Document:

STOCK OPTION AGREEMENT
                             ----------------------
                                (FORM S-8 SHARES)
                                 ---------------

         Stock Option Agreement dated as of May 25, 2000, between Genius
Products, Inc. (the "COMPANY") and Alison Elliott (the "GRANTEE").

         WHEREAS, the Grantee is an officer of the Company and has rendered
valuable services; and

         WHEREAS, the Company in recognition of such services has granted a
non-qualified option (the "OPTION") to Grantee as set forth therein and herein;
and

         WHEREAS, the parties wish to ratify and memorialize the grant and the
terms and conditions by which the Option is governed; and

         WHEREAS, the Company has adopted a stock option plan entitled 2000
Non-Qualified Stock Option Plan (the "PLAN") under which shares of the Company's
common stock into which the Option is exercisable have been registered with the
Securities and Exchange Commission pursuant to a Form S-8 filed on May 25, 2000;

         NOW THEREFORE, in consideration of the mutual covenants set forth
herein, and for other good and valuable consideration, the sufficiency of which
is hereby acknowledged, the parties hereby agree as follows:

         Section 1. GRANT OF OPTION. The Company hereby confirms the grant to
Grantee of the Option to purchase shares of common stock of the Company (the
"SHARES"), subject to the terms and conditions of this Option Agreement and
those of the Plan (which is incorporated herein by reference), as follows:

    DATE OF GRANT    NO. OF SHARES    EXERCISE PRICE    VESTING DATE    TERM
    -------------    -------------    --------------    ------------    ----

    May 25, 2000     20,000           $0.54             May 25, 2000    3 years

         In the event of a conflict between the terms and conditions of the Plan
and this Option Agreement, the terms and conditions of the Plan shall prevail.
This Option is intended to be treated as a non-statutory (non-qualified) stock
option.

         Section 2. EXERCISE OF OPTION. (a) RIGHT TO EXERCISE. This Option to
purchase Shares shall be exercisable at any time after the applicable Vesting
Date and prior to the end of the Term, subject to the applicable provisions of
the Plan and this Option Agreement.

         (b) METHOD OF EXERCISE. This Option shall be exercisable by delivery of
an exercise notice in the form attached as EXHIBIT A (the "EXERCISE NOTICE")
which shall state the election to exercise the Option, the number of Shares with
respect to which the Option is being exercised, and such other representations
and agreements as may be required by the Company. The Exercise Notice shall be
accompanied by payment of the aggregate Exercise Price as to all exercised
Shares. This Option shall be deemed to be exercised upon receipt by the Company
of such fully executed Exercise Notice accompanied by the aggregate Exercise
Price.

         (c) COMPLIANCE WITH APPLICABLE LAW. No Shares shall be issued pursuant
to the exercise of an Option unless such issuance and such exercise complies
with all applicable laws. Assuming such compliance, for income tax purposes the
Shares shall be considered transferred to the Grantee on the date on which the
Option is exercised with respect to such Shares.

<PAGE>

         Section 3. METHOD OF PAYMENT. Payment of the aggregate Exercise Price
shall be by any of the following, or a combination thereof, at the sole
discretion of the Company:

         (a)      cash or check;

         (b)      consideration received by the Company under a formal cashless
                  exercise program adopted by the Company in connection with the
                  Plan; or

         (c)      surrender of other Shares which, (i) in the case of Shares
                  acquired upon exercise of an Option, have been owned by the
                  Grantee for more than six (6) months on the date of surrender,
                  and (ii) have a fair market value on the date of surrender
                  equal to the aggregate Exercise Price of the Exercised Shares.

         Section 4. NON-TRANSFERABILITY OF OPTION. This Option may not be
transferred in any manner otherwise than by will or by the laws of descent or
distribution and may be exercised during the lifetime of Grantee only by
Grantee. The terms of the Plan and this Option Agreement shall be binding upon
the executors, administrators, heirs, successors and assigns of the Grantee.

