Document:

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                                                                    Exhibit 10.3

                       FIRST VIRTUAL COMMUNICATIONS, INC.

                     EMPLOYEE STOCK PURCHASE PLAN OFFERING

                              ADOPTED JUNE 18, 2001

1. GRANT; OFFERING DATE.

   (a) The Board of Directors of First Virtual Communications, Inc. (the
"Company"), pursuant to the Company's 1997 Employee Stock Purchase Plan (the
"Plan"), hereby authorizes the grant of rights to purchase shares of the common
stock of the Company ("Common Stock") to all Eligible Employees (an "Offering").
Subject to earlier termination in accordance with subsection 1(b) below, an
Offering shall commence on July 1, 2001 and end on June 30, 2003. Thereafter, an
Offering shall begin on July 1 every two (2) years, beginning with calendar year
2003, and shall end on the day prior to the second anniversary of its Offering
Date. The first day of an Offering is that Offering's "Offering Date." If an
Offering Date does not fall on a day during which the Common Stock is actively
traded, then the Offering Date shall be the next succeeding day during which the
Common Stock is actively traded.

   (b) Notwithstanding anything to the contrary, in the event that the fair
market value of a share of Common Stock on any Purchase Date (as defined herein)
during an Offering is less than the fair market value on the Offering Date of
the Offering, then following the purchase of Common Stock on such Purchase Date
(i) the Offering shall terminate, (ii) a new Offering shall commence on the day
following the Purchase Date that shall extend for two (2) years, and (iii)
participants shall automatically be enrolled in the new Offering.

   (c) Prior to the commencement of any Offering, the Board of Directors (or the
Committee described in subparagraph 2(c) of the Plan, if any) may change any or
all terms of such Offering and any subsequent Offerings. The granting of rights
pursuant to each Offering hereunder shall occur on each respective Offering Date
unless, prior to such date (a) the Board of Directors (or such Committee)
determines that such Offering shall not occur, or (b) no shares remain available
for issuance under the Plan in connection with the Offering.

2. ELIGIBLE EMPLOYEES.

   (a) All employees of the Company and each of its Affiliates (as defined in
the Plan) incorporated in the United States, shall be granted rights to purchase
Common Stock under each Offering on the Offering Date of such Offering, provided
that each such employee otherwise meets the employment requirements of
subparagraph 5(a) of the Plan (an "Eligible Employee"). Notwithstanding the
foregoing, the following employees shall not be Eligible Employees or be granted
rights under an Offering: (i) part-time or seasonal employees whose customary
employment is less than 20 hours per week or 5 months per calendar year or (ii)
5% stockholders (including ownership through unexercised options) described in
subparagraph 5(c) of the Plan.

                                       1.

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   (b) Each person who first becomes an Eligible Employee during any Offering
and at least six (6) months prior to the final Purchase Date of the Offering
will, on the next January 1 or July 1 during that Offering, receive a right
under such Offering, which right shall thereafter be deemed to be a part of the
Offering. Such right shall have the same characteristics as any rights
originally granted under the Offering except that:

       (1) the date on which such right is granted (i.e., the date an employee
first becomes eligible to commence participation in the Plan) shall be the
"Offering Date" of such right for all purposes, including determination of the
exercise price of such right; and

       (2) the Offering for such right shall begin on its Offering Date and end
coincident with the end of the ongoing Offering.

3. RIGHTS.

   (a) Subject to the limitations contained herein and in the Plan, on each
Offering Date each Eligible Employee shall be granted the right to purchase the
number of shares of Common Stock purchasable with up to fifteen percent (15%) of
such Eligible Employee's Earnings paid during such Offering after the Eligible
Employee first commences participation; provided, however, that no employee may
purchase Common Stock on a particular Purchase Date that would result in more
than fifteen percent (15%) of such employee's Earnings in the period from the
Offering Date to such Purchase Date having been applied to purchase shares under
all ongoing Offerings under the Plan and all other Company plans intended to
qualify as "employee stock purchase plans" under Section 423 of the Internal
Revenue Code of 1986, as amended (the "Code"). For this Offering, "Earnings"
means the total compensation paid to an employee, including all salary, wages
(including amounts elected to be deferred by the employee, that would otherwise
have been paid, under any cash or deferred arrangement established by the
Company), variable pay, overtime pay, commissions, bonuses, and other
remuneration paid directly to the employee, but excluding profit sharing, the
cost of employee benefits paid for by the Company, education or tuition
reimbursements, imputed income arising under any Company group insurance or
benefit program, traveling expenses, business and moving expense reimbursements,
income received in connection with stock options, contributions made by the
Company under any employee benefit plan, and similar items of compensation.

