Document:

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                                                                    EXHIBIT 10.1

                              INDEMNITY AGREEMENT

     This Agreement is made and entered into this __________ day of __________,
2000 by and between Mercata Corporation, a Delaware corporation (the
"Corporation"), and __________ ("Agent").

                                   Recitals

     Whereas, Agent performs a valuable service to the Corporation in __________
capacity as __________ of the Corporation;

     Whereas, the stockholders of the Corporation have adopted bylaws (the
"Bylaws") providing for the indemnification of the directors, officers,
employees and other agents of the Corporation, including persons serving at the
request of the Corporation in such capacities with other corporations or
enterprises, as authorized by the Delaware General Corporation Law, as amended
(the "Code");

     Whereas, the Bylaws and the Code, by their non-exclusive nature, permit
contracts between the Corporation and its agents, officers, employees and other
agents with respect to indemnification of such persons; and

     Whereas, in order to induce Agent to continue to serve as __________ of the
Corporation, the Corporation has determined and agreed to enter into this
Agreement with Agent;

     Now, Therefore, in consideration of Agent's continued service as __________
after the date hereof, the parties hereto agree as follows:

                                   Agreement

     1.   Services to the Corporation.  Agent will serve, at the will of the
Corporation or under separate contract, if any such contract exists, as
__________ of the Corporation or as a director, officer or other fiduciary of an
affiliate of the Corporation (including any employee benefit plan of the
Corporation) faithfully and to the best of his ability so long as he is duly
elected and qualified in accordance with the provisions of the Bylaws or other
applicable charter documents of the Corporation or such affiliate; provided,
however, that Agent may at any time and for any reason resign from such position
(subject to any contractual obligation that Agent may have assumed apart from
this Agreement) and that the Corporation or any affiliate shall have no
obligation under this Agreement to continue Agent in any such position.

     2.   Indemnity of Agent.  The Corporation hereby agrees to hold harmless
and indemnify Agent to the fullest extent authorized or permitted by the
provisions of the Bylaws and the Code, as the same may be amended from time to
time (but, only to the extent that such amendment permits the Corporation to
provide broader indemnification rights than the Bylaws or the Code permitted
prior to adoption of such amendment).

                                       1.
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     3.   Additional Indemnity.  In addition to and not in limitation of the
indemnification otherwise provided for herein, and subject only to the
exclusions set forth in Section 4 hereof, the Corporation hereby further agrees
to hold harmless and indemnify Agent:

          (a)  against any and all expenses (including attorneys' fees), witness
fees, damages, judgments, fines and amounts paid in settlement and any other
amounts that Agent becomes legally obligated to pay because of any claim or
claims made against or by him in connection with any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, arbitrational,
administrative or investigative (including an action by or in the right of the
Corporation) to which Agent is, was or at any time becomes a party, or is
threatened to be made a party, by reason of the fact that Agent is, was or at
any time becomes a director, officer, employee or other agent of Corporation, or
is or was serving or at any time serves at the request of the Corporation as a
director, officer, employee or other agent of another corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise; and

          (b)  otherwise to the fullest extent as may be provided to Agent by
the Corporation under the non-exclusivity provisions of the Code and Section 41
of the Bylaws.

     4.   Limitations on Additional Indemnity.  No indemnity pursuant to Section
3 hereof shall be paid by the Corporation:

          (a)  on account of any claim against Agent solely for an accounting of
profits made from the purchase or sale by Agent of securities of the Corporation
pursuant to the provisions of Section 16(b) of the Securities Exchange Act of
1934 and amendments thereto or similar provisions of any federal, state or local
statutory law;

          (b)  on account of Agent's conduct that is established by a final
judgment as knowingly fraudulent or deliberately dishonest or that constituted
willful misconduct;

          (c)  on account of Agent's conduct that is established by a final
judgment as constituting a breach of Agent's duty of loyalty to the Corporation
or resulting in any personal profit or advantage to which Agent was not legally
entitled;

          (d)  for which payment is actually made to Agent under a valid and
collectible insurance policy or under a valid and enforceable indemnity clause,
bylaw or agreement, except in respect of any excess beyond payment under such
insurance, clause, bylaw or agreement;

          (e)  if indemnification is not lawful (and, in this respect, both the
Corporation and Agent have been advised that the Securities and Exchange
Commission believes that indemnification for liabilities arising under the
federal securities laws is against public policy and is, therefore,
unenforceable and that claims for indemnification should be submitted to
appropriate courts for adjudication); or

          (f)  in connection with any proceeding (or part thereof) initiated by
Agent, or any proceeding by Agent against the Corporation or its directors,
officers, employees or other agents, unless (i) such indemnification is
expressly required to be made by law, (ii) the proceeding was authorized by the
Board of Directors of the Corporation, (iii) such

                                       2.
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indemnification is provided by the Corporation, in its sole discretion, pursuant
to the powers vested in the Corporation under the Code, or (iv) the proceeding
is initiated pursuant to Section 9 hereof.

     5.   Continuation of Indemnity.  All agreements and obligations of the
Corporation contained herein shall continue during the period Agent is a
director, officer, employee or other agent of the Corporation (or is or was
serving at the request of the Corporation as a director, officer, employee or
other agent of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise) and shall continue thereafter so long as Agent
shall be subject to any possible claim or threatened, pending or completed
action, suit or proceeding, whether civil, criminal, arbitrational,
administrative or investigative, by reason of the fact that Agent was serving in
the capacity referred to herein.

     6.   Partial Indemnification.  Agent shall be entitled under this Agreement
to indemnification by the Corporation for a portion of the expenses (including
attorneys' fees), witness fees, damages, judgments, fines and amounts paid in
settlement and any other amounts that Agent becomes legally obligated to pay in
connection with any action, suit or proceeding referred to in Section 3 hereof
even if not entitled hereunder to indemnification for the total amount thereof,
and the Corporation shall indemnify Agent for the portion thereof to which Agent
is entitled.

     7.   Notification and Defense of Claim.  Not later than thirty (30) days
after receipt by Agent of notice of the commencement of any action, suit or
proceeding, Agent will, if a claim in respect thereof is to be made against the
Corporation under this Agreement, notify the Corporation of the commencement
thereof; but the omission so to notify the Corporation will not relieve it from
any liability which it may have to Agent otherwise than under this Agreement.
With respect to any such action, suit or proceeding as to which Agent notifies
the Corporation of the commencement thereof:

          (a)  the Corporation will be entitled to participate therein at its
own expense;

          (b)  except as otherwise provided below, the Corporation may, at its
option and jointly with any other indemnifying party similarly notified and
electing to assume such defense, assume the defense thereof, with counsel
reasonably satisfactory to Agent. After notice from the Corporation to Agent of
its election to assume the defense thereof, the Corporation will not be liable
to Agent under this Agreement for any legal or other expenses subsequently
incurred by Agent in connection with the defense thereof except for reasonable
costs of investigation or otherwise as provided below. Agent shall have the
right to employ separate counsel in such action, suit or proceeding but the fees
and expenses of such counsel incurred after notice from the Corporation of its
assumption of the defense thereof shall be at the expense of Agent unless (i)
the employment of counsel by Agent has been authorized by the Corporation, (ii)
Agent shall have reasonably concluded, and so notified the Corporation, that
there is an actual conflict of interest between the Corporation and Agent in the
conduct of the defense of such action or (iii) the Corporation shall not in fact
have employed counsel to assume the defense of such action, in each of which
cases the fees and expenses of Agent's separate counsel shall be at the expense
of the Corporation. The Corporation shall not be entitled to assume the defense
of any

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action, suit or proceeding brought by or on behalf of the Corporation or as to
which Agent shall have made the conclusion provided for in clause (ii) above;
and

          (c)  the Corporation shall not be liable to indemnify Agent under this
Agreement for any amounts paid in settlement of any action or claim effected
without its written consent, which shall not be unreasonably withheld.  The
Corporation shall be permitted to settle any action except that it shall not
settle any action or claim in any manner which would impose any penalty or
limitation on Agent without Agent's written consent, which may be given or
withheld in Agent's sole discretion.

