Document:

<PAGE>

                                                                   EXHIBIT 10.11

                           BARRIER THERAPEUTICS, INC.

                       RESTRICTED STOCK PURCHASE AGREEMENT

         THIS AGREEMENT is made as of August 1, 2002 by and between BARRIER
THERAPEUTICS, INC., a Delaware corporation (the "Company") and Anne M. VanLent
(the "Purchaser").

         The parties agree as follows:

         1.       Sale of Stock. The Company hereby agrees to sell to the
Purchaser and the Purchaser hereby agrees to purchase an aggregate of 200,000
shares of the Company's Common Stock, par value $0.0001 per share at a purchase
price of $.30 per share (the "Shares"), for an aggregate purchase price of
$60,000.00 (the "Purchase Price").

         2.       Payment of Purchase Price. The payment of the purchase price
shall be by cash, check, by promissory note in a form approved by the Board
of Directors of the Company or compensation committee thereof or any
combination thereof. The Company acknowledges payment by the Purchaser for the
Shares of $20.00 in cash (representing par value of the shares at $0.0001 per
share) and $59,980 via a promissory note between the Purchaser and the Company
dated August 1, 2002. The purchase price is equal to the Fair Market Value (as
defined in the Company's Equity Compensation Plan) of the Shares on the date of
purchase.

         3.       Repurchase Option.

                  (a)      Subject to the provisions of Section 4 below, in the
event of any voluntary or involuntary termination of Purchaser's employment by,
or services to, the Company for any or no reason (including death or disability)
before all of the Shares are released from the Company's Repurchase Option (as
defined below), the Company shall, upon the date of such termination (as
reasonably fixed and determined by the Company), have an irrevocable, exclusive
option, but not the obligation, for a period of ninety (90) days from such date
to repurchase all or any portion of the unreleased Shares (pursuant to Section
4) at such time (the "Repurchase Option") at the original purchase price per
share (the "Repurchase Price"). The Repurchase Option shall be exercisable by
the Company by written notice to the Purchaser or the Purchaser's executor and
shall be exercisable, at the Company's option (i) by delivery to the Purchaser
or the Purchaser's executor with such notice of a check in the amount of the
purchase price for the Shares being repurchased, (ii) by cancellation by the
Company of an amount of the Purchaser's indebtedness, if any, to the Company
equal to the purchase price for the Shares being repurchased or (iii) by a
combination of (i) and (ii) so that the combined payment and cancellation of
indebtedness equals the Repurchase Price times the number of shares to be
repurchased (the "Aggregate Repurchase Price"). Upon delivery of such notice and
the payment of the Aggregate Repurchase Price in any of the ways described
above, the Company shall become the legal and beneficial owner of the Shares
being repurchased and all rights and interests therein or relating thereto, and
the Company shall have the right to retain and transfer to its own name the
number of Shares being repurchased by the Company. The Repurchase Option set
forth in this Section may be assigned by the Company in whole or in part in its
sole and unfettered discretion.

<PAGE>

                  (b)      In the event of any stock dividend, stock split,
recapitalization or other change affecting the Company's outstanding common
stock as a class effected without receipt of consideration, then any new,
substituted or additional securities or other property (including money paid
other than as a regular cash dividend) which is by reason of any such
transaction distributed with respect to the Shares shall be immediately subject
to the Repurchase Option, but only to the extent the Shares are at the time
covered by such right. Appropriate adjustments to reflect the distribution of
such securities or property shall be made to the number of Shares hereunder and
to the price per share to be paid upon the exercise of the Repurchase Option in
order to reflect the effect of any such transaction upon the Company's capital
structure; provided, however, that the aggregate Purchase Price shall remain the
same.

         4.       Release of Shares From Repurchase Option. The Shares shall be
released from the Repurchase Option as follows:

<TABLE>
<CAPTION>

                                                                     PERCENTAGE OF SHARES FOR WHICH THE SHARES
                             DATE                                     ARE RELEASED FROM THE REPURCHASE OPTION
--------------------------------------------------------------------------------------------------------------
<S>                                                                  <C>
                        August 1, 2002                                                 16.66%
--------------------------------------------------------------------------------------------------------------
                       September 1, 2002                                                8.33%
--------------------------------------------------------------------------------------------------------------
                       September 1, 2003                                               18.75%
--------------------------------------------------------------------------------------------------------------
Monthly beginning on September 30, 2003 through April 30, 2006                        1.8145%
</TABLE>

         Notwithstanding anything to the contrary, in the event that the
Purchaser's employment with the Company is terminated (i) as a result of his or
her Disability (as defined in the Employment Agreement dated the date hereof
between the Company and the Purchaser (the "Employment Agreement")) or (ii) as a
result of his or her death or termination of employment by the Company without
Cause (as defined in the Employment Agreement), the Repurchase Option shall
apply solely with respect to seventy five percent (75%), in the case of clause
(i), and fifty percent (50%), in the case of clause (ii), of the shares that
have not been released from the Repurchase Option as of the Termination Date (as
defined in the Employment Agreement).

         The release of shares from the Repurchase Option is cumulative, but
shall not exceed 100%. If the foregoing schedule would produce fractional
Shares, the number of Shares for which the Repurchase Option is released shall
be rounded down to the nearest whole Share.

         5.       Restriction on Transfer. None of the Shares or any beneficial
interest therein shall be transferred, encumbered or otherwise disposed of in
any manner until the release of such Shares from the Repurchase Option in
accordance with the provisions of this Agreement.

         6.       Company's Right of First Refusal. Before any Shares held by
Purchaser or any transferee (either being sometimes referred to herein as the
"Holder") may be sold or otherwise transferred (including transfer by gift or
operation of law), the Company or its assignee(s) shall have a right of first
refusal to purchase the Shares on the terms and conditions set forth in this
Section (the "Right of First Refusal").

                                      - 2 -
<PAGE>

                  (a)      Notice of Proposed Transfer. The Holder of the Shares
shall deliver to the Company a written notice (the "Notice") stating: (i) the
Holder's bona fide intention to sell or otherwise transfer such Shares; (ii) the
name of each proposed purchaser or other transferee ("Proposed Transferee");
(iii) the number of Shares to be transferred to each Proposed Transferee (the
"Offered Shares"); and (iv) the bona fide cash price or other consideration for
which the Holder proposes to transfer the Shares (the "Offered Price"), and the
Holder shall offer the Shares at the offered Price to the Company or its
assignee(s).

                  (b)      Exercise of Right of First Refusal. At any time
within thirty (30) days after receipt of the Notice, the Company and/or its
assignee(s) may, by giving written notice to the Holder, elect to purchase all
or any of the Offered Shares proposed to be transferred to any one or more of
the Proposed Transferees, at the purchase price determined in accordance with
subsection (c) below.

                  (c)      Purchase Price. The purchase price ("Purchase Price")
for the Offered Shares purchased by the Company or its assignee(s) under this
Section shall be the Offered Price. If the Offered Price includes consideration
other than cash, the cash equivalent value of the non-cash consideration shall
be determined by the Board of Directors of the Company in good faith.

                  (d)      Payment. Payment of the Purchase Price shall be made,
at the option of the Company or its assignee(s), in cash (by check), by
cancellation of all or a prior of any outstanding indebtedness of the Holder to
the Company (or, in the case of repurchase by an assignee, to the assignee), or
by any combination thereof within thirty (30) days after receipt of the Notice
or in the manner and at the times set forth in the Notice.

                  (e)      Holder's Right to Transfer. If all of the Offered
Shares proposed in the Notice to be transferred to a given Proposed Transferee
are not purchased by the Company and/or its assignee(s) as provided in this
Section 6, then the Holder may sell or otherwise transfer such Offered Shares or
the remaining Offered Shares to that Proposed Transferee at the Offered Price or
at a higher price, provided that such sale or other transfer is consummated
within forty-five (45) days after the date of the Notice, that any such sale or
other transfer is effected in accordance with any applicable securities laws and
that the Proposed Transferee agrees in writing that the provisions of this
Section shall continue to apply to the Offered Shares purchased by such Proposed
Transferee. If the Offered Shares described in the Notice are not transferred to
the Proposed Transferee within such period, a new Notice shall be given to the
Company, and the Company and/or its assignees shall again be offered the Right
of First Refusal before any Shares held by the Holder may be sold or otherwise
transferred.

                  (f)      Exception for Certain Transfers. Notwithstanding
anything to the contrary contained in this Section 6, the Company's right of
first refusal shall not be applicable provided the Purchaser receives prior
written consent from the Company to (i) a gratuitous transfer of the Shares made
to the Purchaser's spouse or issue, including adopted children, or to a trust
for the exclusive benefit of the Purchaser or the Purchaser's spouse or issue,
(ii) a transfer of title to the Shares effected pursuant to the Purchaser's will
or the laws of intestate succession or (iii) a transfer to the Company in pledge
as security for any purchase-money indebtedness incurred by the Purchaser in
connection with the acquisition of the Shares.

                                      - 3 -
<PAGE>

                  (g)      Termination of Right of First Refusal. The Right of
First Refusal shall terminate as to any Shares upon the first sale of Common
Stock of the Company to the general public pursuant to a registration statement
filed with and declared effective by the Commission under the Securities Act of
1933, as amended (the "Securities Act").

                  (h)      Opinion of Counsel. If requested by the Company,
Purchaser shall provide the Company an opinion of counsel in form and substance
satisfactory to the Company, that (i) the proposed disposition does not require
registration of such transferred Shares under the Securities Act or (ii) all
appropriate action necessary for compliance with the registration requirements
of the Securities Act or of any exemption from registration available under the
Securities Act (including Rule 144) has been taken.

                  (i)      Non-Compliance. The Company shall not be required (i)
to transfer on its books any Shares that have been sold or transferred in
violation of the provisions of this Section 6 or (ii) to treat as the owner of
such transferred Shares, or otherwise to accord voting or dividend rights to,
any transferee to whom such Shares have been transferred in contravention of
this Agreement.

                  (j)      Recapitalization.

                           (i)      In the event of any stock dividend, stock
split, recapitalization or other transaction affecting the Company's outstanding
common stock as a class effected without receipt of consideration, then any new,
substituted or additional securities or other property which is by reason of
such transaction distributed with respect to the Shares shall be immediately
subject to the Company's First Refusal Right hereunder, but only to the extent
the Shares are at a time covered by such right.

                           (ii)     In the event of a change of control of the
Company, the Company's First Refusal Right shall remain in full force and effect
and shall apply to the new capital stock or other property received in exchange
for the Shares in consummation of such change of control, but only to the extent
the Shares are at the time covered by such right.

         7.       Investment Representations. In connection with purchase of the
Shares, the Purchaser represents to the Company the following:

                  (a)      The Purchaser is aware of the Company's business
affairs and financial condition and has acquired sufficient information about
the Company to reach an informed and knowledgeable decision to acquire the
Shares. The Purchaser is purchasing the Shares for investment for the
Purchaser's own account only and not with a view to, or for resale in connection
with, any "distribution" thereof within the meaning of the Securities Act.

                  (b)      The Purchaser understands that the Shares have not
been registered under the Securities Act by reason of a specific exemption
therefrom, which exemption depends upon, among other things, the bona fide
nature of the Purchaser's investment intent as expressed herein. In this
connection, the Purchaser understands that, in view of the Securities and
Exchange Commission ("Commission"), the statutory basis for such exemption may
not be present if the Purchaser's representations meant that the Purchaser's
present intention was to hold the Shares for a minimum capital gains period
under applicable tax statutes, for a deferred

                                      - 4 -
<PAGE>

sale, for a market rise, for a sale if the market does not rise, or for a year
or any other fixed period in the future.

                  (c)      Purchaser is an executive officer of the Company or
otherwise an Accredited Investor within the definition set forth in Rule 501(a)
of the Securities Act. Purchaser has been given, at a reasonable time prior to
the Closing, an opportunity to ask questions and receive answers concerning the
terms and conditions of the investment in the Shares. Purchaser further
acknowledges and understands that the Shares must be held indefinitely unless
they are subsequently registered under the Securities Act or an exemption from
such registration is available. Purchaser further acknowledges and understands
that the Company is under no obligation to register the Shares. Purchaser
understands that the certificate evidencing the Shares will be imprinted with a
legend which prohibits the transfer of the Shares unless they are registered or
such registration is not required in the opinion of counsel satisfactory to the
Company.

                  (d)      Purchaser is a resident in the state set forth on the
signature page below Purchaser's name.

