to pay the purchase
price in installments by payroll deductions.  The Plan is intended to qualify as
an "employee stock purchase plan" under Section 423 of the Internal Revenue Code
of 1986, as amended from time to time (the "Code").  Accordingly, the provisions
                                            ----
of the Plan shall be administered, interpreted, and construed in a matter
consistent with the requirements of that section of the Code.  The Plan is not
intended to be an employee benefit plan under the Employee Retirement Income
Security Act of 1974, and therefore is not required to comply with that Act.

                                   ARTICLE 2
                                  DEFINITIONS
                                  -----------

     2.1   Compensation. "Compensation" means wages, tips, overtime pay,
           ------------   ------------
bonuses, commissions, and other Compensation reported on Form W-2. Compensation
shall include any amounts contributed by the Employer pursuant to a salary
reduction agreement that is not currently includible in the Participant's gross
income by reason of the application of Code Sections 125, 402(e)(3), 402(g)(3),
402(h)(1)(B), 403(b), 414(h)(2), or 457(b). Compensation excludes the sum of all
of the following items, even if otherwise includible in gross income: (i)
reimbursements or other expense allowances; (ii) cash and noncash fringe
benefits; (iii) moving expenses; (iv) deferred compensation; and (v) welfare
benefits.

     2.2  Eligibility Date.  "Eligibility Date" means ninety (90) calendar days
          ----------------    ----------------
from an Employee's initial date of employment with the Company or any of its
Designated Subsidiaries.

                                       1
<PAGE>

     2.3  Employee. "Employee" means each person currently employed by the
          --------   --------
Company or any of its Designated Subsidiaries, any portion of whose income is
subject to withholding of income tax or for whom Social Security retirement
contributions are made by the Company or any Designated Subsidiary and excluding
any persons employed by the Company or any Designated Subsidiary on a part-time
or temporary basis.

     2.4  Enrollment Date.  "Enrollment Date" means the first day of each
          ---------------    ---------------
Offering Period (January 1 and July 1) under the Plan.  However, for the first
Offering Period, the Enrollment Date shall be July 1, 1999 and shall extend
through July 31, 1999.

     2.5  Five Percent (5%) Owner.  "5% Owner" means an Employee who,
          -----------------------    --------
immediately after the grant of any rights under the Plan, would own Company
Stock or hold outstanding options to purchase Company Stock possessing five
percent (5%) or more of the total combined voting power of all classes of stock
of the Company.  For purposes of this Section, the ownership attribution rules
of Code Section 425(d) shall apply.

     2.6  Offering Period.  "Offering Period" means the six-month periods from
          ---------------    ---------------
January 1 through June 30 and July 1 through December 31 of each Plan Year.  The
first Offering Period shall commence on July 1, 1999 and shall end December 31,
1999.

     2.7  Participant.  "Participant" means an Employee who has satisfied the
          -----------    -----------
eligibility requirements of Section 3.1 and has become a participant in the Plan
                            -----------
in accordance with Section 3.2.
                   -----------

     2.8  Plan Year.  "Plan Year" means the twelve consecutive month period
          ---------    ---------
ending on the last day of December.

     2.9  Purchase Date.  "Purchase Date" means the last day of each Offering
          -------------    -------------
Period (June 30 or December 31).

                                   ARTICLE 3
                         ELIGIBILITY AND PARTICIPATION
                         -----------------------------

     3.1  Eligibility.  Subject to limitations imposed by Section 423(b) of the
          -----------
Code, each Employee of the Company or any Designated Subsidiary may become a
Participant in the Plan on the Enrollment Date coincident with or next following
the Eligibility Date.

     3.2  Participation.  An Employee who has satisfied the eligibility
          -------------
requirements of Section 3.1 may become a Participant in the Plan upon his
                -----------
completion and delivery to the Human Resources Department of the Company of a
stock purchase agreement provided by the Company (the "Stock Purchase
                                                       --------------
Agreement") authorizing payroll deductions.  Payroll deductions for a
Participant shall commence on the Enrollment Date coincident with or next
following the filing of the Participant's Stock Purchase Agreement and shall
remain in effect until revoked by the Participant by the filing of a notice of
withdrawal from the Plan under Article 8 or by the filing of a new Stock
                               ---------
Purchase Agreement providing for a change in the Participant's payroll deduction
rate in accordance with Section 5.2.
                        -----------