     8.   Expenses.  The Corporation shall advance, prior to the final
disposition of any proceeding, promptly following request therefor, all expenses
incurred by Agent in connection with such proceeding upon receipt of an
undertaking by or on behalf of Agent to repay said amounts if it shall be
determined ultimately that Agent is not entitled to be indemnified under the
provisions of this Agreement, the Bylaws, the Code or otherwise.

     9.   Enforcement.  Any right to indemnification or advances granted by this
Agreement to Agent shall be enforceable by or on behalf of Agent in any court of
competent jurisdiction if (i) the claim for indemnification or advances is
denied, in whole or in part, or (ii) no disposition of such claim is made within
ninety (90) days of request therefor.  Agent, in such enforcement action, if
successful in whole or in part, shall be entitled to be paid also the expense of
prosecuting his claim.  It shall be a defense to any action for which a claim
for indemnification is made under Section 3 hereof (other than an action brought
to enforce a claim for expenses pursuant to Section 8 hereof, provided that the
required undertaking has been tendered to the Corporation) that Agent is not
entitled to indemnification because of the limitations set forth in Section 4
hereof.  Neither the failure of the Corporation (including its Board of
Directors or its stockholders) to have made a determination prior to the
commencement of such enforcement action that indemnification of Agent is proper
in the circumstances, nor an actual determination by the Corporation (including
its Board of Directors or its stockholders) that such indemnification is
improper shall be a defense to the action or create a presumption that Agent is
not entitled to indemnification under this Agreement or otherwise.

     10.  Subrogation.  In the event of payment under this Agreement, the
Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of Agent, who shall execute all documents required and shall
do all acts that may be necessary to secure such rights and to enable the
Corporation effectively to bring suit to enforce such rights.

     11.  Non-Exclusivity of Rights.  The rights conferred on Agent by this
Agreement shall not be exclusive of any other right which Agent may have or
hereafter acquire under any statute, provision of the Corporation's Certificate
of Incorporation or Bylaws, agreement, vote of stockholders or directors, or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding office.

     12.  Survival of Rights.

          (a)  The rights conferred on Agent by this Agreement shall continue
after Agent has ceased to be a director, officer, employee or other agent of the
Corporation or to serve

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at the request of the Corporation as a director, officer, employee or other
agent of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise and shall inure to the benefit of Agent's
heirs, executors and administrators.

          (b)  The Corporation shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Corporation, expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Corporation would be required to perform if no such succession
had taken place.

     13.  Separability.  Each of the provisions of this Agreement is a separate
and distinct agreement and independent of the others, so that if any provision
hereof shall be held to be invalid for any reason, such invalidity or
unenforceability shall not affect the validity or enforceability of the other
provisions hereof.  Furthermore, if this Agreement shall be invalidated in its
entirety on any ground, then the Corporation shall nevertheless indemnify Agent
to the fullest extent provided by the Bylaws, the Code or any other applicable
law.

     14.  Governing Law.  This Agreement shall be interpreted and enforced in
accordance with the laws of the State of Delaware.

     15.  Amendment and Termination.  No amendment, modification, termination or
cancellation of this Agreement shall be effective unless in writing signed by
both parties hereto.

     16.  Identical Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
but all of which together shall constitute but one and the same Agreement.  Only
one such counterpart need be produced to evidence the existence of this
Agreement.

     17.  Headings.  The headings of the sections of this Agreement are inserted
for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction hereof.

     18.  Notices.  All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given (i)
upon delivery if delivered by hand to the party to whom such communication was
directed or (ii) upon the third business day after the date on which such
communication was mailed if mailed by certified or registered mail with postage
prepaid:

          (a)  If to Agent, at the address indicated on the signature page
hereof.

          (b)  If to the Corporation, to:

               Mercata, Inc.
               110 - 110th Avenue N.E., Suite 390
               Bellevue, Washington  98004-5840

or to such other address as may have been furnished to Agent by the Corporation.

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     In Witness Whereof, the parties hereto have executed this Agreement on and
as of the day and year first above written.

                              [Name]

                              By: ______________________________________

                              Title: ___________________________________

                              Agent

                              __________________________________________

                              __________

                              Address:

                              __________________________________________

                              __________________________________________

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                                                                    EXHIBIT 10.2

                                 MERCATA, INC.

                           2000 EQUITY INCENTIVE PLAN

                             Adopted March 7, 2000
                    Approved By Stockholders _______, 2000
                        Termination Date: March 6, 2010

1.  Purposes.

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

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

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

2.  Definitions.

(a)  "Accountants" means the Company's independent public accountants.

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

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

(d)  "Cause" means (i) conviction of, a guilty plea with respect to, or a plea
     of nolo contendere to a charge that  a Participant has committed a felony
     under the laws of the United States or of any state or a crime involving
     moral turpitude, including, but not limited to, fraud, theft, embezzlement
     or any crime that results in or is intended to result in personal
     enrichment at the expense of the Company or an Affiliate; (ii) material
     breach of any agreement entered into between the Participant and the
     Company or an Affiliate that impairs the Company's or the Affiliate's
     interest therein; (iii) willful misconduct, significant failure of the
     Participant to perform the Participant's duties, or gross neglect by the
     Participant of the Participant's duties; or (iv) engagement in any activity
     that constitutes a material conflict of interest with the Company or any
     Affiliate.

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

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(f)  "Committee" means a committee of one or more members of the Board appointed
     by the Board in accordance with subsection 3(c).

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

(h)  "Company" means Mercata, Inc., a Delaware corporation.

(i)  "Consultant" means any person, including an advisor, (i) engaged by the
     Company or an Affiliate to render consulting or advisory services and who
     is compensated for such services or (ii) who is a member of the Board of
     Directors of an Affiliate.  However, the term "Consultant" shall not
     include either Directors who are not compensated by the Company for their
     services as Directors or Directors who are merely paid a director's fee by
     the Company for their services as Directors.