                  (e)      Purchaser has the requisite power and authority to
enter into this Agreement and to carry out its obligations hereunder. The
execution, delivery and performance of this Agreement by Purchaser has been duly
and validly authorized and no other proceedings on its part are necessary to
authorize this Agreement or the transactions contemplated hereby. This Agreement
is a valid and binding agreement of Purchaser, enforceable against such
Purchaser in accordance with its terms except as may be limited by bankruptcy
and insolvency laws and by other laws affecting the rights of creditors
generally and except as may be limited by the availability of equitable remedies
and except as rights of indemnity or contribution may be limited by federal or
state securities or other laws or the public policy underlying such laws. The
execution and delivery of this Agreement does not and consummation of the
transactions contemplated hereby, will not, result in or constitute (i) a
default, breach or violation of any agreement or governing documents, as the
case may be, to which Purchaser is a party or by which Purchaser may be bound,
or (ii) a violation of any statute, rule, regulation, order, judgment or decree
of any court, public body or authority, which violation would have a material
adverse effect on Purchaser.

                  (f)      Purchaser acknowledges that (i) its investment in the
Shares is speculative and involves a high degree of risk, (ii) it has such
knowledge and experience in financial and business matters as is necessary to
enable it to evaluate the merits and risks of an investment in the Shares, and
(iii) it has no present need for liquidity in their investment in the Shares and
are able to bear the risk of that investment for an indefinite period and to
afford a complete loss thereof.

         8.       Stock Certificate Legends. The share certificate evidencing
the Shares issued hereunder shall be endorsed with the following legends:

                  (a)      THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE
OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION

                                      - 5 -
<PAGE>

MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR
AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER THE SECURITIES ACT OF 1933.

                  (b)      THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE
TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE
COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF
THE COMPANY.

                  (c)      Any legend required by any applicable state
securities laws.

         9.       Market Stand-Off Agreement.

                  (a)      The Purchaser hereby agrees, if so requested by the
managing underwriters or the Company in connection with the initial public
offering of the Company's Common Stock, that, without the prior written consent
of such managing underwriters, the Purchaser will not offer, sell, contact to
sell, grant any option to purchase, make any short sale or otherwise dispose of,
assign any legal or beneficial interest in or make a distribution of any capital
stock of the Company held by or on behalf of the Purchaser or beneficially owned
by the Purchaser in accordance with the rules and regulations of the Securities
and Exchange Commission for a period of up to one hundred eighty (180) days
after the date of the final prospectus relating to the Company's initial public
offering.

                  (b)      In the event of any stock dividend, stock split,
split, recapitalization, or other change affecting the Company's outstanding
common stock effected without receipt of consideration, then any new,
substituted, or additional securities distributed with respect to the Shares
shall be immediately subject to the provisions of this Section 9, to the same
extent the Shares are at such time covered by such provisions.

                  (c)      In order to enforce the provisions of this Section 9,
the Company may impose stop-transfer instructions with respect to the Shares
until the end of the applicable stand-off period.

         10.      Adjustment for Stock Split. All references to the number of
Shares and the purchase price of the Shares in this Agreement shall be
appropriately adjusted to reflect any stock split, reverse stock split or stock
dividend or other similar change in the Shares which may be made by the Company
after the date of this Agreement.

         11.      Tax Consequences. The Purchaser has reviewed with the
Purchaser's own tax advisors the federal, state, local and foreign tax
consequences of this investment and the transactions contemplated by this
Agreement. The Purchaser is relying solely on such advisors and not on any
statements or representations of the Company or any of its agents., The
Purchaser understands that the Purchaser (and not the Company) shall be
responsible for the Purchaser's own tax liability that may arise as a result of
this investment or the transactions contemplated by this Agreement. The
Purchaser understands that Section 83 of the Internal Revenue Code of 1986, as
amended (the "Code"), taxes as ordinary income both (i) the difference between
the fair market value of the Shares when the Company granted the Purchaser

                                      - 6 -
<PAGE>

the right to purchase the Shares and the fair market value of the Shares on the
date of this Agreement and (ii) the difference between the amount paid for the
Shares and the fair market value of the Shares as of the date any restrictions
on the Shares lapse. In this context, "restriction" includes the right of the
Company to buy back the Shares pursuant to its repurchase option. In the event
the Company has registered under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), "restriction" with respect to officers, directors and 10%
stockholders also means the period after the purchase of the Shares during which
such officers, directors and 10% stockholder could be subject to suit under
Section 16(b) of the Exchange Act. The Purchaser understands that the Purchaser
may elect to be taxed at the time the Shares are purchased rather than when and
as the Company's repurchase option or 16(b) period expires by filing an election
under Section 83(b) of the Code with the IRS within thirty (30) days from the
date of purchase. The form for making this election is attached as Exhibit A
hereto.

         THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE
RESPONSIBILITY AND NOT THE COMPANY'S TO TIMELY FILE THE ELECTION UNDER SECTION
83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE
THIS FILING ON THE PURCHASER'S BEHALF.

         12.      General Provisions.

                  (a)      This Agreement shall be governed by the laws of the
Sate of New Jersey. This Agreement represents the entire agreement between the
parties with respect to the purchase of Common Stock by the Purchaser and may
only be modified or amended in writing signed by both parties.

                  (b)      Any notice, demand or request required or permitted
to be given by either the Company or the Purchaser pursuant to the terms of this
Agreement shall be in writing and shall be deemed given when delivered
personally or deposited in the U.S. mail, first Class with postage prepaid, and
addressed to the parties at the addresses of the parties set forth at the end of
this Agreement or such other address as a party may request by notifying the
other in writing.

                  (c)      The rights and benefits of the Company under this
Agreement shall be transferable to any one or more persons or entities, and all
covenants and agreements hereunder shall inure to the benefit of, and be
enforceable by the Company's successors and assigns. The rights and obligations
of the Purchaser under this Agreement may only be assigned with the prior
written consent of the Company and any purported transfer otherwise shall be
null and void.

                  (d)      Either party's failure to enforce any provision or
provisions of this Agreement shall not in any way be construed as a wavier of
any such provision or provisions, nor prevent that that party thereafter from
enforcing each and every other provision of this Agreement. The rights granted
both parties herein are cumulative and shall not constitute a waiver of either
party's right to assert all other legal remedies available to it under the
circumstances.

                  (e)      The Purchaser agrees upon request to execute any
further documents or instruments necessary or desirable to carry out the
purposes or intent of this Agreement.

                                      - 7 -
<PAGE>

                  (f)      PURCHASER ACKNOWLEDGES AND AGREES THAT THE LAPSING OF
THE REPURCHASE OPTION PURSUANT TO SECTION 4 HEREOF IS EARNED ONLY BY CONTINUING
SERVICE AS AN AT-WILL EMPLOYEE OF, OR SERVICE PROVIDER TO, THE COMPANY (AND NOT
THROUGH THE ACT OF BEING HIRED OR PURCHASING SHARES HEREUNDER). PURCHASER
FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS
CONTEMPLATED HEREUNDER AND THE REPURCHASE OPTION SCHEDULE SET FORTH HEREIN DO
NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS AN
EMPLOYEE OR SERVICE PROVIDER FOR SUCH PERIOD, FOR ANY PERIOD OR AT ALL, AND
SHALL NOT INTERFERE WITH THE COMPANY'S RIGHT TO TERMINATE PURCHASER'S EMPLOYMENT
OR SERVICE RELATIONSHIP AT ANY TIME, WITH OR WITHOUT CAUSE.

                  (g)      Purchaser has reviewed this Agreement in its
entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Agreement and fully understands all provisions of this Agreement.

                            [SIGNATURE PAGE FOLLOWS]

                                      - 8 -
<PAGE>

         IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first set forth above.

BARRIER THERAPEUTICS, INC.                    PURCHASER(1)
a Delaware corporation

By: /s/ Geert Cauwenbergh                     By: /s/ Anne M. VanLent
    ----------------------------------------      ------------------------------
        Name: Geert Cauwenbergh                       Anne M. VanLent
        Title: Chief Executive Officer

Address:                                      Address:

                  100 Overlook Center                    33 Governor's Lane
                  Suite 200                              Princeton, NJ  08540
                  Princeton, NJ  08540

--------
(1) I have received the I.R.C. Section 83(b) election that was attached hereto
as Exhibit A. As set forth in Section 11, I understand that I, and not the
Corporation, will be responsible for completing the form and filing the election
with the appropriate office of the federal and state tax authorities and that if
such filing is not completed within thirty (30) days after the date of this
Agreement, I will forfeit the significant tax benefits of Section 83(b). I
understand further that such filing should be made by registered or certified
mail, return receipt requested, and that I must retain two (2) copies of the
completed form for filing with my state and federal tax returns for the current
tax year and an additional copy for my records.

                                      - 9 -
<PAGE>

                                    EXHIBIT A

                             SECTION 83(b) ELECTION

This election is being made under Section 83(b) of the Internal Revenue Code of
1986, as amended, pursuant to Treasury Regulation Section 1.83-2.

         (1)      Name of taxpayer making election: Anne M. VanLent

                  Address: 33 Governor's Lane
                           Princeton, NJ  08540
                  Social Security Number: _______________________________

                  Tax Year for which election is being made: ____________

         (2)      The property with respect to which the election is being made
consists of 200,000 shares of common stock of Barrier Therapeutics, Inc., a
Delaware corporation (the "Common Stock").

         (3)      Date the property was transferred: June 20, 2002.

         (4)      Forfeiture provision: The stock is subject to repurchase by
the Company if the taxpayer ceases to be employed by the Company during the
restriction period. The restriction period lapses according to the following
schedule:

<TABLE>
<CAPTION>
                                                                     PERCENTAGE OF SHARES FOR WHICH THE SHARES
                             DATE                                     ARE RELEASED FROM THE REPURCHASE OPTION
--------------------------------------------------------------------------------------------------------------
<S>                                                                  <C>
                         July 1, 2002                                                   8.33%
--------------------------------------------------------------------------------------------------------------
                        August 1, 2002                                                  8.33%
--------------------------------------------------------------------------------------------------------------
                       September 1, 2002                                                8.33%
--------------------------------------------------------------------------------------------------------------
                       September 1, 2003                                               18.75%
--------------------------------------------------------------------------------------------------------------
Monthly beginning on September 30, 2003 through April 30, 2006                        1.8145%
</TABLE>

         (5)      The fair market value at the time of the transfer of the stock
(determined without regard to any restriction other than a restriction which by
its terms will never lapse) is $.30 per share.

         (6)      The amount paid for the stock is $.30 per share ($60,000
aggregate consideration).

         (7)      A copy of this statement has been furnished to the Company.

         (8)      This statement is executed as of June __, 2002.

______________________________                     _____________________________
Taxpayer                                           Spouse (if applicable)<PAGE>

                                                                   EXHIBIT 10.16

                           BARRIER THERAPEUTICS, INC.

                            2004 STOCK INCENTIVE PLAN

                                  ARTICLE ONE

                               GENERAL PROVISIONS

         I.       PURPOSE OF THE PLAN

                  This 2004 Stock Incentive Plan is intended to promote the
interests of Barrier Therapeutics, Inc., a Delaware corporation, by providing
eligible persons in the Corporation's service with the opportunity to acquire a
proprietary interest, or otherwise increase their proprietary interest, in the
Corporation as an incentive for them to remain in such service.

                  Capitalized terms shall have the meanings assigned to such
terms in the attached Appendix.

         II.      STRUCTURE OF THE PLAN

                  A.       The Plan shall be divided into four separate equity
incentive programs:

                           -        the Discretionary Grant Program under which
eligible persons may, at the discretion of the Plan Administrator, be granted
options to purchase shares of Common Stock or stock appreciation rights tied to
the value of such Common Stock,

                           -        the Salary Investment Option Grant Program
under which eligible employees may elect to have a portion of their base salary
invested in special option grants in one or more years for which the Plan
Administrator implements such program,

                           -        the Stock Issuance Program under which
eligible persons may, at the discretion of the Plan Administrator, be issued
shares of Common Stock pursuant to restricted stock awards, restricted stock
units or other share right awards which vest upon the completion of a designated
service period or the attainment of pre-established performance milestones, or
such shares of Common Stock may be issued through direct purchase or as a bonus
for services rendered the Corporation (or any Parent or Subsidiary), and

                           -        the Automatic Option Grant Program under
which eligible non-employee Board members will automatically receive option
grants at designated intervals over their period of continued Board service.