                                       2
<PAGE>

     3.3  Special Rules.  Under no circumstances shall:
          -------------

          (a)  A 5% Owner be granted a right to purchase Company Stock under the
     Plan;

          (b)  A Participant be entitled to purchase Company Stock under the
     Plan which, when aggregated with all other employee stock purchase plans of
     the Company, exceed an amount equal to the Aggregate Maximum.  "Aggregate
                                                                     ---------
     Maximum" means an amount equal to $20,000 worth of Company Stock
     -------
     (determined using the fair market value of such Company Stock at each
     applicable Enrollment Date) during each calendar year; or

          (c)  The number of shares of Company Stock purchasable by a
     Participant on any Purchase Date exceed 5,000 shares, subject to periodic
     adjustments under Section 10.4.
                       ------------

                                   ARTICLE 4
                                OFFERING PERIOD
                                ---------------

     The initial grant of the right to purchase Company Stock under the Plan
shall occur on July 1, 1999 and terminate on December 31, 1999.  Thereafter, the
Plan shall provide for Offering Periods commencing on each Enrollment Date and
terminating on the next following Purchase Date.

                                   ARTICLE 5
                              PAYROLL DEDUCTIONS
                              ------------------

     5.1  Participant Election.  Upon completion of the Stock Purchase
          --------------------
Agreement, each Participant shall designate the amount of payroll deductions to
be made from his or her paycheck to purchase Company Stock under the Plan.  The
amount of payroll deductions shall be designated in whole percentages of
Compensation, not to exceed 15%.  The amount so designated upon the Stock
Purchase Agreement shall be effective as of the next payroll period and shall
continue until terminated or altered in accordance with Section 5.2 below.
                                                        -----------

     5.2  Changes in Election.  A Participant may terminate participation in the
          -------------------
Plan at any time prior to the close of an Offering Period as provided in Article
                                                                         -------
8.  A Participant may increase or decrease the rate of payroll deductions once
-
during each Offering Period by completing and delivering to the Human Resources
Department of the Company a new Stock Purchase Agreement setting forth the
desired change.  A Participant may also terminate payroll deductions and have
accumulated deductions for the Offering Period applied to the purchase of
Company Stock as of the next Purchase Date by completing and delivering to the
Human Resources Department a new Stock Purchase Agreement setting forth the
desired change.  Any change under this Section shall become effective on the
next payroll period (to the extent practical under the Company's payroll
practices) following the delivery of the new Stock Purchase Agreement.

                                       3
<PAGE>

     5.3  Participant Accounts.  The Company shall establish and maintain a
          --------------------
separate account ("Account") for each Participant.  The amount of each
                   -------
Participant's payroll deductions shall be credited to his / her Account.  No
interest will be paid or allowed on amounts credited to a Participant's Account.
All payroll deductions received by the Company under the Plan are general
corporate assets of the Company and may be used by the Company for any corporate
purpose.  The Company is not obligated to segregate such payroll deductions.

                                   ARTICLE 6
                           GRANT OF PURCHASE RIGHTS
                           ------------------------

     6.1  Right to Purchase Shares.  On each Purchase Date, each Participant
          ------------------------
shall have the right to purchase at the price determined under Section 6.2 that
                                                               -----------
number of whole shares of Company Stock that can be purchased or issued by the
          ------------
Company based upon that price with the amounts held in his Account, subject to
the limits set forth in Section 3.3. In the event that there are amounts held in
                        ---------
a Participant's Account that are not used to purchase Company Stock, such
amounts shall remain in the Participant's Account and shall be eligible to
purchase Company Stock in any subsequent Offering Period.

     6.2  Purchase Price.  The purchase price for any Offering Period shall be
          --------------
the lesser of:

          (a)  85% of the Fair Market Value of Company Stock on the Enrollment
     Date; or

          (b)  85% of the Fair Market Value of Company Stock on the Purchase
     Date.

     6.3  Fair Market Value.  "Fair Market Value" shall be determined as
          -----------------    -----------------
follows:

          (a)  If the Company Stock is then listed or admitted to trading on the
     NASDAQ National Market or a stock exchange which reports closing sale
     prices, the Fair Market Value shall be the closing sale price on the date
     of valuation on the NASDAQ National Market or principal stock exchange on
     which the Company Stock is then listed or admitted to trading, or, if no
     closing sale price is quoted or no sale takes place on such day, then the
     Fair Market Value shall be the closing sale price of the Company Stock on
     the NASDAQ National Market or such exchange on the next preceding day on
     which a sale occurred.