(j)  "Continuous Service" means that the Participant's service with the Company
     or an Affiliate, whether as an Employee, Director or Consultant, is not
     interrupted or terminated.  The Participant's Continuous Service shall not
     be deemed to have terminated merely because of a change in the capacity in
     which the Participant renders service to the Company or an Affiliate as an
     Employee, Consultant or Director or a change in the entity for which the
     Participant renders such service, provided that there is no interruption or
     termination of the Participant's Continuous Service.  For example, a change
     in status from an Employee of the Company to a Consultant of an Affiliate
     or a Director will not constitute an interruption of Continuous Service.
     The Board or the chief executive officer of the Company, in that party's
     sole discretion, may determine whether Continuous Service shall be
     considered interrupted in the case of any leave of absence approved by that
     party, including sick leave, military leave or any other personal leave.

(k)  "Covered Employee" means the chief executive officer and the four (4) other
     highest compensated officers of the Company for whom total compensation is
     required to be reported to stockholders under the Exchange Act, as
     determined for purposes of Section 162(m) of the Code.

(l)  "Director" means a member of the Board of Directors of the Company.

(m)  "Disability" means the permanent and total disability of a person within
     the meaning of Section 22(e)(3) of the Code.

(n)  "Employee" means any person employed by the Company or an Affiliate.  Mere
     service as a Director or payment of a director's fee by the Company or an
     Affiliate shall not be sufficient to constitute "employment" by the Company
     or an Affiliate.

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

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

     (i)  If the Common Stock is listed on any established stock exchange or
          traded on the Nasdaq National Market or the Nasdaq SmallCap Market,
          the Fair Market Value of a share of Common Stock shall be the closing
          sales price for such stock (or the closing bid, if no

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          sales were reported) as quoted on such exchange or market (or the
          exchange or market with the greatest volume of trading in the Common
          Stock) on the 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) In the absence of such markets for the Common Stock, the Fair Market
          Value shall be determined in good faith by the Board.

(q)  "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.

(r)  "Listing Date" means the effective date of the initial public offering of
     the Company's Common Stock.

(s)  "Non-Employee Director" means a Director who either (i) is not a current
     Employee or Officer of the Company or its parent or a subsidiary, does not
     receive compensation (directly or indirectly) from the Company or its
     parent or a subsidiary for services rendered as a consultant or in any
     capacity other than as a Director (except for an amount as to which
     disclosure would not be required under Item 404(a) of Regulation S-K
     promulgated pursuant to the Securities Act ("Regulation S-K")), does not
     possess an interest in any other transaction as to which disclosure would
     be required under Item 404(a) of Regulation S-K and is not engaged in a
     business relationship as to which disclosure would be required under Item
     404(b) of Regulation S-K; or (ii) is otherwise considered a "non-employee
     director" for purposes of Rule 16b-3.

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

(u)  "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.

(v)  "Option" means an Incentive Stock Option or a Nonstatutory Stock Option
     granted pursuant to the Plan.

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

(x)  "Optionholder" means a person to whom an Option is granted pursuant to the
     Plan or, if applicable, such other person who holds an outstanding Option.

(y)  "Outside Director" means a Director who either (i) is not a current
     employee of the Company or an "affiliated corporation" (within the meaning
     of Treasury Regulations promulgated under Section 162(m) of the Code), is
     not a former employee of the Company or an "affiliated corporation"
     receiving compensation for prior services (other than benefits under a tax
     qualified pension plan), was not an officer of the Company or an
     "affiliated corporation" at any time and is not currently receiving direct
     or indirect remuneration from the Company or an

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     "affiliated corporation" for services in any capacity other than as a
     Director or (ii) is otherwise considered an "outside director" for purposes
     of Section 162(m) of the Code.

(z)  "Participant" means a person to whom a Stock Award is granted pursuant to
     the Plan or, if applicable, such other person who holds an outstanding
     Stock Award.

(aa) "Plan" means this Mercata, Inc. 2000 Equity Incentive Plan.

(bb) "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange Act or any
     successor to Rule 16b-3, as in effect from time to time.

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

(dd) "Stock Award" means any right granted under the Plan, including an Option,
     a stock bonus and a right to acquire restricted stock.

(ee) "Stock Award Agreement" means a written agreement between the Company and a
     holder of a Stock Award evidencing the terms and conditions of an
     individual Stock Award grant.  Each Stock Award Agreement shall be subject
     to the terms and conditions of the Plan.

(ff) "Ten Percent Shareholder" means a person who owns (or is deemed to own
     pursuant to Section 424(d) of the Code) stock possessing more than ten
     percent (10%) of the total combined voting power of all classes of stock of
     the Company or of any of its Affiliates.

3.  Administration.

(a)  Administration by Board.  The Board shall administer the Plan unless and
     until the Board delegates administration to a Committee, as provided in
     subsection 3(c).

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

     (i)   To determine from time to time which of the persons eligible under
           the Plan shall be granted Stock Awards; when and how each Stock Award
           shall be granted; what type or combination of types of Stock Award
           shall be granted; the provisions of each Stock Award granted (which
           need not be identical), including the time or times when a person
           shall be permitted to receive Common Stock pursuant to a Stock Award;
           and the number of shares of Common Stock with respect to which a
           Stock Award shall be granted to each such person.

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

     (iii) To amend the Plan or a Stock Award as provided in Section 12.

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     (iv)  Generally, to exercise such powers and to perform such acts as the
           Board deems necessary or expedient to promote the best interests of
           the Company which are not in conflict with the provisions of the
           Plan.

(c)  Delegation to Committee.

     (i)  General.  The Board may delegate administration of the Plan to a
          Committee or Committees of one (1) or more members of the Board, and
          the term "Committee" shall apply to any person or persons to whom such
          authority has been delegated. If administration is delegated to a
          Committee, the Committee shall have, in connection with the
          administration of the Plan, the powers theretofore possessed by the
          Board, including the power to delegate to a subcommittee any of the
          administrative powers the Committee is authorized to exercise (and
          references in this Plan to the Board shall thereafter be to the
          Committee or subcommittee), subject, however, to such resolutions, not
          inconsistent with the provisions of the Plan, as may be adopted from
          time to time by the Board. The Board may abolish the Committee at any
          time and revest in the Board the administration of the Plan.

     (ii) Committee Composition when Common Stock is Publicly Traded.  At such
          time as the Common Stock is publicly traded, in the discretion of the
          Board, a Committee may consist solely of two or more Outside
          Directors, in accordance with Section 162(m) of the Code, and/or
          solely of two or more Non-Employee Directors, in accordance with Rule
          16b-3. Within the scope of such authority, the Board or the Committee
          may (1) delegate to a committee of one or more members of the Board
          who are not Outside Directors the authority to grant Stock Awards to
          eligible persons who are either (a) not then Covered Employees and are
          not expected to be Covered Employees at the time of recognition of
          income resulting from such Stock Award or (b) not persons with respect
          to whom the Company wishes to comply with Section 162(m) of the Code
          and/or (2) delegate to a committee of one or more members of the Board
          who are not Non-Employee Directors the authority to grant Stock Awards
          to eligible persons who are not then subject to Section 16 of the
          Exchange Act.

(d)  Effect of Board's Decision.  All determinations, interpretations and
     constructions made by the Board in good faith shall not be subject to
     review by any person and shall be final, binding and conclusive on all
     persons.

