Document:

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                                                                     Exhibit 4.8

THIS NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER
THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD
EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT
THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION
OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT
ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE
STATE SECURITIES LAWS.

                            BAY AREA MULTIMEDIA, INC.
                           CONVERTIBLE PROMISSORY NOTE

$ 47,296.25                                                         May 25, 2000

        For value received, Bay Area Multimedia, Inc., a California corporation
(the "Company"), with principal offices at 333 West Santa Clara Boulevard, Suite
930, San Jose, California 95113 hereby promises to pay to Raymond C. Musci the
sum of Forty-Seven Thousand Two Hundred Ninety-Six and 25/100 ($47,296.25) plus
simple interest accrued on unpaid principal at a rate equal to 7% per annum
compounded annually from the date of this Note until the principal amount hereof
and all interest accrued thereon is paid as provided in Section 3 hereof or is
converted, as provided in Section 2 hereof.

        1. Definitions. The following definitions shall apply for all purposes
of this Note:

            1.1 "Company" means the "Company" as defined above and includes any
corporation that succeeds to, or assumes, the obligations of the Company under
this Note.

            1.2 "Conversion Price" means the lowest per share selling price of
shares of Series A Preferred Stock.

            1.3 "Conversion Stock" means the Company's Series A Preferred Stock.

            1.4 "Holder" means any person who shall at the time be the
registered holder of this Note.

            1.5 "Note" means this Convertible Promissory Note.

        2. Conversion.

            2.1 Upon the first closing of the sale of shares of Series A
Preferred Stock, all principal on this Note shall automatically convert into
shares of Conversion Stock at the Conversion Price, without the need for any
further action on the part of the Holder and interest

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on this Note shall cease; provided, however, that the Holder shall not be
entitled to receive the stock certificate representing the shares of Conversion
Stock to be issued upon conversion of this Note until the original of this Note
is surrendered to the Company. Interest accrued, if any, as of the date of the
conversion, shall be payable in cash.

            2.2 As soon as practicable after conversion of this Note, the
Company at its expense will cause to be issued in the name of and delivered to
the Holder, a certificate or certificates for the number of shares of Conversion
Stock to which the Holder shall be entitled upon such conversion (bearing such
legends as may be required by applicable state and federal securities laws in
the opinion of legal counsel of the Company, by the Company's Articles of
Incorporation or Bylaws, or by any agreement between the Company and the
Holder), together with any other securities and property to which the Holder is
entitled upon such conversion under the terms of this Note. No fractional shares
will be issued upon conversion of this Note. If upon any conversion of this Note
a fraction of a share would otherwise result, then in lieu of such fractional
share the Company will pay the cash value of that fractional share, calculated
on the basis of the applicable Conversion Price.

        3. Payment. The Company may at any time, without premium or penalty,
upon at least five days' advance written notice to the Holder, prepay in whole
or in part the unpaid principal of this Note, plus any unpaid accrued interest
hereunder. All payments will first be applied to the repayment of accrued
interest until all then outstanding accrued interest has been paid, and then
shall be applied to the repayment of principal. Unless this Note shall have been
previously paid in full or converted pursuant to Section 2 hereof, the principal
amount of this Note then outstanding, and the interest accrued and unpaid
hereunder, shall be due and payable in full on demand by notice duly given in
accordance with Section 6.6 of this Note made at any time after the first
anniversary of the execution of the Note, which payment shall be delivered to
the address of the registered holder of this Note on the books of the Company in
lawful money of the United States.

        4. No Rights or Liabilities as Shareholder. This Note does not by itself
entitle the Holder to any voting rights or other rights as a shareholder of the
Company. In the absence of conversion of this Note, no provisions of this Note,
and no enumeration herein of the rights or privileges of the Holder, shall cause
the Holder to be a stockholder of the Company for any purpose.

        5. No Impairment. The Company will not, by amendment of its Articles of
Incorporation or Bylaws, or through reorganization, consolidation, merger,
dissolution, issue or sale of securities, sale of assets or any other voluntary
action, willfully avoid or seek to avoid the observance or performance of any of
the terms of this Note, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the Holder under this
Note against wrongful impairment.

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        6. General Provisions.

            6.1 Waivers. The Company and all endorsers of this Note hereby waive
notice, presentment, protest and notice of dishonor.

            6.2 Attorneys' Fees. In the event any party is required to engage
the services of any attorneys for the purpose of enforcing this Note, or any
provision thereof, the prevailing party shall be entitled to recover its
reasonable expenses and costs in enforcing this Note, including attorneys' fees.

            6.3 Transfer. Subject to Section 5.3 of the Purchase Agreement,
neither this Note nor any rights hereunder may be assigned, conveyed or
transferred, in whole or in part, without the Company's prior written consent;
provided, however, that this Note may be assigned, conveyed or transferred
without the prior written consent of the Company to any person that directly, or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with the Holder, who is not a competitor of the Company and
who is an "accredited investor" under Rule 503 of Regulation D promulgated under
the Securities Act of 1933, as amended. The rights and obligations of the
Company and the Holder under this Note and the Purchase Agreement shall be
binding upon and benefit their respective permitted successors, assigns, heirs,
administrators and transferees.