          (b)  If the Company Stock is not then listed or admitted to trading on
     the NASDAQ National Market or a stock exchange which reports closing sale
     prices, the Fair Market Value shall be the average of the closing bid and
     asked prices of the Company Stock in the over-the-counter market on the
     date of valuation.

          (c)  If neither (a) nor (b) is applicable as of the date of valuation,
     then the Fair Market Value shall be determined by the Administrator (see
     Section 7.2) in good faith using any reasonable method of valuation, which
     determination shall be conclusive and binding on all interested parties.

                                       4
<PAGE>

                                   ARTICLE 7
                               PURCHASE OF STOCK
                               -----------------

     7.1  Purchase of Company Stock.  A Participant who does not, prior to a
          -------------------------
Purchase Date, notify the Company that such Participant does not want to
purchase any shares of Company Stock pursuant to the Plan or that such
Participant wants to purchase fewer than the maximum number of shares available
for purchase, shall be deemed to elect to purchase the maximum number of whole
shares of Company Stock purchasable with the amounts held in such Participant's
Account, at the purchase price determined under Section 6.2 above and, on each
Purchase Date, the Plan shall purchase such shares on behalf of such
Participant."  In the event that there are amounts held in a Participant's
Account that are not used to purchase Company Stock, all such amounts shall be
held in the Participant's Account and carried forward to the next Offering
Period.

     7.2  Delivery of Company Stock.
          -------------------------

          (a)  Company Stock acquired under the Plan shall be issued directly to
     a contract administrator ("Administrator") engaged by the Company to
                                --------------
     administer the Plan under Article 9. All Company Stock so issued ("Plan
                               ---------                                ----
     Held Stock") shall be held in the name of the Administrator for the benefit
     ----------
     of the Plan.  The Administrator shall maintain accounts for the benefit of
     the Participants that shall reflect each Participant's interest in the Plan
     Held Stock.  Such accounts shall reflect the number of whole shares of
     Company Stock that are being held by the Administrator for the benefit of
     each Participant.

          (b)  Where Company Stock is issued under this paragraph, only full
     shares of stock will be issued to a Participant.  The time of issuance and
     delivery of shares may be postponed for such period as may be necessary to
     comply with the registration requirements under the Securities Act of 1933,
     as amended, the listing requirements of any securities exchange on which
     the Company Stock may then be listed, or the requirements under other laws
     or regulations applicable to the issuance or sale of such shares.

                                   ARTICLE 8
                                  WITHDRAWAL
                                  ----------

     8.1  In Service withdrawal.  At any time prior to the Purchase Date of an
          ---------------------
Offering Period, any Participant may withdraw the amounts held in his/her
Account by executing and delivering to the Human Resources Department of the
Company written notice of withdrawal on the form provided by the Company.  In
such a case, the entire balance of the Participant's Account shall be paid to
the Participant, without interest, as soon as is practicable.  Upon such
notification, the Participant shall cease to participate in the Plan for the
remainder of the Offering Period in which the notice is given.  Any Employee who
has withdrawn under this Section shall be excluded from participation in the
Plan for the remainder of the Offering Period, but may then be reinstated as a
participant for a subsequent Offering Period by executing and delivering a new
Stock Purchase Agreement to the Human Resources Department of the Company.

                                       5
<PAGE>

     8.2  Termination of Employment.
          -------------------------

          (a)  In the event that a Participant's employment with the Company
     terminates for any reason, the Participant shall cease to participate in
     the Plan on the date of termination.  As soon as is practical following the
     date of termination, the entire balance of the Participant's Account shall
     be paid to the Participant or his beneficiary, without interest.

          (b)  A Participant may file a written designation of a beneficiary who
     is to receive any shares of Company Stock purchased under the Plan or any
     cash from the Participant's Account in the event of his or her death
     subsequent to a Purchase Date, but prior to delivery of such shares and
     cash.  In addition, a Participant may file a written designation of a
     beneficiary who is to receive any cash from the Participant's Account under
     the Plan in the event of his death prior to a Purchase Date under paragraph
     (a) above.