         Section 5. TERM OF OPTION. This Option may be exercised only prior to
the Expiration Date set out in the Notice of Grant, and may be exercised during
such term only in accordance with the Plan and the terms of this Option.

         Section 6. TAX CONSEQUENCES. Set forth below is a brief summary as of
the date of this Option of some of the federal tax consequences of exercise of
this Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY
INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE
SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE
SHARES.

         (a)      EXERCISE OF NON-QUALIFIED STOCK OPTION. There may be a regular
                  federal income tax liability upon the exercise of a
                  Non-Qualified Stock Option. The Grantee will be treated as
                  having received compensation income (taxable at ordinary
                  income tax rates) equal to the excess, if any, of the fair
                  market value of the Shares on the date of exercise over the
                  Exercise Price. If Grantee is an employee or a former
                  employee, the Company will be required to withhold from
                  Grantee's compensation or collect from Grantee and pay to the
                  applicable taxing authorities an amount in cash equal to a
                  percentage of this compensation income at the time of
                  exercise, and may refuse to honor the exercise and refuse to
                  deliver the Shares if such withholding amounts are not
                  delivered at the time of exercise.

         (b)      DISPOSITION OF SHARES. In the case of a Non Qualified Stock
                  Option, if Shares are held for at least one year, any gain
                  realized on disposition of the Shares will be treated as
                  long-term capital gain for federal income tax purposes.

         Section 7. ENTIRE AGREEMENT; GOVERNING LAW. The Plan is incorporated
herein by reference. The Plan and this Option Agreement constitute the entire
agreement of the parties with respect to the subject matter hereof and supersede
in their entirety all prior undertakings and agreements of the Company and
Grantee with respect to the subject matter hereof, and may not be modified
adversely to the Grantee's interest except by means of a writing signed by the
Company and Grantee. This agreement is governed by the internal substantive laws
but not the choice of law rules of California.

         Section 8. SUCCESSORS AND ASSIGNS. The Company may assign any of its
rights under this Agreement to single or multiple assignees, and this Agreement
shall inure to the benefit of the successors and assigns of the Company. Subject
to the restrictions on transfer herein set forth, this Agreement shall be
binding upon Grantee and his or her heirs, executors, administrators, successors
and assigns.

         Section 9. INTERPRETATION. Any dispute regarding the interpretation of
this Agreement shall be submitted by Grantee or by the Company forthwith to the
Administrator which shall review such dispute at its next regular meeting. The
resolution of such a dispute by the Administrator shall be final and binding on
all parties.

                                       2
<PAGE>

         Section 10. RECEIPT OF PLAN. Grantee acknowledges receipt of a copy of
the Plan and represents that he or she is familiar with the terms and provisions
thereof, and hereby accepts this Option subject to all of the terms and
provisions thereof. Grantee has reviewed the Plan and this Option Agreement in
their entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Option and fully understands all provisions of the Option
Agreement. Grantee hereby agrees to accept as binding, conclusive and final all
decisions or interpretations of the Administrator upon any questions arising
under the Plan or this Option. Grantee further agrees to notify the Company upon
any change in the residence address indicated below.

GRANTEE:                                                   GENIUS PRODUCTS, INC.

/S/ ALISON ELLIOTT                                         /S/ KLAUS MOELLER
---------------------                                      ---------------------
Alison Elliott                                             Klaus Moeller, CEO

                                       3
<PAGE>

                                    EXHIBIT A
                                    ---------

                             [LETTERHEAD OF GRANTEE]

[Date]

Genius Products, Inc.
11250 El Camino Real, Suite 100
San Diego, CA  92130

Attention:  Corporate Secretary

                                 EXERCISE NOTICE
                      2000 NON-QUALIFIED STOCK OPTION PLAN
                      ------------------------------------

         1. EXERCISE OF OPTION. Effective as of this ___ day of ___________,
_____, the undersigned ("Grantee") hereby elects to exercise Grantee's option to
purchase _________ shares of the Common Stock (the "SHARES") of Genius Products,
Inc. (the "COMPANY") under and pursuant to that certain plan entitled 2000
Non-Qualified Stock Option Plan adopted by the Company as of May 25, 2000 (the
"PLAN") and the Stock Option Agreement dated ________, ____ (the "OPTION
AGREEMENT").