4.  Shares Subject to the Plan.

(a)  Share Reserve.  Subject to the provisions of Section 12 relating to
     adjustments upon changes in Common Stock, the Common Stock that may be
     issued pursuant to Stock Awards shall not exceed in the aggregate Four
     Million Five Hundred Thousand (4,500,000) shares of Common Stock, plus an
     annual increase to be added each January 1, beginning January 1, 2002,
     equal to the lesser of One Million Five Hundred Thousand (1,500,000) shares
     or five percent (5%) of the total number of shares of Common Stock
     outstanding on such January 1.  Notwithstanding the foregoing, the Board
     may designate a smaller number of shares of Common Stock to be added to the
     share reserve as of a particular January 1.

(b)  Reversion of Shares to the Share Reserve.  If any Stock Award shall for any
     reason expire or otherwise terminate, in whole or in part, without having
     been exercised in full,

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     the shares of Common Stock not acquired under such Stock Award shall revert
     to and again become available for issuance under the Plan.

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

5.  Eligibility.

(a)  Eligibility for Specific Stock Awards.  Incentive Stock Options may be
     granted only to Employees.  Stock Awards other than Incentive Stock Options
     may be granted to Employees, Directors and Consultants.

(b)  Ten Percent Stockholders.  A Ten Percent Shareholder shall not be granted
     an Incentive Stock Option unless the exercise price of such Option is at
     least one hundred ten percent (110%) of the Fair Market Value of the Common
     Stock at the date of grant and the Option is not exercisable after the
     expiration of five (5) years from the date of grant.

(c)  Section 162(m) Limitation.  Subject to the provisions of Section 12
     relating to adjustments upon changes in the shares of Common Stock, no
     Employee shall be eligible to be granted Options covering more than two
     million (2,000,000) shares of Common Stock during any calendar year.

(d)  Consultants.

     (i)  A Consultant shall not be eligible for the grant of a Stock Award if,
          at the time of grant, a Form S-8 Registration Statement under the
          Securities Act ("Form S-8") is not available to register either the
          offer or the sale of the Company's securities to such Consultant
          because of the nature of the services that the Consultant is providing
          to the Company, or because the Consultant is not a natural person, or
          as otherwise provided by the rules governing the use of Form S-8,
          unless the Company determines both (i) that such grant (A) shall be
          registered in another manner under the Securities Act (e.g., on a Form
          S-3 Registration Statement) or (B) does not require registration under
          the Securities Act in order to comply with the requirements of the
          Securities Act, if applicable, and (ii) that such grant complies with
          the securities laws of all other relevant jurisdictions.

     (ii) Form S-8 generally is available to consultants and advisors only if
          (i) they are natural persons; (ii) they provide bona fide services to
          the issuer, its parents, its majority-owned subsidiaries or majority-
          owned subsidiaries of the issuer's parent; and (iii) the services are
          not in connection with the offer or sale of securities in a capital-
          raising transaction, and do not directly or indirectly promote or
          maintain a market for the issuer's securities.

6.  Option Provisions.

     Each Option shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate.  All Options shall be separately
designated Incentive Stock Options or Nonstatutory Stock Options at the time of
grant, and, if certificates are issued, a separate certificate or certificates
will be issued for shares of Common Stock purchased on exercise of each type of
Option.  The provisions of separate Options need not be identical, but

                                       6
<PAGE>

each Option shall include (through incorporation of provisions hereof by
reference in the Option or otherwise) the substance of each of the following
provisions:

(a)  Term.  Subject to the provisions of subsection 5(b) regarding Ten Percent
     Stockholders, no Incentive Stock Option shall be exercisable after the
     expiration of ten (10) years from the date it was granted.

(b)  Exercise Price of an Incentive Stock Option.  Subject to the provisions of
     subsection 5(b) regarding Ten Percent Stockholders, the exercise price of
     each Incentive Stock Option shall be not less than one hundred percent
     (100%) of the Fair Market Value of the Common Stock subject to the Option
     on the date the Option is granted.  Notwithstanding the foregoing, an
     Incentive Stock Option may be granted with an exercise price lower than
     that set forth in the preceding sentence if such Option is granted pursuant
     to an assumption or substitution for another option in a manner satisfying
     the provisions of Section 424(a) of the Code.

(c)  Exercise Price of a Nonstatutory Stock Option.  The exercise price of each
     Nonstatutory Stock Option shall be not less than eighty-five percent (85%)
     of the Fair Market Value of the Common Stock subject to the Option on the
     date the Option is granted.  Notwithstanding the foregoing, a Nonstatutory
     Stock Option may be granted with an exercise price lower than that set
     forth in the preceding sentence if such Option is granted pursuant to an
     assumption or substitution for another option in a manner satisfying the
     provisions of Section 424(a) of the Code.

(d)  Consideration.  The purchase price of Common Stock acquired pursuant to an
     Option shall be paid, to the extent permitted by applicable statutes and
     regulations, either (i) in cash or check at the time the Option is
     exercised or (ii) at the discretion of the Board at the time of the grant
     of the Option (or subsequently in the case of a Nonstatutory Stock Option)
     (1) by delivery to the Company of other Common Stock, (2) according to a
     deferred payment or other similar arrangement with the Optionholder or (3)
     in any other form of legal consideration that may be acceptable to the
     Board.  Unless otherwise specifically provided in the Option, the purchase
     price of Common Stock acquired pursuant to an Option that is paid by
     delivery to the Company of other Common Stock acquired, directly or
     indirectly from the Company, shall be paid only by shares of the Common
     Stock of the Company that have been held for more than six (6) months (or
     such longer or shorter period of time required to avoid a charge to
     earnings for financial accounting purposes).  At any time that the Company
     is incorporated in Delaware, payment of the Common Stock's "par value," as
     defined in the Delaware General Corporation Law, shall not be made by
     deferred payment.

     In the case of any deferred payment arrangement, interest shall be
     compounded at least annually and shall be charged at the minimum rate of
     interest necessary to avoid the treatment as interest, under any applicable
     provisions of the Code, of any amounts other than amounts stated to be
     interest under the deferred payment arrangement.

(e)  Transferability of an Incentive Stock Option.  An Incentive Stock Option
     shall not be transferable except by will or by the laws of descent and
     distribution and shall be exercisable during the lifetime of the
     Optionholder only by the Optionholder.  Notwithstanding

                                       7
<PAGE>

     the foregoing, the Optionholder may, by delivering written notice to the
     Company, in a form satisfactory to the Company, designate a third party
     who, in the event of the death of the Optionholder, shall thereafter be
     entitled to exercise the Option.

(f)  Transferability of a Nonstatutory Stock Option.  A Nonstatutory Stock
     Option shall be transferable to the extent provided in the Option
     Agreement.  If the Nonstatutory Stock Option does not provide for
     transferability, then the Nonstatutory Stock Option shall not be
     transferable except by will or by the laws of descent and distribution and
     shall be exercisable during the lifetime of the Optionholder only by the
     Optionholder.  Notwithstanding the foregoing, the Optionholder may, by
     delivering written notice to the Company, in a form satisfactory to the
     Company, designate a third party who, in the event of the death of the
     Optionholder, shall thereafter be entitled to exercise the Option.