          (c)  Any beneficiary designation under paragraph (b) above may be
     changed by the Participant at any time by written notice.  In the event of
     the death of a Participant, the Committee (see Section 9.1) may rely upon
     the most recent beneficiary designation it has on file as being the
     appropriate beneficiary.  In the event of the death of a Participant where
     no valid beneficiary designation exists or the beneficiary has predeceased
     the Participant, the Committee shall deliver any cash or shares of Company
     Stock to the executor or administrator of the estate of the Participant, or
     if no such executor or administrator has been appointed to the knowledge of
     the Committee, the Committee, in its sole discretion, may deliver such
     shares of Company Stock or cash to the spouse or any one or more dependents
     or relatives of the Participant, or if no spouse, dependent or relative is
     known to the Committee, then to such other person as the Committee may
     designate.

                                   ARTICLE 9
                              PLAN ADMINISTRATION
                              -------------------

     9.1  Plan Administration.
          -------------------

          (a)  Authority to control and manage the operation and administration
     of the Plan shall be vested in the Board of Directors (the "Board") for the
                                                                 -----
     Company, or a committee ("Committee") thereof.  The Board or Committee
                               ---------
     shall have all powers necessary to supervise the administration of the Plan
     and control its operations.

          (b)  In addition to any powers and authority conferred on the Board or
     Committee elsewhere in the Plan or by law, the Board or the Committee shall
     have the following powers and authority:

                    (i)  To designate agents to carry out responsibilities
           relating to the Plan;

                                       6
<PAGE>

                    (ii)  To administer, interpret, construe and apply this Plan
           and to answer all questions which may arise or which may be raised
           under this Plan by a Participant, his beneficiary or any other person
           whatsoever;

                    (iii) To establish rules and procedures from time to time
           for the conduct of its business and for the administration and
           effectuation of its responsibilities under the Plan; and

                    (iv)  To perform or cause to be performed such further acts
           as it may deem to be necessary, appropriate, or convenient for the
           operation of the Plan.

           (c) Any action taken in good faith by the Board or Committee in the
     exercise of authority conferred upon it by this Plan shall be conclusive
     and binding upon a Participant and his beneficiaries.  All discretionary
     powers conferred upon the Board shall be absolute.

     9.2   Limitation on Liability.  No Employee of the Company or member of the
           -----------------------
Board or Committee shall be subject to any liability with respect to his duties
under the Plan unless the person acts fraudulently or in bad faith.  To the
extent permitted by law, the Company shall indemnify each member of the Board or
Committee, and any other Employee of the Company with duties under the Plan who
was or is a party, or is threatened to be made a party, to any threatened,
pending or completed proceeding, whether civil, criminal, administrative, or
investigative, by reason of the person's conduct in the performance of his
duties under the Plan.

                                  ARTICLE 10
                                 COMPANY STOCK
                                 -------------

     10.1  Limitations on Purchase of Shares.  The maximum number of shares of
           ---------------------------------
Company Stock that shall be made available for sale under the Plan shall be
250,000 shares, subject to adjustment under Section 10.4 below.  The shares of
                                            ------------
Company Stock to be sold to Participants under the Plan will be issued by the
Company.  If the total number of shares of Company Stock that would otherwise be
issuable pursuant to rights granted pursuant to Section 6.1 of the Plan at the
                                                -----------
Purchase Date exceeds the number of shares then available under the Plan, the
Company shall make a pro rata allocation of the shares remaining available in as
uniform and equitable manner as is practicable.  In such event, the Company
shall give written notice of such reduction of the number of shares to each
participant affected thereby and any unused payroll deductions shall be returned
to such participant if necessary.

     10.2  Voting Company Stock.  The Participant will have no interest or
           --------------------
voting right in shares to be purchased under Section 6.1 of the Plan until such
                                             -----------
shares have been purchased.

     10.3  Registration of Company Stock.  Shares to be delivered to a
           -----------------------------
Participant under the Plan will be registered in the name of the Participant
unless designated otherwise by the Participant.