<PAGE>

                  B.       The provisions of Articles One and Six shall apply to
all equity programs under the Plan and shall govern the interests of all persons
under the Plan.

         III.     ADMINISTRATION OF THE PLAN

                  A.       The Compensation Committee is hereby appointed by the
Board to serve as the Plan Administrator and in that capacity shall have the
sole and exclusive authority to administer the Discretionary Grant and Stock
Issuance Programs with respect to Section 16 Insiders. The Board hereby vests
the Compensation Committee with the authority to administer the Discretionary
Grant and Stock Issuance Programs with respect to all other persons eligible to
participate in those programs; provided, however, that the Board may at any
time, in its discretion, appoint a secondary committee of one or more Board
members to have separate but concurrent jurisdiction with the Compensation
Committee to administer those programs with respect to persons other than
Section 16 Insiders or exercise such separate but concurrent authority itself.

                  B.       The Compensation Committee as Plan Administrator
shall have full power and authority (subject to the provisions of the Plan) to
establish such rules and regulations as it may deem appropriate for proper
administration of the Discretionary Grant and Stock Issuance Programs and to
make such determinations under, and issue such interpretations of, the
provisions of those programs and any outstanding stock options, stock
appreciation rights, stock issuances or other stock-based awards thereunder as
it may deem necessary or advisable. Decisions of the Plan Administrator shall be
final and binding on all parties who have an interest in the Discretionary Grant
and Stock Issuance Programs or any stock option, stock appreciation right, stock
issuance or other stock-based award thereunder.

                  C.       The Compensation Committee as Plan Administrator
shall have the sole and exclusive authority to determine which Section 16
Insiders and other highly compensated Employees shall be eligible for
participation in the Salary Investment Option Grant Program for one or more
calendar years. However, all option grants under the Salary Investment Option
Grant Program shall be made in accordance with the express terms of that
program, and the Plan Administrator shall not exercise any discretionary
functions with respect to the option grants made under that program.

                  D.       Service as the Plan Administrator shall constitute
service as a Board member, and the individuals serving in that capacity shall
accordingly be entitled to full indemnification and reimbursement as Board
members for their service as Plan Administrator. No individual serving in his or
her capacity as Plan Administrator shall be liable for any act or omission made
in good faith with respect to the Plan or any stock option, stock appreciation
right, stock issuance or other stock-based award made or granted under the Plan.

                  E.       Administration of the Automatic Option Grant Program
shall be self-executing in accordance with the terms of those programs, and the
Plan Administrator not shall exercise any discretionary functions with respect
to any option grants or stock issuances made under such program.

                                       2
<PAGE>

         IV.      ELIGIBILITY

                  A.       The persons eligible to participate in the
Discretionary Grant and Stock Issuance Programs are as follows:

                           (i)      Employees,

                           (ii)     non-employee members of the Board or the
         board of directors of any Parent or Subsidiary, and

                           (iii)    consultants and other independent advisors
         who provide services to the Corporation (or any Parent or Subsidiary).

                  B.       Only Employees who are Section 16 Insiders or other
highly compensated individuals shall be eligible to participate in the Salary
Investment Option Grant Program.

                  C.       The Plan Administrator shall have full authority to
determine, (i) with respect to the grant of options or stock appreciation rights
under the Discretionary Grant Program, which eligible persons are to receive
such grants, the time or times when those grants are to be made, the number of
shares to be covered by each such grant, the status of a granted option as
either an Incentive Option or a Non-Statutory Option, the time or times when
each option or stock appreciation right is to become exercisable, the vesting
schedule (if any) applicable to the option or stock appreciation right and the
maximum term for which the option or stock appreciation right is to remain
outstanding and (ii) with respect to stock issuances or other stock-based awards
under the Stock Issuance Program, which eligible persons are to receive such
issuances or awards, the time or times when the issuances or awards are to be
made, the number of shares subject to each such issuance or award, the vesting
schedule (if any) applicable to the shares which are the subject of such
issuance or award and the consideration for those shares.

                  D.       The Plan Administrator shall have the absolute
discretion either to grant options or stock appreciation right in accordance
with the Discretionary Grant Program or to effect stock issuances and other
stock-based awards in accordance with the Stock Issuance Program.

                  E.       The individuals who shall be eligible to participate
in the Automatic Option Grant Program shall be limited to (i) those individuals
who first become non-employee Board members on or after the Underwriting Date,
whether through appointment by the Board or election by the Corporation's
stockholders, and (ii) those individuals who continue to serve as non-employee
Board members at one or more Annual Stockholders Meetings held after the
Underwriting Date. A non-employee Board member who has previously been in the
employ of the Corporation (or any Parent or Subsidiary) shall not be eligible to
receive an option grant under the Automatic Option Grant Program at the time he
or she first becomes a non-employee Board member, but shall be eligible to
receive periodic option grants under the Automatic Option Grant Program while he
or she continues to serve as a non-employee Board member.

                                       3
<PAGE>

         V.       STOCK SUBJECT TO THE PLAN

                  A.       The stock issuable under the Plan shall be shares of
authorized but unissued or reacquired Common Stock, including shares repurchased
by the Corporation on the open market. The number of shares of Common Stock
initially reserved for issuance over the term of the Plan shall not exceed
2,037,500 shares. Such reserve shall consist of (i) the number of shares
estimated to remain available for issuance, as of the Plan Effective Date, under
the Predecessor Plan as last approved by the Corporation's stockholders,
including the shares subject to outstanding options under the Predecessor Plan
transferred to this Plan, (ii) plus an additional increase of approximately
500,000 shares to be approved by the Corporation's stockholders prior to the
Underwriting Date.

                  B.       The number of shares of Common Stock available for
issuance under the Plan shall automatically increase on the first trading day of
January each calendar year during the term of the Plan, beginning with calendar
year 2005, by an amount equal to five percent (5%) of the total number of shares
of Common Stock outstanding on the last trading day in December of the
immediately preceding calendar year, but in no event shall any such annual
increase exceed 1,000,000 shares.

                  C.       No one person participating in the Plan may receive
stock options, stand-alone exercisable stock appreciation rights, direct stock
issuances (whether vested or unvested) or other stock-based awards (whether in
the form of restricted stock units or other share-right awards) for more than
1,250,000 shares of Common Stock in the aggregate per calendar year.

                  D.       Shares of Common Stock subject to outstanding options
(including options transferred to this Plan from the Predecessor Plan) or other
awards made under the Plan shall be available for subsequent issuance under the
Plan to the extent (i) those options or awards expire or terminate for any
reason prior to the issuance of the shares of Common Stock subject to those
options or awards or (ii) the awards are cancelled in accordance with the
exchange/ repricing provisions of Article Two. Unvested shares issued under the
Plan and subsequently forfeited or repurchased by the Corporation, at a price
per share not greater than the original issue price paid per share, pursuant to
the Corporation's repurchase rights under the Plan shall be added back to the
number of shares of Common Stock reserved for issuance under the Plan and shall
accordingly be available for subsequent reissuance. Should the exercise price of
an option under the Plan be paid with shares of Common Stock, then the
authorized reserve of Common Stock under the Plan shall be reduced only by the
net number of shares issued under the exercised stock option. Should shares of
Common Stock otherwise issuable under the Plan be withheld by the Corporation in
satisfaction of the withholding taxes incurred in connection with the exercise
of an option or stock appreciation right or the issuance of fully-vested shares
under the Stock Issuance Program, then the number of shares of Common Stock
available for issuance under the Plan shall be reduced only by the net number of
shares issued under the exercised

                                       4
<PAGE>

stock option or stock appreciation right or the net number of fully-vested
shares issued under the Stock Issuance Program. Such withholding shall in effect
be treated under the Plan as a cash bonus, payable directly to the applicable
taxing authorities on behalf of the individual concerned, in an amount equal to
the Fair Market Value of the withheld shares, and not as an issuance and
immediate repurchase of those shares.

                  E.       If any change is made to the Common Stock by reason
of any stock split, stock dividend, recapitalization, combination of shares,
exchange of shares or other change affecting the outstanding Common Stock as a
class without the Corporation's receipt of consideration, appropriate
adjustments shall be made by the Plan Administrator to (i) the maximum number
and/or class of securities issuable under the Plan, (ii) the maximum number
and/or class of securities for which any one person may be granted stock
options, stand-alone stock appreciation rights, direct stock issuances and other
stock-based awards under the Plan per calendar year, (iii) the number and/or
class of securities for which grants are subsequently to be made under the
Automatic Option Grant Program to new and continuing non-employee Board members,
(iv) the number and/or class of securities and the exercise or base price per
share in effect under each outstanding option or stock appreciation right under
the Plan, (v) the number and/or class of securities subject to each outstanding
restricted stock unit or other stock-based award under the Plan, (vi) the number
and/or class of securities and exercise price per share in effect under each
outstanding option transferred to this Plan from the Predecessor Plan and (vii)
the maximum number and/or class of securities by which the share reserve is to
increase automatically each calendar year pursuant to the provisions of Section
V.B of this Article One. Such adjustments to the outstanding options, stock
appreciation rights or other stock-based awards are to be effected in a manner
which shall preclude the enlargement or dilution of rights and benefits under
those options, stock appreciation rights or other stock-based awards. The
adjustments determined by the Plan Administrator shall be final, binding and
conclusive.

                  F.       Outstanding awards granted pursuant to the Plan shall
in no way affect the right of the Corporation to adjust, reclassify, reorganize
or otherwise change its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or
assets.

                                       5
<PAGE>

                                   ARTICLE TWO

                           DISCRETIONARY GRANT PROGRAM

         I.       OPTION TERMS

                  Each option shall be evidenced by one or more documents in the
form approved by the Plan Administrator; provided, however, that each such
document shall comply with the terms specified below. Each document evidencing
an Incentive Option shall, in addition, be subject to the provisions of the Plan
applicable to such options.

                  A.       EXERCISE PRICE.

                           1.       The exercise price per share shall be fixed
by the Plan Administrator but shall not be less than one hundred percent (100%)
of the Fair Market Value per share of Common Stock on the option grant date.

                           2.       The exercise price shall become immediately
due upon exercise of the option and shall, subject to the provisions of the
documents evidencing the option, be payable in one or more of the forms
specified below:

                                    (i)      cash or check made payable to the
         Corporation,

                                    (ii)     shares of Common Stock held for the
         requisite period necessary to avoid a charge to the Corporation's
         earnings for financial reporting purposes and valued at Fair Market
         Value on the Exercise Date, or

                                    (iii)    to the extent the option is
         exercised for vested shares, through a special sale and remittance
         procedure pursuant to which the Optionee shall concurrently provide
         irrevocable instructions to (a) a brokerage firm (reasonably
         satisfactory to the Corporation for purposes of administering such
         procedure in compliance with the Corporation's
         pre-clearance/pre-notification policies) to effect the immediate sale
         of the purchased shares and remit to the Corporation, out of the sale
         proceeds available on the settlement date, sufficient funds to cover
         the aggregate exercise price payable for the purchased shares plus all
         applicable income and employment taxes required to be withheld by the
         Corporation by reason of such exercise and (b) the Corporation to
         deliver the certificates for the purchased shares directly to such
         brokerage firm in order to complete the sale.

                  Except to the extent such sale and remittance procedure is
utilized, payment of the exercise price for the purchased shares must be made on
the Exercise Date.

                                       6
<PAGE>

                  B.       EXERCISE AND TERM OF OPTIONS. Each option shall be
exercisable at such time or times, during such period and for such number of
shares as shall be determined by the Plan Administrator and set forth in the
documents evidencing the option. However, no option shall have a term in excess
of ten (10) years measured from the option grant date.

                  C.       EFFECT OF TERMINATION OF SERVICE.

                           1.       The following provisions shall govern the
exercise of any options granted pursuant to the Discretionary Grant Program that
are outstanding at the time of the Optionee's cessation of Service:

                                    (i)      Any option outstanding at the time
         of the Optionee's cessation of Service shall remain exercisable for
         such period of time thereafter as shall be determined by the Plan
         Administrator and set forth in the documents evidencing the option, but
         no such option shall be exercisable after the expiration of the option
         term.

                                    (ii)     Any option outstanding at the time
         of the Optionee's death and exercisable in whole or in part at that
         time may be subsequently exercised by the personal representative of
         the Optionee's estate or by the person or persons to whom the option is
         transferred pursuant to the Optionee's will or the laws of inheritance
         or by the Optionee's designated beneficiary or beneficiaries of that
         option.