   (b) Notwithstanding the foregoing, the maximum number of shares of Common
Stock an Eligible Employee may purchase on any Purchase Date in an Offering
shall be such number of shares as has a fair market value (determined as of the
Offering Date for such Offering) equal to (x) $25,000 multiplied by the number
of calendar years in which the right under such Offering has been outstanding at
any time, minus (y) the fair market value of any other shares of Common Stock
(determined as of the relevant Offering Date with respect to such shares) which,
for purposes of the limitation of Section 423(b)(8) of the Code, are attributed
to any of such calendar years in which the right is outstanding. The amount in
clause (y) of the previous sentence shall be determined in accordance with
regulations applicable under Section 423(b)(8) of the Code based on (i) the
number of shares previously purchased with respect to such calendar years
pursuant to such Offering or any other Offering under the Plan, or pursuant to
any other Company plans intended to qualify as "employee stock purchase plans"
under

                                       2.

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Section 423 of the Code, and (ii) the number of shares subject to other rights
outstanding on the Offering Date for such Offering pursuant to the Plan or any
other such Company plan.

   (c) The maximum aggregate number of shares available to be purchased by all
Eligible Employees under an Offering shall be the number of shares remaining
available under the Plan on the Offering Date. If the aggregate purchase of
shares of Common Stock upon exercise of rights granted under the Offering would
exceed the maximum aggregate number of shares available, the Board shall make a
pro rata allocation of the shares available in a uniform and equitable manner.

4. PURCHASE PRICE.

   The purchase price of the Common Stock under the Offering shall be the lesser
of eighty-five percent (85%) of the fair market value of the Common Stock on the
Offering Date (or eighty-five percent (85%) of the fair market value of the
Common Stock on the first day on which the Company's Common Stock is actively
traded that immediately follows the Offering Date if an Offering Date does not
fall on a day during which the Company's Common Stock is actively traded) or
eighty-five percent (85%) of the fair market value of the Common Stock on the
Purchase Date (or eighty-five percent (85%) of the fair market value of the
Common Stock on the first day on which the Company's Common Stock is actively
traded that immediately precedes the Purchase Date if a Purchase Date does not
fall on a day during which the Company's Common Stock is actively traded), in
each case rounded up to the nearest whole cent per share.

5. PARTICIPATION.

   (a) An Eligible Employee may elect to participate in an Offering at the
beginning of the Offering or as of any January 1 or July 1 during the Offering.
An Eligible Employee shall become a participant in an Offering by delivering an
agreement authorizing payroll deductions. Such deductions may be in whole
dollars or whole percentages not to exceed fifteen percent (15%) of Earnings. A
participant may not make additional payments into his or her account. The
agreement shall be made on such enrollment form as the Company provides, and
must be delivered to the Company before the date of participation to be
effective for such Offering, or as otherwise determined by the Company and
communicated to Eligible Employees.

   (b) A participant may increase or reduce (including to zero) his or her
participation level effective as of any January 1 or July 1 during the course of
an Offering. A participant may additionally reduce his or her participation
level once during any six (6)-month period ending on a Purchase Date (or such
longer period ending on the first Purchase Date), except that a participant may
make a second reduction during such period to zero (0) percent, effective as
soon as administratively practicable. Any such change in participation shall be
made by delivering a notice to the Company or a designated Affiliate in such
form and at such time as the Company provides. In addition, a participant may
change his or her deductions prior to the beginning of a new Offering to be
effective at the beginning of such new Offering. A participant may withdraw from
an Offering and receive his or her accumulated payroll deductions from the
Offering (reduced to the extent, if any, such deductions have been used to
acquire Common Stock for the participant on any prior Purchase Dates), without
interest, at any time prior to the end of the

                                       3.