(g)  Vesting Generally.  The total number of shares of Common Stock subject to
     an Option may, but need not, vest and therefore become exercisable in
     periodic installments that may, but need not, be equal.  The Option may be
     subject to such other terms and conditions on the time or times when it may
     be exercised (which may be based on performance or other criteria) as the
     Board may deem appropriate.  The vesting provisions of individual Options
     may vary.  The provisions of this subsection 6(g) are subject to any Option
     provisions governing the minimum number of shares of Common Stock as to
     which an Option may be exercised. Notwithstanding the foregoing, in the
     event an Employee who is also a member of the Board terminates his or her
     employment for any reason but remains as a member of the Board, the vesting
     on such individual's Option shall (unless the Board determines otherwise)
     cease as of the date of the termination of his or her employment but such
     individual shall be permitted to exercise his or her Option to purchase the
     vested number of shares of Common Stock subject to the Option for such
     period of time as provided above or in his or her Option Agreement.

(h)  Termination of Continuous Service.  In the event an Optionholder's
     Continuous Service terminates (other than upon the Optionholder's death or
     Disability), the Optionholder may exercise his or her Option (to the extent
     that the Optionholder was entitled to exercise such Option as of the date
     of termination) but only within such period of time ending on the earlier
     of (i) the date three (3) months following the termination of the
     Optionholder's Continuous Service (or such longer or shorter period
     specified in the Option Agreement), or (ii) the expiration of the term of
     the Option as set forth in the Option Agreement.  If, after termination,
     the Optionholder does not exercise his or her Option within the time
     specified in the Option Agreement, the Option shall terminate.

(i)  Extension of Termination Date.  An Optionholder's Option Agreement may also
     provide that if the exercise of the Option following the termination of the
     Optionholder's Continuous Service (other than upon the Optionholder's death
     or Disability) would be prohibited at any time solely because the issuance
     of shares of Common Stock would violate the registration requirements under
     the Securities Act, then the Option shall terminate on the earlier of (i)
     the expiration of the term of the Option set forth in subsection 6(a) or
     (ii) the expiration of a period of three (3) months after the termination
     of the Optionholder's Continuous Service during which the exercise of the
     Option would not be in violation of such registration requirements.

                                       8
<PAGE>

(j)  Disability of Optionholder.  In the event that an Optionholder's Continuous
     Service terminates as a result of the Optionholder's Disability, the
     Optionholder may exercise his or her Option (to the extent that the
     Optionholder was entitled to exercise such Option as of the date of
     termination), but only within such period of time ending on the earlier of
     (i) the date twelve (12) months following such termination (or such longer
     or shorter period specified in the Option Agreement) or (ii) the expiration
     of the term of the Option as set forth in the Option Agreement.  If, after
     termination, the Optionholder does not exercise his or her Option within
     the time specified herein, the Option shall terminate.

(k)  Death of Optionholder.  In the event (i) an Optionholder's Continuous
     Service terminates as a result of the Optionholder's death or (ii) the
     Optionholder dies within the period (if any) specified in the Option
     Agreement after the termination of the Optionholder's Continuous Service
     for a reason other than death, then the Option may be exercised (to the
     extent the Optionholder was entitled to exercise such Option as of the date
     of death) by the Optionholder's estate, by a person who acquired the right
     to exercise the Option by bequest or inheritance or by a person designated
     to exercise the Option upon the Optionholder's death pursuant to subsection
     6(e) or 6(f), but only within the period ending on the earlier of (1) the
     date eighteen (18) months following the date of death (or such longer or
     shorter period specified in the Option Agreement) or (2) the expiration of
     the term of such Option as set forth in the Option Agreement.  If, after
     death, the Option is not exercised within the time specified herein, the
     Option shall terminate.

(l)  Early Exercise.  The Option may, but need not, include a provision whereby
     the Optionholder may elect at any time before the Optionholder's Continuous
     Service terminates to exercise the Option as to any part or all of the
     shares of Common Stock subject to the Option prior to the full vesting of
     the Option.  Any unvested shares of Common Stock so purchased may be
     subject to a repurchase option in favor of the Company or to any other
     restriction the Board determines to be appropriate.  The Company will not
     exercise its repurchase option until at least six (6) months (or such
     longer or shorter period of time required to avoid a charge to earnings for
     financial accounting purposes) have elapsed following exercise of the
     Option unless the Board otherwise specifically provides in the Option.

(m)  Re-Load Options.

     (i)   Without in any way limiting the authority of the Board to make or not
           to make grants of Options hereunder, the Board shall have the
           authority (but not an obligation) to include as part of any Option
           Agreement a provision entitling the Optionholder to a further Option
           (a "Re-Load Option") in the event the Optionholder exercises the
           Option evidenced by the Option Agreement, in whole or in part, by
           surrendering other shares of Common Stock in accordance with this
           Plan and the terms and conditions of the Option Agreement. Unless
           otherwise specifically provided in the Option, the Optionholder shall
           not surrender shares of Common Stock acquired, directly or indirectly
           from the Company, unless such shares have been held for more than six
           (6) months (or such longer or shorter period of time required to
           avoid a charge to earnings for financial accounting purposes).

     (ii)  Any such Re-Load Option shall (1) provide for a number of shares of
           Common Stock equal to the number of shares of Common Stock
           surrendered as part or all of the

                                       9
<PAGE>

           exercise price of such Option; (2) have an expiration date which is
           the same as the expiration date of the Option the exercise of which
           gave rise to such Re-Load Option; and (3) have an exercise price
           which is equal to one hundred percent (100%) of the Fair Market Value
           of the Common Stock subject to the Re-Load Option on the date of
           exercise of the original Option. Notwithstanding the foregoing, a Re-
           Load Option shall be subject to the same exercise price and term
           provisions heretofore described for Options under the Plan.

     (iii) Any such Re-Load Option may be an Incentive Stock Option or a
           Nonstatutory Stock Option, as the Board may designate at the time of
           the grant of the original Option; provided, however, that the
           designation of any Re-Load Option as an Incentive Stock Option shall
           be subject to the one hundred thousand dollar ($100,000) annual
           limitation on the exercisability of Incentive Stock Options described
           in subsection 9(d) and in Section 422(d) of the Code. There shall be
           no Re-Load Options on a Re-Load Option. Any such Re-Load Option shall
           be subject to the availability of sufficient shares of Common Stock
           under subsection 4(a) and the "Section 162(m) Limitation" on the
           grants of Options under subsection 5(c) and shall be subject to such
           other terms and conditions as the Board may determine which are not
           inconsistent with the express provisions of the Plan regarding the
           terms of Options.

7.  Non-Employee Director Stock Options.

     Without any further action of the Board, each Non-Employee Director shall
be granted Nonstatutory Stock Options as described in subsections 7(a) and 7(b)
(collectively, "Non-Employee Director Options"). The provisions of this Section
7 shall apply only to a Non-Employee Director Option.  Each Non-Employee
Director Option shall include the substance of the terms set forth in
subsections 7(c) through 7(k).