            6.4 Governing Law. This Note shall be governed by and construed
under the internal laws of the State of California as applied to agreements
among California residents entered into and to be performed entirely within
California, without reference to principles of conflict of laws or choice of
laws.

            6.5 Headings. The headings and captions used in this Note are used
for convenience only and are not to be considered in construing or interpreting
this Note. All references in this Note to sections and exhibits shall, unless
otherwise provided, refer to sections hereof and exhibits attached hereto, all
of which exhibits are incorporated herein by this reference.

            6.6 Notices. Unless otherwise provided, any notice required or
permitted under this Note shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or upon
deposit with the local postal service, by registered or certified mail, postage
prepaid and addressed to the Holder at the last address furnished to the Company
by the Holder in writing or, in the case of the Company, at the principal
offices of the Company, or at such other address as any party or the Company may
designate by giving ten days' advance written notice to all other parties.

            6.7 Amendments and Waivers. Any term of this Note may be amended,
and the observance of any term of this Note may be waived (either generally or
in a particular instance and either retroactively or prospectively) only with
the written consent of the Company and the Holder. Any amendment or waiver
effected in accordance with this Section shall be binding upon the Holder and
the Company.

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            6.8 Severability. If one or more provisions of this Note are held to
be unenforceable under applicable law, such provision(s) shall be excluded from
this Note and the balance of the Note shall be interpreted as if such
provision(s) were so excluded and shall be enforceable in accordance with its
terms.

THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS NOTE HAS NOT BEEN
QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND
THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE
OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF
THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS NOTE ARE
EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS
SO EXEMPT.

                            [Signature page follows]

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        IN WITNESS WHEREOF, the Company has caused this Note to be signed in its
name as of the date first above written.

                                            COMPANY:

                                            Bay Area Multimedia, Inc.

                                            By:    /s/ RAYMOND C. MUSCI
                                                   Raymond C. Musci, President

AGREED AND ACKNOWLEDGED:

HOLDER:
/s/ RAYMOND C. MUSCI
------------------------------
Raymond C. Musci

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                                                                    EXHIBIT 10.1

                           BAY AREA MULTIMEDIA, INC.

                           2000 STOCK INCENTIVE PLAN

        1. Purposes of the Plan. The purposes of this Stock Incentive Plan are
to attract and retain the best available personnel, to provide additional
incentive to Employees, Directors and Consultants and to promote the success of
the Company's business.

        2. Definitions. As used herein, the following definitions shall apply:

                (a) "Administrator" means the Board or any of the Committees
appointed to administer the Plan.

                (b) "Applicable Laws" means the legal requirements relating to
the administration of stock incentive plans, if any, under applicable provisions
of federal and state securities laws, the corporate laws of California and, to
the extent other than California, the corporate law of the state of the
Company's incorporation, the Code, the rules of any applicable stock exchange or
national market system, and the rules of any foreign jurisdiction applicable to
Awards granted to residents therein.

                (c) "Award" means the grant of an Option, Restricted Stock, or
other right or benefit under the Plan.

                (d) "Award Agreement" means the written agreement evidencing the
grant of an Award executed by the Company and the Grantee, including any
amendments thereto.

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

                (f) "Cause" means the definition of such term specified in the
Award Agreement. If no such definition is included in the Award Agreement, then
"Cause" shall mean, with respect to the termination by the Company or a Related
Entity of the Grantee's Continuous Service, that such termination is for "Cause"
as such term is expressly defined in the then-effective written agreement
between the Grantee and the Company or such Related Entity, or in the absence of
such then-effective written agreement or definition, that such termination is
based on, in the determination of the Administrator, the Grantee's: (i) refusal
or failure to act in accordance with any specific, lawful direction or order of
the Company or a Related Entity; (ii) performance of any act or failure to
perform any act in bad faith and to the material detriment of the Company or a
Related Entity; (iii) dishonesty, intentional misconduct or material breach of
any agreement with the Company or a Related Entity; or (iv) commission of
embezzlement, misappropriation of trade secrets or any felony involving
dishonesty, breach of trust, or physical or emotional harm to any person. At
least 14 calendar days prior to the termination of the Grantee's Continuous
Service pursuant to (i) above, the Company shall provide the Grantee with notice
of the Company's or such Related Entity's intent to terminate, the reason
therefor, and an opportunity for the Grantee to cure such defects in his or her
service to the Company's or such Related Entity's satisfaction. During this 14
day (or longer) period, no Award issued to the Grantee under the Plan may be
exercised or purchased.

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

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                (h) "Committee" means any committee appointed by the Board to
administer the Plan.

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

                (j) "Company" means Bay Area Multimedia, Inc., a California
corporation.