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Offering, excluding only each ten (10) day period immediately preceding a
Purchase Date (or such shorter period of time determined by the Company and
communicated to participants), by delivering a withdrawal notice to the Company
in such form as the Company provides. A participant who has withdrawn from an
Offering shall not be entitled to again participate in such Offering, but may
participate in other Offerings under the Plan by submitting a new participation
agreement in accordance with the terms thereof.

6. PURCHASES.

   Subject to the limitations contained herein, on each Purchase Date, each
participant's accumulated payroll deductions (without any increase for interest)
shall be applied to the purchase of whole shares of Common Stock, up to the
maximum number of shares permitted under the Plan and the Offering. "Purchase
Date" shall be defined as each June 30 and December 31. If a Purchase Date does
not fall on a day during which the Common Stock is actively traded then the
Purchase Date shall be the nearest prior day on which the Common Stock is
actively traded.

7. NOTICES AND AGREEMENTS.

   Any notices or agreements provided for in an Offering or the Plan shall be
given in writing, in a form provided by the Company, and unless specifically
provided for in the Plan or this Offering shall be deemed effectively given upon
receipt or, in the case of notices and agreements delivered by the Company, five
(5) days after deposit in the United States mail, postage prepaid.

8. EXERCISE CONTINGENT ON STOCKHOLDER APPROVAL.

   The rights granted under an Offering are subject to the approval of the Plan
by the stockholders as required for the Plan to obtain treatment as a
tax-qualified employee stock purchase plan under Section 423 of the Code.

9. OFFERING SUBJECT TO PLAN.

   Each Offering is subject to all the provisions of the Plan, and its
provisions are hereby made a part of the Offering, and is further subject to all
interpretations, amendments, rules and regulations which may from time to time
be promulgated and adopted pursuant to the Plan. In the event of any conflict
between the provisions of an Offering and those of the Plan (including
interpretations, amendments, rules and regulations which may from time to time
be promulgated and adopted pursuant to the Plan), the provisions of the Plan
shall control.

                                       4.<PAGE>
                                                                    Exhibit 10.4

                       FIRST VIRTUAL COMMUNICATIONS, INC.

                 1997 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN

             ADOPTED BY THE BOARD OF DIRECTORS ON SEPTEMBER 25, 1997
                APPROVED BY THE STOCKHOLDERS ON DECEMBER 2, 1997

              AMENDED BY THE BOARD OF DIRECTORS ON JANUARY 17, 2000
                  APPROVED BY THE STOCKHOLDERS ON JUNE 22, 2000

               AMENDED BY THE BOARD OF DIRECTORS ON MARCH 14, 2001
                  APPROVED BY THE STOCKHOLDERS ON JUNE 22, 2001

      AMENDED BY THE BOARD OF DIRECTORS ON JULY 12, 2001 AND APRIL 23, 2002
                 APPROVED BY THE STOCKHOLDERS ON JUNE 14, 2002

               AMENDED BY THE BOARD OF DIRECTORS ON JULY 31, 2002

1. PURPOSE.

   (a) The purpose of the 1997 Non-Employee Directors' Stock Option Plan (the
"Plan") is to provide a means by which each director of First Virtual
Communications, Inc. (the "Company") who is not otherwise at the time of grant
an employee of or consultant to the Company or of any Affiliate of the Company
(each such person being hereafter referred to as a "Non-Employee Director") will
be given an opportunity to purchase stock of the Company.

   (b) The word "Affiliate" as used in the Plan means any parent corporation or
subsidiary corporation of the Company as those terms are defined in Sections
424(e) and (f), respectively, of the Internal Revenue Code of 1986, as amended
from time to time (the "Code").