(a)  Initial Grants.  On the IPO Date, each person who is elected or appointed
     for the first time to be a Non-Employee Director automatically shall, upon
     the date of his or her initial election or appointment to be a Non-Employee
     Director by the Board or stockholders of the Company, be granted an Initial
     Grant to purchase forty thousand (40,000) shares of Common Stock on the
     terms and conditions set forth herein.  For purposes of the foregoing
     sentence, on the IPO Date, each person then serving as a Non-Employee
     Director and who has not previously been granted options to acquire Common
     Stock shall be deemed to have been initially elected as a Non-Employee
     Director on such date.

(b)  Annual Grants.  After the IPO Date, each person who is a Non-Employee
     Director on the Board on the day after the annual stockholders' meeting,
     shall, on that date, be granted an Annual Grant to purchase five thousand
     (5,000) shares of Common Stock on the terms and conditions set forth herein
     for each committee of the Board on which he or she serves; provided, that
     each Non-Employee Director who is on a committee of the Board on the IPO
     Date shall be granted his or her first such Annual Grant on the IPO Date
     for each committee on which he or she serves.   Notwithstanding the
     foregoing, each Non-Employee Director who is first elected or appointed to
     a committee after an annual stockholders' meeting shall be entitled to the
     Annual Grant for service on that committee which shall be reduced, pro-rata
     on a twelve-month basis, for each month following the annual stockholders'
     meeting that such person did not serve on the committee; the pro-rated
     Annual Grant shall vest monthly over the remainder of the twelve (12) month
     period immediately following the annual stockholders' meeting.

                                       10
<PAGE>

(c)  Term.  Each Non-Employee Director Option shall have a term of ten (10)
     years from the date it is granted.

(d)  Exercise Price.  The exercise price of each Non-Employee Director Option
     shall be one hundred percent (100%) of the Fair Market Value of the stock
     subject to the Non-Employee Director Option on the date of grant.
     Notwithstanding the foregoing, a Non-Employee Director Option may be
     granted with an exercise price lower than that set forth in the preceding
     sentence if such Non-Employee Director Option is granted pursuant to an
     assumption or substitution for another option in a manner satisfying the
     provisions of Section 424(a) of the Code.  The exercise price for each
     Initial Grant shall be the initial offering price for the initial public
     offering of the Company's Common Stock as set forth in the Company's
     prospectus for the initial public offering.

(e)  Vesting.  Each Initial Grant shall vest one-fourth (1/4th) per year from
     the date on which the director first served on the Board.  Each Annual
     Grant shall vest fully one (1) year from the date on which it is granted.

(f)  Consideration.  The purchase price of stock acquired pursuant to a Non-
     Employee Director Option may be paid, to the extent permitted by applicable
     statutes and regulations, in any combination of (i) cash or check, (ii)
     delivery to the Company of other Common Stock, (ii) deferred payment or
     (iv) any other form of legal consideration that may be acceptable to the
     Board and provided in the Non-Employee Director Option Agreement; provided,
     however, that at any time that the Company is incorporated in Delaware,
     payment of the Common Stock's "par value," as defined in the Delaware
     General Corporation Law, shall not be made by deferred payment. In the case
     of any deferred payment arrangement, interest shall be compounded at least
     annually and shall be charged at the minimum rate of interest necessary to
     avoid the treatment as interest, under any applicable provisions of the
     Code, of any amounts other than amounts stated to be interest under the
     deferred payment arrangement.

(g)  Transferability.  A Non-Employee Director 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 Non-Employee Director only by the
     Non-Employee Director.  Notwithstanding the foregoing, the Non-Employee
     Director 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 Non-Employee Director, shall thereafter be entitled to
     exercise the Non-Employee Director Option.

(h)  Termination of Continuous Service.  In the event a Non-Employee Director's
     Continuous Service terminates (other than upon the Non-Employee Director's
     death or Disability), the Non-Employee Director may exercise his or her
     Non-Employee Director Option (to the extent that the Non-Employee Director
     was entitled to exercise it as of the date of termination) but only within
     such period of time ending on the earlier of (i) the date three (3) months
     following the termination of the Non-Employee Director's Continuous
     Service, or (ii) the expiration of the term of the Non-Employee Director
     Option as set forth in the Non-Employee Director Option Agreement.  If,
     after termination, the Non-Employee Director does not exercise his or her
     Non-Employee Director Option within the time specified in the Non-Employee
     Director Option Agreement, the Non-Employee Director Option shall
     terminate.

                                       11
<PAGE>

(i)  Extension of Termination Date. If the exercise of the Non-Employee Director
     Option following the termination of the Non-Employee Director's Continuous
     Service (other than upon the Non-Employee Director's death or Disability)
     would be prohibited at any time solely because the issuance of shares would
     violate the registration requirements under the Securities Act, then the
     Non-Employee Director Option shall terminate on the earlier of (i) the
     expiration of the term of the Non-Employee Director Option set forth in
     subsection 7(c) or (ii) the expiration of a period of three (3) months
     after the termination of the Non-Employee Director's Continuous Service
     during which the exercise of the Non-Employee Director Option would not
     violate such registration requirements.

(j)  Disability of Non-Employee Director.  In the event a Non-Employee
     Director's Continuous Service terminates as a result of the Non-Employee
     Director's Disability, the Non-Employee Director may exercise his or her
     Non-Employee Director Option (to the extent that the Non-Employee Director
     was entitled to exercise it as of the date of termination), but only within
     such period of time ending on the earlier of (i) the date twelve (12)
     months following such termination or (ii) the expiration of the term of the
     Non-Employee Director Option as set forth in the Non-Employee Director
     Option Agreement.  If, after termination, the Non-Employee Director does
     not exercise his or her Non-Employee Director Option within the time
     specified herein, the Non-Employee Director Option shall terminate.

(k)  Death of Non-Employee Director.  In the event (i) a Non-Employee Director's
     Continuous Service terminates as a result of the Non-Employee Director's
     death or (ii) the Non-Employee Director dies within the three-month period
     after the termination of the Non-Employee Director's Continuous Service for
     a reason other than death, then the Non-Employee Director Option may be
     exercised (to the extent the Non-Employee Director was entitled to exercise
     the Non-Employee Director Option as of the date of death) by the Non-
     Employee Director's estate, by a person who acquired the right to exercise
     the Non-Employee Director Option by bequest or inheritance or by a person
     designated to exercise the Non-Employee Director Option upon the Non-
     Employee Director's death, but only within the period ending on the earlier
     of (1) the date eighteen (18) months following the date of death or (2) the
     expiration of the term of such Non-Employee Director Option as set forth in
     the Non-Employee Director Option Agreement.  If, after death, the Non-
     Employee Director Option is not exercised within the time specified herein,
     the Non-Employee Director Option shall terminate.

8.  Provisions of Stock Awards other than Options.

(a)  Stock Bonus Awards.  Each stock bonus agreement shall be in such form and
     shall contain such terms and conditions as the Board shall deem
     appropriate.  The terms and conditions of stock bonus agreements may change
     from time to time, and the terms and conditions of separate stock bonus
     agreements need not be identical, but each stock bonus agreement shall
     include (through incorporation of provisions hereof by reference in the
     agreement or otherwise) the substance of each of the following provisions:

     (i)   Consideration.  A stock bonus may be awarded in consideration for
           past services actually rendered to the Company or an Affiliate for
           its benefit.