                (k) "Consultant" means any person (other than an Employee or a
Director, solely with respect to rendering services in such person's capacity as
a Director) who is engaged by the Company or any Related Entity to render
consulting or advisory services to the Company or such Related Entity.

                (l) "Continuous Service" means that the provision of services to
the Company or a Related Entity in any capacity of Employee, Director or
Consultant, is not interrupted or terminated. Continuous Service shall not be
considered interrupted in the case of (i) any approved leave of absence, (ii)
transfers among the Company, any Related Entity, or any successor, in any
capacity of Employee, Director or Consultant, or (iii) any change in status as
long as the individual remains in the service of the Company or a Related Entity
in any capacity of Employee, Director or Consultant (except as otherwise
provided in the Award Agreement). An approved leave of absence shall include
sick leave, military leave, or any other authorized personal leave. For purposes
of Incentive Stock Options, no such leave may exceed ninety (90) days, unless
reemployment upon expiration of such leave is guaranteed by statute or contract.

                (m) "Corporate Transaction" means any of the following
transactions to which the Company is a party:

                        (i) a merger or consolidation in which the Company is
not the surviving entity, except for a transaction the principal purpose of
which is to change the state in which the Company is incorporated;

                        (ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Company (including the capital stock of
the Company's subsidiary corporations) in connection with the complete
liquidation or dissolution of the Company;

                        (iii) any reverse merger in which the Company is the
surviving entity but in which securities possessing more than fifty percent
(50%) of the total combined voting power of the Company's outstanding securities
are transferred to a person or persons different from those who held such
securities immediately prior to such merger; or

                        (iv) acquisition by any person or related group of
persons (other than the Company or by a Company-sponsored employee benefit plan)
of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act)
of securities possessing more than fifty percent (50%) of the total combined
voting power of the Company's outstanding securities, but excluding any such
transaction that the Administrator determines shall not be a Corporate
Transaction.

                (n) "Director" means a member of the Board or the board of
directors of any Related Entity.

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                (o) "Disability" means that a Grantee would qualify for benefit
payments under the long-term disability policy of the Company or the Related
Entity to which the Grantee provides services regardless of whether the Grantee
is covered by such policy; provided that if no such long-term disability policy
exists, Disability shall mean that a Grantee is permanently unable to carry out
the responsibilities and functions of the position held by the Grantee by reason
of any medically determinable physical or mental impairment. A Grantee will not
be considered to have incurred a Disability unless he or she furnishes proof of
such impairment sufficient to satisfy the Administrator in its discretion.

                (p) "Employee" means any person, including an Officer or
Director, who is an employee of the Company or any Related Entity. The payment
of a director's fee by the Company or a Related Entity shall not be sufficient
to constitute "employment" by the Company.

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

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

                        (i) Where there exists a public market for the Common
Stock, the Fair Market Value shall be (A) the closing price for a Share for the
last market trading day prior to the time of the determination (or, if no
closing price was reported on that date, on the last trading date on which a
closing price was reported) on the stock exchange determined by the
Administrator to be the primary market for the Common Stock or the Nasdaq
National Market, whichever is applicable or (B) if the Common Stock is not
traded on any such exchange or national market system, the average of the
closing bid and asked prices of a Share on the Nasdaq Small Cap Market for the
day prior to the time of the determination (or, if no such prices were reported
on that date, on the last date on which such prices were reported), in each
case, as reported in The Wall Street Journal or such other source as the
Administrator deems reliable; or

                        (ii) In the absence of an established market for the
Common Stock of the type described in (i), above, the Fair Market Value thereof
shall be determined by the Administrator in good faith and in a manner
consistent with Section 260.140.50 of Title 10 of the California Code of
Regulations.

                (s) "Grantee" means an Employee, Director or Consultant who
receives an Award under the Plan.

                (t) "Incentive Stock Option" means an Option intended to qualify
as an incentive stock option within the meaning of Section 422 of the Code.

                (u) "Non-Qualified Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.

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

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                (w) "Option" means an option to purchase Shares pursuant to an
Award Agreement granted under the Plan.

                (x) "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.

                (y) "Plan" means this 2000 Stock Incentive Plan.

                (z) "Post-Termination Exercise Period" means the period
specified in the Award Agreement of not less than thirty (30) days commencing on
the date of termination of the Grantee's Continuous Service, or such longer
period as may be applicable upon death or Disability.

                (aa) "Registration Date" means the first to occur of (i) the
closing of the first sale to the general public of (A) the Common Stock or (B)
the same class of securities of a successor corporation (or its Parent) issued
pursuant to a Corporate Transaction in exchange for or in substitution of the
Common Stock, pursuant to a registration statement filed with and declared
effective by the Securities and Exchange Commission under the Securities Act of
1933, as amended; and (ii) in the event of a Corporate Transaction, the date of
the consummation of the Corporate Transaction if the same class of securities of
the successor corporation (or its Parent) issuable in such Corporate Transaction
shall have been sold to the general public pursuant to a registration statement
filed with and declared effective by the Securities and Exchange Commission
under the Securities Act of 1933, as amended, on or prior to the date of
consummation of such Corporate Transaction.