                                    (iii)    Should the Optionee's Service be
         terminated for Misconduct or should the Optionee otherwise engage in
         Misconduct while holding one or more outstanding options granted under
         this Article Two, then all of those options shall terminate immediately
         and cease to be outstanding.

                                    (iv)     During the applicable post-Service
         exercise period, the option may not be exercised in the aggregate for
         more than the number of vested shares for which that option is at the
         time exercisable. No additional shares shall vest under the option
         following the Optionee's cessation of Service, except to the extent (if
         any) specifically authorized by the Plan Administrator in its sole
         discretion pursuant to an express written agreement with Optionee. Upon
         the expiration of the applicable exercise period or (if earlier) upon
         the expiration of the option term, the option shall terminate and cease
         to be outstanding for any shares for which the option has not been
         exercised.

                           2.       The Plan Administrator shall have complete
discretion, exercisable either at the time an option is granted or at any time
while the option remains outstanding, to:

                                    (i)      extend the period of time for which
         the option is to remain exercisable following the Optionee's cessation
         of Service from the limited exercise period otherwise in effect for
         that option to such greater period of time as

                                       7
<PAGE>

         the Plan Administrator shall deem appropriate, but in no event beyond
         the expiration of the option term, and/or

                                    (ii)     permit the option to be exercised,
         during the applicable post-Service exercise period, not only with
         respect to the number of vested shares of Common Stock for which such
         option is exercisable at the time of the Optionee's cessation of
         Service but also with respect to one or more additional installments in
         which the Optionee would have vested had the Optionee continued in
         Service.

                  D.       STOCKHOLDER RIGHTS. The holder of an option shall
have no stockholder rights with respect to the shares subject to the option
until such person shall have exercised the option, paid the exercise price and
become a holder of record of the purchased shares.

                  E.       REPURCHASE RIGHTS. The Plan Administrator shall have
the discretion to grant options which are exercisable for unvested shares of
Common Stock. Should the Optionee cease Service while such shares are unvested,
the Corporation shall have the right to repurchase any or all of those unvested
shares at a price per share equal to the LOWER of (i) the exercise price paid
per share or (ii) the Fair Market Value per share of Common Stock at the time of
repurchase. The terms upon which such repurchase right shall be exercisable
(including the period and procedure for exercise and the appropriate vesting
schedule for the purchased shares) shall be established by the Plan
Administrator and set forth in the document evidencing such repurchase right.

                  F.       LIMITED TRANSFERABILITY OF OPTIONS. During the
lifetime of the Optionee, options shall be exercisable only by the Optionee and
shall not be assignable or transferable other than by will or by the laws of
inheritance following the Optionee's death. However, the Plan Administrator may
permit an assignment, in whole or in part, during the Optionee's lifetime, of a
Non-Statutory Option, if such assignment is in connection with the Optionee's
estate plan and is to one or more Family Members of the Optionee or to a trust
established exclusively for one or more such Family Members or is pursuant to a
domestic relations order covering the option as marital property. The assigned
portion may only be exercised by the person or persons who acquire a proprietary
interest in the option pursuant to the assignment. The terms applicable to the
assigned portion shall be the same as those in effect for the option immediately
prior to such assignment and shall be set forth in such documents issued to the
assignee as the Plan Administrator may deem appropriate. Notwithstanding the
foregoing, the Optionee may also designate one or more persons as the
beneficiary or beneficiaries of his or her outstanding options under this
Article Two, and the options shall, in accordance with such designation,
automatically be transferred to such beneficiary or beneficiaries upon the
Optionee's death while holding those options. Such beneficiary or beneficiaries
shall take the transferred options subject to all the terms and conditions of
the applicable agreement evidencing each such transferred option, including
(without limitation) the limited time period during which the option may be
exercised following the Optionee's death.

                                       8
<PAGE>

         II.      INCENTIVE OPTIONS

                  The terms specified below shall be applicable to all Incentive
Options. Except as modified by the provisions of this Section II, all the
provisions of Articles One, Two and Six shall be applicable to Incentive
Options. Options which are specifically designated as Non-Statutory Options when
issued under the Plan shall not be subject to the terms of this Section II.

                  A.       ELIGIBILITY. Incentive Options may only be granted to
Employees.

                  B.       DOLLAR LIMITATION. The aggregate Fair Market Value of
the shares of Common Stock (determined as of the respective date or dates of
grant) for which one or more options granted to any Employee under the Plan (or
any other option plan of the Corporation or any Parent or Subsidiary) may for
the first time become exercisable as Incentive Options during any one calendar
year shall not exceed the sum of One Hundred Thousand Dollars ($100,000).

                  To the extent the Employee holds two (2) or more such options
which become exercisable for the first time in the same calendar year, the
foregoing limitation on the exercisability of such options as Incentive Options
shall be applied on the basis of the order in which such options are granted.

                  C.       10% STOCKHOLDER. If any Employee to whom an Incentive
Option is granted is a 10% Stockholder, then the exercise price per share shall
not be less than one hundred ten percent (110%) of the Fair Market Value per
share of Common Stock on the option grant date, and the option term shall not
exceed five (5) years measured from the option grant date.

         III.     STOCK APPRECIATION RIGHTS

                  A.       AUTHORITY. The Plan Administrator shall have full
power and authority, exercisable in its sole discretion, to grant stock
appreciation rights in accordance with this Section III to selected Optionees or
other individuals eligible to receive option grants under the Discretionary
Grant Program.

                  B.       TYPES. Three types of stock appreciation rights shall
be authorized for issuance under this Section III: (i) tandem stock appreciation
rights ("Tandem Rights"), (ii) stand-alone stock appreciation rights
("Stand-alone Rights") and (iii) limited stock appreciation rights ("Limited
Rights").

                  C.       TANDEM RIGHTS. The following terms and conditions
shall govern the grant and exercise of Tandem Rights.

                           1.       One or more Optionees may be granted a
Tandem Right, exercisable upon such terms and conditions as the Plan
Administrator may establish, to elect between the exercise of the underlying
stock option for shares of Common Stock or the surrender of that option in
exchange for a distribution from the Corporation in an amount equal to the

                                       9
<PAGE>

excess of (i) the Fair Market Value (on the option surrender date) of the number
of shares in which the Optionee is at the time vested under the surrendered
option (or surrendered portion thereof) over (ii) the aggregate exercise price
payable for such vested shares.

                           2.       No such option surrender shall be effective
unless it is approved by the Plan Administrator, either at the time of the
actual option surrender or at any earlier time. If the surrender is so approved,
then the distribution to which the Optionee shall accordingly become entitled
under this Section III may be made in shares of Common Stock valued at Fair
Market Value on the option surrender date, in cash, or partly in shares and
partly in cash, as the Plan Administrator shall in its sole discretion deem
appropriate.

                           3.       If the surrender of an option is not
approved by the Plan Administrator, then the Optionee shall retain whatever
rights the Optionee had under the surrendered option (or surrendered portion
thereof) on the option surrender date and may exercise such rights at any time
prior to the later of (i) five (5) business days after the receipt of the
rejection notice or (ii) the last day on which the option is otherwise
exercisable in accordance with the terms of the instrument evidencing such
option, but in no event may such rights be exercised more than ten (10) years
after the date of the option grant.

                  D.       STAND-ALONE RIGHTS. The following terms and
conditions shall govern the grant and exercise of Stand-alone Rights under this
Article Two:

                           1.       One or more individuals eligible to
participate in the Discretionary Grant Program may be granted a Stand-alone
Right not tied to any underlying option under this Discretionary Grant Program.
The Stand-alone Right shall relate to a specified number of shares of Common
Stock and shall be exercisable upon such terms and conditions as the Plan
Administrator may establish. In no event, however, may the Stand-alone Right
have a maximum term in excess of ten (10) years measured from the grant date.
Upon exercise of the Stand-alone Right, the holder shall be entitled to receive
a distribution from the Corporation in an amount equal to the excess of (i) the
aggregate Fair Market Value (on the exercise date) of the shares of Common Stock
underlying the exercised right over (ii) the aggregate base price in effect for
those shares.

                           2.       The number of shares of Common Stock
underlying each Stand-alone Right and the base price in effect for those shares
shall be determined by the Plan Administrator in its sole discretion at the time
the Stand-alone Right is granted. In no event, however, may the base price per
share be less than the Fair Market Value per underlying share of Common Stock on
the grant date. In the event outstanding Stand-alone Rights are to be assumed in
connection with a Change in Control transaction or otherwise continued in
effect, the shares of Common Stock underlying each such Stand-alone Right shall
be adjusted immediately after such Change in Control so as to apply to the
number and class of securities into which those shares of Common Stock would
have been converted in consummation of such Change in Control had those shares
actually been outstanding at that time. Appropriate adjustments to reflect such
Change in Control shall also be made to the base price per share in effect under
each outstanding Stand-alone Right, provided the aggregate base price shall
remain the same. To the

                                       10
<PAGE>

extent the actual holders of the Corporation's outstanding Common Stock receive
cash consideration for their Common Stock in consummation of the Change in
Control, the successor corporation may, in connection with the assumption or
continuation of the outstanding Stand-alone Rights under the Discretionary Grant
Program, substitute, for the securities underlying those assumed rights, one or
more shares of its own common stock with a fair market value equivalent to the
cash consideration paid per share of Common Stock in the Change in Control
transaction.

                           3.       Stand-alone Rights shall be subject to the
same transferability restrictions applicable to Non-Statutory Options and may
not be transferred during the holder's lifetime, except to one or more Family
Members of the holder or to a trust established for such Family Members or
pursuant to a domestic relations order covering the Stand-alone Right as marital
property. In addition, one or more beneficiaries may be designated for an
outstanding Stand-alone Right in accordance with substantially the same terms
and provisions as set forth in Section I.F of this Article Two.

                           4.       The distribution with respect to an
exercised Stand-alone Right may be made in shares of Common Stock valued at Fair
Market Value on the exercise date, in cash, or partly in shares and partly in
cash, as the Plan Administrator shall in its sole discretion deem appropriate.

                  E.       LIMITED RIGHTS. The following terms and conditions
shall govern the grant and exercise of Limited Rights under this Article Two:

                           1.       One or more Section 16 Insiders may, in the
Plan Administrator's sole discretion, be granted Limited Rights with respect to
their outstanding options under this Article Two.

                           2.       Upon the occurrence of a Hostile
Tender-Offer, the Section 16 Insider shall have the unconditional right
(exercisable for a thirty (30)-day period following such Hostile Tender-Offer)
to surrender each option with such a Limited Right to the Corporation. The
Section 16 Insider shall in return be entitled to a cash distribution from the
Corporation in an amount equal to the excess of (i) the Tender-Offer Price of
the number of shares in which the Optionee is at the time vested under the
surrendered option (or surrendered portion thereof) over (ii) the aggregate
exercise price payable for those vested shares. Such cash distribution shall be
made within five (5) days following the option surrender date.

                           3.       The Plan Administrator shall pre-approve, at
the time such Limited Right is granted, the subsequent exercise of that right in
accordance with the terms of the grant and the provisions of this Section III.
No additional approval of the Plan Administrator or the Board shall be required
at the time of the actual option surrender and cash distribution. Any
unsurrendered portion of the option shall continue to remain outstanding and
become exercisable in accordance with the terms of the instrument evidencing
such grant.

                                       11
<PAGE>

                  F.       NET COUNTING. Upon the exercise of any Tandem,
Stand-alone or Limited Right under this Section III, the share reserve under
Section V of Article One shall only be reduced by the net number of shares
actually issued by the Corporation upon such exercise, and not by the gross
number of shares as to which such Tandem, Stand-alone or Limited Right is
exercised.

         IV.      CHANGE IN CONTROL/HOSTILE TAKE-OVER

                  A.       In the event of a Change in Control, each outstanding
option or stock appreciation right under the Discretionary Grant Program shall
automatically accelerate so that each such option or stock appreciation right
shall, immediately prior to the effective date of that Change in Control, become
exercisable as to all the shares of Common Stock at the time subject to such
option or stock appreciation right and may be exercised as to any or all of
those shares as fully vested shares of Common Stock. However, an outstanding
option or stock appreciation right shall NOT become exercisable on such an
accelerated basis if and to the extent: (i) such option or stock appreciation
right is to be assumed by the successor corporation (or parent thereof) or is
otherwise to continue in full force and effect pursuant to the terms of the
Change in Control transaction or (ii) such option or stock appreciation right is
to be replaced with a cash incentive program of the successor corporation which
preserves the spread existing at the time of the Change in Control on any shares
as to which the option or stock appreciation right is not otherwise at that time
exercisable and provides for subsequent payout of that spread in accordance with
the same exercise/vesting schedule applicable to those shares or (iii) the
acceleration of such option or stock appreciation right is subject to other
limitations imposed by the Plan Administrator at the time of the grant.