         2. DELIVERY OF PAYMENT. Grantee herewith delivers to the Company the
full purchase price of the Shares, as set forth in the Option Agreement.

         3. REPRESENTATIONS OF GRANTEE. Grantee acknowledges that Grantee has
received, read and understood the Plan and the Option Agreement and agrees to
abide by and be bound by their terms and conditions.

         4. RIGHTS AS SHAREHOLDER. Until the issuance of the Shares (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), no right to vote or receive dividends
or any other rights as a shareholder shall exist with respect to the Shares,
notwithstanding the exercise of the Option. The Shares shall be issued to the
Grantee as soon as practicable after the Option is exercised.

         5. TAX CONSULTATION. Grantee understands that Grantee may suffer
adverse tax consequences as a result of Grantee's purchase or disposition of the
Shares. Grantee represents that Grantee has consulted with any tax consultants
Grantee deems advisable in connection with the purchase or disposition of the
Shares and that Grantee is not relying on the Company for any tax advice.

         6. TRANSFER RESTRICTIONS; STOP-TRANSFER ORDER.

         (a) REFUSAL TO TRANSFER. Grantee acknowledges and agrees that the
         Company shall not be required (i) to transfer on its books any Shares
         that have been sold or otherwise transferred in violation of any of the
         provisions of the Stock Option Agreement or the Plan or (ii) to treat
         as owner of such Shares or to accord the right to vote or pay dividends
         to any purchaser or other transferee to whom such Shares shall have
         been so transferred.

         (b) STOP-TRANSFER NOTICES. Grantee agrees that, in order to ensure
         compliance with the restrictions referred to in the Stock Option
         Agreement, the Company may issue appropriate "stop transfer"
         instructions to its transfer agent, if any, and that, if the Company
         transfers its own securities, it may make appropriate notations to the
         same effect in its own records.

                                       4
<PAGE>

Submitted by:                               Accepted by:

GRANTEE:                                    GENIUS PRODUCTS, INC.

____________________________________        ____________________________________
Signature                                   Name:
                                            Title:

____________________________________        ____________________________________
Print Name                                  Date received

                                       5PRISM SOFTWARE CORPORATION
                       2000 NONSTATUTORY STOCK OPTION PLAN

         1. PURPOSE. The Plan is intended to provide incentive to key employees
and directors of the Company, to encourage proprietary interest in the Company,
to encourage such key employees to remain in the employ of the Company, and to
attract new employees with outstanding qualifications.

         2. DEFINITIONS.

               (a) "Board" shall mean the Board of Directors of the Company.

               (b) "Code" shall mean the Internal Revenue Code of 1986, as
               amended.

               (c) "Committee" shall mean the committee, if any, appointed by
               the Board in accordance with Section 4 of the Plan.

               (d) "Common Stock" shall mean the Common Stock of the Company.

               (e) "Company" shall mean Prism Software Corporation, a Delaware
               corporation.

               (f) "Disability" shall mean the condition of an Employee who is
               unable to engage in any substantial gainful activity by reason of
               any medically determinable physical or mental impairment which
               can be expected to result in death or which has lasted or can be
               expected to last for a continuous period of not less than twelve
               months.

               (g) "Employee" shall mean an individual who is employed (within
               the meaning of Code Section 3401 and the regulations thereunder)
               by the Company.

               (h) "Exercise Price" shall mean the price per Share of Common
               Stock, determined by the Board or the Committee, at which an
               Option may exercised.