   (c) The Company, by means of the Plan, seeks to retain the services of
persons now serving as Non-Employee Directors of the Company, to secure and
retain the services of persons capable of serving in such capacity, and to
provide incentives for such persons to exert maximum efforts for the success of
the Company.

2. ADMINISTRATION.

   (a) The Plan shall be administered by the Board of Directors of the Company
(the "Board") unless and until the Board delegates administration to a
committee, as provided in subparagraph 2(b).

   (b) The Board may delegate administration of the Plan to a committee composed
of not fewer than two (2) members of the Board (the "Committee"). If
administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore possessed
by the Board, subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board.

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The Board may abolish the Committee at any time and revest in the Board the
administration of the Plan.

3. SHARES SUBJECT TO THE PLAN.

   (a) Subject to the provisions of paragraph 10 relating to adjustments upon
changes in stock and Section 3(c) below, the stock that may be sold pursuant to
options granted under the Plan shall not exceed in the aggregate one million
five hundred thousand (1,500,000) shares of the Company's common stock. If any
option granted under the Plan shall for any reason expire or otherwise terminate
without having been exercised in full, the stock not purchased under such option
shall again become available for the Plan.

   (b) The stock subject to the Plan may be unissued shares or reacquired
shares, bought on the market or otherwise.

   (c) Notwithstanding Section 3(a), if at the time of each grant of an option
under the Plan, the Company is subject to Section 260.140.45 of Title 10 of the
California Code of Regulations ("Section 260.140.45"), the total number of
securities issuable upon exercise of all outstanding options of the Company and
the total number of shares provided for under this Plan or any other equity
incentive, stock bonus or similar plan or agreement of the Company or outside
any plan shall not exceed 30% of the then outstanding capital stock of the
Company (as measured as set forth in Section 260.140.45), unless stockholder
approval to exceed 30% has been obtained in compliance with Section 260.140.45,
in which case the limit shall be such higher percentage as approved by the
stockholders.

4. ELIGIBILITY.

   (a) Options shall be granted only to Non-Employee Directors of the Company.

   (b) So long as the Company is subject to Section 260.140.41 of Title 10 of
the California Code of Regulations, a Non-Employee Director who owns (or is
deemed to own pursuant to Section 424(d) of the Code) stock possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Company or any of its Affiliates (a "Ten Percent Stockholder") shall not be
granted an option unless the exercise price of such option is at least (i) one
hundred ten percent (110%) of the Fair Market Value (as such term is defined in
subparagraph 9(e)) of the common stock of the Company on the date of grant or
(ii) such lower percentage of the Fair Market Value of the common stock of the
Company on the date of grant as is permitted by Section 260.140.41 of Title 10
of the California Code of Regulations at the time of the grant of the option.

5. NON-DISCRETIONARY GRANTS.

   (a) Upon the date of the approval of the Plan by the Board (the "Adoption
Date"), each person who is then a Non-Employee Director automatically shall be
granted an option to purchase ten thousand (10,000) shares of common stock of
the Company on such date on the terms and conditions set forth herein.

                                       2.

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   (b) Each person who is, after the Adoption Date, elected for the first time
to be a Non-Employee Director automatically shall, on the date of his or her
initial election as a Non-Employee Director by the Board or the shareholders of
the Company, be granted an option to purchase forty thousand (40,000) shares of
common stock of the Company on the terms and conditions set forth herein.

   (c) Each person who is, after the Adoption Date, elected for the first time
to be a member of the Audit Committee of the Board automatically shall, on the
date of his or her initial appointment as a member of such committee, be granted
an option to purchase twenty-five thousand (25,000) shares of common stock of
the Company on the terms and conditions set forth herein.

   (d) Each person who is, after the Adoption Date, elected for the first time
to be a member of the Compensation Committee and/or Nominating Committee of the
Board automatically shall, on the date of his or her initial appointment as a
member of either such committee, be granted an option to purchase fifteen
thousand (15,000) shares of common stock of the Company on the terms and
conditions set forth herein.