                (bb) "Related Entity" means any Parent, Subsidiary and any
business, corporation, partnership, limited liability company or other entity in
which the Company, a Parent or a Subsidiary holds a substantial ownership
interest, directly or indirectly.

                (cc) "Restricted Stock" means Shares issued under the Plan to
the Grantee for such consideration, if any, and subject to such restrictions on
transfer, rights of first refusal, repurchase provisions, forfeiture provisions,
and other terms and conditions as established by the Administrator.

                (dd) "Share" means a share of the Common Stock.

                (ee) "Subsidiary" means a "subsidiary corporation," whether now
or hereafter existing, as defined in Section 424(f) of the Code.

        3. Stock Subject to the Plan.

                (a) Subject to the provisions of Section 11(a) below, the
maximum aggregate number of Shares which may be issued pursuant to all Awards
(including Incentive Stock Options) is 150,000 Shares. The Shares may be
authorized, but unissued, or reacquired Common Stock.

                (b) Any Shares covered by an Award (or portion of an Award)
which is forfeited or canceled, expires or is settled in cash, shall be deemed
not to have been issued for

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purposes of determining the maximum aggregate number of Shares which may be
issued under the Plan. Shares that actually have been issued under the Plan
pursuant to an Award shall not be returned to the Plan and shall not become
available for future issuance under the Plan, except that if unvested Shares are
forfeited, or repurchased by the Company at their original purchase price, such
Shares shall become available for future grant under the Plan.

        4. Administration of the Plan.

                (a) Plan Administrator. With respect to grants of Awards to
Employees, Directors, or Consultants, the Plan shall be administered by (A) the
Board or (B) a Committee (or a subcommittee of the Committee) designated by the
Board, which Committee shall be constituted in such a manner as to satisfy
Applicable Laws. Once appointed, such Committee shall continue to serve in its
designated capacity until otherwise directed by the Board.

                (b) Powers of the Administrator. Subject to Applicable Laws and
the provisions of the Plan (including any other powers given to the
Administrator hereunder), and except as otherwise provided by the Board, the
Administrator shall have the authority, in its discretion:

                        (i) to select the Employees, Directors and Consultants
to whom Awards may be granted from time to time hereunder;

                        (ii) to determine whether and to what extent Awards are
granted hereunder;

                        (iii) to determine the number of Shares or the amount of
other consideration to be covered by each Award granted hereunder;

                        (iv) to approve forms of Award Agreements for use under
the Plan;

                        (v) to determine the terms and conditions of any Award
granted hereunder;

                        (vi) to establish additional terms, conditions, rules or
procedures to accommodate the rules or laws of applicable foreign jurisdictions
and to afford Grantees favorable treatment under such rules or laws; provided,
however, that no Award shall be granted under any such additional terms,
conditions, rules or procedures with terms or conditions which are inconsistent
with the provisions of the Plan;

                        (vii) to amend the terms of any outstanding Award
granted under the Plan, provided that any amendment that would adversely affect
the Grantee's rights under an outstanding Award shall not be made without the
Grantee's written consent;

                        (viii) to construe and interpret the terms of the Plan
and Awards, including without limitation, any notice of award or Award
Agreement, granted pursuant to the Plan; and

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                        (ix) to take such other action, not inconsistent with
the terms of the Plan, as the Administrator deems appropriate.

        5. Eligibility. Awards other than Incentive Stock Options may be granted
to Employees, Directors and Consultants. Incentive Stock Options may be granted
only to Employees of the Company, a Parent or a Subsidiary. An Employee,
Director or Consultant who has been granted an Award may, if otherwise eligible,
be granted additional Awards. Awards may be granted to such Employees, Directors
or Consultants who are residing in foreign jurisdictions as the Administrator
may determine from time to time.

        6. Terms and Conditions of Awards.

                (a) Type of Awards. The Administrator is authorized under the
Plan to award any type of arrangement to an Employee, Director or Consultant
that is not inconsistent with the provisions of the Plan and that by its terms
involves or might involve the issuance of (i) Shares, (ii) an Option or similar
right with a fixed or variable price related to the Fair Market Value of the
Shares and with an exercise or conversion privilege related to the passage of
time, the occurrence of one or more events, or the satisfaction of performance
criteria or other conditions, or (iii) any other security with the value derived
from the value of the Shares. Such awards include, without limitation, Options
or sales or bonuses of Restricted Stock, and an Award may consist of one such
security or benefit, or two (2) or more of them in any combination or
alternative.

                (b) Designation of Award. Each Award shall be designated in the
Award Agreement. In the case of an Option, the Option shall be designated as
either an Incentive Stock Option or a Non-Qualified Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of Shares subject to Options designated as Incentive Stock Options which
become exercisable for the first time by a Grantee during any calendar year
(under all plans of the Company or any Parent or Subsidiary) exceeds $100,000,
such excess Options, to the extent of the Shares covered thereby in excess of
the foregoing limitation, shall be treated as Non-Qualified Stock Options. For
this purpose, Incentive Stock Options shall be taken into account in the order
in which they were granted, and the Fair Market Value of the Shares shall be
determined as of the grant date of the relevant Option.