               (i) "Fair Market Value" shall mean the value of one Share of
               Common Stock, determined as follows:

                    (1) If the Shares are traded on any recognized exchange, the
               NASDAQ System, or the NASDAQ OTC-Bulletin Board, the closing
               price if one is available, or the mean between the bid and asked
               prices at the close of business on the date of valuation; or

                    (2) If (1) does not apply, the fair market value as
               determined by the Board or the Committee in good faith. Such
               determination shall be conclusive and binding on all persons.

                                       1
<PAGE>

               (j) "Option" shall mean any stock granted pursuant to the Plan.

               (k) "Optionee" shall mean an employee who has received an Option.

               (l) "Plan" shall mean the Prism Software Corporation 2000
               Nonstatutory Stock Option Plan, as it may be amended from time to
               time.

               (m) "Purchase Price" shall mean the Exercise Price times the
               number of Shares with respect to which an Option is exercised.

               (n) "Retirement" shall mean the voluntary termination of
               employment by an Employee upon the attainment of age sixty-five
               and the completion of not less than twenty years of service with
               the Company.

               (o) "Share" shall mean one share of Common Stock, adjusted in
               accordance with Section 9 of the Plan (if applicable).

         3. EFFECTIVE DATE. The Plan was adopted by the Board on May 4, 2000,
which shall be the effective date of the Plan.

         4. ADMINISTRATION. The Plan shall be administered by the Board, or by a
committee appointed by the Board which shall consist of not less than three
members (the "Committee"). The Board shall appoint one of the members of the
Committee, if there be one, as Chairman of the Committee. If a Committee has
been appointed, the Committee shall hold meetings at such times and places as it
may determine. Acts of a majority of the Committee at which a quorum is present,
or acts reduced to or approved in writing by a majority of the members of the
Committee, shall be the valid acts of the Committee. The Board, or the Committee
if there be one, shall from time to time at its discretion select the Employees
who are to be granted Options, and determine the number of Shares to be granted
to each Optionee. A member of the Board or a Committee member shall in no event
participate in any determination relating to Options held by or to be granted to
such Board or Committee member. The interpretation and construction by the
Board, or by the Committee if there be one, of any provision of the Plan or of
any Option granted thereunder shall be final. No member of the Board or of the
Committee shall be liable for any action or determination made in good faith
with respect to the Plan or any Option granted thereunder.

         5. PARTICIPATION.

         The Optionees shall be such persons as the Board, or the Committee if
there be one, may select from among the following classes of persons:

                    (1) Employees of the Company (who may be officers, whether
                    or not they are directors); and

                                       2
<PAGE>

                    (2) Directors of the Company.

         6. STOCK. The stock subject to Options granted under the Plan shall be
Shares of the Company's authorized but unissued or reacquired Common Stock. The
aggregate number of Shares which may be issued upon exercise of Options under
the Plan shall not exceed three million (3,000,000) shares. The number of Shares
subject to Options outstanding at any time shall not exceed the number of Shares
remaining available for issuance under the Plan. In the event that any
outstanding Option for any reason expires or is terminated, the Shares allocable
to the unexercised portion of such Option may again be made subject to any
Option. The limitations established by this Section 6 shall be subject to
adjustment in the manner provided in Section 10 hereof upon the occurrence of an
event specified therein.

         7. TERMS AND CONDITIONS OF OPTIONS.

               (a) STOCK OPTION AGREEMENTS. Options shall be evidenced by
               written stock option agreements in such form as the Board, or the
               Committee if there be one, shall from time to time determine.
               Such agreements shall comply with and be subject to the terms and
               conditions set forth below.

               (b) NUMBER OF SHARES. Each Option shall state the number of
               Shares to which it pertains and shall provide for the adjustment
               thereof in accordance with the provisions of Section 9 hereof.

               (c) EXERCISE PRICE. Each Option shall state the Exercise Price.
               Except as otherwise determined by the Board or the Committee, the
               Exercise Price shall not be less than 85% of the Fair Market
               Value on the date of grant.