                  B.       All outstanding repurchase rights under the
Discretionary Grant Program shall automatically terminate, and the shares of
Common Stock subject to those terminated rights shall immediately vest in full,
in the event of a Change in Control, except to the extent: (i) those repurchase
rights are to be assigned to the successor corporation (or parent thereof) or
are otherwise to continue in full force and effect pursuant to the terms of the
Change in Control transaction or (ii) such accelerated vesting is precluded by
other limitations imposed by the Plan Administrator at the time the repurchase
right is issued.

                  C.       Immediately following the consummation of the Change
in Control, all outstanding options or stock appreciation rights under the
Discretionary Grant Program shall terminate and cease to be outstanding, except
to the extent assumed by the successor corporation (or parent thereof) or
otherwise continued in full force and effect pursuant to the terms of the Change
in Control transaction.

                  D.       Each option which is assumed in connection with a
Change in Control or otherwise continued in effect shall be appropriately
adjusted, immediately after such Change in Control, to apply to the number and
class of securities which would have been issuable to the Optionee in
consummation of such Change in Control had the option been exercised immediately
prior to such Change in Control. Appropriate adjustments to reflect such Change
in Control shall also be made to (i) the exercise price payable per share under
each outstanding

                                       12
<PAGE>

option, provided the aggregate exercise price payable for such securities shall
remain the same, (ii) the maximum number and/or class of securities available
for issuance over the remaining term of the Plan and (iii) the maximum number
and/or class of securities for which any one person may be granted stock
options, stand-alone exercisable stock appreciation rights, direct stock
issuances and other stock-based awards under the Plan per calendar year and (iv)
the maximum number and/or class of securities by which the share reserve is to
increase automatically each calendar year. To the extent the actual holders of
the Corporation's outstanding Common Stock receive cash consideration for their
Common Stock in consummation of the Change in Control, the successor corporation
may, in connection with the assumption or continuation of the outstanding
options or stock appreciation rights under the Discretionary Grant Program,
substitute one or more shares of its own common stock with a fair market value
equivalent to the cash consideration paid per share of Common Stock in such
Change in Control transaction.

                  E.       The Plan Administrator shall have the discretionary
authority to structure one or more outstanding options or stock appreciation
rights under the Discretionary Grant Program so that those options or stock
appreciation rights shall, immediately prior to the effective date of a Change
in Control, become exercisable as to all the shares of Common Stock at the time
subject to those options or stock appreciation rights and may be exercised as to
any or all of those shares as fully vested shares of Common Stock, whether or
not those options or stock appreciation rights are to be assumed in the Change
in Control transaction or otherwise continued in effect. In addition, the Plan
Administrator shall have the discretionary authority to structure one or more of
the Corporation's repurchase rights under the Discretionary Grant Program so
that those rights shall immediately terminate upon the consummation of the
Change in Control transaction, and the shares subject to those terminated rights
shall thereupon vest in full.

                  F.       The Plan Administrator shall have full power and
authority to structure one or more outstanding options or stock appreciation
rights under the Discretionary Grant Program so that those options or stock
appreciation rights shall become exercisable as to all the shares of Common
Stock at the time subject to those options or stock appreciation rights in the
event the Optionee's Service is subsequently terminated by reason of an
Involuntary Termination within a designated period following the effective date
of any Change in Control transaction in which those options or stock
appreciation rights do not otherwise accelerate. In addition, the Plan
Administrator may structure one or more of the Corporation's repurchase rights
so that those rights shall immediately terminate with respect to any shares held
by the Optionee at the time of such Involuntary Termination, and the shares
subject to those terminated repurchase rights shall accordingly vest in full at
that time.

                  G.       The Plan Administrator shall have the discretionary
authority to structure one or more outstanding options or stock appreciation
rights under the Discretionary Grant Program so that those options or stock
appreciation rights shall, immediately prior to the effective date of a Hostile
Take-Over, become exercisable as to all the shares of Common Stock at the time
subject to those options or stock appreciation rights and may be exercised as to
any or

                                       13
<PAGE>

all of those shares as fully vested shares of Common Stock. In addition, the
Plan Administrator shall have the discretionary authority to structure one or
more of the Corporation's repurchase rights under the Discretionary Grant
Program so that those rights shall terminate automatically upon the consummation
of such Hostile Take-Over, and the shares subject to those terminated rights
shall thereupon vest in full. Alternatively, the Plan Administrator may
condition the automatic acceleration of one or more outstanding options or stock
appreciation rights under the Discretionary Grant Program and the termination of
one or more of the Corporation's outstanding repurchase rights under such
program upon the subsequent termination of the Optionee's Service by reason of
an Involuntary Termination within a designated period following the effective
date of such Hostile Take-Over.

                  H.       The portion of any Incentive Option accelerated in
connection with a Change in Control or Hostile Take-Over shall remain
exercisable as an Incentive Option only to the extent the applicable One Hundred
Thousand Dollar ($100,000) limitation is not exceeded. To the extent such dollar
limitation is exceeded, the accelerated portion of such option shall be
exercisable as a Non-statutory Option under the Federal tax laws.

         V.       EXCHANGE/REPRICING PROGRAMS

                  A.       The Plan Administrator shall have the authority to
effect, at any time and from time to time, with the consent of the affected
holders, the cancellation of any or all outstanding options or stock
appreciation right under the Discretionary Grant Program (including outstanding
options transferred from the Predecessor Plan) and to grant in exchange one or
more of the following: (i) new options or stock appreciation rights covering the
same or a different number of shares of Common Stock but with an exercise or
base price per share not less than the Fair Market Value per share of Common
Stock on the new grant date or (ii) cash or shares of Common Stock, whether
vested or unvested, equal in value to the value of the cancelled options or
stock appreciation rights.

                  B.       The Plan Administrator shall also have the authority,
exercisable at any time and from time to time, with the consent of the affected
holders, to reduce the exercise or base price of one or more outstanding stock
options or stock appreciation rights to the then current Fair Market Value per
share of Common Stock or issue new stock options or stock appreciation rights
with a lower exercise or base price in immediate cancellation of outstanding
stock options or stock appreciation rights with a higher exercise or base price.

                                       14
<PAGE>

                                  ARTICLE THREE

                     SALARY INVESTMENT OPTION GRANT PROGRAM

         I.       OPTION GRANTS

                  The Plan Administrator shall have the sole and exclusive
authority to determine the calendar year or years (if any) for which the Salary
Investment Option Grant Program is to be in effect and to select the Section 16
Insiders and other highly compensated Employees eligible to participate in the
Salary Investment Option Grant Program for such calendar year or years. Each
selected individual who elects to participate in the Salary Investment Option
Grant Program must, prior to the start of each calendar year of participation,
file with the Plan Administrator (or its designate) an irrevocable authorization
directing the Corporation to reduce his or her base salary for that calendar
year by an amount not less than Ten Thousand Dollars ($10,000.00) nor more than
One Hundred Thousand Dollars ($100,000.00). Each individual who files such a
timely authorization shall automatically be granted an option under the Salary
Investment Option Grant Program on the first trading day in January of the
calendar year for which the salary reduction is to be in effect.

         II.      OPTION TERMS

                  Each option shall be a Non-Statutory Option evidenced by one
or more documents in the form approved by the Plan Administrator; provided,
however, that each such document shall comply with the terms specified below.

                  A.       EXERCISE PRICE.

                           1.       The exercise price per share shall be
thirty-three and one-third percent (33-1/3%) of the Fair Market Value per share
of Common Stock on the option grant date.

                           2.       The exercise price shall become immediately
due upon exercise of the option and shall be payable in one or more of the
alternative forms authorized under the Discretionary Grant Program. Except to
the extent the sale and remittance procedure specified thereunder is utilized,
payment of the exercise price for the purchased shares must be made on the
Exercise Date.

                  B.       NUMBER OF OPTION SHARES. The number of shares of
Common Stock subject to the option shall be determined pursuant to the following
formula (rounded down to the nearest whole number):

                           X = A / (B x 66-2/3%), where

                           X is the number of option shares,

                                       15
<PAGE>

                           A is the dollar amount by which the Optionee's base
                  salary is to be reduced for the calendar year pursuant to his
                  or her election under the Salary Investment Option Grant
                  Program, and

                           B is the Fair Market Value per share of Common Stock
                  on the option grant date.

                  C.       EXERCISE AND TERM OF OPTIONS. The option shall become
exercisable in a series of twelve (12) successive equal monthly installments
upon the Optionee's completion of each calendar month of Service in the calendar
year for which the salary reduction is in effect. Each option shall have a
maximum term of ten (10) years measured from the option grant date.

                  D.       EFFECT OF TERMINATION OF SERVICE. Should the Optionee
cease Service for any reason while holding one or more options under this
Article Three, then each such option shall remain exercisable, for any or all of
the shares for which the option is exercisable at the time of such cessation of
Service, until the earlier of (i) the expiration of the ten (10)-year option
term or (ii) the expiration of the three (3)-year period measured from the date
of such cessation of Service. Should the Optionee die while holding one or more
options under this Article Three, then each such option may be exercised, for
any or all of the shares for which the option is exercisable at the time of the
Optionee's cessation of Service (less any shares subsequently purchased by
Optionee prior to death), by the personal representative of the Optionee's
estate or by the person or persons to whom the option is transferred pursuant to
the Optionee's will or the laws of inheritance or by the designated beneficiary
or beneficiaries of the option. Such right of exercise shall lapse, and the
option shall terminate, upon the earlier of (i) the expiration of the ten
(10)-year option term or (ii) the three (3)-year period measured from the date
of the Optionee's cessation of Service. However, the option shall, immediately
upon the Optionee's cessation of Service for any reason, terminate and cease to
remain outstanding with respect to any and all shares of Common Stock for which
the option is not otherwise at that time exercisable.

         III.     CHANGE IN CONTROL/HOSTILE TAKE-OVER/HOSTILE TENDER-OFFER

                  A.       In the event of a Change in Control while the
Optionee remains in Service, each outstanding option held by such Optionee under
this Salary Investment Option Grant Program shall automatically accelerate so
that each such option shall, immediately prior to the effective date of the
Change in Control, become exercisable for all the shares of Common Stock at the
time subject to such option and may be exercised for any or all of those shares
as fully vested shares of Common Stock. Each such outstanding option shall
terminate immediately following the Change in Control, except to the extent
assumed by the successor corporation (or parent thereof) or otherwise continued
in effect pursuant to the terms of the Change in Control transaction. Any option
so assumed or continued shall remain exercisable for the fully vested shares
until the earlier of (i) the expiration of the ten (10)-year option term or (ii)
the expiration of the three (3)-year period measured from the date of the
Optionee's cessation of Service.

                                       16
<PAGE>

                  B.       In the event of a Hostile Take-Over while the
Optionee remains in Service, each outstanding option held by such Optionee under
this Salary Investment Option Grant Program shall automatically accelerate so
that each such option shall, immediately prior to the effective date of the
Hostile Take-Over, become exercisable for all the shares of Common Stock at the
time subject to such option and may be exercised for any or all of those shares
as fully vested shares of Common Stock. The option shall remain so exercisable
until the earliest to occur of (i) the expiration of the ten (10)-year option
term, (ii) the expiration of the three (3)-year period measured from the date of
the Optionee's cessation of Service, (iii) the termination of the option in
connection with a Change in Control or (iv) the surrender of the option in
connection with a Hostile Tender-Offer.

                  C.       Upon the occurrence of a Hostile Tender-Offer while
the Optionee remains in Service, such Optionee shall have a thirty (30)-day
period in which to surrender to the Corporation each outstanding option held by
him or her under the Salary Investment Option Grant Program. The Optionee shall
in return be entitled to a cash distribution from the Corporation in an amount
equal to the excess of (i) the Tender-Offer Price of the shares of Common Stock
at the time subject to the surrendered option (whether or not the option is
otherwise at the time exercisable for those shares) over (ii) the aggregate
exercise price payable for such shares. Such cash distribution shall be paid
within five (5) days following the surrender of the option to the Corporation.
The Plan Administrator shall, at the time the option with such limited stock
appreciation right is granted under the Salary Investment Option Grant Program,
pre-approve any subsequent exercise of that right in accordance with the terms
of this Paragraph C. Accordingly, no further approval of the Plan Administrator
or the Board shall be required at the time of the actual option surrender and
cash distribution.