                (c) Conditions of Award. Subject to the terms of the Plan, the
Administrator shall determine the provisions, terms, and conditions of each
Award including, but not limited to, the Award vesting schedule, repurchase
provisions, rights of first refusal, forfeiture provisions, form of payment
(cash, Shares, or other consideration) upon settlement of the Award, payment
contingencies, and satisfaction of any performance criteria. The performance
criteria established by the Administrator may be based on any one of, or
combination of, increase in share price, earnings per share, total shareholder
return, return on equity, return on assets, return on investment, net operating
income, cash flow, revenue, economic value added, personal management
objectives, or other measure of performance selected by the Administrator.
Partial achievement of the specified criteria may result in a payment or vesting
corresponding to the degree of achievement as specified in the Award Agreement.

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                (d) Acquisitions and Other Transactions. The Administrator may
issue Awards under the Plan in settlement, assumption or substitution for,
outstanding awards or obligations to grant future awards in connection with the
Company or a Related Entity acquiring another entity, an interest in another
entity or an additional interest in a Related Entity whether by merger, stock
purchase, asset purchase or other form of transaction.

                (e) Deferral of Award Payment. The Administrator may establish
one or more programs under the Plan to permit selected Grantees the opportunity
to elect to defer receipt of consideration upon exercise of an Award,
satisfaction of performance criteria, or other event that absent the election
would entitle the Grantee to payment or receipt of Shares or other consideration
under an Award. The Administrator may establish the election procedures, the
timing of such elections, the mechanisms for payments of, and accrual of
interest or other earnings, if any, on amounts, Shares or other consideration so
deferred, and such other terms, conditions, rules and procedures that the
Administrator deems advisable for the administration of any such deferral
program.

                (f) Award Exchange Programs. The Administrator may establish one
or more programs under the Plan to permit selected Grantees to exchange an Award
under the Plan for one or more other types of Awards under the Plan on such
terms and conditions as determined by the Administrator from time to time.

                (g) Separate Programs. The Administrator may establish one or
more separate programs under the Plan for the purpose of issuing particular
forms of Awards to one or more classes of Grantees on such terms and conditions
as determined by the Administrator from time to time.

                (h) Early Exercise. The Award Agreement may, but need not,
include a provision whereby the Grantee may elect at any time while an Employee,
Director or Consultant to exercise any part or all of the Award prior to full
vesting of the Award. Any unvested Shares received pursuant to such exercise may
be subject to a repurchase right in favor of the Company or a Related Entity or
to any other restriction the Administrator determines to be appropriate.

                (i) Term of Award. The term of each Award shall be the term
stated in the Award Agreement, provided, however, that the term shall be no more
than ten (10) years from the date of grant thereof. However, in the case of an
Incentive Stock Option granted to a Grantee who, at the time the Option is
granted, owns stock representing more than ten percent (10%) of the voting power
of all classes of stock of the Company or any Parent or Subsidiary, the term of
the Incentive Stock Option shall be five (5) years from the date of grant
thereof or such shorter term as may be provided in the Award Agreement.

                (j) Transferability of Awards. Non-Qualified Stock Options shall
be transferable (i) to the extent provided in the Award Agreement and in a
manner consistent with Section 260.140.41 of Title 10 of the California Code of
Regulations and (ii) by will, and by the laws of descent and distribution.
Incentive Stock Options and other Awards may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any manner other than by will or by
the laws of descent or distribution and may be exercised, during the lifetime of
the Grantee, only by the Grantee.

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                (k) Time of Granting Awards. The date of grant of an Award shall
for all purposes be the date on which the Administrator makes the determination
to grant such Award, or such other date as is determined by the Administrator.
Notice of the grant determination shall be given to each Employee, Director or
Consultant to whom an Award is so granted within a reasonable time after the
date of such grant.

        7. Award Exercise or Purchase Price, Consideration and Taxes.

                (a) Exercise or Purchase Price. The exercise or purchase price,
if any, for an Award shall be as follows:

                        (i) In the case of an Incentive Stock Option:

                                (A) granted to an Employee who, at the time of
the grant of such Incentive Stock Option owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the Company or any
Parent or Subsidiary, the per Share exercise price shall be not less than one
hundred ten percent (110%) of the Fair Market Value per Share on the date of
grant; or

                                (B) granted to any Employee other than an
Employee described in the preceding paragraph, the per Share exercise price
shall be not less than one hundred percent (100%) of the Fair Market Value per
Share on the date of grant.