               (d) MEDIUM AND TIME OF PAYMENT. The Purchase Price shall be
               payable in full in United States dollars upon the exercise of the
               Option; provided, however, that if the applicable Option
               Agreement so provides the Purchase Price may be paid (i) by the
               surrender of Shares in good form for transfer, owned by the
               person exercising the Option and having a Fair Market Value on
               the date of exercise equal to the Purchase Price, or in any
               combination of cash and Shares, as long as the sum of the cash so
               paid and the Fair Market Value of the Shares so surrendered equal
               the Purchase Price, (ii) by cancellation of indebtedness owed by
               the Company to the Optionee, (iii) with a full recourse
               promissory note executed by the Optionee, or (iv) any combination
               of the foregoing. The interest rate and other terms and
               conditions of such note shall be determined by the Board, or the
               Committee if there be one. The Board, or the Committee if there
               be one, may require that the Optionee pledge his or her Shares to
               the Company for the purpose of securing the payment of such note.
               In no event shall the stock certificate(s) representing such
               Shares by released to the Optionee until such note shall have
               been paid in full. In the event the Company determines that it is
               required to withhold state or Federal income tax as a result of
               the exercise of an Option, as a condition to the exercise
               thereof, an Employee may be required to make arrangements
               satisfactory to the Company to enable it to satisfy such
               withholding requirements.

                                       3
<PAGE>

               (e) TERM AND NONTRANSFERABILITY OF OPTIONS. Each Option shall
               state the time or times, and the conditions upon which, all or
               part thereof becomes exercisable. No Option shall be exercisable
               after the expiration of ten years from the date it was granted.
               During the lifetime of the Optionee, the Option shall be
               exercisable only by the Optionee and shall not be assignable or
               transferable. In the event of the Optionee's death, the Option
               shall not be transferable. In the event of the Optionee's death,
               the Option shall not be transferable by the Optionee other than
               by will or the laws of descent and distribution.

               (f) TERMINATION OF EMPLOYMENT, EXCEPT BY DEATH, DISABILITY OR
               RETIREMENT. If an Optionee ceases to be an Employee for any
               reason other than his or her death, Disability or Retirement,
               such Optionee shall have the right, subject to the restrictions
               of (e) above, to exercise the Option at any time within three
               months after termination of employment, but only to the extent
               that, at the date of termination of employment, the Optionee's
               right to exercise such Option had accrued pursuant to the terms
               of the applicable option agreement and had not previously been
               exercised; provided, however, that if the Optionee was terminated
               for cause (as defined in the applicable option agreement) any
               Option not exercised in full prior to such termination shall be
               canceled. For this purpose, the employment relationship shall be
               treated as continuing intact while the Optionee is on military
               leave, sick leave or other bona fide leave of absence (to be
               determined in the sole discretion of the Committee). The
               foregoing notwithstanding, the Board, or the Committee if there
               be one, may extend or otherwise modify the period of time
               specified herein during which the Option may be exercised
               following termination of Optionee's employment.

               (g) DEATH OF OPTIONEE. If an Optionee dies while an Employee, or
               after ceasing to be an Employee but during the period while he or
               she could have exercised the Option under this Section 7, and has
               not fully exercised the Option, then the Option may be exercised
               in full, subject to the restrictions of (e) above, at any time
               within twelve months after the Optionee's death, by the executors
               or administrators of his or her estate or by any person or
               persons who have acquired the Option directly from the Optionee
               by bequest or inheritance, but only to the extent that, at the
               date of death, the Optionee's right to exercise such Option had
               accrued and had not been forfeited pursuant to the terms of the
               applicable Option Agreement and had not previously been
               exercised. The foregoing notwithstanding, the Board, or the
               Committee if there be one, may extend or otherwise modify the
               period of time specified herein during which the Option may be
               exercised following termination of Optionee's employment.