   (e) Each Non-Employee Director who received an initial grant described in
subparagraph 5(a) or 5(b) automatically shall, on each anniversary following the
date of such grant, be granted an option to purchase forty thousand (40,000)
shares of common stock of the Company provided that such person (i) is at that
time a Non-Employee Director, and (ii) has served continuously as a Non-Employee
Director for the entire preceding twelve (12) months.

   (f) Each Non-Employee Director who received an initial grant described in
subparagraph 5(c) and each Non-Employee Director serving on the Audit Committee
of the Board automatically shall, on each anniversary following the date of such
initial grant or previous stock option grant for service on the Audit Committee,
be granted an option to purchase twenty-five thousand (25,000) shares of common
stock of the Company provided that such person (i) is at that time a
Non-Employee Director and a member of the Audit Committee, and (ii) has served
continuously as a member of the Audit Committee for the entire preceding twelve
(12) months.

   (g) Each Non-Employee Director who received an initial grant described in
subparagraph 5(d) and each Non-Employee Director serving on either of the
Compensation Committee and/or Nominating Committee of the Board automatically
shall, on each anniversary following the date of such initial grant or previous
stock option grant for service on either such committee, be granted an option to
purchase fifteen thousand (15,000) shares of common stock of the Company
provided that such person (i) is at the time a Non-Employee Director and a
member of the Compensation Committee and/or Nominating Committee, as applicable,
and (ii) has served continuously as a member of such committee for the entire
preceding twelve (12) months.

                                       3.

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6. OPTION PROVISIONS.

   Each option shall be subject to the following terms and conditions:

   (a) The term of each option commences on the date it is granted and, unless
sooner terminated as set forth herein, expires on the date ("Expiration Date")
ten (10) years from the date of grant. If the optionee's service as a
Non-Employee Director or employee of or consultant to the Company or any
Affiliate terminates for any reason or for no reason, the option shall terminate
on the earlier of the Expiration Date or the date twenty-four (24) months
following the date of termination of all such service; provided, however, that:
(i) if such termination of service is due to the optionee's death, the option
shall terminate on the earlier of the Expiration Date or eighteen (18) months
following the date of the optionee's death; and (ii) if such termination of
service is due to the optionee's disability, the option shall terminate on the
earlier of the Expiration Date or twelve (12) months following the date of the
optionee's disability. In any and all circumstances, an option may be exercised
following termination of the optionee's service as a Non-Employee Director or
employee of or consultant to the Company or any Affiliate only as to that number
of shares as to which it was exercisable as of the date of termination of all
such service under the provisions of subparagraph 6(e).

   (b) Subject to the provisions of subsection 4(b) regarding Ten Percent
Stockholders, the exercise price of each option shall be equal to one hundred
percent (100%) of the Fair Market Value of the stock (as such term is defined in
subparagraph 9(e)) subject to such option on the date such option is granted.

   (c) The optionee may elect to make payment of the exercise price under one of
the following alternatives:

       (i) Payment of the exercise price per share in cash at the time of
exercise; or

       (ii) Provided that at the time of the exercise the Company's common stock
is publicly traded and quoted regularly in the Wall Street Journal, payment by
delivery of shares of common stock of the Company already owned by the optionee,
held for the period required to avoid a charge to the Company's reported
earnings, and owned free and clear of any liens, claims, encumbrances or
security interest, which common stock shall be valued at its Fair Market Value
on the date preceding the date of exercise; or

       (iii) Payment by a combination of the methods of payment specified in
subparagraph 6(c)(i) and 6(c)(ii) above.

   Notwithstanding the foregoing, this option may be exercised pursuant to a
program developed under Regulation T as promulgated by the Federal Reserve Board
which results in the receipt of cash (or check) by the Company either prior to
the issuance of shares of the Company's common stock or pursuant to the terms of
irrevocable instructions issued by the optionee prior to the issuance of shares
of the Company's common stock.

   (d) An option shall not be transferable except by will or by the laws of
descent and distribution and, to the extent provided in the option agreement, to
such further extent as permitted by Section 260.140.41(d) of Title 10 of the
California Code of Regulations at the time

                                       4.