                        (ii) In the case of a Non-Qualified Stock Option:

                                (A) granted to a person who, at the time of the
grant of such Option, owns stock representing more than ten percent (10%) of the
voting power of all classes of stock of the Company or any Parent or Subsidiary,
the per Share exercise price shall be not less than one hundred ten percent
(110%) of the Fair Market Value per Share on the date of grant; or

                                (B) granted to any person other than a person
described in the preceding paragraph, the per Share exercise price shall be not
less than eighty-five percent (85%) of the Fair Market Value per Share on the
date of grant.

                        (iii) In the case of the sale of Shares:

                                (A) granted to a person who, at the time of the
grant of such Award, or at the time the purchase is consummated, owns stock
representing more than ten percent (10%) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the per Share purchase price
shall be not less than one hundred percent (100%) of the Fair Market Value per
Share on the date of grant; or

                                (B) granted to any person other than a person
described in the preceding paragraph, the per Share purchase price shall be not
less than eighty-five percent (85%) of the Fair Market Value per Share on the
date of grant.

                                       8
<PAGE>   9

                        (iv) In the case of other Awards, such price as is
determined by the Administrator.

                        (v) Notwithstanding the foregoing provisions of this
Section 7(a), in the case of an Award issued pursuant to Section 6(d), above,
the exercise or purchase price for the Award shall be determined in accordance
with the principles of Section 424(a) of the Code.

                (b) Consideration. Subject to Applicable Laws, the consideration
to be paid for the Shares to be issued upon exercise or purchase of an Award
including the method of payment, shall be determined by the Administrator (and,
in the case of an Incentive Stock Option, shall be determined at the time of
grant). In addition to any other types of consideration the Administrator may
determine, the Administrator is authorized to accept as consideration for Shares
issued under the Plan the following:

                        (i) cash;

                        (ii) check;

                        (iii) delivery of Grantee's promissory note with such
recourse, interest, security, and redemption provisions as the Administrator
determines as appropriate;

                        (iv) if the exercise or purchase occurs on or after the
Registration Date, surrender of Shares or delivery of a properly executed form
of attestation of ownership of Shares as the Administrator may require
(including withholding of Shares otherwise deliverable upon exercise of the
Award) which have a Fair Market Value on the date of surrender or attestation
equal to the aggregate exercise price of the Shares as to which said Award shall
be exercised (but only to the extent that such exercise of the Award would not
result in an accounting compensation charge with respect to the Shares used to
pay the exercise price unless otherwise determined by the Administrator);

                        (v) with respect to Options, if the exercise occurs on
or after the Registration Date, payment through a broker-dealer sale and
remittance procedure pursuant to which the Grantee (A) shall provide written
instructions to a Company designated brokerage firm to effect the immediate sale
of some or all of the purchased Shares and remit to the Company, out of the sale
proceeds available on the settlement date, sufficient funds to cover the
aggregate exercise price payable for the purchased Shares and (B) shall provide
written directives to the Company to deliver the certificates for the purchased
Shares directly to such brokerage firm in order to complete the sale
transaction; or

                        (vi) any combination of the foregoing methods of
payment.

                (c) Taxes. No Shares shall be delivered under the Plan to any
Grantee or other person until such Grantee or other person has made arrangements
acceptable to the Administrator for the satisfaction of any foreign, federal,
state, or local income and employment tax withholding obligations, including,
without limitation, obligations incident to the receipt of Shares or the
disqualifying disposition of Shares received on exercise of an Incentive Stock
Option. Upon exercise of an Award the Company shall withhold or collect from
Grantee an amount sufficient to satisfy such tax obligations.

                                       9
<PAGE>   10

        8. Exercise of Award.

                (a) Procedure for Exercise; Rights as a Shareholder.

                        (i) Any Award granted hereunder shall be exercisable at
such times and under such conditions as determined by the Administrator under
the terms of the Plan and specified in the Award Agreement but in the case of an
Option, in no case at a rate of less than twenty percent (20%) per year over
five (5) years from the date the Option is granted, subject to reasonable
conditions such as continued employment. Notwithstanding the foregoing, in the
case of an Option granted to an Officer, Director or Consultant, the Award
Agreement may provide that the Option may become exercisable, subject to
reasonable conditions such as such Officer's, Director's or Consultant's
Continuous Service, at any time or during any period established in the Award
Agreement.

                        (ii) An Award shall be deemed to be exercised when
written notice of such exercise has been given to the Company in accordance with
the terms of the Award by the person entitled to exercise the Award and full
payment for the Shares with respect to which the Award is exercised, including,
to the extent selected, use of the broker-dealer sale and remittance procedure
to pay the purchase price as provided in Section 7(b)(v). Until the issuance (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company) of the stock certificate evidencing
such Shares, no right to vote or receive dividends or any other rights as a
shareholder shall exist with respect to Shares subject to an Award,
notwithstanding the exercise of an Option or other Award. No adjustment will be
made for a dividend or other right for which the record date is prior to the
date the stock certificate is issued, except as provided in the Award Agreement
or Section 11(a), below.