               (h) DISABILITY OF OPTIONEE. If an Optionee ceases to be an
               Employee by reason of Disability, such Optionee shall have the
               right, subject to the restrictions of (f) above, to exercise the
               Option at any time within twelve months after termination of
               employment, but only to the extent that, at the date of
               termination of employment, the Optionee's right to exercise such
               Option had accrued pursuant to the terms of the applicable Option
               Agreement and had not previously been exercised. The Board, or
               the Committee if there be one, may extend or otherwise modify the
               period of time specified herein during which the Option may be
               exercised following termination of Optionee's employment.

                                       4
<PAGE>

               (i) RETIREMENT OF OPTIONEE. If an Optionee ceases to be an
               Employee by reason of Retirement, such Optionee shall have the
               right, subject to the restrictions of (e) above, to exercise the
               Option at any time within three months after termination of
               employment, but only to the extent that, at the date of
               termination of employment, the Optionee's right to exercise such
               Option had accrued pursuant to the terms of the applicable Option
               Agreement and had not previously been exercised. The foregoing
               notwithstanding, the Board, or the Committee if there be one, may
               extend or otherwise modify the period of time specified herein
               during which the Option may be exercised following termination of
               Optionee's employment.

               (j) RIGHTS AS A STOCKHOLDER. An Optionee, or a transferee of an
               Optionee, shall have no rights as a stockholder with respect to
               any Shares covered by his or her Option until the date of the
               issuance of a stock certificate for such Shares. No adjustment
               shall be made for dividends (ordinary or extraordinary, whether
               in cash, securities or other property), distributions or other
               rights for which the record date is prior to the date such stock
               certificate is issued, except as provided in Section 9 hereof.

               (k) MODIFICATION, EXTENSION AND RENEWAL OF OPTION. Within the
               limitations of the Plan, the Board, or the Committee if there be
               one, may modify, extend or renew outstanding Options or accept
               the cancellation of outstanding Options (to the extent not
               previously exercised) for the granting of new Options in
               substitution therefor. The foregoing notwithstanding, no
               modification of an Option shall, without the consent of the
               Optionee, alter or impair any rights or obligations under any
               Option previously granted.

               (l) OTHER PROVISIONS. The stock option agreements authorized
               under the Plan may contain such other provisions not inconsistent
               with the terms of the Plan (including, without limitation,
               restrictions upon the exercise of the Option) as the Board, or
               the Committee if there be one, shall deem advisable.

         8. TERM OF PLAN. Options may be granted pursuant to the Plan until the
expiration of ten years from the effective date of the Plan.

         9. RECAPITALIZATIONS. The number of Shares covered by the Plan as
provided in Section 6 hereof, the number of Shares covered by each outstanding
Option and the Exercise Price thereof shall be proportionately adjusted for any
increase of decrease in the number of issued Shares resulting from a subdivision
or consolidation of Shares or the payment of a stock dividend (but only of
Common Stock) or any other increase or decrease in the number of issued Shares
effected without receipt of consideration by the Company. Subject to any
required action by stockholders, if the Company is the surviving Company in any
merger or consolidation, each outstanding Option shall pertain and apply to the
securities to which a holder of the number of Shares subject to the Option would
have been entitled. In the event of a merger or consolidation in which the
Company is not the surviving Company, the date of exercisability of each
outstanding Option shall be accelerated to a date prior to such merger or
consolidation, unless the agreement of merger or consolidation provides for the
assumption of the Option by the successor to the Company. To the extent that the

                                       5
<PAGE>

foregoing adjustments relate to securities of the Company, such adjustments
shall be made by the Board, or the Committee if there be one, whose
determination shall be conclusive and binding on all persons. Except as
expressly provided in this Section 9, the Optionee shall have no rights by
reason of subdivision or consolidation of shares of stock of any class, the
payment of any stock dividend or any other increase or decrease in the number of
shares of stock of any class or by reason of any dissolution, liquidation,
merger or consolidation or spin-off of assets or stock of another Company, and
any issue by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number or
Exercise Price of Shares subject to an Option. The grant of an Option pursuant
to the Plan shall not affect in any way the right or power to the Company to
make adjustments, reclassifications, reorganizations or changes of its capital
or business structure, to merge or consolidate or to dissolve, liquidate, sell
or transfer all or any part of its business assets.