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of the grant of the option, and, except in the case of a permitted transfer,
shall be exercisable during the lifetime of the person to whom the option is
granted only by such person. If the option does not provide for transferability,
then the option shall not be transferable except by will or by the laws of
descent and distribution and shall be exercisable during the lifetime of the
person to whom the option is granted only by such person. Notwithstanding the
foregoing, the person to whom the option is granted may, by delivering written
notice to the Company, in a form satisfactory to the Company, designate a third
party who, in the event of the death of the optionee, shall thereafter be
entitled to exercise the option.

   (e) The option shall become exercisable on a daily ratable basis over a one
(1) year period from the date of grant, provided that the optionee has
continuously served as a Non-Employee Director or employee of or consultant to
the Company or any Affiliate of the Company during the period prior to each
vesting installment date, whereupon such option shall become fully exercisable
in accordance with its terms with respect to that portion of the shares
represented by that installment.

   (f) The Company may require any optionee, or any person to whom an option is
transferred under subparagraph 6(d), as a condition of exercising any such
option: (i) to give written assurances satisfactory to the Company as to the
optionee's knowledge and experience in financial and business matters; and (ii)
to give written assurances satisfactory to the Company stating that such person
is acquiring the stock subject to the option for such person's own account and
not with any present intention of selling or otherwise distributing the stock.
These requirements, and any assurances given pursuant to such requirements,
shall be inoperative if (i) the issuance of the shares upon the exercise of the
option has been registered under a then currently-effective registration
statement under the Securities Act of 1933, as amended (the "Securities Act"),
or (ii) as to any particular requirement, a determination is made by counsel for
the Company that such requirement need not be met in the circumstances under the
then applicable securities laws. The Company may require any optionee to provide
such other representations, written assurances or information which the Company
shall determine is necessary, desirable or appropriate to comply with applicable
securities laws as a condition of granting an option to the optionee or
permitting the optionee to exercise the option. The Company may, upon advice of
counsel to the Company, place legends on stock certificates issued under the
Plan as such counsel deems necessary or appropriate in order to comply with
applicable securities laws, including, but not limited to, legends restricting
the transfer of the stock.

   (g) Notwithstanding anything to the contrary contained herein, an option may
not be exercised unless the shares issuable upon exercise of such option are
then registered under the Securities Act or, if such shares are not then so
registered, the Company has determined that such exercise and issuance would be
exempt from the registration requirements of the Securities Act.

   (h) The Company (or a representative of the underwriters) may, in connection
with the first underwritten registration of the offering of any securities of
the Company under the Securities Act, require that any optionee not sell or
otherwise transfer or dispose of any shares of common stock or other securities
of the Company during such period (not to exceed one hundred eighty (180) days)
following the effective date of the registration statement of the Company filed

                                       5.

<PAGE>

under the Securities Act as may be requested by the Company or the
representative of the underwriters.

7. COVENANTS OF THE COMPANY.

   (a) During the terms of the options granted under the Plan, the Company shall
keep available at all times the number of shares of stock required to satisfy
such options.

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

8. USE OF PROCEEDS FROM STOCK.

   Proceeds from the sale of stock pursuant to options granted under the Plan
shall constitute general funds of the Company.

9. MISCELLANEOUS.

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

   (b) Nothing in the Plan or in any instrument executed pursuant thereto shall
confer upon any Non-Employee Director any right to continue in the service of
the Company or any Affiliate in any capacity or shall affect any right of the
Company, its Board or shareholders or any Affiliate, to remove any Non-Employee
Director pursuant to the Company's Bylaws and the provisions of the California
Corporations Code.

   (c) No Non-Employee Director, individually or as a member of a group, and no
beneficiary or other person claiming under or through him, shall have any right,
title or interest in or to any option reserved for the purposes of the Plan
except as to such shares of common stock, if any, as shall have been reserved
for him pursuant to an option granted to him.