                  D.       Each option which is assumed in connection with a
Change in Control or otherwise continued in effect shall be appropriately
adjusted, immediately after such Change in Control, to apply to the number and
class of securities which would have been issuable to the Optionee in
consummation of such Change in Control had the option been exercised immediately
prior to such Change in Control. Appropriate adjustments shall also be made to
the exercise price payable per share under each outstanding option, provided the
aggregate exercise price payable for such securities shall remain the same. To
the extent the actual holders of the Corporation's outstanding Common Stock
receive cash consideration for their Common Stock in consummation of the Change
in Control, the successor corporation may, in connection with the assumption of
the outstanding options under the Salary Investment Option Grant Program,
substitute one or more shares of its own common stock with a fair market value
equivalent to the cash consideration paid per share of Common Stock in such
Change in Control.

         IV.      REMAINING TERMS

                  The remaining terms of each option granted under the Salary
Investment Option Grant Program shall be the same as the terms in effect for
option grants made under the Discretionary Grant Program.

                                       17
<PAGE>

                                  ARTICLE FOUR

                             STOCK ISSUANCE PROGRAM

         I.       STOCK ISSUANCE TERMS

                  Shares of Common Stock may be issued under the Stock Issuance
Program, either as vested or unvested shares, through direct and immediate
issuances without any intervening option grants. Each such stock issuance shall
be evidenced by a Stock Issuance Agreement which complies with the terms
specified below. Shares of Common Stock may also be issued under the Stock
Issuance Program pursuant to share right awards or restricted stock units which
entitle the recipients to receive the shares underlying those awards or units
upon the attainment of designated performance goals or the satisfaction of
specified Service requirements or upon the expiration of a designated time
period following the vesting of those awards or units.

                  A.       ISSUE PRICE.

                           1.       The issue price per share shall be fixed by
the Plan Administrator, but shall not be less than one hundred percent (100%) of
the Fair Market Value per share of Common Stock on the issuance date.

                           2.       Shares of Common Stock may be issued under
the Stock Issuance Program for any of the following items of consideration which
the Plan Administrator may deem appropriate in each individual instance:

                                    (i)      cash or check made payable to the
         Corporation,

                                    (ii)     past services rendered to the
         Corporation (or any Parent or Subsidiary); or

                                    (iii)    any other valid consideration under
         the Delaware General Corporation Law.

                  B.       VESTING PROVISIONS.

                           1.       Shares of Common Stock issued under the
Stock Issuance Program may, in the discretion of the Plan Administrator, be
fully and immediately vested upon issuance or may vest in one or more
installments over the Participant's period of Service or upon the attainment of
specified performance objectives. The elements of the vesting schedule
applicable to any unvested shares of Common Stock issued under the Stock
Issuance Program shall be determined by the Plan Administrator and incorporated
into the Stock Issuance Agreement. Shares of Common Stock may also be issued
under the Stock Issuance Program pursuant to share right awards or restricted
stock units which entitle the recipients to receive the shares underlying those
awards or units upon the attainment of designated performance goals or the

                                       18
<PAGE>

satisfaction of specified Service requirements or upon the expiration of a
designated time period following the vesting of those awards or units, including
(without limitation) a deferred distribution date following the termination of
the Participant's Service.

                           2.       Any new, substituted or additional
securities or other property (including money paid other than as a regular cash
dividend) which the Participant may have the right to receive with respect to
the Participant's unvested shares of Common Stock by reason of any stock
dividend, stock split, recapitalization, combination of shares, exchange of
shares or other change affecting the outstanding Common Stock as a class without
the Corporation's receipt of consideration shall be issued subject to (i) the
same vesting requirements applicable to the Participant's unvested shares of
Common Stock and (ii) such escrow arrangements as the Plan Administrator shall
deem appropriate.

                           3.       The Participant shall have full stockholder
rights with respect to any shares of Common Stock issued to the Participant
under the Stock Issuance Program, whether or not the Participant's interest in
those shares is vested. Accordingly, the Participant shall have the right to
vote such shares and to receive any regular cash dividends paid on such shares.
The Participant shall not have any stockholder rights with respect to the shares
of Common Stock subject to a restricted stock unit or share right award until
that award vests and the shares of Common Stock are actually issued thereunder.
However, dividend-equivalent units may be paid or credited, either in cash or in
actual or phantom shares of Common Stock, on outstanding restricted stock unit
or share right awards, subject to such terms and conditions as the Plan
Administrator may deem appropriate.

                           4.       Should the Participant cease to remain in
Service while holding one or more unvested shares of Common Stock issued under
the Stock Issuance Program or should the performance objectives not be attained
with respect to one or more such unvested shares of Common Stock, then those
shares shall be immediately surrendered to the Corporation for cancellation, and
the Participant shall have no further stockholder rights with respect to those
shares. To the extent the surrendered shares were previously issued to the
Participant for consideration paid in cash, the Corporation shall repay to the
Participant the LOWER of (i) the cash consideration paid for the surrendered
shares or (ii) the Fair Market Value of those shares at the time of
cancellation.

                           5.       The Plan Administrator may in its discretion
waive the surrender and cancellation of one or more unvested shares of Common
Stock which would otherwise occur upon the cessation of the Participant's
Service or the non-attainment of the performance objectives applicable to those
shares. Such waiver shall result in the immediate vesting of the Participant's
interest in the shares of Common Stock as to which the waiver applies. Such
waiver may be effected at any time, whether before or after the Participant's
cessation of Service or the attainment or non-attainment of the applicable
performance objectives.

                           6.       Outstanding share right awards or restricted
stock units under the Stock Issuance Program shall automatically terminate, and
no shares of Common Stock shall actually be issued in satisfaction of those
awards or units, if the performance goals or Service

                                       19
<PAGE>

requirements established for such awards or units are not attained or satisfied.
The Plan Administrator, however, shall have the discretionary authority to issue
vested shares of Common Stock under one or more outstanding share right awards
or restricted stock units as to which the designated performance goals or
Service requirements have not been attained or satisfied.

         II.      CHANGE IN CONTROL/HOSTILE TAKE-OVER

                  A.       All of the Corporation's outstanding repurchase
rights under the Stock Issuance Program shall terminate automatically, and all
the shares of Common Stock subject to those terminated rights shall immediately
vest in full, in the event of any Change in Control, except to the extent (i)
those repurchase rights are to be assigned to the successor corporation (or
parent thereof) or are otherwise to continue in full force and effect pursuant
to the terms of the Change in Control transaction or (ii) such accelerated
vesting is precluded by other limitations imposed in the Stock Issuance
Agreement.

                  B.       Each outstanding restricted stock unit or share right
award assumed in connection with a Change in Control or otherwise continued in
effect shall be adjusted immediately after the consummation of that Change in
Control so as to apply to the number and class of securities into which the
shares of Common Stock subject to the award immediately prior to the Change in
Control would have been converted in consummation of such Change in Control had
those shares actually been outstanding at that time.

                  C.       The Plan Administrator shall have the discretionary
authority to structure one or more unvested stock issuances or one or more
restricted stock unit or other share right awards under the Stock Issuance
Program so that the shares of Common Stock subject to those issuances or awards
shall automatically vest (or vest and become issuable) in whole or in part
immediately upon the occurrence of a Change in Control or upon the subsequent
termination of the Participant's Service by reason of an Involuntary Termination
within a designated period following the effective date of that Change in
Control transaction.

                  D.       The Plan Administrator shall also have the
discretionary authority to structure one or more unvested stock issuances or one
or more restricted stock unit or other share right awards under the Stock
Issuance Program so that the shares of Common Stock subject to those issuances
or awards shall automatically vest (or vest and become issuable) in whole or in
part immediately upon the occurrence of a Hostile Take-Over or upon the
subsequent termination of the Participant's Service by reason of an Involuntary
Termination within a designated period following the effective date of that
Hostile Take-Over.

                                       20
<PAGE>

                                  ARTICLE FIVE

                         AUTOMATIC OPTION GRANT PROGRAM

         I.       OPTION TERMS

                  A.       GRANT DATES. Option grants shall be made on the dates
specified below:

                           1.       Each individual who is first elected or
appointed as a non-employee Board member at any time on or after the
Underwriting Date shall automatically be granted, on the date of such initial
election or appointment, a Non-Statutory Option to purchase up to 30,000 shares
of Common Stock, provided that individual has not previously been in the employ
of the Corporation or any Parent or Subsidiary.

                           2.       On the date of each Annual Stockholders
Meeting held after the Underwriting Date, each individual who is to continue to
serve as a non-employee Board member, whether or not that individual is standing
for re-election to the Board at that particular Annual Meeting, shall
automatically be granted a Non-Statutory Option to purchase up to 15,000 shares
of Common Stock, provided such individual has served as a non-employee Board
member for at least six (6) months. There shall be no limit on the number of
such annual share option grants any one non-employee Board member may receive
over his or her period of Board service, and non-employee Board members who have
previously been in the employ of the Corporation (or any Parent or Subsidiary)
or who have otherwise received one or more stock option grants from the
Corporation prior to the Underwriting Date shall be eligible to receive one or
more such annual option grants over their period of continued Board service.

                  B.       EXERCISE PRICE.

                           1.       The exercise price per share shall be equal
to one hundred percent (100%) of the Fair Market Value per share of Common Stock
on the option grant date.

                           2.       The exercise price shall be payable in one
or more of the alternative forms authorized under the Discretionary Grant
Program. Except to the extent the sale and remittance procedure specified
thereunder is utilized, payment of the exercise price for the purchased shares
must be made on the Exercise Date.

                  C.       OPTION TERM. Each option shall have a maximum term of
ten (10) years measured from the option grant date, subject to earlier
termination following the Optionee's cessation of Board service.

                  D.       EXERCISE AND VESTING OF OPTIONS. Each option shall be
immediately exercisable for any or all of the option shares. However, any
unvested shares purchased under the option shall be subject to repurchase by the
Corporation, at the LOWER of (i) the exercise price paid per share or (ii) the
Fair Market Value per share of Common Stock at the time of

                                       21
<PAGE>

repurchase, upon the Optionee's cessation of Board service prior to vesting in
those shares. The shares subject to each initial share grant shall vest, and the
Corporation's repurchase right shall lapse, in a series of four (4) successive
equal annual installments upon the Optionee's completion of each year of service
as a Board member over the four (4)-year period measured from the option grant
date. The shares subject to each annual share option grant shall vest in one
installment upon the EARLIER of (i) the Optionee's completion of the one
(1)-year period of Board service measured from the grant date or (ii) the
Optionee's continuation in Board service through the day immediately preceding
the next Annual Stockholders Meeting following such grant date.

                  E.       LIMITED TRANSFERABILITY OF OPTIONS. Each option under
this Article Five may be assigned in whole or in part during the Optionee's
lifetime to one or more of his or her Family Members or to a trust established
exclusively for one or more such Family Members, to the extent such assignment
is in connection with the Optionee's estate plan or pursuant to a domestic
relations order. The assigned portion may only be exercised by the person or
persons who acquire a proprietary interest in the option pursuant to the
assignment. The terms applicable to the assigned portion shall be the same as
those in effect for the option immediately prior to such assignment and shall be
set forth in such documents issued to the assignee as the Plan Administrator may
deem appropriate. The Optionee may also designate one or more persons as the
beneficiary or beneficiaries of his or her outstanding options under this
Article Five, and the options shall, in accordance with such designation,
automatically be transferred to such beneficiary or beneficiaries upon the
Optionee's death while holding those options. Such beneficiary or beneficiaries
shall take the transferred options subject to all the terms and conditions of
the applicable agreement evidencing each such transferred option, including
(without limitation) the limited time period during which the option may be
exercised following the Optionee's death.

                  F.       TERMINATION OF BOARD SERVICE. The following
provisions shall govern the exercise of any options held by the Optionee at the
time the Optionee ceases to serve as a Board member:

                                    (i)      The Optionee (or, in the event of
         Optionee's death, the personal representative of the Optionee's estate
         or the person or persons to whom the option is transferred pursuant to
         the Optionee's will or the laws of inheritance or the designated
         beneficiary or beneficiaries of such option) shall have a twelve
         (12)-month period following the date of such cessation of Board service
         in which to exercise each such option.