         10. SECURITIES LAW REQUIREMENTS.

               (a) LEGALITY OF ISSUANCE. The issuance of any Shares upon the
               exercise of any Option and the grant of any Option shall be
               contingent upon the following:

                    (1) the Company and the Optionee shall have taken all
                    actions required to register the Shares under the Securities
                    Act of 1933, as amended (the "Act"), and to qualify the
                    Option and the Shares under any and all applicable state
                    securities or "blue sky" laws or regulations, or to perfect
                    an exemption from the respective registration and
                    qualification requirements thereof;

                    (2) any applicable listing requirement of any stock exchange
                    on which the Common Stock is listed shall have been
                    satisfied; and

                    (3) any other applicable provision of state of Federal law
                    shall have been satisfied.

               (b) RESTRICTIONS ON TRANSFER. Regardless of whether the offering
               and sale of Shares under the plan has been registered under the
               Act or has been registered or qualified under the securities laws
               of any state, the Company may impose restrictions on the sale,
               pledge or other transfer of such Shares (including the placement
               of appropriate legends on stock certificates) if, in the judgment
               of the Company and its counsel, such restrictions are necessary
               or desirable in order to achieve compliance with the provisions
               of the Act, the securities laws of any state or any other law. In
               the event that the sale of Shares under the Plan is not
               registered under the Act but an exemption is available which
               required an investment representation or other representation,
               each Optionee shall be required to represent that such Shares are
               being acquired for investment, and not with a view to the sale or
               distribution thereof, and to make such other representations as
               are deemed necessary or appropriate by the Company and its
               counsel. Any determination by the Company and its counsel in
               connection with any of the matters set forth in this Section
               shall be conclusive and binding on all persons. Stock
               certificates evidencing Shares acquired under the Plan pursuant
               to an unregistered transaction shall bear the following
               restrictive legend and such other restrictive legends as are
               required or deemed advisable under the provisions of any
               applicable law.

                                       6
<PAGE>

         "THE SALE OF THE SECURITIES REPRESENTED HEREBY HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT"). ANY TRANSFER OF SUCH SECURITIES
WILL BE INVALID UNLESS A REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT AS TO
SUCH TRANSFER OR IN THE OPINION OF COUNSEL FOR THE ISSUER SUCH REGISTRATION IS
UNNECESSARY IN ORDER FOR SUCH TRANSFER TO COMPLY WITH THE ACT."

               (c) REGISTRATION OR QUALIFICATION OF SECURITIES. The Company may,
               but shall not be obligated to register or qualify the issuance of
               Options and/or the sale of Shares under the Act or any other
               applicable law. The Company shall not be obligated to take any
               affirmative action in order to cause the issuance of Options or
               the sale of Shares under the plan to comply with any law.

               (d) EXCHANGE OF CERTIFICATES. If, in the opinion of the Company
               and its counsel, any legend placed on a stock certificate
               representing shares sold under the Plan is no longer required,
               the holder of such certificate shall be entitled to exchange such
               certificate for a certificate representing the same number of
               Shares but lacking such legend.

         11. AMENDMENT OF THE PLAN. The Board may from time to time, with
respect to any Shares at the time not subject to Options, suspend or discontinue
the plan or revise or amend it in any respect whatsoever.

         12. EXECUTION. To record the adoption of the Plan in the form set forth
above by the Board effective as of May 4, 2000 the Company has caused this Plan
to be executed in the name and on behalf of the Company where provided below by
an officer of the Company thereunto duly authorized.

                                            Prism Software Corporation

                                            By: /s/ Ted Daniels
                                                --------------------------------
                                                Ted Daniels, President/CEO

                                            By: /s/ Allard Villere
                                                --------------------------------
                                                Al Villere, Secretary

                                       7

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