                                       12
<PAGE>

     (ii)  Vesting.  Shares of Common Stock awarded under the stock bonus
           agreement may, but need not, be subject to a share repurchase option
           in favor of the Company in accordance with a vesting schedule to be
           determined by the Board.

     (iii) Termination of Participant's Continuous Service.  In the event a
           Participant's Continuous Service terminates, the Company may
           reacquire any or all of the shares of Common Stock held by the
           Participant which have not vested as of the date of termination under
           the terms of the stock bonus agreement.

     (iv)  Transferability.  Rights to acquire shares of Common Stock under the
           stock bonus agreement shall be transferable by the Participant only
           upon such terms and conditions as are set forth in the stock bonus
           agreement, as the Board shall determine in its discretion, so long as
           Common Stock awarded under the stock bonus agreement remains subject
           to the terms of the stock bonus agreement.

(b)  Restricted Stock Awards.  Each restricted stock purchase agreement shall be
     in such form and shall contain such terms and conditions as the Board shall
     deem appropriate.  The terms and conditions of the restricted stock
     purchase agreements may change from time to time, and the terms and
     conditions of separate restricted stock purchase agreements need not be
     identical, but each restricted stock purchase agreement shall include
     (through incorporation of provisions hereof by reference in the agreement
     or otherwise) the substance of each of the following provisions:

     (i)   Purchase Price.  The purchase price under each restricted stock
           purchase agreement shall be such amount as the Board shall determine
           and designate in such restricted stock purchase agreement. The
           purchase price shall not be less than eighty-five percent (85%) of
           the Common Stock's Fair Market Value on the date such award is made
           or at the time the purchase is consummated.

     (ii)  Consideration.  The purchase price of Common Stock acquired pursuant
           to the restricted stock purchase agreement shall be paid either: (i)
           in cash or check at the time of purchase; (ii) at the discretion of
           the Board, according to a deferred payment or other similar
           arrangement with the Participant; or (iii) in any other form of legal
           consideration that may be acceptable to the Board in its discretion;
           provided, however, that at any time that the Company is incorporated
           in Delaware, then payment of the Common Stock's "par value," as
           defined in the Delaware General Corporation Law, shall not be made by
           deferred payment.

     (iii) Vesting.  Shares of Common Stock acquired under the restricted stock
           purchase agreement may, but need not, be subject to a share
           repurchase option in favor of the Company in accordance with a
           vesting schedule to be determined by the Board.

     (iv)  Termination of Participant's Continuous Service.  In the event a
           Participant's Continuous Service terminates, the Company may
           repurchase or otherwise reacquire any or all of the shares of Common
           Stock held by the Participant which have not vested as of the date of
           termination under the terms of the restricted stock purchase
           agreement.

     (v)   Transferability.  Rights to acquire shares of Common Stock under the
           restricted stock purchase agreement shall be transferable by the
           Participant only upon such terms

                                      13
<PAGE>

           and conditions as are set forth in the restricted stock purchase
           agreement, as the Board shall determine in its discretion, so long as
           Common Stock awarded under the restricted stock purchase agreement
           remains subject to the terms of the restricted stock purchase
           agreement.

9.  Covenants of the Company.

(a)  Availability of Shares.  During the terms of the Stock Awards, the Company
     shall keep available at all times the number of shares of Common Stock
     required to satisfy such Stock Awards.

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

10.  Use of Proceeds from Stock.

     Proceeds from the sale of Common Stock pursuant to Stock Awards shall
constitute general funds of the Company.

11.  Miscellaneous.

(a)  Acceleration of Exercisability and Vesting.  The Board shall have the power
     to accelerate the time at which a Stock Award may first be exercised or the
     time during which a Stock Award or any part thereof will vest in accordance
     with the Plan, notwithstanding the provisions in the Stock Award stating
     the time at which it may first be exercised or the time during which it
     will vest.

(b)  Stockholder Rights.  No Participant shall be deemed to be the holder of, or
     to have any of the rights of a holder with respect to, any shares of Common
     Stock subject to such Stock Award unless and until such Participant has
     satisfied all requirements for exercise of the Stock Award pursuant to its
     terms.

(c)  No Employment or other Service Rights.  Nothing in the Plan or any
     instrument executed or Stock Award granted pursuant thereto shall confer
     upon any Participant any right to continue to serve the Company or an
     Affiliate in the capacity in effect at the time the Stock Award was granted
     or shall affect the right of the Company or an Affiliate to terminate (i)
     the employment of an Employee with or without notice and with or without
     cause, (ii) the service of a Consultant pursuant to the terms of such
     Consultant's agreement with the Company or an Affiliate or (iii) the
     service of a Director pursuant to the Bylaws of the Company or an
     Affiliate, and any applicable provisions of the corporate law of the state
     in which the Company or the Affiliate is incorporated, as the case may be.

                                       14
<PAGE>

(d)  Incentive Stock Option $100,000 Limitation.  To the extent that the
     aggregate Fair Market Value (determined at the time of grant) of Common
     Stock with respect to which Incentive Stock Options are exercisable for the
     first time by any Optionholder during any calendar year (under all plans of
     the Company and its Affiliates) exceeds one hundred thousand dollars
     ($100,000), the Options or portions thereof which exceed such limit
     (according to the order in which they were granted) shall be treated as
     Nonstatutory Stock Options.

(e)  Investment Assurances.  The Company may require a Participant, as a
     condition of exercising or acquiring Common Stock under any Stock Award,
     (i) to give written assurances satisfactory to the Company as to the
     Participant's knowledge and experience in financial and business matters
     and/or to employ a purchaser representative reasonably satisfactory to the
     Company who is knowledgeable and experienced in financial and business
     matters and that he or she is capable of evaluating, alone or together with
     the purchaser representative, the merits and risks of exercising the Stock
     Award; and (ii) to give written assurances satisfactory to the Company
     stating that the Participant is acquiring Common Stock subject to the Stock
     Award for the Participant's own account and not with any present intention
     of selling or otherwise distributing the Common Stock.  The foregoing
     requirements, and any assurances given pursuant to such requirements, shall
     be inoperative if (1) the issuance of the shares of Common Stock upon the
     exercise or acquisition of Common Stock under the Stock Award has been
     registered under a then currently effective registration statement under
     the Securities Act or (2) 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 Common Stock.

(f)  Withholding Obligations.  To the extent provided by the terms of a Stock
     Award Agreement, the Participant may satisfy any federal, state or local
     tax withholding obligation relating to the exercise or acquisition of
     Common Stock under a Stock Award by any of the following means (in addition
     to the Company's right to withhold from any compensation paid to the
     Participant by the Company) or by a combination of such means:  (i)
     tendering a cash payment; (ii) authorizing the Company to withhold shares
     of Common Stock from the shares of Common Stock otherwise issuable to the
     Participant as a result of the exercise or acquisition of Common Stock
     under the Stock Award, provided, however, that no shares of Common Stock
     are withheld with a value exceeding the minimum amount of tax required to
     be withheld by law; or (iii) delivering to the Company owned and
     unencumbered shares of Common Stock.