   (d) In connection with each option made pursuant to the Plan, it shall be a
condition precedent to the Company's obligation to issue or transfer shares to a
Non-Employee Director, or to evidence the removal of any restrictions on
transfer, that such Non-Employee Director make arrangements satisfactory to the
Company to insure that the amount of any federal, state or local withholding tax
required to be withheld with respect to such sale or transfer, or such removal
or lapse, is made available to the Company for timely payment of such tax.

                                       6.

<PAGE>

   (e) As used in this Plan, "Fair Market Value" means, as of any date, the
value of the common stock of the Company determined as follows and in each case
in a manner consistent with Section 260.140.50 of Title 10 of the California
Code of Regulations:

       (i) If the Common Stock is listed on any established stock exchange, or
traded on the Nasdaq National Market or The Nasdaq SmallCap Market, the Fair
Market Value of a share of Common Stock shall be the closing sales price for
such stock (or the closing bid, if no sales were reported) as quoted on such
exchange or market (or the exchange or market with the greatest volume of
trading in Common Stock) on the last market trading day prior to determination,
as reported in The Wall Street Journal or such other source as the Board deems
reliable;

       (ii) In the absence of such markets for the Common Stock, the Fair Market
Value shall be determined in good faith by the Board and to the extent that the
Company is subject to Section 260.140.50 of Title 10 of the California Code of
Regulations, in a manner consistent with Section 260.140.50 of Title 10 of the
California Code of Regulations.

    (f) To the extent required by Section 260.140.46 of Title 10 of the
California Code of Regulations, the Company shall deliver financial statements
to each Non-Employee Director at least annually.

10. ADJUSTMENTS UPON CHANGES IN STOCK.

    (a) If any change is made in the stock subject to the Plan, or subject to
any option granted under the Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or other transaction not involving the
receipt of consideration by the Company), the Plan and outstanding options will
be appropriately adjusted in the class(es) and maximum number of shares subject
to the Plan and the class(es) and number of shares and price per share of stock
subject to outstanding options. Such adjustments shall be made by the Board, the
determination of which shall be final, binding and conclusive. (The conversion
of any convertible securities of the Company shall not be treated as a
"transaction not involving the receipt of consideration by the Company.")

    (b) In the event of: (1) a dissolution, liquidation, or sale of all or
substantially all of the assets of the Company; (2) a merger or consolidation in
which the Company is not the surviving corporation (other than a merger solely
to effect a reincorporation of the Company into another jurisdiction); (3) a
reverse merger in which the Company is the surviving corporation but the shares
of the Company's common stock outstanding immediately preceding the merger are
converted by virtue of the merger into other property, whether in the form of
securities, cash or otherwise; or (4) the acquisition by any person, entity or
group within the meaning of Section 13(d) or 14(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act") or any comparable successor
provisions (excluding any employee benefit plan, or related trust, sponsored or
maintained by the Company or any Affiliate of the Company) of the beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act,
or comparable successor rule) of securities of the Company representing at least
fifty percent (50%)

                                       7.

<PAGE>

of the combined voting power entitled to vote in the election of directors, then
options outstanding under the Plan shall terminate if not exercised at or prior
to such event.

11. AMENDMENT OF THE PLAN.

    (a) The Board at any time, and from time to time, may amend the Plan and/or
some or all outstanding options granted under the Plan. However, except as
provided in paragraph 10 relating to adjustments upon changes in stock, no
amendment shall be effective unless approved by the shareholders of the Company
to the extent shareholder approval is necessary for the Plan to comply with the
requirements of Rule 16b-3 promulgated under the Exchange Act or any Nasdaq or
securities exchange listing requirements.

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

12. TERMINATION OR SUSPENSION OF THE PLAN.

    (a) The Board may suspend or terminate the Plan at any time. Unless sooner
terminated, the Plan shall terminate on September 24, 2007. No options may be
granted under the Plan while the Plan is suspended or after it is terminated.

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

    (c) The Plan shall terminate upon the occurrence of any of the events
described in Section 10(b) above.

13. EFFECTIVE DATE OF PLAN; CONDITIONS OF EXERCISE.

    The Plan shall become effective on September 25, 1997, the date adopted by
the Board.

                                       8.

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