                (b) Exercise of Award Following Termination of Continuous
Service. In the event of termination of a Grantee's Continuous Service for any
reason other than Disability or death (but not in the event of a Grantee's
change of status from Employee to Consultant or from Consultant to Employee),
such Grantee may, but only during the Post-Termination Exercise Period (but in
no event later than the expiration date of the term of such Award as set forth
in the Award Agreement), exercise the Award to the extent that the Grantee was
entitled to exercise it at the date of such termination or to such other extent
as may be determined by the Administrator. The Grantee's Award Agreement may
provide that upon the termination of the Grantee's Continuous Service for Cause,
the Grantee's right to exercise the Award shall terminate concurrently with the
termination of Grantee's Continuous Service. The Grantee's Award Agreement may
specify a definition of Cause applicable to such Award (which may or may not be
the same as the definition of Cause in Section 2). In the event of a Grantee's
change of status from Employee to Consultant, an Employee's Incentive Stock
Option shall convert automatically to a Non-Qualified Stock Option on the day
three (3) months and one day following such change of status. To the extent that
the Grantee is not entitled to exercise the Award at the date of termination, or
if the Grantee does not exercise such Award to the extent so entitled within the
Post-Termination Exercise Period, the Award shall terminate.

                (c) Disability of Grantee. In the event of termination of a
Grantee's Continuous Service as a result of his or her Disability, Grantee may,
but only within twelve (12) months from the date of such termination (and in no
event later than the expiration date of the

                                       10
<PAGE>   11

term of such Award as set forth in the Award Agreement), exercise the Award to
the extent that the Grantee was otherwise entitled to exercise it at the date of
such termination; provided, however, that if such Disability is not a
"disability" as such term is defined in Section 22(e)(3) of the Code, in the
case of an Incentive Stock Option such Incentive Stock Option shall
automatically convert to a Non-Qualified Stock Option on the day three (3)
months and one day following such termination. To the extent that the Grantee is
not entitled to exercise the Award at the date of termination, or if Grantee
does not exercise such Award to the extent so entitled within the time specified
herein, the Award shall terminate.

                (d) Death of Grantee. In the event of a termination of the
Grantee's Continuous Service as a result of his or her death, or in the event of
the death of the Grantee during the Post-Termination Exercise Period or during
the twelve (12) month period following the Grantee's Termination of Continuous
Service as a result of his or her Disability, the Grantee's estate or a person
who acquired the right to exercise the Award by bequest or inheritance may
exercise the Award, but only to the extent that the Grantee was entitled to
exercise the Award as of the date of termination, within twelve (12) months from
the date of death (but in no event later than the expiration of the term of such
Award as set forth in the Award Agreement). To the extent that, at the time of
death, the Grantee was not entitled to exercise the Award, or if the Grantee's
estate or a person who acquired the right to exercise the Award by bequest or
inheritance does not exercise such Award to the extent so entitled within the
time specified herein, the Award shall terminate.

        9. Conditions Upon Issuance of Shares.

                (a) Shares shall not be issued pursuant to the exercise of an
Award unless the exercise of such Award and the issuance and delivery of such
Shares pursuant thereto shall comply with all Applicable Laws, and shall be
further subject to the approval of counsel for the Company with respect to such
compliance.

                (b) As a condition to the exercise of an Award, the Company may
require the person exercising such Award to represent and warrant at the time of
any such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required by any
Applicable Laws.

        10. Repurchase Rights. The Award Agreement may grant to the Company the
right to repurchase Shares upon termination of the Grantee's Continuous Service.
In which case, the Award Agreement shall (or may, with respect to Awards granted
or issued to Officers, Directors or Consultants) provide that:

                (a) the right to repurchase must be exercised, if at all, within
ninety (90) days of the termination of the Grantee's Continuous Service (or in
the case of Shares issued upon exercise of Awards after the date of termination
of the Grantee's Continuous Service, within ninety (90) days after the date of
the Award exercise);

                                       11
<PAGE>   12

                (b) the consideration payable for the Shares upon exercise of
such repurchase right shall be made by check or by cancellation of purchase
money indebtedness within the ninety (90) day periods specified in Section
10(a);

                (c) the amount of such consideration shall (i) be equal to the
lesser of the Fair Market Value of each Share on the date of repurchase and the
original purchase price paid by Grantee for each such Share; provided, that the
right to repurchase such Shares at the original purchase price shall lapse at
the rate of at least twenty percent (20%) of the Shares subject to the Award per
year over five (5) years from the date the Award is granted (without respect to
the date the Award was exercised or became exercisable), and (ii) with respect
to Shares, other than Shares subject to repurchase at the original purchase
price pursuant to clause (i) above, not less than the Fair Market Value of the
Shares to be repurchased on the date of repurchase; and

                (d) the right to repurchase Shares, other than the right to
repurchase Shares at the original purchase price pursuant to clause (i) of
Section 10(c), shall terminate on the Registration Date.