                                       7
<PAGE>

     10.4  Changes in Capitalization of the Company.  Subject to any required
           ----------------------------------------
action by the shareholders of the Company, the number of shares of Company Stock
covered by each right under the Plan which has not yet been exercised and the
number of shares of Company Stock which have been authorized for issuance under
the Plan but have not yet been placed under rights or which have been returned
to the Plan upon the cancellation of a right, as well as the Purchase Price per
share of Company Stock covered by each right under the Plan which has not yet
been exercised, shall be proportionately adjusted for any increase or decrease
in the number of issued shares of Company Stock resulting from a stock split,
stock dividend, spin-off, reorganization, recapitalization, merger,
consolidation, exchange of shares or the like.  Such adjustment shall be made by
the Board of Directors for the Company, whose determination in that respect
shall be final, binding and conclusive.  Except as expressly provided herein, no
issue by the Company of shares of stock of any class, or securities convertible
into shares of stock of any class, shall affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of shares of Company
Stock subject to any right granted hereunder.

     10.5  Merger of Company.  In the event that the Company at any time
           -----------------
proposes to merge into, consolidate with or enter into any other reorganization
pursuant to which the Company is not the surviving entity (including the sale of
substantially all of its assets or a "reverse" merger in which the Company is
the surviving entity), then, to the extent permitted by applicable law:  (i) any
surviving corporation shall assume the rights theretofore granted or substitute
for such rights new rights covering the shares of a successor corporation, with
appropriate adjustments as to the number and kind of shares and prices, or (ii)
the Plan and the rights theretofore granted shall continue in full force and
effect.  In the event any surviving corporation refuses to assume or continue
the Plan, or to substitute similar options for those under the Plan, then the
Board of Directors or its committee shall cause written notice of the proposed
action to be given to the persons holding rights not less than 10 days prior to
the anticipated effective date of the proposed transaction and, concurrent with
the effective date of the proposed transaction, such rights shall be exercised
automatically in accordance with Section 7.1 as if such effective date were a
Purchase Date of the applicable Offering Period unless a Participant withdraws
from the Plan as provided in Section 8.1.

                                  ARTICLE 11
                                 MISCELLANEOUS
                                 -------------

     11.1  Amendment and Termination.  The Plan shall terminate on December 31,
           -------------------------
2008.  Since future conditions affecting the Company cannot be anticipated or
foreseen, the Company reserves the right to amend, modify, or terminate the Plan
at any time.  Upon termination of the Plan, all benefits shall become payable
immediately. Notwithstanding the foregoing, no such amendment or termination
shall affect rights previously granted, nor may an amendment make any change in
any right previously granted which adversely affects the rights of any
Participant.  In addition, no amendment may be made without prior approval of
the shareholders of the Company if such amendment would:

          (a)  Increase the number of shares of Company Stock that may be issued
     under the Plan;

          (b)  Materially modify the requirements as to eligibility for
     participation in the Plan; or

                                       8
<PAGE>

           (c)  Materially increase the benefits that accrue to Participants
     under the Plan.

     11.2  Shareholder Approval.  Continuance of the Plan and the effectiveness
           --------------------
of any right granted hereunder shall be subject to approval by the shareholders
of the Company, within twelve months before or after the date the Plan is
adopted by the Board.

     11.3  Benefits Not Alienable.  Benefits under the Plan may not be assigned
           ----------------------
or alienated, whether voluntarily or involuntarily.  Any attempt at assignment,
transfer, pledge or other disposition shall be without effect, except that the
Company may treat such act as an election to withdraw funds in accordance with
Article 8.

     11.4  No Enlargement of Employee Rights.  This Plan is strictly a voluntary
           ---------------------------------
undertaking on the part of the Company and shall not be deemed to constitute a
contract between the Company and any Employee or to be consideration for, or an
inducement to, or a condition of, the employment of any Employee.  Nothing
contained in the Plan shall be deemed to give the right to any Employee to be
retained in the employ of the Company or to interfere with the right of the
Company to discharge any Employee at any time.

     11.5  Governing Law.  To the extent not preempted by Federal law, all legal
           -------------
questions pertaining to the Plan shall be determined in accordance with the laws
of the State of California.

     11.6  Non-business Days.  When any act under the Plan is required to be
           -----------------
performed on a day that falls on a Saturday, Sunday or legal holiday, that act
shall be performed on the next succeeding day which is not a Saturday, Sunday or
legal holiday.  Notwithstanding the above, Fair Market Value shall be determined
in accordance with Section 6.3.
                   -----------

     11.7  Compliance With Securities Laws.  Notwithstanding any provision of
           -------------------------------
the Plan, the Committee shall administer the Plan in such a way to ensure that
the Plan at all times complies with any requirements of Federal Securities Laws.

                                       9

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