                                    (ii)     During the twelve (12)-month
         exercise period, the option may not be exercised in the aggregate for
         more than the number of vested shares of Common Stock for which the
         option is exercisable at the time of the Optionee's cessation of Board
         service.

                                       22
<PAGE>

                                    (iii)    Should the Optionee cease to serve
         as a Board member by reason of death or Permanent Disability, then all
         shares at the time subject to the option shall immediately vest so that
         such option may, during the twelve (12)-month exercise period following
         such cessation of Board service, be exercised for any or all of those
         shares as fully vested shares of Common Stock.

                                    (iv)     In no event shall the option remain
         exercisable after the expiration of the option term. Upon the
         expiration of the twelve (12)-month exercise period or (if earlier)
         upon the expiration of the option term, the option shall terminate and
         cease to be outstanding for any vested shares for which the option has
         not been exercised. However, the option shall, immediately upon the
         Optionee's cessation of Board service for any reason other than death
         or Permanent Disability, terminate and cease to be outstanding to the
         extent the option is not otherwise at that time exercisable for vested
         shares.

         II.      CHANGE IN CONTROL/HOSTILE TAKE-OVER/HOSTILE TENDER-OFFER

                  A.       In the event of a Change in Control while the
Optionee remains a Board member, the shares of Common Stock at the time subject
to each outstanding option held by such Optionee under this Automatic Option
Grant Program but not otherwise vested shall automatically vest in full so that
each such option shall, immediately prior to the effective date of the Change in
Control, become exercisable for all the option shares as fully vested shares of
Common Stock and may be exercised for any or all of those vested shares.
Immediately following the consummation of the Change in Control, each automatic
option grant shall terminate and cease to be outstanding, except to the extent
assumed by the successor corporation (or parent thereof) or otherwise continued
in effect pursuant to the terms of the Change in Control transaction.

                  B.       In the event of a Hostile Take-Over while the
Optionee remains a Board member, the shares of Common Stock at the time subject
to each outstanding option held by such Optionee under this Automatic Option
Grant Program but not otherwise vested shall automatically vest in full so that
each such option shall, immediately prior to the effective date of the Hostile
Take-Over, become exercisable for all the option shares as fully vested shares
of Common Stock and may be exercised for any or all of those vested shares. Each
such option shall remain exercisable for such fully vested option shares until
the expiration or sooner termination of the option term or the surrender of the
option in connection with a Hostile Tender-Offer.

                  C.       All outstanding repurchase rights under this under
this Automatic Option Grant Program shall automatically terminate, and the
shares of Common Stock subject to those terminated rights shall immediately vest
in full, in the event of any Change in Control or Hostile Take-Over.

                                       23
<PAGE>

                  D.       Upon the occurrence of a Hostile Tender-Offer while
the Optionee remains a Board member, such Optionee shall have a thirty (30)-day
period in which to surrender to the Corporation each of his or her outstanding
options under this Automatic Option Grant Program. The Optionee shall in return
be entitled to a cash distribution from the Corporation in an amount equal to
the excess of (i) the Tender-Offer Price of the shares of Common Stock at the
time subject to each surrendered option (whether or not the Optionee is
otherwise at the time vested in those shares) over (ii) the aggregate exercise
price payable for such shares. Such cash distribution shall be paid within five
(5) days following the surrender of the option to the Corporation. No approval
or consent of the Board or any Plan Administrator shall be required at the time
of the actual option surrender and cash distribution.

                  E.       Each option which is assumed in connection with a
Change in Control or otherwise continued in effect shall be appropriately
adjusted, immediately after such Change in Control, to apply to the number and
class of securities which would have been issuable to the Optionee in
consummation of such Change in Control had the option been exercised immediately
prior to such Change in Control. Appropriate adjustments shall also be made to
the exercise price payable per share under each outstanding option, provided the
aggregate exercise price payable for such securities shall remain the same. To
the extent the actual holders of the Corporation's outstanding Common Stock
receive cash consideration for their Common Stock in consummation of the Change
in Control, the successor corporation may, in connection with the assumption of
the outstanding options under the Automatic Option Grant Program, substitute one
or more shares of its own common stock with a fair market value equivalent to
the cash consideration paid per share of Common Stock in such Change in Control
transaction.

         III.     REMAINING TERMS

                  The remaining terms of each option granted under the Automatic
Option Grant Program shall be the same as the terms in effect for option grants
made under the Discretionary Grant Program.

                                       24
<PAGE>

                                  ARTICLE SIX

                                  MISCELLANEOUS

         I.       TAX WITHHOLDING

                  A.       The Corporation's obligation to deliver shares of
Common Stock upon the exercise of options or stock appreciation rights or the
issuance or vesting of such shares under the Plan shall be subject to the
satisfaction of all applicable income and employment tax withholding
requirements.

                  B.       The Plan Administrator may, in its discretion,
provide any or all holders of Non-Statutory Options (other than the options
granted under the Automatic Option Grant Program), stock appreciation rights,
restricted stock units or any other share right awards pursuant to which vested
shares of Common Stock are to be issued under the Plan and any or all
Participants to whom vested or unvested shares of Common Stock are issued in a
direct issuance under the Stock Issuance Program with the right to use shares of
Common Stock in satisfaction of all or part of the Withholding Taxes to which
such holders may become subject in connection with the exercise of their options
or stock appreciation rights, the issuance to them of vested shares or the
subsequent vesting of unvested shares issued to them. Such right may be provided
to any such holder in either or both of the following formats:

                           Stock Withholding: The election to have the
Corporation withhold, from the shares of Common Stock otherwise issuable upon
the exercise of such Non-Statutory Option or stock appreciation right or upon
the issuance of fully-vested shares, a portion of those shares with an aggregate
Fair Market Value equal to the percentage of the Withholding Taxes (not to
exceed one hundred percent (100%)) designated by the holder. The shares of
Common Stock so withheld shall NOT reduce the number of shares of Common Stock
authorized for issuance under the Plan.

                           Stock Delivery: The election to deliver to the
Corporation, at the time the Non-Statutory Option or stock appreciation right is
exercised, the vested shares are issued or the unvested shares subsequently
vest, one or more shares of Common Stock previously acquired by such holder
(other than in connection with the option exercise, share issuance or share
vesting triggering the Withholding Taxes) with an aggregate Fair Market Value
equal to the percentage of the Withholding Taxes (not to exceed one hundred
percent (100%)) designated by the holder. The shares of Common Stock so
delivered shall not be added to the shares of Common Stock authorized for
issuance under the Plan.

         II.      SHARE ESCROW/LEGENDS

                  Unvested shares may, in the Plan Administrator's discretion,
be held in escrow by the Corporation until the Participant's interest in such
shares vests or may be issued directly to the Participant with restrictive
legends on the certificates evidencing those unvested shares.

                                       25
<PAGE>

         III.     EFFECTIVE DATE AND TERM OF THE PLAN

                  A.       The Plan shall become effective immediately on the
Plan Effective Date. However, the Salary Investment Option Grant Program shall
not be implemented until such time as the Plan Administrator may deem
appropriate. Options may be granted under the Discretionary Grant at any time on
or after the Plan Effective Date, and the initial option grants under the
Automatic Option Grant Program shall also be made on the Plan Effective Date to
any non-employee Board members eligible for such grants at that time. However,
no options or stock appreciation rights granted under the Plan may be exercised,
and no shares shall be issued under the Plan, until the Plan is approved by the
Corporation's stockholders. If such stockholder approval is not obtained within
twelve (12) months after the date the Plan is adopted by the Board, then all
options or stock appreciation rights previously granted under this Plan shall
terminate and cease to be outstanding, and no further options or stock
appreciation rights shall be granted and no shares shall be issued under the
Plan.

                  B.       The Plan shall serve as the successor to the
Predecessor Plan, and no further option grants or stock issuances shall be made
under the Predecessor Plan after the Plan Effective Date. All options
outstanding under the Predecessor Plan on the Plan Effective Date shall be
transferred to the Plan at that time and shall be treated as outstanding options
under the Plan. However, each outstanding option so transferred shall continue
to be governed solely by the terms of the documents evidencing such option, and
no provision of the Plan shall be deemed to affect or otherwise modify the
rights or obligations of the holders of such transferred options with respect to
their acquisition of shares of Common Stock.

                  C.       One or more provisions of the Plan, including
(without limitation) the option/vesting acceleration provisions of Article Two
relating to Changes in Control and Hostile Take-Overs, may, in the Plan
Administrator's discretion, be extended to one or more options incorporated from
the Predecessor Plan which do not otherwise contain such provisions.

                  D.       The Plan shall terminate upon the earliest to occur
of (i) January 31, 2014, (ii) the date on which all shares available for
issuance under the Plan shall have been issued as fully vested shares or (iii)
the termination of all outstanding options, stock appreciation rights,
restricted stock units and other share right awards in connection with a Change
in Control. Should the Plan terminate on January 31, 2014, then all option
grants, stock appreciation rights, unvested stock issuances, restricted stock
units and other share right awards outstanding at that time shall continue to
have force and effect in accordance with the provisions of the documents
evidencing such grants, issuances or awards.

         IV.      AMENDMENT OF THE PLAN

                  A.       The Board shall have complete and exclusive power and
authority to amend or modify the Plan in any or all respects. However, no such
amendment or modification shall adversely affect the rights and obligations with
respect to stock options, stock appreciation rights, unvested stock issuances or
other stock-based awards at the time outstanding under the Plan unless the
Optionee or the Participant consents to such amendment or modification. In

                                       26
<PAGE>

addition, stockholder approval will be required for any amendment to the Plan
which (i) materially increases the number of shares of Common Stock available
for issuance under the Plan, (ii) materially expands the class of individuals
eligible to receive option grants or other awards under the Plan, (iii)
materially increases the benefits accruing to the Optionees and Participants
under the Plan or materially reduces the price at which shares of Common Stock
may be issued or purchased under the Plan, (iv) materially extends the term of
the Plan or (v) expands the types of awards available for issuance under the
Plan.

                  B.       Options and stock appreciation rights may be granted
under the Discretionary Grant and Salary Investment Option Grant Programs and
shares of Common Stock may be issued under the Stock Issuance Program that in
each instance involve shares of Common Stock in excess of the number of shares
then available for issuance under the Plan, provided any excess shares actually
issued under those programs shall be held in escrow until the number of shares
of Common Stock available for issuance under the Plan is sufficiently increased
either by (1) the automatic annual share increase provisions of Section V.B. of
Article One or (2) the stockholder approval of an amendment of the Plan
sufficiently increasing the share reserve. If stockholder approval is required
and is not obtained within twelve (12) months after the date the first excess
issuances are made against the contingent increase, then (i) any unexercised
options, stock appreciation rights or other stock-based awards granted on the
basis of such excess shares shall terminate and cease to be outstanding and (ii)
the Corporation shall promptly refund to the Optionees and the Participants the
exercise or purchase price paid for any excess shares issued under the Plan and
held in escrow, together with interest (at the applicable Short Term Federal
Rate) for the period the shares were held in escrow, and such shares shall
thereupon be automatically cancelled and cease to be outstanding.

         V.       USE OF PROCEEDS

                  Any cash proceeds received by the Corporation from the sale of
shares of Common Stock under the Plan shall be used for general corporate
purposes.

         VI.      REGULATORY APPROVALS

                  A.       The implementation of the Plan, the granting of any
stock option, stock appreciation right or other stock-based award under the Plan
and the issuance of any shares of Common Stock (i) upon the exercise or vesting
of any granted option, stock appreciation right or other stock-based award or
(ii) under the Stock Issuance Program shall be subject to the Corporation's
procurement of all approvals and permits required by regulatory authorities
having jurisdiction over the Plan, the stock options granted under it and the
shares of Common Stock issued pursuant to it.

                  B.       No shares of Common Stock or other assets shall be
issued or delivered under the Plan unless and until there shall have been
compliance with all applicable requirements of applicable securities laws,
including the filing and effectiveness of the Form S-8 registration

                                       27
<PAGE>

statement for the shares of Common Stock issuable under the Plan, and all
applicable listing requirements of any Stock Exchange (or the Nasdaq Stock
Market, if applicable) on which Common Stock is then listed for trading.

         VII.     NO EMPLOYMENT/SERVICE RIGHTS

                  Nothing in the Plan shall confer upon the Optionee or the
Participant any right to continue in Service for any period of specific duration
or interfere with or otherwise restrict in any way the rights of the Corporation
(or any Parent or Subsidiary employing or retaining such person) or of the
Optionee or the Participant, which rights are hereby expressly reserved by each,
to terminate such person's Service at any time for any reason, with or without
cause.