        11. Adjustments Upon Changes in Capitalization or Corporate Transaction.

                (a) Adjustments upon Changes in Capitalization. Subject to any
required action by the shareholders of the Company, the number of Shares covered
by each outstanding Award, and the number of Shares which have been authorized
for issuance under the Plan but as to which no Awards have yet been granted or
which have been returned to the Plan, the exercise or purchase price of each
such outstanding Award, as well as any other terms that the Administrator
determines require adjustment shall be proportionately adjusted for (i) any
increase or decrease in the number of issued Shares resulting from a stock
split, reverse stock split, stock dividend, combination or reclassification of
the Shares, or similar transaction affecting the Shares, (ii) any other increase
or decrease in the number of issued Shares effected without receipt of
consideration by the Company, or (iii) as the Administrator may determine in its
discretion, any other transaction with respect to Common Stock to which Section
424(a) of the Code applies or a similar transaction; provided, however that
conversion of any convertible securities of the Company shall not be deemed to
have been "effected without receipt of consideration." Such adjustment shall be
made by the Administrator and its determination shall be final, binding and
conclusive. Except as the Administrator determines, no issuance 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 hereof shall be made
with respect to, the number or price of Shares subject to an Award.

                (b) Corporate Transaction.

                        (i) Termination of Award if Not Assumed. In the event of
a Corporate Transaction, each Award will terminate upon the consummation of the
Corporate Transaction, unless the Award is assumed by the successor corporation
or Parent thereof in connection with the Corporate Transaction.

                                       12
<PAGE>   13

                        (ii) No Acceleration of Award Upon Corporate
Transaction. Except as provided otherwise in an individual Award Agreement, in
the event of any Corporate Transaction there will not be any acceleration of
vesting or exercisability of any Award.

        12. Effective Date and Term of Plan. The Plan shall become effective
upon the earlier to occur of its adoption by the Board or its approval by the
stockholders of the Company, which dates are listed on Exhibit A. It shall
continue in effect for a term of ten (10) years unless sooner terminated.
Subject to Section 17, below, and Applicable Laws, Awards may be granted under
the Plan upon its becoming effective.

        13. Amendment, Suspension or Termination of the Plan.

                (a) The Board may at any time amend, suspend or terminate the
Plan. To the extent necessary to comply with Applicable Laws, the Company shall
obtain shareholder approval of any Plan amendment in such a manner and to such a
degree as required.

                (b) No Award may be granted during any suspension of the Plan or
after termination of the Plan.

                (c) Any amendment, suspension or termination of the Plan
(including termination of the Plan under Section 12, above) shall not affect
Awards already granted, and such Awards shall remain in full force and effect as
if the Plan had not been amended, suspended or terminated, unless mutually
agreed otherwise between the Grantee and the Administrator, which agreement must
be in writing and signed by the Grantee and the Company.

        14. Reservation of Shares.

                (a) The Company, during the term of the Plan, will at all times
reserve and keep available such number of Shares as shall be sufficient to
satisfy the requirements of the Plan.

                (b) The inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company's
counsel to be necessary to the lawful issuance and sale of any Shares hereunder,
shall relieve the Company of any liability in respect of the failure to issue or
sell such Shares as to which such requisite authority shall not have been
obtained.

        15. No Effect on Terms of Employment/Consulting Relationship. The Plan
shall not confer upon any Grantee any right with respect to the Grantee's
Continuous Service, nor shall it interfere in any way with his or her right or
the Company's right to terminate the Grantee's Continuous Service at any time,
with or without cause, and with or without notice. The Company's ability to
terminate the employment of a Grantee (whether such employment is at will or
pursuant to an employment agreement) is in no way affected by its determination
that the Grantee's Continuous Service has been terminated for Cause or not for
Cause for the purposes of this Plan.

        16. No Effect on Retirement and Other Benefit Plans. Except as
specifically provided in a retirement or other benefit plan of the Company or a
Related Entity, Awards shall not be

                                       13
<PAGE>   14

deemed compensation for purposes of computing benefits or contributions under
any retirement plan of the Company or a Related Entity, and shall not affect any
benefits under any other benefit plan of any kind or any benefit plan
subsequently instituted under which the availability or amount of benefits is
related to level of compensation. The Plan is not a "Retirement Plan" or
"Welfare Plan" under the Employee Retirement Income Security Act of 1974, as
amended.

        17. Shareholder Approval. Continuance of the Plan shall be subject to
approval by the shareholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such shareholder approval shall be obtained
in the degree and manner required under Applicable Laws. Any Award exercised
before shareholder approval is obtained shall be rescinded if shareholder
approval is not obtained within the time prescribed, and Shares issued on the
exercise of any such Award shall not be counted in determining whether
shareholder approval is obtained.

        18. Information to Grantees. The Company shall provide to each Grantee,
during the period for which such Grantee has one or more Awards outstanding,
copies of financial statements at least annually.

                                       14
<PAGE>   15

                                    EXHIBIT A

                                  PLAN HISTORY

1.  July 10, 2000            Board adopts Plan with an initial reserve of
                             150,000 shares.

2.  July 7, 2000             Shareholders approve Plan with an initial reserve
                             of 150,000 shares.

                                       15

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