12.  Adjustments upon Changes in Stock.

     The provisions in this Section 12 may be modified by the Board, Committee
or the person or persons delegated the authority to make Stock Awards under
Section 3 with respect to a particular Stock Award as provided in the pertinent
Stock Award Agreement.

(a)  Capitalization Adjustments.  If any change is made in the stock subject to
     the Plan, or subject to any Stock Award, without the receipt of
     consideration by the Company (through merger, consolidation,
     reorganization, recapitalization, reincorporation, stock dividend,

                                       15
<PAGE>

     dividend in property other than cash, stock split, liquidating dividend,
     combination of shares, exchange of shares, change in corporate structure or
     other transaction not involving the receipt of consideration by the
     Company), the Plan will be appropriately adjusted in the class(es) and
     maximum number of securities subject to the Plan pursuant to subsection
     4(a) and the maximum number of securities subject to award to any person
     pursuant to subsection 5(c), and the outstanding Stock Awards will be
     appropriately adjusted in the class(es) and number of securities and price
     per share of stock subject to such outstanding Stock Awards. The Board
     shall make such adjustments, and its determination shall be final, binding
     and conclusive. (The conversion of any convertible securities of the
     Company shall not be treated as a transaction "without receipt of
     consideration" by the Company.)

(b)  Dissolution or Liquidation.  In the event of a dissolution or liquidation
     of the Company, then all outstanding Stock Awards shall terminate
     immediately prior to such event.

(c)  Asset Sale, Merger, Consolidation or Reverse Merger.

     (i)   In the event of a "Change of Control" (as defined below), the
           surviving corporation or acquiring corporation shall assume any Stock
           Awards outstanding under the Plan or shall substitute similar stock
           awards (including an award to acquire the same consideration paid to
           the stockholders in the transaction constituting a "Change of
           Control" for those outstanding under the Plan). In the event such
           surviving corporation or acquiring corporation in the "Change of
           Control" refuses to assume such Stock Awards or to substitute similar
           stock awards for those outstanding under the Plan, then with respect
           to Stock Awards held by Participants whose Continuous Service has not
           terminated, the vesting of such Stock Awards (and, if applicable, the
           time during which such Stock Awards may be exercised) shall be
           accelerated in full, and the Stock Awards shall terminate if not
           exercised (if applicable) at or prior to such event. With respect to
           any other Stock Awards outstanding under the Plan, such Stock Awards
           shall terminate if not exercised (if applicable) prior to such event

     (ii)  If within twelve (12) months following the effective date of a
           "Change of Control," the employment of a Participant is terminated
           without Cause, then with respect to Stock Awards held by Participants
           whose Continuous Service was not terminated prior to the effective
           date of the "Change of Control," the vesting of such Stock Awards
           (and, if applicable, the time during which such Stock Awards may be
           exercised) shall be accelerated in full, and the Stock Awards shall
           be exercisable as provided in this Plan or the Participant's Stock
           Award Agreement.

     (iii) For purposes of this Section 12(c), a "Change of Control" shall mean
           any one of the following transactions or events: the following
           transactions ((i) a dissolution or liquidation of the Company; (ii) a
           sale of all or substantially all of the assets of the Company; (iii)
           a merger or consolidation in which the Company is not the surviving
           corporation and in which beneficial ownership of securities of the
           Company representing at least fifty percent (50%) of the combined
           voting power entitled to vote in the election of Directors has
           changed; (iv) a reverse merger in which the Company is the surviving
           corporation but the shares of Common Stock outstanding immediately
           preceding the merger are converted by virtue of the merger into other
           property, whether in the form of securities, cash or otherwise, and
           in which beneficial ownership of securities of the Company
           representing at least fifty percent (50%) of the

                                       16
<PAGE>

           combined voting power entitled to vote in the election of Directors
           has changed; (v) an acquisition by any person, entity or group within
           the meaning of Section 13(d) or 14(d) of the Exchange Act, or any
           comparable successor provisions (excluding any employee benefit plan,
           or related trust, sponsored or maintained by the Company or
           subsidiary of the Company or other entity controlled by the Company)
           of the beneficial ownership (within the meaning of Rule 13d-3
           promulgated under the Exchange Act, or comparable successor rule) of
           securities of the Company representing at least fifty percent (50%)
           of the combined voting power entitled to vote in the election of
           Directors; or (vi) in the event that the individuals who, as of the
           Listing Date, are members of the Company's Board (the "Incumbent
           Board"), cease for any reason to constitute at least fifty percent
           (50%) of the Board. If the election, or nomination for election by
           the Company's stockholders, of any new Director is approved by a vote
           of at least fifty percent (50%) of the Incumbent Board, such new
           Director shall be considered to be a member of the Incumbent Board in
           the future. Notwithstanding the foregoing, the initial public
           offering of the common stock of the Company shall not constitute a
           Change of Control.

13.  Amendment of the Plan and Stock Awards.

(a)  Amendment of Plan.  The Board at any time, and from time to time, may amend
     the Plan.  However, except as provided in Section 12 relating to
     adjustments upon changes in Common Stock, no amendment shall be effective
     unless approved by the Stockholders of the Company to the extent
     shareholder approval is necessary to satisfy the requirements of Section
     422 of the Code, Rule 16b-3 or any Nasdaq or securities exchange listing
     requirements.

(b)  Shareholder Approval.  The Board may, in its sole discretion, submit any
     other amendment to the Plan for shareholder approval, including, but not
     limited to, amendments to the Plan intended to satisfy the requirements of
     Section 162(m) of the Code and the regulations thereunder regarding the
     exclusion of performance-based compensation from the limit on corporate
     deductibility of compensation paid to certain executive officers.

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

(d)  No Impairment of Rights.  Rights under any Stock Award granted before
     amendment of the Plan shall not be impaired by any amendment of the Plan
     unless (i) the Company requests the consent of the Participant and (ii) the
     Participant consents in writing.

(e)  Amendment of Stock Awards.  The Board at any time, and from time to time,
     may amend the terms of any one or more Stock Awards; provided, however,
     that the rights under any Stock Award shall not be impaired by any such
     amendment unless (i) the Company requests the consent of the Participant
     and (ii) the Participant consents in writing.

14.  Termination or Suspension of the Plan.

(a)  Plan Term.  The Board may suspend or terminate the Plan at any time.
     Unless sooner terminated, the Plan shall terminate on the day before the
     tenth (10th) anniversary of the

                                       17
<PAGE>

     date the Plan is adopted by the Board or approved by the Stockholders of
     the Company, whichever is earlier. No Stock Awards may be granted under the
     Plan while the Plan is suspended or after it is terminated.

(b)  No Impairment of Rights.  Suspension or termination of the Plan shall not
     impair rights and obligations under any Stock Award granted while the Plan
     is in effect except with the written consent of the Participant.

15.  Effective Date of Plan.

     The Plan shall become effective as determined by the Board, but no Stock
Award shall be exercised (or, in the case of a stock bonus, shall be granted)
unless and until the Plan has been approved by the Stockholders of the Company,
which approval shall be within twelve (12) months before or after the date the
Plan is adopted by the Board.

16.  Choice of Law.

     The law of the State of Delaware shall govern all questions concerning the
construction, validity and interpretation of this Plan, without regard to such
state's conflict of laws rules.

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