                                       28
<PAGE>

                                    APPENDIX

                  The following definitions shall be in effect under the Plan:

                  A.       AUTOMATIC OPTION GRANT PROGRAM shall mean the
automatic option grant program in effect under Article Five of the Plan.

                  B.       BOARD shall mean the Corporation's Board of
Directors.

                  C.       CHANGE IN CONTROL shall mean a change in ownership or
control of the Corporation effected through any of the following transactions:

                           (i)      a merger, consolidation or other
         reorganization approved by the Corporation's stockholders, unless
         securities representing more than fifty percent (50%) of the total
         combined voting power of the voting securities of the successor
         corporation are immediately thereafter beneficially owned, directly or
         indirectly and in substantially the same proportion, by the persons who
         beneficially owned the Corporation's outstanding voting securities
         immediately prior to such transaction, or

                           (ii)     a stockholder-approved sale, transfer or
         other disposition of all or substantially all of the Corporation's
         assets, or

                           (iii)    the closing of any transaction or series of
         related transactions pursuant to which any person or any group of
         persons comprising a "group" within the meaning of Rule 13d-5(b)(1) of
         the 1934 Act (other than the Corporation or a person that, prior to
         such transaction or series of related transactions, directly or
         indirectly controls, is controlled by or is under common control with,
         the Corporation) becomes directly or indirectly the beneficial owner
         (within the meaning of Rule 13d-3 of the 1934 Act) of securities
         possessing (or convertible into or exercisable for securities
         possessing) more than fifty percent (50%) of the total combined voting
         power of the Corporation's securities (as measured in terms of the
         power to vote with respect to the election of Board members)
         outstanding immediately after the consummation of such transaction or
         series of related transactions, whether such transaction involves a
         direct issuance from the Corporation or the acquisition of outstanding
         securities held by one or more of the Corporation's existing
         stockholders.

                  D.       CODE shall mean the Internal Revenue Code of 1986, as
amended.

                  E.       COMMON STOCK shall mean the Corporation's common
stock.

                  F.       COMPENSATION COMMITTEE shall mean the Compensation
Committee of the Corporation's Board of Directors.

                                       A-1.
<PAGE>

                  G.       CORPORATION shall mean Barrier Therapeutics, Inc., a
Delaware corporation, and any corporate successor to all or substantially all of
the assets or voting stock of Barrier Therapeutics, Inc. which has by
appropriate action assumed the Plan.

                  H.       DISCRETIONARY GRANT PROGRAM shall mean the
discretionary grant program in effect under Article Two of the Plan pursuant to
which stock options and stock appreciation rights may be granted to one or more
eligible individuals.

                  I.       EMPLOYEE shall mean an individual who is in the
employ of the Corporation (or any Parent or Subsidiary, whether now existing or
subsequently established), subject to the control and direction of the employer
entity as to both the work to be performed and the manner and method of
performance.

                  J.       EXERCISE DATE shall mean the date on which the
Corporation shall have received written notice of the option exercise.

                  K.       FAIR MARKET VALUE per share of Common Stock on any
relevant date shall be determined in accordance with the following provisions:

                           (i)      If the Common Stock is at the time traded on
         the Nasdaq National Market, then the Fair Market Value shall be the
         closing selling price per share of Common Stock on the date in
         question, as such price is reported by the National Association of
         Securities Dealers on the Nasdaq National Market and published in The
         Wall Street Journal. If there is no closing selling price for the
         Common Stock on the date in question, then the Fair Market Value shall
         be the closing selling price on the last preceding date for which such
         quotation exists.

                           (ii)     If the Common Stock is at the time listed on
         any Stock Exchange, then the Fair Market Value shall be the closing
         selling price per share of Common Stock on the date in question on the
         Stock Exchange determined by the Plan Administrator to be the primary
         market for the Common Stock, as such price is officially quoted in the
         composite tape of transactions on such exchange and published in The
         Wall Street Journal. If there is no closing selling price for the
         Common Stock on the date in question, then the Fair Market Value shall
         be the closing selling price on the last preceding date for which such
         quotation exists.

                           (iii)    For purposes of any option grants made on
         the Underwriting Date, the Fair Market Value shall be deemed to be
         equal to the price per share at which the Common Stock is to be sold in
         the initial public offering pursuant to the Underwriting Agreement.

                                      A-2.
<PAGE>

                  L.       FAMILY MEMBER means, with respect to a particular
Optionee or Participant, any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law,
father-in-law, son-in-law, daughter-in-law, bother-in-law or sister-in-law.

                  M.       HOSTILE TAKE-OVER shall mean a change in ownership or
control of the Corporation effected through either of the following
transactions:

                           (i)      a change in the composition of the Board
         over a period of thirty-six (36) consecutive months or less such that a
         majority of the Board members ceases, by reason of one or more
         contested elections for Board membership, to be comprised of
         individuals who either (A) have been Board members continuously since
         the beginning of such period or (B) have been elected or nominated for
         election as Board members during such period by at least a majority of
         the Board members described in clause (A) who were still in office at
         the time the Board approved such election or nomination, or

                           (ii)     a Hostile Tender-Offer.

                  N.       HOSTILE TENDER-OFFER shall mean the acquisition,
directly or indirectly, by any person or related group of persons (other than
the Corporation or a person that directly or indirectly controls, is controlled
by, or is under common control with, the Corporation) of beneficial ownership
(within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing more
than twenty percent (20%) of the total combined voting power of the
Corporation's outstanding securities pursuant to a tender or exchange offer made
directly to the Corporation's stockholders which the Board does not recommend
such stockholders to accept.

                  O.       INCENTIVE OPTION shall mean an option which satisfies
the requirements of Code Section 422.

                  P.       INVOLUNTARY TERMINATION shall mean the termination of
the Service of any individual which occurs by reason of:

                           (i)      such individual's involuntary dismissal or
         discharge by the Corporation (or any Parent or Subsidiary) for reasons
         other than Misconduct, or

                           (ii)     such individual's voluntary resignation
         following (A) a change in his or her position with the Corporation (or
         any Parent or Subsidiary) which materially reduces his or her duties
         and responsibilities or the level of management to which he or she
         reports, (B) a reduction in his or her level of compensation (including
         base salary, fringe benefits and target bonus under any
         corporate-performance based bonus or incentive programs) by more than
         fifteen percent (15%) or (C) a relocation of such individual's place of
         employment by

                                      A-3.
<PAGE>

         more than fifty (50) miles, provided and only if such change, reduction
         or relocation is effected by the Corporation (or any Parent or
         Subsidiary) without the individual's consent.

                  Q.       MISCONDUCT shall mean the commission of any act of
fraud, embezzlement or dishonesty by the Optionee or Participant, any
unauthorized use or disclosure by such person of confidential information or
trade secrets of the Corporation (or any Parent or Subsidiary), or any other
intentional misconduct by such person adversely affecting the business or
affairs of the Corporation (or any Parent or Subsidiary) in a material manner.
The foregoing definition shall not in any way preclude or restrict the right of
the Corporation (or any Parent or Subsidiary) to discharge or dismiss any
Optionee, Participant or other person in the Service of the Corporation (or any
Parent or Subsidiary) for any other acts or omissions, but such other acts or
omissions shall not be deemed, for purposes of the Plan, to constitute grounds
for termination for Misconduct.

                  R.       1934 ACT shall mean the Securities Exchange Act of
1934, as amended.

                  S.       NON-STATUTORY OPTION shall mean an option not
intended to satisfy the requirements of Code Section 422.

                  T.       OPTIONEE shall mean any person to whom an option is
granted under the Discretionary Grant, Salary Investment Option Grant or
Automatic Option Grant Program.

                  U.       PARENT shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations ending with the Corporation,
provided each corporation in the unbroken chain (other than the Corporation)
owns, at the time of the determination, stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.

                  V.       PARTICIPANT shall mean any person who is issued
shares of Common Stock or restricted stock units or other stock-based awards
under the Stock Issuance Program..

                  W.       PERMANENT DISABILITY OR PERMANENTLY DISABLED shall
mean the inability of the Optionee or the Participant to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment expected to result in death or to be of continuous duration of
twelve (12) months or more. However, solely for purposes of the Automatic Option
Grant Program, Permanent Disability or Permanently Disabled shall mean the
inability of the non-employee Board member to perform his or her usual duties as
a Board member by reason of any medically determinable physical or mental
impairment expected to result in death or to be of continuous duration of twelve
(12) months or more.

                  X.       PLAN shall mean the Corporation's 2004 Stock
Incentive Plan, as set forth in this document.

                                      A-4.
<PAGE>

                  Y.       PLAN ADMINISTRATOR shall mean the Compensation
Committee acting in its administrative capacity under the Plan. Such term shall
also include the Board or any secondary committee of the Board, to the extent
the Board or such secondary committee is carrying out any administrative
responsibilities allocated to it under the Plan with respect to persons other
than Section 16 Insiders.

                  Z.       PLAN EFFECTIVE DATE shall mean the date the Plan
shall become effective and shall be coincident with the Underwriting Date.

                  AA.      PREDECESSOR PLAN shall mean the Corporation's 2002
Equity Incentive Plan in effect immediately prior to the Plan Effective Date
hereunder.

                  BB.      SALARY INVESTMENT OPTION GRANT PROGRAM shall mean the
salary investment option grant program in effect under Article Three of the
Plan.

                  CC.      SECTION 16 INSIDER shall mean an officer or director
of the Corporation subject to the short-swing profit liabilities of Section 16
of the 1934 Act.

                  DD.      SERVICE shall mean the performance of services for
the Corporation (or any Parent or Subsidiary, whether now existing or
subsequently established) by a person in the capacity of an Employee, a
non-employee member of the board of directors or a consultant or independent
advisor, except to the extent otherwise specifically provided in the documents
evidencing the option grant or stock issuance. Service shall not be deemed to
cease during a period of military leave, sick leave or other personal leave
approved by the Corporation; provided, however, that for a leave which exceeds
ninety (90) days, Service shall be deemed, for purposes of determining the
period within which any outstanding option held by the Optionee in question may
be exercised as an Incentive Option, to cease on the ninety-first (91st) day of
such leave, unless the right of that Optionee to return to Service following
such leave is guaranteed by law or statute. Except to the extent otherwise
required by law or expressly authorized by the Plan Administrator, no Service
credit shall be given for vesting purposes for any period the Optionee or
Participant is on a leave of absence.

                  EE.      STOCK EXCHANGE shall mean either the American Stock
Exchange or the New York Stock Exchange.

                  FF.      STOCK ISSUANCE AGREEMENT shall mean the agreement
entered into by the Corporation and the Participant at the time of issuance of
shares of Common Stock under the Stock Issuance Program.

                  GG.      STOCK ISSUANCE PROGRAM shall mean the stock issuance
program in effect under Article Four of the Plan.

                                      A-5
<PAGE>

                  HH.      SUBSIDIARY shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations beginning with the
Corporation, provided each corporation (other than the last corporation) in the
unbroken chain owns, at the time of the determination, stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.

                  II.      TENDER-OFFER PRICE shall mean the GREATER of (i) the
Fair Market Value per share of Common Stock on the date the option is
surrendered to the Corporation in connection with a Hostile Tender-Offer or (ii)
the highest reported price per share of Common Stock paid by the tender offeror
in effecting such Hostile Tender-Offer. However, if the surrendered option is an
Incentive Option, the Tender-Offer Price shall not exceed the clause (i) price
per share.

                  JJ.      10% STOCKHOLDER shall mean the owner of stock (as
determined under Code Section 424(d)) possessing more than ten percent (10%) of
the total combined voting power of all classes of stock of the Corporation (or
any Parent or Subsidiary).

                  KK.      UNDERWRITING AGREEMENT shall mean the agreement
between the Corporation and the underwriter or underwriters managing the initial
public offering of the Common Stock.

                  LL.      UNDERWRITING DATE shall mean the date on which the
Underwriting Agreement is executed and priced in connection with an initial
public offering of the Common Stock.

                  MM.      WITHHOLDING TAXES shall mean the applicable income
and employment withholding taxes to which the holder of an option or stock
appreciation right or shares of Common Stock under the Plan may become subject
in connection with the grant or exercise of those options or stock appreciation
rights or the issuance or vesting of those shares.

                                      A-6.

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